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UNIVERSAL COMPRESSION HOLDINGS, INC.




6,750,000 Shares of Common Stock




Underwriting Agreement




December 8, 2005




J.P. Morgan Securities Inc.

277 Park Avenue

New York, New York 10172




Ladies and Gentlemen:




     Weatherford International Ltd., a company incorporated under the laws of Bermuda (the “Selling
Stockholder”), propose to sell to J.P. Morgan Securities, Inc. (the “Underwriter”), an aggregate of
6,750,000 shares (the “Shares”) of Common Stock, par value $0.01 per share (the “Stock”), of
Universal Compression Holdings, Inc., a Delaware corporation (the “Company”).



     Each of the Company and the Selling Stockholder hereby confirms its agreement with the
Underwriter concerning the purchase and sale of the Shares, as follows:



     1. Registration Statement. The Company has prepared and filed with the Securities and
Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, and the rules
and regulations of the Commission thereunder (collectively, the “Securities Act”), a registration
statement (File No. 333-121937) including a prospectus, relating to the Shares. Such registration
statement, as amended at the time it became effective, including the information, if any, deemed
pursuant to Rule 430A, 430B or 430C under the Securities Act to be part of the registration
statement at the time of its effectiveness (“Rule 430 Information”), is referred to herein as the
“Registration Statement”; and as used herein, the term “Preliminary Prospectus” means each
prospectus included in such registration statement (and any amendments thereto) before it became
effective, any prospectus filed with the Commission pursuant to Rule 424(a) under the Securities
Act and the prospectus included in the Registration Statement at the time of its effectiveness that
omits Rule 430 Information, and the term “Prospectus” means the prospectus in the form first used
(or made available upon request of purchasers pursuant to Rule 173 under the Securities Act) in
connection with confirmation of sales of the Shares. If the Company has filed an abbreviated
registration statement pursuant to Rule 462(b) under the Securities Act (the “Rule 462 Registration
Statement”), then any reference herein to the term “Registration Statement” shall be deemed to
include such Rule 462 Registration Statement. Any reference in this Agreement to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be









 



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deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the Securities Act, as of the effective date of the Registration Statement or the
date of such Preliminary Prospectus or the Prospectus, as the case may be, and any reference to
“amend”, “amendment” or “supplement” with respect to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after such
date under the Securities Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder (collectively, the “Exchange Act”) that are deemed to be incorporated by
reference therein. Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Registration Statement and the Prospectus.



     At or prior to the time when sales of the Shares were first made (the “Time of Sale”), the
Company had prepared the following information (collectively with the information referred to in
the next succeeding sentence, the “Time of Sale Information”): a Preliminary Prospectus dated March
9, 2005 (as amended to the Time of Sale) and the information listed on Annex C hereto. If,
subsequent to the date of this Agreement, the Company and the Underwriter have determined that such
Time of Sale Information included an untrue statement of a material fact or omitted a statement of
material fact necessary to make the information therein, in the light of the circumstances under
which it was made, not misleading and have agreed to provide an opportunity to purchasers of the
Shares to terminate their old purchase contracts and enter into new purchase contracts, then “Time
of Sale Information” will refer to the information available to purchasers at the time of entry
into the first such new purchase contract.



     2. Purchase of the Shares by the Underwriter. (a) The Selling Stockholder agrees to
sell the Shares to the Underwriter as provided in this Agreement, and the Underwriter, on the basis
of the representations, warranties and agreements set forth herein and subject to the conditions
set forth herein, agrees to purchase the Shares from the Selling Stockholder at a purchase price
per share of $41.00 (the “Purchase Price”).



     (b) The Selling Stockholder understands that the Underwriter intends to make a public offering
of the Shares as soon after the effectiveness of this Agreement as in the judgment of the
Underwriter is advisable, and initially to offer the Shares on the terms set forth in the
Prospectus. The Selling Stockholder acknowledges and agrees that the Underwriter may offer and
sell Shares to or through any affiliate of the Underwriter and that any such affiliate may offer
and sell Shares purchased by it to or through the Underwriter.



     (c) Payment for the Shares shall be made by wire transfer in immediately available funds to
the account specified by the Selling Stockholder (as defined below) to the Underwriter at the
offices of Vinson & Elkins L.L.P., 1001 Fannin, Houston, Texas 77002, at 10:00 A.M. New York City
time on Wednesday, December 14, 2005, or at such other time or place on the same or such other
date, not later than the fifth business day thereafter, as the Underwriter and the Selling
Stockholder may agree upon in writing. The time and date of such payment is referred to herein as
the “Closing Date”.



     Payment for the Shares shall be made against delivery to the Underwriter for the account of
the Underwriter of the Shares in definitive form registered in such names and in such









 



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denominations as the Underwriter shall request in writing not later than two full business days
prior to the Closing Date, with any transfer taxes payable in connection with the sale of the
Shares duly paid by the Selling Stockholder. The certificates for the Shares will be made
available for inspection and packaging by the Underwriter at the office of J.P. Morgan Securities
Inc. set forth above not later than 1:00 P.M., New York City time, on the business day prior to the
Closing Date.



     (d) As compensation to the Underwriter for its commitments hereunder, the Selling Stockholder
will pay, or cause to be paid, to J.P. Morgan Securities Inc., for the account of the Underwriter,
an amount equal to $41.00 per share for the Shares to be delivered by the Selling Stockholder
hereunder on the Closing Date. On December 14, 2005, or on such other date, not later than the
fifth Business Day thereafter, as the Underwriter and the Selling Stockholder may agree upon in
writing, the Selling Stockholder will pay or cause to be paid by wire transfer, in immediate
available funds, such commission to the account specified by J.P. Morgan Securities Inc.



     (e) Each of the Company and the Selling Stockholder acknowledges and agrees that the
Underwriter is acting solely in the capacity of an arm’s length contractual counterparty to the
Selling Stockholder with respect to the offering of Shares contemplated hereby (including in
connection with determining the terms of the offering) and not as a financial advisor or a
fiduciary to, or an agent of, the Company, the Selling Stockholder or any other person.
Additionally, the Underwriter is not advising the Company, the Selling Stockholder or any other
person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The
Company and the Selling Stockholder shall consult with their own advisors concerning such matters
and shall be responsible for making their own independent investigation and appraisal of the
transactions contemplated hereby, and the Underwriter shall have no responsibility or liability to
the Company or the Selling Stockholder with respect thereto. Any review by the Underwriter of the
Company, the transactions contemplated hereby or other matters relating to such transactions will
be performed solely for the benefit of the Underwriter and shall not be on behalf of the Company or
the Selling Stockholder.



     3. Representations and Warranties of the Company. The Company represents and warrants
to the Underwriter and the Selling Stockholder that:



     (a) Preliminary Prospectus. No stop order preventing or suspending the effectiveness of the
Preliminary Prospectus has been issued by the Commission, and each Preliminary Prospectus, at the
time of filing thereof, complied in all material respects with the applicable requirements of the
Securities Act and did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading; provided that
the Company makes no representation and warranty with respect to any statements or omissions made
in reliance upon and in conformity with information relating to the Underwriter furnished to the
Company in writing by the Underwriter expressly for use in any Preliminary Prospectus.









 



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     (b) Time of Sale Information. The Time of Sale Information, at the Time of Sale did not, and
at the Closing Date will not, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that the Company makes no
representation and warranty with respect to any statements or omissions made in reliance upon and
in conformity with information relating to any Underwriter furnished to the Company in writing by
the Underwriter expressly for use in such Time of Sale Information. No statement of material fact
included in the Prospectus has been omitted from the Time of Sale Information and no statement of
material fact included in the Time of Sale Information that is required to be included in the
Prospectus has been omitted therefrom.



     (c) Issuer Free Writing Prospectus. Other than the Preliminary Prospectus and the Prospectus,
the Company (including its agents and representatives, other than the Underwriter in its capacity
as such) has not made, used, prepared, authorized, approved or referred to and will not prepare,
make, use, authorize, approve or refer to any “written communication” (as defined in Rule 405 under
the Securities Act) that constitutes an offer to sell or solicitation of an offer to buy the Shares
(each such communication by the Company or its agent and representatives an “Issuer Free Writing
Prospectus”).



     (d) Registration Statement and Prospectus. The Registration Statement has been declared
effective by the Commission. No order suspending the effectiveness of the Registration Statement
has been issued by the Commission and no proceeding for that purpose or pursuant to Section 8A of
the Securities Act against the Company or related to the offering has been initiated or threatened
by the Commission; as of the applicable effective date of the Registration Statement and any
amendment or supplement thereto, the Registration Statement complied and will comply in all
material respects with the applicable requirements of the Securities Act, and did not and will not
contain any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not misleading; and as of the
date of the Prospectus and any amendment or supplement thereto and as of the Closing Date, the
Prospectus will not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided that the
Company makes no representation and warranty with respect to any statements or omissions made in
reliance upon and in conformity with information relating to the Underwriter furnished to the
Company in writing by the Underwriter expressly for use in the Registration Statement and the
Prospectus and any amendment or supplement thereto.



     (e) Incorporated Documents. The documents incorporated by reference in the Registration
Statement, the Prospectus or the Time of Sale Information, when they became effective or were filed
with the Commission, as the case may be, conformed in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and none of such documents contained any
untrue statement of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading; and any further documents so filed and incorporated by reference in
the Registration Statement, the Prospectus or the Time of Sale









 



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Information, when such documents become effective or are filed with the Commission, as the case may
be, will conform in all material respects to the requirements of the Securities Act or the Exchange
Act, as applicable, and will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.



     (f) Financial Statements. The financial statements and the related notes thereto of the
Company and its consolidated subsidiaries included or incorporated by reference in the Registration
Statement, the Time of Sale Information and the Prospectus comply in all material respects with the
applicable requirements of the Securities Act and the Exchange Act, as applicable, and present
fairly the financial position of the Company and its subsidiaries as of the dates indicated and the
results of their operations and the changes in their cash flows for the periods specified; such
financial statements have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods covered thereby, except as disclosed therein,
and the supporting schedules included or incorporated by reference in the Registration Statement
present fairly the information required to be stated therein; the other financial information
included or incorporated by reference in the Registration Statement, the Time of Sale Information
and the Prospectus has been derived from the accounting records of the Company and its subsidiaries
and presents fairly in all material respects the information shown thereby.



     (g) No Material Adverse Change. Since the date of the most recent financial statements of the
Company included or incorporated by reference in the Registration Statement, the Time of Sale
Information and the Prospectus, (i) there has not been any material adverse change in the capital
stock or long-term debt of the Company and its subsidiaries taken as a whole, or any dividend or
distribution of any kind declared, set aside for payment, paid or made by the Company on any class
of capital stock, or any material adverse change, in or affecting the business, properties,
management, financial position, stockholders’ equity, results of operations or prospects of the
Company and its subsidiaries taken as a whole; (ii) neither the Company nor any of its subsidiaries
has entered into any transaction or agreement or incurred any liability or obligation, direct or
contingent, that would, individually or in the aggregate, have a material adverse effect on the
business, properties, management, financial position, stockholders’ equity or results of operations
of the Company and its subsidiaries taken as a whole (a “Material Adverse Effect”); and (iii)
neither the Company nor any of its subsidiaries has sustained any material loss or interference
with its business, that is material to the Company and its subsidiaries taken as a whole, from
fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor
disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or
regulatory authority, except in each case as otherwise disclosed in the Registration Statement, the
Time of Sale Information and the Prospectus or as would not, individually or in the aggregate, have
a Material Adverse Effect.



     (h) Organization and Good Standing. The Company and each of its significant subsidiaries have
been duly organized and are validly existing and in good standing under the laws of their
respective jurisdictions of organization, are duly qualified to do business and are in good
standing in each jurisdiction in which their respective ownership or lease of property or the
conduct









 



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of their respective businesses requires such qualification, and have all power and authority
necessary to own or hold their respective properties and to conduct the businesses in which they
are engaged, except where the failure to be so qualified or have such power or authority would not,
individually or in the aggregate, have a Material Adverse Effect.



     (i) Capitalization. The Company has an authorized capitalization as set forth on the
Company’s balance sheet for the year ended March 31, 2005; all the outstanding shares of capital
stock of the Company (including the Shares to be sold by the Selling Stockholder) have been duly
and validly authorized and issued and are fully paid and non-assessable and are not subject to any
pre-emptive or similar rights; except as described in or expressly contemplated by the Time of Sale
Information and the Prospectus, there are no outstanding rights (including, without limitation,
pre-emptive rights), warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interest in the Company or any of its
subsidiaries, or any contract, commitment, agreement, understanding or arrangement of any kind
relating to the issuance of any capital stock of the Company or any such subsidiary, any such
convertible or exchangeable securities or any such rights, warrants or options; the capital stock
of the Company conforms in all material respects to the description thereof contained in the
Registration Statement, the Time of Sale Information and the Prospectus; and all the outstanding
shares of capital stock or other equity interests of each subsidiary of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable and are owned directly or
indirectly by the Company, free and clear of any lien, charge, encumbrance, security interest,
restriction on voting or transfer or any other claim of any third party.



     (j) Due Authorization. The Company has full right, power and authority to execute and deliver
this Agreement and to perform its obligations hereunder; and all action required to be taken for
the due and proper authorization, execution and delivery by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby has been duly and validly
taken.



     (k) Underwriting Agreement. This Agreement has been duly authorized, executed and delivered
by the Company.



     (l) Descriptions of Underwriting Agreement. This Agreement conforms in all material respects
to the description thereof contained in the Registration Statement, the Time of Sale Information
and the Prospectus.



     (m) No Violation or Default. Neither the Company nor any of its significant subsidiaries is
(i) in violation of its charter or by-laws or similar organizational documents; (ii) in default,
and no event has occurred that, with notice or lapse of time or both, would constitute such a
default, in the performance or observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of its significant
subsidiaries is bound or to which any of the property or assets of the Company or any of its
significant subsidiaries is subject; or (iii) in violation of any law or statute or any judgment,
order, rule or regulation of any court or arbitrator or governmental or regulatory authority,
except, in the









 



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case of clauses (ii) and (iii) above, for any such default or violation that would not,
individually or in the aggregate, have a Material Adverse Effect.



     (n) No Conflicts. The execution, delivery and performance by the Company of this Agreement,
and the consummation by the Company of the transactions contemplated by this Agreement will not (i)
conflict with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company or any of its subsidiaries is
subject, (ii) result in any violation of the provisions of the charter or by-laws or similar
organizational documents of the Company or any of its significant subsidiaries or (iii) result in
the violation of any law or statute or any judgment, order, rule or regulation of any court or
arbitrator or governmental or regulatory authority except, in the case of clauses (i) and (iii)
above, for any such default or violation that would not, individually or in the aggregate, have a
Material Adverse Effect.



     (o) No Consents Required. No consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or governmental or regulatory authority is
required for the execution, delivery and performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated by this Agreement, except for the
registration of the Shares under the Securities Act and such consents, approvals, authorizations,
orders and registrations or qualifications as may be required under applicable state securities
laws in connection with the purchase and distribution of the Shares by the Underwriter.



     (p) Legal Proceedings. Except as described in the Registration Statement, the Time of Sale
Information and the Prospectus, there are no legal, governmental or regulatory investigations,
actions, suits or proceedings pending to which the Company or any of its subsidiaries is or may be
a party or to which any property of the Company or any of its subsidiaries is or may be the subject
that, individually or in the aggregate, if determined adversely to the Company or any of its
subsidiaries, could reasonably be expected to have a Material Adverse Effect or materially and
adversely affect the ability of the Company to perform its obligations under this Agreement; no
such investigations, actions, suits or proceedings are threatened in writing or, to the best
knowledge of the Company, contemplated by any governmental or regulatory authority or threatened by
others; and (i) there are no current or pending legal, governmental or regulatory actions, suits or
proceedings that are required under the Securities Act to be described in the Registration
Statement that are not so described in the Registration Statement, the Time of Sale Information and
the Prospectus and (ii) there are no statutes, regulations or contracts or other documents that are
required under the Securities Act to be filed as exhibits to the Registration Statement or
described in the Registration Statement or the Prospectus that are not so filed as exhibits to the
Registration Statement or described in the Registration Statement, the Time of Sale Information and
the Prospectus.









 



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     (q) Independent Accountants. Deloitte & Touche LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries are an independent registered public
accounting firm with respect to the Company and its consolidated subsidiaries within the applicable
rules and regulations adopted by the Commission and the Public Accounting Oversight Board (United
States) and as required by the Securities Act.



     (r) Title to Real and Personal Property. The Company and its significant subsidiaries have
good and marketable title, all items of real and personal property that are material to the
respective businesses of the Company and its subsidiaries taken as a whole, in each case free and
clear of all liens, encumbrances, claims and defects of title except those that (i) do not
materially interfere with the use made and proposed to be made of such property by the Company and
its subsidiaries or (ii) could not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect.



     (s) Title to Intellectual Property. The Company and its subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service mark registrations, copyrights, licenses and know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures) necessary for the conduct of their respective businesses; and the conduct of
their respective businesses will not conflict in any material respect with any such rights of
others, and the Company and its subsidiaries have not received any notice of any claim of
infringement or conflict with any such rights of others with respect to any of the foregoing which
singly or in the aggregate, if the subject of an enforceable decision, ruling or finding, would
have a Material Adverse Effect.



     (t) No Undisclosed Relationships. No relationship, direct or indirect, exists between or
among the Company or any of its subsidiaries, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of its subsidiaries, on the other, that
is required by the Securities Act to be described in the Registration Statement and the Prospectus
and that is not so described in such documents and in the Time of Sale Information.



     (u) Investment Company Act. The Company is not and, after giving effect to the offering and
sale of the Shares as described in the Registration Statement, the Time of Sale Information and the
Prospectus, will not be required to register as an “investment company” or an entity “controlled”
by an “investment company” within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations of the Commission thereunder (collectively, “Investment Company
Act”).



     (v) Public Utility Holding Company Act. Neither the Company nor any of its subsidiaries is a
“holding company” or a “subsidiary company” of a holding company or an “affiliate” thereof within
the meaning of the Public Utility Holding Company Act of 1935, as amended.



     (w) Taxes. Except as would not, individually, or in the aggregate, have a Material Adverse
Effect: (1) the Company and its subsidiaries have paid all federal, state, local and









 



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foreign taxes and filed all tax returns required to be paid or filed through the date hereof, other
than those being contested in good faith; and (2) except as otherwise disclosed in the Registration
Statement, the Time of Sale Information and the Prospectus, there is no tax deficiency that has
been, or is expected to be, asserted against the Company or any of its subsidiaries or any of their
respective properties or assets.



     (x) Licenses and Permits. The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by, and have made all declarations and
filings with, the appropriate federal, state, local or foreign governmental or regulatory
authorities that are necessary for the ownership or lease of their respective properties or the
conduct of their respective businesses as described in the Registration Statement, the Time of Sale
Information, and the Prospectus, except where the failure to possess or make the same would not,
individually or in the aggregate, have a Material Adverse Effect; and except as described in the
Registration Statement, the Time of Sale Information and the Prospectus, neither the Company nor
any of its subsidiaries has received notice of any revocation or modification of any such license,
certificate, permit or authorization which, individually or in the aggregate, would have a Material
Adverse Effect.



     (y) No Labor Disputes. No labor disturbance by or dispute with employees of the Company or
any of its subsidiaries exists or, to the best knowledge of the Company, is contemplated or
threatened and the Company is not aware of any existing or imminent labor disturbance by, or
dispute with, the employees of any of its or its subsidiaries’ principal suppliers, contractors or
customers, except as would not have a Material Adverse Effect.



     (z) Compliance With Environmental Laws. (i) The Company and its subsidiaries (x) are in
compliance with any and all applicable federal, state, local and foreign laws, rules, regulations,
requirements, decisions and orders relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or contaminants (collectively,
“Environmental Laws”); (y) have received and are in compliance with all permits, licenses,
certificates or other authorizations or approvals required of them under applicable Environmental
Laws to conduct their respective businesses; and (z) have not received notice of any actual or
potential liability for the investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, and (ii) there are no costs or liabilities
associated with Environmental Laws of or relating to the Company or its subsidiaries, except in the
case of each of (i)(x), (ii)(y) and (i)(z) above, for any such failure to comply, or failure to
receive required permits, licenses or approvals, or cost or liability as would not, individually or
in the aggregate, have a Material Adverse Effect.



     (aa) Compliance With ERISA. Except as would not have a Material Adverse Effect, each employee
benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), that is maintained, administered or contributed to by the Company or
any of its subsidiaries for employees or former employees of the Company and its subsidiaries has
been maintained in compliance with its terms and the requirements of any applicable statutes,
orders, rules and regulations, including but not limited to ERISA and the Internal Revenue Code of
1986, as amended (the “Code”); no prohibited transaction, within the meaning of Section 406 of
ERISA or Section 4975 of the Code, has









 



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occurred with respect to any such plan excluding transactions effected pursuant to a statutory or
administrative exemption; and for each such plan that is subject to the funding rules of Section
412 of the Code or Section 302 of ERISA, no “accumulated funding deficiency” as defined in Section
412 of the Code has been incurred, whether or not waived, and the fair market value of the assets
of each such plan (excluding for these purposes accrued but unpaid contributions) exceeds the
present value of all benefits accrued under such plan determined using reasonable actuarial
assumptions.



     (bb) Disclosure Controls. The Company and its subsidiaries maintain an effective system of
“disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that is
designed to ensure that information required to be disclosed by the Company in reports that it
files or submits under the Exchange Act is recorded, processed, summarized and reported within the
time periods specified in the Commission’s rules and forms, including controls and procedures
designed to ensure that such information is accumulated and communicated to the Company’s
management as appropriate to allow timely decisions regarding required disclosure. The Company and
its subsidiaries have carried out evaluations of the effectiveness of their disclosure controls and
procedures as required by Rule 13a-15 of the Exchange Act.



     (cc) Accounting Controls. The Company and its subsidiaries maintain systems of “internal
control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that comply
with the requirements of the Exchange Act and have been designed by, or under the supervision of,
their respective principal executive and principal financial officers, or persons performing
similar functions, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles, including, but not limited to internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Except as disclosed in the
Registration Statement, the Time of Sale Information and the Prospectus, there are no material
weaknesses in the Company’s internal controls.



     (dd) Insurance. The Company and its subsidiaries have insurance covering their respective
properties, operations, personnel and businesses, which insurance is in amounts and insures against
such losses and risks as it reasonably believes are adequate to protect the Company and its
subsidiaries and their respective businesses; and neither the Company nor any of its subsidiaries
has (i) received notice from any insurer or agent of such insurer that capital improvements or
other expenditures are required or necessary to be made in order to continue such insurance except
as would not have a Material Adverse Effect or (ii) any reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage expires or to









 



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obtain similar coverage at reasonable cost from similar insurers as may be necessary to continue
its business.



     (ee) No Unlawful Payments. Neither the Company nor any of its subsidiaries nor, to the best
knowledge of the Company, any director, officer, agent, employee or other person associated with or
acting on behalf of the Company or any of its subsidiaries has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to political
activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; (iii) violated or is in violation of any provision of
the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.



     (ff) Compliance with Money Laundering Laws. The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued, administered or
enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit
or proceeding by or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is
pending or, to the best knowledge of the Company, threatened.



     (gg) Compliance with OFAC. None of the Company, any of its subsidiaries or, to the knowledge
of the Company, any director, officer, agent, employee or Affiliate of the Company or any of its
subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Department of the Treasury (“OFAC”).



     (hh) No Restrictions on Subsidiaries. Except for material agreements filed as such with the
Company’s filings made pursuant to the Exchange Act and the documents executed and delivered on
October 28, 2005 in connection with the Company’s asset backed securitization facility, no
subsidiary of the Company is currently prohibited, directly or indirectly, under any material
agreement or other instrument to which it is a party or is subject, from paying any dividends to
the Company, from making any other distribution on such subsidiary’s capital stock, from repaying
to the Company any loans or advances to such subsidiary from the Company or from transferring any
of such subsidiary’s properties or assets to the Company or any other subsidiary of the Company.









 



12


     (ii) No Broker’s Fees. Neither the Company nor any of its subsidiaries is a party to any
contract, agreement or understanding with any person (other than this Agreement) that would give
rise to a valid claim against the Company or any of its subsidiaries or the Underwriter for a
brokerage commission, finder’s fee or like payment in connection with the offering and sale of the
Shares.



     (jj) No Registration Rights. Except for rights that have been waived, no person has the right
to require the Company or any of its subsidiaries to register any securities for sale under the
Securities Act by reason of the filing of the Registration Statement with the Commission or, to the
best knowledge of the Company, the sale of the Shares to be sold by the Selling Stockholder
hereunder.



     (kk) No Stabilization. The Company has not taken, directly or indirectly, any action designed
to or that could reasonably be expected to cause or result in any stabilization or manipulation of
the price of the Shares.



     (ll) Forward-Looking Statements. No forward-looking statement (within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act) contained in the Registration
Statement, the Time of Sale Information and the Prospectus has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.



     (mm) Sarbanes-Oxley Act. There is and has been no failure on the part of the Company or any
of the Company’s directors or officers, in their capacities as such, to comply in all material
respects with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related to
loans and Sections 302 and 906 related to certifications.



     (nn) Status under the Securities Act. The Company is not an ineligible issuer as defined
under the Securities Act, in each case at the times specified in the Securities Act in connection
with the offering of the Shares.



     (oo) New York Stock Exchange. The Shares are listed on the New York Stock Exchange (the
“Exchange”).



     4. Representations and Warranties of the Selling Stockholder. The Selling
Stockholder represents and warrants to each of the Underwriter and the Company that:



          (a) Required Consents; Authority. All consents, approvals, authorizations and orders
necessary for the execution and delivery by the Selling Stockholder of this Agreement, and for the
sale and delivery of the Shares to be sold by the Selling Stockholder hereunder, have been
obtained; and the Selling Stockholder has full right, power and authority to enter into this
Agreement, and to sell, assign, transfer and deliver the Shares to be sold by the Selling
Stockholder hereunder; this Agreement has been duly authorized, executed and delivered by the
Selling Stockholder.










 



13




          (b) No Conflicts. The execution, delivery and performance by the Selling Stockholder of this
Agreement, the sale of the Shares to be sold by the Selling Stockholder and the consummation by the
Selling Stockholder of the transactions herein contemplated will not (i) conflict with or result in
a breach or violation of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance upon any property or assets
of the Selling Stockholder pursuant to, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Selling Stockholder is a party or by which the Selling
Stockholder is bound or to which any of the property or assets of the Selling Stockholder is
subject, (ii) result in any violation of the provisions of the charter or by-laws or similar
organizational documents of the Selling Stockholder or (iii) result in the violation of any law or
statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or
regulatory agency.




          (c) Title to Shares. The Selling Stockholder has good and valid title to the Shares to be
sold at the Closing Date by the Selling Stockholder hereunder, free and clear of all liens,
encumbrances, equities or adverse claims; and, upon delivery of the certificates representing such
Shares and payment therefor pursuant hereto, good and valid title to such Shares, free and clear of
all liens, encumbrances, equities or adverse claims, will pass to the Underwriter.




          (d) No Stabilization. The Selling Stockholder has not taken and will not take, directly or
indirectly, any action designed to or that could reasonably be expected to cause or result in any
stabilization or manipulation of the price of the Shares.




          (e) Information Provided by the Selling Stockholder. The information furnished to the
Company in writing by the Selling Stockholder expressly for use in the Registration Statement, the
Prospectus (or any amendment or supplement thereto), any Issuer Free Writing Prospectus or any Time
of Sale Information (including any Time of Sale Information that has subsequently been amended),
which information shall solely consist of (i) the name and address of the Selling Stockholder and
(ii) the enumeration of the Shares to be sold by the Selling Stockholder to the Underwriter
pursuant to this Agreement does not and shall not contain any untrue statement.




          (f) Issuer Free Writing Prospectus. Other than the Preliminary Prospectus and the Prospectus,
the Selling Stockholder (including its agents and representatives, other than the Underwriter in
its capacity as such) has not made, used, prepared, authorized, approved or referred to and will
not prepare, make, use, authorize, approve or refer to any Issuer Free Writing Prospectus, other
than (i) any document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the
Securities Act or Rule 134 under the Securities Act or (ii) the documents listed on Annex C hereto.




          (g) Material Information. As of the date hereof and as of the Closing Date, that the sale of
the Shares by the Selling Stockholder is not and will not be prompted by any material information
concerning the Company that is not set forth in the Registration Statement, the Time of Sale
Information or the Prospectus.










 



14




          The Selling Stockholder specifically agrees that the obligations of the Selling Stockholder
hereunder shall not be terminated by operation of law, whether by the dissolution of the Selling
Stockholder, or by the occurrence of any other event. If the Selling Stockholder should be
dissolved, or if any other such event should occur, before the delivery of the Shares hereunder,
certificates representing such Shares shall be delivered by or on behalf of the Selling Stockholder
in accordance with the terms and conditions of this Agreement, shall be as valid as if such
dissolution or other event had not occurred.




     5. Further Agreements of the Company. The Company covenants and agrees with the
Underwriter that:



     (a) Required Filings. The Company will file the final Prospectus with the Commission within
the time periods specified by Rule 424(b) and Rule 430A, 430B or 430C under the Securities Act ,
will file any Issuer Free Writing Prospectus to the extent required by Rule 433 under the
Securities Act; and will file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as
the delivery of a prospectus is required in connection with the offering or sale of the Shares; and
the Company will furnish copies of the Prospectus and each Issuer Free Writing Prospectus (to the
extent not previously delivered) to the Underwriter in New York City prior to 10:00 A.M., New York
City time, on the business day next succeeding the date of this Agreement in such quantities as the
Underwriter may reasonably request.



     (b) Delivery of Copies. The Company will deliver, without charge, (i) to the Underwriter, two
signed copies of the Registration Statement as originally filed and each amendment thereto, in each
case including all exhibits and consents filed therewith and documents incorporated by reference
therein; and (ii) to the Underwriter (A) a conformed copy of the Registration Statement as
originally filed and each amendment thereto (without exhibits) and (B) during the Prospectus
Delivery Period (as defined below), as many copies of the Prospectus (including all amendments and
supplements thereto and documents incorporated by reference therein) and each Issuer Free Writing
Prospectus as the Underwriter may reasonably request. As used herein, the term “Prospectus
Delivery Period” means such period of time after the first date of the public offering of the
Shares as in the opinion of counsel for the Underwriter a prospectus relating to the Shares is
required by law to be delivered (or required to be delivered but for Rule 172 under the Securities
Act) in connection with sales of the Shares by the Underwriter.



     (c) Amendments or Supplements, Issuer Free Writing Prospectuses. Before preparing, using,
authorizing, approving, referring to or filing any Issuer Free Writing Prospectus, and before
filing any amendment or supplement to the Registration Statement or the Prospectus, whether before
or after the time that the Registration Statement becomes effective, the Company will furnish to
the Underwriter and counsel for the Underwriter a copy of the proposed Issuer Free Writing
Prospectus, amendment or supplement for review and will not prepare, use, authorize, approve, refer
to or file any such Issuer Free Writing Prospectus or file any such proposed amendment or
supplement to which the Underwriter reasonably objects.









 



15


     (d) Notice to the Underwriter. The Company will advise the Underwriter promptly, and confirm
such advice in writing, (i) when any amendment to the Registration Statement has been filed or
becomes effective; (ii) when any supplement to the Prospectus or any Issuer Free Writing Prospectus
or any amendment to the Prospectus has been filed; (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to the Prospectus or the
receipt of any comments from the Commission relating to the Registration Statement or any other
request by the Commission for any additional information; (iv) of the issuance by the Commission of
any order suspending the effectiveness of the Registration Statement or preventing or suspending
the use of any Preliminary Prospectus or the Prospectus or the initiation or threatening of any
proceeding for that purpose or pursuant to Section 8A of the Securities Act; (v) of the occurrence
of any event within the Prospectus Delivery Period as a result of which the Prospectus, the Time of
Sale Information or any Issuer Free Writing Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the light of the
circumstances existing when the Prospectus, the Time of Sale Information or any Issuer Free Writing
Prospectus is delivered to a purchaser, not misleading; and (vi) of the receipt by the Company of
any notice with respect to any suspension of the qualification of the Shares for offer and sale in
any jurisdiction or the initiation or threatening of any proceeding for such purpose; and the
Company will use its best efforts to prevent the issuance of any such order suspending the
effectiveness of the Registration Statement, preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification of the Shares and, if any such
order is issued, will obtain as soon as possible the withdrawal thereof.



     (e) Ongoing Compliance. (1) If during the Prospectus Delivery Period (i) any event shall
occur or condition shall exist as a result of which the Prospectus as then amended or supplemented
would include any untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, not misleading or (ii) it
is necessary to amend or supplement the Prospectus to comply with law, the Company will immediately
notify the Underwriter thereof and forthwith prepare and, subject to paragraph (c) above, file with
the Commission and furnish to the Underwriter and to such dealers as the Underwriter may designate,
such amendments or supplements to the Prospectus as may be necessary so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the circumstances existing when
the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply
with law and (2) if at any time prior to the Closing Date (i) any event shall occur or condition
shall exist as a result of which the Time of Sale Information as then amended or supplemented would
include any untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances, not misleading or (ii) it
is necessary to amend or supplement the Time of Sale Information to comply with law, the Company
will immediately notify the Underwriter thereof and forthwith prepare and, subject to paragraph (c)
above, file with the Commission (to the extent required) and furnish to the Underwriter, such
amendments or supplements to the Time of Sale Information as may be necessary so that the
statements in the Time of Sale Information as so









 



16



amended or supplemented will not, in the light of the circumstances, be misleading or so that the
Time of Sale Information will comply with law.



     (f) Blue Sky Compliance. The Company will qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Underwriter shall reasonably request and
will continue such qualifications in effect so long as required for distribution of the Shares;
provided that the Company shall not be required to (i) qualify as a foreign corporation or
other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be
required to so qualify, (ii) file any general consent to service of process in any such
jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so
subject.



     (g) Earning Statement. The Company will make generally available to its security holders and
the Underwriter as soon as practicable an earning statement that satisfies the provisions of
Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder covering
a period of at least twelve months beginning with the first fiscal quarter of the Company occurring
after the “effective date” (as defined in Rule 158) of the Registration Statement.



     (h) Clear Market. For a period of 30 days after the date of the public offering of the
Shares, the Company will not (i) offer, pledge, announce the intention to sell, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly,
any shares of Stock or any securities convertible into or exercisable or exchangeable for Stock or
(ii) enter into any swap or other agreement that transfers, in whole or in part, any of the
economic consequences of ownership of the Stock, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of Stock or such other securities, in cash or
otherwise, without the prior written consent of the Underwriter, other than the Shares to be sold
hereunder and any shares of Stock of the Company issued upon the exercise of options granted under
existing employee stock option plans. Notwithstanding the foregoing, if (1) during the last 17 days
of the 30-day restricted period, the Company issues an earnings release or material news or a
material event relating to the Company occurs; or (2) prior to the expiration of the 30-day
restricted period, the Company announces that it will release earnings results during the 16-day
period beginning on the last day of the 30-day period, the restrictions imposed by this Agreement
shall continue to apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event.



     (i) No Stabilization. The Company will not take, directly or indirectly, any action designed
to or that could reasonably be expected to cause or result in any stabilization or manipulation of
the price of the Shares.



     (j) Record Retention. The Company will, pursuant to reasonable procedures developed in good
faith, retain copies of each Issuer Free Writing Prospectus that is not filed with the Commission
in accordance with Rule 433 under the Securities Act.









 



17


     6. Further Agreements of the Selling Stockholder. The Selling Stockholder covenants
and agrees with the Underwriter that:



     (a) Clear Market. For a period of 30 days after the date of the public offering of the
Shares, the Selling Stockholder will not (i) offer, pledge, announce the intention to sell, sell,
contract to sell, sell any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or
indirectly, any shares of Stock or any securities convertible into or exercisable or exchangeable
for Stock or (ii) enter into any swap or other agreement that transfers, in whole or in part, any
of the economic consequences of ownership of the Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Stock or such other securities, in cash or
otherwise or (iii) make any demand for or exercise any right with respect to the registration of
any shares of Stock or any security convertible into or exercisable or exchangeable for Stock
without the prior written consent of the Underwriter, in each case other than the Shares to be sold
by the Selling Stockholder hereunder. Notwithstanding the foregoing, if (1) during the last 17 days
of the 30-day restricted period, the Company issues an earnings release or material news or a
material event relating to the Company occurs; or (2) prior to the expiration of the 30-day
restricted period, the Company announces that it will release earnings results during the 16-day
period beginning on the last day of the 30-day period, the restrictions imposed by this Agreement
shall continue to apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event.



     (b) Tax Form. It will deliver to the Underwriter prior to or at the Closing Date a properly
completed and executed United States Treasury Department Form W-9 (or other applicable form or
statement specified by the Treasury Department regulations in lieu thereof) in order to facilitate
the Underwriter’s documentation of their compliance with the reporting and withholding provisions
of the Tax Equity and Fiscal Responsibility Act of 1982 with respect to the transactions herein
contemplated.



          7. Certain Agreements of the Underwriter. The Underwriter hereby represents and
agrees that:




     (a) It has not and will not use, authorize use of, refer to, or participate in the planning
for use of, any “free writing prospectus”, as defined in Rule 405 under the Securities Act (which
term includes use of any written information furnished to the Commission by the Company and not
incorporated by reference into the Registration Statement and any press release issued by the
Company) other than (i) a free writing prospectus that contains no “issuer information” (as defined
in Rule 433(h)(2) under the Securities Act) that was not included (including through incorporation
by reference) in a previously filed Issuer Free Writing Prospectus, (ii) any Issuer Free Writing
Prospectus listed on Annex C, or (iii) any free writing prospectus prepared by the Underwriter and
approved by the Company in advance in writing (each such free writing prospectus referred to in
clauses (i) or (iii), an “Underwriter Free Writing Prospectus”).



     (b) It has not and will not distribute any Underwriter Free Writing Prospectus referred to in
clause (a)(i) in a manner reasonably designed to lead to its broad unrestricted dissemination.









 



18


     (c) It has not and will not, without the prior written consent of the Company, use any free
writing prospectus that contains the final terms of the Shares unless such terms have previously
been included in a free writing prospectus filed with the Commission; provided that Underwriter may
use a term sheet substantially in the form of Annex D hereto without the consent of the Company;
provided further that any Underwriter using such term sheet shall notify the Company, and provide a
copy of such term sheet to the Company, prior to, or substantially concurrently with, the first use
of such term sheet.



     (d) It will, pursuant to reasonable procedures developed in good faith, retain copies of each
free writing prospectus used or referred to by it, in accordance with Rule 433 under the Securities
Act.



     (e) It is not subject to any pending proceeding under Section 8A of the Securities Act with
respect to the offering (and will promptly notify the Company if any such proceeding against it is
initiated during the Prospectus Delivery Period).



     8. Conditions of Underwriter’s Obligations. The obligation of each Underwriter to
purchase the Shares on the Closing Date as provided herein is subject to the performance by the
Company and the Selling Stockholder of their respective covenants and other obligations hereunder
and to the following additional conditions:



     (a) The Company Purchase Obligation. At Closing Time, concurrently with the closing of this
offering, the Company shall have purchased from the Underwriter at the Purchase Price, pursuant to
the documents reasonably satisfactory to the Underwriter, 2,439,024 of the Shares, as set forth in
the Prospectus.



     (b) Registration Compliance; No Stop Order. No order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceeding for such purpose or pursuant to
Section 8A under the Securities Act shall be pending before or threatened by the Commission; the
Prospectus and each Issuer Free Writing Prospectus shall have been timely filed with the Commission
under the Securities Act (in the case of an Issuer Free Writing Prospectus, to the extent required
by Rule 433 under the Securities Act) and in accordance with Section 5(a) hereof; and all requests
by the Commission for additional information shall have been complied with to the reasonable
satisfaction of the Underwriter.



     (c) Representations and Warranties. The respective representations and warranties of the
Company and the Selling Stockholder contained herein shall be true and correct on the date hereof
and on and as of the Closing Date; and the statements of the Company and its officers and of the
Selling Stockholder made in any certificates delivered pursuant to this Agreement shall be true and
correct on and as of the Closing Date.



     (d) No Downgrade. Subsequent to the execution and delivery of this Agreement, (i) no
downgrading shall have occurred in the rating accorded any securities or preferred stock of or
guaranteed by the Company or any of its subsidiaries by any “nationally recognized statistical









 



19



rating organization”, as such term is defined by the Commission for purposes of Rule 436(g)(2)
under the Securities Act and (ii) no such organization shall have publicly announced that it has
under surveillance or review, or has changed its outlook with respect to, its rating of any
securities or preferred stock of or guaranteed by the Company or any of its subsidiaries (other
than an announcement with positive implications of a possible upgrading).



     (e) No Material Adverse Change. No event or condition of a type described in Section 3 (g)
hereof shall have occurred or shall exist, which event or condition is not described in the Time of
Sale Information (excluding any amendment or supplement thereto) and the Prospectus (excluding any
amendment or supplement thereto) and the effect of which in the judgment of the Underwriter makes
it impracticable or inadvisable to proceed with the offering, sale or delivery of the Shares on the
Closing Date on the terms and in the manner contemplated by this Agreement, the Time of Sale
Information and the Prospectus.



     (f) Officer’s Certificate. The Underwriter shall have received on and as of the Closing Date
a certificate of the chief financial officer or chief accounting officer of the Company and one
additional senior executive officer of the Company who is satisfactory to the Underwriter (i)
confirming that such officers have carefully reviewed the Registration Statement, the Time of Sale
Information and the Prospectus and, to the best knowledge of such officers, the representations of
the Company set forth in Sections 3(b) and 3(d) hereof are true and correct, (ii) confirming that
the other representations and warranties of the Company in this Agreement are true and correct and
that the Company has complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to such Closing Date and (iii) confirming the effect
set forth in paragraphs (8)(b), (d) and (e) above. The Underwriter shall have received on and as
of the Closing Date a certificate of the chief financial officer or chief accounting officer of the
Selling Stockholder and one additional senior executive officer of the Selling Stockholder who is
satisfactory to the Underwriter of the Selling Stockholder, in form and substance reasonably
satisfactory to the Underwriter, confirming that the representations of the Selling Stockholder in
this agreement are true and correct and that the Selling Stockholder has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or
prior to such Closing Date.



     (g) Comfort Letters. On the date of this Agreement and on the Closing Date, Deloitte & Touche
LLP shall have furnished to the Underwriter, at the request of the Company, letters, dated the
respective dates of delivery thereof and addressed to the Underwriter, in form and substance
reasonably satisfactory to the Underwriter, containing statements and information of the type
customarily included in accountants’ “comfort letters” to underwriters with respect to the
financial statements and certain financial information contained or incorporated by reference in
the Registration Statement, the Time of Sale Information and the Prospectus; provided, that the
letter delivered on the Closing Date shall use a “cut-off” date no more than three business days
prior to such Closing Date.



     (h) Opinion of Counsel for the Company. Gardere Wynne Sewell LLP, counsel for the Company,
shall have furnished to the Underwriter, at the request of the Company, their









 



20



written opinion, dated the Closing Date and addressed to the Underwriter, in form and substance
reasonably satisfactory to the Underwriter, to the effect set forth in Annex A hereto.



     (i) Opinion of Counsel for the Selling Stockholder. Burt M. Martin, General Counsel for the
Selling Stockholder, shall have furnished to the Underwriter, at the request of the Selling
Stockholder, his written opinion, dated the Closing Date and addressed to the Underwriter, in form
and substance reasonably satisfactory to the Underwriter, to the effect set forth in Annex B
hereto.



     (j) Opinion of Counsel for the Underwriter. The Underwriter shall have received on and as of
the Closing Date an opinion of Vinson & Elkins L.L.P., counsel for the Underwriter, with respect to
such matters as the Underwriter may reasonably request, and such counsel shall have received such
documents and information as they may reasonably request to enable them to pass upon such matters.



     (k) No Legal Impediment to Sale. No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any federal, state or foreign
governmental or regulatory authority that would, as of the Closing Date, prevent the issuance or
sale of the Shares; and no injunction or order of any federal, state or foreign court shall have
been issued that would, as of the Closing Date, prevent the sale of the Shares.



     (l) Good Standing. The Underwriter shall have received on and as of the Closing Date
satisfactory evidence of the good standing of the Company and Universal Compression, Inc., in each
case in writing or any standard form of telecommunication from the appropriate Governmental
Authorities of such jurisdictions.



     (m) Additional Documents. On or prior to the Closing Date, the Company and the Selling
Stockholder shall have furnished to the Underwriter such further certificates and documents as the
Underwriter may reasonably request.



     All opinions, letters, certificates and evidence mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Underwriter.



     9. Indemnification and Contribution.



     (a) Indemnification of the Underwriter by the Company. The Company agrees to indemnify and
hold harmless the Underwriter, its affiliates, directors and officers and each person, if any, who
controls the Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages and liabilities (including,
without limitation, legal fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that
arise out of, or are based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order









 



21



to make the statements therein, not misleading, (ii) or any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus (or any amendment or supplement thereto),
any Issuer Free Writing Prospectus or any Time of Sale Information (including any Time of Sale
Information that has subsequently been amended), or caused by any omission or alleged omission to
state therein a material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, in each case except insofar as such
losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in conformity with any
information relating to the Underwriter furnished to the Company in writing by the Underwriter
expressly for use therein, it being understood and agreed that the only such information furnished
by the Underwriter consists of the information described as such in subsection (c) below.



     (b) Indemnification of the Underwriter by the Selling Stockholder. The Selling Stockholder
agrees to indemnify and hold harmless the Underwriter, its affiliates, directors and officers and
each person, if any, who controls the Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in
paragraph (a) above, in each case except insofar as such losses, claims, damages or liabilities
arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with any information relating to the Underwriter
furnished to the Company in writing by the Underwriter expressly for use in the Registration
Statement, the Prospectus (or any amendment or supplement thereto), any Issuer Free Writing
Prospectus or any Time of Sale Information, it being understood and agreed that the only such
information furnished by the Underwriter consists of the information described as such in
subsection (c) below; provided, however, that (i) the Selling Stockholder’s agreement to indemnify
and hold harmless hereunder shall only apply insofar as such losses, claims, damages or liabilities
arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with any information relating to the Selling
Stockholder furnished to the Company in writing by the Selling Stockholder expressly for use in the
Registration Statement, the Prospectus (or any amendment or supplement thereto), any Issuer Free
Writing Prospectus or any Time of Sale Information (including any Time of Sale Information that has
subsequently been amended), it being expressly acknowledged and agreed by the parties to this
Agreement that the only information so furnished by the Selling Stockholder is that referenced in
Section 4(e) of this Agreement, and (ii) the aggregate amount of the Selling Shareholder’s
liability pursuant to this Section 9(b) shall not exceed the aggregate amount of net proceeds
received by the Selling Stockholder from the sale of its Shares hereunder.



     (c) Indemnification of the Company and the Selling Stockholder. The Underwriter agrees to
indemnify and hold harmless the Company, its directors, its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and the Selling Stockholder to the same extent as
the indemnity set forth in paragraph (a) above, but only with respect to any losses, claims,
damages or liabilities that arise out of, or are based upon, any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity with any information
relating to the Underwriter furnished to the Company in writing by the









 



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Underwriter expressly for use in the Registration Statement, the Prospectus (or any amendment or
supplement thereto), any Issuer Free Writing Prospectus or any Time of Sale Information, it being
understood and agreed upon that the only such information furnished by the Underwriter consists of
the information in the Prospectus described in paragraph 7 under the caption “Underwriting” related
to short sales and stabilization transaction.



     (d) Notice and Procedures. If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against any person in
respect of which indemnification may be sought pursuant to the preceding paragraphs of this Section
9, such person (the “Indemnified Person”) shall promptly notify the person against whom such
indemnification may be sought (the “Indemnifying Person”) in writing; provided that the
failure to notify the Indemnifying Person shall not relieve it from any liability that it may have
under this Section 9 except to the extent that it has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure; and provided,
further, that the failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have to an Indemnified Person otherwise than under this Section 9. If any
such proceeding shall be brought or asserted against an Indemnified Person and it shall have
notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably
satisfactory to the Indemnified Person (who shall not, without the consent of the Indemnified
Person, be counsel to the Indemnifying Person) to represent the Indemnified Person in such
proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as
incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to
the contrary or (ii) the Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person. It is understood and agreed that the
Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to
any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be paid
or reimbursed as they are incurred. Any such separate firm for the Underwriter, its affiliates,
directors and officers and any control persons of the Underwriter shall be designated in writing by
the Underwriter, any such separate firm for the Company, its directors, its officers who signed the
Registration Statement and any control persons of the Company shall be designated in writing by the
Company and any such separate firm for the Selling Stockholder shall be designated in writing by
the Selling Stockholder. The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such consent or if there be a
final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified
Person from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested
that an Indemnifying Person reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by this paragraph, the Indemnifying Person shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is entered into more than 30
days after receipt by the Indemnifying Person of such request and (ii) the Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such request prior to the date
of such settlement. No Indemnifying Person shall, without the written









 



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consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in
respect of which any Indemnified Person is or could have been a party and indemnification could
have been sought hereunder by such Indemnified Person, unless such settlement (x) includes an
unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to
such Indemnified Person, from all liability on claims that are the subject matter of such
proceeding and (y) does not include any statement as to or any admission of fault, culpability or a
failure to act by or on behalf of any Indemnified Person.



     (e) Contribution. If the indemnification provided for in paragraphs (a), (b) and (c) above is
unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company and the
Selling Stockholder, on the one hand, and the Underwriter, on the other, from the offering of the
Shares or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause (i)
but also the relative fault of the Company and the Selling Stockholder, on the one hand, and the
Underwriter, on the other, in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Stockholder, on the one hand, and the
Underwriter, on the other, shall be deemed to be in the same respective proportions as the gross
proceeds (net of underwriting discount) received by the Selling Stockholder from the sale of the
Shares and the total underwriting discounts and commissions received by the Underwriter in
connection therewith, in each case as set forth in the table on the cover of the Prospectus bear to
the aggregate offering price of the Shares. The relative fault of the Company and the Selling
Stockholder, on the one hand, and the Underwriter, on the other, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by the
Company and the Selling Stockholder or by the Underwriter and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission.



     (f) Limitation on Liability. The Company, the Selling Stockholder and the Underwriter agree
that it would not be just and equitable if contribution pursuant to this Section 9 were determined
by pro rata allocation (even if the Selling Stockholder or the Underwriter were
treated as one entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (e) above. The amount paid or
payable by an Indemnified Person as a result of the losses, claims, damages and liabilities
referred to in paragraph (e) above shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such Indemnified Person in connection with any such
action or claim. Notwithstanding the provisions of this Section 9, in no event shall the
Underwriter be required to contribute any amount in excess of the amount by which the total
underwriting discounts and commissions received by the Underwriter with respect to the offering of
the Shares exceeds the amount of any damages that the Underwriter has otherwise been









 



24



required to pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. Notwithstanding the provisions of this Section 9, in no event shall the Selling
Stockholder be required to contribute any amount in excess of the aggregate amount of net proceeds
received by the Selling Stockholder from the sale of its Shares hereunder exceeds the amount of any
damages that the Selling stockholder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation.



     (g) Non-Exclusive Remedies. The remedies provided for in this Section 9 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any Indemnified Person
at law or in equity.



     10. Effectiveness of Agreement. This Agreement shall become effective upon the
execution and delivery hereof by the parties.



     11. Termination. This Agreement may be terminated in the absolute discretion of the
Underwriter, by notice to the Company and the Selling Stockholder, if after the execution and
delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by any of the Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade; (ii) trading of any securities issued or
guaranteed by the Company shall have been suspended on any exchange or in any over-the-counter
market; (iii) a general moratorium on commercial banking activities shall have been declared by
federal or New York State authorities; (iv) there shall have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis, either within or outside
the United States, that, in the judgment of the Underwriter, is material and adverse and makes it
impracticable or inadvisable to proceed with the offering, sale or delivery of the Shares on the
terms and in the manner contemplated by this Agreement, the Time of Sale Information and the
Prospectus; or (v) the representation in Section 3(b) is incorrect in any respect.



     12. Payment of Expenses. Whether or not the transactions contemplated by this
Agreement are consummated or whether this Agreement is terminated, the Company will pay or cause to
be paid all costs and expenses incident to the performance of its obligations hereunder, including
without limitation, (i) the costs incident to the authorization, issuance, sale, preparation and
delivery of the Shares and any taxes payable in that connection; (ii) the costs incident to the
preparation, printing and filing under the Securities Act of the Registration Statement, any Issuer
Free Writing Prospectus, any Time of Sale Information and the Prospectus (including all exhibits,
amendments and supplements thereto) and the distribution thereof; (iii) the costs of reproducing
and distributing this Agreement; (iv) the fees and expenses of the Company’s counsel and
independent accountants; (v) the fees and expenses incurred in connection with the registration or
qualification and determination of eligibility for investment of the Shares under the laws of such
jurisdictions as the Underwriter may designate and the preparation, printing and distribution of a
Blue Sky Memorandum (excluding the related fees and expenses of counsel for the Underwriter); (vi)
the cost of preparing stock certificates; (vii) the costs and charges of any









 



25



transfer agent and any registrar; (viii) all expenses and application fees incurred in connection
with any filing with, and clearance of the offering by, the National Association of Securities
Dealers, Inc.; (ix) all expenses incurred by the Company in connection with any “road show”
presentation to potential investors; and (x) all expenses and application fees related to the
listing of the Shares on the Exchange; provided, however, that the Underwriter shall be responsible
for the fees and expenses of the Underwriter’s counsel whether or not the transactions contemplated
by this Agreement are consummated or whether this Agreement is terminated .



     13. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective successors and the officers
and directors and any controlling persons referred to in Section 9 hereof. Nothing in this
Agreement is intended or shall be construed to give any other person any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained herein. No
purchaser of Shares from the Underwriter shall be deemed to be a successor merely by reason of such
purchase.



     14. Survival. The respective indemnities, rights of contribution, representations,
warranties and agreements of the Company, the Selling Stockholder and the Underwriter contained in
this Agreement or made by or on behalf of the Company, the Selling Stockholder or the Underwriter
pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery
of and payment for the Shares and shall remain in full force and effect, regardless of any
termination of this Agreement or any investigation made by or on behalf of the Company, the Selling
Stockholder or the Underwriter.



     15. Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise
expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities
Act; (b) the term “business day” means any day other than a day on which banks are permitted or
required to be closed in New York City; and (c) the term “subsidiary” has the meaning set forth in
Rule 405 under the Securities Act; and (d) the term “significant subsidiary” has the meaning set
forth in Rule 1-02 of Regulation S-X under the Exchange Act.



     16. Miscellaneous. (a) Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or transmitted and confirmed by
any standard form of telecommunication. Notices to the Underwriter shall be given to J.P. Morgan
Securities Inc., 277 Park Avenue, New York, New York 10172 (fax: (212) 622-8358); Attention: Equity
Syndicate Desk. Notices to the Company shall be given to it at 4444 Brittmoore Road, Houston,
Texas 77041 (Fax: (713) 466-6720); Attention: D. Bradley Childers. Notices to the Selling
Stockholder shall be given at 515 Post Oak Boulevard, Suite 600 Houston, Texas 77027, (Fax: (713)
693-4480); Attention: Burt M. Martin, General Counsel.



     (b) Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.









 



26


     (c) Counterparts. This Agreement may be signed in counterparts (which may include
counterparts delivered by any standard form of telecommunication), each of which shall be an
original and all of which together shall constitute one and the same instrument.



     (d) Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any
consent or approval to any departure therefrom, shall in any event be effective unless the same
shall be in writing and signed by the parties hereto.



     (e) Headings. The headings herein are included for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this Agreement.









 



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     If the foregoing is in accordance with your understanding, please indicate your
acceptance of this Agreement by signing in the space provided below.



	 	 	 	 	 
	 	Very truly yours,





UNIVERSAL COMPRESSION HOLDINGS, INC.

 	 
	 	By:  	/s/ D. Bradley Childers
 	 
	 	 	Name:  	D. Bradley Childers 	 
	 	 	Title:  	Senior Vice President and
General Counsel 	 
	 
	 	WEATHERFORD INTERNATIONAL LTD., the 

Selling Stockholder

 	 
	 	By:  	/s/ Lisa W. Rodriguez
 	 
	 	 	Name:  	Lisa W. Rodriguez 	 
	 	 	Title:  	Senior Vice President and
 Chief Financial Officer 	 
	 



Accepted: December 8, 2005




J.P. MORGAN SECURITIES INC.




	 	 	 
	By

	 	/s/ Yaw Asamoah — Duodu
	 

	 	 
	 

	 	Authorized Signatory