Execution
      Version


    


     

    


     

    DRESSER
      RAND GROUP INC.

     

      
        

      

    

     

    PARENT
      GUARANTY

     

    
      
 

    Dated
      as
      of December 28, 2007

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    


    PARENT
      GUARANTY


    PARENT
      GUARANTY

     

    PARENT
      GUARANTY, dated as of December 28, 2007 (this "Guaranty"),
      by
      DRESSER RAND GROUP INC, a Delaware corporation (the "Guarantor"),
      to
      CITIBANK INTERNATIONAL PLC (PARIS BRANCH), a finance institution established
      under the laws of England and qualified in France as a credit establishment
      of
      the European Economic Area (the "Lessor").
      Capitalized terms used herein and not defined herein shall have the meanings
      ascribed to them in the Participation Agreement dated as of the date hereof
      among the Lessor, Dresser-Rand S.A. (France) (the "Lessee"
      or the
      "Company"),
      the
      Persons named therein as Note Holders and Citicorp North America, Inc., as
      Agent
      (the "Agent")
      (as
      the same may be amended from time to time, the "Participation
      Agreement").

     

    Preliminary
      Statement

     

    A. The
      Guarantor intends this Guaranty to be an inducement for (i) the Lessor and
      the Agent to enter into the transactions contemplated by the Operative
      Documents, and (ii) the Note Holders to make Advances under the Notes, and
      (iii) the Lessor to make the Investments, all of which the Agent, the
      Lessor and the Note Holders would be unwilling to do if the Guarantor did not
      execute and deliver this Guaranty.

     

    B. The
      Guarantor will derive substantial direct and indirect hereafter from the
      transaction contemplated by the Participation Agreement and the Other Operative
      Documents. It is a condition precedent to the making of Investments by the
      Lessor and Advances by the Note Holders under the Participation Agreement from
      time to time that the Guarantor shall have executed and deliver this
      Guaranty.

     

    NOW,
      THEREFORE, in consideration of the premises and intending to be legally bound
      by
      this Guaranty, the Guarantor hereby agrees to be bound as follows:

     

    1. Guaranty.
      The
      Guarantor unconditionally guarantees and agrees with the Lessor that
      (i) all Rent, the Residual Value Amount, the Termination Value, all
      indemnification payments required to be made pursuant to Section 9.14 of
      the Participation Agreement and all other sums stated in the Operative Documents
      to the extent payable by the Company thereunder will be promptly paid in full
      when due, whether at stated maturity, by acceleration or otherwise, in
      accordance with the provisions of the Operative Documents and (ii) the
      Company will perform, comply with and observe all other obligations, covenants,
      terms, conditions and undertakings of the Company (as Lessee and in its capacity
      as Construction Agent) contained in the Operative Documents.

     

    
      
         

      

      
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      PARENT
        GUARANTY

       

    

    2. Nature
      of the Guaranty.
      a) This
      Guaranty shall be irrevocable, and in all events shall be continuing,
      unconditional and absolute, and if for any reason any sums stated in the other
      Operative Documents to be payable by the Company, or any part thereof, shall
      not
      be paid promptly when due, or any other obligation, covenant, term, condition
      or
      undertaking of the Company contained in any Operative Document shall not be
      performed, complied with or observed in accordance with said Operative Document,
      subject in each case, in respect of such obligation to pay or perform, to the
      terms of the Operative Documents, then in each such instance upon demand of
      payment, performance, compliance or observance, made by the Lessor to the
      Guarantor, the Guarantor shall pay, perform, comply with or observe the same
      to
      or for the benefit of the Lessor pursuant to and in accordance with the
      provisions of the Operative Documents, regardless of any defenses or rights
      of
      set-off or counterclaim, regardless of whether the Lessor shall have taken
      any
      steps to enforce its rights against the Guarantor, the Company or any other
      Person, to collect such sums, or any part thereof, and regardless of any other
      condition or contingency. The Guarantor also agrees to pay on demand to the
      Lessor such further amounts as shall be sufficient to cover the reasonable
      costs
      and expenses of collecting such sums, or part thereof, or of otherwise enforcing
      this Guaranty, including, in any case, reasonable compensation to their
      respective attorneys for all services rendered in that connection.

     

    (b) Any
      and
      all payments by the Guarantor hereunder shall be made free and clear of and
      without deduction for any and all present or future Charges and all liabilities
      with respect thereto. If the Guarantor shall be required by Law to deduct any
      Charges from or in respect of any amounts payable hereunder, (i) the
      amounts payable by the Guarantor shall be increased by the amount necessary
      so
      that after making all required deductions (including deductions applicable
      to
      additional sums payable under this Section 2(b)) the Lessor receives an
      amount equal to the sum it would have received had no such deductions been
      made,
      (ii) the Guarantor shall make such deductions and (iii) the Guarantor
      shall pay the full amount deducted to the relevant taxation authority or other
      Governmental Authority in accordance with applicable Laws. Within fifteen
      (15) days after the date of any deduction of any Charges, the Guarantor
      shall furnish to the Lessor, and the Agent the original or a certified copy
      of a
      receipt or other documentation evidencing payment thereof as is reasonably
      acceptable to the Lessor.

     

    3. Certain
      Waivers.
      b) The
      Guarantor hereby unconditionally (i) waives any requirement that the Agent,
      the Lessor and the Note Holders first make demand upon, or seek to enforce
      remedies against, any other Person or any of the collateral or property of
      such
      other Person before demanding payment from, or seeking to enforce this Guaranty
      against, the Guarantor; (ii) covenants that this Guaranty will not be
      discharged except by complete satisfaction of all obligations of the Company
      contained in the Operative Documents; (iii) agrees that this Guaranty shall
      remain in full effect without regard to, and shall not be affected or impaired
      by, any invalidity, illegality, irregularity or unenforceability in whole or
      in
      part of any other Operative Document (and the Guarantor hereby waives any
      defense relating to the enforceability of the Operative Documents or any
      provision contained therein) or except as expressly set forth herein or in
      the
      Operative Documents, or any limitation of the liability of the Company
      thereunder or any limitation on the method or terms of payment thereunder which
      may now or hereafter be caused or imposed in any manner whatsoever;
      (iv) waives diligence, presentment and protest with respect to, and, except
      as expressly provided herein or in the Operative Documents, any notice of
      default in, the payment of any amount at any time payable under or in connection
      with the Notes, the Investments or any of the Operative Documents; and
      (v) agrees that each and every right, power and remedy given under this
      Guaranty or any other Operative Document shall be cumulative and not exclusive,
      and be in addition to all other rights, powers and remedies now or hereafter
      granted or otherwise existing.

     

    
      
         

      

      
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        PARENT
          GUARANTY

         

      

    

    (b) Until
      all
      obligations of the Company under the Operative Documents have been indefeasibly
      paid in full, the Guarantor hereby irrevocably waives any claim, remedy or
      right
      that it may now have or hereafter acquire against the Company that arise from
      the existence, payment, performance or enforcement of the obligations of the
      Company under any other Operative Document, including, without limitation,
      any
      right of subrogation, reimbursement, exoneration, contribution or
      indemnification and any right to participate in any claim or remedy of the
      Agent, the Lessor or any Note Holder against the Company whether or not such
      claim, remedy or right arises in equity or under contract, statute or common
      law, including, without limitation, the right to take or receive from the
      Company directly or indirectly, in cash or other property or by set-off or
      in
      any other manner, payment or security on account of such claim, remedy or right.
      If any amount shall be paid to the Guarantor in violation of the preceding
      sentence at any time prior to the indefeasible cash payment in full of all
      amounts payable under this Guaranty, such amount shall be held in trust for
      the
      benefit of the Lessor, and shall forthwith be paid to the Lessor and be credited
      and applied to the amounts payable under this Guaranty. The Guarantor
      acknowledges that it will receive direct and indirect benefits from the
      financing arrangement contemplated by the Operative Documents and that the
      waiver set forth in this Section 3 is knowingly made in contemplation of
      such benefits. Notwithstanding the foregoing, the obligation to hold amounts
      in
      trust shall not have effect to the extent that it would otherwise create or
      take
      effect as a charge or security interest over such amounts.

     

    4. Absolute
      Obligations.
      The
      obligations, undertakings and conditions to be performed or observed by the
      Guarantor under this Guaranty shall not be affected or impaired by reason of
      the
      happening from time to time of any of the following with respect to the
      Operative Documents, all without notice to, or the further consent of, the
      Guarantor:

     

    
      
         

      

      
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      PARENT
        GUARANTY

       

    

    (a) the
      waiver by the Agent, the Lessor, any Note Holder or any other Person of the
      observance or performance by the Company or the Guarantor of any of the
      obligations, undertakings or conditions contained in any of the Operative
      Documents, except to the extent of such waiver;

     

    (b) the
      extension, in whole or in part, of the time for payment of any amount owing
      or
      payable under or with respect to any of the Notes, the Investments, the Loan
      Agreement, or any other Operative Document or of any other sums or obligations
      under or arising out of or on account of the Notes, the Investments, the Loan
      Agreement or any other Operative Document except to the extent of such
      extension;

     

    (c) the
      modification or amendment (whether material or otherwise) of any of the
      obligations of the Company, the Lessor, the Guarantor or any other guarantor
      under any Operative Document, except to the extent of such modification or
      amendment;

     

    (d) the
      taking or the omission of any of the actions referred to in any other Operative
      Document (including, without limitation, the giving of any consent referred
      to
      therein);

     

    (e) any
      failure, omission, delay or lack on the part of the Agent, the Lessor, any
      Note
      Holder, or any other Person to enforce, assert or exercise any right, power
      or
      remedy conferred on the Agent, the Lessor, any Note Holder or any other Person
      in any of the Operative Documents or any action on the part of the Agent, the
      Lessor, any Note Holder or any other Person granting indulgence or extension
      in
      any form;

     

    (f) the
      release or discharge of the Agent, the Lessor, the Company or any other Person
      from the performance or observance of any obligation, undertaking or condition
      to be performed by the Agent, the Company or any other Person under or with
      respect to any Notes, the Investments or any other Operative Document by
      operation of Law;

     

    (g) any
      action, inaction or election of remedies by the Agent, the Lessor, a Note Holder
      or any other Person which results in any impairment or destruction of any
      subrogation rights of the Guarantor, or any rights of the Guarantor to proceed
      against any other Person for reimbursement;

     

    (h) the
      surrender by the Agent, the Lessor, any Note Holder or any other Person of
      any
      security at any time held for the performance or observance of any of the
      agreements, covenants, terms or conditions contained in the Notes or any of
      the
      other Operative Documents;

     

    
      
         

      

      
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        GUARANTY

       

    

    (i) any
      event
      or circumstance which might otherwise constitute a legal or equitable discharge
      or defense of a guarantor, indemnitor or surety under the laws of the State
      of
      New York or any other applicable jurisdiction;

     

    (j) any
      other
      circumstances whatsoever (with or without notice to or knowledge of the
      Guarantor) which constitutes, or might be construed to constitute, an equitable
      or legal discharge of the Guarantor with respect to its obligations hereunder
      or
      under the other Operative Documents, in bankruptcy or in any other instance,
      except based on payment or performance;

     

    (k) any
      change in circumstances, whether or not foreseen or foreseeable, whether or
      not
      imputable to the Guarantor, any Note Holder, the Agent or the Lessor and whether
      or not such change in circumstances shall or might in any manner and to any
      extent vary the risk of the Guarantor hereunder;

     

    (l) any
      sublease or other use of any of the Property, or any sale, transfer,
      disposition, grant of security interest, mortgaging or assignment by the Company
      of any of its interests, rights or obligations, in, to and under the Lease,
      or
      with respect to the Property or any part thereof, whether or not permitted
      by
      the terms of any of the Operative Documents;

     

    (m) any
      assignment or grant of security interest by any Note Holder or the Lessor of
      all
      or any part of such Note Holder's or the Lessor's right, title and interest
      in
      or in respect of its Notes, Investments or in the Property;

     

    (n) any
      sale
      by the Lessor, or its successors or assigns, of the Property or any part thereof
      pursuant to the terms of the Operative Documents, subject to the application
      of
      the proceeds thereof in accordance with the Operative Documents;

     

    (o) any
      consolidation or merger of the Company, whether permitted under the terms of
      the
      Participation Agreement or otherwise, or the sale, transfer or other disposition
      by the Company of all or substantially all of the assets and/or liabilities
      of
      the Company or any change in the ownership of the equity interests of the
      Company;

     

    (p) the
      voluntary or involuntary liquidation, dissolution, receivership, insolvency,
      bankruptcy, assignment for the benefit of creditors, reorganization, the
      arrangement, composition or readjustment of the Company, or any other similar
      proceeding affecting the status, existence, assets or obligations of the
      Company, or the limitation on damages for the breach of, or the disaffirmation
      of, any of the Operative Documents in any such proceeding;

     

    
      
         

      

      
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          GUARANTY

         

      

    

    (q) any
      invalidity or unenforceability, for any reason, of the Lease or any other
      Operative Document, or of any provision thereof, or of any of the obligations,
      or any defect in the Lessor's title to, or any security interest granted in,
      the
      Property or any part thereof; or

     

    (r) any
      other
      cause, whether similar or dissimilar to the foregoing;

     

    it
      being
      the intention of the Guarantor that this Guaranty be absolute and unconditional
      in any and all circumstances and that this Guaranty shall be discharged only
      by
      the indefeasible payment in full of all sums and the performance of all
      obligations with respect to which this Guaranty relates.

     

    5. Events
      of Default.
      An
      Event of Default under the Participation Agreement shall constitute an Event
      of
      Default hereunder.

     

    6. Representation
      and Warranties.
      The
      Guarantor represents and warrants to the Lessor, the Agent and the Note Holders
      that the following shall be true and correct on and as of the date hereof and
      true and correct in all material respects on and as of each Funding Date on
      which a Funding shall occur (except to the extent such representations and
      warranties relate expressly to an earlier date):

     

    (a) The
      execution, delivery and performance by the Guarantor of this Guaranty are within
      the Guarantor’s corporate powers, have been duly authorized by all necessary
      corporate action and do not contravene (i) the Guarantor’s charter or by-laws or
      (ii) any law or any contractual restriction binding on or affecting the
      Guarantor, except where such contravention would not reasonably be expected
      to
      cause a Material Adverse Effect.

     

    (b) The
      Guaranty is a legal, valid and binding obligation of the Guarantor enforceable
      against the Guarantor in accordance with its terms, except as enforceability
      thereof may be limited by the effect of any applicable bankruptcy, insolvency,
      reorganization, moratorium or similar laws affecting creditors’ rights generally
      and by general principles of equity.

     

    (c) the
      representations and warranties applicable to the Guarantor set forth in Sections
      3.01(a), (b) and (c), 3.04 through 3.10, 3.12 through 3.15 and 3.18 through
      3.20
      (each as amended, supplemented or otherwise modified from time to time) of
      the
      Revolving Credit Agreement, incorporated herein by reference (the “Incorporated
      Representations”),
      mutatis
      mutandis,
      are
      true and correct in all material respects as if made on the date hereof. For
      purposes of this representation, the terms defined in the Revolving Credit
      Agreement and used in any of the Incorporated Representations are incorporated
      herein by reference.

     

    
      
         

      

      
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          GUARANTY

         

      

    

    7. Affirmative
      Covenants.
      The
      affirmative covenants applicable to the Guarantor set forth in Sections 5.01
      through 5.07, 5.09 and 5.11 (each as amended, supplemented or otherwise modified
      from time to time) of the Revolving Credit Agreement, are incorporated herein
      by
      reference (the “Incorporated
      Affirmative Covenants”),
      mutatis
      mutandis.
      For
      purposes of this Section 7, the terms defined in the Revolving Credit Agreement
      and used in any of the Incorporated Affirmative Covenants are incorporated
      herein by reference.

     

    8. Negative
      Covenants.
      The
      negative covenants applicable to the Guarantor set forth in Sections 6.01
      through 6.14 (each as amended, supplemented or otherwise modified from time
      to
      time) of the Revolving Credit Agreement, are incorporated herein by reference
      (the “Incorporated
      Negative Covenants”),
      mutatis
      mutandis.
      For
      purposes of this Section 8, the terms defined in the Revolving Credit Agreement
      and used in any of the Incorporated Negative Covenants are incorporated herein
      by reference..

     

    9. Waiver
      of Notice of Acceptance.
      Notice
      of acceptance of this Guaranty and notice of the execution and delivery of
      any
      other instrument referred to in this Guaranty are hereby waived by the
      Guarantor.

     

    10. Reinstatement.
      This
      Guaranty shall continue to be effective or be reinstated, as the case may be,
      if
      at any time payment, or any part thereof, of any of the obligations to be paid
      hereunder is rescinded or must otherwise be restored or returned by any Person,
      upon the insolvency, bankruptcy or reorganization of the Guarantor, or
      otherwise, all as though such payment had not been made. The provisions of
      this
      Section shall survive the termination of this Guaranty.

     

    11. Term.
      This
      Guaranty shall remain in full force and effect until payment in full of all
      sums
      payable by the Company under the Operative Documents, the termination of all
      Commitments and the performance in full of all obligations of the Guarantor
      in
      accordance with the provisions of this Guaranty, subject to reinstatement as
      provided in Section 10. Subject as aforesaid, the Guarantor's payment
      obligations hereunder shall be deemed satisfied upon the actual and timely
      receipt by the Agent of all amounts payable hereunder in full in cash. This
      Guaranty is a guaranty of payment and performance when due and not a guaranty
      of
      collection.

     

    
      
         

      

      
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    12. Severability.
      In case
      any provision of this Guaranty or any application thereof shall be invalid,
      illegal or unenforceable, the validity, legality and enforceability of the
      remaining provisions and any other application thereof shall not in any way
      be
      affected or impaired thereby.

     

    13. Time
      of the Essence; Successor; No Oral Modification; Enforcement.
      TIME IS OF THE ESSENCE IN THIS GUARANTY AND THE TERMS HEREIN SHALL BE SO
      CONSTRUED.
      This
      Guaranty shall be binding upon the Guarantor and its successors and shall inure
      to the benefit of, and be enforceable by, the Lessor and its respective
      successors and assigns. This Guaranty may not be changed, waived, discharged
      or
      terminated orally, but only by a statement in writing signed by the Guarantor
      and the parties required pursuant to Section 9.04 of the Participation
      Agreement. This Guaranty may be enforced as to any one or more defaults either
      separately or cumulatively.

     

    14. GOVERNING
      LAW.
      c) THIS
      GUARANTY SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
      ACCORDANCE WITH,
      THE
      LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5­1401 OF THE GENERAL
      OBLIGATIONS LAW (OR ANY SIMILAR SUCCESSOR PROVISION THERETO) BUT EXCLUDING
      ALL
      OTHER CONFLICT-OF-LAW RULES.

     

    15. Submission
      to Jurisdiction. d) The
      Guarantor hereby irrevocably and unconditionally submits, for itself and its
      property, to the nonexclusive jurisdiction of any New York State court or
      federal court of the United States of America sitting in New York City, and
      any
      appellate court from any thereof, in any action or proceeding arising out of
      or
      relating to this Guaranty or any other Operative Document, or for recognition
      or
      enforcement of any judgment, and the Guarantor hereby irrevocably and
      unconditionally agrees that all claims in respect of any such action or
      proceeding may be heard and determined in any such New York State court or,
      to
      the extent permitted by law, in such federal court. The Guarantor agrees that
      a
      final judgment in any such action or proceeding shall be conclusive and may
      be
      enforced in other jurisdictions by suit on the judgment or in any other manner
      provided by law. Nothing in this Guaranty shall affect any right that the Note
      Holders, the Agent or the Lessor may otherwise have to bring any action or
      proceeding relating to this Guaranty in the courts of any
      jurisdiction.

     

    (b) The
      Guarantor irrevocably and unconditionally waives, to the fullest extent it
      may
      legally and effectively do so, any objection that it may now or hereafter have
      to the laying of venue of any suit, action or proceeding arising out of or
      relating to this Guaranty or any other Operative Document in any New York State
      or federal court. The Guarantor hereby irrevocably waives, to the fullest extent
      permitted by law, the defense of an inconvenient forum to the maintenance of
      such action or proceeding in any such court.

     

    
      
         

      

      
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    16. Notices.
      All
      notices, demands, requests, consents, approvals and other instruments hereunder
      shall be given in the manner and at the appropriate address set forth in the
      Participation Agreement or at such other address as such party shall designate
      by notice to each of the other parties hereto.

     

    17. Waiver;
      Reliance.
      The
      Guarantor waives any and all notice of the creation, renewal, extension or
      accrual of any of the amounts which the Guarantor is obligated to pay hereunder
      and notice of or proof of reliance by the Agent, the Lessor or the Note Holders
      upon this Guaranty or acceptance of this Guaranty. The indebtedness evidenced
      by
      the Operative Documents shall conclusively be deemed to have been created,
      contracted, incurred, renewed, extended, amended or waived in reliance upon
      this
      Guaranty, and all dealings between the Guarantor, the Agent, the Lessor and
      the
      Note Holders shall likewise be conclusively presumed to have been had or
      consummated in reliance upon this Guaranty.

     

    18. Construction.
      The
      rules of construction set forth in Appendix A to the Participation
      Agreement apply to this Guaranty.

     

    19. Revolving
      Credit Agreement.
      If the
      Revolving Credit is terminated or is otherwise no longer in effect, the
      Incorporated Representations, the Incorporated Affirmative Covenants and the
      Incorporated Negative Covenants shall be deemed to be the representations and
      warranties, affirmative covenants and negative covenants, as applicable, in
      effect immediately prior to the termination thereof.

     

    
      
         

      

      
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    PARENT
      GUARANTY


    IN
      WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed
      as
      of the day and year first above written.

     

    
      	 	 	 
	 	
              DRESSER
                RAND GROUP INC.

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name:

            
	 	Title 


    

     

    
      
         

      

      
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