1
EXHIBIT 10.35
HANOVER COMPRESSOR COMPANY
$200,000,000 CREDIT AGREEMENT,
DATED AS OF DECEMBER 15, 1997
AMENDMENTS FIRST THROUGH THIRD
INDEX OF CLOSING DOCUMENTS
DOCUMENT TAB
1. Waiver and First Amendment, with Annexes
attached thereto, dated as of June 10, 1998 ............................ 1
2. Letter Agreement, dated June 1, 1998,
waiving defaults under and amending the
Exchange and Subordinated Loan Agreement ............................... 2
3. Letter Agreement, dated June 10, 1998,
committing Chase to additional loans ................................... 3
4. Promissory Note, dated June 10, 1998 ................................... 4
5. Resolutions of the Company and Subsidiaries,
dated as of June 10, 1998 .............................................. 5
6. Second Amendment, dated as of June 29, 1998 ............................ 6
7. Synthetic Lease Summary of Terms and Conditions
(Annex I to the Second Amendment) ...................................... 7
8. Third Amendment, dated as of July 28, 1998 ............................. 8
2
WAIVER AND FIRST AMENDMENT
WAIVER AND FIRST AMENDMENT, dated as of June 10, 1998 (this "Waiver
and Amendment"), to the Credit Agreement, dated as of December 15, 1997 (as the
same may be amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among HANOVER COMPRESSOR COMPANY, a Delaware corporation
("HCC"), the several banks and other financial institutions from time to time
parties thereto (the "Lenders") and THE CHASE MANHATTAN BANK, a New York banking
corporation, as the administrative agent for the Lenders (in such capacity, the
"Administrative Agent").
W I T N E S S E T H:
WHEREAS, HCC, the Lenders and the Administrative Agent are parties to
the Credit Agreement; and
WHEREAS, HCC has requested that the Administrative Agent and the
Required Lenders amend (i) the indebtedness covenant in the Credit Agreement so
as to permit HCC to incur additional indebtedness up to $35,000,000 and (ii)
certain Schedules to the Credit Agreement; and
WHEREAS, HCC has requested that the Administrative Agent and the
Required Lenders agree to waive any failure by HCC to comply with certain
provisions of the Credit Agreement, upon the terms and subject to the
conditions set forth herein; and
WHEREAS, the Administrative Agent and the Required Lenders are
agreeable to the requested amendments and waivers, but only on the terms and
subject to the conditions set forth herein;
NOW THEREFORE, in consideration of the premises herein contained and
for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms
used herein which are defined in the Credit Agreement are used herein as
therein defined.
2. Amendment to Subsection 1.1 (Defined Terms). (a) Subsection 1.1 of
the Credit Agreement is hereby amended by inserting the following new
definition in the appropriate alphabetical order:
"Chase Letter Agreement": the $30,000,000 Letter Agreement, dated June
10, 1998, between The Chase Manhattan Bank and HCC.
3
3. Amendment to Schedule II. Schedule II of the Credit Agreement is
hereby amended by deleting it in its entirety and substituting in place thereof
Annex A attached hereto.
4. Amendment to Schedule IX. Schedule IX of the Credit Agreement is
hereby amended by deleting it in its entirety and substituting in place thereof
Annex B attached hereto.
5. Waiver of Subsection 7.7(a). The Administrative Agent and the
Required Lenders hereby waive any violation of subsection 7.7(a) of the Credit
Agreement as a result of any failure by HCC prior to the date hereof to give
notice to the Administrative Agent and each Lender of HCC's defaults under
subsection 5.6, Section 6 and subsections 7.1(c), (d) and (k) of the
Shareholder Subordinated Loan Agreement.
6. Amendment to Subsection 8.2 (Limitation on Indebtedness).
Subsection 8.2 of the Credit Agreement is hereby amended by deleting paragraph
(i) therefrom and substituting in place thereof the following:
"(i) Indebtedness not contemplated by clauses (a)-(h) above not
exceeding (i) $35,000,000 in the aggregate at any time outstanding until the
earlier of (A) September 10, 1998 and (B) the date of the initial extension
of credit made under the proposed approximate $194,000,000 equipment lease
transaction being arranged by Chase Securities Inc. for HCC, and (ii)
thereafter $5,000,000 in the aggregate at any time outstanding."
7. Waiver of Subsection 8.10 (Limitation on Investments, Loans and
Advances). The Administrative Agent and the Required Lenders hereby waive
compliance with subsection 8.10(g) of the Credit Agreement for the period
commencing the date hereof and ending on the date that the loans made by The
Chase Manhattan Bank to HCC under the Chase Letter Agreement are required to be
paid or prepaid in full, provided that (i) all acquisitions made by HCC and/or
its Subsidiaries in connection with all such Permitted Business Acquisitions
does not exceed $35,000,000.
8. Waiver of Subsection 9(f). The Administrative Agent and the
Required Lenders hereby waive any violation prior to the date hereof of
subsection (9)(f)(ii) of the Credit Agreement as a result of HCC's defaults
under subsection 5.6, Section 6 and subsections 7.1(c),(d) and (k) of the
Shareholder Subordinated Loan Agreement.
9. Effectiveness. This Waiver and Amendment shall become effective on
June 10, 1998 subject to the fulfillment of the following conditions: (a) HCC
and each of its Subsidiaries listed on the signature pages hereto shall have
delivered to the Administrative Agent duly executed copies of this Waiver and
Amendment, (b) the Administrative Agent shall have received duly executed
copies of this Waiver and Amendment from the Required
4
3
Lenders, (c) the Administrative Agent shall have received evidence reasonably
satisfactory to it that the lenders under the Shareholder Subordinated Loan
Agreement have waived HCC's defaults under subsection 5.6, Section 6 and
subsections 7.1(c), (d) and (k) of the Shareholder Subordinated Loan Agreement
and (d) no Default or Event of Default shall have occurred and be continuing on
the date hereof after giving effect to this Waiver and Amendment.
10. Representations and Warranties. HCC hereby represents and
warrants that the representations and warranties contained in the Credit
Agreement (except those which expressly speak as of a certain date) will be,
after giving effect to this Waiver and Amendment, true and correct in all
material respects, as if made on and as of the date hereof.
11. Continuing Effect of Credit Agreement. This Waiver and Amendment
shall not constitute an amendment or waiver of any other provision of the
Credit Agreement or the Loan Documents not expressly referred to herein and
shall not be construed as a waiver or consent to any further or future action
on the part of HCC that would require a waiver or consent of the Administrative
Agent and/or the Lenders. Except as expressly amended hereby, the provisions of
the Credit Agreement and the Loan Documents are and shall remain in full force
and effect.
12. Counterparts. This Waiver and Amendment may be executed in
counterparts and all of the said counterparts taken together shall be deemed to
constitute one and the same instrument. Delivery of an executed signature page
of this Waiver and Amendment by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof.
13. GOVERNING LAW. THIS WAIVER AND AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
14. Expenses. HCC agrees to pay or reimburse the Administrative
Agent for all of their out-of-pocket costs and expenses incurred in connection
with the preparation, negotiation and execution of this Waiver and Amendment,
including, without limitation, the fees and disbursements of counsel to the
Administrative Agent.
5
IN WITNESS WHEREOF, the parties hereto have caused this Waiver and
Amendment to be executed and delivered by their duly authorized officers as of
the date first written above.
HANOVER COMPRESSOR COMPANY
BY: /s/ XXXXXX XXXXXXX
--------------------------
Name: Xxxxxx Xxxxxxx
Title: Treasurer
THE CHASE MANHATTAN BANK (formerly known
as Chemical Bank), as Administrative
Agent and as a Lender
BY: /s/ [ILLEGIBLE]
--------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA
BY: /s/ [ILLEGIBLE]
--------------------------
Name: [ILLEGIBLE]
Title: Senior Manager, Loan Operations
CREDIT LYONNAIS, NEW YORK BRANCH
BY: /s/ PHILIPPE SOUSTRA
--------------------------
Name: Philippe Soustra
Title: Senior Vice President
XXXXX FARGO BANK (TEXAS), NATIONAL
ASSOCIATION
BY:
--------------------------
Name:
Title:
6
BANQUE PARIBAS
BY: /s/ XXXXXX X. XXXXXXXX
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Managing Director
BY: /s/ XXXXX X. XXXXXX
-----------------------------
Name: Xxxxx X. Xxxxxx
Title: Assistant Vice President
FIRST UNION BANK
BY: /s/ XXXXXX X. XXXXXXXXX
-----------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President
BANKERS TRUST COMPANY
BY:
-----------------------------
Name:
Title:
Acknowledged and agreed to as of
the date hereof:
HANOVER MAINTECH, INC.
BY: /s/ XXXXXX XXXXXXX
-----------------------------
Name: Xxxxxx Xxxxxxx
Title: Treasurer
HANOVER/XXXXX, INC.
BY: /s/ XXXXXX XXXXXXX
-----------------------------
Name: Xxxxxx Xxxxxxx
Title: Treasurer
HANOVER LAND COMPANY
BY: /s/ XXXXXX XXXXXXX
-----------------------------
Name: Xxxxxx Xxxxxxx
Title: Treasurer
7
ANNEX A
SCHEDULE II SUBSIDIARIES
----------- ------------
1. Hanover Acquisition Corporation, a Texas corporation and a wholly-owned
Subsidiary of HCC.
2. Hanover Compressor Colombia, Inc., a Delaware corporation and a wholly-owned
Subsidiary of HCC.
3. Hanover Land Company, a Texas corporation and a wholly-owned Subsidiary of HCC
(initial Credit Party).
4. Hanover Maintech, Inc. (f/k/a Maintech Enterprises, Inc.), a Texas corporation
and a wholly-owned Subsidiary of HCC (initial Credit Party).
5. Hanover/Xxxxx, Inc., a Delaware corporation and a wholly-owned Subsidiary of HCC
(initial Credit Party).
6. HCC owns 33% of the issued and outstanding stock of Warsila Compression Systems
GmbH, a German Company.
7. H.C.C. Compressor de Venezuela, C.A., a Venezuelan corporation ("H.C.C.
Venezuela") and a wholly-owned Subsidiary of HCC.
8. Hanover-PGN Compressor, C.A., a Venezuelan corporation and a wholly-owned
Subsidiary of H.C.C. Venezuela.
9. HCC owns 99.992% of the issued and outstanding stock of Contract Compression
International Argentina, S.A., an Argentinean corporation ("CCIA"). HMI owns the
remaining 0.008% of CCIA stock.
10. Hanover Compressor Holding Company NL B.V., a Dutch company ("Hanover Holding")
and a wholly-owned Subsidiary of HCC.
11. Hanover Cayman Limited, a Cayman Islands company ("Hanover Cayman") and a
wholly-owned Subsidiary of HCC.
12. Hanover Holding owns 99.99% of the issued and outstanding stock of Hanover
Compressor Company Bolivia, Ltd., a Bolivian company ("HCC Bolivia"). Hanover
Cayman owns the remaining 0.01% of HCC Bolivia stock.
13. Hanover Cayman owns 60% of the issued and outstanding stock of Hanover/Enron
Venezuela, Ltd., a Cayman Islands company.
8
14. HCC owns 99.99% of the membership interests of Hanover Compressor Mexico SRL, a
Mexican limited liability company ("Hanover Mexico"). Hanover Cayman owns the
remaining 0.01% of said membership interests.
15. Hanover Compressor Sucursal Mexico, a Mexican branch and a wholly-owned
Subsidiary of HCC.
16. HCC owns 51% of Hanover/Cosacol Consortium, a Columbian consortium.
17. HCC owns 51% of Hanover Compressor Colombia Ltd., a Colombian limitada.
18. HCC owns 99% of the membership interests of 3013442 Nova Scotia Co., a Nova
Scotia unlimited liability company. HMI owns the remaining 1% of said membership
interests.
19. Xxxxxx Equipment, Inc., a Texas corporation and a wholly-owned Subsidiary of HCC.*
20. Gas Tech Compression Services, Inc., a Texas corporation and a wholly-owned
Subsidiary of HCC.*
21. HCC owns 35% of Collicutt's Mechanical Services, Ltd., a Canadian corporation.
22. Astra Resources International, Inc., a Texas corporation and a wholly-owned
subsidiary of Hanover Acquisition Corporation.
23. HCC Acquisition, Inc., a Texas corporation and a wholly-owned subsidiary of HCC.
24. Xxxxxx Corporation, a Delaware corporation and a wholly-owned subsidiary of HCC.
25. Hanover International Trade Corporation a West Indies (Barbados) corporation.
---------------------
* The assets of this entity have been transferred to HCC and it is now an
inactive corporation.
2
9
ANNEX B
SCHEDULE IX ENVIRONMENTAL
BRIGHTON, COLORADO
1. This is leased facility while HCC is in the process of shutting down. The
existing property has been documented as having elevated levels of TPH and
some metals in the surface soils prior to HCC's acquisition of the
EconoFlow assets. Since the acquisition HCC has conducted no activities
that would result in increased level of TPH or soil contamination. The
documented levels are the responsibility of the property owner.
BRYAN, TEXAS
1. Leased facility at 0000 Xxxxxxx 00 X. Xxxxx, Xxxxx 00000. Preliminary Phase
II surface soil and water testing has been conducted. There are elevated
levels of TPH and some metals in the surface soil which relate to periods
prior to HCC's occupancy. A letter is being sent to the lessor regarding
those elevated levels of TPH and the surface soil conditions of response as
to compliance according to state and federal regulations. A Notice of
Violation was issued because no permit was issued prior to the commencement
of painting operations. The matter was resolved when the PI-7 was received
and an exemption was granted.
COLUMBUS, TEXAS
1. Environmental Management Services ("EMS"), an environmental consultant to
HCC, is submitting an Application to Amend an existing Air Permit to the
TNRCC regarding sand blasting and painting, operations at the facility in
order to update permit conditions. The applications is slated for submittal
June 1, 1998. HCC/Xxxxx has submitted a Notice of Intent ("NOI") to apply
for a stormwater permit. EMS has completed two quarterly stormwater
sampling events, which were within EPA discharge limits. EMS is currently
waiting on further rain to conduct its final sampling. EMS has also
prepared a Pollution Prevention Plan as required by the EPA Stormwater
Permitting Rules. The final EPA stormwater permit application will also be
submitted June 1, 1998.
2. EMS completed a Site Remediation and Cleanup Proposal with respect to
metals and TPH contamination in the soils at the Columbus facility, which
results from previous tenant activities. GeoMonitoring Services ("GMS"),
another environmental consultant to HCC, recently completed a Voluntary
Cleanup Plan ("VCP") to address residual levels of contamination. GMS has
recommended to HCC that it delay implementation of the VCP until recently
proposed TNRCC rules as finalized.
EAST XXXXXXX, TEXAS
1. Remediation was conducted at the East Xxxxxxx facility by an FDIC
consultant firm prior to occupancy by HCC; however, a final certification
of completion was not issued for a non-hazardous landfill remediation
located on the property. Xxxxxxx Capital has
10
indemnified HCC regarding potential environmental liabilities relating to
the closed landfill.
2. Potable water at this facility may need to be tested and certified.
3. An underground separator at this facility may need to be registered as a
UST with possible overflow discharge.
4. A spill control and contingency planning document for an 8,000 gallon
above-ground tank is required for this facility. Plans are under way to
relocate this tank to another facility.
FARMINGTON, NEW MEXICO
----------------------
1. This is a leased facility that has limited surface soil oil staining. HCC
is fabricating a new facility approximately a mile away to be opened in the
summer of 1998. Once HCC has relocated, HCC will complete any required
cleanup of the property in accordance with applicable law.
HOUSTON (NORTH HOUSTON ROSSLYN), TEXAS
--------------------------------------
1. The City of Houston issued a Notice of Violation ("NOV") to HCC in 1996
with respect to painting and sand blasting at this facility. HCC has taken
measures to comply with applicable TNRCC requirements and has submitted
documentation of such compliance. However, since the City of Houston is not
required to issue a final resolution letter, it has not done so, and
subsequently, a second NOV was issued by the City of Houston on August 4,
1997. On August 22, 1997, the second NOV was deleted by the City of Houston
as not valid. HCC filed an application for and received a PI-7 and operates
thereunder.
2. HCC purchased the property adjoining the North Houston Rosslyn facility
from Xxxxxx X. Construction, Inc. ("GMCI"). HCC leased the property back to
GMCI through December 1998. The property contains stockpiled soils, waste
oil drums, used transformers, used tires, telephone poles, scrap equipment
and other debris that will be removed prior to HCC taking possession of the
property. GMCI is required to clean-up the property prior to the expiration
of its Lease.
HOUSTON (SOUTH LOOP), TEXAS
---------------------------
1. This leased facility has limited soil and groundwater contamination based
on a preliminary Phase II investigation by GMS. Waukesha/Xxxxxx, Inc.
("WPI") is responsible for any environmental contamination and related
clean-up. HCC is in negotiations with WPI to install four permanent
groundwater monitoring xxxxx and conduct additional groundwater and soil
testing at the facility based on GMS' test results.
2
11
HCC is also asking WPI to bioremediate soils in contaminated area near the
main building and to remove soils around the paint and waste storage areas.
GENERAL FACILITIES DISCLOSURE
-----------------------------
HCC has acquired air permits or received approval of standard exemptions
for painting and/or sandblasting activities at Xxxx Xxxxxxx, Xxxxxxx,
Xxxxxxxxxx, Xxxxxxxx and Xxxxx, Xxxxxxx. Yukon and Ft. Xxxxx (Pocola, OK) are
exempted from air permitting under applicable law.
HCC has not acquired stormwater permits for any of its facilities, but has
determined that these permits are only required at its manufacturing facilities
in Columbus and Houston. Stormwater permitting applications at these facilities
are currently being prepared or evaluated. The other facilities are
reconditioning facilities and not fabricating facilities and permitting is not
required.
Underground storage tanks formerly containing waste oils, glycols and wash
waters have been removed from the Houston, Columbus and Oklahoma City
facilities. Minor releases associated with these tanks were detected in
surrounding soils, but were below applicable risk-based cleanup levels. None of
these tanks are used by HCC.
The following lube/oil antifreeze storage tanks are above 1,100 gallon
capacity and therefore may require permitting: Deweyville (8,000 gallon);
Lafayette (8,000 gallon); Wilburton (2 at 8,800 gallons, 2 at 2,000 gallons);
East Xxxxxxx (8,000 gallon); Xxxxxxx (6,000 gallon, 4,000 gallon and 2,000
gallon); Sterling City.
Most HCC facilities (including, but not limited to, Houston, Columbus,
Lafayette, Fort Xxxxx, Oklahoma City, Victoria and Bridgeport) have sumps which
are typically associated with cleaning, painting, ballasting, testing and
fabrication operations. HCC does not believe any of the sumps operated at their
facilities are USTs as defined under the EPA definition under RCRA. These sumps
may require state registration or the filing of Notice of Registrations with the
appropriate state or federal agency.
HCC contracts with various solvent, oil and waste handling and disposal
companies to dispose of used oils, glycols, equipment wash waters and other
wastewaters or sediments. We are not aware of any violations or notices of
non-compliance relating to the off-site disposal or re-use of such waste
materials.
3
12
HANOVER COMPRESSOR COMPANY
00000 XXXXX XXXXXXX - XXXXXXX
XXXXXXX, XXXXX 00000
June 1, 1998
To the Holders of Hanover Compressor
Company's Subordinated Notes due
December 21, 2000
Re: Hanover Compressor Company ("HCC")
Reference is made to the Exchange and Subordinated Loan Agreement dated as
of December 23, 1996 (the "SUB DEBT AGREEMENT") among HCC and the parties
listed on the signature pages thereof as Lenders. Capitalized terms not
otherwise defined herein have the meanings ascribed to them in the Sub Debt
Agreement.
As you may recall, the negative covenants set forth in Section 6 of the
Sub Debt Agreement are tied directly to the negative covenants in the Second
Amended and Restated Credit Agreement, dated as of December 15, 1995 among HCC,
The Chase Manhattan Bank, as agent and the banks parties thereto, as amended
(the "OLD SENIOR CREDIT AGREEMENT"). In December of 1997, HCC terminated the
Old Senior Credit Agreement and simultaneously entered into a Credit
Agreement dated as of December 15, 1997 among HCC, The Chase Manhattan Bank, as
Administrative Agent and the several lenders parties thereto (the "EXISTING
SENIOR CREDIT AGREEMENT"), which provides HCC with a $200,000,000 unsecured
revolving line of credit. In connection with the negotiation of the Existing
Senior Credit Agreement, HCC was able to improve the terms of a number of
covenants and events of default as compared to those in the Old Senior Credit
Agreement. These improvements recognized the expanding, more mature nature of
HCC's business and its status as a public company.
Due to the fact that Section 6 of the Sub Debt Agreement did not
automatically incorporate the more flexible covenants in the Existing Senior
Credit Agreement (because it was a new agreement and not an amendment of the
Old Senior Credit Agreement) there are a number of inconsistencies between the
negative covenants in Section 6 of the Sub Debt Agreement and the negative
covenants in Section 8 of the Existing Senior Credit Agreement. As HCC has been
operating in a manner consistent with the Existing Senior Credit Agreement's
more flexible covenants certain technical Events of Default may have occurred
under the terms of the Sub Debt Agreement.
13
June 1, 1998
Page 2
In order to avoid (i) the occurrence and continuation of Defaults and
Events of Default under the Sub Debt Agreement (and related defaults under the
Existing Senior Credit Agreement) and (ii) inconsistencies between the Sub Debt
Agreement and the Existing Senior Credit Agreement, HCC hereby requests that
the Lenders agree as follows:
(a) to waive any and all Defaults and Events of Default that exist under
the Sub Debt Agreement arising out of or related to actions or omissions of HCC
and its Subsidiaries that were permitted by the negative covenants in the
Existing Senior Credit Agreement;
(b) to waive any Events of Default caused by the breach of the covenants
in Sections 5.6(a) and 5.6(b)(i) of the Sub Debt Agreement due to the failure
of HCC to timely notify the Lender of any default or Event of Default waived in
clause (a) above;
(c) to amend Section 1.1 of the Sub Debt Agreement to delete the text of
the definition of "Senior Loan Agreements" in its entirety and substitute the
following in lieu thereof:
"SENIOR LOAN AGREEMENTS": that certain Credit Agreement dated as of
December 15, 1997 (as amended), by and among the Company and The Chase
Manhattan Bank administrative agent for the banks parties thereto and any
successor agreements under any restructuring, refinancing, replacement, or
succession thereof, or any other new creditor facility provided by
institutional lenders for the benefit of the Company, its Subsidiaries, or
their respective successors and assigns as such agreements may be amended,
restated modified or supplemented from time to time, including, without
limitation, amendments, modifications, supplements and restatements thereof
giving effect to increases, renewals, extensions, refundings, deferrals,
restructurings, replacements or refinancing of, or additions to, the
arrangements provided in such Agreements (whether provided by the original
lenders and administrative agent under such Credit Agreement or any
successor agent or other lenders).
(d) to amend Section 5.6 of the Sub Debt Agreement by deleting the text
of that Section in its entirety and substituting the text of Section 7.7 of the
Existing Senior Credit Agreement, mutatis mutandis, in lieu thereof; provided,
that to the extent Section 7.7 of the Existing Senior Credit Agreement is
hereafter amended, supplemented, waived, or deleted, the text of Section 5.6 of
the Sub Debt Agreement shall be deemed to be so amended, waived, supplemented
or deleted;
(e) to amend Section 6 of the Sub Debt Agreement by deleting the text of
that Section
14
June 1, 1998
Page 3
in its entirety and substituting the following in lieu thereof:
"So long as the Notes remain outstanding and unpaid, or any other amount is
owing to the Lenders hereunder, the Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly take any action, omit to
take any action, or permit to exist any circumstances, that would cause the
Company to fail to comply with the negative covenants set forth in the
Senior Loan Agreements, with such amendments, supplements and other changes
to such negative covenants, and such consents, waivers or other
modifications and other changes to such negative covenants, and such
consents, waivers or other modifications granted in connection therewith,
as shall be adopted or granted pursuant to the terms of such Senior Loan
Agreements. The obligations of the Company set forth in this Section 6
shall continue notwithstanding the termination of such Senior Loan
Agreements; provided, however, in the event that the Company is bound by
more than one Senior Loan Agreement and the negative covenants in such
Senior Loan Agreements conflict, the negative covenants that provide the
Company with the greatest flexibility will govern and bind the Company for
the purposes of this Section 6."
(f) to amend Sections 7(e), 7(h) and 7(i) of the Sub Debt Agreement to
delete the references to "$2,500,000" therein and substitute "$5,000,000" in
lieu thereof;
(g) to amend Section 9.2 of the Sub Debt Agreement to delete the
telecopier number for HCC listed therein and substituting "(000) 000-0000" in
lieu thereof;
(h) to amend Section 9 of the Sub Debt Agreement by adding a new Section
9.16 thereto as follows:
"9.16 Conflicts with Senior Loan Agreements. In the event that any
provisions of this Agreement conflicts with any provisions of the Senior
Loan Agreements, the provisions of this Agreement shall be deemed amended,
supplement or waived to the extent necessary to avoid such conflict."
The effectiveness of the waivers and amendment set forth herein is subject
to the approval by each Lender of the terms hereof, which approval shall be
indicated by the execution by all such Lenders of counterparts of this letter.
Except as specifically set forth herein, the Sub Debt Agreement shall
remain in full force and effect in accordance with its terms, without any
further amendment, modification or waiver
15
June 1, 1998
Page 4
of any provision thereof.
This letter may be executed by one or more of the parties hereto on any
number of separate counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument. This letter may be
executed and delivered by telecopier.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
If you are in agreement with the foregoing, please execute a copy of
this letter in the space indicated below, which signature will constitute
acceptance of the terms hereof and will implement the waivers and amendments
described above (subject to the condition to effectiveness described above), and
return it no later than Friday, June 5, 1998 by facsimile to 312/269-1747,
Attention: Xxxxxxx X. Xxxxxx, with a hard copy to follow by U.S. Mail addressed
as follows:
Xxxx, Gerber & Xxxxxxxxx
Xxx Xxxxx XxXxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
If you have any questions regarding the foregoing please contact Xxxxxx
Xxxxxxx at 281/447-8787 or Xxxxxxx X. Pucker at 312/269-8444.
Very truly yours,
HANOVER COMPRESSOR COMPANY
By: /s/ XXXXXX XXXXXXX
--------------------------------------
Xxxxxx Xxxxxxx,
Chief Financial Officer
Agreed to and Accepted as of June 1, 1998:
16
June 1, 1998
Page 5
GKH INVESTMENTS, L.P., a Delaware limited
partnership
By: GKH PARTNERS, L.P., a Delaware
limited partnership, its general partner
By: JAKK Holding Corp., a general partner
By: /s/ XXXXXX X. XXXXX
------------------------------
Xxxxxx X. Xxxxx, President
GKH PARTNERS, L.P., a Delaware limited
partnership
By: JAKK Holding Corp., a general partner
By: /s/ XXXXXX X. XXXXX
------------------------------
Xxxxxx X. Xxxxx, President
IPP95, L.P.
By: WESINVEST, Inc., its general partner
By: /s/ [ILLEGIBLE]
-------------------------------
Title: [ILLEGIBLE]
17
June 1, 1998
Page 6
XXXXX INVESTMENT GROUP II
By: /s/ XXX X. XXXXX
--------------------------------
Title: Managing Partner
XXXX CANDIES, INC.
By: /s/ XXXXXXX X. XXXXX
--------------------------------
Title: Agent
XXXXXXX X. XXXX, XX. PROPERTIES, INC.
By: /s/ XXXXXXX X. XXXX, XX.
--------------------------------
Title: President
/s/ XXXXXXX X. XXXXX
--------------------------------
XXXXXXX X. XXXXX
/s/ XXX XXXXXXX, JR.
--------------------------------
XXX XXXXXXX, JR.
/s/ L. O. XXXX
--------------------------------
L. O. XXXX
18
[CHASE LOGO]
June 10, 1998
Hanover Compressor Company
00000 Xxxxx Xxxxxxx-Xxxxxxx
Xxxxxxx, Xxxxx 00000
Dear Sirs:
The Chase Manhattan Bank ("Chase") is pleased to inform you of its
agreement, subject to the terms and conditions hereof, to make loans to Hanover
Compressor Company ("HCC") from time to time through September 10, 1998, in an
aggregate principal amount not to exceed $30,000,000 at any one time outstanding
(the "Loans"). The Loans to be made under this letter agreement (the "Letter
Agreement") are in addition to loans Chase is committed to make under the Credit
Agreement, dated as of December 15, 1997, as amended by the Waiver and First
Amendment thereto, dated as of June 10, 1998 (the "Credit Agreement") among HCC,
the several Lenders party thereto and The Chase Manhattan Bank, as
Administrative Agent, Except as otherwise defined herein, all capitalized terms
used in the Credit Agreement are used herein with their defined meanings.
The Loans to be made under this Letter Agreement will be governed by
the same terms and provisions of the Credit Agreement as if Chase were the sole
Lender thereunder, the functions of the Administrative Agent were performed by
Chase and the
19
Hanover Compressor Company -2- June 10, 1998
Loans were made under the Credit Agreement. The Applicable Margin for the Loans
and Applicable Commitment Fee Rate for the Bank's agreement to make the Loans
hereunder will be the rates as provided in the Credit Agreement. The Loans under
this Letter Agreement will be evidenced by the promissory note attached hereto
as Exhibit A (the "Note"). All Loans shall be paid in full no later than
September 10, 1998 (the "Final Maturity Date"). In addition, HCC shall prepay
the Loans in full (together with all interest and any other amounts described in
subsection 3.13 of the Credit Agreement with respect to such Loans) on the date
that the initial extension of credit is made under the proposed approximate
$194,000,000 equipment lease transaction being arranged by Chase Securities Inc.
So long as the Loans are available to HCC pursuant to the terms hereof, HCC may
borrow, prepay and reborrow the Loans in whole or in part.
In furtherance of the foregoing, the provisions of the Credit Agreement
(other than subsections 2.1, 3.6, 3.14, Section 4, subsection 6.1, Section 10
and subsections 11.5(a) and 11.7(a)) are hereby incorporated by reference,
mutatis mutandis. Notwithstanding anything to the contrary contained herein, no
amendment, modification or waiver of any provision of the Credit Agreement after
the date hereof shall be effective under this Letter Agreement unless consented
to by Chase thereunder.
In order to induce Chase to enter into this Letter Agreement and make
the Loans provided for herein, HCC hereby confirms that the representations and
warranties as incorporated herein from the Credit Agreement are true and correct
in all material respects on the date hereof (except for (i) the representations
and warranties or parts
20
Hanover Compressor Company -3- June 10, 1998
thereof that, by their terms, expressly relate solely to a specific date, in
which case such representations or warranties or parts thereof shall be true and
correct in all material respects as of such specific date and (ii) to the extent
updated in connection with the Waiver and First Amendment dated as of June 10,
1998).
This Letter Agreement and Chase's obligations to make Loans hereunder
shall become effective upon Chase's receipt of (i) a copy of this Letter
Agreement and the Note executed by a Responsible Officer of HCC and each
Subsidiary Guarantor listed below and (ii) a copy of resolutions authorizing
HCC's execution, delivery and performance of this Letter Agreement and the Note.
This Letter Agreement may be executed in counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Letter Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof.
THIS LETTER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
HCC agrees to pay or reimburse Chase for all of Chase's reasonable
out-of-pocket costs and expenses incurred in connection with the preparation,
negotiation and execution of this Letter Agreement, including, without
limitation, the reasonable fees and disbursements of counsel to Chase.
21
Hanover Compressor Company -4- June 10, 1998
If you are in agreement with the foregoing, please execute a copy of
this letter in the space provided below, whereupon this Letter Agreement shall
become an agreement among us as of the day and year first above written.
Very truly yours,
THE CHASE MANHATTAN BANK
By: /s/ XXXXX X. XXXX
-------------------------------
Title: Xxxxx X. Xxxx
Vice President
Agreed to and Accepted:
HANOVER COMPRESSOR COMPANY
By: /s/ XXXXXX XXXXXXX
---------------------------
Title: Treasurer
Each of the undersigned hereby acknowledges receipt of the foregoing
Letter Agreement and hereby, jointly and severally, unconditionally and
irrevocably guarantees to Chase the prompt, complete payment and performance by
HCC when due (whether at stated maturity, by acceleration or otherwise) of the
unpaid principal of and interest on the Loans and all other obligations and
liabilities of HCC to Chase (including, without limitation, interest accruing at
the then applicable rate provided in the Letter Agreement after the maturity of
the Loans and interest accruing at the then applicable rate provided in the
Letter Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
HCC,
22
Hanover Compressor Company -5- June 10, 1998
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding), whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter incurred, which may arise under, out of,
or in connection with, the Letter Agreement, the Note, or any other document
made, delivered or given in connection therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and disbursements
of counsel to Chase that are required to be paid by HCC).
The terms and provisions of the foregoing guarantee shall be subject to
the same terms and conditions of the Subsidiaries' Guarantee dated as of
December 15, 1997 made by each of the undersigned as if such provisions were
herein incorporated mutatis mutandis, provided that the term Obligations shall
refer specifically and only to the obligations described in the immediately
preceding paragraph.
23
Hanover Compressor Company -6- June 10, 1998
IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
to be duly executed and delivered by its duly authorized officer as of the day
and year first above written.
HANOVER/XXXXX, INC. HANOVER MAINTECH, INC.
By /s/ XXXXXX XXXXXXX By /s/ XXXXXX XXXXXXX
--------------------------------- ---------------------------------
Name: Xxxxxx Xxxxxxx Name: Xxxxxx Xxxxxxx
Title: Treasurer Title: Treasurer
Address for Notices: Address for Notices:
00000 Xxxxx Xxxxxxx Rosslyn 00000 Xxxxx Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
Attn: Chief Financial Officer Attn: Chief Financial Officer
Fax: 000-000-0000 Fax: 000-000-0000
HANOVER LAND COMPANY
By /s/ XXXXXX XXXXXXX
---------------------------------
Name: Xxxxxx Xxxxxxx
Title: Treasurer
Address for Notices:
00000 Xxxxx Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Chief Financial Officer
Fax: 000-000-0000
24
EXHIBIT A
PROMISSORY NOTE
$30,000,000 New York, New York
June 10, 1998
FOR VALUE RECEIVED, the undersigned, Hanover Compressor Company, a Delaware
corporation ("HCC"), hereby unconditionally promises to pay to the order of The
Chase Manhattan Bank ("The Bank") at its office located at 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, in lawful money of the United States of America and in
immediately available funds, on the Final Maturity Date the principal amount of
(a) THIRTY MILLION DOLLARS ($30,000,000), or, if less, (b) the aggregate unpaid
principal amount of all Loans made by the Bank to HCC pursuant to the Letter
Agreement, as hereinafter defined. HCC further agrees to pay interest in like
money at such office on the unpaid principal amount hereof from time to time
outstanding at the rates and on the dates specified in the Letter Agreement.
The holder of this Note is authorized to endorse on the schedules annexed
hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof the date, Type and amount of each Loan
made pursuant to the Letter Agreement and the date and amount of each payment or
repayment of principal thereof, each continuation thereof, each conversion of
all or a portion thereof to another Type and, in the case of Eurodollar Loans,
the length of each Interest Period with respect thereto. Each such endorsement
shall constitute prima facie evidence of the accuracy of the information
endorsed. The failure to make any such endorsement shall not affect the
obligations of HCC in respect of such Loan.
This Note (a) is the Note referred to in the Letter Agreement dated June
10, 1998 (as further amended, supplemented or otherwise modified from time to
time, the "Letter Agreement"), between HCC and the Bank, (b) is subject to the
provisions of the Letter Agreement and (c) is subject to optional and mandatory
prepayment in whole or in part as provided in the Letter Agreement. This Note
is guaranteed as provided in the Letter Agreement. Reference is hereby made to
the Letter Agreement for a description of the nature and extent of the
guarantees, the terms and conditions upon which each guarantee was granted and
the rights of the holder of this Note in respect thereof.
25
2
Upon the occurrence of any one or more of the Events of default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Letter Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Letter Agreement
and used herein shall have the meanings given to them in the Letter Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
HANOVER COMPRESSOR COMPANY
By: /s/ XXXXXX XXXXXXX
-------------------------------------
Name: Xxxxxx Xxxxxxx
-----------------------------------
Title: Treasurer
----------------------------------
26
3
SCHEDULE A
TO PROMISSORY NOTE
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
----------------------------------------------------------------------------------------------------------
AMOUNT OF ABR
AMOUNT AMOUNT OF LOANS CONVERTED UNPAID PRINCIPAL
AMOUNT OF ABR CONVERTED TO PRINCIPAL OF ABR TO BALANCE OF ABR NOTATION
DATE LOANS ABR LOANS LOANS REPAID EURODOLLAR LOANS LOANS MADE BY
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
27
4
----------------------------------------------------------------------------------------------------------
AMOUNT OF ABR
AMOUNT AMOUNT OF LOANS CONVERTED UNPAID PRINCIPAL
AMOUNT OF ABR CONVERTED TO PRINCIPAL OF ABR TO BALANCE OF ABR NOTATION
DATE LOANS ABR LOANS LOANS REPAID EURODOLLAR LOANS LOANS MADE BY
----------------------------------------------------------------------------------------------------------
==========================================================================================================
28
SCHEDULE B
TO PROMISSORY NOTE
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
-------------------------------------------------------------------------------------------------------------------
Amount of Unpaid
Amount Interest Period Amount of Eurodollar Principal
Amount of Converted to and Eurodollar Principal of Loans Balance of
Eurodollar Eurodollar Rate with Eurodollar Converted to Eurodollar Notation
Date Loans Loans Respect Thereto Loans Repaid ABR Loans Loans Made By
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
===================================================================================================================
29
HANOVER COMPRESSOR COMPANY
SECRETARY'S CERTIFICATE
I, Xxxxxxx X. Xxxxxx, do hereby certify that I am the Secretary of
Hanover Compressor Company, a Delaware corporation (the "Corporation"), and that
I have been duly appointed and qualified and am presently serving in the
capacity of Secretary of the Corporation in accordance with the By-laws of the
Corporation. I hereby further certify as follows:
1. Annexed hereto as Exhibit A are true and correct copy of the
resolutions duly adopted by the Board of Directors of the Corporation. The
resolutions set forth in Exhibit A have not been altered, amended, modified,
revoked or rescinded and are in full force and effect on the date hereof.
IN WITNESS WHEREOF, I have set my hand hereto as of the 15th day of
July, 1998.
/s/ XXXXXXX X. XXXXXX
-------------------------------------
Xxxxxxx X. Xxxxxx, Secretary
30
EXHIBIT A
APPROVAL OF SUPPLEMENTAL $30 MILLION SHORT TERM CREDIT FACILITY.
Xx. Xxxxxxx presented to the Board a proposal for a supplemental $30
million short term credit facility from the Chase Manhattan Bank. After motion
duly made and seconded, the Board approved the following resolutions:
RESOLVED, that a new $30 million credit facility (the
"Supplemental Credit Facility") with The Chase Manhattan Bank
("Chase") in the form of Exhibit C hereto together with the
amendment to the Company's $200 million revolving credit
facility (the "Amendment") permitting the Supplemental Credit
Facility in the form of Exhibit D hereto is hereby authorized
and approved.
FURTHER RESOLVED, that the proper officers of the Company be,
and they hereby are, authorized and directed on behalf of the
Company to execute any and all agreements, instruments and
documents and to do or cause to be done all such further acts
and things as they may deem necessary or advisable in order to
carry into effect the tenor and purport of the above
resolutions; and that all actions taken by the officers of the
Company and all actions heretofore taken by the officers, be
and they hereby are, ratified, approved, adopted and confirmed;
FURTHER RESOLVED, that whenever it is provided in these
resolutions that any officer or officers of the Company may
execute any document or other instrument or take such other
action as he or they may or shall deem, or determine to be,
advisable or in the best interests of the Company or as he or
they may or shall approve, the fact that such officer or
officers shall execute such document or other instrument or
take such other action shall be deemed to be conclusive
evidence that such officer or officers deem and determine the
execution of such document or other instrument or the taking of
such other action to be advisable and in the best interests of
the Company and approve such action; and
FURTHER RESOLVED, that for purposes of these resolutions the
"proper officers of the Company" shall be deemed to be the
Chairman of the Board, the President and Chief Executive
Officer, the Executive Vice President and the Chief Financial
Officer and Treasurer of the Company, unless applicable
statutes, rules or regulations applicable to the Company
require action by a particular officer or officers of the
Company, in which event the term "proper officers of the
Company" shall be deemed to include any such officer or
officers and the action of any proper officer
31
of the Company may be attested to or verified under the
corporate seal of the Company by the Secretary of the Company.
SYNTHETIC LEASE FINANCING
Xx. Xxxxxxx then presented to the Board plans for a synthetic lease
financing facility in the amount of $200 million and reviewed the terms thereof
and attached hereto as Exhibit E. After discussion and a motion duly made and
seconded, the Board unanimously adopted the following resolutions:
RESOLVED, that the lease transaction described in Exhibit E
attached hereto, is hereby authorized and approved, including
without limitation, the sale of compressors and related
equipment, the lease of such compressors and related equipment
and the guaranty all as contemplated therein.
FURTHER RESOLVED, that the proper officers of the Company be,
and they hereby are, authorized and directed on behalf of the
Company to execute any and all agreements, instruments and
documents and to do or cause to be done all such further acts
and things as they may deem necessary or advisable in order to
carry into effect the tenor and purport of the above
resolutions; and that all actions taken by the officers of the
Company and all actions heretofore taken by the officers, be
and the hereby are, ratified, approved, adopted and confirmed;
FURTHER RESOLVED, that whenever it is provided in these
resolutions that any officer or officers of the Company may
execute any document or other instrument or take such other
action as he or they may or shall deem, or determine to be,
advisable or in the best interests of the Company or as he or
they may or shall approve, the fact that such officer or
officers shall execute such document or other instrument or
take such other action shall be deemed to be conclusive
evidence that such officer or officers deem and determine the
execution of such document or other instrument or the taking
of such other action to be advisable and in the best interests
of the Company and approve such action; and
FURTHER RESOLVED, that for purposes of these resolutions the
"proper officers of the Company" shall be deemed to be the
Chairman of the Board, the President and Chief Executive
Officer, the Executive Vice President and the Chief Financial
Officer and Treasurer of the Company, unless applicable
statutes, rules or regulations applicable to the Company
require action by a particular officer or officers of the
Company, in which event the
32
term "proper officers of the Company" shall be deemed to
include any such officer or officers and the action of any
proper officer of the Company may be attested to or verified
under the corporate seal of the Company by the Secretary of
the Company.
33
EXHIBIT C
See tab 3 of this set of Closing Documents, "Letter Agreement, dated
June 10 1998, committing Chase to additional loans."
34
EXHIBIT D
See tab 1 of this set of Closing Documents, "Waiver and First
Amendment, with Annexes attached thereto, dated as of June 10, 1998."
35
EXHIBIT E
See tab 7 of this set of Closing Documents, "Synthetic Lease Summary of
Terms and Conditions (Annex I to the Second Amendment)."
36
HANOVER/XXXXX, INC.
SECRETARY'S CERTIFICATE
I, Xxxxxxx X. Xxxxxx, do hereby certify that I am the Secretary of
Hanover/Xxxxx, Inc., a Texas corporation (the "Corporation"), and that I have
been duly appointed and qualified and am presently serving in the capacity of
Secretary of the Corporation in accordance with the By-laws of the Corporation.
I hereby further certify as follows:
1. Annexed hereto as Exhibit A are true and correct copy of the
resolutions duly adopted by the Board of Directors of the Corporation. The
resolutions set forth in Exhibit A have not been altered, amended, modified,
revoked or rescinded and are in full force and effect on the date hereof.
IN WITNESS WHEREOF, I have set my hand hereto as of the 15th day of
July, 1998.
/s/ XXXXXXX X. XXXXXX
-------------------------------------
Xxxxxxx X. Xxxxxx, Secretary
37
EXHIBIT A
UNANIMOUS WRITTEN CONSENT
OF THE BOARD OF DIRECTORS OF
HANOVER/XXXXX, INC.
The undersigned, being all of the directors of HANOVER/XXXXX, INC., a
Delaware corporation (the "Corporation"), in lieu of a special meeting of the
Board of Directors and pursuant to the authority of Section 141(f) of the
Delaware General Corporation Law, hereby consent to, authorize and adopt the
following resolutions with the same force and effect as if the undersigned were
personally present at a meeting of the Board of Directors of the Corporation and
had voted for the same:
RESOLVED, that a new $30 million credit facility (the
"Supplemental Credit Facility") with The Chase Manhattan Bank
("Chase") in the form of Exhibit A hereto together with the
amendment to the Company's $200 million revolving credit
facility (the "Amendment") permitting the Supplemental Credit
Facility in the form of Exhibit B hereto is hereby authorized
and approved.
FURTHER RESOLVED, that the proper officers of the Company be,
and they hereby are, authorized and directed on behalf of the
Company to execute any and all agreements, instruments and
documents and to do or cause to be done all such further acts
and things as they may deem necessary or advisable in order to
carry into effect the tenor and purport of the above
resolutions; and that all actions taken by the officers of the
Company and all actions heretofore taken by the officers, be
and they hereby are, ratified, approved, adopted and confirmed;
FURTHER RESOLVED, that whenever it is provided in these
resolutions that any officer or officers of the Company may
execute any document or other instrument or take such other
action as he or they may or shall deem, or determine to be,
advisable or in the best interests of the Company or as he or
they may or shall approve, the fact that such officer or
officers shall execute such document or other instrument or
take such other action shall be deemed to be conclusive
evidence that such officer or officers deem and determine the
execution of such document or other instrument or the taking of
such other action to be advisable and in the best interests of
the Company and approve such action; and
FURTHER RESOLVED, that for purposes of these resolutions the
"proper officers of the Company" shall be deemed to be the
Chairman of the Board, the President and Chief Executive
Officer, the Executive Vice President and the Chief Financial
Officer and Treasurer of the Company, unless applicable
statutes,
38
rules or regulations applicable to the Company require action
by a particular officer or officers of the Company, in which
event the term "proper officers of the Company" shall be
deemed to include any such officer or officers and the action
of any proper officer of the Company may be attested to or
verified under the corporate seal of the Company by the
Secretary of the Company.
FURTHER RESOLVED, that the lease transaction described in
Exhibit C attached hereto, is hereby authorized and approved,
including without limitation, the sale of compressors and
related equipment, the lease of such compressors and related
equipment and the guaranty all as contemplated therein.
FURTHER RESOLVED, that the proper officers of the Company be,
and they hereby are, authorized and directed on behalf of the
Company to execute any and all agreements, instruments and
documents and to do or cause to be done all such further acts
and things as they may deem necessary or advisable in order to
carry into effect the tenor and purport of the above
resolutions; and that all actions taken by the officers of the
Company and all actions heretofore taken by the officers, be
and they hereby are, ratified, approved, adopted and
confirmed;
FURTHER RESOLVED, that whenever it is provided in these
resolutions that any officer or officers of the Company may
execute any document or other instrument or take such other
action as he or they may or shall deem, or determine to be,
advisable or in the best interests of the Company or as he or
they may or shall approve, the fact that such officer or
officers shall execute such document or other instrument or
take such other action shall be deemed to be conclusive
evidence that such officer or officers deem and determine the
execution of such document or other instrument or the taking
of such other action to be advisable and in the best interests
of the Company and approve such action; and
-2-
39
FURTHER RESOLVED, that for purposes of these resolutions the
"proper officers of the Company" shall be deemed to be the
Chairman of the Board, the President and Chief Executive
Officer, the Executive Vice President and the Chief Financial
Officer and Treasurer of the Company, unless applicable
statutes, rules or regulations applicable to the Company
require action by a particular officer or officers of the
Company, in which event the term "proper officers of the
Company" shall be deemed to include any such officer or
officers and the action of any proper officer of the Company
may be attested to or verified under the corporate seal of the
Company by the Secretary of the Company.
Dated: May 20, 1998
/s/ XXXXXXX X. XXXXXX
-------------------------------------------
Xxxxxxx X. XxXxxx
/s/ XXXXXXX X. XXXXXXXX
-------------------------------------------
Xxxxxxx X. Xxxxxxxx
/s/ XXXXXX XXXXXXX
-------------------------------------------
Xxxxxx Xxxxxxx
BEING ALL OF THE DIRECTORS OF THE
CORPORATION
-3-
40
EXHIBIT A
See tab 3 of this set of Closing Documents, "Letter Agreement, dated
June 10 1998, committing Chase to additional loans."
41
EXHIBIT B
See tab 1 of this set of Closing Documents, "Waiver and First
Amendment, with Annexes attached thereto, dated as of June 10, 1998."
42
EXHIBIT C
See tab 7 of this set of Closing Documents, "Synthetic Lease Summary of
Terms and Conditions (Annex I to the Second Amendment)."
43
HANOVER LAND COMPANY
SECRETARY'S CERTIFICATE
I, Xxxxxxx X. Xxxxxx, do hereby certify that I am the Secretary of
Hanover Land Company, a Texas corporation (the "Corporation"), and that
I have been duly appointed and qualified and am presently serving in the
capacity of Secretary of the Corporation in accordance with the By-laws of the
Corporation. I hereby further certify as follows:
1. Annexed hereto as Exhibit A are true and correct copy of the
resolutions duly adopted by the Board of Directors of the Corporation. The
resolutions set forth in Exhibit A have not been altered, amended, modified,
revoked or rescinded and are in full force and effect on the date hereof.
IN WITNESS WHEREOF, I have set my hand hereto as of the 15th day of
July, 1998.
/s/ XXXXXXX X. XXXXXX
-------------------------------------
Xxxxxxx X. Xxxxxx, Secretary
44
EXHIBIT A
UNANIMOUS WRITTEN CONSENT
OF THE BOARD OF DIRECTORS OF
HANOVER LAND COMPANY
The undersigned, being all of the directors of HANOVER LAND COMPANY, a
Texas corporation (the "Corporation"), in lieu of a special meeting of the Board
of Directors and pursuant to the authority of Section 9.10 of the Texas Business
Corporation Act, hereby consent to, authorize and adopt the following
resolutions with the same force and effect as if the undersigned were personally
present at a meeting of the Board of Directors of the Corporation and had voted
for the same:
RESOLVED, that a new $30 million credit facility (the
"Supplemental Credit Facility") with The Chase Manhattan Bank
("Chase") in the form of Exhibit A hereto together with the
amendment to the Company's $200 million revolving credit
facility (the "Amendment") permitting the Supplemental Credit
Facility in the form of Exhibit B hereto is hereby authorized
and approved.
FURTHER RESOLVED, that the proper officers of the Company be,
and they hereby are, authorized and directed on behalf of the
Company to execute any and all agreements, instruments and
documents and to do or cause to be done all such further acts
and things as they may deem necessary or advisable in order to
carry into effect the tenor and purport of the above
resolutions; and that all actions taken by the officers of the
Company and all actions heretofore taken by the officers, be
and they hereby are, ratified, approved, adopted and confirmed;
FURTHER RESOLVED, that whenever it is provided in these
resolutions that any officer or officers of the Company may
execute any document or other instrument or take such other
action as he or they may or shall deem, or determine to be,
advisable or in the best interests of the Company or as he or
they may or shall approve, the fact that such officer or
officers shall execute such document or other instrument or
take such other action shall be deemed to be conclusive
evidence that such officer or officers deem and determine the
execution of such document or other instrument or the taking of
such other action to be advisable and in the best interests of
the Company and approve such action; and
FURTHER RESOLVED, that for purposes of these resolutions the
"proper officers of the Company" shall be deemed to be the
Chairman of the Board, the President and Chief Executive
Officer, the Executive Vice President and the Chief Financial
Officer and Treasurer of the Company, unless applicable
statutes,
45
rules or regulations applicable to the Company require action
by a particular officer or officers of the Company, in which
event the term "proper officers of the Company" shall be
deemed to include any such officer or officers and the action
of any proper officer of the Company may be attested to or
verified under the corporate seal of the Company by the
Secretary of the Company.
FURTHER RESOLVED, that the lease transaction described in
Exhibit C attached hereto, is hereby authorized and approved,
including without limitation, the sale of compressors and
related equipment, the lease of such compressors and related
equipment and the guaranty all as contemplated therein.
FURTHER RESOLVED, that the proper officers of the Company be,
and they hereby are, authorized and directed on behalf of the
Company to execute any and all agreements, instruments and
documents and to do or cause to be done all such further acts
and things as they may deem necessary or advisable in order to
carry into effect the tenor and purport of the above
resolutions; and that all actions taken by the officers of the
Company and all actions heretofore taken by the officers, be
and they hereby are, ratified, approved, adopted and
confirmed;
FURTHER RESOLVED, that whenever it is provided in these
resolutions that any officer or officers of the Company may
execute any document or other instrument or take such other
action as he or they may or shall deem, or determine to be,
advisable or in the best interests of the Company or as he or
they may or shall approve, the fact that such officer or
officers shall execute such document or other instrument or
take such other action shall be deemed to be conclusive
evidence that such officer or officers deem and determine the
execution of such document or other instrument or the taking
of such other action to be advisable and in the best interests
of the Company and approve such action; and
-2-
46
FURTHER RESOLVED, that for purposes of these resolutions the
"proper officers of the Company" shall be deemed to be the
Chairman of the Board, the President and Chief Executive
Officer, the Executive Vice President and the Chief Financial
Officer and Treasurer of the Company, unless applicable
statutes, rules or regulations applicable to the Company
require action by a particular officer or officers of the
Company, in which event the term "proper officers of the
Company" shall be deemed to include any such officer or
officers and the action of any proper officer of the Company
may be attested to or verified under the corporate seal of the
Company by the Secretary of the Company.
Dated: May 20, 1998
/s/ XXXXXXX X. XXXXXX
-------------------------------------------
Xxxxxxx X. XxXxxx
/s/ XXXXXXX X. XXXXXXXX
-------------------------------------------
Xxxxxxx X. Xxxxxxxx
BEING ALL OF THE DIRECTORS OF THE
CORPORATION
-3-
47
EXHIBIT A
See tab 3 of this set of Closing Documents, "Letter Agreement, dated
June 10 1998, committing Chase to additional loans."
48
EXHIBIT B
See tab 1 of this set of Closing Documents, "Waiver and First
Amendment, with Annexes attached thereto, dated as of June 10, 1998."
49
EXHIBIT C
See tab 7 of this set of Closing Documents, "Synthetic Lease Summary of
Terms and Conditions (Annex I to the Second Amendment)."
50
MAINTECH ENTERPRISES, INC.
SECRETARY'S CERTIFICATE
I, Xxxxxxx X. Xxxxxx, do hereby certify that I am the Secretary of
Maintech Enterprises, Inc., a Texas corporation (the "Corporation"), and that
I have been duly appointed and qualified and am presently serving in the
capacity of Secretary of the Corporation in accordance with the By-laws of the
Corporation. I hereby further certify as follows:
1. Annexed hereto as Exhibit A are true and correct copy of the
resolutions duly adopted by the Board of Directors of the Corporation. The
resolutions set forth in Exhibit A have not been altered, amended, modified,
revoked or rescinded and are in full force and effect on the date hereof.
IN WITNESS WHEREOF, I have set my hand hereto as of the 15th day of
July, 1998.
/s/ XXXXXXX X. XXXXXX
-------------------------------------
Xxxxxxx X. Xxxxxx, Secretary
51
EXHIBIT A
UNANIMOUS WRITTEN CONSENT
OF THE BOARD OF DIRECTORS OF
MAINTECH ENTERPRISES, INC.
The undersigned, being all of the directors of MAINTECH ENTERPRISES,
INC., a Texas corporation (the "Corporation"), in lieu of a special meeting of
the Board of Directors and pursuant to the authority of Section 9.10 of the
Texas Business Corporation Act, hereby consent to, authorize and adopt the
following resolutions with the same force and effect as if the undersigned were
personally present at a meeting of the Board of Directors of the Corporation and
had voted for the same:
RESOLVED, that a new $30 million credit facility (the
"Supplemental Credit Facility") with The Chase Manhattan Bank
("Chase") in the form of Exhibit A hereto together with the
amendment to the Company's $200 million revolving credit
facility (the "Amendment") permitting the Supplemental Credit
Facility in the form of Exhibit B hereto is hereby authorized
and approved.
FURTHER RESOLVED, that the proper officers of the Company be,
and they hereby are, authorized and directed on behalf of the
Company to execute any and all agreements, instruments and
documents and to do or cause to be done all such further acts
and things as they may deem necessary or advisable in order to
carry into effect the tenor and purport of the above
resolutions; and that all actions taken by the officers of the
Company and all actions heretofore taken by the officers, be
and they hereby are, ratified, approved, adopted and confirmed;
FURTHER RESOLVED, that whenever it is provided in these
resolutions that any officer or officers of the Company may
execute any document or other instrument or take such other
action as he or they may or shall deem, or determine to be,
advisable or in the best interests of the Company or as he or
they may or shall approve, the fact that such officer or
officers shall execute such document or other instrument or
take such other action shall be deemed to be conclusive
evidence that such officer or officers deem and determine the
execution of such document or other instrument or the taking of
such other action to be advisable and in the best interests of
the Company and approve such action; and
FURTHER RESOLVED, that for purposes of these resolutions the
"proper officers of the Company" shall be deemed to be the
Chairman of the Board, the President and Chief Executive
Officer, the Executive Vice President and the Chief Financial
Officer and Treasurer of the Company, unless applicable
statutes,
52
rules or regulations applicable to the Company require action
by a particular officer or officers of the Company, in which
event the term "proper officers of the Company" shall be
deemed to include any such officer or officers and the action
of any proper officer of the Company may be attested to or
verified under the corporate seal of the Company by the
Secretary of the Company.
FURTHER RESOLVED, that the lease transaction described in
Exhibit C attached hereto, is hereby authorized and approved,
including without limitation, the sale of compressors and
related equipment, the lease of such compressors and related
equipment and the guaranty all as contemplated therein.
FURTHER RESOLVED, that the proper officers of the Company be,
and they hereby are, authorized and directed on behalf of the
Company to execute any and all agreements, instruments and
documents and to do or cause to be done all such further acts
and things as they may deem necessary or advisable in order to
carry into effect the tenor and purport of the above
resolutions; and that all actions taken by the officers of the
Company and all actions heretofore taken by the officers, be
and they hereby are, ratified, approved, adopted and
confirmed;
FURTHER RESOLVED, that whenever it is provided in these
resolutions that any officer or officers of the Company may
execute any document or other instrument or take such other
action as he or they may or shall deem, or determine to be,
advisable or in the best interests of the Company or as he or
they may or shall approve, the fact that such officer or
officers shall execute such document or other instrument or
take such other action shall be deemed to be conclusive
evidence that such officer or officers deem and determine the
execution of such document or other instrument or the taking
of such other action to be advisable and in the best interests
of the Company and approve such action; and
-2-
53
FURTHER RESOLVED, that for purposes of these resolutions the
"proper officers of the Company" shall be deemed to be the
Chairman of the Board, the President and Chief Executive
Officer, the Executive Vice President and the Chief Financial
Officer and Treasurer of the Company, unless applicable
statutes, rules or regulations applicable to the Company
require action by a particular officer or officers of the
Company, in which event the term "proper officers of the
Company" shall be deemed to include any such officer or
officers and the action of any proper officer of the Company
may be attested to or verified under the corporate seal of the
Company by the Secretary of the Company.
Dated: May 20, 1998
/s/ XXXXXXX X. XXXXXX
-------------------------------------------
Xxxxxxx X. XxXxxx
/s/ XXXXXXX X. XXXXXXXX
-------------------------------------------
Xxxxxxx X. Xxxxxxxx
/s/ XXXXXX XXXXXXX
-------------------------------------------
Xxxxxx Xxxxxxx
BEING ALL THE DIRECTORS OF THE
CORPORATION
-3-
54
EXHIBIT A
See tab 3 of this set of Closing Documents, "Letter Agreement, dated
June 10 1998, committing Chase to additional loans."
55
EXHIBIT B
See tab 1 of this set of Closing Documents, "Waiver and First
Amendment, with Annexes attached thereto, dated as of June 10, 1998.
56
EXHIBIT C
See tab 7 of this set of Closing Documents, "Synthetic Lease Summary of
Terms and Conditions (Annex I to the Second Amendment)."
57
EXECUTION COPY
SECOND AMENDMENT
SECOND AMENDMENT, dated as of June 29, 1998 (this "Amendment"), to the
Credit Agreement, dated as of December 15, 1997 (as the same may be amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among HANOVER COMPRESSOR COMPANY, a Delaware corporation ("HCC") the several
banks and other financial institutions from time to time parties thereto (the
"Lenders") and THE CHASE MANHATTAN BANK, a New York banking corporation, as the
administrative agent for the Lenders (in such capacity, the "Administrative
Agent").
W I T N E S S E T H:
WHEREAS, HCC, the Lenders and the Administrative Agent are parties to
the Credit Agreement; and
WHEREAS, HCC has requested that the Administrative Agent and the
Required Lenders amend certain definitions and covenants in the Credit Agreement
so as to permit HCC to enter into transactions involving Equipment Leases (as
hereinafter defined); and
WHEREAS, the Administrative Agent and the Required Lenders are
agreeable to the requested amendments, but only on the terms and subject to the
conditions set forth herein;
NOW THEREFORE, in consideration of the premises herein contained and
for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms
used herein which are defined in the Credit Agreement are used herein as
therein defined.
2. Amendment to Subsection 1.1 (Defined Terms), (a) Subsection 1.1 of
the Credit Agreement is hereby amended by deleting therefrom the definitions of
the following defined terms in their respective entireties and substituting in
place thereof the following new definitions:
"Consolidated Earnings Before Interest and Taxes": for any
period, with respect to HCC and its Subsidiaries, the sum of (a)
Consolidated Net Income for such period, (b) all amounts attributable
to provision for taxes measured by income (to the extent that such
amounts have been deducted in determining Consolidated Net Income for
such period) and (c) Consolidated Interest Expense for such period (to
the extent
58
2
that such amounts have been deducted in determining Consolidated Net
Income for such period).
"Consolidated Interest Expense": for any period, with respect
to any HCC and its Subsidiaries, the amount which, in conformity with
GAAP, would be set forth opposite the caption "interest expense" or any
like caption (including, without limitation, imputed interest included
in Financing Lease payments) on a consolidated income statement of HCC
and its Subsidiaries for such period, plus, to the extent not so
included, payments by HCC under the Equipment Lease attributable to (i)
interest payments under the Equipment Lease Tranche A Loans and
Equipment Lease Tranche B Loans and (ii) the yield to the Investors in
connection with the Equipment Lease Transaction.
"Consolidated Lease Expense": for any period as to HCC and its
Subsidiaries, the aggregate rental obligations of HCC and its
Subsidiaries determined on a consolidated basis payable in respect of
such period under leases of real and/or personal property (net of
income from sub-leases thereof, but including taxes, insurance,
maintenance and similar expenses which the lessee is obligated to pay
under the terms of said leases), whether or not such obligations are
reflected as liabilities or commitments on a consolidated balance sheet
of such Person and its Subsidiaries or in the notes thereto, and
whether or not such leases constitute Financing Leases, but excluding
obligations of HCC with respect to the Equipment Lease.
"Consolidated Net Income": for any period as to HCC and its
Subsidiaries, the consolidated net income (or loss) of such Person and
its Subsidiaries, determined on a consolidated basis in accordance with
GAAP, provided that for purposes of determining Consolidated Net
Income, payments under Equipment Leases attributable to (i) Equipment
Lease Tranche A Loans and Equipment Lease Tranche B Loans and (ii)
the yield to the Investors in connection with the Equipment Lease
Transaction shall be considered interest expense.
"Current Ratio": at a particular date, for HCC and its
Subsidiaries the quotient of the consolidated current assets of HCC
and its Subsidiaries at such time, to the consolidated current
liabilities of HCC, and its Subsidiaries at such time less the current
portion of long-term debt (all determined in accordance with GAAP at
such time), provided that for purposes of calculating the Current
Ratio, current liabilities of the Lessor which are then accrued but
unpaid with respect to the Equipment Lease Tranche A Loans shall be
included as current liabilities of HCC.
"Financing Lease": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee, and excluding all obligations with respect to the Equipment
Lease.
"Indebtedness": of HCC and its Subsidiaries at any date, (a)
all indebtedness of HCC and its Subsidiaries for borrowed money or for
the deferred purchase price of
59
3
property or services (other than current liabilities incurred in the
ordinary course of business and payable in accordance with customary
trade practices) or which is evidenced by a note, bond, debenture or
similar instrument, (b) all obligations of HCC and its Subsidiaries
under Financing Leases, (c) all obligations of HCC and its
Subsidiaries in respect of acceptances issued or created for the
account of HCC and its Subsidiaries and (d) all liabilities secured by
any Lien (other than any lien of a type described in subsection 8.3(a)
through (j) on any property owned by HCC or its Subsidiaries even
though HCC and its Subsidiaries have not assumed or otherwise become
liable for the payment thereof, provided that all obligations of the
Lessor with respect to Equipment Lease Tranche A Loans shall be
considered Indebtedness of HCC.
(b) Subsection 1.1 of the Credit Agreement is hereby amended
by inserting the following new definitions in the appropriate alphabetical
order:
"Equipment Lease": the lease to be entered into by HCC, as
lessee, in connection with the Equipment Lease Transaction as described
in Annex I to this Amendment.
"Equipment Lease Transaction": the transaction whereby HCC
leases natural gas compressors from the Lessor as described in Annex I
to this Amendment.
"Equipment Lease Tranche A Loans": the loans to be made to the
Lessor in connection with the Equipment Lease Transaction and
identified as the "Tranche A Loans" as described in Annex I to this
Amendment.
"Equipment Lease Tranche B Loans": the loans to be made to the
Lessor in connection with the Equipment Lease Transaction and
identified as the "Tranche B Loans" as described in Annex I to this
Amendment.
"Investor": the parties that hold the beneficial interest in
the Lessor.
"Lessor": the lessor under the Equipment Lease.
"Sale and Leaseback Transaction": as defined in subsection
8.13.
3. Amendment to Subsection 8.2 (Limitation on Indebtedness).
Subsection 8.2 of the Credit Agreement is hereby amended by deleting paragraph
(i) therefrom and substituting in place thereof the following:
"(i) Indebtedness in respect of Equipment Lease Tranche A
Loans; and
(j) Indebtedness not contemplated by clauses (a)-(i) above not
exceeding (i) $35,000,000 in the aggregate at any time outstanding
until the earlier of (A) September 10, 1998 and (B) the date of the
initial extension of credit made under the
60
4
Equipment Lease Transaction, and (ii) thereafter $5,000,000 in the
aggregate at any time outstanding."
4. Amendment to Subsection 8.3 (Limitation on Liens).
Subsection 8.3 of the Credit Agreement is hereby amended by deleting paragraph
(s) therefrom and substituting in place thereof the following:
"(s) Liens that arise in connection with the Equipment Lease
Transaction; and
(t) Liens not otherwise permitted in clauses (a)-(s) above
securing Indebtedness not exceeding $2,500,000 in the aggregate."
5. Amendment to Subsection 8.4 (Limitation on Guarantee
Obligations). Subsection 8.4 of the Credit Agreement is hereby amended by
deleting paragraph (e) therefrom and substituting in place thereof the
following:
"(e) guarantees in respect of Indebtedness (other than
Subordinated Debt) permitted under this Agreement; and
(f) Guarantee Obligations arising pursuant to the Equipment
Lease Transaction."
6. Amendment to Subsection 8.6 (Limitation on Sale or Lease of
Assets). Subsection 8.6 of the Credit Agreement is hereby amended by deleting
paragraph (g) therefrom and substituting in place thereof the following:
"(g) the lease by the Real Estate Subsidiary or any other
Qualified Subsidiary as lessor of real estate properties to HCC or any
Qualified Subsidiary of HCC for use by HCC or such Qualified Subsidiary
as the site of its offices and facilities; and
(h) the sale of natural gas compressors to the Lessor in
connection with the Equipment Lease Transaction."
7. Amendment to Subsection 8.11 (Limitation on Optional
Payments and Modifications of Debt Instruments). Subsection 8.11 of the Credit
Agreement is hereby amended by deleting it in its entirety and substituting in
place thereof the following:
8.11 Limitation on Optional Payments and Modifications of Debt
Instruments. (i) Make any optional payment or prepayment on or
redemption of any portion of the Shareholder Subordinated Debt or (ii)
with respect to any Indebtedness other than the Shareholder
Subordinated Debt and Indebtedness under the Equipment Lease
Transaction, (a) make any optional payment or prepayment in excess of
$10,000,000 during any calendar year on or redemption of any
Indebtedness (other than Indebtedness pursuant to this Agreement) or
(b) amend, modify or change, or consent or agree to any amendment,
modification or change to any of the terms of any such Indebtedness
(other than any such amendment, modification or change which would
61
5
extend the maturity or reduce the amount of any payment of principal
thereof or which would reduce the rate or extend the date for payment
of interest thereon, or any amendment or waiver which would render the
terms of such Indebtedness less restrictive)."
8. Amendment of Subsection 8.13 (Sale and Leaseback).
Subsection 8.13 of the Credit Agreement is hereby amended by deleting it in its
entirety and substituting in place thereof the following:
"8.13 Sale and Leaseback. Except for the transactions of a
type set forth on Schedule VI, enter into any arrangement with any
Person where HCC or any of the Subsidiaries of HCC is the lessee of
real or personal property which has been or is to be sold or
transferred by HCC or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on
the security of such property or rental obligations of HCC or such
Subsidiary (any of such arrangements, a "Sale and Leaseback
Transaction"), except that (i) HCC and its Subsidiaries may enter into
Financing Leases as lessee for natural gas compressors and oil and gas
production equipment if after giving effect thereto subsection 8.2 is
not contravened and (ii) HCC may enter into Sale and Leaseback
Transactions as lessee for natural gas compressors in connection with
the Equipment Lease Transaction,"
9. Effectiveness, This Amendment shall become effective upon
fulfillment of the following conditions precedent: (a) HCC and each of its
Subsidiaries listed on the signature pages hereto shall have delivered to the
Administrative Agent duly executed copies of this Amendment, (b) the
Administrative Agent shall have received duly executed copies of this Amendment
from the Required Lenders and (c) no Default or Event of Default shall have
occurred and be continuing on the date hereof after giving effect to this
Amendment.
10. Representations and Warranties. HCC hereby represents
and warrants that the representations and warranties contained in the Credit
Agreement (except those which expressly speak as of a certain date) will be,
after giving effect to this Amendment, true and correct in all material
respects, as if made on and as of the date hereof.
11. Continuing Effect of Credit Agreement. This Amendment
shall not constitute an amendment or waiver of any other provision of the Credit
Agreement or the Loan Documents not expressly referred to herein and shall not
be construed as a waiver or consent to any further or future action on the part
of HCC that would require a waiver or consent of the Administrative Agent and/or
the Lenders. Except as expressly amended hereby, the provisions of the Credit
Agreement and the Loan Documents are and shall remain in full force and effect.
12. Counterparts. This Amendment may be executed in
counterparts and all of the said counterparts taken together shall be deemed to
constitute one and the same instrument. Delivery of an executed signature page
of this Amendment by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.
62
6
13. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
14. Expenses. HCC agrees to pay or reimburse the
Administrative Agent for all of their out-of-pocket costs and expenses incurred
in connection with the preparation, negotiation and execution of this Amendment,
including, without limitation, the fees and disbursements of counsel to the
Administrative Agent.
63
7
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed and delivered by their duly authorized officers of the
date first written above.
HANOVER COMPRESSOR COMPANY
BY: /s/ XXXXXX XXXXXXX
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Treasurer
THE CHASE MANHATTAN BANK (formerly
known as Chemical Bank), as Administrative
Agent and as a Lender
BY: /s/ XXXXX X. XXXX
----------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
THE BANK OF NOVA SCOTIA
BY: /s/ F.O.R. XXXXX
----------------------------------
Name: F.O.R. Xxxxx
Title: Senior Manager
Loan Operations
CREDIT LYONNAIS, NEW YORK BRANCH
BY: /s/ PASCAL POURELLE
----------------------------------
Name: Pascal Pourelle
Title: Executive Vice President
XXXXX FARGO BANK (TEXAS), NATIONAL
ASSOCIATION
BY: /s/ XXXXXXXX X. XXXXX
----------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
64
8
BANQUE PARIBAS
BY: /s/ XXXXXXX X. XXXXXX
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
FIRST UNION BANK
BY: /s/ XXXXXX X. XXXXXXXXX
----------------------------------
Name: Xxxxxx x. Xxxxxxxxx
Title: Senior Vice President
Acknowledged and agreed to as
of the date hereof:
HANOVER MAINTECH, INC.
By: /s/ XXXXXX XXXXXXX
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Treasurer
HANOVER/XXXXX, INC.
By: /s/ XXXXXX XXXXXXX
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Treasurer
HANOVER LAND COMPANY
By: /s/ XXXXXX XXXXXXX
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Treasurer
65
ANNEX I
CONFIDENTIAL HANOVER COMPRESSOR COMPANY
-------------------------------------------------------------------------------
SUMMARY OF PRINCIPAL TERMS AND CONDITIONS
THIS SUMMARY OF PRINCIPAL TERMS AND CONDITIONS DOES NOT CONSTITUTE A
COMMITMENT, OR A PROMISE TO COMMIT, ON THE PART OF THE CHASE MANHATTAN BANK OR
CHASE SECURITIES INC. ANY AGREEMENT, COMMITMENT, ASSURANCE OR INTENTION ON
BEHALF OF THE CHASE MANHATTAN BANK OR CHASE SECURITIES INC. SHALL BE EFFECTIVE
ONLY IF IN WRITING AND DULY EXECUTED ON BEHALF OF THE CHASE MANHATTAN BANK OR
CHASE SECURITIES INC., AS THE CASE MAY BE.
PART I -- PARTIES
LESSEE: Hanover Compressor Company ("Hanover Compressor"
or the "Lessee").
INVESTOR: A party or parties acceptable to Hanover
Compressor and Chase that will hold the beneficial
interest in the Lessor (the "Investor").
LESSOR: A Delaware business trust established for the
benefit of the Investor (the "Lessor"). The trust
will be managed by a bank or trust company
acceptable to the Agent and to the Company, (the
"Trustee"). The Lessor shall own the Equipment,
borrow the Loans and execute a lease for all the
Equipment (the "Lease") with the Lessee.
GUARANTOR: Hanover Compressor and all guarantors (the
"Guarantors") under the Lessee's existing senior
credit facility dated December 15, 1997 (the
"Senior Credit Facility").
LENDERS: A syndicate of financial institutions (the
"Lenders") providing the Loans (as defined below)
to the Lessor to fund 97% of the Equipment Cost.
AGENT: The Chase Manhattan Bank ("Chase") will act as
administrative agent (in such capacity, the
"Agent") for the Lenders.
ARRANGER: Chase Securities Inc. ("CSI") will act as
syndication agent and arranger for the Loans and
the Investor Contribution (as defined below).
PART II -- THE EQUIPMENT
EQUIPMENT: Compressors identified by the Lessee (the
"Equipment"). The Lessee will furnish to the Agent
an inventory of the compressors (the "Inventory")
every six months throughout the term of the Lease.
The Inventory will include a comprehensive list of
all the compressors in the Lease and the location
of each unit.
EQUIPMENT COST: As used herein. the "Equipment Cost" means all
cost and expenses of any kind or character
incurred to acquire such Equipment. The Equipment
Cost is expected to be approximately $200,000,000.
There shall be no limit on the number of items of
Equipment or the value or the cost of acquisition
thereof provided, however, that the aggregate
Equipment Cost subject to the financing
contemplated hereby must at all times equal the
aggregate outstanding principal amount of the
Loans (as defined below) and the unrecovered
Investor Contribution.
-------------------------------------------------------------------------------
[CHASE LOGO] 1 CHASE SECURITIES INC.
66
CONFIDENTIAL HANOVER COMPRESSOR COMPANY
--------------------------------------------------------------------------------
PART III -- TRANSACTION STRUCTURE
STRUCTURE OF THE
FINANCING: The Investor will contribute 3% of the Equipment
Cost and the Lessor will agree to borrow from the
Lenders, and the Lenders will agree to lend to
the Lessor, on a non-recourse basis, 97% of the
Equipment Cost, up to a maximum of $194,000,000
aggregate principal amount of Loans outstanding
at any time. The Investor will fund its 3%
portion of the Equipment Cost simultaneously and
pro rata with the funding by the Lenders. The
Investor contribution will not be more than
$6,000,000.
APPRAISAL: Prior to the acquisition by the Lessor of any
Equipment, the Lessee will deliver to the Agent
and the Investor an appraisal with respect to
such Equipment from an independent appraiser (the
"Appraisal") satisfactory to the Agent, which
will be in form and substance satisfactory to the
Lenders, the Agent, and the Investor.
PARTICIPATION
AGREEMENT: On the Closing Date, the Lessor, the Trustee, the
Agent, the Investor, the Lenders and the Lessee
will enter into a participation agreement (the
"Participation Agreement") which will include,
among other things, similar representations,
warranties, indemnities and terms and conditions
as those found in the Senior Credit Facility in
addition to other terms and conditions typically
found in similar synthetic lease financing
facilities.
PART IV -- THE LOANS:
STRUCTURE: The Loans will be advanced pursuant to a Credit
Agreement (the "Credit Agreement") among the
Lessor, as borrower, the Lenders and the Agent.
The Lenders will commit under the Credit
Agreement to make Loans to the Lessor to fund 97%
of the Equipment Costs as incurred or invoiced.
The Lenders' commitments will be in the nature of
a revolving credit facility commencing on the
Closing Date and ending upon the first
anniversary thereof (the "Revolving Period").
After that, the Lenders' commitments will be in
the nature of a term loan credit facility
maturing on the fifth anniversary of the Closing
Date. Loans to fund Equipment Cost will be
separated into two tranches, with Loans, in the
aggregate, equal to the Maximum Residual
Guarantee Amount (as defined below) being
advanced as Tranche A Loans (the "Tranche A
Loans") and the balance of the Loans being
advanced as Tranche B Loans (the "Tranche B
Loans"; collectively with the Tranche A Loans,
the "Loans"). The Lenders will make Tranche A
Loans and Tranche B Loans ratably according to
their respective commitments. Hanover Compressor
will agree to maintain a ratio of aggregate
Tranche A Loans to the Equipment Cost of not less
than 85.0% and not more than 89.9%.
PURPOSE: To finance a maximum of 97% of the Equipment Cost.
MATURITY: 5 years after the Closing Date (the "Maturity
Date").
--------------------------------------------------------------------------------
[CHASE LOGO]
2 CHASE SECURITIES INC.
67
CONFIDENTIAL HANOVER COMPRESSOR COMPANY
--------------------------------------------------------------------------------
REPAYMENT: The Loans will be payable in full on the Maturity Date
and will not be subject to any amortization prior
thereto depending upon the results of the Appraisal.
The Loans may be prepaid at any time (without premium
or penalty, other than "break funding" costs with
respect to Eurodollar Loans) and shall be repaid in
the event of (i) any sale of Equipment (pursuant to a
purchase option under the Lease or otherwise), (ii)
any Event of Loss (as defined below) with respect to
Equipment (subject to the Lessee's rights to restore
or rebuild such Equipment, as described below) or
(iii) the termination of the Lease with respect to any
Equipment (pursuant to an early termination option
under the Lease or otherwise). If any such event
occurs with respect to one or more items (but less
than all) of the Equipment, then the principal amount
of the Loans that must be repaid will be limited to
the portion of the outstanding Loans allocable to the
affected Equipment (i.e., 97% of the total Equipment
Cost of the affected Equipment).
SOURCE OF REPAYMENT: On the Maturity Date, if the Lessee has exercised its
purchase option to purchase all of the Equipment
(having provided notice to the Lessor six months prior
to the Maturity Date), all the Loans and the
Investor's unrecovered equity investment (the
"Investor Contribution") will be repaid from the
proceeds of such purchase. If the Lessee does not
exercise its option to purchase the Equipment on the
Maturity Date, the following provisions shall apply:
(a) the Lessee shall market and use its best efforts
to sell the Equipment on the Lessor's behalf on or
prior to the Maturity Date;
(b) if the Equipment is sold to a third party, after
the Lessee makes a rent payment equal to the Maximum
Residual Guarantee Amount, the proceeds will be
applied first, to the payment of the Tranche B Loans
and accrued interest on the Tranche B Loans, and,
second, to the payment of the Investor Contribution
and accrued Investor Yield. Excess proceeds will be
returned to the Lessee;
(c) in the event that the Equipment has not been sold
on or prior to the Maturity Date, (i) the Lessee shall
pay to the Agent (as assignee of the Lessor) the
Maximum Residual Guarantee Amount, which shall be
applied to pay the Tranche A Loans in full; and (ii)
the Lessee shall surrender possession of the Equipment
to the Lessor.
FEES AND INTEREST RATES: As set forth in Annex I.
GUARANTEE: Independent of the obligations of the Lessee under the
Lease, the Guarantor will execute and deliver a
guarantee (the "Guarantee") in favor of the Agent for
the benefit of the Lenders, pursuant to which the
Guarantor will unconditionally guarantee the payment
when due of all amounts required to be paid by the
Lessor under the Credit Agreement, including the
Loans; provided that the Guarantor will not be
required to make any payment under the Guarantee in
respect of the Tranche B Loan principal or Investor
Contribution unless an Event of Default under the
Lease has occurred and is continuing.
--------------------------------------------------------------------------------
[CHASE LOGO] 3 Chase Securities Inc.
68
CONFIDENTIAL HANOVER COMPRESSOR COMPANY
--------------------------------------------------------------------------------
COLLATERAL: The obligations of the Lessor under the Credit
Agreement will be secured by perfected and
first-priority security interests in the Lessors
interest in and liens on all of the assets of the
Lessor, including an absolute and present
assignment of the Lease. The Lenders, however,
acknowledge that, due to the right of the Lessee
to relocate the Equipment, certain of the
Equipment may not be subject to such perfected and
first priority security interest for a period of
time not to exceed six months. The Lessor and the
Lessee shall execute and deliver all necessary
financing statements to perfect and create a first
priority security interest in such Equipment
simultaneously with the delivery of the inventory
required to be delivered to the Agent every six
months. The Equipment will be released from such
liens and security interests upon the purchase by
the Lessee, or its assignee, of such Equipment and
the payment by the Lessee of the Loans allocable
to such Equipment and all other amounts due to
the Lenders and the Agent with respect to such
Equipment.
CERTAIN CONDITIONS: The obligations of the Lenders to make Loans under
the Credit Agreement will be subject to the
following conditions: (i) receipt by the Agent of
a borrowing certificate, (ii) accuracy of
representations, (iii) absence of defaults, (iv)
an appraisal of the Equipment reasonably
satisfactory to the Agent, the Lender and the
Investor, and (v) evidence of perfection of liens
(subject to agreed exceptions) and other
appropriate documentation. The Lessee will warrant
to the Agent and the Lenders title to the
Equipment.
PARTICIPATIONS: Lenders will be permitted to assign Loans, notes
and commitments to other financial institutions
without the consent of the Lessor; provided that,
except in the case of assignments to another
Lender or an affiliate of a Lender, the Lessee's
consent will be required for an assignment (which
consent will not be unreasonably withheld).
Assignments will be by novation.
Lenders will be permitted to participate in Loans,
notes and commitments to other financial
institutions.
All assignments and participations will be on
terms substantially the same as contained in the
Senior Credit Facility.
REQUIRED LENDERS: 51%
FINANCIAL COVENANTS: To include, without limitation.
(a) maintenance of a ratio of indebtedness to
capitalization at a level not greater than
0.65 : 100;
(b) maintenance of a ratio of total current assets
to total current liabilities at a level not less
than 1.00 : 1.00;
(c) maintenance of a ratio of U.S. EBITDA to
indebtedness at a level not less than 1.00 : 4.50:
and
(d) maintenance of a ratio of EBITDA to interest
expense (including rental payments) at a level not
less than 2.50 : 1.00.
--------------------------------------------------------------------------------
[CHASE LOGO] CHASE SECURITIES INC.
69
CONFIDENTIAL HANOVER COMPRESSOR COMPANY
--------------------------------------------------------------------------------
OTHER TERMS AND
CONDITIONS: The Credit Agreement will contain similar
representations, warranties, indemnities and
terms and conditions as those found in the Senior
Credit Facility, as amended and restated, in
addition to other terms and conditions typically
found in similar synthetic lease financing
facilities.
PART V - INVESTOR
CONTRIBUTION:
AMOUNT: The Investor will advance 3% of the Equipment
Cost, up to $6,000,000 at anytime outstanding,
simultaneously and pro rata with the Loans made
by the Lenders.
PURPOSE: To finance 3% of the Equipment Cost.
YIELD: The Investor will receive a current yield, paid
from rent, in amounts to be agreed to prior to
the Closing Date between the Lessee and the
Investor (the "Investor Yield").
CERTAIN TERMS: The Lessor will be obligated to distribute to
the Investor any rent and other payments due
under the Lease by the Lessee and received by
the Lessor for the benefit of the Investor to
the extent that said amounts are in excess of
payments due to the Lenders thereunder. Like the
Loans, the Investor Contribution will be in the
nature of a revolving credit facility up until
the first anniversary of the Closing Date. After
that, it will be in the nature of a term credit
facility. In any case, at no time shall the
Investor Contribution be in an amount that is
less than 3% of the outstanding Equipment Cost.
PART VI - TERMS AND CONDITIONS OF THE LEASE:
GENERAL: The Lease will be executed on the Closing Date.
BASIC LEASE TERM: The term for the Lease will commence (the "Lease
Commencement Date") on the Closing Date. The term
of the Lease (the "Lease Term") for all the
Equipment will expire on the Maturity Date.
The Lease will provide that it will terminate
early as to all Equipment as of any rent payment
date on which the Loans mature.
NET LEASE: The Lease will be a triple net lease whereby the
Lessee is responsible for the operation and
maintenance, insurance and other expenses
relating to the Equipment and is unconditionally
obligated to pay all rent coming due during the
Lease Term without offset.
RENT PAYMENTS: During the Lease Term, the Lessee will make rent
payments ("Basic Rent Payments") as follows: (i)
on each Interest Payment Date, an amount equal to
such payment then due plus (ii) a yield to the
Investor on the Investor Contribution, at times
and in amounts agreed between the Lessee and the
Investor. Further, during the Lease Term with
respect to the Equipment, the Lessee will make
rent payments ("Supplemental Rent Payments") from
time to time in an amount sufficient to allow the
Lessor to pay all amounts due to the Lenders and
the Agent under the Credit Agreement, including
--------------------------------------------------------------------------------
[CHASE LOGO] 5 CHASE SECURITIES INC.
70
CONFIDENTIAL HANOVER COMPRESSOR COMPANY
-------------------------------------------------------------------------------
commitment fees, cost and yield protection
provisions, indemnities and expenses.
On the Maturity Date the Lessee will pay (in
addition to Basic Rent and Supplemental Rent) an
amount equal to the maximum amount permitted under
SFAS No. 13 which permits the lessee to account
for the lease as an operating lease (but in no
event less than 85.0% nor more than 89.9% of the
Equipment Cost). The amount referred to in the
preceding sentence shall be referred to as the
"Maximum Residual Guarantee Amount". The Maximum
Residual Guarantee Amount payments will be used
only to repay Tranche A Loans. The foregoing
amounts shall not be required to be paid in
respect of Equipment if the Lessee exercises its
purchase option under the Lease to purchase such
Equipment or otherwise pays the Termination Value
(as defined below).
TERMINATION VALUE: The total termination value (the "Termination
Value") at any time will be an amount equal to the
sum of the aggregate outstanding principal amount
of the Loans, any accrued interest to the date of
payment, the unrecovered Investor Contribution and
the unpaid Investor Yield and all other amounts
due by Lessee under any of the operative
agreements. If it is necessary to compute the
Termination Value for a particular item(s) of
Equipment, the total Termination Value will be
allocated among the Equipment based upon the
relative Equipment Cost of each item.
PURCHASE OPTIONS
AND EARLY TERMINATION
RIGHTS: The Lease will permit the Lessee, at its option,
to purchase at any time 6 months prior to the
Maturity Date all of the Equipment and terminate
the Lease with respect to the Equipment upon the
payment of the Termination Value. In the event the
Lessee wants to purchase less than all of the
Equipment, no Default or Event of Default shall
have occurred and be continuing. By giving written
notice to the Lessor 6 months prior to the
Maturity Date, the Lessee will have the option to
purchase, or designate another person to purchase,
on the Maturity Date all, but not less than all,
the Equipment then subject to the Lease. If six
months prior to the Maturity Date, the aggregate
Termination Value of all Equipment then held by
the Lessor is less than 75% of the highest
Termination Value of all Equipment held by the
Lessor at any one time during the period starting
at the first anniversary of the Closing Date and
ending six months prior to the Maturity Date, then
the Lessee will be required to purchase, or cause
its designee to purchase, all remaining Equipment
on the Maturity Date.
EVENT OF LOSS: An Event of Loss means any of the following
events: (i) destruction, damage beyond repair or
rendition of the affected Equipment permanently
unfit for the Lessee's normal use for any reason
whatsoever; or (ii) the condemnation,
confiscation or seizure of in whole or in any
significant part of the affected Equipment, or
requisition of title to, or use of, any
significant part of the affected Equipment
rendering such affected Equipment permanently
unfit for the Lessee's normal use: or (iii) the
occurrence or discovery of certain environmental
conditions or events affecting the Equipment, the
estimated cost to remediate would exceed 10% of
the Equipment Cost for such Equipment.
Upon the occurrence of an Event of Loss, the
Lessee, at its election, shall either: (i)
purchase the affected Equipment by paying or
causing to be paid
------------------------------------------------------------------------------
[CHASE LOGO] 6 Chase Securities Inc.
71
CONFIDENTIAL HANOVER COMPRESSOR COMPANY
--------------------------------------------------------------------------------
the Termination Value of the affected Equipment
(upon such payment, title to the affected
Equipment will be transferred to the Lessee or its
designee); or (ii) rebuild and restore the
affected Equipment to like kind, value and quality
immediately prior to the time of the Event of
Loss, in which case the Lease of the affected
Equipment will continue and the rent payable under
the Lease will not be reduced; provided that if in
the Lessee's reasonable judgment the Equipment
cannot be rebuilt prior to the Maturity Date, then
the Lessee will purchase the affected Equipment
pursuant to clause (i). Except as set forth above,
proceeds from insurance or condemnation will be
used to repay the Loans and excess insurance
proceeds or condemnation awards will be paid to
the Lessee unless an Event of Default has
occurred and is continuing.
REMARKETING AND
RETURN: In the event that the Lessee does not exercise
its option to purchase all of the Equipment, then
not later than 6 months prior to the Maturity
Date the Lessee will be required to use its best
efforts to remarket the Equipment on the Lessor's
behalf and consummate a sale of all of the
Equipment on or prior to the Maturity Date. The
proceeds from the sale of the Equipment will be
applied to, first, repay the Tranche B Loans and
second, repay the unrecovered Investor
Contribution. On the date of sale of the
Equipment, a Maximum Residual Guarantee Payment
will be made to repay in full the Tranche A Loans.
Excess proceeds will be returned to Lessee on the
Maturity Date. If the sale proceeds from the
Equipment is less than the sum of the amount
necessary to pay the Tranche B Loans and the
unrecovered Investor Contribution, then Lessee
shall be liable for an assessment of additional
rent with respect to actual excess wear and tear
of the Equipment, as determined by an appraisal
procedure up to such sum; provided, however, that
such assessment shall under no circumstances
prevent the Lessee from accounting for the Lease
as an operating lease under SFAS No. 13.
If the Lessee is unable to sell the Equipment on
or prior to the Maturity Date, then the Lessee
shall pay the Maximum Residual Guarantee Amount
and shall surrender possession of the Equipment
to the Lessor on the Maturity Date.
ASSIGNMENT AND
SUBLETTING: The Lease will permit the Lessee to sublease the
Equipment but will prohibit assignment.
Notwithstanding any sublease, the Lessee will
remain primarily liable for the performance of
all of its obligations under the Lease.
QUIET ENJOYMENT: The Lessee will have the right to peaceably and
quietly hold, possess and use the Equipment
during the Lease Term prior to the Maturity Date
so long as no Event of Default shall have
occurred and be continuing under the Lease.
MAINTENANCE: The Lessee will cause the Equipment to be
maintained and repaired in good condition,
ordinary wear and tear excepted. The Equipment
will be maintained at all times in accordance
with applicable law, including without limitation
all environmental laws, and in accordance with
all insurance requirements.
INSURANCE: The Lessee will carry and maintain with respect
to the Equipment commercial general liability and
property insurance in amounts and on terms
reasonably satisfactory to the Agent. Each
liability policy and equipment policy shall be
primary without right of contribution from any
other insurance carried by the parties to the
transaction.
--------------------------------------------------------------------------------
[CHASE LOGO]
7 CHASE SECURITIES INC.
72
CONFIDENTIAL HANOVER COMPRESSOR COMPANY
--------------------------------------------------------------------------------
MODIFICATIONS: The Lessee will have the right to make modifications,
alterations or renovations to the Equipment (the
"Modifications") so long as such Modifications do not
impair the value, utility or the useful life of the
Equipment. The Lessee will also be required to make any
Modifications that are required by law or by any
governmental or regulatory authority having jurisdiction
over the Equipment. Title will vest with the Lessor with
respect to all required Modifications and to all other
Modifications that are not severable from the Equipment
without damage or other loss of value. Title to all other
Modifications will vest with the Lessee.
GENERAL INDEMNITIES: The Lessee will indemnify, on an after-tax basis, the
Lessor, the Trust Company, the Investor, the Lenders and
the Agent and any of such parties' assignees, affiliates
and their officers (the "Indemnified Persons") from and
against liabilities, losses or expenses which may be
asserted against any such person arising out of (i) the
ownership, leasing, maintenance, use, or possession of
the Equipment, and (ii) the transactions in connection
with the Lease and the Loans. The General Indemnity
will exclude claims that are attributable to the gross
negligence or willful misconduct of the applicable
indemnified party or its affiliates, representatives
or agents. There will be no structural indemnity with
respect to the tax characterization or accounting
treatment of the Lease.
TAX INDEMNIFICATION: The Lessee will indemnify, on an after tax basis, the
Indemnified Persons against and will agree to pay any and
all taxes payable as a result of ownership, rental,
operation, use, maintenance or sale of the Equipment,
including, but not limited to, rental, withholding,
sales, use, gross receipts, personal equipment,
franchise, excise, value added or other taxes, but
excluding (i) federal net income taxes and (ii) state and
local net income taxes except taxes imposed by the state
where the Equipment are located.
ENVIRONMENTAL
INDEMNIFICATION: The Lessee will indemnify the Indemnified Persons from
and against liabilities, losses or expenses arising out
of or related to any pre-existing condition, or any
activity, occurrence or other condition that violates or
threatens to violate or results in non-compliance with
any environmental law.
OTHER TERMS AND
CONDITIONS: The Lease, Participation Agreement and Guarantee will
contain representations, warranties, covenants,
indemnities and Events of Default similar to those
contained in the Senior Credit Facility, as amended and
restated.
LEASE COLLATERAL: The Lessee will secure its obligations under the Lease by
granting to Lessor a first perfected security interest
and lien on Lessee's right, title and interest in the
Lease, all other operative documents, the Equipment and
all proceeds therefrom, and will file appropriate UCC
financing statements as required by the Agent.
PART VII -- GENERAL PROVISIONS
CLOSING CONDITIONS: The obligations of the Lessee, the Lessor, the Investor
and the Lenders to enter into agreements contemplated
hereby on or prior to the Closing Date will be subject
to certain further conditions which include the
following:
--------------------------------------------------------------------------------
[CHASE LOGO]
8 CHASE SECURITIES INC.
73
CONFIDENTIAL HANOVER COMPRESSOR COMPANY
-------------------------------------------------------------------------------
(i) execution of documentation satisfactory to the
parties;
(ii) receipt of legal opinions satisfactory to the
parties;
(iii) receipt of any required consents or waivers under
Hanover Compressor's existing debt instruments; and
(iv) other customary conditions to closing for a
transaction of this type.
TRANSACTION EXPENSES: The Lessee will pay as transaction expenses all fees and
out-of-pocket expenses associated with the negotiation
and preparation of the documents, including, but not
limited to, the reasonable fees of outside legal counsel
for the Lessor, the Lessee, the Investor and the Agent,
the syndication and arrangement fees and reasonable
out-of-pocket expenses of CSI, commitment fees of the
Lenders, any applicable recording costs of the
documentation, and reasonable fees and expenses of the
Trustee.
DOCUMENTATION: Documentation for the transaction will be prepared by
Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel to Chase.
EVENTS OF DEFAULT: The Credit Agreement will contain Events of Defaults
similar to those found in the Senior Credit Facility,
as amended and restated, and usual for facilities of
this type, including a cross default to the Lease, the
Guarantee and other debt instruments of Hanover
Compressor. The Lessee may cure any Equipment-related
default under the Lease and the Guarantee by purchasing
such Equipment for Termination Value.
GOVERNING LAW: All documents will be governed by the laws of the State
of New York.
-------------------------------------------------------------------------------
[CHASE LOGO] 9 CHASE SECURITIES INC.
74
CONFIDENTIAL HANOVER COMPRESSOR COMPANY
-------------------------------------------------------------------------------
ANNEX I
INTEREST AND CERTAIN FEES
INTEREST RATE
OPTIONS: The Lessor, at the direction of the Lessee, may elect
that all or a portion of the Loans bear interest at a
rate per annum equal to:
the ABR plus the Applicable Margin; or
the Eurodollar Rate plus the Applicable Margin.
As used herein;
"ABR" means the highest of (i) the rate of interest
publicly announced by Chase as its prime rate in
effect at its principal office in New York City (the
"Prime Rate"), (ii) the secondary market rate for
certificates of deposit (grossed up for maximum
statutory reserve requirements) plus 1% and (iii) the
federal funds effective rate from time to time plus
0.5%.
"Applicable Margin" means a percentage determined in
accordance with the pricing grid attached hereto as
Annex I-A.
"Eurodollar Rate" means the rate (grossed-up for
maximum statutory reserve requirements for
eurocurrency liabilities) at which eurodollar deposits
for one, two, three or six months (as selected by the
Lessor, at the direction of the Lessee) are offered to
Chase in the interbank eurodollar market in the
approximate amount of Chase's share of the relevant
Loan.
INTEREST PAYMENT
DATES: In the case of Loans bearing interest based upon the
ABR ("ABR Loans"), quarterly in arrears.
In the case of Loans bearing interest based upon the
Eurodollar Rate ("Eurodollar Loans"), on the last day
of each relevant interest period and, in the case of
any interest period longer than three months, on each
successive date three months after the first day of
such interest period.
REVOLVING COMMITMENT
FEES: The Lessor shall pay a revolving commitment fee
calculated at the rate per annum on the average daily
unused portion of the Loans and the Investor
Contribution during the Revolving Period, payable
quarterly in arrears as shown on the pricing grid
below.
DEFAULT RATE: At any time when the Lessor is in default in the
payment of any amount due under the Credit Agreement,
the principal of all Loans shall bear interest at 2%
above the rate otherwise applicable thereto. Overdue
interest, fees and other amounts shall bear interest
at 2% above the rate applicable to ABR Loans.
RATE AND FEE BASIS: All per annum rates shall be calculated on the basis
of a year of 365/366 days for actual days elapsed.
-------------------------------------------------------------------------------
[CHASE LOGO] 10 CHASE SECURITIES INC.
75
CONFIDENTIAL HANOVER COMPRESSOR COMPANY
--------------------------------------------------------------------------------
ANNEX I-A
APPLICABLE MARGIN/COMMITMENT FEE
For Loans, the rate per annum set forth below opposite the ratio of indebtedness
to EBITDA:
Debt/EBITDA
RATIO ABR LOANS EURODOLLAR LOANS COMMITMENT FEE
----- --------- ---------------- --------------
<1.00 0.00% 0.75% .1875%
-
>1.00 and < or = 2.00 0.00% 1.00% .25%
>2.00 and < or = 3.00 0.50% 1.25% .30%
>3.00 and < or = 4.00 0.50% 1.50% .30%
>4.00 0.75% 1.75% .375%
--------------------------------------------------------------------------------
[CHASE LOGO] CHASE SECURITIES INC.
11
76
EXECUTION COPY
THIRD AMENDMENT
THIRD AMENDMENT, dated as of July 28, 1998 (this "Amendment"),
to the Credit Agreement, dated as of December 15, 1997, as amended by the Waiver
and First Amendment, dated as of June 10, 1998 and the Second Amendment, dated
as of June 29, 1998 (as the same may be further amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among HANOVER
COMPRESSOR COMPANY, a Delaware corporation ("HCC"), the several banks and other
financial institutions from time to time parties thereto (the "Lenders") and THE
CHASE MANHATTAN BANK, a New York banking corporation, as the administrative
agent for the Lenders (in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, HCC, the Lenders and the Administrative Agent are
parties to the Credit Agreement; and
WHEREAS, HCC has requested that the Administrative Agent and
the Required Lenders amend certain covenants in the Credit Agreement in
connection with (i) required amendments to the Subsidiaries' Guarantee (as
hereinafter defined) and (ii) guidelines concerning capital stock owned by
employees, officers and directors; and
WHEREAS, the Administrative Agent and the Required Lenders are
agreeable to the requested amendments, but only on the terms and subject to the
conditions set forth herein;
NOW THEREFORE, in consideration of the premises herein
contained and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized
terms used herein which are defined in the Credit Agreement are used herein as
therein defined.
2. Amendment to Subsection 7.9 (Subsequent Guarantees).
Subsection 7.9 of the Credit Agreement is hereby amended by deleting it in its
entirety and substituting in place thereof the following:
"7.9 Subsequent Guarantees. HCC shall cause each Qualified
Subsidiary of HCC for which the aggregate value of all assets owned by
such Qualified Subsidiary is or becomes greater than $20,000,000, to
execute an amendment to the Subsidiaries' Guarantee, substantially in
the form of Exhibit A to the Subsidiaries' Guarantee within
77
2
one year after the later of (i) the date on which such Qualified
Subsidiary becomes a Subsidiary of HCC and (ii) the date on which such
Qualified Subsidiary's assets attain an aggregate value in excess of
$20,000,000; provided, however, that if during such one-year period the
aggregate value of such Qualified Subsidiary's assets is or becomes
$20,000,000 or less, such Qualified Subsidiary shall not be required to
become a party to the Subsidiaries' Guarantee."
3. Amendment to Subsection 8.8 (Limitation on Dividends).
Subsection 8.8 of the Credit Agreement is hereby amended by deleting the amount
"$2,500,000" from clause (ii) thereof and substituting in place thereof the
amount "7,500,000".
4. Amendment to Subsection 5,10 (Limitation on investments,
Loans and Advances). Subsection 8.10 of the Credit Agreement is hereby amended
by deleting paragraph (i) therefrom and substituting in place thereof the
following:
"(i) Loans to employees, officers and directors of HCC and its
Subsidiaries to acquire shares of capital stock of HCC not to exceed
$20,000,000."
5. Effectiveness. This Amendment shall become effective upon
fulfillment of the following conditions precedent: (a) HCC and each of its
Subsidiaries listed on the signature pages hereto shall have delivered to the
Administrative Agent duly executed copies of this Amendment, (b) the
Administrative Agent shall have received duly executed copies of this Amendment
from the Required Lenders and (c) no Default or Event of Default shall have
occurred and be continuing on the date hereof after giving affect to this
Amendment.
6. Representations and Warranties. HCC hereby represents and
warrants that the representations and warranties contained in the Credit
Agreement (except those which expressly speak as of a certain date) will be,
after giving effect to this Amendment, true and correct in all material
respects, as if made on and as of the date hereof
7. Continuing Effect of Credit Agreement. This Amendment shall
not constitute an amendment or waiver of any other provision of the Credit
Agreement or the Loan Documents not expressly referred to herein and shall not
be construed as a waiver or consent to any further or future action on the part
of HCC that would require a waiver or consent of the Administrative Agent and/or
the Lenders. Except as expressly amended hereby, the provisions of the Credit
Agreement and the Loan Documents are and shall remain in full force and effect.
8. Counterparts. This Amendment may be executed in
counterparts and all of the said counterparts taken together shall be deemed to
constitute one and the same instrument. Delivery of an executed signature page
of this Amendment by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.
9. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
78
3
10. Expenses. HCC agrees to pay or reimburse the
Administrative Agent for all of their out-of-pocket costs and expenses incurred
in connection with the preparation, negotiation and execution of this Amendment,
including, without limitation, the fees and disbursements of counsel to the
Administrative Agent.
79
4
IN WITNESS WHEREOF, the parties have caused this Amendment to
be executed and delivered by their duly authorized officers of the date first
written above.
HANOVER COMPRESSOR COMPANY
BY: /s/ XXXXXX XXXXXXX
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Treasurer
THE CHASE MANHATTAN BANK (formerly
known as Chemical Bank), as Administrative
Agent and as a Lender
BY: /s/ XXXXX X. XXXX
----------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
THE BANK OF NOVA SCOTIA
BY: /s/ F.O.R. XXXXX
----------------------------------
Name: F.O.R. Xxxxx
Title: Senior Manager
Loan Operations
CREDIT LYONNAIS, NEW YORK BRANCH
BY: /s/ PHILIPPE SOUSTRA
----------------------------------
Name: Philippe Soustra
Title: Senior Vice President
XXXXX FARGO BANK (TEXAS), NATIONAL
ASSOCIATION
BY: /s/ XXXXXXXX X. XXXXX
----------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
80
5
BANQUE PARIBAS
BY: /s/ XXXXXXX X. XXXXXX
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
FIRST UNION BANK
BY: /s/ XXXXXX X. XXXXXXXXX
----------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President
BANKERS TRUST COMPANY
BY: /s/ XXXXXX X. XXXXXXXXXX
----------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Principal
Acknowledged and agreed to as
of the date hereof:
HANOVER MAINTECH, INC.
By: /s/ XXXXXX XXXXXXX
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Treasurer
HANOVER/XXXXX, INC.
By: /s/ XXXXXX XXXXXXX
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Treasurer
HANOVER LAND COMPANY
By: /s/ XXXXXX XXXXXXX
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Treasurer
