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EXHIBIT 10.3    
  

MASTER EQUIPMENT LEASE AGREEMENT  

 between  

 BRL UNIVERSAL COMPRESSION FUNDING I 2002, L.P.

as Head Lessor  

 and  

 UCO COMPRESSION 2002 LLC

as Head Lessee  

 Dated as of December 31, 2002  

        As
further described in Section 27 hereof, certain of the Head Lessor's interests in this Head Lease have been assigned to and are subject
to a first priority security interest in favor of Wells Fargo Bank Minnesota, National Association, as indenture trustee (together with its successors and assigns, the
"Indenture Trustee") under and to the extent set forth in the Indenture, dated as of December 31, 2002,
between the Head Lessor and the Indenture Trustee, as such Indenture may be amended, supplemented or otherwise modified in accordance with the terms thereof. 

 
 
 

TABLE OF CONTENTS    
  

	 
	 	 
	 	 
	 	Page

	1.	 	Definitions	 	1
	2.	 	General Provisions.	 	1
	 	 	  2.1.	 	Agreement for Leasing of Head Lessor Compressors.	 	1
	 	 	  2.2.	 	Monthly Lease Payment, Scheduled Deposits and Additional Payment.	 	1
	 	 	  2.3.	 	Supplemental Rent	 	1
	 	 	  2.4.	 	Payments of Rent	 	1
	 	 	  2.5.	 	Minimum Payments and Deposits	 	2
	 	 	  2.6.	 	Nature of Payment, Taxes.	 	2
	 	 	  2.7.	 	Quiet Enjoyment Intention of the Parties	 	2
	 	 	  2.8.	 	Characterization of Head Lease	 	3
	 	 	  2.9.	 	Overpayments	 	3
	3.	 	Delivery, Acceptance and Leasing of Head Lessor Compressors.	 	3
	4.	 	Term.	 	3
	5.	 	Return of Head Lessor Compressors.	 	3
	 	 	  5.1.	 	Redelivery	 	3
	 	 	  5.2.	 	Items to Accompany Redelivery	 	4
	 	 	  5.3.	 	Redelivery Condition	 	4
	 	 	  5.4.	 	Storage	 	5
	 	 	  5.5.	 	Timely Redelivery, Deemed Head Lessee Purchase Option	 	5
	 	 	  5.6.	 	Specific Performance.	 	6
	6.	 	Net Lease Agreement.	 	6
	7.	 	Head Lessor Compressors are Personal Property	 	6
	8.	 	Use of Head Lessor Compressors; Compliance with Laws	 	7
	9.	 	Maintenance and Repair of Head Lessor Compressors.	 	7
	10.	 	Alterations.	 	8
	11.	 	Assignment and Subleasing by Head Lessee.	 	8
	12.	 	Liens.	 	9
	13.	 	Loss, Damage or Destruction.	 	10
	 	 	13.1.	 	Risk of Loss, Damage or Destruction.	 	10
	 	 	13.2.	 	Payment Upon an Event of Loss	 	10
	 	 	13.3.	 	Application of Payments Not Relating to an Event of Loss	 	11
	 	 	13.4.	 	Substitution of Compressors	 	11
	14.	 	Insurance.	 	11
	15.	 	NO HEAD LESSOR WARRANTIES.	 	11
	16.	 	Assignment of Manufacturer Warranties	 	11
	17.	 	Head Lease Event of Default.	 	12
	19.	 	Head Lessor's Right to Perform for Head Lessee	 	15
	20.	 	Optional Conversion to Finance Lease	 	15
	21.	 	Head Lessee Purchase Option During Lease Term	 	16
	 	 	1.1.	 	Refinance Option	 	18
	22.	 	End of Lease Term Options	 	18
	23.	 	Head Lessee End of Term Head Lessee Purchase Option.	 	18
	 	 	23.1.	 	Election of Head Lessee Purchase Option	 	18
	 	 	23.2.	 	Payment of Purchase Price	 	18
	24.	 	Return Option	 	19
	 	 	24.1.	 	End of Term Lease Payment Adjustment	 	19
	 	 	24.2.	 	Renewal Option	 	20
	25.	 	General Indemnity.	 	20

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	26.	 	Tax Indemnity.	 	23
	27.	 	Security for Head Lessor's Obligations	 	24
	28.	 	Notices	 	24
	29.	 	GOVERNING LAW, SUBMISSION TO JURISDICTION: VENUE, WAIVER OF JURY TRIAL.	 	25
	 	 	29.1.	 	AGREEMENT INTERPRETATION	 	25
	 	 	29.2.	 	LEGAL FEES	 	25
	 	 	29.3.	 	WAIVER.	 	25
	30.	 	Miscellaneous.	 	26
	31.	 	Execution and Effectiveness.	 	26
	32.	 	Statutory References	 	26
	33.	 	Severability	 	26
	34.	 	Counterparts	 	26
	35.	 	Amendments and Waivers	 	26

EXHIBIT
A    Form of Lease Supplement No. 1 

ii

        This MASTER EQUIPMENT LEASE AGREEMENT, dated as of December 31, 2002 (as amended, supplemented or otherwise modified from time to time, this "Head
Lease"), is between BRL UNIVERSAL COMPRESSION FUNDING I 2002, L.P., a Delaware limited partnership (together with its successors and assigns, "Head
Lessor") and UCO COMPRESSION 2002 LLC, a Delaware limited liability company (together with its successors and assigns, "Head
Lessee"). 

WITNESSETH  

        WHEREAS, the Head Lessor desires to lease to the Head Lessee, and Head Lessee desires to lease from the Head Lessor, certain natural gas and coalbed methane
compressors and related equipment; 

        NOW
THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows: 

        1.    Definitions.    Capitalized terms used herein but not defined herein shall have meanings given to such terms in
Appendix A to the Indenture, dated as of December 31, 2002, between the Head Lessor, as Issuer, and Wells Fargo Bank Minnesota, National Association, as Indenture Trustee, as such Appendix A may be
amended, supplemented or otherwise modified from time to time in accordance with the provisions of the Indenture, and the rules of usage set forth in such Appendix A shall apply to this Head Lease. 

        2.    General Provisions.    

        2.1.    Agreement for Leasing of Head Lessor Compressors.    Subject to, and upon all of the terms and conditions of
this Head Lease, Head Lessor hereby agrees to lease to Head Lessee, and Head Lessee hereby agrees to lease from Head Lessor, the Head Lessor Compressors identified in each Lease Supplement from time
to time executed by the Head Lessor and the Head Lessee. Each Lease Supplement entered into by the parties hereto shall (i) constitute a separate non-cancellable lease agreement,
(ii) incorporate therein all of the terms and conditions of this Head Lease and (iii) contain such additional terms and conditions as agreed upon by the Head Lessee and Head Lessor and
consented to by any other Persons required to consent thereto pursuant to the Indenture or any other Related Documents. The term "Head Lease" shall
refer to this Head Lease and all Lease Supplements outstanding from time to time. 

        2.2.    Monthly Lease Payment, Scheduled Deposits and Additional Payment.    On each Rent Payment Date during the Term
of a Lease Supplement and on the Termination Date, the Head Lessee shall or shall cause to be: (i) paid to the Head Lessor in arrears, the Monthly Lease Payment and any Additional Payment then
due and (ii) deposited into the Collateral Account the Scheduled Deposit then due and payable. 

        2.3.    Supplemental Rent.    The Head Lessee agrees to pay to the Head Lessor on behalf of such Person as shall be
entitled thereto as expressly provided herein or in any other Related Document, as appropriate, any and all Supplemental Rent when and as the same shall become due and owing. Without limiting the Head
Lessee's obligation to pay amounts of Supplemental Rent in accordance with the Related Documents, the Head Lessee shall pay to the Head Lessor, on demand, as Supplemental Rent, interest at a rate
equal to the lesser of (x) the Overdue Rate and (y) the maximum rate permissible by law, on any part of any installment of Monthly Lease Payment, Additional Payment, Scheduled Deposit
and/or Supplemental Rent not paid when due, in each case for the period from the due date thereof until the same shall be paid in full. 

        2.4.    Payments of Rent.    All Monthly Lease Payments, Scheduled Deposits, Additional Payments and Supplemental Rent
shall be paid in Dollars by wire transfer in immediately available funds by not later than 11:00 a.m., New York City time, on the due date therefor. All Monthly Lease Payments, Scheduled Deposits,
Additional Payments and Supplemental Rent payable pursuant to the terms of any Lease Supplement shall be paid or caused to be paid by the Head Lessee. Such amounts will be held in the Head Lessee
Collection Account for the payment of such 

 

amounts and shall be distributed from the Head Lessee Collection Account to the Head Lessor pursuant to Section 7.2(c) of the Head Lessee
Security Agreement, and such amounts so distributed will be applied to the satisfaction of the obligations of the Head Lessee under this Head Lease with respect to the payment of such amounts. If any
payment hereunder is due on a date which is not a Business Day, then payment is to be made on the next following Business Day, and the amount thereof to be paid on such next Business Day shall be the
amount which would have been payable on the date which is not a Business Day (unless calculation of such amount is based on actual days elapsed). 

        2.5.    Minimum Payments and Deposits.    Notwithstanding anything contained in this Head Lease or any other Related
Document to the contrary, on each Rent Payment Date there will be due and payable hereunder an amount of Monthly Lease Payment, Scheduled Deposits, Additional Payments and Supplemental Rent that shall
be in an amount at least sufficient to pay in full any payments required to be made on the immediately following Payment Date of the principal balance of the Notes and the Certificates and any
Interest Expense, Commitment Fees, Premium, Indenture Trustee Fees, Partnership Priority Payments and other Indemnity Amounts, other than any such payment due as a
result of an acceleration of the Notes by reason of the occurrence and continuation of an Event of Default other than an Event of Default constituting a Head Lease Event of Default. 

        2.6.    Nature of Payment, Taxes.    

        (a)  All
payments of the Monthly Lease Payment, Scheduled Deposits, Additional Payment and Supplemental Rent shall be made free and clear of, and without deduction or
withholding for, any and all Taxes of any nature whatsoever except if, when and to the extent required by Applicable Law. If any such withholding Taxes are imposed on or against or with respect to any
amounts payable by the Head Lessee under this Head Lease, then the Head Lessee shall pay, as Supplemental Rent, an additional amount such that the net amount actually received by the Head Lessor or
such other Person entitled thereto will, after deduction of such Taxes and payment thereof by the Head Lessee to the applicable taxing authority, be equal on an After-Tax Basis to the amount that
would have been received by the Head Lessor or such other Person, as the case may be, in the absence of such withholding Taxes. 

        (b)  If
the Head Lessee is liable for the payment of such withholding Taxes, it shall pay the full amount of withholding Tax (including any additional withholding Tax as may
be payable as a result of the payment of additional amounts pursuant to Section 2.6(a)) to the competent tax authorities within the applicable
statutory deadlines, and upon such payment, deliver to the Head Lessor and the Control Party a duly executed certificate, confirming such payment, together with such other documents as the Head Lessor
or the Control Party may require under Applicable Law in order to obtain a refund or tax credit, if available, in respect of such withholding Taxes. 

        2.7.    Quiet Enjoyment Intention of the Parties.    Head Lessor agrees that so long as no Head Lease Event of Default
has occurred and is continuing, Head Lessor shall not take, or cause to be taken, any action (except for the creation of the Liens created by operation of the Related Documents), contrary to or
interfering with (i) Head Lessee's right to peaceful possession, use and quiet enjoyment of each Compressor that is then subject to the terms of this Head Lease or (ii) the right of any
User under any User Lease that is permitted in accordance with the provisions of Section 11 hereof to peaceful possession, use and quiet
enjoyment of each Compressor that is then subject to such User Lease; provided, however that, nothing in this  Section 2.7 shall prevent the
Head Lessor, the Indenture Trustee or the Control Party from exercising their inspection rights 

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with respect to such Head Lessor Compressors in accordance with the terms of the Head Lessee Security Agreement. 

        2.8.    Characterization of Head Lease For Tax Purposes.    Head Lessor and Head Lessee intend that for federal and
all state and local income tax purposes: (A) this Head Lease and each Lease Supplement will be treated as a financing arrangement; and (B) Head Lessee will be treated as the owner of the
Head Lessor Compressors for such tax purposes and will be entitled to all tax benefits ordinarily available to owners of property similar to the Head Lessor Compressors. Head Lessee shall claim the
cost recovery deductions associated with each Head Lessor Compressor and Head Lessor shall not,
unless required by law, take on its tax return a position inconsistent with Head Lessee's claim of such deductions. Notwithstanding the foregoing, neither party hereto (or any other party to any of
the Related Documents) has made, nor shall be deemed to have made, any representation or warranty as to the availability of any of the foregoing treatments under applicable accounting rules, tax,
bankruptcy, regulatory or commercial law or under any other set of rules. 

        2.9.    Overpayments.    To the extent that the Head Lessor shall at any time receive from the Head Lessee funds in
excess of the Monthly Lease Payment, Scheduled Deposit, Supplemental Rent and Additional Payment then due and payable, then, so long as no Trigger Event has occurred and is then continuing, the Head
Lessor shall return such excess to the Head Lessee on the next date that amounts are distributable under Section 7.2(c) of the Head Lessee Security Agreement, to the extent of any amounts
remaining in the Head Lessee Collection Account after distribution of amounts pursuant to clauses (1) through (20) of such Section 7.2(c). 

        3.    Delivery, Acceptance and Leasing of Head Lessor Compressors.    The execution by Head Lessor and Head Lessee of
a Lease Supplement shall (a) evidence that each Head Lessor Compressor leased under such Lease Supplement is leased under, and is subject to all of the terms, provisions and conditions of, this
Head Lease, and (b) constitute Head Lessee's unconditional and irrevocable acceptance of each such Head Lessor Compressor for all purposes of this Head Lease and the related Lease Supplement
without further action by any Person. Head Lessor shall not be liable to Head Lessee for any failure or delay in the delivery of any Head Lessor Compressor to Head Lessee. 

        4.    Term.    The Term for each Lease Supplement shall commence on (and include) the Effective Date specified in such
Lease Supplement and end on (and include) the earlier of (x) the date on which such Lease Supplement is terminated, with respect to all Head Lessor Compressors subject thereto, in accordance
with the terms hereof and (y) the Termination Date specified in such Lease Supplement (each such period from such Effective Date to such earlier date, a
"Term"). Notwithstanding the foregoing to the contrary, in the event (x) the Return Option is exercised but the Maximum Lease Payment Adjustment
has not been paid in full on the Termination Date pursuant to Section 24.1 hereof, or (y) the Head Lessee Purchase Option is exercised but
the Purchase Option Amount has not been paid in full on the Termination Date, the Term shall be automatically extended to coincide with the date the Maximum Lease Payment Adjustment has been paid in
full (in the case of clause (x)) or the date the Purchase Option Amount has been paid in full (in the case of clause (y)). 

        5.    Return of Head Lessor Compressors.    

        5.1.    Redelivery.    If the Head Lessee has elected to exercise the Return Option in accordance with the terms of  Section 24 hereof, then on or prior to the expiration or earlier termination of the Term of the
related Lease Supplement, Head Lessee shall dismantle (to the extent necessary to ship such Head Lessor Compressor), surrender and deliver possession to Head Lessor at the Redelivery Location of each
Head Lessor Compressor subject to the terms of such Lease Supplement. All such costs of dismantling, surrender and delivery shall be payable by the Head Lessee. 

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        5.2.    Items to Accompany Redelivery.    Each redelivery under  Section 5.1 shall be accompanied by all of the
following: 

	(i)
	a
certificate executed by a Responsible Officer of Head Lessee certifying that (A) Head Lessee has used best efforts to maintain all plans, specifications and operating,
maintenance and repair manuals prepared or reviewed by Head Lessee or any of its Affiliates for each Head Lessor Compressor being redelivered and (B) such Head Lessor Compressor is in the
condition required pursuant to the provisions of Section 5.3 hereof,

	(ii)
	a
copy of an inventory list for each Head Lessor Compressor,

	(iii)
	all
then current plans, specifications and operating, maintenance, and repair manuals and logs relating to such Head Lessor Compressor that have been retained by Head Lessee or any
of its Affiliates,

	(iv)
	with
respect to any Head Lessor Compressor which qualifies for or is subject to any manufacturer's maintenance, repair or warranty policy: (A) if such manufacturer is the Head
Lessee or an Affiliate thereof, Head Lessee shall cause such manufacturer to deliver to Head Lessor a statement or certificate that has been signed by an authorized representative of the manufacturer
to the availability of such maintenance, repair or warranty policy or (B) if the manufacturer is not the Head Lessee or an Affiliate thereof and generally provides its customers upon request a
statement or certificate attesting to the availability of such maintenance, repair or warranty policy, then Head Lessee shall utilize reasonable efforts to obtain from such manufacturer such a
statement or certificate,

	(v)
	all
operating licenses and agreements pertinent to the operation of each Head Lessor Compressor, (other than non-transferable licenses to use software), if any, that are capable of
being transferred,

	(vi)
	a
bill of sale from Head Lessee to Head Lessor, conveying to Head Lessor all of Head Lessee's interest in such Head Lessor Compressors and in all insurance proceeds related thereto
and manufacturer's and vendor's warranties applicable to such Head Lessor Compressors (including a termination of the assignment of warranties made pursuant to  Section 16),

	(vii)
	an
instrument duly executed by the Head Lessee acknowledging termination of the Lease Supplement and Head Lease with respect to such Head Lessor Compressors, and

	(viii)
	any
additional documentation reasonably requested by Head Lessor or any Control Party, at Head Lessee's cost and expense, relating to the redelivery of such Head Lessor Compressor. 

        5.3.    Redelivery Condition.    At the time of such return to Head Lessor, each Head Lessor Compressor (and each part
or component thereof) shall: 

	(i)
	meet
the original design specifications and operating standards of such Head Lessor Compressor;

	(ii)
	be
in as good operating condition, state of repair and appearance as when delivered to Head Lessee hereunder, and shall not have been subjected to excess wear and tear; provided,
that ordinary wear and tear as a result of normal and customary usage is excepted; and provided, further that "ordinary wear and tear" as used herein shall not be construed as permitting any material
broken, damaged or missing items 

4

 

or
components of any Head Lessor Compressor such that its value, utility or remaining useful life will be reduced; 

	(iii)
	be
in the condition required by Section 9 and with respect to any Head Lessor Compressor that qualifies for or is subject to
any manufacturer's maintenance, repair or warranty policy, such Head Lessor Compressor shall have been maintained and repaired in a manner consistent with such policy;

	(iv)
	have
no missing or damaged components such that its value, utility or remaining useful life will be reduced;

	(v)
	comply
with all laws and rules referred to in Section 8;

	(vi)
	have
attached or affixed thereto all Required Alterations and any addition, modification or improvement considered an accession thereto as provided in  Section 10;

	(vii)
	have
had removed therefrom in a workmanlike manner (A) at Head Lessor's option, any addition, modification or improvement which, as provided in  Section 10, is owned by Head Lessee, and
(B) any insignia or marking;

	(viii)
	be
free and clear of all Liens, other than (A) Head Lessor Liens and (B) if such Lease Supplement has been terminated prior to its scheduled termination date, any
User Lease that may be in effect with respect to such Head Lessor Compressor on such date;

	(ix)
	if
such Head Lessor Compressor qualifies for or is subject to any manufacturer's maintenance, repair or warranty policy, be properly deinstalled in a manner consistent with such
policy and in such a way that the Head Lessor Compressor remains eligible for or subject to such policy, as appropriate, and Head Lessee shall provide a certificate from a Responsible Officer
certifying that each Head Lessor Compressor was deinstalled in a manner consistent with such policy and remains eligible for or subject to such policy, as appropriate. Upon deinstallation, each Head
Lessor Compressor shall be secured properly for air or overland or other suitable transport; and

	(x)
	be
delivered to the Redelivery Location in the manner in which is customary for equipment of the same type as such Head Lessor Compressor. 

        Head
Lessee shall, at its own expense, make repairs necessary to restore each Head Lessor Compressor to the condition required by this  Section 5.3 prior to redelivery hereunder. 

        5.4.    Storage.    For the purpose of delivering possession of any Head Lessor Compressor to Head Lessor as above
required, Head Lessee shall at its own cost, expense and risk cause each such Head Lessor Compressor to be insured in accordance with Section 14
and stored at the Redelivery Location identified by Head Lessor at the risk of Head Lessee without charge to Head Lessor for insurance, rent or storage until all such Head Lessor Compressors have been
sold, leased or otherwise disposed of by Head Lessor; provided, however, Head Lessee's obligations under this  Section 5.4 shall terminate with
respect to each Head Lessor Compressor one (1) year after the required date of delivery of such Head
Lessor Compressor to the Redelivery Location in the condition required by Section 5.3 or, if later, one (1) year after the actual date of
delivery in such condition. 

        5.5.    Timely Redelivery, Deemed Head Lessee Purchase Option.    If Head Lessee has not timely satisfied the
obligations and conditions set forth in this Section 5 with respect to the redelivery of each and every Head Lessor Compressor in each Lease
Pool, then Head Lessee shall be deemed 

5

 

to have exercised the Head Lessee Purchase Option set forth in Section 23 hereof, and Head Lessee shall pay to Head Lessor on the Termination
Date the Purchase Option Amount with respect to all Head Lessor Compressors then subject to this Head Lease. 

        5.6.    Specific Performance.    The provisions of this  Section 5 are of the essence of this Head Lease, and the parties
hereto agree that Head Lessor shall be entitled to specific performance of the
covenants of Head Lessee set forth in this Section 5. 

        6.    Net Lease Agreement.    This Head Lease is a net lease agreement. Head Lessee acknowledges and agrees that its
obligations hereunder, including, without limitation, its obligations to pay Monthly Lease Payments, Scheduled Deposits, Additional Payments and Supplemental Rent payable hereunder, shall be absolute
and unconditional and irrevocable under any and all circumstances, shall not be subject to cancellation, termination, modification or repudiation by Head Lessee, and shall be paid and performed by
Head Lessee without notice or demand (except whenever this Head Lease expressly provides for notice or demand or both) and without any abatement, reduction, diminution, setoff, defense (other than
prior payment), counterclaim or recoupment whatsoever, including, without limitation, any abatement, reduction, diminution, setoff, defense (other than prior payment), counterclaim, withholding or
recoupment due or alleged to be due to, or by reason of, any past, present or future claims which Head Lessee may have against any Indemnitee, any sublessee or assignee of Head Lessee, any
manufacturer or supplier of any Compressor or any part thereof, or any other Person for any reason whatsoever, or any defect in any Compressor or any part thereof, or the condition, design, operation
or fitness for use thereof, any damage to, or any loss or destruction of, any Compressor or any part thereof, or any Liens or rights of others with respect to any Compressor or any part thereof, or
any default or failure to pay by any sublessee or assignee of Head Lessee, or any prohibition or interruption of or other restriction against Head Lessee's or any User's, sublessee's or assignee's
use, operation, possession, maintenance, insurance, improvement or return of any Compressor thereof, for any reason whatsoever, or any interference with such use, operation or possession by any
Person, or any default by Head Lessor in the performance of any of its obligations herein contained, or any other indebtedness or liability, howsoever and whenever arising, of Head Lessor, or any
other Indemnitee, any sublessee or assignee of Head Lessee, any other Person, or by reason of insolvency, bankruptcy or similar proceedings by or against Head Lessor, or any other Indemnitee, any
sublessee or assignee of Head Lessee, or any other Person, or for any other reason whatsoever, whether similar or dissimilar to any of the foregoing, any present or future law to the contrary
notwithstanding; it being the intention of the parties hereto that all Monthly Lease Payments, Scheduled Deposits, Additional Payments and Supplemental Rent payable by Head Lessee hereunder shall
continue to be payable in all events and in the manner and at the times herein provided, unless the obligation to pay the same shall be terminated pursuant to the express provisions of this Head
Lease. Nothing contained in this Section 6 shall: (a) affect any claim, action or right that Head Lessee may have against Head Lessor or
any other Person or (b) be considered as (i) a guaranty of the fair market value or useful life of any Compressor, (ii) a prohibition of assertion of any claim against any
manufacturer, supplier, dealer, vendor, contractor, subcontractor or installer with respect to any Compressor or any part thereof or (iii) a waiver by Head Lessee or any other Person of any of
its or their express rights under any of the Related Documents or of its or their right to assert and sue upon any claims it may have against any Person in one or more separate actions. 

        7.    Head Lessor Compressors are Personal Property.    It is the intention and understanding of both Head Lessor and
Head Lessee that the Head Lessor Compressors shall be and at all times remain personal property, notwithstanding the manner in which the Head Lessor Compressors may be attached or affixed to realty.
The Head Lessee agrees to take all actions that are necessary or desirable to ensure the continued characterization of the Head Lessor Compressors as personal property under Applicable Law. 

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        8.    Use of Head Lessor Compressors; Compliance with Laws.    Head Lessee agrees that each Head Lessor Compressor
will be used and operated in compliance with any and all insurance policy terms, conditions and provisions referenced in the Related Documents and in all material respects with all statutes, laws,
ordinances, rules and regulations of any federal, national, state or local governmental body, agency or authority applicable to the use and operation of such Head Lessor Compressor, including, without
limitation, environmental, noise and pollution laws (including notifications and reports), and that each Head Lessor Compressor will be used and operated solely in the manner for which it was intended
and in accordance with the license or certificate, if any, provided by the manufacturer thereof. Head Lessee agrees that no Head Lessor Compressor shall be used by Head Lessee other than in the
subleasing of such Head Lessor Compressor to Head Lessee's customers and no Head Lessor Compressor shall be used or located at a location outside of the United States. Head Lessee shall use reasonable
precautions to prevent loss or damage to each Head Lessor Compressor from fire and other hazards. Head Lessee shall not permit any Head Lessor Compressor to be used in any unlawful trade or in any
manner that would violate any law that would expose such Head Lessor Compressor to penalty, forfeiture or capture. Head Lessee shall not attach or incorporate any Head Lessor Compressor to or in any
other Head Lessor Compressor or other personal property or to or in any real property in a manner that could give rise to the assertion of any Lien on such Head Lessor Compressor by reason of such
attachment or the assertion of a claim that such Head Lessor Compressor has become a fixture and is subject to a Lien in favor of a third party. Head Lessee shall comply in all material respects with
environmental laws and maintain liability insurance as required pursuant to the Related Documents for all Head Lessor Compressors. 

        9.    Maintenance and Repair of Head Lessor Compressors.    Head Lessee, at its sole cost and expense shall maintain
(or cause to be maintained): 

	(i)
	each
Head Lessor Compressor in a manner consistent with Head Lessee's maintenance practices applicable to its other equipment of the same or similar type as such Head Lessor
Compressor, so as to keep each Head Lessor Compressor in good condition (ordinary wear and tear excepted),

	(ii)
	each
Head Lessor Compressor in all material respects in compliance with Applicable Law (including environmental laws),

	(iii)
	each
Head Lessor Compressor in compliance with the manufacturer's maintenance standards and procedures,

	(iv)
	each
Head Lessor Compressor in all respects in compliance with the insurance applicable to such Head Lessor Compressors,

	(v)
	liability
insurance as required pursuant to the Related Documents for all Head Lessor Compressors and

	(vi)
	all
records, logs and other materials required by any Governmental Authority having jurisdiction over any Head Lessor Compressor or Head Lessee, to be maintained in respect of such
Head Lessor Compressor. Head Lessee agrees to prepare and deliver to Head Lessor and the Control Party within a reasonable time prior to the required date of filing (or, to the extent permissible,
file on behalf of Head Lessor and the Indenture Trustee) any and all reports (other than income tax returns) to be filed by Head Lessor or the Indenture Trustee with any federal, national, state or
other regulatory authority by reason of the ownership by Head Lessor or the Indenture Trustee of any Head Lessor Compressor or the leasing thereof to Head Lessee to the extent any such reports are
required because of the nature of the Head Lessor Compressors. Head Lessee hereby waives any right now or hereafter conferred by law to make repairs on the Head Lessor Compressors at the expense of
Head Lessor. 

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        10.    Alterations.    

        (a)  Except
as required or permitted by the provisions of this Section 10, Head Lessee shall not modify or alter any
Head Lessor Compressor without the prior written approval of the Head Lessor and the Control Party. 

        (b)  In
case any Head Lessor Compressor (or any part or component thereof) is required to be altered, added to, replaced or modified in order to comply with any insurance
policies required pursuant to this Head Lease or Applicable Law (any such alteration, additional replacement or modification, a "Required Alteration"),
Head Lessee agrees to promptly make (or cause to be made) such Required Alteration at its own expense. Thereupon, title to such Required Alteration shall, without further act, immediately become the
property of Head Lessor, free and clear of all Liens, other than Head Lessor Liens and Permitted Encumbrances and such Required Alteration shall immediately become subject to the terms and conditions
of this Head Lease and the Lease Supplement to which the related Head Lessor Compressor is subject. 

        (c)  Head
Lessee may make any optional renovation, improvement, addition, or alteration to any Head Lessor Compressor ("Optional
Alteration") provided that such Optional Alteration does not impair the value, use or remaining useful life of such Head Lessor Compressor. In the event an Optional Alteration
is readily removable without impairing the value, use or remaining useful life of the Head Lessor Compressor, and is not a part or appliance which replaces any part or appliance originally
incorporated or installed in or attached to such Head Lessor Compressor on the Effective Date for the related Lease Supplement, the Head Lessee may (or, if requested by the Head Lessor shall) remove
such Optional Alteration whereupon such Optional Alteration will remain the property of Head Lessee.
To the extent such Optional Alteration is not readily removable without impairing the value, use or remaining useful life of the Head Lessor Compressor to which such Optional Alteration has been made,
or is a part or appliance which replaces any part or appliance originally incorporated or installed in or attached to such Head Lessor Compressor on the Effective Date for the related Lease
Supplement, such Optional Alteration shall, without further act, immediately be and become the property of, and title shall vest in, Head Lessor, free and clear of all Liens, other than Head Lessor
Liens and Permitted Encumbrances, and shall be subject to the terms of this Head Lease and the Lease Supplement to which the related Head Lessor Compressor is subject. Any parts installed or
replacements made by the Head Lessee upon any Head Lessor Compressor pursuant to its obligation to maintain and keep the Head Lessor Compressors in the condition required pursuant to the terms of this
Head Lease shall be considered accessions to such Head Lessor Compressor and ownership thereof shall be immediately vested in Head Lessor. 

        11.    Assignment and Subleasing by Head Lessee.    

        EXCEPT
AS SET FORTH IN THE MANAGEMENT AGREEMENT AND OTHERWISE EXPRESSLY PROVIDED IN THIS SECTION 11 AND EXCEPT PURSUANT TO LIENS
CREATED BY THE HEAD LESSEE SECURITY AGREEMENT AND OTHER RELATED DOCUMENTS, HEAD LESSEE SHALL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF THE HEAD LESSOR, EACH INTEREST RATE HEDGE PROVIDER AND THE
CONTROL PARTY, ASSIGN, TRANSFER OR ENCUMBER ITS RIGHTS, INTERESTS OR OBLIGATIONS HEREUNDER. ANY ATTEMPTED ASSIGNMENT, TRANSFER OR ENCUMBRANCE BY HEAD LESSEE OF ITS RIGHTS, INTERESTS OR OBLIGATIONS
HEREUNDER IN CONTRAVENTION OF THE PRECEDING SENTENCE SHALL BE NULL AND VOID. So long as no Head Lease Event of Default shall have occurred and be continuing, Head Lessee may, without the consent of
Head Lessor or any Entitled Party, sublease one or more Head Lessor Compressors to any User pursuant to the terms of a User Lease; provided, however,
that all of the following 

8

 

requirements shall be satisfied with respect to each such User Lease entered into pursuant to this Section 11: 

        (a)  such
User Lease, if for a period longer than thirty days, shall expire on or before, or automatically expire on or before, the expiration of the Term of the Lease
Supplement covering the Head Lessor Compressors subject to such User Lease, unless at the time such User Lease is entered into both of the following conditions have been satisfied: (i) the Head
Lessee is permitted to, and has elected to, exercise the Head Lessee Purchase Option in accordance with the provisions of Section 23 hereof and
has satisfied all of the conditions precedent set forth therein and (ii) no Trigger Event or Prospective Trigger Event shall have occurred and then be continuing; and 

        (b)  such
User Lease may contain a purchase option in favor of the User or any other provision pursuant to which the applicable User may obtain record or beneficial title to
the Head Lessor Compressor leased thereunder from Head Lessee; provided, however, that upon the exercise of such purchase option, Head Lessee shall
purchase such Head Lessor Compressor from the Head Lessor in accordance with Section 21(a) and either (i) substitute new
Compressor(s) for such purchased Head Lessor
Compressors in accordance with the provisions of Section 21(b) hereof or (ii) make a payment of Supplemental Rent on the next succeeding
Rent Payment Date in an amount equal to the Depreciated Value of such purchased Head Lessor Compressors (which amount shall be deposited into the Head Lessee Collection Account for application in
accordance with the Head Lessee Security Agreement). 

        For
so long as a Head Lease Event of Default has occurred and is continuing, Head Lessee shall not agree to enter into any additional subleases, or agree to extend the term of any then
existing sublease, of any Head Lessor Compressor without the prior consent of Head Lessor and the Control Party in each instance; provided, however, if
such Head Lease Event of Default is solely the result of a breach of a covenant or of covenants to (x) deliver financial or other information to Head Lessor or any Entitled Party or
(y) use, maintain or repair the Head Lessor Compressors in accordance with Sections 8, 9 and 10 (each of (x) and (y), a
"Limited Event of Default"), Head Lessee may agree to sublease or extend the term of any Head Lessor Compressor in accordance with the requirements set
forth in this Section 11. 

        Upon
request by Head Lessor, Head Lessee shall promptly deliver to Head Lessor, the Control Party and Deal Agent (x) a schedule of all User Leases of the Head Lessor Compressors
including Users certified by a Responsible Officer of Head Lessee and (y) for so long as a Head Lease Event of Default has occurred and is continuing, copies of each User Lease at the time in
effect. No such subleasing by Head Lessee will reduce or affect any of the obligations of Head Lessee hereunder or the rights of Head Lessor and the Control Party hereunder, and all of the obligations
of Head Lessee hereunder shall be and remain primary and shall continue in full force and effect as the obligations of a principal and not of a guarantor or surety. 

        12.    Liens.    Head Lessee shall not directly or indirectly create, incur, assume or suffer to exist any Lien on or
with respect to (a) any Head Lessor Compressor or any part thereof or Head Lessor's interest therein or proceeds thereof, (b) any insurances required hereunder or (c) this Head
Lease or any of Head Lessor's interests hereunder, except (i) Head Lessor Liens and (ii) in the case of the Head Lessor Compressors, Permitted Encumbrances. Head Lessee, at its own
expense, will promptly pay, satisfy and otherwise take such actions as may be necessary to keep this Head Lease and each Head Lessor Compressor subject hereto free and clear of, and to duly discharge
or eliminate (or bond in a manner satisfactory to Head Lessor and the Control Party), any Lien that may arise in violation of the foregoing. Head Lessee will notify Head Lessor, the Indenture Trustee
and the Control Party in writing promptly upon a Responsible Officer of Head Lessee obtaining knowledge of any Lien, other 

9

 

than Permitted Encumbrances, that shall attach to any Head Lessor Compressor and of the full particulars of such Lien. 

        13.    Loss, Damage or Destruction.    

        13.1.    Risk of Loss, Damage or Destruction.    Head Lessee hereby assumes all risk of loss, damage, theft, taking,
destruction, confiscation, requisition or commandeering, partial or complete, of or to each Head Lessor Compressor subject to this Head Lease ("Loss, Damage or
Destruction"), however caused or
occasioned except for Loss, Damage or Destruction caused by the gross negligence or willful misconduct of Head Lessor. Any such risk of Loss, Damage or Destruction shall be borne by Head Lessee with
respect to each such Head Lessor Compressor commencing on the Effective Date for the Lease Supplement covering such Head Lessor Compressor, and continuing until the earlier to occur of (x) the
return of such Head Lessor Compressor to Head Lessor in accordance with the provisions of Section 5 hereof or (y) the transfer of such
Head Lessor Compressor to Head Lessee in accordance with the provisions of Section 21 or 22. 

        13.2.    Payment Upon an Event of Loss.    If an Event of Loss occurs with respect to a Head Lessor Compressor subject
to this Head Lease during the Term, Head Lessee shall within thirty (30) days after the occurrence of such Event of Loss: (i) replace such Head Lessor Compressor in accordance with the
provisions of Section 13.4 hereof or (ii) pay to Head Lessor an amount equal to the sum of (A) all unpaid Monthly Lease Payments
(determined on a pro rata basis based on the number of horsepower of such Head Lessor Compressor relative to the total horse power of all Head Lessor
Compressors then subject to this Head Lease) due and payable for such Head Lessor Compressor, plus (B) the then Depreciated Value of such Head Lessor Compressor, plus (C) all other
Additional Payment, and Supplemental Rent (determined on a pro rata basis based on the number of horsepower of such Head Lessor Compressor relative to
the total horse power of all Head Lessor Compressors) due for such Head Lessor Compressor as of the date of payment of the amounts specified in the foregoing clauses (A) and (B), plus (D) such
additional amount as may be necessary so that, after distribution of such sum from the Head Lessee Collection Account pursuant to the provisions of the Head Lessee Security Agreement, the amount
actually received by the Head Lessor for deposit into the Trust Account equals the sum of (A), (B), and (C) above. So long as no Head Lease Event of Default is then continuing, any payments
received at any time by Head Lessor from any insurer or other third party as a result of the occurrence of such Event of Loss will be applied in reduction of Head Lessee's obligation to pay the
foregoing amounts (if not already paid by Head Lessee) or, if already paid by Head Lessee, will be applied to reimburse Head Lessee for its payment of such amount. If a Head Lease Event of Default
shall have occurred and be continuing, any such insurance proceeds shall be paid to, or retained by, Head Lessor or the Indenture Trustee and applied in accordance with the priority of payments
established under the Indenture. In the event that any payments received by Head Lessor or Indenture Trustee referred to in the immediately preceding sentence with respect to any Head Lessor
Compressor exceed any amounts due and owing by Head Lessee to Head Lessor under the Related Documents, then, provided there are no amounts then due and owing by Head Lessor to any Entitled Party under
the Related Documents, such excess shall forthwith be paid to Head Lessee. Upon payment in full of the amounts described in the first sentence of this  Section 13.2, (a) the Head
Lessee's obligations hereunder with respect to the applicable Head Lessor Compressor (other than those
expressly stated to survive the termination of this Head Lease) shall terminate, (b) all rights and interests of Head Lessor in such Head Lessor Compressor shall automatically cease and
(c) title to such Head Lessor Compressor shall vest in Head Lessee. Head Lessor will, at the request and cost of Head Lessee, furnish to or at the direction of Head Lessee, a bill of sale
without recourse or warranty (except as to the absence of Head Lessor Liens) and otherwise in form and substance reasonably satisfactory to Head Lessee and Head Lessor, evidencing the transfer to or
at the direction of Head Lessee, all of Head 

10

 

Lessor's right, title and interest in and to such Head Lessor Compressor(s), on an "as-is, where-is" basis. Following any such transfer, Head Lessee will be subrogated to all claims of Head Lessor,
if any, against third parties to the extent the same relate to physical damage to or loss of the transferred Head Lessor Compressor, which was the subject of such Event of Loss. 

        13.3.    Application of Payments Not Relating to an Event of Loss.    Any payments (including, without limitation,
insurance proceeds) received at any time by Head Lessor or Head Lessee from any Governmental Authority or other Person with respect to any loss or damage to any Head Lessor Compressor not constituting
an Event of Loss, will be applied directly in payment of repairs or for replacement of property in accordance with the provisions of Section 13
hereof, if not already paid by Head Lessee, or if already paid by Head Lessee and no Head Lease Event of Default shall have occurred and be continuing, shall be applied to reimburse Head Lessee for
such payment. Any balance remaining after making such payment in accordance with the provisions of said Sections with respect to such loss or damage shall be retained by Head Lessee. If any Head Lease
Event of Default shall have occurred and be continuing, all payments hereunder shall be paid to Head Lessor and applied in accordance with the priority of payments set forth in the Indenture. 

        13.4.    Substitution of Head Lessor Compressors.    So long as no Trigger Event or Prospective Trigger Event would
result therefrom, the Head Lessee may substitute one or more Eligible Compressors for any Head Lessor Compressor(s) for which an Event of Loss has occurred. Any such substitution shall be implemented
in accordance with and subject to the restrictions set forth in Section 21(b). 

        14.    Insurance.    

        Head
Lessee shall cause the Manager to maintain Property Insurance and Liability Insurance in accordance with the terms of  Section 5.7 of the Management Agreement. 

        15.    NO HEAD LESSOR WARRANTIES.    HEAD LESSOR HEREBY LEASES THE HEAD LESSOR COMPRESSORS TO HEAD LESSEE AS-IS
WHERE-IS, WITH ALL FAULTS, IF ANY, AND IN WHATEVER CONDITION SUCH COMPRESSORS MAY BE IN, AND EXPRESSLY DISCLAIMS AND MAKES NO REPRESENTATION OR WARRANTY, EITHER EXPRESSED OR IMPLIED, AS TO THE DESIGN,
CONDITION, QUALITY, CAPACITY, MERCHANTABILITY, DURABILITY, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF, OR ANY OTHER MATTER CONCERNING, SUCH COMPRESSORS. HEAD LESSEE HEREBY WAIVES ANY CLAIM
(INCLUDING ANY CLAIM BASED ON STRICT OR ABSOLUTE LIABILITY IN TORT OR INFRINGEMENT) IT MIGHT HAVE AGAINST HEAD LESSOR, ANY OTHER INDEMNITEE OR ANY OTHER PERSON FOR ANY LOSS, DAMAGE (INCLUDING
INCIDENTAL OR CONSEQUENTIAL DAMAGE) OR EXPENSE CAUSED BY THE COMPRESSORS OR BY HEAD LESSEE'S OR ANY SUBLESSEE'S LOSS OF USE THEREOF FOR ANY REASON WHATSOEVER, INCLUDING COMPLIANCE WITH ENVIRONMENTAL
LAWS (WHICH ITEMS OF HEAD LESSOR COMPRESSORS, HEAD LESSEE ACKNOWLEDGES, WERE SELECTED BY HEAD LESSEE ON THE BASIS OF ITS OWN JUDGMENT WITHOUT RELIANCE ON ANY STATEMENTS, REPRESENTATIONS, GUARANTIES OR
WARRANTIES MADE BY HEAD LESSOR OR ANY OTHER INDEMNITEE). 

        16.    Assignment of Manufacturer Warranties.    So long and only so long as (x) a Head Lease Event of Default
shall not have occurred and be continuing, (y) any Head Lessor Compressor shall be subject to this
Head Lease and (z) the Head Lessee shall be entitled to possession of such Head Lessor Compressor pursuant to the terms of this Head Lease, Head Lessor authorizes Head Lessee, at Head Lessee's
expense, to assert for Head Lessee's account, and assigns to Head Lessee all rights and powers of Head Lessor under any manufacturer's, vendor's or dealer's warranty on the Head Lessor 

11

 

Compressors or any part thereof and Head Lessor agrees to use reasonable efforts at Head Lessee's expense to assist Head Lessee in obtaining the benefits of such warranties;  provided, however, that Head
Lessee shall indemnify, protect, save, defend and hold harmless Head Lessor and each other Indemnitee from and against any
and all claims, and all costs, expenses, damages, losses and liabilities incurred or suffered by Head Lessor in connection therewith, as a result of, or incident to, any action by Head Lessee pursuant
to the foregoing authorization. 

        17.    Head Lease Event of Default.    The occurrence of any of the following specified events or conditions (whatever
the reason for such event or condition and whether such event or condition shall be voluntary or involuntary or come about or be effected by operation of law or pursuant to or in compliance with any
judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body) shall constitute a "Head Lease Event of
Default": 

        (a)  Head
Lessee shall fail to make any payment of Monthly Lease Payment on the date such payment becomes due and such failure shall continue unremedied for two (2)
Business Days after the due date thereof; or 

        (b)  Head
Lessee shall fail to pay in full all the Head Lessee Secured Obligations by the Final Maturity Date; or 

        (c)  the
Head Lessee shall incur or assume, or permit to exist, any Liens on the Collateral (except Permitted Encumbrances) and any such Liens shall continue to exist
unremedied for a period of ten (10) days after the earlier to occur of (i) receipt by Head Lessee of written notice thereof from the Head Lessor, the Indenture Trustee or any Entitled
Party or (ii) the date on which any of the president, any senior vice president or any executive vice president of Head Lessee shall have actual knowledge of such Liens; or 

        (d)  the
Head Lessor shall fail to have a first priority perfected security interest in all or any portion of the Head Lessee Collateral; or 

        (e)  Head
Lessee shall fail to perform or observe any covenant, condition, or agreement to be performed or observed by it under any Related Document (other than those
identified in clauses (a), (c) and (d) above and the failure to pay the Purchase Option Amount on the date when due) and, if such failure is capable of remedy, such failure shall continue
unremedied for a period of ten (10) days after the earlier to occur of (i) receipt by Head Lessee of written notice thereof from the Head Lessor, the Indenture
Trustee or any Entitled Party or (ii) the date on which any of the president, any senior vice president or any executive vice president of Head Lessee shall have actual knowledge of such
failure; or 

        (f)    any
representation or warranty made by Head Lessee in any of the Related Documents, or in any certificate delivered pursuant thereto, shall prove to be untrue in any
material respect on the date on which made and, if such misrepresentation or breach of warranty is capable of cure, such misrepresentation or breach of warranty continues unremedied for
fifteen (15) days after the earliest to occur of (i) receipt by Head Lessee of notice thereof from the Indenture Trustee or any Entitled Party or (ii) the Indenture Trustee or any
Entitled Party delivers a notice to the Head Lessee to such effect or (iii) the date on which any of the president, any senior vice president or any executive vice president of Head Lessee
shall have actual knowledge of such misrepresentation or breach of warranty; or 

        (g)  the
entry of a decree or order for relief by a court having jurisdiction in respect of the Head Lessee in any involuntary case under any applicable Insolvency Law, or
other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, or sequestrator (or other similar official) for the Head Lessee or for any substantial
part of its properties, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or 

12

 

        (h)  the
commencement by the Head Lessee of a voluntary case under any applicable Insolvency Law, or other similar law now or hereafter in effect, or the consent by the Head
Lessee to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee or sequestrator (or other similar official) of the Head Lessee or any substantial part of its
properties, or the making by the Head Lessee of any general assignment for the benefit of creditors, or the inability or the inability or failure by the Head Lessee generally to pay its debts as they
become due, or the taking of any action by the Head Lessee in furtherance of any such action; or 

        (i)    the
Head Lessee is required to register as an investment company under the Investment Company Act of 1940, as amended; or 

        (j)    the
rendering against the Head Lessee of a final judgment, decree or order for the payment of money in excess of $25,000 and the continuance of such judgment, decree or
order unsatisfied, unbonded or uninsured for a period of five (5) consecutive days; or 

        (k)  an
Event of Default shall have occurred and then be continuing. 

        18.    Remedies Upon Default.    Upon the occurrence of any Head Lease Event of Default and at any time thereafter,
Head Lessor may (and shall at the direction of the Control Party) exercise one or more of the following remedies, to the extent permitted by applicable law, as Head Lessor in its sole discretion shall
elect: 

        (a)  Head
Lessor may terminate or cancel this Head Lease, without prejudice to any other remedies of Head Lessor hereunder or under any of the Related Documents, with respect
to all or any Head Lessor Compressor, and whether or not this Head Lease has been so terminated, may enter the premises of Head Lessee, subject to Head Lessee's normal safety and security concerns,
including standard confidentiality requirements, or any other party to take immediate possession of the Head Lessor Compressors and remove all or any Head Lessor Compressor by summary proceedings or
otherwise, or may cause Head Lessee, at Head Lessee's expense, to (i) store, maintain, surrender and deliver possession of the Head Lessor Compressors in the same manner as provided in  Section 5 and/or (ii) assign to the Head Lessor all of its rights under any User Lease then in effect with respect to any Head Lessor
Compressor subject to this Head Lease; 

        (b)  Head
Lessor may hold, keep idle or lease to others any Head Lessor Compressor, as Head Lessor in its sole discretion may determine, free and clear of any rights of Head
Lessee, except that Head Lessee's obligation to pay Monthly Lease Payments, make Scheduled Deposits or Additional Payments on any Rent Payment Date after Head Lessee shall have been deprived of
possession pursuant to this Section 18 shall be reduced by the net proceeds (after deducting therefrom all costs incurred by the Head Lessor or
any other Indemnitee in connection with leasing such Head Lessor Compressors to any other Person, including all broker's costs and commissions and all costs of repair and alterations), if any,
received by Head Lessor from leasing the Head Lessor Compressors to any Person other than Head Lessee for the same periods or any portion thereof; 

        (c)  Head
Lessor may sell the Head Lessor Compressors at public or private sale as Head Lessor may determine, free and clear of any rights of Head Lessee, and Head Lessee
shall pay to Head Lessor, as liquidated damages for loss of a bargain and not as a penalty (in lieu of the Monthly Lease Payments due for the Head Lessor Compressor (determined on a  pro rata basis based
on the number of horsepower of such Head Lessor Compressor relative to the total horse power of all Head Lessor Compressors) so
sold for any period commencing after the date on which such sale occurs), the sum, without duplication, of (i) all unpaid Monthly Lease Payments, Scheduled Deposits, Additional Payments and
Supplemental Rent payable for such Head Lessor Compressor, together with all other termination payments payable under any Interest Rate Swap Agreement, including any previously terminated Interest
Rate Swap Agreements, (determined on a 

13

 

 pro rata basis based on the number of horsepower of such Head Lessor Compressor relative to the total horse power of all Head Lessor Compressors) for all periods through the
date on which such sale occurs, (ii) an amount equal to the excess, if any, of (x) the Appraised Value of the Head Lessor Compressor so sold over (y) the net proceeds of such
sale, and (iii) interest at the rate specified in Section 2.3 on such amounts from the due date thereof until the date of actual payment; 

        (d)  the
Head Lessor, by written notice to the Head Lessee specifying a payment date which shall be not earlier than ten (10), nor more than sixty (60), days
from the date of such notice, may demand that the Head Lessee pay to the Head Lessor, and the Head Lessee shall pay the Head Lessor, on the payment date specified in such notice, as liquidated damages
for loss of a bargain and not as a penalty (in lieu of the Monthly Lease Payment, Scheduled Deposits and Additional Payments and Supplemental Rent payable under this Head Lease after such payment
date), an amount equal to the sum of (i) all unpaid Monthly Lease Payments, Scheduled Deposits, Additional Payments and Supplemental Rent due and payable on or before such payment date,
together with all other termination payments payable under any Interest Rate Swap Agreement, including any previously terminated Interest Rate Swap Agreements, (ii) an amount equal to the
excess, if any, of the Appraised Value of all Head Lessor Compressors (determined as of the Closing Date, the Contribution Date or the Substitution Date, as appropriate, without regard to any
reappraisal after such date) over the Fair Market Sales Value of all of the Head Lessor Compressors leased hereunder as of such payment date and (iii) to the extent permitted by Applicable Law,
interest at the Overdue Rate on the amounts payable pursuant to this Section 18(d) from the payment date specified pursuant to this  Section 18(d)
 to the date of actual payment of all such amounts; 

        (e)  Unless
all of the Head Lessor Compressors have been sold in their entirety, the Head Lessor may, whether or not the Head Lessor shall have exercised or shall thereafter
at any time exercise any of its rights under any other provision of this Section 18, demand, by written notice to the Head Lessee specifying a
purchase date not earlier than three Business Days after the date of such notice, that the Head Lessee purchase, in accordance with the provisions of  Section 23, all Head Lessor Compressors
on the purchase date specified in such notice for a price equal to the Purchase Option Amount for each
Head Lessor Compressor then subject to any Lease Supplement and, upon delivery of such notice, the Head Lessee shall be obligated to pay such Purchase Option Amount to the Head Lessor in cash on such
date specified in such notice. Without limiting the obligations of the Head Lessee under the preceding sentence (which obligations are unconditional), the Head Lessor may, at its option, elect to
apply all or any of the amounts then on deposit in the Collateral Account and available for distribution to the Head Lessor (after giving effect to all other required distributions from the Collateral
Account) toward the Head Lessee's obligation to pay such Purchase Option Amount (in which case, such amounts shall be distributed from the Collateral Account to the Head Lessor for deposit into the
Trust Account and distributed from the Trust Account in accordance with the provisions of the Indenture). 

        (f)    Head
Lessor may exercise any other right or remedy which may be available to it under the Head Lessee Security Agreement or Applicable Law or proceed by appropriate
court action to enforce the terms hereof or to recover damages for the breach hereof and terminate this Head Lease. In addition, Head Lessee shall be liable for all costs and expenses, including
reasonable attorney's fees and expenses, incurred by Head Lessor and any Entitled Party by reason of the occurrence of any Head Lease Event of Default or the exercise of Head Lessor's remedies with
respect thereto, including all reasonable costs and expenses incurred in connection with the return of the Head Lessor Compressors in accordance with  Section 5 or in placing the Head Lessor
Compressors in the condition required by said Section. 

14

 

Except
as otherwise expressly provided above, no remedy referred to in this Section 18 is intended to be exclusive, but each shall be cumulative
and in addition to any other remedy referred to above or otherwise available to Head Lessor at law or in equity; and the exercise or beginning of exercise by Head Lessor of any one or more of such
remedies shall not constitute the exclusive election of such remedies and shall not preclude the simultaneous or later exercise by Head Lessor of any or all of such other remedies. No express or
implied waiver by Head Lessor of any Head Lease Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Head Lease Event of Default. To the extent permitted
by applicable law, Head Lessee hereby waives any rights now or hereafter conferred by statute or otherwise which may require Head Lessor to sell, lease or otherwise use the Head Lessor Compressors in
mitigation of Head Lessor's damages as set forth in this Section 18 or which may otherwise limit or modify any of Head Lessor's rights and
remedies in this Section 18. 

        19.    Head Lessor's Right to Perform for Head Lessee.    During the existence and continuance of a Head Lease Event
of Default, the Head Lessor or its designee may, but shall not be obligated to, (i) subject to the terms of any Related Document, perform any and all acts required by the Head Lessee's
covenants herein contained and take all such action thereon as in the Head Lessor's opinion may be reasonably necessary or appropriate therefor and (ii) make payments or advances to perform the
same. The Head Lessee shall reimburse the Head Lessor for the amount of any such payment or advance and the amount of the Head Lessor's and its designee's and other Indemnitee's reasonable and
documented costs and expenses incurred in connection with such acts or cure, together with interest thereon, to the extent permitted by Applicable Law, at the Overdue Rate, all of which shall be
deemed Supplemental Rent due and payable by the Head Lessee upon demand and shall be paid in accordance with Sections 2.3 and 2.4. The Head Lessor shall be under no obligation to the Head
Lessee or any other Person to perform any such act or make any such payment, and no such payment or performance shall be deemed to waive any Head Lease Event of Default or relieve the Head Lessee of
its obligations hereunder or be deemed an eviction or termination of this Head Lease or a repossession of the Head Lessor Compressors or any interest therein. 

        20.    Optional Conversion to Finance Lease.    Upon the written request of the Head Lessee delivered to the Head
Lessor, the Control Party, the Deal Agent and the Indenture Trustee at least 15 days prior to the date specified in such request, the Head Lessor and the Head Lessee agree, at the sole expense of the
Head Lessee, to negotiate amendments to this Head Lease and any Lease Supplement previously issued pursuant to the terms of this Head Lease and the other Related Documents so as to increase the amount
of the Maximum Lease Payment Adjustment by an amount specified by the Head Lessee; provided that all of the following conditions have been satisfied: 

	(i)
	after
giving effect to such adjustment, this Head Lease and all Lease Supplements will be characterized by the Head Lessee as a Finance Lease;

	(ii)
	on
the effective date of such adjustment, there shall be an adjustment to the Maximum Head Lessee Risk Amount and Maximum Head Lessor Risk Amount to take into account the change
resulting from such increase in the Maximum Lease Payment Adjustment;

	(iii)
	if
the Head Lessee makes the election described in this Section 20 on or after the Commitment Termination Date, then the
Scheduled Deposit Amount(s) for all subsequent Rent Payment Dates shall be recalculated in a manner to reflect the revised Maximum Lease Payment Adjustment and the number of months that have
previously elapsed since the Commitment Termination Date;

	(iv)
	on
the effective date of such adjustment, each of the Head Lessee, the Head Lessor, the Control Party and the Indenture Trustee shall have executed and delivered all appropriate
supplements to the Related Documents that are necessary to give effect to such increase 

15

 

in
the Maximum Lease Payment Adjustment, in form and substance reasonably satisfactory to the Head Lessee, the Head Lessor and the Control Party; 

	(v)
	the
Head Lessor and the Control Party shall have received from Head Lessee a certificate dated the date of the issuance executed on behalf of Head Lessee by an officer thereof stating
that all conditions precedent to this adjustment have been satisfied; and

	(vi)
	the
consummation of the transaction contemplated by this Section 20 shall not violate any Applicable Law. 

        21.    Head Lessee's Purchase Option and Substitution Rights During Lease Term.    

        (a)  The
Head Lessee may, upon not less than three (3) Business Days' prior written notice to each of the Head Lessor and the Control Party, purchase one or more Head
Lessor Compressor(s) identified in such notification for an amount in cash equal to the sum of (A) the sum of the Appraised Value(s) of such Head Lessor Compressor(s) measured as of the
Contribution Date, as applicable, (B) a ratable portion (based on such Appraised Value(s) of such Head Lessor Compressors) of the sum of (x) accrued but unpaid interest on the Notes and
accrued but unpaid Limited Partner Preferred Return on the Certificates to the date of such payment and (y) (without duplication of (x)) accrued and unpaid Monthly Lease Payments,
(C) Breakage Costs, any unpaid termination payments resulting from any Issuer Swap Default and other costs associated with the partial termination of the related Interest Rate Swap Agreements,
(D) in connection with the purchase of all Head Lessor Compressors then subject to this Head Lease, all other termination payments payable under an Interest Rate Swap Agreement, including any
previously terminated Interest Rate Swap Agreements, and (E) such additional amount as may be necessary so that, after distribution of such sum from the Head Lessee Collection Account pursuant
to the provisions of the Head Lessee Security Agreement, the amount actually received by the Head Lessor for deposit into the Trust Account equals the sum of (A), (B), (C) and (D) above;  provided, however, that if at any time such purchase option is elected with respect to less than all of the Head Lessor Compressors subject to a
particular Lease Supplement, those Head Lessor Compressors selected by the Head Lessee for purchase shall be selected by the Head Lessee in a non-discriminatory manner and shall, in the aggregate, be
substantially similar to the remaining Head Lessor Compressors
in such Lease Pool that were not selected for purchase with respect to each of the following characteristics: 

	(i)
	utilization;

	(ii)
	age;

	(iii)
	User
concentrations levels; and

	(iv)
	horsepower
concentrations. 

Upon
payment in full of such amounts to the Head Lessor (for deposit into the Head Lessee Collection Account), Head Lessor will, at the request and cost of Head Lessee, transfer to, or at the
direction of Head Lessee, without recourse or warranty (except as to the absence of Head Lessor Liens), all of Head Lessor's right, title and interest in and to each such Head Lessor Compressor, "as-
is, where-is" and at the cost and request of Head Lessee, furnish to or at the direction of Head Lessee, a bill of sale without recourse or warranty evidencing such transfer (except as to the absence
of Head Lessor Liens), such bill of sale to be in form and substance reasonably satisfactory to Head Lessee and Head Lessor. 

        (b)    Substitutions of Equipment    

	(i)
	Notwithstanding
any provision of any Related Document to the contrary and subject to the provisions of this Section 21, Head
Lessee may at any time, so long as no 

16

 

Head
Lease Event of Default has occurred and is continuing hereunder, substitute one or more Head Lessor Compressors ("Replaced Equipment") with
Compressors ("Replacement Equipment") provided that (x) the Replacement Equipment has a Depreciated Value which is greater than or equal to that
of the Replaced Equipment; (y) the Replacement Equipment has a Weighted Average Age which is less than or equal to the Replaced Equipment; (z) the Replacement Equipment, based upon
collectible billed rental amounts, in the aggregate has Net Revenues not less than the Net Revenues of the Replaced Equipment; (aa) the Excess 99 hp Amount, the Excess 299 hp Amount, the Excess
599 hp Amount, the Excess 999 hp Amount, the Excess B Rated Lessee Concentration Amount, the Excess BB Rated Lessee Concentration Amount and the Excess Investment Grade Lessee Concentration Amount do
not exceed values existing immediately prior to the substitution of the Replaced Equipment with the Replacement Equipment; and (bb) the Replacement Equipment qualifies as Eligible Compressors
and the User Lease(s), if any, in connection with the Replacement Equipment qualifies as an Eligible Lease. Notwithstanding anything contained herein to the contrary, provided that the cumulative
substitutions for any one year are less than ten percent (10%) of the aggregate Depreciated Values of Replacement Equipment of all Head Lessor Compressors, the requirement contained in
subsection (x) of this Section 21(b)(i) can be satisfied by comparing the book values of the Replaced Equipment with the book values of the Replacement Equipment. 

	(ii)
	On
the first Business Day of each week after Head Lessee has, in the immediately prior calendar week, substituted Replacement Equipment for Replaced Equipment, Head Lessee shall
provide Head Lessor with written notice thereof ("Notice of Substitution") in the form required pursuant to the Contribution Agreement which Notice of
Substitution shall have attached thereto one or more bills of sale representing the transfer from the seller thereof to Head Lessor and contain a certification from the Head Lessee as to the
Depreciated Value of each item of Replacement Equipment. Upon delivery of a Notice of Substitution with respect to a Head Lessor Compressor under this  Section 21(b), and provided that all
conditions to such substitution set forth herein shall have been satisfied, all rights and interests of Head
Lessor in such Replaced Equipment shall automatically cease and vest in Head Lessee. Head Lessor will at the request and cost of Head Lessee furnish to or at the direction of Head Lessee, a bill of
sale without recourse or warranty (except as to the absence of Head Lessor Liens) and otherwise in form and substance reasonably satisfactory to Head Lessee and Head Lessor, evidencing the transfer to
or at the direction of Head Lessee, of all of Lessor's right, title and interest in and to such Replaced Item(s), "as-is", "where-is". The purchase price for such Replacement Equipment shall be deemed
paid by Head Lessor by virtue of its reconveyance to Head Lessee or its designee of the Replaced Equipment and no further action shall be required (x) between Head Lessee or the seller of such
Replacement Equipment on the one hand and Head Lessor on the other hand to convey the Replacement Equipment to Head Lessor or (y) between Head Lessee or its designated purchaser of the Replaced
Equipment on the one hand and Head Lessor on the other hand to convey the Replaced Equipment to Lessee or its designee, provided that Head Lessor shall
execute or cause Indenture Trustee to execute any documents reasonably requested by Head Lessee (at Head Lessee's sole cost and expense) to evidence the release of any Liens created pursuant to the
Related Documents with respect to such Replaced Equipment. Upon the occurrence of such events, Replacement Equipment shall be deemed to be Head Lessor Compressors as of the date of the related Notice 

17

 

of
Substitution for all purposes set forth in this Head Lease and the other Related Documents and the Depreciated Value for such Replacement Equipment on the applicable Substitution Date shall be
deemed to be equal to the Depreciated Value set forth therefor on the Notice of Substitution. 

        21.1.    Refinance Option.    The Head Lessee may request, upon not less than one hundred twenty (120) Business
Days' prior written notice delivered to each of the Head Lessor, the Control Party, the Deal Agent and the Interest Rate Hedge Provider, and the Head Lessor agrees, upon receipt of such request, to
negotiate, at the sole cost of the Head Lessee, for the purposes of causing a refinancing of all (but not less than all) of the Outstanding Obligations and all other amounts then due and payable by
the Head Lessor pursuant to the terms of the Related Documents. 

        22.    End of Lease Term Options.    The Head Lessee shall have the option to elect to exercise (i) the Head
Lessee Purchase Option in accordance with the provisions of Section 23 hereof, (ii) the Return Option in accordance with the provisions of  Section 24 hereof or (iii) the Renewal Option in accordance with the provisions of  Section 24A hereof, in each case by delivering written
notice of such election not less than 180 days prior to the Termination Date. If the Head
Lessee fails to deliver such written notice before
such 180th day, or if the Head Lessee shall have elected (iii) above but the Head Lessor shall not have consented to such renewal before such 180th day, then, in
each such case, the Head Lessee shall be deemed to have irrevocably elected to exercise the Return Option under clause (ii) above. 

        23.    Head Lessee End of Term Purchase Option.    

        23.1.    Election of Head Lessee Purchase Option.    The Head Lessee shall have the option to purchase at the end of
the Term of any Lease Supplement all (but not less than all) of the Head Lessor Compressors then subject to such Lease Supplement on the Termination Date for such Lease Supplement for a purchase price
equal to the Purchase Option Amount in accordance with the terms of this Section 23; provided,
that the Head Lessee shall have elected to exercise its Head Lessee Purchase Option with respect to all Lease Supplements then subject to this Head Lease. The Head Lessee may exercise the Head Lessee
Purchase Option by giving written notice (which notice shall be irrevocable) to the Head Lessor (with a copy to the Control Party and the Indenture Trustee) not more than 210 days prior to the
Termination Date and not less than 180 days prior to the Termination Date (which election shall be irrevocable as of the 180th day prior to the Termination Date). The Head Lessor shall have the right
to request from the Lessee not more than one year prior to the Termination Date a notice from the Lessee as to its intention with respect to its exercise of such Head Lessee Purchase Option;  provided, however, that failure to make any such request shall not alter the rights or obligations of the parties or give rise to any liability on the
part of the Head Lessor nor shall it limit to Head Lessee's right to change its intentions in that regard. To the extent the Purchase Option Amount is not paid in full on the Termination Date, such
unpaid amount shall bear interest until the date on which such amounts are paid in full at a rate per annum equal to the sum of (x) the Adjusted Eurodollar Rate and (y) two and one half
of one percent (2.5%) per annum. 

        23.2.    Payment of Purchase Price.    If the Head Lessee shall have elected (or shall be deemed to have elected) to
exercise the Head Lessee Purchase Option in accordance with the provisions of Section 23.1 hereof, the Head Lessee shall pay to the Head Lessor
(for deposit into the Head Lessee Collection Account) on the Termination Date the Purchase Option Amount for each Head Lessor Compressor then subject to any Lease Supplement and may apply the amounts
on deposit in the Collateral Account that are available for distribution to the Head Lessor (after giving effect to all other required distributions from the Collateral Account) in payment of such
amount. Upon payment in full of the Purchase Option Amount, Head Lessor will, at the request and cost of 

18

 

Head Lessee, transfer to, or at the direction of Head Lessee, without recourse or warranty (except as to the absence of Head Lessor Liens), all of Head Lessor's right, title and interest in and to
each such Head Lessor Compressor, "as-is, where-is" and at the cost and request of Head Lessee, furnish to or at the direction of Head Lessee, a bill of sale without recourse or warranty evidencing
such transfer (except as to the absence of Head Lessor Liens), such bill of sale to be in form and substance reasonably satisfactory to Head Lessee and Head Lessor. 

        24.    Return Option.    The Head Lessee may elect to exercise the return of all (but not less than all) the Head
Lessor Compressors that are then subject to this Head Lease by giving written notice of such
election to the Head Lessor and the Control Party not more than 210 days nor less than 180 days prior to the Termination Date. 

        24.1.    Maximum Lease Payment Adjustment.    If the Head Lessee shall have elected its Return Option under this  Section 24, then on the Termination Date, the Head Lessee shall pay to Head Lessor from amounts on deposit in the Collateral Account and
Available Head Lessee Collections that are available therefor an amount equal to the Maximum Lease Payment Adjustment. To the extent the Maximum Lease Payment Adjustment is not paid in full on the
Termination Date, such unpaid amount shall bear interest until the date on which such amounts are paid in full at a rate per annum equal to the sum of (x) the Adjusted Eurodollar Rate and
(y) two and one half of one percent (2.5%) per annum. 

19

  

        24.2.    Renewal Option.    So long as (i) the Head Lessee has not elected to exercise the Return Option as set forth
in Section 24 hereof and (ii) the Head Lessee has not elected (or be deemed to have elected to) the Head Lessee Purchase Option as set forth in  Section
23 hereof under Section 23.1, Head Lessee may request in a written notice to the Head Lessor and
the Control Party (with a copy to the Indenture Trustee) not more than 210 days prior nor less than 180 days prior to the Termination Date to renew this Head Lease (the
"Renewal Option") with respect to all (but not less than all) of the Head Lessor Compressors. Such Renewal Option shall continue the terms of this Head
Lease and the related Lease Supplement; in its sole discretion, the Head Lessor shall determine on or before the date three (3) months prior to the Termination Date whether to renew and extend the
leasing of the Head Lessor Compressors and to specify the terms and conditions on which the Head Lessor would be willing to do so; provided that any renewal and the terms thereof shall be with the
prior approval of the Control Party in its sole discretion. Any failure on the part of Head Lessor to respond to Head Lessee's request shall be deemed a refusal to extend the Term of the affected
Lease Supplement(s). 

        25.    General Indemnity.    

        (a)  The
Head Lessee hereby agrees to, and hereby does, indemnify each Indemnitee on an After-Tax Basis against, and agrees to protect, defend and keep harmless on an
After-Tax Basis each Indemnitee from, any and all liabilities (including, without limitation, negligence, warranty, statutory, product, strict or absolute liability, liability in tort or otherwise),
obligations, losses, settlements, damages, penalties, claims, actions, suits, judgments or proceedings of any kind and nature, costs, expenses and disbursements (including reasonable legal fees and
expenses of external counsel and reasonable allocable fees and expenses of internal legal counsel) of whatsoever kind and nature (whether or not any of the transactions contemplated by the Related
Documents are consummated), imposed on, incurred or suffered by, or asserted against, such Indemnitee (herein collectively called "Claims"), in any way
relating to or arising out of: 

	(i)
	the
Head Lessor Compressors, the Head Lessee Security Agreement or any portion of or interest in either of the foregoing or any other property in which the Head Lessor has an interest
under any Related Document;

	(ii)
	the
Head Lease, the Head Lessee Security Agreement and any other Related Document or any of the transactions contemplated thereby, or resulting therefrom, or execution or delivery
thereof, or the performance, enforcement or amendment of any of the terms thereof;

	(iii)
	the
conduct of the business or affairs of the Head Lessee or the purchase, acceptance, rejection, financing, refinancing, mortgaging, delivery, non-delivery, manufacture,
construction, acquisition, design, condition, operation, use, ownership, lease, sublease, sub-sublease, maintenance, repair, substitution, possession, rental, conversion, return, registration,
re-registration, alteration, overhaul, modification, improvement, testing, removal, replacement, installation, storage, severance, transfer of title, abandonment, sale, resale, or other application or
disposition or use of the Head Lessor Compressors, and the Head Lessee Collateral or any portion of or interest in any one or more of the foregoing or any other property in which the Head Lessor has
an interest under any Related Document, including, without limitation, any Claim in any way relating to or arising out of (a) any violation of environmental law, (b) loss of or damage to any property
or the environment or death or injury to any Person, (c) any patent, trademark or copyright infringement, and (d) latent or other defects, regardless of whether discoverable; and including, without
limitation, injury, death, and property damage to others; 

20

 

	(iv)
	non-performance
or breach by Head Lessee of any covenant or obligation, or the falsity of any representation or warranty by Head Lessee, contained in this Head Lease, the Head Lessee
Security Agreement or any other Related Document or any act, or omission to act in breach of a legal duty to act, with respect to or in connection with this Head Lease, any Related Documents or the
Head Lessor Compressors or any portion of or interest in any one or more of the foregoing or any other property in which the Head Lessor has an interest under any Related Document;

	(v)
	any
increased costs, Breakage Costs, termination amounts or other indemnities payable with respect to the Notes, the Certificates, the Interest Rate Swap Agreements, the Notes Policy,
the Certificates Policy or the Insurance Agreement;

	(vi)
	the
imposition of any Lien on or with respect to any Head Lessor Compressor or any Head Lessee Collateral or any portion of or interest in any one or more of the foregoing or any
other property in which the Indenture Trustee has an interest under any Related Document;

	(vii)
	any
violation of any Applicable Law with respect to the Head Lessor Compressors, the Head Lessee Collateral or any portion of or interest in any one or more of the foregoing, or any
other property in which any Indemnitee has an interest under any Related Document or the transactions contemplated by or resulting from the Related Documents;

	(viii)
	the
environmental condition and impact of, to or from the Head Lessor Compressors, the Head Lessee Collateral or any other property in which any Indemnitee has an interest under
any Related Document;

	(ix)
	any
regulatory action under Applicable Law pertaining directly or indirectly to the Head Lessor Compressors, the Head Lessee Collateral or any other property in which any Indemnitee
has an interest under any Related Document;

	(x)
	any
failure to provide and maintain the Head Lessee Collateral in accordance with the terms of the Related Documents; or

	(xi)
	any
change in Applicable Law occurring after the Closing Date. 

        (b)  The
following Claims are excluded from the Head Lessee's agreement to indemnify any Indemnitee under Section 25(a): 

	(i)
	any
Claim attributable to events or circumstances occurring after (A) the return of all Head Lessor Compressors to Head Lessor in the condition required by  Section 5 (except for any Claim arising
from a return under conditions not in accordance with this Head Lease or a return in connection with a Head
Lease Event of Default) or (B) the purchase of all of the Head Lessor Compressors by the Head Lessee and payment in full of all applicable Purchase Option Amounts or other purchase price therefor
provided for under the Related Documents by the Head Lessee (except to the extent that such Claim arises in respect of or relating to any period prior to or simultaneously with the occurrence of the
events described in (A) or (B)), unless such Claim relates to, or is a remedy with respect to, any Head Lease Event of Default;

	(ii)
	any
Claim that is a Tax (other than any Tax included for purposes of making a payment on an After-Tax Basis) or a cost related to the payment, non-payment or contesting of a Tax
whether or not such Tax or cost is indemnified for under any other provision of this Head Lease or any other Related Document; 

21

 

	(iii)
	with
respect to a particular Indemnitee, any Claim to the extent, but only to the extent, resulting from the gross negligence or willful misconduct of such Indemnitee (except to the
extent, in each case, if any, that such gross negligence or willful misconduct is imputed to such Indemnitee by reason of such Indemnitee's interest in the Head Lessor Compressors) or under the
Related Document;

	(iv)
	with
respect to a particular Indemnitee, any Claim to the extent, but only to the extent, caused by the breach by such Indemnitee of any material agreement, covenant or
indemnification in any Related Document, except, in each case, to the extent that such breach shall have been caused by any act, or failure to act in breach of a duty to do so, by Head Lessee or any
of its Affiliates;

	(v)
	with
respect to a particular Indemnitee, any Claim to the extent, but only to the extent, caused by any misrepresentation or breach of warranty of a material nature by such Indemnitee
contained in any Related Document;

	(vi)
	with
respect to a particular Indemnitee, any Claim that is a cost, fee or expense payable by such Indemnitee pursuant to any provision of this Head Lease or any other Related
Document where it is expressly stated in such provision that such cost, fee or expense is not subject to indemnification by the Head Lessee under this Head Lease or any other Related Document;

	(vii)
	with
respect to any particular Indemnitee, any Claim to the extent caused by amendments, supplements, waivers or consents with respect to the Related Documents requested by such
Indemnitee unless (i) a Head Lease Event of Default shall have occurred and be continuing, (ii) such amendment, supplement, waiver or consent shall have been required by any Related Document or by
Applicable Law or (iii) the Head Lessee shall have expressly agreed to pay for the same in any Related Document;

	(viii)
	with
respect to any particular Indemnitee, any Claim for losses of future profits or losses attributable to any Indemnitee's overhead (other than allocation of such Indemnitee's
internal counsel expenses relating to a Head Lease Event of Default. 

        (c)    Insured Claims.    In the case of any Claim indemnified by the Head Lessee hereunder which is covered by a
policy of insurance maintained by the Head Lessee pursuant to Section 14 of this Head Lease, each Indemnitee agrees to cooperate, at the request of the
Head Lessee and at the Head Lessee's expense, with the insurers in the exercise of their rights to investigate, defend or compromise such Claim as may be required to retain the benefits of such
insurance with respect to such Claim. 

        (d)    Subrogation.    To the extent that a Claim indemnified by the Head Lessee under this  Section 25 is paid in full by
the Head Lessee or an insurer under a policy of insurance maintained by the Head Lessee pursuant to  Section 14 of this Head Lease, the Head Lessee or such other insurer, as the case may be, shall
be subrogated to the rights and remedies of the
Indemnitee on whose behalf such Claim was paid (other than rights of such Indemnitee under insurance policies maintained at its own expense) with respect to the transaction or event giving rise to
such Claim; provided, however, that the Head Lessee shall not be entitled to exercise any such right of subrogation at any time while a Head Lease Event
of Default has occurred and is continuing. Should an Indemnitee receive any refund, in whole or in part, with respect to any Claim paid by the Head Lessee hereunder, it shall promptly pay the amount
refunded (but not an amount in excess of the amount the Head Lessee or any of its insurers, has paid in respect of such Claim) over to the Head Lessee after deducting from such amount any withholding
Tax in respect thereof 

22

 

(and the Head Lessee shall indemnify the relevant Indemnitees against any such withholding Taxes). 

        (e)    No Guaranty.    The general indemnification provisions of this Section
25 are not intended to constitute a guaranty by the Head Lessee that the principal or interest on the Note will be paid. 

        (f)    Certain Amounts Payable.    The Head Lessee shall promptly pay on request to the party entitled thereto as
Supplemental Rent (on an After-Tax Basis as to such party and the beneficiaries) amounts equal to all amounts, other than principal and interest, payable by the Issuer including, without limitation,
increased costs, make-whole amount and tax indemnification. 

        (g)    No Claim.    The amounts payable pursuant to this Section 25
shall not constitute a "claim" (as defined in Section 101 (5) of the Bankruptcy Code) as against the Head Lessee in the event amounts distributed from
time to time under Section 7.2 of the Head Lessee Security Agreement are not sufficient to pay such amounts. 

        26.    Tax Indemnity.    

        (a)  Head
Lessee agrees to pay timely, and promptly upon notice to indemnify and hold each Indemnitee harmless on an After-Tax Basis from, any and all Taxes imposed on or
with respect to or asserted against such Indemnitee, the Head Lessee, this Head Lease (or any document contemplated hereby), the Head Lessor Compressors or any part or component thereof, or such
Indemnitee's interest therein, by any federal, state, local or foreign government or taxing authority (each, a "Taxing Authority") with respect to any
Indemnitee, the Head Lessor Compressors or any part thereof or interest therein, or the manufacture, purchase, acceptance, rejection, ownership, financing, refinancing, delivery, leasing, subleasing,
possession, use, condition, operation, maintenance, repair, modification, replacement, return, sale or other disposition thereof, or upon or with respect to the Head Lessee or any sublessee or user of
Head Lessor Compressors or any rental payments, receipts, earnings or other proceeds received or accrued with respect to the Head Lessor Compressors while the same is subject to any Lease Supplement,
or with respect to the Related Documents or the transactions contemplated thereby, including all such Taxes payable under this Section 26 (excluding,
however, (i) federal income taxes and Taxes to the extent based on, or to the extent measured by, the net income and, to the extent imposed as a result of such Indemnitee engaging in business in the
jurisdiction imposing such Tax, gross income, capital, franchise and comparable doing business Taxes of such Indemnitee imposed by Taxing Authorities of those jurisdictions in which such Indemnitee is
subject to such Taxes by reason of transactions unrelated to the transactions contemplated by this Head Lease, (ii) Taxes imposed on such Indemnitee arising from any voluntary sale or transfer by such
Indemnitee of any interest in the Head Lessor Compressors or any related documents, other than (x) any assignment for security in connection with a financing contemplated by this Head Lease and the
other Related Documents and the transactions related thereto and (y) any such sale or transfer while a Head Lease Event of Default is continuing, (iii) Taxes imposed with respect to a period, acts or
events after the last to occur of (w) the end of the Term, (x) delivery of possession of the Head Lessor Compressors to the Head Lessor as provided herein, (y) except in the case of Taxes attributable
to the Head Lessor Compressors, the payment by the Head Lessee of all amounts due under this Head Lease and the Related Documents and (z) the completion of the exercise of remedies by the Head Lessor
in connection with a Head Lease Event of Default, provided, however that this clause (iii) shall not apply to the extent that such Taxes are imposed on
payments made by the Head Lessee pursuant to this Head Lease and the
Related Documents regardless of when such payments are made, or relate to the exercise of remedies in connection with a Head Lease Event of Default, or arise from the failure of the Head Lessee to
take (or fail to take) actions required by this Head Lease and the Related Documents, or a breach of a representation, warranty, covenant or other obligation under the Lease or relate to events
occurring or matters arising prior to or 

23

 

simultaneously with the end of the Term, (iv) Taxes imposed on an assignee of the Head Lessor which are in excess of Taxes of which would be due under this Head Lease under applicable law as of the
date of such assignment had the Head Lessor not assigned its interest in this Head Lease and the Head Lessor Compressors to an assignee (provided that
this clause (iv) shall not apply to Taxes imposed on the Indenture Trustee or any other Indemnitee as assignee of the Head Lessor pursuant to the transactions contemplated by the Indenture and other
Related Documents), (v) Taxes arising from the gross negligence or willful misconduct of such Indemnitee or a material breach by such Indemnitee of its obligations under this Head Lease or any Related
Document, and (vi) Taxes imposed as a result of an unreasonable failure by such Indemnitee to cooperate (at the Head Lessee's expense) with the Head Lessee in connection with filing of tax forms or
taking of other actions in connection with the payment of Taxes. In the event an Indemnitee receives a refund of any Tax which has been paid by Head Lessee, such refund, plus all interest paid in
connection therewith and fairly attributable thereto, shall be refunded to Head Lessee. 

        (b)  If
any return, report or statement ("Report") relating to Taxes or otherwise is required to be made by Head Lessee or an
Indemnitee relating to the Head Lessor Compressor or the transactions contemplated by this Head Lease, Head Lessee shall so notify such Indemnitee and shall prepare and timely file such Report at its
own expense and provide a copy thereof to such Indemnitee, provided, that if such report or return is required by Applicable Law to be filed by such
Indemnitee the Head Lessee shall timely provide to such Indemnitee such report or return (in form and substance reasonably satisfactory to such Indemnitee) for filing. Head Lessee shall cause all
billings of such Taxes to be made to the Head Lessee (to the extent permitted by law), make timely payment thereof and furnish written evidence of such payment to such Indemnitee promptly after
payment thereof. 

        27.    Security for Head Lessor's Obligations.    In order to secure all amounts payable by and all obligations to be
performed by the Head Lessor under the Indenture and the other Related Documents, the Head Lessor has agreed in the Indenture, among other things, to assign to the Indenture Trustee for its benefit
and the benefit of the various Entitled Parties certain rights under this Head Lease and to pledge to the Indenture Trustee, and to grant a first priority security interest in favor of the Indenture
Trustee, in this Head Lease, subject to the reservations and conditions therein set forth. The Head Lessee hereby consents to such assignments and to the creation of such pledge and security interest
and the pledges and security interests in the other Collateral created thereunder and acknowledges receipt of a copy of the Indenture, it being understood that such consent shall not affect any
requirement or the absence of any requirement for any consent under any other circumstances. To the extent, if any, that this Head Lease or a Lease Supplement constitutes chattel paper (as such term
is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction), no security interest in this Head Lease or such Lease Supplement may be created through the transfer or
possession of any counterpart hereof other than the original counterpart, which shall be identified as the counterpart containing the receipt therefor executed by the Indenture Trustee on the
signature page hereof. 

        28.    Notices.    All demands, notices, and communications under this Agreement shall be in writing personally
delivered, or sent by facsimile (with subsequent telephone confirmation of receipt thereof) or sent by overnight courier service, at the following address: (a) the Head Lessor and/or the Head Lessee,
each at its address at 4444 Brittmoore Road, Houston, Texas 77041; and (b) the Indenture Trustee, the Noteholders, the Rating Agencies, any Control Party, each Interest Rate Hedge Counterparty and
Deal Agent at their respective addresses set forth in the related Supplement. Notice shall be effective and deemed received (a) when delivered to the courier service, if sent by courier, (b) upon
receipt of confirmation of transmission, if sent by facsimile, or (c) when delivered, if delivered by hand. Either party may alter the address to which communications are to be sent by giving notice
of 

24

 

such change of address in conformity with the provisions of this Section 28 for giving notice and by otherwise complying with any applicable terms of
this Head Lease. 

        29.    GOVERNING LAW, SUBMISSION TO JURISDICTION: VENUE, WAIVER OF JURY TRIAL. 

        29.1.    THIS
HEAD LEASE SHALL BE CONSTRUED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTIONS
1401 AND 1402 OF THE GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW, AND THE RIGHTS, OBLIGATIONS AND REMEDIES OF THE PARTIES
HERETO SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 

        29.2.    ANY
LEGAL SUIT, ACTION OR PROCEEDING AGAINST THE HEAD LESSOR OR THE HEAD LESSEE ARISING OUT OF OR RELATING TO THIS HEAD LEASE, OR ANY TRANSACTION
CONTEMPLATED HEREBY, MAY BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE STATE OF NEW YORK AND THE CONTRIBUTOR AND THE TRANSFEREE EACH HEREBY WAIVE ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE
TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND, SOLELY FOR THE PURPOSES OF ENFORCING THIS HEAD LEASE, THE HEAD LESSOR AND HEAD LESSEE EACH HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING. HEAD LESSEE HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CT CORPORATION SYSTEM, WITH OFFICES ON THE DATE HEREOF AT 111
EIGHTH AVENUE, NEW YORK 10011 AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS,
SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, HEAD LESSEE AGREES
TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE AGENT UNDER THIS HEAD LEASE. EACH OF HEAD LESSEE AND HEAD
LESSOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO IT AT 4440
BRITTMOORE ROAD, HOUSTON, TEXAS 77041 ATTENTION: GENERAL COUNSEL, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF HEAD LESSEE OR HEAD LESSOR UNDER
THIS HEAD LEASE, TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PERSON IN ANY OTHER JURISDICTION. 

        29.3.    EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, AS AGAINST THE OTHER PARTIES HERETO, ANY RIGHTS IT MAY HAVE TO A JURY TRIAL IN RESPECT OF ANY CIVIL
ACTION OR PROCEEDING (WHETHER ARISING IN CONTRACT OR TORT OR OTHERWISE), INCLUDING ANY COUNTERCLAIM, ARISING UNDER OR RELATING TO THIS HEAD LEASE OR ANY OTHER RELATED DOCUMENT, INCLUDING IN RESPECT OF
THE NEGOTIATION, ADMINISTRATION OR ENFORCEMENT HEREOF OR THEREOF. 

25

 

        30.    Miscellaneous.    A waiver on any one occasion shall not be construed as a waiver on a future occasion. Except
as provided for in the Related Documents, Head Lessee shall not assign or transfer its interests in this Head Lease. All of the covenants, conditions and obligations contained in this Head Lease shall
be binding upon and shall inure to the benefit of the respective successors and assigns of Head Lessor and (subject to the restrictions of this Head Lease) Head Lessee. This Head Lease and the other
Related Documents, and each related instrument, document, agreement and certificate, collectively constitute the complete and exclusive statement of the terms of the agreement between Head Lessor and
Head Lessee with respect to the acquisition and leasing of the Head Lessor Compressors, and cancel and supersede any and all prior oral or written understandings with respect thereto. 

        31.    Execution and Effectiveness.    This Head Lease shall become effective when each of the parties hereto and each
of the parties hereto have executed and delivered this Head Lease. 

        32.    Statutory References.    References in this Head Lease to any section of the Uniform Commercial Code shall
mean, on or after the effective date of adoption of any revision to the uniform commercial code in the applicable jurisdiction, such revised or successor section thereto. 

        33.    Severability.    Any provision of this Head Lease which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction, provided that in no event shall the
provisions of Sections 20, 21, 22, 23 and 24 be deemed to be severable from the other provisions of this Head Lease. To the extent permitted by
Applicable Law, the Head Lessee and the Head Lessor hereby waive any provision of law that renders any provision hereof invalid, prohibited or unenforceable in any respect. 

        34.    Counterparts.    This Head Lease may be executed by the parties hereto in separate counterparts, each of which,
subject to Section 27 hereof, when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the
same instrument. 

        35.    Amendments and Waivers.    No term or provision of this Head Lease may be changed, amended, altered, waived,
discharged or terminated except by an instrument in writing signed by the parties to this Head Lease, each Interest Rate Hedge Provider, the Indenture Trustee (at the written direction of the Control
Party), and such other party against which the enforcement of the change, amendment, alteration, waiver, discharge or termination is sought. 

        [Signatures
to follow] 

26

        IN WITNESS WHEREOF, the parties hereto have caused this Head Lease to be duly executed by their duly authorized representatives as of the date first above written. 

	

 	
 	
BRL UNIVERSAL COMPRESSION FUNDING I 2002, L.P., as Head Lessor
	

 	
 	

By:	
 	

BRL Universal Compression Management 2002, Inc.
	

 	
 	

 	
 	

By:	

/s/  GREGORY C. GREENE      
 Gregory C. Greene, President
	

 	
 	
UCO COMPRESSION 2002 LLC, as Head Lessee
	

 	
 	

By:	
 	

/s/  RICHARD W. FITZGERALD      
 Richard W. FitzGerald
 Senior Vice President

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EXHIBIT 10.3

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EXHIBIT 10.4    
  

 
 

GUARANTY    
  

        THIS GUARANTY, dated as of December 31, 2002 (as amended, modified or supplemented from time to time in accordance with its terms, this
"Guaranty"), is issued by UNIVERSAL COMPRESSION HOLDINGS, INC., a Delaware corporation (together with its successors and permitted assigns, the
"Guarantor"), for the benefit of UCO COMPRESSION 2002 LLC, a Delaware limited liability company (together with its successors and permitted assigns, the
"Head Lessee"), BRL UNIVERSAL COMPRESSION FUNDING I 2002, L.P., a Delaware limited partnership (together with its successors and permitted assigns, the
"Issuer" or the "Head Lessor"), and WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking
association, as indenture trustee on behalf of the parties set forth in the hereinafter defined Indenture (together with its successors and permitted assigns, the "Indenture
Trustee"; each of the Head Lessee, the Head Lessor and the Indenture Trustee (for the benefit of the Noteholders, any Series Enhancer and any Interest Rate Hedge Provider), a
"Beneficiary" and collectively, the "Beneficiaries"). 

        PRELIMINARY
STATEMENTS: 

        (1)  The
Head Lessee and the Head Lessor have entered into that certain Master Equipment Lease Agreement, dated as of December 31, 2002 (as amended, modified or supplemented
from time to time in accordance with its terms, the "Head Lease") pursuant to which the Head Lessor has and will lease certain Compressors to the Head Lessee; 

        (2)  The
Head Lessee, the Head Lessor and Universal Compression, Inc. ("UCI") have entered into that certain Management Agreement, dated as of December 31, 2002 (as amended,
modified or supplemented from time to time in accordance with its terms, the "Management Agreement") pursuant to which UCI has and will manage certain Compressors on behalf of the Head Lessor or the
Head Lessee, as the case may be; 

        (3)  The
Issuer is issuing one or more classes of notes (collectively, the "Notes") pursuant to that certain Indenture (as amended, modified or supplemented from time to time
in accordance with its terms, the
"Indenture"), dated as of December 31, 2002, between the Issuer and the Indenture Trustee, which Notes will be collateralized by, inter alia, all of the
Issuer's right, title and interest in and to the Head Lease, the Owner Compressors, the User Leases and the Management Agreement; 

        (4)  UCI
is a wholly-owned subsidiary of the Guarantor; 

        (5)  Issuer
requires that the Guarantor guarantee the payment and performance by UCI under the Management Agreement as a condition to leasing Compressors to Head Lessee under
the Head Lease; 

        (6)  Guarantor
will obtain substantial direct and indirect benefit from the lease of the Compressors to the Head Lessee and the management thereof by UCI, and is willing to
provide this guaranty on the terms and conditions set forth herein; and 

        (7)  Beneficiaries
have entered into the Indenture in reliance upon the benefits of this Guaranty; 

        NOW,
THEREFORE, in consideration of the premises and other consideration, the receipt and sufficiency of which is hereby acknowledged by the Guarantor, the Guarantor hereby agrees as
follows: 

        SECTION
1.    Definitions.    Capitalized terms used in this Guaranty, unless otherwise defined herein, shall have the
meaning set forth in Appendix A to the Indenture. 

        SECTION
2.    Guaranty.    Guarantor hereby irrevocably, absolutely and unconditionally guarantees, as primary obligor
and as a guarantor of payment and not merely as surety or guarantor of collection to the Beneficiaries: (i) the full and prompt payment when due, whether by stated maturity, acceleration or otherwise,
and at all times thereafter, of the payment and deposit obligations of UCI as the initial Manager under the Management Agreement (UCI in this capacity, the "Guaranteed
Party") and all other amounts from time to time owing by UCI under the Management Agreement, and 

 

(ii) the full and timely performance of, and compliance with each and every duty, agreement, covenant, undertaking, indemnity, and obligation of the Guaranteed Party under the Management
Agreement, in each case, howsoever created, arising or evidenced, whether direct or indirect, primary or secondary, absolute or contingent, joint or several, now or hereafter existing or due or to
become due, which
arises out of or in connection with the Management Agreement (all of such obligations described in clauses (i) and (ii) being hereinafter collectively called the  "Liabilities"); provided that nothing
contained herein shall be deemed to constitute credit recourse to the Guarantor for payment of: (A) losses arising
solely from the financial inability of a User to make rental or other payments under a User Lease, (B) losses arising solely from the failure of the remarketing proceeds of a Compressor to equal or
exceed the Appraised Value thereof for reasons other than the Manager's failure to comply with the Services Standard, or (C) the Notes or the Certificates. Guarantor further agrees to pay all costs
and expenses (including reasonable attorneys' fees and legal expenses) paid or incurred by any Beneficiary in endeavoring to collect the Liabilities, or any part thereof, and in enforcing this
Guaranty. 

        SECTION
3.    Continuing Guaranty.    This Guaranty shall in all respects be a continuing, absolute and unconditional
guaranty, and shall remain in full force and effect (notwithstanding, without limitation, that at any time or from time to time all Liabilities may have been paid in full), subject to discontinuance
only upon payment and performance in full of: (i) all Liabilities and (ii) any and all expenses paid or incurred by a Beneficiary in endeavoring to collect the Liabilities and in enforcing this
Guaranty; and all of the agreements and obligations under this Guaranty shall remain fully in effect until all such obligations and expenses finally shall have been paid in full. 

        SECTION
4.    Rescission.    Guarantor further agrees that, if at any time all or any part of any payment theretofore
applied by Beneficiary to any of the Liabilities is or must be rescinded or returned by Beneficiary for any reason whatsoever, such Liabilities shall, for the purposes of this Guaranty, to the extent
that such payment is or must be rescinded or returned, be deemed to have continued in existence, notwithstanding such application by Beneficiary, and this Guaranty shall continue to be effective or be
reinstated, as the case may be, as to such Liabilities, all as though such application by Beneficiary had not been made. 

        SECTION
5.    Certain Actions.    Each Beneficiary may, from time to time at its sole discretion and without notice to
Guarantor, take any or all of the following actions without affecting the obligations of Guarantor hereunder: (a) retain or obtain a Lien upon or a security interest in any property to secure any of
the Liabilities or any obligation hereunder; (b) retain or obtain the primary or secondary obligation of any obligor or obligors, in addition to Guarantor, with respect to any of the Liabilities or
any obligation hereunder; (c) extend or renew for one or more periods (regardless of whether longer than the original period), alter or exchange any of the Liabilities, or release or compromise any
obligation of Guarantor hereunder or any obligation of any nature of any other obligor including UCI with respect to any of the Liabilities; (d) release or fail to perfect its Lien upon or security
interest in, or impair, surrender, release or permit any substitution or exchange for, all or any part of any property securing any of the Liabilities or any obligation hereunder, or extend or renew
for one or more periods (regardless of whether longer than the original period) or release, compromise, alter or exchange any obligations of any nature of any obligor with respect to any such
property; and (e) resort to Guarantor for payment of any of the Liabilities, regardless of whether Beneficiary shall have resorted to any property securing any of the Liabilities or any obligation
hereunder or shall have proceeded against any other obligor primarily or secondarily obligated with respect to any of the Liabilities. 

        SECTION
6.    Subrogation.    Any amounts received by a Beneficiary from whatsoever source on account of the
Liabilities may be applied by it toward the payment of such of the Liabilities, and in such order of application, as Beneficiary may from time to time elect. Until one year and one day after payment
of
the full amount of all Liabilities, the performance of all of Guarantor's obligations hereunder and the termination of this Guaranty, no payment made by or for the account of Guarantor pursuant to
this Guaranty shall entitle Guarantor by subrogation, indemnity or otherwise to any 

2

 

payment by UCI or from or out of any property of UCI, and Guarantor shall not exercise any right or remedy against UCI or any property of UCI by reason of any performance by Guarantor of this
Guaranty. If any amount shall be paid to the Guarantor on account of such subrogation rights at any time when all of the Liabilities shall not have been paid in full, such amount shall be held in
trust for the benefit of the Beneficiaries and shall forthwith be paid to the Indenture Trustee to be credited and applied upon the Liabilities, whether matured or unmatured, in accordance with the
terms of this Guaranty. 

        SECTION
7.    Waiver; Waiver of Defenses.    Guarantor hereby expressly waives: (a) notice of any Beneficiary's
acceptance of this Guaranty; (b) notice of the existence or creation or non-payment of all or any of the Liabilities; (c) presentment, demand, notice of dishonor, protest, and all other notices
whatsoever (provided that nothing contained in this clause (c) shall affect any obligations to give notice or make demand as set forth in the Management Agreement); and (d) all diligence in collection
or protection of or realization upon the Liabilities or any thereof, any obligation hereunder, or any security for or guaranty of any of the foregoing. To the fullest extent permitted by applicable
law, Guarantor agrees not to assert, and hereby waives for the benefit of each Beneficiary, all rights (whether by counterclaim, setoff or otherwise) and defenses (including, without limitation, the
defense of fraud or fraud in the inducement), whether acquired by subrogation, assignment or otherwise, to the extent that such rights and defenses may be available to Guarantor to avoid payment of
its obligations under this Guaranty in accordance with the express provisions of this Guaranty. 

        SECTION
8.    Unconditional Nature of Guaranty.    This Guaranty shall constitute a guaranty of payment or of
performance and not of collection, and the Guarantor specifically agrees that it shall not be necessary, and that the Guarantor shall not be entitled to require, before or as a condition of enforcing
the liability of the Guarantor under this Guaranty or requiring payment or performance of the Liabilities by the Guarantor hereunder, or at any time thereafter, that any Person: (a) file suit or
proceed to obtain or assert a claim for personal judgment against UCI or any other Person that may be liable for any Liabilities; (b) make any other effort to obtain payment or performance of any
Liabilities from UCI or any other Person that may be liable for such Liabilities; (c) foreclose against or seek to realize upon any security now or hereafter existing for such Liabilities; (d)
exercise or assert any other right or remedy to which such Person is or may be entitled in connection with any Liabilities or any security or other guaranty therefor; or (e) assert or file any claim
against the assets of UCI or any other Person liable for any Liabilities. Notwithstanding anything herein to the contrary, no provision of this Guaranty shall require the Guarantor to pay, perform or
discharge any Liabilities prior to the time such Liabilities are due and payable. No delay on any Beneficiary's part in the exercise of any right or remedy shall operate as a waiver thereof, and no
single or partial exercise by any Beneficiary of any right or remedy shall preclude other or further exercise thereof or the exercise of any other right or remedy; nor shall any modification or waiver
of any of the provisions of this Guaranty be binding upon Beneficiary except as expressly set forth in a writing duly signed by each Beneficiary. The Beneficiaries may in all events pursue their
rights under this Guaranty prior to or simultaneously with pursuing their various rights referred to in the Management Agreement, as the Beneficiaries may determine. No action of any Beneficiary
permitted hereunder shall in any way affect or impair any Beneficiary's rights or Guarantor's obligations under this Guaranty. For the purposes of this Guaranty, Liabilities shall include all of UCI's
obligations under the Management Agreement, notwithstanding any right or power
of UCI or anyone else to assert any claim or defense as to the invalidity or unenforceability of any such obligation, and no such claim or defense shall affect or impair the obligations of Guarantor
hereunder. The obligations of the Guarantor are unlimited in amount (but not greater than the Liabilities plus costs and expenses payable hereunder) and shall be continuing and irrevocable, absolute
and unconditional, primary, original and immediate and not contingent and shall remain in full force and effect without regard to and not be released, discharged or in any way affected by any
circumstance or 

3

 

condition (other than by payment in full of Liabilities) including, without limitation, the occurrence of any one or more of the following: 

          (i)  any
lack of validity or enforceability of any of the Liabilities under the Management Agreement or any document entered into in connection with the transactions
contemplated by the Management Agreement, any provision thereof, or any other agreement or instrument relating thereto or the absence of any action to enforce the same; 

        (ii)  any
failure, omission, delay or lack on the part of the Beneficiaries to enforce, assert or exercise any right, power, privilege or remedy conferred on the
Beneficiaries in the Management Agreement or this Guaranty, or the inability of the Beneficiaries to enforce any provision of the Management Agreement for any reason, or any other act or omission on
the part of the Beneficiaries; provided that the foregoing shall not apply to applicable statutes of limitation; 

        (iii)  any
change in the time, manner or place of performance or of payment, or in any other term of, all or any of the Liabilities, or any other modification, supplement,
amendment or waiver of or any consent to departure from the terms and conditions of any of the Management Agreement, the Intercreditor Agreement or any document entered into in connection with the
transactions contemplated by the Management Agreement or the Related Documents; 

        (iv)  any
taking, exchange, release or non-perfection of any collateral or security, or any taking, release or amendment or waiver of or consent to departure from any other
guaranty, for all or any of the Liabilities or the acceptance of any security therefor; 

        (v)  the
waiver by the Beneficiaries of the performance or observance by the Guaranteed Party of any Liabilities, the waiver of any default in the performance or observance
thereof, any extension by the Beneficiaries of the time for payment or performance and discharge by the Guaranteed Party of any Liabilities or any extension, indulgence or renewal of any Liabilities;  provided that the foregoing shall not apply to applicable statutes of limitation; 

        (vi)  any
bankruptcy, suspension of payments, insolvency, sale of assets, winding-up, dissolution, liquidation, receivership or reorganization of, or similar proceedings
involving, the Guaranteed Party or its assets or any resulting release or discharge of any of the Liabilities; 

      (vii)  the
recovery of any judgment against any Person or any action to enforce the same; 

      (viii)  any
failure or delay in the enforcement of the Liabilities of any Person under the Management Agreement or any document entered into in connection with the
transactions contemplated by the Management Agreement or any provision thereof; provided that the foregoing shall not apply to applicable statutes of
limitation; 

        (ix)  any
set-off, counterclaim, deduction, defense, abatement, suspension, deferment, diminution, recoupment, limitation or termination available with respect to any
Liabilities and, to the extent permitted by Applicable Law, irrespective of any other circumstances that might otherwise limit recourse by or against the Guarantor or any other Person; 

        (x)  the
obtaining, the amendment or the release of or consent to any departure from the primary or secondary obligation of any other Person, in addition to the Guarantor,
with respect to any Liabilities; 

        (xi)  any
compromise, alteration, amendment, modification, extension, renewal, release or other change, or waiver, consent or other action, or delay or omission or failure to
act, in respect of any of the terms, covenants or conditions of the Management Agreement or any document entered into in connection with the transactions contemplated by the Management Agreement or
any Liabilities, or any other agreement or any related document referred to therein, or any assignment or transfer of any thereof; 

4

 

      (xii)  any
manner of application of collateral, or proceeds thereof, to all or any of the Liabilities, or any manner of sale or other disposition of any collateral for all or
any of the Liabilities or any other assets of the Guaranteed Party or any of its subsidiaries, or any furnishing or acceptance of additional collateral or any release of any existing securities; 

      (xiii)  any
change in control or the ownership of the Guaranteed Party, any change, merger, demerger, consolidation, restructuring or termination of the corporate structure
or existence of the Guaranteed Party or its subsidiaries; 

      (xiv)  to
the fullest extent permitted by Applicable Law, any other circumstance which might otherwise constitute a defense available to, or a discharge of, a guarantor or
surety with respect to any Liabilities; 

      (xv)  any
default, failure or delay, whether as a result of actual or alleged force majeure, commercial impracticability or otherwise, in the performance of the Liabilities,
or by any other act or circumstances which may or might in any manner or to any extent vary the risk of the Guarantor, or which would otherwise operate as a discharge of the Guarantor; 

      (xvi)  the
existence of any other obligation of the Guarantor, or any limitation thereof, in the Management Agreement; 

    (xvii)  any
regulatory change or other governmental action (whether or not adverse or other change in applicable law); or 

    (xviii)  the
partial payment or performance of the Liabilities (whether as a result of the exercise of any right, remedy, power or privilege or otherwise) or the invalidity
of any payment for any reason whatsoever. 

Should
any money due or owing under this Guaranty not be recoverable from the Guarantor due to any of the matters specified in clauses (i) through (xviii) above or for any other reason, then, in any
such case, such money shall nevertheless be recoverable from the Guarantor as though the Guarantor were principal debtor or obligor in respect thereof and not merely a guarantor and shall be paid by
the Guarantor forthwith. 

        This
Guaranty shall continue to be effective or be automatically reinstated, as the case may be, if at any time any payment, or any part thereof, of any of the Liabilities is rescinded
or must otherwise be restored or returned by the Beneficiaries for any reason whatsoever, whether upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Guaranteed Party or
otherwise, all as though such payment had not been made, and the Guarantor agrees that it will indemnify the Beneficiaries on demand for all reasonable costs and expenses (including, without
limitation, fees and disbursements of counsel) incurred by the Beneficiaries in connection with such rescission or restoration. If an event permitting the exercise of remedies under the Management
Agreement shall at any time have occurred and be continuing and such exercise, or any consequences thereof provided in the Management Agreement, shall at such time be prevented by reason of the
pendency against the Guaranteed Party of a case or proceeding under a bankruptcy or insolvency law, the Guarantor agrees that, for purposes of this Guaranty and its obligations hereunder, amounts
payable under the Management Agreement shall be deemed to have been declared in default, with all attendant consequences as provided in the Management Agreement as if such declaration of default and
the consequences thereof had been accomplished in accordance with the terms of the Management Agreement, and the Guarantor shall forthwith pay any amounts guaranteed hereunder, without further notice
or demand. 

        SECTION
9.    Information.    Guarantor has and will continue to have independent means of obtaining information
concerning UCI's affairs, financial condition and business. Beneficiary shall not 

5

 

have any duty or responsibility to provide Guarantor with any credit or other information concerning UCI's affairs, financial condition or business which may come into Beneficiary's possession. 

        SECTION
10.    Representations and Warranties.    Guarantor represents and warrants as follows: 

        (a)    Organization and Good Standing.    It has been duly organized and is validly existing as a corporation in good
standing under the laws of its state of incorporation, with corporate power and authority to own its properties and to conduct its business as such properties are presently owned and such business is
presently conducted. 

        (b)    Due Qualification.    It is duly licensed, qualified and authorized to do business and is in good standing in
each jurisdiction where the ownership, leasing or operation of its property or the conduct of its business requires such license or qualification except for failures to be so qualified which,
individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. 

        (c)    Power and Authority; Due Authorization.    It has (i) all necessary power, authority and legal right to
execute, deliver and perform its obligations under this Guaranty and (ii) duly authorized by all necessary corporate action such execution, delivery and performance of this Guaranty. 

        (d)    Binding Obligations.    This Guaranty constitutes the legal, valid and binding obligation of Guarantor,
enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law. 

        (e)    No Violation.    The execution, delivery and performance of this Guaranty will not (i) conflict with, or result
in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under (A) the certificate of incorporation or by-laws of Guarantor or (B)
any indenture, lease, loan agreement, receivables purchase agreement, mortgage, deed of trust, or other agreement or instrument to which Guarantor is a party or by which it or its property is bound,
(ii) result in or require the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, lease, loan agreement, receivables purchase agreement,
mortgage, deed of trust, or other agreement or instrument or (iii) violate any law or any order, rule, regulation applicable to Guarantor of any court or of any federal, state or foreign regulatory
body, administrative agency or other governmental instrumentality having jurisdiction over Guarantor or any of its properties. 

        (f)    Solvency.    The execution, delivery and performance by the Guarantor of this Guaranty will not render the
Guarantor insolvent, nor is it being made in contemplation of the Guarantor's insolvency; the Guarantor does not, in its reasonable judgment, have an unreasonably small capital for conducting its
business as presently contemplated by it. 

        SECTION
11.    Successors and Assigns; Amendment.    (a) This Guaranty shall be binding upon Guarantor and upon
Guarantor's successors and assigns and all references herein to Guarantor or UCI shall be deemed to include any successor or successors whether immediate or remote, to such Person. Guarantor shall not
assign any of its obligations hereunder without the prior written consent of each Beneficiary. 

        (b)  This
Guaranty shall inure to the benefit of each Beneficiary and respective its successors and assigns and all references herein to Beneficiary shall be deemed to
include any successors and assigns of Beneficiary (whether or not reference in a particular provision is made to such successors and assigns). 

6

 

        (c)  No
amendment or waiver of any provision of this Guaranty, and no consent to any departure by the Guarantor herefrom, shall in any event be effective unless the same
shall be in writing and signed by the Guarantor and each Beneficiary and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. 

        SECTION
12.    GOVERNING LAW.    THIS GUARANTY SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. Wherever possible each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Guaranty shall be prohibited by or invalid under such law, such provision
shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Guaranty. 

        SECTION
13.    Consent to Jurisdiction; Waiver of Jury Trial.    Each Beneficiary may enforce any claim arising out of
this Guaranty in any state or federal court having subject matter jurisdiction and located in New York, New York and with respect to any such claim, Guarantor hereby irrevocably submits to the
jurisdiction of such courts. Guarantor irrevocably consents to the service of process out of said courts by mailing a copy thereof, by registered mail, postage prepaid, to Guarantor, and agrees that
such service, to the fullest extent permitted by law, (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall be taken and held
to be valid personal service upon and personal delivery to it. Nothing herein contained shall preclude Beneficiary from bringing an action or proceeding in respect hereof in any other country, state
or place having jurisdiction over such action. Guarantor irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in such a court located in New York, New York and any claim that any such suit,
action or proceeding brought in such court has been brought in an inconvenient forum. GUARANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS UNDER THIS GUARANTY OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY RELATIONSHIP
EXISTING IN CONNECTION WITH THIS GUARANTY, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. 

7

 

        SECTION
14.    Notices.    All notices, demands or requests given pursuant to this Guaranty shall be in writing, sent
by overnight courier service or by telefax or hand delivery to the following addresses: 

	To Manager:	 	Universal Compression, Inc.

4444 Brittmoore Road

Houston, Texas 77042
	

To Issuer:	
 	

BRL Universal Compression Management 2002, Inc.

2911 Turtle Creek Boulevard, Suite 1240

Dallas, Texas 75219
	

To Lessee:	
 	

UCO Compression 2002 LLC

4444 Brittmoore Road

Houston, Texas 77042
	

To the Indenture Trustee:	
 	

Wells Fargo Bank Minnesota, National Association

Sixth & Marquette Avenue

MAC N9311-161

Minneapolis, MN 55479
	

To any Series Enhancer:	
 	

At the address as set forth in the related Enhancement Agreement.
	

To any Interest Rate Hedge Provider:	
 	

At the address as set forth in the related Interest Rate Swap Agreement.

        Notice
shall be effective and deemed received (a) one (1) day after being delivered to the courier service, if sent by courier, (b) upon receipt of confirmation of transmission, if sent
by telecopy, or (c) when delivered, if delivered by hand. Copies of each such notice shall be sent to the Administrative Agent at Wachovia Securities, Inc., 301 S. College St., TW-10, Charlotte, North
Carolina 28288-0610, Attention: Manoj Kumar. 

        SECTION
15.    Third Party Beneficiary.    In addition to its rights as a Beneficiary hereunder as a secured party
under the Indenture, the Series Enhancer shall be a third party beneficiary of this Guaranty and shall be entitled to directly enforce its rights hereunder as though it were a party hereto. 

[SIGNATURE
PAGE FOLLOWS] 

8

        IN
WITNESS WHEREOF, this Guaranty has been executed and delivered by Guarantor's duly authorized officer as of the date first written above. 

	 	 	 	UNIVERSAL COMPRESSION HOLDINGS, INC.
	

 	

 	
 	

By:	

/s/  RICHARD W. FITZGERALD      

	 	 	 	Name: Richard W. FitzGerald
	 	 	 	Title: Senior Vice President
	

Accepted and Agreed:	
 	

 	

 
	

WELLS FARGO BANK MINNESOTA,

NATIONAL ASSOCIATION, as

    Indenture Trustee	
 	

 	

 
	

By:	

/s/  EDNA BARBER      
	
 	

 	

 
	Name: Edna Barber	 	 	 
	Title: Assistant Vice President	 	 	 
	

UCO COMPRESSION 2002 LLC	
 	

 	

 
	

By:	

/s/  RICHARD W. FITZGERALD      
	
 	

 	

 
	Name: Richard W. FitzGerald	 	 	 
	Title: Senior Vice President	 	 	 
	

BRL UNIVERSAL COMPRESSION

FUNDING I 2002, L.P.	
 	

 	

 
	

By:	

BRL UNIVERSAL COMPRESSION

MANAGEMENT 2002, Inc., its

general partner	
 	

 	

 
	

By:	

/s/  GREGORY C. GREENE      
	
 	

 	

 
	Name: Gregory C. Greene	 	 	 
	Title: President	 	 	 

QuickLinks

EXHIBIT 10.4

GUARANTY

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