EXHIBIT 10.55
EXECUTION COPY
GUARANTEE
made by
HANOVER COMPRESSOR COMPANY
HANOVER COMPRESSION INC.
and certain of their Subsidiaries
Dated as of October 27, 2000
TABLE OF CONTENTS
1. Defined Terms......................................................................................... 1
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2. Guaranty.............................................................................................. 2
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3. Right of Set-off...................................................................................... 3
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4. No Subrogation........................................................................................ 3
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5. Amendments, etc. with respect to the Guaranteed Obligations; Waiver of Rights......................... 3
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6. Guarantee Absolute and Unconditional.................................................................. 4
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7. Reinstatement......................................................................................... 5
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8. Payments.............................................................................................. 5
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9. Representations, Warranties........................................................................... 5
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9.1 Financial Condition.......................................................................... 5
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9.2 No Change.................................................................................... 6
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9.3 Corporate Existence; Compliance with Law..................................................... 6
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9.4 Corporate Power; Authorization; Enforceable Obligations...................................... 6
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9.5 No Legal Bar................................................................................. 7
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9.6 No Material Litigation....................................................................... 7
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9.7 No Default................................................................................... 7
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9.8 Ownership of Property; Liens; Leases of Equipment............................................ 7
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9.9 Intellectual Property........................................................................ 8
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9.10 Taxes........................................................................................ 8
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9.11 Federal Regulations.......................................................................... 8
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9.12 ERISA........................................................................................ 8
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9.13 Investment Company Act; Other Regulations.................................................... 9
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9.14 Subsidiaries................................................................................. 9
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9.15 Environmental Matters........................................................................ 9
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9.16 Accuracy and Completeness of Information..................................................... 10
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9.17 Senior Indebtedness.......................................................................... 10
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9.18 Representations and Warranties in Equipment Guarantees....................................... 10
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10. Affirmative Covenants of the Guarantor................................................................ 10
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10.1 Financial Statements......................................................................... 10
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10.2 Certificates; Other Information.............................................................. 11
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10.3 Payment of Obligations....................................................................... 12
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10.4 Conduct of Business and Maintenance of Existence............................................. 12
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10.5 Maintenance of Property; Insurance........................................................... 13
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10.6 Inspection of Property; Books and Records; Discussions....................................... 13
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10.7 Notices...................................................................................... 13
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10.8 Environmental Laws........................................................................... 14
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10.9 Subsequent Guarantees........................................................................ 15
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11. Negative Covenants.................................................................................... 15
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11.1 Financial Condition Covenants................................................................ 15
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11.2 Limitation on Indebtedness................................................................... 16
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11.3 Limitation on Liens.......................................................................... 17
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11.4 Limitation on Guarantee Obligations. Create, incur, assume or suffer to exist any
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Guarantee Obligation except:................................................................. 19
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11.5 Limitations on Fundamental Changes........................................................... 19
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11.6 Limitation on Sale or Lease of Assets........................................................ 20
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11.7 Limitation on Leases......................................................................... 21
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11.8 Limitation on Dividends...................................................................... 21
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11.9 Limitation on Derivatives.................................................................... 22
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11.10 Limitation on Investments, Loans and Advances................................................ 22
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11.11 Limitation on Optional Payments and Modifications of Debt Instruments........................ 23
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11.12 Transactions with Affiliates................................................................. 23
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11.13 Sale and Leaseback........................................................................... 23
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11.14 Corporate Documents.......................................................................... 24
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11.15 Fiscal Year.................................................................................. 24
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11.16 Nature of Business........................................................................... 24
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11.17 Unqualified Subsidiaries..................................................................... 24
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12. Miscellaneous......................................................................................... 24
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12.1 Notices...................................................................................... 24
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12.2 Severability................................................................................. 25
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12.3 Integration.................................................................................. 25
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12.4 Amendments in Writing; No Waiver; Cumulative Remedies........................................ 25
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12.5 Section Headings............................................................................. 25
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12.6 Successors and Assigns....................................................................... 25
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12.7 SUBMISSION TO JURISDICTION; WAIVERS.......................................................... 26
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12.8 GOVERNING LAW................................................................................ 26
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12.9 Survival of Representations, Warranties, etc................................................. 26
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12.10 Authority of Agent........................................................................... 27
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12.11 Third Party Beneficiaries.................................................................... 27
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12.12 Right of Contribution........................................................................ 27
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12.13 WAIVER OF JURY TRIAL......................................................................... 27
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Page
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Schedules
Schedule 9.2 Material Changes
Schedule 9.4 Required Consents
Schedule 9.14 Subsidiaries
Schedule 9.15 Environmental
Schedule 11.2 Existing Indebtedness
Schedule 11.3(1) Existing Liens
Schedule 11.3(n) Additional Existing Liens
Schedule 11.3(t) Additional Liens
Schedule 11.6(i) Lease of Assets
Schedule 11.12 Affiliate Transactions
Schedule 11.13 Sale and Leaseback Transactions
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1
GUARANTEE
GUARANTEE dated as of October 27, 2000, made by HANOVER COMPRESSOR
COMPANY, a Delaware corporation, HANOVER COMPRESSION INC., a Delaware
corporation, and each of their Subsidiaries that are signatories hereto
(individually, a "Guarantor", collectively, the "Guarantors"), in favor of the
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Beneficiaries (as hereinafter defined).
Preliminary Statement
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The Guarantors wish to induce (i) Hanover Equipment Trust 2000B (the
"Lessor") to enter into the Lease and the other Operative Agreements to which it
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is a party; (ii) the Lenders to enter into the Credit Agreement and the other
Operative Agreements to which they are party; and (iii)Bank Hapoalim B.M. and
FBTC Leasing Corp. (the "Investors") to enter into the Participation Agreement
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(as hereinafter defined) and the other Operative Agreements to which they are a
party.
NOW, THEREFORE, in consideration of the premises contained herein and
to induce (i) the Lessor to enter into the Lease and the other Operative
Agreements to which it is a party; (ii) the Lenders to enter into the Credit
Agreement and the other Operative Agreements to which it is a party; and (iii)
the Investors to enter into the Participation Agreement and the other Operative
Agreements to which it is a party, the Guarantors hereby agree for the benefit
of the Lessor, the Agent, for the ratable benefit of the Lenders and the
Investors and their respective successors and assigns (individually a
"Beneficiary", collectively, the "Beneficiaries"), as follows:
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1. Defined Terms. (a) Capitalized terms not otherwise defined herein
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(including in the Preliminary Statement) shall have the meanings ascribed to
them in Annex A to the Participation Agreement dated as of the date hereof among
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Hanover Compression Inc. ("HCC"), the Lessor, the Investors, The Chase Manhattan
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Bank, as agent (the "Agent") and the several banks and financial institutions
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from time to time party thereto (the "Lenders"), as the same may from time to
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time be amended, supplemented or otherwise modified (the "Participation
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Agreement").
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(b) As used herein, the following terms shall have the following
meanings:
"Agreement" means this Guarantee, as the same may be amended,
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supplemented or otherwise modified from time to time.
"Contribution Obligations" means the collective reference to the
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outstanding amount of the Investor Contributions and the Investor Yield with
respect thereto and all rights of the Investors to receive distributions under
the Trust Agreement and any of the other Operative Agreements.
"Guaranteed Obligations" means the collective reference to (i)
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the Note Obligations, (ii) the Contribution Obligations and (iii) the Lease
Obligations and, with respect to each such obligation, interest accruing thereon
at the applicable rate provided in the Operative Agreements after maturity and
interest accruing at the then applicable rate provided in the
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Operative Agreements after the filing of any petition in bankruptcy, or the
commencement of an insolvency, reorganization or like proceeding, whether or not
a claim for post-filing or post-petition interest is allowed in such proceeding
and whether such obligations are direct or indirect, absolute or contingent, due
or to become due, or now existing or hereinafter incurred, which may arise,
under, out of or in connection with any of the Operative Agreements, any other
document made, delivered or given in connection therewith, in each case whether
on account of principal, interest, Investor Contributions or Investor Yield,
reimbursement obligations, fees, indemnities, costs, expenses, or payment
obligations (including, without limitation, all fees and disbursements of
counsel to any of the Beneficiaries that are required to be paid by HCC pursuant
to the terms of the Operative Agreements).
"Lease Obligations" means the collective reference to the payment
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obligations and undertakings applicable to HCC contained in or arising under the
Lease or any of the other Operative Agreements to which HCC is a party,
including, but not limited to, the full and punctual payment by HCC, when due,
of any and all Rent, the payments required pursuant to Section 17.2 and 17.3 of
the Lease, the Purchase Option Price and the Maximum Residual Guarantee Amount.
"Note Obligations" means the collective reference to the unpaid
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principal of and interest on the Notes and all other payment obligations and
liabilities of the Lessor to the Agent and the Lenders under the Notes, the
Credit Agreement and any of the other Operative Agreements.
2. Guaranty. (a) Subject to the provisions of paragraph 2(b) and
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(c), the Guarantors hereby, jointly and severally, unconditionally and
irrevocably guaranty to the Beneficiaries and their respective successors,
endorsees, transferees and assigns the prompt and complete payment when due
(whether at the stated maturity, by acceleration or otherwise) of the Guaranteed
Obligations.
(b) Anything to the contrary notwithstanding, the Guarantors shall
not at anytime be required to make any payment with regard to the Tranche B
Loans or with respect to the Contribution Obligations unless at such time a
Lease Event of Default has occurred and is continuing.
(c) Anything herein or in any other Operative Agreement to the
contrary notwithstanding, the maximum liability of each Guarantor (other than
Holdings and HCC) hereunder and under the other Operative Agreement shall in no
event exceed the amount which can be guaranteed by such Guarantor under
applicable federal and state laws relating to the insolvency of debtors.
(d) The Guarantors further agree, jointly and severally, to pay any
and all costs, expenses (including all fees and disbursements of counsel) and
damages which may be paid or incurred in enforcing, or obtaining advice of
counsel in respect of, any rights with respect to, or collecting from the
Guarantors, any or all of the Guaranteed Obligations and/or enforcing any rights
with respect to, or collecting against, the Guarantors under this Guarantee.
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3. Right of Set-off. In addition to any rights now or hereafter
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granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each of the Investors, Agent and each Lender is hereby authorized at
any time or from time to time, without presentment, demand, protest or other
notice of any kind to the Borrower, the Guarantors or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by such Investor, Agent or such Lender (including,
without limitation, by branches and agencies of such Investor, Agent or such
Lender wherever located) to or for the credit or the account of the Guarantors
against and on account of the obligations and liabilities of the Guarantors
hereunder or under any of the other Operative Agreements, and all other claims
of any nature or description arising out of or connected with this Guarantee or
any other Operative Agreement, irrespective of whether such Investor, Agent or
such Lender shall have made any demand hereunder and although said obligations,
liabilities or claims, or any of them, shall be contingent or unmatured. Each
of the Investors, Agent and each Lender shall notify such Guarantor promptly of
any such set-off and the application made by such Investor, Agent or such
Lender; provided, that the failure to give such notice shall not affect the
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validity of such set-off and application.
4. No Subrogation. Notwithstanding any payment or payments made by
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the Guarantors hereunder or any set-off or application of funds of the
Guarantors by any Lender, the Guarantors shall not be entitled to exercise or
enforce any subrogation rights of the Investors, Agent or any Lender against the
Borrower or any other Person or any collateral security or guarantee or right of
offset held by the Investors, Agent or any Lender for the payment of the
Guaranteed Obligations, nor shall the Guarantors seek or be entitled to seek any
contribution or reimbursement from the Borrower or any other Person in respect
of payments made by the Guarantors hereunder, until all amounts owing to the
Investors, Agent and the Lenders by the Borrower on account of the Guaranteed
Obligations and all amounts owing hereunder are paid in full and the Commitments
are terminated. If any amount shall be paid to the Guarantors on account of such
subrogation rights at any time when all of the Guaranteed Obligations and all
amounts owing hereunder shall not have been paid in full or the Commitments
shall not have been terminated, such amount shall be held by the Guarantors in
trust for the Investors, Agent and the Lenders, segregated from other funds of
the Guarantors, and shall, forthwith upon receipt by the Guarantors, be turned
over to the Agent in the exact form received by the Guarantors (duly indorsed by
the Guarantors to the Agent, if required), to be applied against the Guaranteed
Obligations, whether matured or unmatured, in such order as the Agent may
determine.
5. Amendments, etc. with respect to the Guaranteed Obligations;
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Waiver of Rights. The Guarantors shall remain obligated hereunder
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notwithstanding that, without any reservation of rights against the Guarantors
and without notice to or further assent by the Guarantors, any demand for
payment of any of the Guaranteed Obligations made by the Investors, Agent or any
Lender may be rescinded by such party and any of the Guaranteed Obligations
continued, and the Guaranteed Obligations, or the liability of any other party
upon or for any part thereof, or any collateral security or guarantee therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Investors, Agent or any
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Lender, and the Credit Agreement, the Participation Agreement and the other
Operative Agreements may be amended, modified, supplemented or terminated, in
whole or in part, as the Agent (or the Required Lenders, as the case may be) may
deem advisable from time to time in accordance with the terms thereof, and any
collateral security, guarantee or right of offset at any time held by the
Investors, Agent or any Lender for the payment of the Guaranteed Obligations may
be sold, exchanged, waived, surrendered or released. Neither the Investors,
Agent nor any Lender shall have any obligation to protect, secure, perfect or
insure any Lien at any time held by it as security for the Guaranteed
Obligations or for this Guarantee or any property subject thereto. When making
any demand hereunder against the Guarantors, the Investors, Agent or any Lender
may, but shall be under no obligation to, make a similar demand on the Borrower
or any other guarantor, and any failure by the Investors, Agent or any Lender to
make any such demand or to collect any payments from the Borrower or any other
guarantor or any release of the Borrower or such other guarantor shall not
relieve the Guarantors from their obligations under this Guarantee, and shall
not impair or affect the rights and remedies, express or implied, or as a matter
of law, of the Investors, Agent or any Lender against the Guarantors. For the
purposes hereof "demand" shall include the commencement and continuance of any
legal proceedings.
6. Guarantee Absolute and Unconditional. Each Guarantor waives any
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and all notice of the creation, renewal, extension or accrual of any of the
Guaranteed Obligations and notice of or proof of reliance by the Investors,
Agent or any Lender upon this Guarantee or acceptance of this Guarantee, the
Guaranteed Obligations, and any of them, shall conclusively be deemed to have
been created, contracted or incurred, or renewed, extended, amended or waived,
in reliance upon this Guarantee; and all dealings between the Borrower and such
Guarantor, on the one hand, and the Agent and the Lenders, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon this Guarantee. Each Guarantor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Borrower or such Guarantor with respect to the Guaranteed Obligations. Each
Guarantor understands and agrees that this Guarantee shall be construed as a
continuing, absolute and unconditional guarantee and surety of payment without
regard to (a) the validity, regularity or enforceability of the Credit Agreement
or any other Operative Agreement, any of the Guaranteed Obligations or any other
collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Investors, Agent or any
Lender, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted by
the Borrower or such Guarantor against the Investors, Agent or any Lender, or
(c) any other circumstance whatsoever (with or without notice to or knowledge of
the Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Guaranteed
Obligations, or of such Guarantor under this Guarantee, in bankruptcy or in any
other instance. When pursuing its rights and remedies hereunder against any
Guarantor, the Investors, the Agent and any Lender may, but shall be under no
obligation to, pursue such rights and remedies as it may have against the
Borrower or any other Person or against any collateral security or guarantee for
the Guaranteed Obligations or any right of offset with respect thereto, and any
failure by the Investors, Agent or any Lender to pursue such other rights or
remedies or to collect any payments from the Borrower or any such other Person
or to realize upon any such collateral
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security or guarantee or to exercise any such right of offset, or any release of
the Borrower or any such other Person or any such collateral security, guarantee
or right of offset, shall not relieve such Guarantor of any liability hereunder,
and shall not impair or affect the rights and remedies, whether express, implied
or available as a matter of law, of the Investors, the Agent and the Lenders
against such Guarantor. This Guarantee shall remain in full force and effect and
be binding in accordance with and to the extent of its terms upon such Guarantor
and the successors and assigns thereof, and shall inure to the benefit of the
Investors, the Lessor, the Agent and the Lenders, and their respective
successors, indorsees, transferees and assigns, until all the Guaranteed
Obligations and the obligations of such Guarantor under this Guarantee shall
have been satisfied by payment in full and the Commitments shall be terminated,
notwithstanding that from time to time during the term of the Credit Agreement
the Borrower may be free from any Guaranteed Obligations.
7. Reinstatement. This Guarantee shall continue to be effective,
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or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Guaranteed Obligations is rescinded or must otherwise be
restored or returned by the Investors, Agent or any Lender upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or the
Guarantors, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Borrower or the
Guarantors or any substantial part of its property, or otherwise, all as though
such payments had not been made.
8. Payments. The Guarantors hereby guarantee that payments
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hereunder will be paid to the Agent without set-off or counterclaim in Dollars
at the office of the Agent located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
9. Representations, Warranties. In order to induce the Lenders to
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enter into the Credit Agreement and to make the Loans, the Investors to enter
into the Participation Agreement and make the Investor Contribution and the
Lessor to enter into the Lease, Holdings and HCC hereby jointly and severally
represent and warrant to the Beneficiaries as follows, all of which shall
survive the execution and delivery of this Guarantee and the Credit Agreement
and the making of the Loans:
9.1 Financial Condition. (a) The unaudited pro forma consolidated
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balance sheet of HCC and its consolidated Subsidiaries as at June 30, 2000
(including the notes thereto) (the "Pro Forma Balance Sheet"), copies of which
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have heretofore been furnished to each Lender, has been prepared giving effect
(as if such events had occurred on such date) to the consummation of the TIDES
issuance. The Pro Forma Balance Sheet has been prepared based on the best
information available to Holdings and HCC as of the date of delivery thereof,
and presents fairly in all material respects on a pro forma basis the estimated
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financial position of HCC and its consolidated Subsidiaries as at June 30, 2000,
assuming that the events specified in the preceding sentence had actually
occurred at such date.
(b) The audited consolidated balance sheets of HCC as at December 31,
1998 and December 31, 1999, and the related consolidated statements of
income and of cash flows for the fiscal years ended on such dates, reported
on by and accompanied by an unqualified report from PricewaterhouseCoopers
LLP, present fairly in all material
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respects the consolidated financial condition of HCC as at such date, and
the consolidated results of its operations and its consolidated cash flows
for the respective fiscal years then ended. The unaudited consolidated
balance sheet of HCC as at March 31, 2000 and June 30, 2000, and the
related unaudited consolidated statements of income and cash flows for the
three and six-month periods ended on such date, present fairly in all
material respects the consolidated financial condition of HCC as at such
date, and the consolidated results of its operations and its consolidated
cash flows for the three and six-month periods then ended (subject to
normal year-end audit adjustments). All such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by the aforementioned firm of accountants and disclosed
therein). Holdings, HCC and its Subsidiaries do not have any material
Guarantee Obligations, contingent liabilities and liabilities for taxes, or
any long-term leases or unusual forward or long-term commitments, including
any interest rate or foreign currency swap or exchange transaction or other
obligation in respect of derivatives, that are not reflected in the most
recent financial statements referred to in this paragraph. During the
period from June 30, 2000 to and including the date hereof there has been
no Disposition by Holdings or any of its Subsidiairies, as applicable, of
any material part of their business or property (other than to Holdings or
any of its Subsiciaries).
9.2 No Change. Since June 30, 2000 (a) there has been no
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development or event nor any prospective development or event, which has had or
would reasonably be expected to have a Material Adverse Effect and (b) except as
disclosed on Schedule 9.2 to this Agreement, as of the date of this Agreement,
no dividends or other distributions have been declared, paid or made upon the
Capital Stock of Holdings or HCC nor has any of the Capital Stock of Holdings or
HCC (other than in connection with the Restructuring) been redeemed, retired,
purchased or otherwise acquired for value by Holdings or any of its respective
Subsidiaries.
9.3 Corporate Existence; Compliance with Law. Each Guarantor (a) is
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duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the corporate power and authority, and
the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged,
(c) is duly qualified as a foreign corporation and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification, except where the
failure to be so qualified would not reasonably be expected to have a Material
Adverse Effect, and (d) is in compliance with all Requirements of Law except to
the extent that the failure to comply therewith would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
9.4 Corporate Power; Authorization; Enforceable Obligations. Each
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Guarantor has the corporate power and authority, and the legal right, to make,
deliver and perform the Operative Agreements to which it is a party. HCC has
the corporate power and authority, and the legal right, to perform the Operative
Agreements and has taken all necessary corporate action to authorize the
performing under the Operative Agreements on the terms and conditions of the
Operative Agreements. Each Guarantor has taken all necessary corporate
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action to authorize the execution, delivery and performance of this Guarantee.
No consent or authorization of, filing with or other act by or in respect of,
any Governmental Authority or any other Person (other than consents that have
been obtained and consents or authorizations the failure to obtain would not, in
the aggregate, reasonably be expected to have a Material Adverse Effect) is
required in connection with the Loans or with the execution, delivery,
performance, validity or enforceability of this Guarantee or any of the other
Operative Agreements, except consents, authorizations, filings and notices
described in Schedule 9.4, which consents, authorizations, filings and notices
have been obtained or made and are in full force and effect. This Guarantee has
been duly executed and delivered on behalf of the Guarantors party hereto. This
Guarantee constitutes, each Operative Agreement when executed and delivered will
constitute, a legal, valid and binding obligation of the Guarantors party
thereto enforceable against such Guarantors in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
9.5 No Legal Bar. The execution, delivery and performance of this
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Guarantee and the other Operative Agreements, the Loans and the use of the
proceeds thereof will not violate any Requirement of Law or Contractual
Obligation of any Guarantor party thereto and will not result in, or require,
the creation or imposition of any Lien on any of their respective properties or
revenues pursuant to any such Requirement of Law or Contractual Obligation,
except as contemplated hereby or thereby and except to the extent any such
violation or creation or imposition of a Lien would not reasonably be expected
to have a Material Adverse Effect.
9.6 No Material Litigation. Except as set forth in HCC's Form 10-Q,
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filed with respect to the period ending June 30, 2000, no litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the knowledge of HCC, threatened by or against any
Guarantor or against any of their respective properties or revenues (a) with
respect to this Guarantee or the other Operative Agreements or any of the
transactions contemplated hereby, or (b) which would reasonably be expected to
have a Material Adverse Effect.
9.7 No Default. None of the Guarantors nor any of their respective
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Subsidiaries is in default under or with respect to any of their respective
Contractual Obligations in any respect which if not cured would reasonably be
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
9.8 Ownership of Property; Liens; Leases of Equipment. Each of the
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Guarantors has good record and marketable title in fee simple (except for
exceptions to title as will not in the aggregate materially interfere with the
present or contemplated use of the property affected thereby) to, or a valid
leasehold interest in, all its real property, and good title to all its other
property, and none of such property is subject to any Lien except as permitted
by Section 11.3. None of the Equipment or Inventory (as defined in the Uniform
Commercial Code) owned by any Guarantor has been leased by such Guarantor as
lessor, except pursuant to operating leases (which do not constitute Financing
Leases). As used herein, Equipment or Inventory leased by a Guarantor under a
Financing Lease shall be deemed "owned" by such Guarantor.
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9.9 Intellectual Property. Each Guarantor owns, or is licensed to
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use, all trademarks, tradenames, trade secrets, copyrights, technology, know-how
and processes necessary for the conduct of its business as currently conducted
except for those the failure to own or license which would not reasonably be
expected to have a Material Adverse Effect (the "Intellectual Property"). To
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the knowledge of each Guarantor, no claim has been asserted and is pending by
any Person challenging or questioning the use of any such Intellectual Property
or the validity or effectiveness of any such Intellectual Property, nor does
each Guarantor know of any valid basis for any such claim, which would
reasonably be expected to have a Material Adverse Effect. The use of such
Intellectual Property by the Guarantors does not infringe on the rights of any
Person, except for such claims and infringements that, in the aggregate, would
not reasonably be expected to have a Material Adverse Effect.
9.10 Taxes. Each of the Guarantors has filed or caused to be filed
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all tax returns which, to the knowledge of each Guarantor, are required to be
filed and has paid all taxes shown to be due and payable on said returns or on
any assessments made against it or any of its property and all other taxes, fees
or other charges imposed on it or any of its property by any Governmental
Authority (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of any of the
Guarantors, as the case may be); no tax Lien has been filed against the property
of any Guarantor, and, to the knowledge of each Guarantor, no claim is being
asserted, with respect to any such tax, fee or other charge.
9.11 Federal Regulations. No part of the proceeds of any Loans will
------------------------
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect or for any purpose which violates the provisions of the Regulations of
such Board of Governors. If requested by any Lender or the Agent, HCC will
furnish to the Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 referred to in said Regulation
U.
9.12 ERISA. Neither a Reportable Event nor an "accumulated funding
----------
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred and no lien
in favor of the PBGC or a Plan has arisen during the five-year period prior to
the date as of which this representation is deemed made. The present value of
all accrued benefits under each Single Employer Plan maintained by HCC, or any
Commonly Controlled Entity (based on those assumptions used to fund the Plans)
did not, as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets of such
Plan allocable to such accrued benefits. Neither HCC nor any Commonly
Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan, and neither HCC nor any Commonly Controlled Entity would
become subject to any liability under ERISA if HCC or any such Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans as of
the valuation date most closely preceding the date on which this
9
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvent. The present value (determined using actuarial and
other assumptions which are reasonable in respect of the benefits provided and
the employees participating) of the liability of HCC and each Commonly
Controlled Entity for post retirement benefits to be provided to their current
and former employees under Plans which are welfare benefit plans (as defined in
Section 3(1) of ERISA) does not, in the aggregate, exceed the assets under all
such Plans allocable to such benefits.
9.13 Investment Company Act; Other Regulations. None of the
----------------------------------------------
Guarantors is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended. None of the Guarantors is subject to regulation under any Federal or
State statute or regulation which limits its ability to incur Indebtedness or
change rates or change tariffs. None of the Guarantors are "holding companies"
or "subsidiary companies" of a "holding company" or a "subsidiary company" of a
"holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
9.14 Subsidiaries. As of the Initial Closing Date, Holdings has no
-----------------
Subsidiaries other than as set forth on Schedule 9.14. Except if a Guarantor,
-------------
other than cash or Cash Equivalents located in bank accounts at the Agent, none
of the assets owned by any Unqualified Subsidiary as of the date hereof are
located within the United States of America or any territory thereof.
9.15 Environmental Matters. Each of the representations and
--------------------------
warranties set forth in paragraphs (a) through (e) of this subsection is true
and correct with respect to each parcel of real property owned or operated by
any of the Guarantors (the "Properties"), except to the extent that the facts
----------
and circumstances giving rise to any such failure to be so true and correct
would not reasonably be expected to have a Material Adverse Effect:
(a) Except as set forth on Schedule 9.15, the Properties do not
-------------
contain, and have not previously contained, in, on, or under, including,
without limitation, the soil and groundwater thereunder, any Hazardous
Substances in concentrations which violate Environmental Laws.
(b) Except as set forth on Schedule 9.15, the Properties and all
-------------
operations and facilities at the Properties are in compliance with all
Environmental Laws, and there is no Hazardous Substances contamination or
violation of any Environmental Law which would reasonably be expected to
interfere with the continued operation of any of the Properties or impair
the fair saleable value of any thereof.
(c) Except as set forth on Schedule 9.15, none of the Guarantors has
-------------
received any complaint, notice of violation, alleged violation,
investigation or advisory action or of potential liability or of potential
responsibility regarding environmental protection matters or environmental
permit compliance with regard to the Properties which have not been
resolved, nor is HCC aware that any Governmental Authority is contemplating
delivering to any Guarantor any such notice.
10
(d) Hazardous Substances have not been generated, treated, stored,
disposed of, at, on or under any of the Properties in concentrations that
violate Environmental Laws, nor have any Hazardous Substances been
transferred to any other location, in violation of any Environmental Laws
from the Properties or as a result of the sale or lease of any equipment or
inventory of any Guarantor.
(e) There are no governmental, administrative actions or judicial
proceedings pending or contemplated under any Environmental Laws to which
any Guarantor is or to HCC's knowledge will be named as a party with
respect to the Properties, nor to HCC's knowledge are there any consent
decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under
any Environmental Law with respect to any of the Properties.
9.16 Accuracy and Completeness of Information. The factual statements
---------------------------------------------
contained in the Operative Agreements and each other agreement, instrument,
certificate and document related thereto and any other certificates or documents
furnished or to be furnished to the Investors, the Agent or the Lenders by any
Guarantor from time to time in connection with this Guarantee (in any case
excluding any of the financial statements referred to in Section 9.1(a) and 10.1
hereof), taken as a whole, and taking into consideration all corrections or
substituted documents, do not and will not, as of the date when made, contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not misleading in
light of the circumstances in which the same were made, all except as otherwise
qualified herein or therein.
9.17 Senior Indebtedness. The Guaranteed Obligations constitute
------------------------
"Senior Indebtedness" of HCC under and as defined in the Shareholder
Subordinated Loan Agreement. The obligations of the Guarantors under the
Agreement constitute "Senior Indebtedness" of such applicable Guarantors under
and as defined in the Shareholder Subordinated Loan Agreement.
9.18 Representations and Warranties in Equipment Guarantees. The
-----------------------------------------------------------
representations and warranties contained in Section 9 of the Equipment
Guarantees and in any amendment, consent or waiver thereto were true and correct
in all material respects on and as of the dates when made pursuant to the
Equipment Guarantees.
10. Affirmative Covenants of the Guarantor. Each Guarantor hereby
-------------------------------------------
covenants and agrees that so long as this Guarantee is in effect and until the
Commitments have terminated and the Guaranteed Obligations and all amounts owing
hereunder are paid in full such Guarantor will:
10.1 Financial Statements. Furnish to each Lender and each of the
-------------------------
Investors:
(a) as soon as available for distribution to shareholders and
creditors generally, but in any event within 120 days after the end of each
fiscal year of Holdings, a copy of the consolidated balance sheet of
Holdings and its consolidated Subsidiaries, as at the end of such year and
the related consolidated statements of income and retained earnings and of
cash flows for such year, setting forth in each case in comparative form
11
the figures for the previous year, reported on without a "going concern" or
like qualification or exception, or qualification arising out of the scope
of the audit, by PricewaterhouseCoopers LLP or other independent certified
public accountants of nationally recognized standing not unacceptable to
the Required Lenders;
(b) as soon as available for distribution to shareholders and
creditors generally, but in any event within 90 days after the end of each
fiscal year of Holdings, a copy of the unaudited consolidated balance sheet
of Holdings and its consolidated Subsidiaries, as at the end of such year,
and the related unaudited consolidated statements of income and retained
earnings and of cash flows for such year, in each case setting forth in
comparative form the figures for the corresponding period of the previous
year and the figures for such period as shown on the budgets of Holdings
for such year; and
(c) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of Holdings, the unaudited consolidated balance sheet of Holdings and
its consolidated Subsidiaries, as at the end of such quarter, and the
related unaudited consolidated statements of income and retained earnings
and of cash flows of Holdings and its consolidated Subsidiaries, for such
quarter and the portion of the fiscal year through the end of such quarter,
setting forth in each case in comparative form the figures for the
corresponding period of the previous year, certified by a Responsible
Officer as being fairly stated in all material respects when considered in
relation to the consolidated financial statements of Holdings and its
consolidated Subsidiaries, (subject to normal year-end audit adjustments),
and in each case setting forth in comparative form the figures for such
periods as shown on the budgets of such Person for such year;
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
10.2 Certificates; Other Information. Furnish to each Lender and
------------------------------------
each of the Investors:
(a) concurrently with the delivery of the financial statements
referred to in subsection 10.1(a), a certificate of the independent
certified public accountants reporting on such financial statements stating
that in making the examination necessary therefor no knowledge was obtained
of any Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 10.1(a) and 10.1(c), a certificate of a
Responsible Officer stating that, to the best of such Responsible Officer's
knowledge, Holdings during such period has observed or performed all of its
covenants and other agreements, and satisfied every material condition,
contained in this Guarantee and the other Operative Agreements to which it
is a party to be observed, performed or satisfied by it, and that such
Responsible Officer has
12
obtained no knowledge of any Default or Event of Default except as
specified in such certificate, such certificate to include the original
total dollar amount of any Equipment True Leases;
(c) not later than 45 days following the end of each fiscal year of
Holdings, a copy of the projections by Holdings of the operating budget and
cash flow budget of Holdings and its Subsidiaries for the succeeding fiscal
year, such projections to be accompanied by a certificate of a Responsible
Officer to the effect that such projections have been prepared on the basis
of reasonable assumptions and that such Officer has no reason to believe
they are incorrect or misleading in any material respect;
(d) (i) within five days after the same are sent, copies of all
financial statements and reports which Holdings, if at such time any class
of Holding's securities are held by the public, sends to its stockholders
generally, or, if otherwise, such financial statements and reports as are
made generally available to the public, and (ii) within five days after the
same are filed, copies of all financial statements and reports which
Holdings may make to, or file with, the Securities and Exchange Commission
or any successor or analogous Governmental Authority;
(e) concurrently with the delivery of the financial statements
referred to in subsections 10.1(a) and (c), a management summary describing
and analyzing the performance of Holdings and its Subsidiaries during the
periods covered by such financial statements;
(f) within 45 days after the end of each quarter in each fiscal year
of Holdings, a certificate of the principal financial officer of Holdings
showing both the Applicable Margin for the next quarter and the detailed
computations necessary to calculate the Applicable Margin (an "Applicable
----------
Margin Certificate"); and
------------------
(g) promptly, such additional financial and other information as any
Lender or either of the Investors may from time to time reasonably request.
10.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
-----------------------------
or before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
Holdings or any Subsidiary of Holdings, as the case may be.
10.4 Conduct of Business and Maintenance of Existence. Continue to
-------------------------------------------------------
engage in business of the same general type as now conducted by it and preserve,
renew and keep in full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business except as otherwise permitted
pursuant to Section 11.5; comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith would
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
13
10.5 Maintenance of Property; Insurance. (a) Keep and maintain all
-----------------------------------------
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (b) maintain, with financially
sound and reputable insurance companies, insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations.
10.6 Inspection of Property; Books and Records; Discussions. Keep
-------------------------------------------------------------
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of either of the Investors or any Lender to visit and inspect
any of its properties and examine and make abstracts from any of its books and
records at any reasonable time and as often as may reasonably be desired and to
discuss the business, operations, properties and financial and other condition
of Holdings and Subsidiaries of Holdings with officers and employees of Holdings
and Subsidiaries of Holdings and with its independent certified public
accountants; provided, however, that no such visit, inspection or examination or
--------
discussion shall unreasonably disrupt or interfere with normal operations of
Holdings or any of its Subsidiaries and any such representatives of such
Investor, Agent and the Lenders shall be accompanied by a Responsible Officer of
Holdings. No failure to comply with any request for the exercise of rights
hereunder shall be cause for any Event of Default unless such request is
submitted in writing to Holdings with reference to this Section 10.6.
10.7 Notices. Promptly give notice to the Investors, Agent and each
--------------
Lender of:
(a) the occurrence of any Default or Event of Default of which any
Guarantor has actual knowledge;
(b) any (i) default or event of default by any Guarantor or any of
its Subsidiaries under or with respect to any of their respective
Contractual Obligations in any respect which, if not cured, would
reasonably be expected to have a Material Adverse Effect, or to Guarantor's
knowledge any default or event of default by any third party under or with
respect to any Contractual Obligation of said third party with any
Guarantor or any of its Subsidiaries in a respect which, if not cured,
would reasonably be expected to have a Material Adverse Effect or (ii)
litigation, investigation or proceeding of which any Guarantor has actual
knowledge which may exist at any time between any Guarantor or any
Subsidiary of such Guarantor and any Governmental Authority, which in
either case, if not cured or if adversely determined, as the case may be,
would reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting any Guarantor or any
Subsidiary of such Guarantor of which such Guarantor has actual knowledge
in which the amount involved is $5,000,000 or more and not covered by
insurance or in which injunctive or similar relief is sought and which if
adversely determined would reasonably be expected to have a Material
Adverse Effect;
(d) the following events, as soon as possible and in any event
within 30 days after any Guarantor has actual knowledge thereof: (i) the
occurrence or expected
14
occurrence of any Reportable Event with respect to any Plan, or any
withdrawal from, or the termination, Reorganization or Insolvency of any
Multiemployer Plan or (ii) the institution of proceedings or the taking of
any other action by the PBGC or such Guarantor, any Commonly Controlled
Entity with respect to the termination of any Single Employer Plan; and
(e) a development or event which has had or would reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the applicable Guarantor proposes to take with respect
thereto.
10.8 Environmental Laws.
-------------------
(a) Comply in all material respects with, and undertake all
reasonable efforts to ensure compliance by all tenants and subtenants, if
any, with, all Environmental Laws and obtain and comply in all material
respects with and maintain, and undertake all reasonable efforts to ensure
that all tenants and subtenants obtain and comply with and maintain, any
and all licenses, approvals, registrations or permits required by
Environmental Laws, and upon discovery of any non-compliance or suspected
non-compliance, undertake all reasonable efforts to attain full compliance;
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities respecting
Environmental Laws, except to the extent that the failure to so conduct,
complete or take such actions, or to comply with such orders and
directives, would not in the aggregate reasonably be expected to have a
Material Adverse Effect; and
(c) Defend, indemnify and hold harmless the Investors, the Lessor,
the Agent and the Lenders, and their respective employees, agents, officers
and directors, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out of, or in any
way relating to the violation of or noncompliance with any Environmental
Laws applicable to the real property owned or operated by any Guarantor or
any Subsidiary of such Gurantor, or any orders, requirements or demands of
Governmental Authorities related thereto, including, without limitation,
reasonable attorney's and consultant's fees, investigation and laboratory
fees, court costs and litigation expenses, except to the extent that any of
the foregoing arise out of the gross negligence or willful misconduct of
the party seeking indemnification therefor.
(d) Maintain a program to identify and promote substantial
compliance with and to minimize prudently any liabilities or potential
liabilities under any Environmental Law that may affect any Guarantor or
any of its Qualified Subsidiaries.
15
10.9 Subsequent Guarantees. Each Guarantor shall cause each
----------------------------
Qualified Subsidiary (other than the TIDES Trust, HMS, MAC and Collicut) of such
Guarantor 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
this Guarantee, substantially in the form of Exhibit A hereto within one-year
---------
after the later of (i) the date on which such Qualified Subsidiary becomes a
Subsidiary of such Guarantor 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 this Guarantee.
11. Negative Covenants. Each Guarantor hereby agrees that so long
-------------------------
as this Guarantee is in effect and until the Commitments have terminated and the
Guaranteed Obligations and all amounts owing hereunder are paid in full, the
Guarantor shall not, directly or indirectly:
11.1 Financial Condition Covenants. (a) Maintenance of Consolidated
------------------------------------- ---------------------------
Indebtedness to Consolidated Capitalization. Permit the ratio (expressed as a
-------------------------------------------
percentage) of Consolidated Indebtedness to Consolidated Capitalization of
Holdings as at the end of any of Holdings' fiscal quarters to be greater than
.65 to 1.0; provided that for purposes of calculating the numerator of the
--------
foregoing ratio, Consolidated Indebtedness shall exclude seventy percent (70%)
of the Indebtedness in respect of the TIDES Debentures.
(b) Current Ratio. Permit the Current Ratio of Holdings at the end
-------------
of any of Holdings' fiscal quarters to be less than 1.0 to 1.0.
(c) Consolidated Indebtedness to Consolidated Adjusted EBITDA.
---------------------------------------------------------
Permit the ratio of Consolidated Indebtedness of Holdings to Consolidated
Adjusted EBITDA for the four consecutive fiscal quarters of Holdings most
recently ended to be greater than 5.25 to 1.0; provided that for purposes
--------
of calculating the numerator of the foregoing ratio, Consolidated
Indebtedness of Holdings shall exclude seventy percent (70%) of the
Indebtedness in respect of the TIDES Debentures.
(d) Consolidated Indebtedness to Consolidated EBITDA. Permit the
------------------------------------------------
ratio of Consolidated Indebtedness to Consolidated EBITDA of Holdings for
the four consecutive fiscal quarters of Holdings most recently ended
("Consolidated Indebtedness Ratio") to be greater than 4.0 to 1.0; provided
------------------------------- --------
that for purposes of calculating the numerator of the foregoing ratio,
Consolidated Indebtedness of Holdings shall exclude seventy percent (70%)
of the Indebtedness in respect of the TIDES Debentures.
(e) Interest Coverage Ratio. Permit the ratio of Consolidated
-----------------------
EBITDA to Consolidated Interest Expense of Holdings for the period of four
consecutive fiscal quarters of Holdings most recently ended to be less than
2.5 to 1.0.; provided that for purposes of calculating the foregoing ratio,
--------
Consolidated Interest Expense of Holdings shall exclude any accrued but
unpaid interest to the TIDES or TIDES Debentures.
16
11.2 Limitation on Indebtedness. Create, incur, assume or suffer to
---------------------------------
exist any Indebtedness, except:
(a) Indebtedness in respect of the loans, and other obligations of
the Gurantors under the Corporate Credit Agreement and the other Loan
Documents as defined in the Corporate Credit Agreement;
(b) Indebtedness of HCC to any of its Subsidiaries and of any such
Subsidiary which is a Guarantor to HCC or any other Subsidiary of HCC;
(c) Indebtedness outstanding on the Initial Closing Date and listed
on, Schedule 11.2 and all extensions, renewals, replacements, refinancings
-------------
and modifications thereof permitted hereunder;
(d) Indebtedness of Holdings and any of its Subsidiaries in an
aggregate amount not to exceed $50,000,000 at any time outstanding which is
recourse only to the assets of HCC or any Subsidiaries acquired or financed
with the proceeds of such Indebtedness; provided, that immediately after
--------
giving effect to the incurrence of such Indebtedness, Holdings shall be in
compliance, on a pro forma basis after giving effect to such Indebtedness,
--- -----
with the covenants in subsection 11.1 recomputed as at the last day of the
most recently ended fiscal quarter of Holdings as if such Indebtedness had
been incurred on the first day of each relevant period for testing such
compliance, and Holdings shall have delivered to the Agent an officers'
certificate to such effect, together with all relevant financial
information;
(e) Indebtedness in respect of Financing Leases provided that,
--------
after giving effect thereto, subsection 11.7 is not contravened;
(f) Indebtedness in respect of Subordinated Debt, the terms and
conditions of which have been approved in writing by the Required Lenders
and Investors and all extensions, renewals, replacements, refinancings and
modifications thereof permitted hereunder;
(g) Indebtedness of Unqualified Subsidiaries of Holdings; provided
that any such Indebtedness is Non-Recourse Indebtedness;
(h) Indebtedness of a Person which becomes a Subsidiary after the
date hereof in an aggregate principal amount not exceeding as to Holdings
and its Subsidiaries $10,000,000 at any time outstanding, provided that (i)
--------
such indebtedness existed at the time such Person became a Subsidiary and
was not created in anticipation thereof and (ii) immediately after giving
effect to the acquisition of such Person by Holdings or any of its
Subsidiaries no Default or Event of Default shall have occurred and be
continuing;
(i) Indebtedness in respect of Equipment Lease Tranche A Loans; and
17
(j) Indebtedness not contemplated by clauses (a)-(i) above not
exceeding $20,000,000 in the aggregate at any time outstanding.
11.3 Limitation on Liens. Create, incur, assume or suffer to exist
--------------------------
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings, provided that adequate reserves with
--------
respect thereto are maintained on the books of Holdings or any Subsidiary
of Holdings, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
which are not overdue for a period of more than 60 days or which are being
contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self insurance
arrangements;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of Holdings
or any of its Subsidiaries;
(f) leases or subleases granted to third Persons not interfering in
any material respect with the business of Holdings or any of its
Subsidiaries;
(g) Liens arising from UCC financing statements regarding leases
permitted by this Agreement or the Equipment Leases;
(h) any interest or title of a lessor or sublessor under any lease
permitted by the Corporate Credit Agreement or the Equipment Leases;
(i) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of custom duties in connection with the
importation of goods so long as such Liens attach only to the imported
goods;
(j) Liens arising out of consignment or similar arrangements for
the sale of goods entered into by Holdings or any of its Subsidiaries in
the ordinary course of business;
18
(k) Liens created pursuant to Financing Leases permitted pursuant
to Section 11.2(e);
(l) Liens in existence on the Initial Closing Date listed on,
Schedule 11.3(l), securing Indebtedness permitted by subsection 11.2(C),
---------------
provided that no such Lien is spread to cover any additional property after
--------
the Initial Closing Date and that the amount of Indebtedness secured
thereby is not increased;
(m) Liens on (i) natural gas compressors and related equipment, and
usual accessories and improvements and proceeds thereof (other than the
Equipment), and (ii) oil and gas production equipment, in each case, the
acquisition of which were financed with the proceeds of the Indebtedness
permitted by subsection 11.2(e) and which secures only such Indebtedness,
provided that any such Lien is placed upon such natural gas compressor or
--------
related equipment or such oil and gas production equipment at the time of
the acquisition of such natural gas compressors or related equipment or
such oil and gas production equipment by Holdings or any of its
Subsidiaries and the Lien extends to no other property, and provided,
--------
further, that no such Lien is spread to cover any additional property after
-------
the date such Lien attaches and that the amount of Indebtedness secured
thereby is not increased;
(n) Liens on assets of the Guarantors listed on Schedule 11.3(n),
provided that no such Lien is spread to cover any additional property after
--------
the Initial Closing Date and that the amount of Indebtedness secured
thereby is not increased;
(o) Liens on the assets of Unqualified Subsidiaries of Holdings
securing Indebtedness of such Unqualified Subsidiaries permitted under
Section 11.2(g);
(p) Liens securing Derivatives entered into by Holdings and its
Subsidiaries which are permitted hereunder;
(q) Liens securing Indebtedness of Holdings or any Subsidiary
permitted under subsection 11.2(d) so long as such Liens attach only to the
assets acquired or financed pursuant to such subsection;
(r) Liens on the property or assets of a Person which becomes a
Subsidiary after the date hereof securing Indebtedness permitted by
subsection 11.2(h), provided that (i) such Liens existed at the time such
--------
Person became a Subsidiary and were not created in anticipation thereof,
(ii) any such Lien is not spread to cover any property or assets of such
Person after the time such Person becomes a Subsidiary, and (iii) the
amount of Indebtedness secured thereby is not increased;
(s) Liens that arise in connection with the Equipment Lease
Transactions;
(t) Liens listed on Schedule 11.3(t); and
----------------
19
(u) Liens not otherwise permitted in clauses (a)-(t) above securing
Indebtedness not exceeding $2,500,000 in the aggregate.
11.4 Limitation on Guarantee Obligations. Create, incur, assume or
-----------------------------------
suffer to exist any Guarantee Obligation except:
(a) the Corporate Guarantees and the Equipment Lease Guarantees;
(b) up to $5,000,000 in the aggregate of Guarantee Obligations of
HCC or any of its Subsidiaries in connection with indebtedness incurred by
customers of HCC or any of its Subsidiaries; provided, that the proceeds of
--------
any such indebtedness shall be used by such customers to purchase natural
gas compressors or oil and gas production equipment from HCC or any of its
Subsidiaries;
(c) Guarantee Obligations (in respect of obligations not
constituting Indebtedness) arising under agreements entered into by HCC or
any of its Subsidiaries in the ordinary course of business;
(d) guarantees in respect of Indebtedness (other than Subordinated
Debt) permitted under the Corporate Credit Agreement;
(e) Guarantee Obligations of Holdings and any of its Subsidiaries
arising pursuant to the Equipment Lease Transactions;
(f) the Guarantee Obligations of HCC in the nature of a guarantee
or indemnification for, in each case, performance obligations (and not
Indebtedness) as contemplated by the HMS Transactions; and
(g) the Subordinated Guarantee Obligations of Holdings arising
under the TIDES Guarantees.
11.5 Limitations on Fundamental Changes. Enter into any merger,
-----------------------------------------
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:
(a) any Qualified Subsidiary may be merged or consolidated with or
into any other Qualified Subsidiary; provided, that a Qualified Subsidiary
--------
shall be the continuing or surviving corporation;
(b) Holdings or any Qualified Subsidiary may be merged or
consolidated with any other Person organized under a jurisdiction of the
United States with assets held primarily in the United States; provided,
--------
that Holdings or such Qualified Subsidiary shall be the continuing or
surviving corporation; the Agent is provided with written notice, and after
giving effect thereto no Default or Event of Default would exist or
reasonably be expected to be caused thereby;
20
(c) any Qualified Subsidiary may sell, lease, assign, transfer or
otherwise dispose of any or all of its assets to Holdings or any Qualified
Subsidiary;
(d) any Unqualified Subsidiary may be merged or consolidated with
or into any other Person and/or may sell, lease, assign, transfer or
otherwise dispose of any of its assets (upon voluntary liquidation or
otherwise) to any other Person provided that, if merged or consolidated
--------
with or into a Qualified Subsidiary, the Qualified Subsidiary will remain
as a "Qualified Subsidiary" after the merger;
(e) pursuant to the Equipment Lease Transactions;
(f) the TIDES Trust may wind up or dissolve itself (or suffer a
liquidation or dissolution), or convey, assign, transfer or otherwise
dispose of, all or substantially all of its property, business or a assets,
as contemplated by the TIDES Declaration of Trust;
(g) any of the HMS Entities may wind up, dissolve (or suffer a
liquidation or dissolution), or convey, assign, transfer or otherwise
dispose of, all or substantially all of its property, business or assets;
and
(h) HCC may merge with another Subsidiary of Holdings in connection
with the Restructuring.
11.6 Limitation on Sale or Lease of Assets. Convey, sell, lease,
--------------------------------------------
assign, transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, except:
(a) obsolete or worn out property disposed of in the ordinary
course of business, provided that the aggregate value of obsolete or worn
out natural gas compressors and oil and gas production equipment disposed
of in the ordinary course of business does not exceed $5,000,000 during any
fiscal year of Holdings;
(b) the sale of inventory in the ordinary course of business,
provided that if such inventory is comprised of natural gas compressors or
oil and gas production equipment, such natural gas compressors or oil and
gas production equipment were never part of the natural gas compressors or
oil and gas production equipment leased or held for lease by HCC or any of
its Subsidiaries;
(c) the lease or sublease by HCC or any of its Subsidiaries as
lessor of natural gas compressors and oil and gas production equipment in
the ordinary course of business under operating leases (which do not
constitute Financing Leases);
(d) the sale or discount without recourse of defaulted accounts
receivable arising in the ordinary course of business in connection with
the compromise or collection thereof;
(e) as permitted by subsection 11.5;
21
(f) the sale of natural gas compressors and oil and gas production
equipment, other than disposals and sales covered by clauses (a) and (b)
above, provided that the fair market value of natural gas compressors and
--------
oil and gas production equipment sold during the term of this Agreement
does not exceed ten percent of the aggregate fair market value of all
natural gas compressors and oil and gas production equipment owned by HCC
and its Qualified Subsidiaries; provided further that if the proceeds are
-------- -------
reinvested in natural gas compressors or oil and gas production equipment
to be owned by HCC or its Qualified Subsidiaries within nine months after
the sale of the assets which produced such proceeds, such proceeds shall
not be included for purposes of this covenant;
(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;
(h) the sale of natural gas compressors to the Lessor in connection
with the Equipment Lease Transactions; and
(i) the lease of assets as listed on Schedule 11.6(i).
11.7 Limitation on Leases. Permit Consolidated Lease Expense for any
---------------------------
fiscal year of Holdings to exceed $10,000,000, except to the extent any such
excess results from expenses relating to any Equipment True Leases.
11.8 Limitation on Dividends. Declare or pay any dividend (other
------------------------------
than dividends payable solely in common stock of such Person) on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, defeasance, retirement or other acquisition of,
any shares of any class of Capital Stock of such Person or any warrants or
options to purchase any such Stock, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of Holdings or any Subsidiary of
Holdings, except that if no Default or Event of Default exists or would
reasonably be expected to be caused thereby (i) Subsidiaries of Holdings may
declare and pay dividends to Holdings (to the extent necessary to pay interest
on, or redeem, the TIDES Debentures or to cover operating expenses of Holdings)
and other shareholders of such Subsidiaries and the TIDES Trust may redeem the
TIDES as contemplated by the TIDES Declaration of Trust, (ii) Holdings may
repurchase or redeem shares of Holdings common stock from its employees and
former employees so long as the aggregate amount of all such repurchases since
the Closing Date does not exceed $7,500,000, (iii) Holdings may make open market
repurchases of shares of Holdings common stock so long as the aggregate amount
of all such repurchases since the Closing Date does not exceed $25,000,000, (iv)
Holdings may declare or pay dividends on and make mandatory stock repurchases
(pursuant to the terms of the applicable certificate of designation) of its
preferred stock, if any, (v) Holdings may declare or pay dividends on shares of
Holdings common stock, provided that the aggregate amount of such declarations
--------
or payments pursuant to this clause (v) above does not exceed 25% of the
Consolidated Net Income of Holdings for the period (taken as one accounting
period) from the beginning of the first fiscal quarter commencing after the
22
Closing Date to the end of Holdings' most recently ended fiscal quarter for
which financial statements have been delivered to the Agent and the Lenders
pursuant to subsection 10.1 at or prior to the time of such declaration or
payment and (vi) HCC may declare and pay dividends or make distributions to
Holdings to the extent necessary to allow Holdings to make payments on its
promissory notes to be issued in favor of the sellers of the KCC Group Limited
so long as (A) the aggregate amount of such declarations, payments or
distributions pursuant to this clause (vi) does not exceed (Pounds)6,000,000
(UK) plus accrued interest thereon and (B) no such dividend may be paid more
than three Business Days prior to the date the equivalent payment is made on
such notes.
11.9 Limitation on Derivatives. Enter into or assume any obligations
--------------------------------
with respect to any Derivatives except for Derivatives used by Holdings or any
of its Subsidiaries in reducing the interest rate risk exposure or foreign
currency risk exposure of Holdings and its Subsidiaries which have been provided
by a lender under the Corporate Credit Agreement or the Equipment Lease
Transactions; provided, that the aggregate notional amounts of such Derivatives
--------
shall not exceed the aggregate amount of loans outstanding under the Corporate
Credit Agreement and the Equipment Lease Transactions.
11.10 Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in (all of the
foregoing being herein collectively referred to as "Investments"), any Person,
-----------
except:
(a) extensions of trade credit in the ordinary course of business;
(b) Investments in Cash Equivalents;
(c) loans and advances to employees of such Person or its
Subsidiaries for travel, entertainment and relocation expenses in the
ordinary course of business in an aggregate amount for Holdings and its
Subsidiaries not to exceed $250,000 at any one time outstanding;
(d) Investments by Holdings in its Subsidiaries which are or become
Guarantors and investments by such Subsidiaries which are or become
Guarantors in Holdings and in other Subsidiaries of Holdings which are or
become Guarantors;
(e) Investments by Holdings in the Real Estate Subsidiary in an
aggregate amount not to exceed $5,000,000 plus amounts necessary to
maintain and operate the real property and improvements thereon owned by
the Real Estate Subsidiary;
(f) Investments in Unqualified Subsidiaries of Holdings not to
exceed $20,000,000 in the aggregate;
(g) Investments constituting Permitted Business Acquisitions so
long as, after giving effect to the consummation of the transactions
contemplated by each Permitted
23
Business Acquisition, the Loans to be made and the Letters of Credit to be
issued under the Corporate Credit Agreement and the loans to be made under
the Equipment Lease Credit Agreements in connection therewith, the sum of
(i) the cash and Cash Equivalents then held by Holdings, (ii) the Available
Commitments of all the Lenders under the Corporate Credit Agreement, and
(iii) the Available Commitments and Available Investor Commitments under
the Equipment Lease Participation Agreements at such time, equals at least
$20,000,000;
(h) Investments or acquisitions by Holdings or its Subsidiaries in
(i) up to 50% of the shares of capital stock, partnership interests, joint
venture interests, limited liability company interests or other similar
equity interests in, a Person (other than a Subsidiary), or (ii) loans or
advances to a Person (other than a Subsidiary), provided that the aggregate
--------
amount of all such loans, advances, investments or acquisitions does not
exceed $25,000,000 in any fiscal year;
(i) Loans to employees, officers and directors of Holdings and its
Subsidiaries to acquire shares of capital stock of Holdings not to exceed
$20,000,000; and
(j) the purchase by the TIDES Trust of the TIDES Debentures, as
contemplated under the TIDES Declaration of Trust.
11.11 Limitation on Optional Payments and Modifications of Debt
----------------------------------------------------------------
Instruments. (i) Make any optional payment or prepayment on or redemption,
-----------
purchase or defeasance of any portion of the Shareholder Subordinated Debt, (ii)
make any optional payment or prepayment in excess of $10,000,000 during any
calendar year on or redemption of any Indebtedness other than (a) redemptions of
any portion of the TIDES Debentures pursuant to the TIDES Indenture or
redemptions of any portion of the TIDES pursuant to the TIDES Declaration of
Trust or (b) any optional payment, prepayment or redemption of any Indebtedness
pursuant to the Corporate Credit Agreement, the Equipment Lease Credit
Agreements or (iii) amend, modify or change, or consent or agree to any
amendment, modification or change to any of the terms of any Indebtedness other
than (a) any Indebtedness pursuant to the Corporate Credit Agreement, the
Equipment Lease Credit Agreements or (b) any amendment, modification or change
which would 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.
11.12 Transactions with Affiliates. Except for transactions of a
-----------------------------------
type set forth on Schedule 11.12, enter into any transaction, including, without
--------------
limitation, any purchase, sale, lease or exchange of property or the rendering
of any service, with any Affiliate unless such transaction is otherwise
permitted under this Agreement, is in the ordinary course of Holdings' or such
Subsidiary's business and is upon fair and reasonable terms no less favorable to
Holdings or such Subsidiary, as the case may be, than it would obtain in a
comparable arm's length transaction with a Person not an Affiliate.
24
11.13 Sale and Leaseback. Except for the transactions of a type set
-------------------------
forth on Schedule 11.13, enter into any arrangement with any Person where
Holdings or any of the Subsidiaries of Holdings is the lessee of real or
personal property which has been or is to be sold or transferred by Holdings 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 Holdings 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 11.2 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
Transactions.
11.14 Corporate Documents. Amend its Certificate of Incorporation in
--------------------------
any way adverse to the interests of the Agent and the Lenders.
11.15 Fiscal Year. Permit the fiscal year of Holdings to end on a day
------------------
other than December 31.
11.16 Nature of Business. Engage in any business other than (a) the
-------------------------
leasing, maintenance, purchase, sale and operation of natural gas compressor
units and oil and gas production equipment, (b) the design, engineering and
fabrication of natural gas compressor units, (c) the design, engineering and
fabrication of oil and gas production equipment, (d) the provision of contract
compression and related services, (e) the provision of gas metering services as
contemplated under the HMS Transactions, and (f) any activities related thereto
which are consistent with past practice and conducted in the ordinary course of
business.
11.17 Unqualified Subsidiaries. Permit any Unqualified Subsidiary to
-------------------------------
directly or indirectly own any assets (other than cash or Cash Equivalents
located in bank accounts at Chase) which are located in the United States of
America or any territory thereof.
12. Miscellaneous.
-------------
12.1 Notices. All notices, requests and demands to or upon the
-------
respective parties hereto to be effective shall be in writing (including by
facsimile transmission), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) when delivered by hand, (b) one
Business Day after delivery to a nationally recognized courier service
specifying overnight delivery, (c) three Business Days after being deposited in
the mail, certified or registered, postage prepaid, or (d) in the case of
facsimile notice, when sent and receipt has been confirmed, addressed as
follows:
(a) if to the Agent or any Lender, at its address or transmission
number for notices provided in Section 9.2 of the Credit Agreement; and
(b) if to any Guarantor, at its address or transmission number for
notices set forth on the signature page below.
25
(c) if to the Investors, at their address or transmission number
for notices provided in Section 13.3 of the Participation Agreement.
The Investors, Agent, each Lender and each Guarantor may change its address and
transmission numbers for notices by notice in the manner provided in this
Section 12.
12.2 Severability. Any provision of this Guarantee which is
-------------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
12.3 Integration. This Guarantee and the other Operative Agreements
------------------
represents the agreement of the Guarantors with respect to the subject matter
hereof and there are no promises or representations by the Investors, Agent, any
Lender or any Guarantor relative to the subject matter hereof not reflected
herein or in the other Operative Agreements.
12.4 Amendments in Writing; No Waiver; Cumulative Remedies (a) None
------------------------------------------------------------
of the terms or provisions of this Guarantee may be waived, amended,
supplemented or otherwise modified except as provided in Section 9.1 of the
Credit Agreement.
(b) Neither the Investors, Agent nor any Lender shall not by any
act (except by a written instrument pursuant to Section 15(a) hereof),
delay, indulgence, omission or otherwise be deemed to have waived any right
or remedy hereunder or to have acquiesced in any Default or Event of
Default or in any breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the part of the
Investors, Agent or any Lender, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any
right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by both Investors, Agent or any Lender of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right
or remedy which the Investors, Agent or such Lender would otherwise have on
any future occasion.
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights
or remedies provided by law.
12.5 Section Headings. The section headings used in this Guarantee
-----------------------
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
12.6 Successors and Assigns. This Guarantee shall be binding upon
-----------------------------
the successors and assigns of the Guarantors and shall inure to the benefit of
the Investors, Agent and the Lenders and their successors and assigns.
26
12.7 SUBMISSION TO JURISDICTION; WAIVERS. (a) EACH GUARANTOR HEREBY
------------------------------------------
IRREVOCABLY AND UNCONDITIONALLY:
(b) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS GUARANTEE AND THE OTHER OPERATIVE AGREEMENTS TO
WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGEMENT IN
RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(c) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH
ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO
PLEAD OR CLAIM THE SAME;
(d) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL
(OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO SUCH
PERSON AT ITS ADDRESS SET FORTH IN SECTION 12 OR AT SUCH OTHER ADDRESS OF
WHICH THE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO;
(e) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT TO XXX IN ANY OTHER JURISDICTION; AND
(f) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT
IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED
TO IN THIS SUBSECTION ANY SPECIAL, EXEMPLARY, PUNITIVE, INDIRECT OR
CONSEQUENTIAL DAMAGES.
12.8 GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY, AND
--------------------
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
12.9 Survival of Representations, Warranties, etc. All
---------------------------------------------------
representations, warranties, covenants and agreements made herein and in
statements or certificates delivered pursuant hereto shall survive any
investigation or inspection made by or on behalf of the Lessor and shall
continue in full force and effect until all of the obligations of the Guarantors
under this Guaranty shall be fully performed in accordance with the terms
hereof, and until the payment in
27
full of all the Guaranteed Obligations, and until performance in full of all
obligations of HCC in accordance with the terms and provisions of such
agreements.
12.10 Authority of Agent. Each Guarantor acknowledges that the rights
-------------------------
and responsibilities of the Agent under this Guarantee with respect to any
action taken by the Agent or the exercise or non-exercise by the Agent of any
option, right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Guarantee shall, as between the Investors,
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Agent and each Guarantor, the Agent shall be conclusively
presumed to be acting as agent for the Lenders with full and valid authority so
to act or refrain from acting, and no Guarantor shall be under any obligation,
or entitlement, to make any inquiry respecting such authority.
12.11 Third Party Beneficiaries. Each Guarantor expressly
--------------------------------
acknowledges and agrees that each Indemnified Person shall be a third party
beneficiary of this Guarantee.
12.12 Right of Contribution. Each Guarantor hereby agrees that to the
----------------------------
extent that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder who has not paid its
proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 4 hereof. The
provisions of this Section shall in no respect limit the obligations and
liabilities of any Guarantor to Beneficiaries and each Guarantor shall remain
liable to the Beneficiaries for the full amount guaranteed by such Guarantor
hereunder.
12.13 WAIVER OF JURY TRIAL. THE GUARANTORS EACH HEREBY IRREVOCABLY
---------------------------
AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS GUARANTY AND FOR ANY COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, 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 COMPRESSOR COMPANY
By: ______________________________
Name:
Title:
HANOVER COMPRESSION INC.
By: ______________________________
Name:
Title:
HANOVER COMPRESSOR LIMITED
HOLDINGS, LLC
by Hanover General Holdings, Inc.,
as sole member
By: ______________________________
Name:
Title:
HANOVER MAINTECH LIMITED
PARTNERSHIP
by Hanover General Holdings, Inc.,
As general partner
By: ______________________________
Name:
Title:
HANOVER/XXXXX LIMITED
PARTNERSHIP
by Hanover General Holdings, Inc.,
as general partner
By: ______________________________
Name:
Title:
HANOVER LAND LIMITED
PARTNERSHIP
by Hanover General Holdings, Inc.,
general partner
By: ______________________________
Name:
Title:
Address for Notices for all Guarantors:
00000 Xxxxx Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Telecopy: 000-000-0000
with a copy to:
Xxxxxx & Xxxxxxx
Sears Tower, Suite 5800
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx and Xxxxxxx X. Pucker
Telecopy: 000-000-0000
