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EXHIBIT 10.1
ESCROW AGREEMENT
This Escrow Agreement (this "Agreement") is entered into as of
September 15, 2000 by and among Universal Compression Holdings, Inc., a Delaware
corporation ("Universal"), the Reuben James Helton Trust Dated January 24, 2000
as amended and in effect, a trust formed pursuant to the laws of the State of
Michigan (the "Trust"), Garlin R. Rhymes, as trustee of the Trust ("Trustee"),
Michael Pahl ("Pahl") (collectively, the Trust, Trustee and Pahl are referred to
as the "Stockholders"), Garlin R. Rhymes, as representative (the
"Representative") of the former stockholders of Gas Compression Services, Inc.,
a Michigan corporation ("GCSI"), and State Street Bank and Trust Company, a
Massachusetts trust company, as escrow agent (the "Escrow Agent"). Capitalized
terms used in this Agreement and not otherwise defined herein will have the
meanings given them in the Merger Agreement (as defined below). Universal and
the Stockholders are sometimes referred to herein collectively as the
"Interested Parties" or individually as the "Interested Party."
RECITALS:
A. Universal, Universal Compression, Inc., a Texas corporation and
wholly-owned subsidiary of Universal ("Sub"), GCSI and the Company Holders have
entered into an Agreement and Plan of Merger dated as of August 4, 2000 (the
"Merger Agreement") pursuant to which GCSI will merge with and into Sub (the
"Merger"), with Sub as the surviving corporation in the Merger.
B. Pursuant to the Merger Agreement, the outstanding shares of capital
stock of GCSI are to be converted into the right to receive cash and an
aggregate of 1,420,631 shares of common stock, par value $.01 per share, of
Universal (the "Universal Common Stock") at the effective time of the Merger
(such shares, the "Merger Shares").
C. The Merger Agreement provides that 9.5652% of the Merger Shares, or
135,887 Merger Shares (the "Escrow Shares"), are to be placed in an escrow
account (the "Escrow Account") to provide for the payment of certain obligations
that the Stockholders may owe to Universal and Sub and their affiliates,
directors, officers and employees (collectively, the "Covered Persons"). The
Escrow Shares of each Stockholder so required to be deposited in the Escrow
Account pursuant to this Agreement and the Merger Agreement are shown on Exhibit
A attached hereto.
D. The parties hereto desire to establish the terms and conditions
pursuant to which the Escrow Shares will be deposited, held in and disbursed
from the Escrow Account.
NOW, THEREFORE, the parties hereto agree as follows:
1. Escrow and Recovery.
(a) Escrow of Shares. Promptly after the Effective Time, the transfer
agent of Universal (the "Transfer Agent"), will deposit the Escrow Shares,
in the manner prescribed in Section 2, with the Escrow Agent, who will hold
them in escrow to provide
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for the payment of the obligations of the Stockholders to Covered Persons
as set forth in this Agreement until the Escrow Agent is required to
release such Escrow Shares pursuant to the terms of this Agreement. The
Escrow Shares will include "Additional Escrow Shares" as that term is
defined in Section 2(b) of this Agreement. The Escrow Agent agrees to
accept delivery of the Escrow Shares and to hold in escrow and release such
Escrow Shares subject to the terms and conditions of this Agreement.
(b) Recovery. Pursuant to the Merger Agreement and that certain Letter
Agreement for the transfer of insurance dated September 15, 2000, by and
among Universal, Reuben James Helton and the Trust (the "Letter
Agreement"), Universal is entitled to recover from the Escrow Shares the
following amounts (each, a "Claim"): (i) any amounts to which the Covered
Persons may be entitled pursuant to Article IX of the Merger Agreement;
(ii) any amounts in excess of $250,000 payable to or on behalf of Ms.
Colleen Yuncker in connection with the Merger Agreement, the transactions
contemplated thereby, or any termination of or change in her employment in
connection herewith or therewith (whether pursuant to the Agreement dated
June 26, 2000 between Ms. Yuncker and the Company or any other agreement
entered into by the GCS Entities prior to the Effective Time (as defined in
the Merger Agreement) (such arrangements, the "Yuncker Arrangements"));
(iii) the costs associated with the Retention Plan (as defined in the
Merger Agreement); and (iv) any indemnity payments or interest thereon
payable to Universal pursuant to the Letter Agreement; provided, however,
that the maximum aggregate amount of Escrow Shares to which Universal shall
be entitled for (ii) and (iii) above shall not exceed that number of Escrow
Shares valued at $800,000 (with the actual number of shares based on the
value at the release date calculated in accordance with Section 4(c)
hereof), and provided further, that Universal shall be entitled to receive
without Claim the Escrow Shares as provided in Section 2(c)(ii)(A).
(c) Defense of Claim. Promptly after the receipt by Universal of
notice or discovery of any Claim giving rise to recovery rights under this
Agreement, Universal will give the Representative and the Escrow Agent
written notice of such Claim in accordance with Section 3 hereof. Failure
to give prompt notice of a Claim hereunder shall not affect the obligations
of any party. Universal shall provide the Representative with reasonable
access to its premises, books and records during Universal's regular
business hours and shall furnish such information as the Representative
shall reasonably request from time to time, in each case to the extent
reasonably required in connection with the verification of such Claim;
provided, however, that any records, information or documents that are not
publicly available shall not be disclosed by the Representative unless
disclosure of such records, information or documents is required by court
or administrative order or as may be necessary or appropriate in connection
with the resolution of any dispute regarding a Claim; and provided further,
that if the Representative is ordered to disclose any of such records,
documents or information, the Representative will provide Universal with
prompt written notice of such requirement so that Universal may seek a
protective order or other appropriate remedy if it so chooses, and, in the
event that such protective order or other remedy is not obtained, or
Universal waives compliance with the provisions hereof, the Representative
agrees to furnish only that portion of such records, documents or
information that the Representative is legally required to disclose in the
written opinion of counsel to the Representative.
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(d) Time Period of Claims. No Claim or Claims hereunder may be made by
Universal after June 30, 2002.
2. Deposit of Escrow Shares; Release from Escrow.
(a) Delivery of Escrow Shares. On the Closing Date, the Escrow Shares
allocable to the Stockholders (the "Initial Escrow Shares") will be
delivered by the Transfer Agent to the Escrow Agent in the form of a single
duly authorized stock certificate with applicable restrictive legends
issued in the name of "Embassy & Co." as nominee for the Escrow Agent. In
the event Universal issues any Additional Escrow Shares (as defined below),
such shares will be issued and delivered to the Escrow Agent and treated in
the same manner as the Initial Escrow Shares. The Escrow Agent shall hold
and administer the Escrow Shares (said Escrow Shares, together with any
dividends and other distributions therefrom or proceeds thereof received by
the Escrow Agent, collectively, the "Escrow Property") subject to the terms
of this Agreement. The Escrow Agent shall have no responsibility for the
genuineness, validity, market value, title or sufficiency for any intended
purpose of the Escrow Property.
(b) Dividends, Voting and Rights of Ownership. Except for tax-free
dividends paid in stock declared with respect to the Escrow Shares pursuant
to Section 305(a) of the Code ("Additional Escrow Shares"), any cash
dividends, dividends payable in securities or other distributions of any
kind made in respect of the Escrow Shares will be distributed promptly by
Universal to the Stockholders proportionate to their respective interests
as set forth in Exhibit A hereto. Neither the Escrow Agent nor its nominee
shall be under any duty to take any action to preserve, protect, exercise
or enforce any rights or remedies under or with respect to the Escrow
Property (including without limitation the exercise of any voting or
consent rights, conversion or exchange rights, defense of title,
preservation of rights against prior matters or otherwise). Notwithstanding
the foregoing, if the Escrow Agent is so requested in a written request of
the Representative received by the Escrow Agent at least three Business
Days prior to the date on which the Escrow Agent is requested therein to
take such action (or such later date as may be acceptable to the Escrow
Agent), the Escrow Agent shall execute or cause its nominee to execute, and
deliver to the Representative a proxy or other instrument in the form
supplied to it by the Representative for voting or otherwise exercising any
right of consent with respect to any of the Escrow Shares held by it
hereunder, to authorize therein the Stockholder's Representative to
exercise such voting or consent authority in respect of the Escrow Shares
(provided that the Escrow Agent shall not be obliged to execute any such
proxy or other instrument if, in its judgment, the terms thereof may
subject the Escrow Agent to any liabilities or obligations in its
individual capacity). Subject to compliance with applicable law, the Escrow
Agent shall not be under any duty or responsibility to forward to any
Interested Party, or to notify any Interested Party with respect to, or to
take any action with respect to, any notice, solicitation or other document
or information, written or otherwise, received from an issuer or other
person with respect to the Escrow Shares, including but not limited to,
proxy material, tenders, options, the pendency of calls and maturities and
expiration of rights. Each Stockholder will have the right to vote his
share of the Escrow Shares deposited in the Escrow Account for the account
of such Stockholder so long as such Escrow Shares are held in escrow, and
Universal will take all
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reasonable steps necessary to allow the exercise of such rights. While the
Escrow Shares remain in the Escrow Agent's possession pursuant to this
Agreement, the Stockholders will retain and will be able to exercise all
other incidents of ownership of said Escrow Shares that are not
inconsistent with the terms and conditions hereof.
(c) Distributions. The Escrow Shares shall be released and distributed
as follows:
(i) On June 30, 2001, the Escrow Agent will release from the
Escrow Account to the Stockholders their pro rata portions (as provided in
Section 2(d)) of all of the Escrow Shares except for (A) $1,800,000 of the
Escrow Shares (with the actual number of shares based on the value at such
release date calculated in accordance with Section 4(c) hereof), (B) any
Escrow Shares (with the actual number of shares based on the value at such
release date calculated in accordance with Section 4(c) of this Agreement)
subject, in accordance with Section 4 hereof, to any then pending but
unresolved Claims ("Pending Claim Collateral"), and (C) in the event that
any Escrow Shares have been released to Universal in payment of any amounts
owed pursuant to the Letter Agreement prior to such date (the "Letter
Agreement Shares"), a number of Escrow Shares equal to the number of Letter
Agreement Shares so released. Any Pending Claim Collateral held by the
Escrow Agent as a result of the preceding sentence will be released to the
Stockholders or released to Universal, as appropriate, promptly upon
resolution of the specific Claim or Claims involved.
(ii) On June 30, 2002, the Escrow Agent will (A) release from the
Escrow Account to Universal $1,000,000 of the Escrow Shares (with the
actual number of shares based on the value at such release date calculated
in accordance with Section 4(c) hereof) or, to the extent the Escrow Shares
in the Escrow Account have a value less than $1,000,000, all remaining
Escrow Shares, (B) to the extent Escrow Shares remain in the Escrow Account
after the release of Escrow Shares pursuant to Section 2(c)(ii)(A) hereof,
hold in the Escrow Account and not release any then Pending Claim
Collateral (with the actual number of shares based on the value at such
release date calculated in accordance with Section 4(c) hereof) and (C)
release from the Escrow Account to the Stockholders their pro rata portion
(as provided in Section 2(d)) of all remaining Escrow Shares other than as
provided in subclauses (A) and (B).
(iii) In the event that any Pending Claim Collateral has not been
released on or prior to the date which is seven years after its applicable
Claim date, the Representative may, at its option, submit the amount of the
Claim to arbitration in accordance with Section 10 hereof and the
arbitrator(s) shall determine the value of the Claim, and any Escrow Shares
(as determined in accordance with Section 4(c) of this Agreement) not
needed to satisfy such Claim (as so determined by the arbitrator(s)) shall
be released to the Stockholders.
(d) Release of Shares. The Escrow Shares will be held by the Escrow
Agent until required to be released pursuant to Section 2(c) above or
Section 4, below. Upon the applicable release date or with respect to the
Pending Claim Collateral, if any, within five Business Days after the
release condition is met as confirmed by Universal and the Representative
to the Escrow Agent in writing, the Escrow Agent will distribute to each
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Stockholder or Universal, as the case may be, the requisite number of
Escrow Shares as of the applicable release date. Universal and the
Representative undertake to deliver a timely notice to the Escrow Agent
identifying the number of Escrow Shares to be released within such five
business day period. Escrow Shares will be distributed pro rata to the
respective Stockholders in proportion to their respective interests as set
forth in Exhibit A; provided, however, that in the event any Letter
Agreement Shares and Escrow Shares are thereafter distributed to the
Stockholders as provided herein, then the pro rata portion of such Escrow
Shares otherwise distributable to the Trust shall be reduced, and the pro
rata portion of the Escrow Shares otherwise distributable to Pahl shall be
correspondingly increased, by a number of such Escrow Shares equal to 10%
of the number of such Letter Agreement Shares so released to Universal.
Universal will take such action as may be necessary to cause stock
certificates to be issued bearing any appropriate legends.
(e) No Encumbrances. Except as otherwise provided in this Agreement,
no Escrow Shares nor any beneficial interest therein may be pledged, sold,
assigned or transferred, including by operation of law, by a Stockholder,
or be taken or reached by any legal or equitable process in satisfaction of
any debt or other liability of a Stockholder (other than such Stockholder's
obligations under this Agreement), prior to the release to such Stockholder
of the Escrow Shares by the Escrow Agent. Either Stockholder may
distribute, transfer, convey or assign its obligations hereunder together
with its right to receive Escrow Shares; provided, that the transferee of
such right shall execute and deliver to the Escrow Agent, Universal and the
other Stockholder(s) party hereto an Additional Party Counterpart in the
form of Exhibit B hereto; and provided further, that such distribution,
transfer, conveyance or assignment shall not adversely affect the rights of
Universal, the Escrow Agent or the other Stockholder(s) party hereto as
evidenced by their written acknowledgment and acceptance of such transfer.
No such transfer shall be effective until there shall have been delivered
to the Escrow Agent such fully executed Additional Party Counterpart,
whereupon such transferee shall succeed in all respects to the rights and
obligations of the related transferor.
(f) Power to Transfer Escrow Shares. The Escrow Agent is hereby
granted the power to effect any transfer of Escrow Shares contemplated by
this Agreement. Universal will cooperate with the Escrow Agent in promptly
issuing stock certificates to effect such transfers.
(g) Any distribution of all or a portion of the Escrow Shares to the
Stockholders shall be made by delivery of the stock certificate held by the
Escrow Agent representing the Escrow Shares to the Transfer Agent, endorsed
for transfer, with instruction to the Transfer Agent to transfer and issue
such aggregate number of Escrow Shares being distributed, allocated among
the Stockholders based upon his or her pro rata share according to the
percentages set forth on Schedule A (as nearly as practicable, and, if
applicable, as adjusted for the future release of any Letter Agreement
shares as provided in Section 2(d)), in each case by issuing to each such
Stockholder a stock certificate representing such allocated shares,
registered in his or her name set forth on Schedule A and mailed by first
class mail to such Stockholder's address set forth on Schedule A (or to
such other address as such Stockholder may have previously provided
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to the Escrow Agent in writing); and, if less than all the then remaining
Escrow Shares are to be so distributed and transferred, the Escrow Agent
shall instruct the Transfer Agent to issue and return to the Escrow Agent
(or its nominee, if the Escrow Agent shall so instruct) a stock certificate
representing the remaining Escrow Shares. The Escrow Agent shall have no
liability for the actions or omissions of, or any delay on the part of, the
Transfer Agent in connection with the foregoing.
(h) Any distribution of all or a portion of the Escrow Shares to
Universal shall be made by delivery of the stock certificate held by the
Escrow Agent representing the Escrow Shares to the Transfer Agent, endorsed
for transfer, with instruction to the Transfer Agent to transfer to
Universal or its designee or cancel the released Escrow Shares as requested
by Universal; and, if less than all the then remaining Escrow Shares are to
be so distributed and transferred or canceled, the Escrow Agent shall
instruct the Transfer Agent to issue and return to the Escrow Agent (or its
nominee, if the Escrow Agent shall so instruct) a stock certificate
representing the remaining Escrow Shares. The Escrow Agent shall have no
liability for the actions or omissions of, or any delay on the part of, the
Transfer Agent in connection with the foregoing.
3. Notice of Claim.
(a) Each notice of a Claim by Universal (the "Notice of Claim") will
be in writing and will contain the following information to the extent it
is reasonably available to Universal:
(i) Universal's good faith estimate of the reasonably foreseeable
maximum amount of the alleged amounts related to the Claim; and
(ii) A brief description in reasonable detail of the facts,
circumstances or events giving rise to the alleged amounts based on
Universal's good faith belief thereof, including, without limitation, if
applicable, the identity and address of any third party claimant and copies
of any formal demand or complaint.
(b) The Escrow Agent will not transfer any of the Escrow Shares held
in the Escrow Account to Universal pursuant to a Notice of Claim until such
Notice of Claim has been resolved in accordance with Section 4 below.
4. Resolution of Notice of Claim and Transfer of Escrow Shares. Any Notice
of Claim received by the Representative and the Escrow Agent pursuant to Section
3 above will be resolved as follows:
(a) Uncontested Claims. In the event that the Representative does not
contest a Notice of Claim in writing to the Escrow Agent within 30 calendar
days after a Notice of Claim containing a statement of the amounts claimed
is delivered pursuant to Section 9 below, the Escrow Agent will promptly
distribute to Universal that number of Escrow Shares having a value
(determined pursuant to Section 4(c) hereof) equal to the amounts specified
in the Notice of Claim and notify the Representative of such transfer.
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(b) Contested Claims. In the event that the Representative gives
written notice to Universal and the Escrow Agent contesting all, or a
portion of, the Claim specified in a Notice of Claim (a "Contested Claim")
within the 30-day period described above (which contesting notice shall
specify the Claim, or portion or amount thereof, being contested), matters
that are subject to any Claim described in Sections 1(b)(i) or (iv) of this
Agreement, including third party Claims brought against Universal, Sub or
the GCSI Entities or any of their affiliates in litigation or arbitration
will await the final nonappealable decision, award or settlement of such
Claim, while all other disputes, controversies or claims that arise between
Universal, Sub or GCSI, on the one hand, and the Stockholders, on the other
hand, (including their agents and employees) out of this Agreement, or the
breach, termination or invalidity thereof (all "Arbitrable Claims"), will
be settled by agreement between Representative and Universal, or failing
such agreement, by binding arbitration pursuant to Section 10 hereof. This
Section 4(b) is not intended to alter the parties rights or remedies under
the Merger Agreement or the Letter Agreement. Any portion of the Notice of
Claim that is not contested will be resolved as set forth above in Section
4(a). The final decision of the arbitrator will be furnished to the Escrow
Agent, the Representative, the Stockholders and Universal in writing and
will constitute a conclusive determination of the issue in question,
binding upon the Stockholders, the Representative, Universal, Sub and all
Covered Persons. After notice that the Notice of Claim is contested by the
Representative, the Escrow Agent will not release any Escrow Shares from
the Escrow Account, except as provided in Section 2(c) and notwithstanding
the expiration of the applicable release date, until (i) execution of a
settlement agreement by Universal and the Representative setting forth a
resolution of the Notice of Claim, or (ii) receipt of a copy of the final
decision of the court or award of the arbitrator(s), as applicable, subject
to Section 2(c)(iii) above.
(c) Determination of Amount of Claims. Pursuant to Section 4(a) or (b)
above, any amount owed to Universal for, or to be held pending resolution
of, any Claim, subject to the provisions of the Merger Agreement with
respect to the Threshold, will be payable to Universal for, or withheld by
the Escrow Agent pending resolution of, such Claim out of the applicable
Escrow Shares then held by the Escrow Agent at a per share value for all
Escrow Shares equal to the weighted average sales price of Universal Common
Stock as quoted on the New York Stock Exchange (or other principal
securities exchange on which such shares are then traded) for the 20
consecutive trading days up to the third business day immediately preceding
the date of such payment or, with respect to Pending Claim Collateral, the
applicable release date. As to the calculation of such per share value, the
Escrow Agent may request and rely upon a written certification from
Universal and the Representative. In no event will the amount owed for any
Claim with respect to the Yuncker Arrangements, the Retention Plan or the
Letter Agreement be subject to the Threshold, and the amount owed for
Claims for the Yuncker Arrangements and the Retention Plan in the aggregate
shall not exceed $800,000.
5. Concerning the Escrow Agent.
(a) Each Interested Party and the Representative acknowledge and agree
that the Escrow Agent (i) shall not be responsible for any of the
agreements referred to or described herein (including without limitation
the Merger Agreement and the Letter
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Agreement), or for determining or compelling compliance therewith, and
shall not otherwise be bound thereby, (ii) shall be obligated only for the
performance of such duties as are expressly and specifically set forth in
this Agreement on its part to be performed, each of which is ministerial
(and shall not be construed to be fiduciary) in nature, and no implied
duties or obligations of any kind shall be read into this Agreement against
or on the part of the Escrow Agent, (iii) shall not be obligated to take
any legal or other action hereunder which might in its judgment involve or
cause it to incur any expense or liability unless it shall have been
furnished with acceptable indemnification, (iv) may rely on and shall be
protected in acting or refraining from acting upon any written notice,
instruction (including, without limitation, wire transfer instructions,
whether incorporated herein or provided in a separate written instruction),
instrument, statement, certificate, request or other document furnished to
it hereunder and believed by it to be genuine and to have been signed or
presented by the proper person, and shall have no responsibility for making
inquiry as to or determining the genuineness, accuracy or validity thereof,
or of the authority of the person signing or presenting the same, and (v)
may consult counsel satisfactory to it, including in-house counsel, and the
opinion or advice of such counsel in any instance shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in accordance with
the opinion or advice of such counsel. Documents and written materials
referred to in this paragraph include, without limitation, e-mail and other
electronic transmissions capable of being printed, whether or not they are
in fact printed; and any such e-mail or other electronic transmission may
be deemed and treated by the Escrow Agent as having been signed or
presented by a person if it bears, as sender, the person's e-mail address.
(b) The Escrow Agent shall not be liable to anyone for any action
taken or omitted to be taken by it hereunder except in the case of the
Escrow Agent's gross negligence or willful misconduct in breach of the
terms of this Agreement. In no event shall the Escrow Agent be liable for
indirect, punitive, special or consequential damage or loss (including but
not limited to lost profits) whatsoever, even if the Escrow Agent has been
informed of the likelihood of such loss or damage and regardless of the
form of action.
(c) The Escrow Agent shall have no more or less responsibility or
liability on account of any action or omission of any book-entry
depository, securities intermediary or other subescrow agent employed by
the Escrow Agent than any such book-entry depository, securities
intermediary or other subescrow agent has to the Escrow Agent, except to
the extent that such action or omission of any book-entry depository,
securities intermediary or other subescrow agent was caused by the Escrow
Agent's own gross negligence or willful misconduct in breach of this
Agreement.
(d) Notwithstanding any term appearing in this Agreement to the
contrary, in no instance shall the Escrow Agent be required or obligated to
distribute any Escrow Property (or take other action that may be called for
hereunder to be taken by the Escrow Agent) sooner than two Business Days
after (i) it has received the applicable documents required under this
Agreement in good form, or (ii) passage of the applicable time period (or
both, as applicable under the terms of this Agreement), as the case may be.
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(e) Conflicting Instructions. In the event conflicting demands are
made or conflicting notices are served upon the Escrow Agent with respect
to the Escrow Account, the Escrow Agent will have the absolute right, at
the Escrow Agent's election, to do either or both of the following: (i)
resign, in which case a successor escrow agent will appointed pursuant to
Section 14 hereof or (ii) file a suit in interpleader and obtain an order
from a court of competent jurisdiction requiring the parties to interplead
and litigate in such court their several claims and rights among
themselves. In the event such interpleader suit is brought, the Escrow
Agent will thereby be fully released and discharged from all further
obligations imposed upon it under this Agreement, and Universal will pay
the Escrow Agent (subject to reimbursement from the Stockholders pursuant
to Section 13 hereof) all costs, expenses and reasonable attorneys' fees
expended or incurred by the Escrow Agent pursuant to the exercise of the
Escrow Agent's rights under this Section 5 (such costs, fees and expenses
will be treated as extraordinary fees and expenses for the purposes of
Section 13 hereof).
(f) The Escrow Agent may execute any of its powers or responsibilities
hereunder and exercise any rights hereunder either directly or by or
through its agents or attorneys. Nothing in this Agreement shall be deemed
to impose upon the Escrow Agent any duty to qualify to do business or to
act as a fiduciary in any jurisdiction other than the Commonwealth of
Massachusetts.
(g) The Escrow Agent shall not be responsible for delays or failures
in performance resulting from acts beyond its control. Such acts shall
include but not be limited to acts of God, strikes, lockouts, riots, acts
of war, epidemics, governmental regulations superimposed after the fact,
fire, communication line failures, computer viruses, power failures,
earthquakes or other disasters.
6. Compensation, Expense Reimbursement and Indemnification.
(a) Each of the Interested Parties agrees, jointly and severally, (i)
to pay or reimburse the Escrow Agent for its reasonable attorney's fees and
expenses incurred in connection with the preparation of this Agreement and
(ii) to pay the Escrow Agent's compensation for its normal services
hereunder in accordance with the fee schedule attached hereto as Exhibit C
and made a part hereof, which may be subject to change hereafter by the
Escrow Agent on an annual basis.
(b) Each of the Interested Parties agrees, jointly and severally, to
reimburse the Escrow Agent on demand for all costs and expenses incurred in
connection with the administration of this Agreement or the escrow created
hereby or the performance or observance of its duties hereunder which are
in excess of its compensation for normal services hereunder, including
without limitation, payment of any reasonable legal fees and expenses
incurred by the Escrow Agent in connection with resolution of any claim by
any party hereunder.
(c) EACH OF THE INTERESTED PARTIES, JOINTLY AND SEVERALLY (EACH, AN
"INDEMNIFYING PARTY" AND TOGETHER, THE "INDEMNIFYING PARTIES"), HEREBY
COVENANTS AND AGREES TO REIMBURSE, INDEMNIFY AND HOLD HARMLESS THE
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ESCROW AGENT AND THE ESCROW AGENT'S EMPLOYEES AND AGENTS (SEVERALLY AND
COLLECTIVELY, THE "ESCROW AGENT"), FROM AND AGAINST ANY LOSS, LIABILITY,
DAMAGE, COST AND EXPENSE OF ANY NATURE INCURRED BY THE ESCROW AGENT ARISING
OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR WITH THE ADMINISTRATION OF
ITS DUTIES HEREUNDER, INCLUDING BUT NOT LIMITED TO REASONABLE ATTORNEY'S
FEES AND OTHER COSTS AND EXPENSES OF DEFENDING OR PREPARING TO DEFEND
AGAINST ANY CLAIM OF LIABILITY UNLESS AND EXCEPT TO THE EXTENT SUCH LOSS,
LIABILITY, DAMAGE, COST AND EXPENSE SHALL BE CAUSED BY THE ESCROW AGENT'S
GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT. THE FOREGOING INDEMNIFICATION AND
AGREEMENT TO HOLD HARMLESS SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.
(d) Participation in Defense of Claim Against Escrow Agent. Each
Indemnifying Party may participate at its own expense in the defense of any
claim or action that may be asserted against the Escrow Agent and, if the
Indemnifying Parties so elect, the Indemnifying Parties may assume the
defense of such claim or action; provided, however, that if there exists a
conflict of interest that would make it inappropriate for the same counsel
to represent both the Escrow Agent and the Indemnifying Parties, the Escrow
Agent's retention of separate counsel shall be reimbursable as hereinabove
provided. The Escrow Agent's right to indemnification hereunder shall
survive the Escrow Agent's resignation or removal as the Escrow Agent and
shall survive the termination of this Agreement by lapse of time or
otherwise.
(e) Notice of Claim Against Escrow Agent. The Escrow Agent hereby
represents that the Escrow Agent will notify each Indemnifying Party by
letter, or by telephone or telex confirmed by letter, of any receipt by the
Escrow Agent of a written assertion of a claim against the Escrow Agent, or
any action commenced against the Escrow Agent, within ten calendar days
after the Escrow Agent's receipt of written notice of such claim. However,
the Escrow Agent's failure to so notify each Indemnifying Party shall not
operate in any manner whatsoever to relieve an Indemnifying Party from any
liability that it may have otherwise than on account of this Section 6,
unless the defense of such claim is materially prejudiced by the failure of
the Escrow Agent to notify the Indemnifying Parties within such ten-day
period.
(f) Without altering or limiting the joint and several liability of
any of the Interested Parties to the Escrow Agent hereunder, each of the
Interested Parties agrees as among themselves that they shall share
responsibility for amounts payable to the Escrow Agent as specified in
Section 13 hereof.
7. Tax Indemnification. Each of the Interested Parties agrees, jointly and
severally, with the Escrow Agent (i) to assume any and all obligations imposed
now or hereafter on the Escrow Agent by any applicable tax law with respect to
any payment or distribution of the Escrow Property or performance of other
activities under this Agreement (and as among the Interested Parties, each
Interested Party agrees to assume any obligations imposed now or hereafter on
them by any applicable tax law with respect to any payment or distribution of
the Escrow Property), (ii) to instruct the Escrow Agent in writing with respect
to the Escrow Agent's
10
<PAGE> 11
responsibility for withholding and other taxes, assessments or other
governmental charges, and to instruct the Escrow Agent with respect to any
certifications and governmental reporting that may be required under any tax
laws or regulations that may be applicable in connection with its acting as
Escrow Agent under this Agreement, and (iii) to indemnify and hold the Escrow
Agent harmless from any liability or obligation on account of taxes,
assessments, additions for late payment, interest, penalties, expenses and other
governmental charges that may be assessed or asserted against the Escrow Agent
in connection with, on account of or relating to the Escrow Property, the
management established hereby, any payment or distribution of or from the Escrow
Property pursuant to the terms hereof or other activities performed under the
terms of this Agreement, including without limitation any liability for the
withholding or deduction of (or the failure to withhold or deduct) the same, and
any liability for failure to obtain proper certifications or to report properly
to governmental authorities in connection with this Agreement, including costs
and expenses (including reasonable legal fees and expenses), interest and
penalties. The foregoing indemnification and agreement to hold harmless shall
survive the termination of this Agreement.
8. Stockholders' Representative. For purposes of this Agreement, the
Stockholders hereby consent to, confirm and irrevocably effect the appointment
of Garlin R. Rhymes as the Representative, as representative of the
Stockholders, and as the attorney-in-fact for and on behalf of each Stockholder,
and, subject to the express limitations set forth below, the taking by the
Representative of any and all actions and the making of any decisions required
or permitted to be taken by him under this Agreement, including, without
limitation, the exercise of the power to (i) authorize delivery to Universal of
the Escrow Shares or any portion thereof, in satisfaction of Claims, (ii) agree
to, negotiate, enter into settlements and compromises of, and demand and conduct
arbitration and comply with orders of courts and awards of arbitrators with
respect to such Claims, (iii) resolve any Claims, and (iv) take all actions
necessary in the judgment of the Representative for the accomplishment of the
foregoing and all of the other terms, conditions and limitations of this
Agreement. The Representative will have unlimited authority and power to act on
behalf of each Stockholder with respect to this Agreement and the disposition,
settlement or other handling of all Claims, rights or obligations arising under
this Agreement so long as all Stockholders are treated in the same manner. The
Stockholders will be bound by all actions taken by the Representative in
connection with this Agreement, and Universal will be entitled to rely on any
action or decision of the Representative. In performing his functions hereunder,
the Representative will not be liable to the Stockholders in the absence of
gross negligence or willful misconduct. In the event the Representative becomes
unavailable or unwilling to continue in his capacity herewith, the
Representative may resign and be discharged from his duties or obligations
hereunder by giving his resignation to the parties to this Agreement, specifying
a date not less than ten days following such notice date of when such
resignation will take effect and, in that event, James Bauters will be deemed to
be appointed by the Stockholders as the new Representative. In the event Mr.
Bauters then becomes unavailable or unwilling to continue in his capacity as
Representative, he may resign and be discharged from his duties or obligations
hereunder by giving his resignation to the parties to this Agreement, specifying
a date not less than ten days following such notice date of when such
resignation will take effect. In that event, the Stockholder(s) owning a
majority of the Escrow Shares will designate a successor Representative prior to
the expiration of such ten-day period by giving written notice to the Escrow
Agent and Universal. If the Stockholders have not appointed a successor
Representative
11
<PAGE> 12
and notified Universal of the identity and address of such successor
Representative within such ten-day period, Universal shall be relieved of the
obligation to send notices to or obtain consents from the Representative while
there is no Representative and, for purposes of this Agreement, in each such
case, it shall be deemed that the Representative has received the required
notice and/or approved such action. Until notified in writing by the
Representative that he has resigned, the Escrow Agent may rely conclusively and
act upon the directions, instructions and notices of the Representative named
above and, thereafter, upon the directions, instructions and notices of any
successor Representative named in a writing executed by a majority-in-interest
of the Stockholders filed with the Escrow Agent.
9. Notices. All notices, instructions and other communications required or
permitted to be given hereunder or necessary or convenient in connection
herewith must be in writing and will be deemed delivered (i) when personally
served or when delivered by telex or facsimile (to the telex or facsimile number
of the person to whom the notice is given), (ii) the first business day
following the date of deposit with an overnight courier service or (iii) on the
earlier of actual receipt or the third business day following the date on which
the notice is deposited in the United States mail, first class certified,
postage prepaid, addressed as follows:
If to the Escrow Agent: State Street Bank and Trust Company
Corporate Trust
Lafayette Corporate Center
2 Avenue De Lafayette
6th Floor South
Boston, Massachusetts 02110
Attention: Christina Mullen
Facsimile: 617/662-1463
If to Universal: Universal Compression Holdings, Inc.
4440 Brittmoore Road
Houston, Texas 77041
Attention: Valerie L. Banner, Senior
Vice President and General Counsel
Facsimile: 713/466-6720
With a copy to: King & Spalding
1100 Louisiana, Suite 3300
Houston, Texas 77002
Attention: Christine B. LaFollette
Facsimile: 713/751-3290
If to the Representative: Garlin R. Rhymes
24106 Bay Hill Blvd.
Katy, Texas 77494
Facsimile: (281) 392-0832
12
<PAGE> 13
With a copy to: Mayor, Day, Caldwell & Keeton, L.L.P.
700 Louisiana, Suite 1900
Houston, Texas 77002
Attention: Ms. Kathleen M. Kopp
Facsimile: (713) 225-7047
or to such other address as Universal, the Representative or the Escrow Agent,
as the case may be, designates in a writing delivered to each of the other
parties hereto.
10. Arbitration.
(a) Universal, the Stockholders and the Representative hereby agree
that all Arbitrable Claims, except those that involve the Escrow Agent
pursuant to Section 11 hereof, shall be submitted to, and determined by,
binding arbitration. Nothing in this Section 10 is intended to alter the
parties rights or remedies under the Merger Agreement or the Letter
Agreement. Such arbitration shall be conducted pursuant to the Commercial
Arbitration Rules (the "Rules") then in effect of the American Arbitration
Association, except to the extent such rules are inconsistent with this
Section 10. If the amount in controversy in the arbitration exceeds
$1,000,000, exclusive of interest, attorneys' fees and costs, the
arbitration shall be conducted by a panel of three neutral arbitrators with
Universal and the Representative each selecting one arbitrator and the
third arbitrator being chosen by the two served. Otherwise, the arbitration
shall be conducted by a single neutral arbitrator mutually agreed upon by
the parties, or if no such agreement is reached then by the panel of three
arbitrators. The arbitrator(s) shall be selected pursuant to the Rules and
shall be a person or persons experienced in the oil and gas industry and
the nature of the issues to be arbitrated. Exclusive venue for such
arbitration shall be in Houston, Texas. The arbitrator(s) shall apply the
internal laws of the State of Texas (without regard to conflict of law
rules) in determining the substance of the dispute, controversy or claim
and shall decide the same in accordance with the applicable usages and
terms of trade. The proceedings shall be governed by the Texas Rules of
Civil Procedure and the Texas Rules of Evidence. The arbitrator(s)' award
shall be in writing and shall set forth the findings and conclusions upon
which the arbitrator(s) based the award. The prevailing party in any such
arbitration shall be entitled to recover its reasonable attorneys' fees,
costs and expenses incurred in connection with the arbitration. Any award
pursuant to such arbitration shall be final and binding upon Universal, the
Stockholders and the Representative, and judgment on the award may be
entered in any federal or state court with appropriate jurisdiction sitting
or located in Harris County, Texas. The provisions of this Section 10 shall
survive the termination of this Agreement.
(b) The arbitration shall commence within 60 days after the selection
of neutral arbitrator(s) in accordance with the provisions of this Section
10. In fulfilling his or her duties, the arbitrator(s) may consider such
matters as, in the opinion of the arbitrator(s), are necessary or helpful
to render an appropriate decision. All discovery shall be expedited,
consistent with the nature and complexity of the claim or dispute and
consistent with fairness and justice. The arbitrator(s) shall have the
power to compel any party to comply with discovery requests of the other
parties and to issue binding orders
13
<PAGE> 14
relating to any discovery dispute which shall be enforceable in the same
manner as awards. The arbitrator(s) also shall have the power to impose
sanctions for abuse or frustration of the arbitration process, including
without limitation, the refusal to comply with orders of the arbitrator(s)
relating to discovery and compliance with subpoenas.
(c) Without limiting the enforceability or scope of this Section 10,
Universal, the Stockholders and the Representative agree that if a
controversy or claim between them pursuant to this Section 10 arises out of
or relates to this Agreement and results in litigation, the courts of
Harris County, Texas or the courts of the United States of America located
in Harris County, Texas shall have jurisdiction to hear and decide such
matter, and Universal, the Stockholders and the Representative hereby
submit to the jurisdiction of such courts. The foregoing notwithstanding,
Universal, the Stockholders and the Representative may seek and obtain from
a court of competent jurisdiction a temporary restraining order, temporary
injunction or other temporary emergency relief without first having to
submit such dispute to arbitration.
(d) Governing Law. With respect to matters governed by this Section
10, this Agreement will be governed by and construed in accordance with the
internal laws of the State of Texas without regard to conflict of law
principles and will be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and permitted assigns.
11. Dispute Resolution Involving Escrow Agent or Escrow Property.
(a) It is understood and agreed that, should any dispute arise with
respect to this Agreement between the Interested Parties and the Escrow
Agent or any claim made by the Escrow Agent with respect to the delivery,
ownership, right of possession, and/or disposition of the Escrow Property
other than the resolution of Claims pursuant to Section 4 or 10 hereof, or
should any claim be made upon the Escrow Agent or the Escrow Property by a
third party, the Escrow Agent upon receipt of notice of such dispute or
claim is authorized and shall be entitled (at its sole option and election)
to retain in its possession without liability to anyone, all or any of said
Escrow Property until such dispute shall have been settled either by the
mutual written agreement of the parties involved or by a final order,
decree or judgment of a court in the United States of America, the time for
perfection of an appeal of such order, decree or judgment having expired.
The Escrow Agent may, but shall be under no duty whatsoever to, institute
or defend any legal proceedings which relate to the Escrow Property.
(b) Universal, the Stockholders, the Representative and the Escrow
Agent further agree that if a controversy or claim between them which (i)
arises out of or relates to this Agreement or the delivery, ownership,
right of possession, and/or disposition of the Escrow Property, other than
the resolution of Claims pursuant to Section 4 or 10 hereof, (ii) involves
the Escrow Agent and (iii) results in litigation, then the courts of the
State of New York or the courts of the United States of America located in
the State of New York shall have jurisdiction to hear and decide such
matter, and Universal, the Stockholders, the Representative and the Escrow
Agent hereby submit to the jurisdiction of such courts. This Section 11 is
intended to apply only to the above limited matters involving the
14
<PAGE> 15
Escrow Agent or the Escrow Property and is not intended to alter the
resolution agreement set forth in Section 4 hereof or the arbitration
agreement set forth in Section 10 hereof. The foregoing notwithstanding,
Universal, the Stockholders, the Representative and the Escrow Agent may
seek and obtain from a court of competent jurisdiction a temporary
restraining order, temporary injunction or other temporary emergency relief
without first having to submit such dispute to arbitration.
(c) Each of the Interested Parties and the Representative hereby
absolutely and irrevocably consent and submit to the jurisdiction of the
courts in the State of New York and of any Federal court located in said
State in connection with any actions or proceedings brought against the
Interested Parties (or any of them) or the Representative by the Escrow
Agent arising out of or relating to this Escrow Agreement. In any such
action or proceeding, the Interested Parties each hereby absolutely and
irrevocably (i) waives any objection to jurisdiction or venue, (ii) waives
personal service of any summons, complaint, declaration or other process,
and (iii) agrees that the service thereof may be made by certified or
registered first-class mail directed to such party, as the case may be, at
their respective addresses in accordance with Section 9 hereof.
(d) WITH RESPECT TO MATTERS GOVERNED BY THIS SECTION 11, THE ESCROW
AGENT, THE INTERESTED PARTIES AND THE REPRESENTATIVE HEREBY WAIVE A TRIAL
BY JURY OF ANY AND ALL ISSUES ARISING IN ANY ACTION OR PROCEEDING BETWEEN
THEM OR THEIR SUCCESSORS OR ASSIGNS, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OF ITS PROVISIONS OR ANY NEGOTIATIONS IN CONNECTION
HEREWITH.
(e) Governing Law. With respect to matters governed by this Section
11, this Agreement will be governed by and construed in accordance with the
internal laws of the State of New York without regard to conflict of law
principles and will be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and permitted assigns.
12. General.
(a) Governing Law; Assigns. Except as otherwise provided in Section 10
hereof, this Agreement will be governed by and construed in accordance with
the internal laws of the State of New York without regard to conflict of
law principles and will be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and permitted assigns.
Except as otherwise provided in this Agreement, no party to this Agreement
may assign all or any portion of its or their rights, obligations or
liabilities under this Agreement without the prior written consent of the
other parties hereto. Any attempted assignment in violation of this Section
12(a) shall be voidable.
(b) Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
15
<PAGE> 16
(c) Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties with respect to the subject
matter of this Agreement and supersedes all prior agreements or
understandings, written or oral, between the parties with respect to the
subject matter hereof.
(d) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Agreement.
(e) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision
in any other situation or in any other jurisdiction. If the final judgment
of a court of competent jurisdiction declares that any term or provision
hereof is invalid or unenforceable, the parties agree that the court making
the determination of invalidity or unenforceability shall have the power to
reduce the scope, duration, or area of the term or provision, to delete
specific words or phrases, or to replace any invalid or unenforceable term
or provision with a term or provision that is valid and enforceable and
that comes closest to expressing the intention of the invalid or
unenforceable term or provision, and this Agreement shall be enforceable as
so modified after the expiration of the time within which the judgment may
be appealed.
(f) Waivers. No waiver by any party hereto of any condition or of any
breach of any provision of this Agreement will be effective unless in
writing. No waiver by any party of any such condition or breach, in any one
instance, will be deemed to be a further or continuing waiver of any such
condition or breach or a waiver of any other condition or breach of any
other provision contained herein.
13. Expenses.
(a) Escrow Agent. All fees and expenses of the Escrow Agent incurred
in the ordinary course of performing its responsibilities hereunder will be
borne by Universal upon receipt of a written invoice by Escrow Agent. Any
extraordinary fees and expenses, including, without limitation, any fees or
expenses incurred by the Escrow Agent in connection with a dispute over the
distribution of Escrow Shares or the validity of a Notice of Claim or as
described in Sections 6(b) or 7, will be paid 50% by Universal and 50% by
the Stockholders, other than fees and expenses related to withholding or
other taxes, assessments or governmental charges that apply to the
Stockholders, which will be paid 100% by the Stockholders directly. The
Stockholders' 50% liability for the extraordinary fees and expenses of the
Escrow Agent (which will be pro rata for each Stockholder based on the
proportion of the total Escrow Shares attributable to such Stockholder)
will be paid by Universal and recovered as a claim hereunder out of the
Escrow Shares or, if there are no Escrow Shares remaining, recovered from
the Stockholders directly.
(b) Representative. The Representative will not be entitled to receive
any compensation from Universal or the Stockholders in connection with this
Agreement.
16
<PAGE> 17
Any out-of-pocket costs and expenses reasonably incurred by the
Representative in connection with actions taken pursuant to the terms of
this Agreement will be paid by the Stockholders to the Representative in
proportion to their percentage interests in the Escrow Shares as set forth
on Exhibit A.
14. Successor Escrow Agent. In the event the Escrow Agent becomes
unavailable or unwilling to continue in its capacity herewith, the Escrow Agent
may resign and be discharged from its duties or obligations hereunder by giving
written notice of resignation to the parties to this Agreement, specifying a
date not less than 21 days following such notice date of when such resignation
will take effect. Universal will designate a successor Escrow Agent prior to the
expiration of such 21-day period by giving written notice to the Escrow Agent
and the Representative. Universal may appoint a successor Escrow Agent without
the consent of the Stockholders or the Representative so long as such successor
is a bank with assets of at least $50 million, and may appoint any other
successor Escrow Agent with the consent of the Representative, which consent
will not be unreasonably withheld. The Escrow Agent will promptly transfer the
Escrow Shares to such designated successor.
15. Limitation of Responsibility. The Escrow Agent's duties are limited to
those set forth in this Agreement, and Escrow Agent, acting as such under this
Agreement, and charged with knowledge of or any duties or responsibilities under
any other document or agreement, including, without limitation, the Merger
Agreement.
16. Amendment. This Agreement may be amended by the written agreement of
Universal, the Escrow Agent and the Representative; provided, that if the Escrow
Agent does not agree to an amendment agreed upon by Universal and the
Representative, the Escrow Agent will resign and Universal will appoint a
successor Escrow Agent in accordance with Section 14 above.
17
<PAGE> 18
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the day and first above written.
UNIVERSAL COMPRESSION HOLDINGS,
INC.
By: /s/ ERNIE L. DANNER
-------------------------------
Name: Ernie L. Danner
Title: Executive Vice President
REUBEN JAMES HELTON TRUST DATED
JANUARY 24, 2000
By: /s/ GARLIN R. RHYMES
-------------------------------
Name: Garlin R. Rhymes, Trustee
/s/ MICHAEL PAHL
----------------------------------
Michael Pahl
REPRESENTATIVE:
/s/ GARLIN R. RHYMES
----------------------------------
Name: Garlin R. Rhymes
STATE STREET BANK AND TRUST
COMPANY, AS ESCROW AGENT
By: /s/ CHI C. MA
-------------------------------
Name: Chi C. Ma
Title: Vice President
18
<PAGE> 19
EXHIBIT A
<TABLE>
<CAPTION>
STOCKHOLDER NAME NUMBER OF ESCROW PRO RATA
AND ADDRESS SHARES INITIALLY DEPOSITED INTEREST
---------------- -------------------------- --------
<S> <C> <C>
The Reuben James Helton 122,299 90%
Trust Dated January 24, 2000
c/o Garlin R. Rhymes, Trustee
24106 Bay Hill Blvd.
Katy, Texas 77494
Michael L. Pahl 13,588 10%
5319 N. Liberty Drive
Traverse City, Michigan 49684
</TABLE>
<PAGE> 20
EXHIBIT B
ADDITIONAL PARTY COUNTERPART
The undersigned, after having received and reviewed to its, his or her
satisfaction a copy of the Escrow Agreement, dated as of September 15, 2000 (the
"Escrow Agreement"), by and among Universal Compression Holdings, Inc. (the
"Company"), the Reuben James Helton Trust Dated January 24, 2000 as amended and
in effect, a trust formed pursuant to the laws of the State of Michigan (the
"Trust"), Garlin R. Rhymes, as trustee of the Trust ("Trustee"), Michael Pahl
("Pahl") (collectively, the Trust, Trustee and Pahl are referred to as the
"Stockholders"), Garlin R. Rhymes, as representative of the former stockholders
of Gas Compression Services, Inc., a Michigan corporation, and State Street Bank
and Trust Company, a Massachusetts trust company, as the Escrow Agent, does
hereby agree to become party to the Escrow Agreement, thereby accepting all of
the rights, benefits and obligations of a Stockholder thereunder. The Company
may attach this page as a counterpart to the Escrow Agreement and the
undersigned agrees that such attachment shall be deemed conclusive evidence of
its, his or her acknowledgment and acceptance of the terms thereof.
Capitalized terms used herein and not otherwise defined herein shall
have the meaning given such terms in the Escrow Agreement.
Dated:
[NAME]
[ADDRESS FOR NOTICES]
By:
-----------------------------
Name:
Title:
Acknowledged and Accepted By:
UNIVERSAL COMPRESSION HOLDINGS, INC.
By:
-------------------------------
Name:
Title:
<PAGE> 21
EXHIBIT C
FEE SCHEDULE
STATE STREET
SCHEDULE OF FEES
FOR
ESCROW SERVICES
UNIVERSAL COMPRESSION, INC.,
GAS COMPRESSION SERVICES, INC.,
REUBEN JAMES HELTON TRUST DATED JANUARY 24, 2000
AND
MICHAEL L. PAHL
<TABLE>
<S> <C>
ACCEPTANCE FEE: Waived
ADMINISTRATION FEE: $3,500.00 per year or part thereof
PLUS $35.00 PER SHAREHOLDER
INVESTMENT FEE: (if applicable) $65.00 per buy/sell
direct investments in treasuries, C/D's
CP, Repo's, etc.
SWEEP FEE: (if applicable) 40 basis points per annum of the
SSgA or selected other Money Market average daily net assets
Funds
State Street's Insured Money Market No Charge
Account
WIRE TRANSFER FEE (outgoing): $20.00
OUT-OF-POCKET EXPENSES At cost
LEGAL FEES (Peabody & Arnold): At Cost
</TABLE>
August 2, 2000
