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EXHIBIT 10.4
This ASSEMBLY AGENCY AGREEMENT, dated as of May 30, 2000 (as amended,
supplemented or otherwise modified from time to time, this "Agreement"), between
WILMINGTON TRUST COMPANY, a Delaware bank corporation, not in its individual
capacity, but solely as Trustee of Universal Compression Trust (2000-1) under
the Trust Agreement dated May 30, 2000 (the "Trustee"), and UNIVERSAL
COMPRESSION, INC., a Texas corporation ("Universal").
PRELIMINARY STATEMENT
A. Universal has entered and will enter into various contracts in its
individual capacity and not as agent for Trustee for the purchase, delivery,
construction and successful assembly of each Item of Equipment (each a
"Contract" and collectively, the "Contracts").
B. Pursuant and subject to the terms and conditions of the
Participation Agreement, dated as of the date hereof among Universal, Universal
Compression Holdings, Inc., Wilmington Trust Company, not in its individual
capacity but as Trustee of Universal Compression Trust (2000-1), Wilmington
Trust Company in its individual capacity, Deutsche Bank and the other financial
institution that may become party thereto, as Certificate Holders, Bankers Trust
Company, as Administrative Agent and Collateral Agent, and the Lenders named
therein or that may become a party thereto (the "Participation Agreement"),
Universal will collaterally assign its rights under the Contracts to Trustee to
secure Universal's obligations hereunder.
C. Subject to the terms and conditions hereof, Trustee desires to
appoint Universal as Trustee's sole and exclusive agent for the delivery,
construction and assembly of all aspects of the Equipment in accordance with
design specifications and all Applicable Laws and Universal desires, for the
benefit of Trustee, to purchase, take delivery of, construct and assemble the
Equipment in each case in accordance with the terms herein set forth.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Defined Terms; Rules of Usage. Capitalized terms used but
not otherwise defined in this Agreement shall have the respective meanings
specified in Appendix A to the Participation Agreement, which Appendix A is made
a part hereof by this reference, and the rules of interpretation set forth in
such Appendix A shall apply to this Agreement.
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ARTICLE II.
APPOINTMENT OF UNIVERSAL
SECTION 2.1. Appointment of Universal. (a) Pursuant to and subject to
the terms and conditions set forth herein and in the Participation Agreement and
the other Operative Documents, during the Assembly Period, Trustee hereby
irrevocably designates and appoints Universal as its exclusive agent for the
following purposes and expressly authorizes Universal, or any agent or
contractor of Universal, and, subject to Article VI, Universal agrees, for the
benefit of Trustee, whether or not a Lease Event of Default has occurred or is
continuing, to take all action necessary or that Universal reasonably determines
to be desirable for the performance and satisfaction of all of Universal's
obligations hereunder and under the Operative Documents, including, without
limitation:
(i) to acquire and successfully assemble each Item of Equipment
under and in accordance with the terms of the Contracts,
and in connection therewith to exercise all rights of
Trustee concerning supervision and inspection under the
Contracts in such manner to ensure that each Item of
Equipment will be constructed, assembled, completed and
delivered to Trustee (or its designee) in accordance with
the Contracts and the Operative Documents;
(ii) to approve or disapprove in a timely manner of all
materials delivered under the Contracts and all plans and
specifications as Universal shall deem to be in the best
interests of Trustee;
(iii) to the extent applicable, to attend shop tests of each Item
of Equipment;
(iv) to be present at and attend the Appraisals, to the extent
reasonably requested by the Appraiser;
(v) to agree to any amendment, modification or change in the
Contracts, any part of an Item of Equipment or any plans
and specifications for an Item of Equipment, as Universal
deems in its sole discretion to be necessary or appropriate
for the completion of each of the Items of Equipment in
accordance with the Operative Documents; provided, that (x)
no such amendment or modification shall reasonably be
anticipated to cause the continuation of the construction
and assembly of the Equipment to be completed after the
last day of the Interim Term and (y) the aggregate effect
of any amendment or modification, when taken together with
any previous or contemporaneous amendments or
modifications, will not have a material adverse effect on
the fair market value, Residual Value or utility of the
Item of Equipment upon completion and (z) no such
amendment, modification or change shall be required if
Universal reasonably determines that the failure to agree
to such amendment, modification or change will not result
in a violation of any provision of any Operative Document;
(vi) in the event Trustee shall be required to accept the Item
of Equipment in accordance with the terms of the Operative
Documents, to exercise all rights of acceptance of Trustee
(or its designee) thereunder;
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(vii) to exercise any and all rights of termination or
cancellation of any Contract and in the event of any such
cancellation or termination to take such action in respect
of such cancellation;
(viii) to take all such other actions with respect to the Items of
Equipment or the Contracts as Universal shall deem to be in
the best interests of Trustee and of Universal; provided
that in no event shall Universal institute any litigation
for or on behalf of Trustee;
(ix) to perform all engineering work and all design and
supervisory functions relating to the construction and
assembly of each Item of Equipment;
(x) to obtain all necessary permits, authorizations,
registrations, consents, approvals, waivers, variances,
orders, licenses, filings, notices to and declarations of
any Governmental Entity reasonably required under
Applicable Law (including environmental laws), in
connection with the purchase, delivery, construction and
assembly of each Item of Equipment in accordance with the
Contracts and the Operative Documents; and
(xi) to maintain adequate books and records with respect to the
purchase, delivery, construction, assembly and operation
and management of the Items of Equipment.
(b) Neither Universal nor any of its Affiliates or agents shall enter
into any contract as agent for Trustee or which would impose any liability or
obligation on Trustee.
(c) Universal shall comply with all obligations of the buyer or user of
service under the Contracts in order to maintain the Contracts in full force and
effect so as to preserve fully the rights of Trustee and Universal thereunder;
(d) Subject to the terms and conditions of this Agreement and the other
Operative Documents, Universal shall have sole management and control over the
construction means, methods, sequences and procedures with respect to the
permanent construction and assembly of each Item of Equipment.
SECTION 2.2. Acceptance. Subject to the terms hereof, Universal hereby
unconditionally and irrevocably accepts the designation and appointment as agent
to Trustee in accordance with the terms hereof.
SECTION 2.3. Term. This Agreement shall commence on the date hereof and
shall terminate on the first to occur of:
(i) payment by Universal of the Payment Date Option Amount
pursuant to Section 28.4 of the Lease Agreement; and
(ii) the Basic Term Commencement Date.
Notwithstanding anything contained herein to the contrary, Universal's
obligations under this
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Agreement shall automatically terminate upon the termination of this Agreement
pursuant to this Section 2.3, other than those obligations which by the terms of
the Operative Documents survive such termination.
SECTION 2.4. Construction Documents; Assignment of Construction
Documents. Universal may execute any of its duties under this Agreement by or
through agents, contractors, employees or attorneys-in-fact. Universal shall
enter into such agreements in its individual capacity and not as agent for
Trustee in addition to the Contracts, which it deems necessary or desirable for
the purchase, delivery, design, construction, assembly, testing and performance
of the Equipment and performance of all other duties described in Section 2.1
hereof (the "Construction Documents"); provided, however, that no such
delegation shall limit or reduce in any way Universal's duties and obligations
under this Agreement. As security for its obligations hereunder, Universal
agrees to assign Trustee all of the Universal's rights under and interest in
such Construction Documents.
SECTION 2.5. Covenants of Universal. Universal hereby covenants and
agrees that it will:
(a) use commercially reasonable efforts to cause construction of the
Equipment to be pursued diligently and without undue interruption in accordance
with the Contracts and the other Construction Documents and, to render the
Equipment fully operational in accordance with the design specification, in
compliance in all material respects with Applicable Laws; and
(b) maintain adequate records with respect to the application of all
amounts reimbursed to Universal by Trustee or paid directly by Trustee to
manufacturers and vendors of Equipment under the Participation Agreement.
ARTICLE III.
PAYMENT OF FUNDS
SECTION 3.1. Reimbursement of Construction Costs Universal may request
reimbursement of Acquisition Costs in accordance with Section 4.4 of the
Participation Agreement.
ARTICLE IV.
MISCELLANEOUS
SECTION 4.1. Notices. All notices, consents, directions, approvals,
instructions, requests, demands and other communications required or permitted
by the terms hereof to be given to any Person shall be given in writing in the
manner provided in, shall be sent to the respective addresses set forth in, and
the effectiveness thereof shall be governed by the provisions of, Section 12.4
of the Participation Agreement.
SECTION 4.2. Successors and Assigns This Agreement shall be binding
upon and inure to the benefit of Trustee, Universal and their respective legal
representatives, successors and
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permitted assigns. Universal shall not assign its rights or obligations
hereunder without the prior written consent of Trustee and the Administrative
Agent.
SECTION 4.3. Governing Law, Jurisdiction and Venue; Waiver of Jury.
This Agreement and the rights and obligations of the parties hereunder and under
the Notes shall be construed in accordance with, and be governed by, the law of
the State of New York. The parties hereto hereby agree that all actions or
proceedings initiated by any party hereto arising directly or indirectly out of
this Agreement may be litigated in the Supreme Court of the State of New York
located in New York City or the District Court of the United States District
Court for the Southern District of New York. Each party hereto hereby expressly
submits and consents in advance to such jurisdiction and venue in any action or
proceeding commenced by any party hereto in any of such courts, agrees that
jurisdiction and venue is proper in such courts, and hereby waives personal
service of the summons and complaint, or other process or papers issued therein,
and agrees that such service of the summons and complaint may be made by
registered mail, return receipt requested, addressed to the party hereto being
served at the address for such party set forth in Section 12.4 of the
Participation Agreement. Universal and Trustee irrevocably designate and appoint
CT Corporation, with offices on the date hereof at 111 Eighth Avenue, New York,
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
action or proceeding hereunder. If for any reason, such designee, appointee and
agent shall cease to be available to act as such, Universal and Trustee agree to
designate a new designee, appointee and agent in New York City on terms and for
the purposes of this provision satisfactory to administrative agent. Each party
hereto waives any claim that New York City or the Southern District of New York
is an inconvenient forum or an improper forum based on lack of venue. The choice
of forum set forth herein shall not be deemed to preclude the enforcement by
Trustee of any judgment in any other appropriate jurisdiction. Trustee hereby
waives trial by jury in any judicial proceeding involving directly or
indirectly, any matter in any way arising out of, related to, or connected with
this Agreement or the other Operative Documents.
SECTION 4.4. Counterparts This Agreement may be executed in any number
of separate counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same agreement.
SECTION 4.5. Severability. Any provision of this Agreement 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.
SECTION 4.6. Headings and Table of Contents. The headings and table of
contents contained in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Assembly Agency
Agreement to be duly executed and delivered by their duly authorized
representatives as of the day first above written.
WILMINGTON TRUST COMPANY,
not in its individual capacity, but
solely as Trustee of Universal
Compression Trust (2000-1) under
the Trust Agreement dated as of May
25, 2000, as Trustee,
By: /s/ ROBERT P. HINES, JR.
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Name: Robert P. Hines, Jr.
Title: Financial Services Officer
UNIVERSAL COMPRESSION, INC.
By: /s/ RICHARD W. FITZGERALD
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Name: Richard W. FitzGerald
Title: Chief Financial Officer
