EXHIBIT 10.13
EXECUTION COPY
THIRD AMENDMENT
THIRD AMENDMENT, dated as of March 13, 2000 (this "Amendment"), to (i)
the Participation Agreement, dated as of June 15, 1999 (as the same may be
amended, supplemented or otherwise modified from time to time, the
"Participation Agreement"), among Hanover Compression Inc., a Delaware
corporation ("HCC" and the "Lessee"), Hanover Equipment Trust 1999A (the
"Lessor"), Societe Generale Financial Corporation and FBTC Leasing Corp., Inc.
(the "Investors"), the lenders parties thereto (the "Lenders") and The Chase
Manhattan Bank, a New York banking corporation, as the agent for the Lenders
(the "Agent"), (ii) the Credit Agreement, as defined in the Participation
Agreement (the "Credit Agreement").
W I T N E S S E T H:
WHEREAS, (i) the Lenders have agreed to make, and have made, loans and
(ii) the Investors have agreed to make, and have made, investments to the Lessor
in order for the Lessor to acquire the Equipment and to pay other Equipment
Acquisition Costs;
WHEREAS, HCC has requested that the Investors, Agent and the Required
Lenders (i) amend certain definitions and covenants in the Participation
Agreement and Credit Agreement and (ii) amend and restate the Guarantee, dated
as of June 15, 1999, among Hanover Compressor Company ("Holdings"), HCC and
certain subsidiaries of Holdings (the "Existing Guarantee") so as to permit HCC
to enter into transactions involving the New Equipment Lease Transactions; and
WHEREAS, the Investors, Agent and the Required Lenders are agreeable
to the requested amendments, but only on the terms and subject to the conditions
set forth herein; and
WHEREAS, Holdings, HCC and the New Guarantors have agreed to execute
and deliver the Amended and Restated Guarantee to the Agent and the Lessor, for
the ratable benefit of the Lenders and the Investors;
NOW THEREFORE, in consideration of the premises herein contained and
for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
I. Defined Terms. As used in this Amendment, terms defined in the
preamble hereof and the recitals hereto are used herein as so defined, terms
defined in either Participation Agreement are used herein as therein defined and
the following terms shall have the following meanings:
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"Amended and Restated Guarantee" shall mean the Amended and Restated
Guarantee, dated as of March 13, 2000, among Holdings, HCC and the New
Guarantors, substantially in the form of Exhibit A hereto.
"New Equipment Lease Transactions" shall mean the transactions
contemplated under the New Equipment Lease Documents, as further described
in the term sheet attached as Annex A hereto.
"New Equipment Lease Documents" shall mean (i) the Participation
Agreement, dated as of March 13, 2000 (the "New Participation Agreement"),
among Hanover Compression Inc., a Delaware corporation, Hanover Equipment
Trust 2000A, First Union National Bank and Scotiabanc Inc., as investors,
the lenders parties thereto and The Chase Manhattan Bank, a New York
banking corporation, as the agent for the lenders thereunder and (ii) the
other "Operative Documents" as defined in the New Participation Agreement.
"New Guarantors" shall mean Hanover Compressor Limited Holdings, LLC,
Hanover Maintech Limited Partnership, Hanover/Xxxxx Limited Partnership,
Hanover Land Limited Partnership, Hanover Maintech Limited Partnership.
II. Amendments to the Participation Agreement.
1. Amendment to Annex A (Rules of Usage). Annex A to the
Participation Agreement is hereby amended by deleting it in its entirety and
substituting in place thereof Annex B as attached hereto.
2. Addition of Annex B (Pricing Grid). The Participation
Agreement is hereby amended by adding Annex C hereto as Annex B thereto.
III. Amendments to the Credit Agreement.
1. Sections 9.5 though 9.17 (a) Sections 9.5 through 9.8 to the
Credit Agreement are hereby amended by deleting them in their entirety and
substituting in place thereof the following:
"9.5 Successors and Assigns; Participations; Purchasing Lenders. (a)
This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Agent, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign
or transfer any of its rights or obligations under this Agreement without
the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to
one or more banks or other entities ('Participants') participating
interests in any Loan owing to such Lender, any Commitment of such Lender
or any other interest of such Lender hereunder and under the other
Operative Agreements, provided that each such sale shall be of Loans and
Commitments in an aggregate amount of at least $5,000,000, and provided,
further, that
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no Lender may so sell its Commitments so that less than $5,000,000 of such
Commitments are held by such Lender without participating interests
therein, unless such Lender (excluding Chase) so sells 100% of its
Commitments. In the event of any such sale by a Lender of participating
interests to a Participant, such Lender's obligations under this Agreement
to the other parties to this Agreement shall remain unchanged, such Lender
shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Loan for all purposes under this
Agreement and the other Operative Agreements, and the Guarantors and the
Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement
and the other Operative Agreements. The Borrower agrees that if amounts
outstanding under this Agreement and the Loans are due or unpaid, or shall
have been declared or shall have become due and payable upon the occurrence
of a Credit Agreement Event of Default, each Participant shall be deemed to
have the right of setoff in respect of its participating interest in
amounts owing under this Agreement to the same extent as if the amount of
its participating interest were owing directly to it as a Lender under this
Agreement, provided that such Participant shall only be entitled to such
right of setoff if it shall have agreed in the agreement pursuant to which
it shall have acquired its participating interest to share with the Lenders
the proceeds thereof as provided in subsection 9.6. The Borrower also
agrees that each Participant shall be entitled to the benefits of
subsections 2.13, 2.14 and 2.15 with respect to its participation in the
Commitments and the Loans outstanding from time to time; provided, that no
Participant shall be entitled to receive any greater amount pursuant to
such subsections than the transferor Lender would have been entitled to
receive in respect of the amount of the participation transferred by such
transferor Lender to such Participant had no such transfer occurred.
(c) Any Lender, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time may sell to any
Lender or any Affiliate thereof and, with the consent of the Borrower and
the Agent (which in each case shall not be unreasonably withheld), to one
or more additional banks or financial institutions ('Purchasing Lenders')
all or any part of the assigning Lender's rights and obligations under this
Agreement and the other Operative Agreements pursuant to an Assignment and
Acceptance, substantially in the form of Exhibit B, executed by such
Purchasing Lender, such assigning Lender (and, in the case of a Purchasing
Lender that is not then a Lender or an Affiliate thereof, by the Borrower
and the Agent) and delivered to the Agent for its acceptance and recording
in the Register, provided that each such sale shall be of Loans and
Commitments of an aggregate amount of at least $5,000,000 and provided,
further, that no Lender party to this Agreement on the date hereof may so
sell any of its initial Commitments hereunder such that such Lender holds
directly less than $5,000,000 of such Commitments unless such Lender
(excluding Chase) so sells 100% of its Commitments. Any such assignment
shall be ratable as between the Tranche A Loans and Tranche B Loans. Such
Assignment and Acceptance shall specify an Effective Date which is not less
than five Business Days after the date of execution thereof. Upon such
execution, delivery, acceptance and recording, from and after the Effective
Date determined pursuant to such Assignment and Acceptance, (x) the
Purchasing Lender thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and obligations
of a Lender hereunder with a Commitment
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and/or Loans as set forth therein, and (y) the assigning Lender thereunder
shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such
assigning Lender shall cease to be a party hereto). Such Assignment and
Acceptance shall be deemed to amend this Agreement to the extent, and only
to the extent, necessary to reflect the addition of such Purchasing Lender
and the resulting adjustment of Commitment Percentages arising from the
purchase by such Purchasing Lender of all or a portion of the rights and
obligations of such assigning Lender under this Agreement.
(d) The Agent shall, on behalf of the Borrower, maintain at its
address referred to in subsection 9.2 a copy of each Assignment and
Acceptance delivered to it and a register (the 'Register') for the
recordation of the names and addresses of the Lenders and the Commitment
of, and the principal amount of the Loans owing to, each Lender from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the Lenders shall treat
each Person whose name is recorded in the Register as the owner of the
Loans and any Notes evidencing the Loans recorded therein for all purposes
of this Agreement. Any assignment of any Loan, whether or not evidenced by
a Note, shall be effective only upon appropriate entries with respect
thereto being made in the Register (and each Note shall expressly so
provide). Any assignment or transfer of all or part of a Loan evidenced by
a Note shall be registered on the Register only upon surrender for
registration of assignment or transfer of the Note evidencing such Loan,
accompanied by a duly executed Assignment and Acceptance, and thereupon one
or more new Notes shall be issued to the designated Assignee.
(e) Upon its receipt of an Assignment and Acceptance executed by a
transferor Lender and Purchasing Lender (and, in the case of a Purchasing
Lender that is not then a Lender or an affiliate thereof, by the Borrower
and the Agent) together with payment to the Agent of a registration and
processing fee of $3,500, the Agent shall (i) promptly accept such
Assignment and Acceptance (ii) on the Effective Date determined pursuant
thereto record the information contained therein in the Register and give
notice of such acceptance and recordation to the Lenders and HCC.
(f) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this Section 9.5 concerning assignments of Loans and
Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests, including any pledge or
assignment by a Lender of any Loan or Note to any Federal Reserve Bank in
accordance with applicable law.
(g) The Borrower, upon receipt of written notice from the relevant
Lender, agrees to issue Notes to any Lender requiring Notes to facilitate
transactions of the type described in paragraph (f) above.
(h) Holdings and the Borrower authorize each Lender to disclose to
any Participant or Purchasing Lender (each, a 'Transferee') and any
prospective Transferee any and all financial information in such Lender's
possession concerning any Guarantor
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and its affiliates which has been delivered to such Lender by or on behalf
of Holdings or the Borrower pursuant to this Agreement or which has been
delivered to such Lender by or on behalf of Holdings or the Borrower in
connection with such Lender's credit evaluation of the Guarantors and their
affiliates prior to becoming a party to this Agreement.
(i) If, pursuant to this subsection, any interest in this Agreement
or any Note is transferred to any Transferee which is organized under the
laws of any jurisdiction other than the United States or any state thereof,
the transferor Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, (i) to represent to the transferor Lender
(for the benefit of the transferor Lender, the Agent and the Borrower) that
under applicable law and treaties no taxes will be required to be withheld
by the Administrative Agent, the Borrower or the transferor Lender with
respect to any payments to be made to such Transferee in respect of the
Loans, (ii) to furnish to the transferor Lender (and, in the case of any
Purchasing Lender registered in the Register, the Agent and the Borrower)
either U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue
Service Form 1001 (wherein such Transferee claims entitlement to complete
exemption from U.S. federal withholding tax on all interest payments
hereunder) and (iii) to agree (for the benefit of the transferor Lender,
the Agent and the Borrower) to provide the transferor Lender (and, in the
case of any Purchasing Lender registered in the Register, the Agent and the
Borrower) a new Form 4224 or Form 1001 upon the expiration or obsolescence
of any previously delivered form and comparable statements in accordance
with applicable U.S. laws and regulations and amendments duly executed and
completed by such Transferee, and to comply from time to time with all
applicable U.S. laws and regulations with regard to such withholding tax
exemption.
(j) Nothing herein shall prohibit any Lender from pledging or
assigning any Note to any Federal Reserve Lender in accordance with
applicable law.".
(b) Section 9.9 through 9.17 to the Credit Agreement are
hereby amended by renumbering them as Sections 9.6 through 9.14 respectively.
IV. General.
3. Effectiveness. This Amendment shall become effective upon
fulfillment of the following conditions precedent: (a) The Agent shall have
received duly executed copies of this Amendment from HCC, acknowledged and
agreed to by each of Holdings and the New Guarantors, (b) The Agent shall have
received, with a copy for each Lender, the Amended and Restated Guarantee,
executed and delivered by duly authorized officers of Holdings and each New
Guarantor, (c) the Agent shall have received duly executed copies of this
Amendment from the Required Lenders and the Investors under the Participation
Agreement, (d) no Default or Event of Default shall have occurred and be
continuing on the date hereof after giving effect to this Amendment and (e) the
Agent shall have received duly executed copies of the New Equipment Lease
Documents.
4. Representations and Warranties. Holdings, The Borrower and
each of the New Guarantors hereby represents and warrants that the
representations and warranties contained
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in the Participation Agreements and the Operative Agreements (as defined in the
Participation Agreement) (except those which expressly speak as of a certain
date) will be, after giving effect to this Amendment, true and correct in all
material respects, as if made on and as of the date hereof.
5. Continuing Effect of Participation Agreements and Operative
Agreements. This Amendment shall not constitute an amendment or waiver of any
other provision of either the Participation Agreement or the Operative
Agreements (as defined in the Participation Agreement) not expressly referred to
herein and shall not be construed as a waiver or consent to any further or
future action on the part of HCC, Holdings, the Lessor, or New Guarantors that
would require a waiver or consent of the Agent and/or the Lenders. Except as
expressly amended hereby, the provisions of the Participation Agreement and the
Operative Agreements (as defined in the Participation Agreement) are and shall
remain in full force and effect.
6. Counterparts. This Amendment may be executed in counterparts
and all of the said counterparts taken together shall be deemed to constitute
one and the same instrument. Delivery of an executed signature page of this
Amendment by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof.
7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
8. Expenses. Holdings and HCC agree to pay or reimburse the Agent
for all of its reasonable out-of-pocket costs and expenses incurred in
connection with the preparation, negotiation and execution of this Amendment,
including, without limitation, the fees and disbursements of counsel to the
Agent.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective officers thereunto duly authorized as of the
day and year first above written.
HANOVER COMPRESSION INC. (formerly
known as Hanover Compressor Company),
as Lessee and as a Guarantor
By: /s/ Xxxxxx Xxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxx
Title: Treasurer
HANOVER EQUIPMENT TRUST 1999A
By: Wilmington Trust Company, not
individually but solely as Trustee
By:
-----------------------------
Name:
Title:
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective officers thereunto duly authorized as of the
day and year first above written.
HANOVER COMPRESSION INC. (formerly
known as Hanover Compressor Company),
as Lessee and as a Guarantor
By:
----------------------------
Name:
Title:
HANOVER EQUIPMENT TRUST 1999A
By: Wilmington Trust Company, not
individually but solely as Trustee
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Administrative Account Manager
Acknowledged and agreed to
as of the date hereof:
HANOVER COMPRESSOR COMPANY,
as a Guarantor
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxx
Title: Treasurer
HANOVER COMPRESSOR LIMITED HOLDINGS, LLC,
as a Guarantor
by Hanover General Holdings, Inc.
as sole member
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxx
Title: Treasurer
HANOVER MAINTECH LIMITED PARTNERSHIP,
as a Guarantor
by Hanover General Holdings, Inc.,
as general partner
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxx
Title: Treasurer
HANOVER/XXXXX LIMITED PARTNERSHIP,
as a Guarantor
by Hanover General Holdings, Inc.,
as general partner
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxx
Title: Treasurer
HANOVER LAND LIMITED PARTNERSHIP,
as a Guarantor
by Hanover General Holdings, Inc.,
general partner
By: /s/ Xxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxx
Title: Treasurer
SOCIETE GENERALE, SOUTHWEST AGENCY, as a
Lender
By: /s/ Xxxx X. Xxx
--------------------------------
Name: Xxxx X. Xxx
Title: Director
Head of Houston Office
SUNTRUST BANK, ATLANTA, as a Lender
By: /s/ Xxxx X. Xxxxxx, Xx.
-------------------------------
Name: Xxxx X. Xxxxxx, Xx.
Title: Managing Director
THE INDUSTRIAL BANK OF JAPAN, LTD.,
NEW YORK BRANCH, as a Lender
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President,
Houston Office
BANK ONE, N.A. (formerly known as The
First National Bank of Chicago),
as a Lender
By: /s/ Xxxxx Xxxxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxxxx
Title: First Vice President
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK
AG, as a Lender
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH,
as a Lender
By: /s/ [Illegible]
---------------------------------
Name: [Illegible]
Title: [Illegible]
COMERICA BANK, as a Lender
By: /s/ X. Xxxxxxxx Xxxxxx
----------------------------------
Name: X. Xxxxxxxx Xxxxxx
Title: Account Officer
BANKERS TRUST COMPANY, as a Lender
By: /s/ Xxxxxx X. Xxxxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Principal
FUJI BANK, LIMITED, as a Lender
By: /s/ Xxxx Xxxxx
---------------------------------
Name: Xxxx Xxxxx
Title: Executive Vice President and
General Manager
PARIBAS, as a Lender
By: /s/ [Illegible]
------------------------------------
Name: [Illegible]
Title: Vice President
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
BANK OF SCOTLAND, as a Lender
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Name: Xxxxxx Xxxxxx
Title: Asst. Vice President
THE BANK OF NOVA SCOTIA, as a Lender
By: /s/ X. Xxxx
------------------------------
Name: X. Xxxx
Title: Assistant Agent
ABN AMRO BANK N.V., as a Lender
By: /s/ [Illegible]
------------------------------
Name: [Illegible]
Title: Vice President
By: /s/ Xxxxxx Xxxxxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Assistant Vice President
FBTC LEASING CORP., as an Investor
By: /s/ Xxxxxx Xxxx
------------------------------
Name: Xxxxxx Xxxx
Title: Vice President
SOCIETE GENERALE FINANCIAL CORPORATION,
as an Investor
By: /s/ [Illegible]
------------------------------
Name: [Illegible]
Title: [Illegible]
THE CHASE MANHATTAN BANK, as Agent and Lender
By: /s/ Xxxxx X. Xxxx
------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
XXXXX FARGO BANK (TEXAS) N.A., as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
WILMINGTON TRUST COMPANY, in its individual
capacity, only to the extent expressly set forth
herein
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Administrative Account Manager
ANNEX A
DESCRIPTION OF NEW EQUIPMENT LEASE TRANSACTIONS
ANNEX B TO
THIRD AMENDMENT
RULES OF USAGE AND DEFINITIONS
Rules of Usage
The following rules of usage shall apply to this Annex A and the
Operative Agreements (and each appendix, schedule, exhibit and annex to the
foregoing) unless otherwise required by the context or unless otherwise defined
therein:
(a) Except as otherwise expressly provided, any definitions
defined herein or in any other document shall be equally applicable to the
singular and plural forms of the terms defined.
(b) Except as otherwise expressly provided, references in any
document to articles, sections, paragraphs, clauses, annexes, appendices,
schedules or exhibits are references to articles, sections, paragraphs,
clauses, annexes, appendices, schedules or exhibits in or to such document.
(c) The headings, subheadings and table of contents used in any
document are solely for convenience of reference and shall not constitute a
part of any such document nor shall they affect the meaning, construction
or effect of any provision thereof.
(d) References to any Person shall include such Person, its
successors and permitted assigns and transferees.
(e) Except as otherwise expressly provided, reference to any
agreement means such agreement as amended, modified, extended or
supplemented from time to time in accordance with the applicable provisions
thereof.
(f) Except as otherwise expressly provided, references to any law
includes any amendment or modification to such law and any rules or
regulations issued thereunder or any law enacted in substitution or
replacement therefor.
(g) When used in any document, words such as "hereunder",
"hereto", "hereof" and "herein" and other words of like import shall,
unless the context clearly indicates to the contrary, refer to the whole of
the applicable document and not to any particular article, section,
subsection, paragraph or clause thereof.
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(h) References to "including" means including without limiting the
generality of any description preceding such term and for purposes hereof
the rule of ejusdem generis shall not be applicable to limit a general
statement, followed by or referable to an enumeration of specific matters,
to matters similar to those specifically mentioned.
(i) Each of the parties to the Operative Agreements and their
counsel have reviewed and revised, or requested revisions to, the Operative
Agreements, and the usual rule of construction that any ambiguities are to
be resolved against the drafting party shall be inapplicable in the
construing and interpretation of the Operative Agreements and any
amendments or exhibits thereto.
(j) For purposes of determining compliance with the covenants
contained in Subsection 10.1 and 11.1 of the Guarantee, the term "Holdings"
shall be deemed a reference to HCC for any period which is prior to December 9,
1999, covered by such covenants.
Definitions
"ABR" shall mean, for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime
Rate in effect on such day, (b) the Base CD Rate in effect on such day plus
1% and (c) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%. For purposes hereof: "Prime Rate" shall mean the rate of interest
per annum publicly announced from time to time by Chase as its prime rate
in effect at its principal office in New York City (the Prime Rate not
being intended to be the lowest rate of interest charged by Chase in
connection with extensions of credit to debtors); "Base CD Rate" shall mean
the sum of (a) the product of (i) the Three-Month Secondary CD Rate and
(ii) a fraction, the numerator of which is one and the denominator of which
is one minus the C/D Reserve Percentage and (b) the C/D Assessment Rate;
"Three-Month Secondary CD Rate" shall mean, for any day, the secondary
market rate for three-month certificates of deposit reported as being in
effect on such day (or, if such day shall not be a Business Day, the next
preceding Business Day) by the Board of Governors of the Federal Reserve
System (the "Board") through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current
practices of the Board, be published in Federal Reserve Statistical Release
H.15(519) during the week following such day), or, if such rate shall not
be so reported on such day or such next preceding Business Day, the average
of the secondary market quotations for three-month certificates of deposit
of major money center banks in New York City received at approximately
10:00 A.M., New York City time, on such day (or, if such day shall not be a
Business Day, on the next preceding Business Day) by the Agent from three
New York City negotiable certificate of deposit dealers of recognized
standing selected by it; and "Federal Funds Effective Rate" shall mean, for
any day, the
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weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Lender
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for the day of such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by it. If for any reason the Agent shall have
determined (which determination shall be conclusive absent manifest error)
that it is unable to ascertain the Base CD Rate or the Federal Funds
Effective Rate, or both, for any reason, including the inability or failure
of the Agent to obtain sufficient quotations in accordance with the terms
thereof, the ABR shall be determined without regard to clause (b) or (c),
or both, of the first sentence of this definition, as appropriate, until
the circumstances giving rise to such inability no longer exist. Any change
in the ABR due to a change in the Prime Rate, the Three-Month Secondary CD
Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Rate,
the Three-Month Secondary CD Rate or the Federal Funds Effective Rate,
respectively.
"ABR Loans" shall mean Loans the rate of interest applicable to which
is based upon the ABR.
"Acceleration" shall have the meaning set forth in Section 6.1 of the
Credit Agreement.
"Account" shall have the meaning set forth in Section 8.1(a) of the
Credit Agreement.
"Adjustment Date" as defined in the Pricing Grid.
"Adjusted EBITDA Companies" shall mean Holdings and each of its
wholly-owned Subsidiaries which (i) is organized under a jurisdiction of
the United States, Canada and any other country approved by Required
Lenders and (ii) has at least 90% of its assets located in any such
jurisdiction or which derives at least 90% of its revenues from such
jurisdiction, in each case, at the time the applicable calculation is being
made for purposes of subsection 11.1(c).
"Advance" shall mean an advance of Loans by the Lenders and an advance
of the Investor Contribution by the Investors, in each case pursuant to
Section 5.2 of the Participation Agreement to pay Equipment Acquisition
Costs.
"Affiliate" shall mean, as to any Person, any other Person (other than
a Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under
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common control with, such Person; provided, however, that in no case shall
the Trust Company be considered to be an Affiliate of any of the Trustee,
the Trust, the Agent or the Investors, nor shall any of the Trustee, Trust,
Agent or Investors be considered to be an Affiliate of the Trust Company.
For purposes of this definition, "control" of a Person means the power,
directly or indirectly, either to (a) vote 30% or more of the securities
having ordinary voting power for the election of directors of such Person
or (b) direct or cause the direction of the management and policies of such
Person, whether by contract or otherwise.
"After Tax Basis" shall mean, with respect to any payment to be
received, the amount of such payment increased so that, after deduction of
the amount of all taxes required to be paid by the recipient (less any tax
savings realized and the present value of any tax savings projected to be
realized by the recipient as a result of the payment of the indemnified
amount) with respect to the receipt by the recipient of such amounts, such
increased payment (as so reduced) is equal to the payment otherwise
required to be made.
"Agent" shall mean The Chase Manhattan Bank, a New York banking
corporation, as the agent for the Lenders under the Credit Agreement and
the other Operative Agreements, or any successor agent appointed in
accordance with the terms of the Credit Agreement.
"Aggregate Tranche A Percentage" shall mean, as of any date of
determination, a fraction, expressed as a percentage, equal to the sum of
the aggregate of the Maximum Residual Guarantee Amounts with respect to
each piece of Equipment as of such date divided by the aggregate of the
Tranche A/B Equipment Cost of each of the pieces of Equipment as of such
date.
"Applicable Commitment Fee Rate" shall mean, for each day, the rate
per annum determined pursuant to the Pricing Grid.
"Applicable Margin" shall mean, for each day, the rate per annum
determined pursuant to the Pricing Grid.
"Applicable Margin Certificate" shall have the meaning set forth in
Section 10.2(f) of the Guarantee.
"Appraisal" shall mean, with respect to the Equipment, an appraisal,
ordered by the Agent, prepared by a reputable independent appraiser
acceptable to the Agent, of such Equipment, which complies with all
applicable Legal Requirements and is otherwise in a form satisfactory to
Agent. The appraisal shall state an estimate of the value thereof at the
end of the Term and may cover more than one piece of Equipment.
5
"Appraisal Procedure" shall have the meaning given such term in
Section 21.4 of the Lease.
"Arranger" shall mean Chase Securities Inc.
"Assignment and Acceptance" shall have the meaning set forth in
Section 9.7 of the Credit Agreement.
"Assignment of Lease" shall mean the collective reference to the
Assignment of Leases, Rents and Guarantee dated as of the Initial Closing
Date from the Lessor to the Agent for the benefit of the Lenders and each
Supplement to Assignment of Leases dated as of each Equipment Closing Date,
as each may be amended, supplemented or otherwise modified from time to
time in accordance with the terms thereof or of any other Operative
Agreement.
"Available Commitment" shall mean, as to any Lender at any time, an
amount equal to the excess, if any, of (a) the amount of such Lender's
Commitment over (b) the aggregate principal amount of all Loans made by
such Lender then outstanding.
"Available Investor Commitment" shall mean at any time, an amount
equal to the excess, if any, of (a) the amount of Investor Commitment over
(b) the aggregate amount of all Investor Contributions made by the
Investors as of such date.
"Basic Rent" shall mean, the sum of (i) the Tranche A Basic Rent, (ii)
the Tranche B Basic Rent and (iii) the Investor Yield, calculated as of the
applicable date on which Basic Rent is due.
"Basic Term" shall mean for each piece of Equipment, the period
commencing on the Equipment Closing Date for such Equipment and ending on
the Maturity Date.
"Benefitted Lender" shall have the meaning set forth in Section 9.9 of
the Credit Agreement.
"Xxxx of Sale" shall have the meaning set forth in Section 6.2(b) of
the Participation Agreement.
"Borrower" shall mean Lessor, in its capacity of borrower under the
Credit Agreement.
6
"Borrowing Date" shall mean any Business Day specified in a
Requisition as a date on which the Borrower requests the Lenders to make
Loans under the Credit Agreement.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or
required by law to close, and in the case of a Eurodollar Loan, any day on
which dealings in U.S. dollar deposits are carried on in the interbank
Eurodollar market and on which commercial banks are open for domestic and
international business in New York and London.
"Capital Stock" shall mean any and all shares, interests,
participations or other equivalents (however designated) of capital stock
of a corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants or options to purchase
any of the foregoing.
"Capitalized Lease Obligations" shall mean all obligations under
capital leases of any Person, in each case taken at the amount thereof
accounted for as liabilities in accordance with GAAP.
"Cash Equivalents" shall mean (a) securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b)
certificates of deposit and eurodollar time deposits with maturities of one
year or less from the date of acquisition and overnight bank deposits of
any Lender or of any commercial bank having capital and surplus in excess
of $500,000,000, (c) repurchase obligations of any Lender or of any
commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than 30 days with respect to
securities issued or fully guaranteed or insured by the United States
Government, (d) commercial paper of a domestic issuer rated at least A-2 by
Standard and Poor's Rating Group ("S&P") or P-2 by Xxxxx'x Investors
Services, Inc. ("Moody's"), (e) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political
subdivision or taxing authority of any political subdivision or taxing
authority of any such state, commonwealth or territory or any foreign
government, the securities of which state, commonwealth, territory,
political subdivision, taxing authority or foreign government (as the case
may be) are rated at least A by S&P or A by Moody's, (f) securities with
maturities of one year or less from the date of acquisition backed by
standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition or (g) shares
of money market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (f) of this definition.
7
"Casualty" shall mean any damage or destruction of all or any portion
of a piece of Equipment as a result of fire or other casualty.
"C/D Assessment Rate" shall mean for any day the net annual assessment
rate (rounded upwards, if necessary, to the next 1/100 of 1%) determined by
Chase to be payable on such day to the Federal Deposit Insurance
Corporation or any successor ("FDIC") for FDIC's insuring time deposits
made in Dollars at offices of Chase in the United States.
"C/D Reserve Percentage" shall mean for any day as applied to any
calculation of the Base CD Rate, that percentage (expressed as a decimal)
which is in effect on such day, as prescribed by the Board for determining
the maximum reserve requirement for a Depositary Institution (as defined in
Regulation D of the Board) in respect of new non-personal time deposits in
Dollars having a maturity of 30 days or more.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of-1980, 42 U.S.C. Sections 9601 et seq.,
as amended by the Superfund Amendments and Reauthorization Act of 1986, and
all rules and regulations thereunder.
"Certificate" shall mean a certificate issued pursuant to the Trust
Agreement to evidence an investment in the beneficial ownership of the
Trust Estate, and shall include any certificate issued in exchange therefor
or replacement thereof.
"Chase" shall mean The Chase Manhattan Bank, a New York banking
corporation.
"Claims" shall mean any and all actions, suits, penalties, claims and
demands and reasonable out-of-pocket liabilities, losses, costs and
expenses (including, without limitation, reasonable attorney's fees and
expenses) of any nature whatsoever.
"Closing Date" shall mean the Initial Closing Date and each Equipment
Closing Date.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute thereto.
"Collateral" shall mean all assets of the Lessor, now owned or
hereafter acquired, upon which a Lien is purported to be created by the
Security Documents.
8
"Collicut" shall mean Collicut Hanover Compression Co., a Nova Scotia
unlimited liability company.
"Commitment" shall mean, as to any Lender, the obligation of such
Lender to make Loans to the Borrower under the Credit Agreement in an
aggregate principal amount at any one time outstanding not to exceed the
amount set forth opposite such Lender's name on Schedule 1.1 of the Credit
Agreement.
"Commitment Fee" shall mean, on each Commitment Fee Payment Date, an
amount equal to the product of (i) the Available Commitment on such
Commitment Fee Payment Date times (ii) the Applicable Commitment Fee Rate.
"Commitment Fee Payment Date" shall mean the last day of each March,
June, September and December during the Commitment Period and the last
Business Day of the Commitment Period or such earlier date as the
Commitments shall terminate as provided in the Credit Agreement.
"Commitment Percentage" shall mean, as to any Lender at any time, the
percentage which such Lender's Commitment then constitutes of the aggregate
Commitments (or, at any time after the Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such
Lender's Loans then outstanding constitutes of the aggregate principal
amount of the Loans then outstanding).
"Commitment Period" shall mean the period from and including the
Initial Closing Date to but not including the earlier of (i) the first
anniversary of the Initial Closing Date and (ii) the date on which an
Acceleration occurs.
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with HCC within the meaning of
Section 4001 (a)(14) of ERISA or is part of a group which includes HCC and
which is treated as a single employer under Section 414 of the Code.
"Condemnation" shall mean any taking or sale of the use, access, or
title to any piece of Equipment or any part thereof, wholly or partially
(temporarily or permanently), by or on account of any actual eminent domain
proceeding or other taking of action by any Person having the power of
eminent domain.
"Consent to Assignment" shall mean the collective reference to the
Lessee's Consent to Assignment dated as of the Initial Closing Date from
the Lessee and the Guarantors to the Agent with respect to the Assignment
of Leases, as amended,
9
supplemented or otherwise modified from lime to time in accordance with the
terms thereof or of any other Operative Agreement.
"Consolidated Adjusted EBITDA" shall mean, for any period, the sum of
Consolidated EBITDA for the Adjusted EBITDA Companies.
"Consolidated Capitalization" shall mean, at a particular date, as to
any Person, the sum of (a) Consolidated Net Worth and (b) the amount of
Consolidated Indebtedness at such date.
"Consolidated Earnings Before Interest and Taxes" shall mean, for any
period, with respect to any Person, the sum of (a) Consolidated Net Income
for such period, (b) all amounts attributable to provision for taxes
measured by income (to the extent that such amounts have been deducted in
determining Consolidated Net Income for such period) and (c) Consolidated
Interest Expense for such period (to the extent that such amounts have been
deducted in determining Consolidated Net Income for such period).
"Consolidated EBITDA" shall mean, for any period, with respect to any
Person, the sum of (a) Consolidated Earnings Before Interest and Taxes for
such Person for such period plus, (b) all amounts attributable to
depreciation and amortization, determined in accordance with GAAP (to the
extent such amounts have been deducted in determining Consolidated Earnings
Before Interest and Taxes for such period) plus, (c) all amounts classified
as extraordinary charges for such period (to the extent such amounts have
been deducted in determining Consolidated Earnings Before Interest and
Taxes for such period) minus, (d) all amounts classified as extraordinary
income for such period (to the extent such amounts have been included in
determining Consolidated Earnings Before Interest and Taxes for such
period).
"Consolidated Indebtedness" shall mean, at a particular date, as to
any Person, all Indebtedness of such Person and its Subsidiaries other than
Indebtedness in respect of Financing Leases, determined on a consolidated
basis in accordance with GAAP at such date.
"Consolidated Indebtedness Ratio" shall have the meaning set forth in
Section 11.l(d) of the Guarantee.
"Consolidated Interest Expense" shall mean, for any period, with
respect to any Person, the amount which, in conformity with GAAP, would be
set forth opposite the caption "interest expense" or any like caption
(including, without limitation, imputed interest included in Financing
Lease payments) on a consolidated income statement of such Person and its
Subsidiaries for such period, plus, to the extent not so included,
10
payments by such Person and its Subsidiaries under the Equipment Leases
attributable to (i) interest payments under the Equipment Lease Tranche A
Loans and Equipment Lease Tranche B Loans and (ii) the yield to the
Equipment Investors in connection with the Equipment Lease Transactions.
"Consolidated Lease Expense" shall mean, for any period as to any
Person, the aggregate rental obligations of such Person and its
Subsidiaries determined on a consolidated basis payable in respect of such
period under leases of real and/or personal property (net of income from
sub-leases thereof, but including taxes, insurance, maintenance and similar
expenses which the lessee is obligated to pay under the terms of said
leases), whether or not such obligations are reflected as liabilities or
commitments on a consolidated balance sheet of such Person and its
Subsidiaries or in the notes thereto, and whether or not such leases
constitute Financing Leases, but excluding obligations of such Person and
its Subsidiaries with respect to the Equipment Leases.
"Consolidated Net Income" shall mean, for any period as to any Person,
the consolidated net income (or loss) of such Person and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP, provided that
for purposes of determining Consolidated Net Income, payments under
Equipment Leases attributable to (i) Equipment Lease Tranche A Loans and
Equipment Lease Tranche B Loans and (ii) the yield to the Equipment
Investors in connection with the Equipment Lease Transactions shall be
considered interest expense.
"Consolidated Net Worth" shall mean, at a particular date, as to any
Person, the amount which could be included under stockholders' equity on a
consolidated balance sheet of such Person and its Subsidiaries determined
on a consolidated basis in accordance with GAAP.
"Contractual Obligation" shall mean, as to any Person, any provision
of any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a parry or by which it or any of
its property is bound.
"Corporate Credit Agreement" means that Credit Agreement among HCC,
Agent and the several banks from time to time parties thereto dated as of
December 15, 1997, as amended and restated through March 13, 2000, and as
it may be further amended, modified, or supplemented from time-to-time.
"Corporate Guarantees" shall mean, collectively, that certain
Subsidiaries' Guarantee and Parent Guarantee made by the Guarantors
pursuant to the Corporate Credit Agreement and such other guarantees of the
loans and the other obligations of HCC under the Corporate Credit
Agreement.
11
"Credit Agreement" shall mean the Credit Agreement dated as of the
Initial Closing Date among the Lessor, the Agent and the Lenders, as
amended, supplemented or otherwise modified from time to time in accordance
with the terms thereof or of any other Operative Agreement.
"Credit Agreement Default" shall mean any event or condition which,
with the lapse of time or the giving of notice, or both, would constitute a
Credit Agreement Event of Default.
"Credit Agreement Event of Default" shall have the meaning set forth
in Section 6.1 of the Credit Agreement.
"Credit Documents" shall mean the Credit Agreement, the Notes, the
Guarantee, the Lease and the Security Documents.
"Current Ratio" shall mean, at a particular date, as to any Person and
its Subsidiaries, the quotient of the consolidated current assets of such
Person and its Subsidiaries at such time, to the consolidated current
liabilities of such Person and its Subsidiaries at such time less the
current portion of long-term debt (all determined in accordance with GAAP
at such time), provided that for purposes of calculating the Current Ratio,
current liabilities of such Person and its Subsidiaries which are then
accrued but unpaid with respect to the Equipment Lease Tranche A Loans
shall be included as current liabilities of such Person.
"Default" shall mean any event or condition which, with the lapse of
time or the giving of notice, or both, would constitute an Event of
Default.
"Derivatives" shall mean, any swap, hedge, cap, collar, or similar
arrangement providing for the exchange of risks related to price changes in
any commodity, including money.
"Disposition": with respect to any property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof.
The terms "Dispose" and "Disposed of" shall have correlative meanings.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Effective Date" shall have the meaning set forth in the Assignment
and Acceptance.
12
"Environmental Claim" shall mean any claim, notice of claim,
complaint, notice of violation, letter, or other assertion or inquiry of
any kind concerning any asserted or actual violation of or liability under
any Environmental Law or any asserted or actual violation or liability
relating to any Hazardous Substance.
"Environmental Law" shall mean any and all Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees or requirements of any Governmental Authority regulating, relating
to or imposing liability or standards of conduct concerning environmental
protection matters, including without limitation, Hazardous Substances, as
now or may at any time hereafter be in effect.
"Environmental Violation" shall mean any activity, occurrence or
condition that violates or results in non-compliance with any applicable
Environmental Laws or results in a written complaint or other written claim
from a Governmental Authority with respect to any Environmental Laws.
"Equipment" shall mean natural gas compressors used in gas and oil
field gathering, transmission and processing activities that are acquired
by the Lessor and then leased by the Lessor to Lessee pursuant to the terms
of the Operative Agreements.
"Equipment Acquisition Costs" shall mean all costs and expenses
incurred in connection with the acquisition of any Equipment, including all
reasonable professional fees and other soft costs incurred in connection
therewith, Transaction Expenses and other pre-closing and closing costs
incurred by Lessee in connection with the transactions contemplated by the
Operative Agreements.
"Equipment Closing Certificate" shall mean a certificate executed by a
Responsible Officer of the Lessee certifying (i) the Tranche A Percentage
for the particular piece of Equipment and (ii) the Aggregate Tranche A
Percentage for all Equipment after giving effect to the acquisition of the
particular piece of Equipment substantially in the form attached as Exhibit
F to the Participation Agreement.
"Equipment Closing Date" shall mean each date on which the Lessor
purchases any piece of Equipment.
"Equipment Cost" shall mean with respect to a piece of Equipment the
aggregate amount of the Tranche A/B Equipment Cost allocated to such piece
of Equipment pursuant to the Credit Agreement, plus the Investor Equipment
Cost for such piece of Equipment.
13
"Equipment Guarantees" shall mean (i) the Guarantee dated as of July 22,
1998 (as amended, supplemented or otherwise modified from time to time),
made by Holdings. HCC, Hanover/Xxxxx, HMI, Hanover Land Company, in favor
of Hanover Equipment Trust 1998A and The Chase Manhattan Bank, as agent,
(ii) the Guarantee dated as of June 15, 1999 (as amended, supplemented or
otherwise modified from time to time), made by Holdings, HCC,
Hanover/Xxxxx, HMI, Hanover Land Company, in favor of Hanover Equipment
Trust 1999A and The Chase Manhattan Bank, as agent and (iii) the Guarantee
dated as of March 13, 2000 (as amended, supplemented or otherwise modified
from time to time), made by Holdings, HCC and certain of their Subsidiaries
listed on the signature pages thereto, in favor of Hanover Equipment Trust
2000 A and The Chase Manhattan Bank, as agent.
"Equipment Lease Credit Agreements" shall mean (i) the Credit
Agreement dated as of July 23, 1998 (as amended, supplemented or otherwise
modified from time to time), among Hanover Equipment Trust 1998A, as
borrower, the several lenders from time to time parties thereto and The
Chase Manhattan Bank, as agent, (ii) the Credit Agreement dated as of June
15, 1999 (as amended, supplemented or otherwise modified from time to
time), among Hanover Equipment Trust 1999A, as borrower, the several
lenders from time to time parties thereto, the managing agents thereto and
The Chase Manhattan Bank, as agent and (iii) the Credit Agreement dated as
of March 13, 2000 (as amended, supplemented or otherwise modified from time
to time), among Hanover Equipment Trust 2000A, as borrower, the several
lenders from time to time parties thereto, Industrial Bank of Japan, LTD.,
as syndication agent, the Bank of Nova Scotia, as documentation agent and
The Chase Manhattan Bank, as agent.
"Equipment Lease Participation Agreements" shall mean (i) the
Participation Agreement dated July 22, 1998 (as amended, supplemented or
otherwise modified from time to time), among HCC, Hanover Equipment Trust
1998A, Societe Generale Financial Corporation, as investor, The Chase
Manhattan Bank, as agent, and the lenders parties thereto, (ii) the
Participation Agreement dated June 15, 1999 (as amended, supplemented or
otherwise modified from time to time), among HCC, Hanover Equipment Trust
1999A, Societe Generale Financial Corporation and FBTC Leasing Corp., as
investors, the managing agents thereto, The Chase Manhattan Bank, as agent,
and the lenders parties thereto and (iii) the Participation Agreement dated
March 13, 2000 (as amended, supplemented or otherwise modified from time to
time), among HCC, Hanover Equipment Trust 2000A, First Union National Bank
and Scotiabanc Inc., as investors, Industrial Bank of Japan, LTD., as
syndication agent, the Bank of Nova Scotia, as documentation agent, The
Chase Manhattan Bank, as agent, and the lenders parties thereto.
14
"Equipment Lease Tranche A Loans" shall mean the loans to be made
pursuant to each Equipment Lease Credit Agreement and identified as the
"Tranche A Loans" in Schedule 1.1 of each of the Equipment Lease Credit
Agreements.
"Equipment Lease Tranche B Loans" shall mean the loans to be made
pursuant to each Equipment Lease Credit Agreement and identified as the
"Tranche B Loans" in Schedule 1.1 of each of the Equipment Lease Credit
Agreements.
"Equipment Lease Transactions" shall mean the transactions whereby HCC
leases natural gas compressors from the Lessors as described in each of the
Equipment Lease Participation Agreements and any Operative Document (as
defined in such Equipment Lease Participation Agreements).
"Equipment Leases": (i) the Lease dated as of July 23, 1998 (as
amended, supplemented or otherwise modified from time to time), between
Hanover Equipment Trust 1998A, as lessor, and HCC, as lessee, (ii) the
Lease dated as of June 15, 1999 (as amended, supplemented or otherwise
modified from time to time), between Hanover Equipment Trust 1999A, as
lessor, and HCC, as lessee, and (iii) the Lease dated as of March 13, 2000
(as amended, supplemented or otherwise modified from time to time), between
Hanover Equipment Trust 2000A, as lessor, and HCC, as lessee.
"Equipment Investors" means the parties that hold the beneficial
interest in the respective Equipment Lessors.
"Equipment Lessors" means the lessors under the Equipment Leases.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" shall mean each entity required to be aggregated
with the Lessee pursuant to the requirements of Section 414(b) or (c) of
the Code.
"Eurocurrency Reserve Requirements" shall mean for any day as applied
to a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board or other Governmental
Authority having jurisdiction with respect thereto) dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board) maintained by a
member bank of the Federal Reserve System.
15
"Eurodollar Base Rate" shall mean, with respect to each day during
each Interest Period pertaining to a Eurodollar Loan, the rate per annum
equal to the rate at which Chase is offered Dollar deposits at or about
10:00 A.M., New York City time, two Business Days prior to the beginning of
such Interest Period in the interbank eurodollar market where the
eurodollar and foreign currency and exchange operations in respect of its
Eurodollar Loans are then being conducted for delivery on the first day of
such Interest Period for the number of days comprised therein and in an
amount comparable to the amount of its Eurodollar Loan to be outstanding
during such Interest Period.
"Eurodollar Loans" shall mean Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate" shall mean with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula (rounded
upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
-----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche" shall mean the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all of which begin
on the same date and end on the same later date (whether or not such Loans
shall originally have been made on the same day).
"Event of Default" shall mean a Lease Event of Default or a Credit
Agreement Event of Default.
"Excepted Payments" shall mean:
(a) all indemnity payments (including indemnity payments made
pursuant to Section 12 of the Participation Agreement), to which the
Lessor, Trust Company or the Investors are entitled;
(b) any amounts (other than Basic Rent, Termination Value, or
Purchase Option Price) payable under any Operative Agreement to
reimburse the Lessor, the Trust Company, the Investors, or any of
their respective Affiliates (including the reasonable expenses of the
Trust Company and the Investors incurred in connection with any such
payment) for performing or complying with any of the obligations of
Lessee under and as permitted by any Operative Agreement;
16
(c) any amount payable to the Investors by any transferee of
the interest of the Investors as the purchase price of the Investors'
interest in the Trust Estate (or a portion thereof);
(d) any insurance proceeds (or payments with respect to risks
self- insured or policy deductibles) under liability policies with
respect to the Equipment other than such proceeds or payments payable
to the Lessee or the Agent;
(e) any insurance proceeds under policies maintained by the
Lessor, Trust Company or the Investors;
(f) Transaction Expenses or other amounts or expenses paid or
payable to or for the benefit of the Trust Company or the Investors;
(g) all right, title and interest of the Investors or the
Lessor to any Equipment, any portion thereof or any other property to
the extent any of the foregoing has been released from the Liens of
the Security Agreement and the Assignment of Lease pursuant to the
terms thereof and not otherwise purchased by the Lessee or a third
party pursuant to the terms of the Lease;
(h) any payments in respect of interest to the extent
attributable to payments referred to in clauses (a) through (g) above;
and
(i) any rights of the Investors, the Trust Company or the
Lessor to demand, collect, xxx for or otherwise receive and enforce payment
of any of the foregoing amounts.
"Excepted Rights" shall mean the rights retained by the Lessor
pursuant to Section 8.3(i) of the Credit Agreement and all right, title and
interest of the Lessor in the Shared Rights.
"Excess Sales Proceeds" shall have the meaning given to such term in
Section 8.l(b)(iii) of the Credit Agreement.
"Exculpated Persons" shall have the meaning set forth in Section 9.17
of the Credit Agreement.
"Expiration Date" shall mean the final day of the Term.
17
"Fair Market Sales Value" shall mean the amount, which in any event
shall not be less than zero, that would be paid in cash in an arm's-length
transaction between an informed and willing purchaser and an informed and
willing seller, neither of whom is under any compulsion to purchase or
sell, respectively, for the ownership of any piece of Equipment. Fair
Market Sales Value shall be determined based on the assumption that, except
for purposes of Section 21.3 of the Lease, any piece of Equipment is in the
condition and state of repair required under Section 10.1 of the Lease and
that the Lessee is in compliance with the other requirements of the
Operative Agreements.
"Fee Letter" shall mean the Fee Letter dated May 11, 1999 from Chase
and Chase Securities Inc. to HCC.
"Financing Lease" shall mean any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the lessee,
and excluding all obligations with respect to the Equipment Leases.
"GAAP" means generally accepted accounting principles in the United
States of America consistent with those used in preparing the audited
financial statements referred to in Section 10.1 of the Guarantee.
"Governmental Action" shall mean all permits, authorizations,
registrations, consents, approvals, waivers, exceptions, variances, orders,
judgments, written interpretations, decrees, licenses, exemptions,
publications, filings, notices to and declarations of or with, or required
by, any Governmental Authority, or required by any Legal Requirement, and
shall include, without limitation, all environmental and operating permits
and licenses that are required for the full use and operation of the
Equipment.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"Guarantee" shall mean the Guarantee dated as of the Initial Closing
Date from the Guarantors to the Agent for the benefit of the Lenders and to
the Lessor for the benefit of the Investors, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof or of any other Operative Agreement.
"Guaranteed Obligations" shall have the meaning specified in Section
l(b) of the Guarantee.
18
"Guarantee Obligation" means as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including without limitation, any bank under any letter of credit)
to induce the creation of which the guaranteeing person has issued a
reimbursement, counter indemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other third Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (a) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (b) to
advance or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation
or (d) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
term Guarantor Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantor Obligation of any guaranteeing person shall be deemed to be the
lower of (a) an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guarantor Obligation is made
and (b) the maximum amount for which such guaranteeing person may be liable
pursuant to the terms of the instrument embodying such Guarantor
Obligation, unless such primary obligation and the maximum amount for which
such guaranteeing person may be liable are not stated or determinable, in
which case the amount of such Guarantor Obligation shall be such
guaranteeing person's maximum reasonably anticipated liability in respect
thereof as determined by HCC, in good faith.
"Guarantors" shall mean collectively, Lessee, Holdings, Hanover
Compressor Limited Holdings, LLC, Hanover Maintech Limited Partnership,
Hanover/Xxxxx Limited Partnership, Hanover Land Limited Partnership,
Hanover Maintech Limited Partnership.
"HCC" shall mean Hanover Compression Inc., a Delaware corporation, or
its assigns or successors.
"Hazardous Substance" shall mean any hazardous materials, hazardous
waste, hazardous constituents, hazardous or toxic substances, petroleum
products (including crude oil or any fraction thereof), defined or
regulated as such in or under any Environmental Law, including, without
limitation, polychlorinated biphenyls.
"HMS" shall mean Hanover Measurement Services Company, L.P., a
Delaware limited partnership, and its successors and assigns.
19
"HMS Entities" shall mean HMS, Meter Acquisition Company LP, LLLP, a
Delaware limited liability partnership, Hanover Measurement, LLC, a
Delaware limited liability company, HCC Holdings, Inc., a Delaware
corporation and Hanover MAC, LLC, a Delaware limited liability company.
"HMS Transactions" shall mean the transactions described in the Common
Agreement, dated as of September 30, 1999, by and among Meter Acquisition
Company LP, LLLP, Hanover Measurement Services Company, L.P., HPL, Hanover
MAC, LLC, HCC Holdings, Inc., Barclays Bank PLC, as agent and arranger,
Credit Lyonnais New York Branch, as syndication agent and the other parties
thereto.
"Holdings" shall mean Hanover Compressor Company, a Delaware
corporation, the parent company of HCC.
"HPL" shall mean Houston Pipe Line Company, a Delaware corporation,
and its successors and assigns.
"Impositions" shall mean, except to the extent described in the
following sentence, any and all liabilities, losses, expenses and costs of
any kind whatsoever for fees, taxes, levies, imposts, duties, charges,
assessments or withholdings ("Taxes") (including (i) real and personal
property taxes, including personal property taxes on any property covered
by the Lease that is classified by Governmental Authorities as personal
property, and real estate or ad valorem taxes in the nature of property
taxes; (ii) sales taxes, use taxes and other similar taxes (including rent
taxes and intangibles taxes); (iii) any excise taxes; (iv) real estate
transfer taxes, conveyance taxes, stamp taxes and documentary recording
taxes and fees; (v) taxes that are or are in the nature of franchise,
income, value added, privilege and doing business taxes, license and
registration fees; and (vi) assessments on the Equipment), and in each case
all interest, additions to tax and penalties thereon, which at any time
prior to, during or with respect to the Term or in respect of any period
for which the Lessee shall be obligated to pay Supplemental Rent, may be
levied, assessed or imposed by any Federal, state, city, county or local
authority upon or with respect to (a) the Equipment or any part thereof or
interest therein; (b) the purchase, sale, leasing, financing, refinancing,
demolition, construction, renovation, substitution, subleasing, assignment,
control, condition, occupancy, servicing, maintenance, repair, ownership,
possession, activity conducted on, delivery, insuring, use, operation,
improvement, transfer of title, return or other disposition of the
Equipment or any part thereof or interest therein; (c) the Notes or other
indebtedness with respect to the Equipment or any part thereof or interest
therein; (d) the rentals, receipts or earnings arising from the Equipment
or any part thereof or interest therein; (e) the Operative Agreements or
any payment made or accrued pursuant thereto; (f) the income or other
proceeds received with respect to the Equipment or any part thereof or
interest therein
20
upon the sale or disposition thereof; (g) any contract relating to the
construction or renovation of the Equipment; (h) the issuance of the Notes;
or (i) otherwise in connection with the transactions contemplated by the
Operative Agreements.
The term "Imposition" shall not mean or include:
(i) Taxes and impositions (other than Taxes that are, or are
in the nature of, sales, use, rental, value added, transfer or
property taxes) that are imposed on a Tax Indemnitee by the United
States federal government that are based on or measured by the gross
or net income (including taxes based on capital gains and minimum
taxes) of such Person; provided that this clause (i) shall not be
interpreted to prevent a payment from being made on an After Tax Basis
if such payment is otherwise required to be so made;
(ii) Taxes and impositions (other than Taxes that are, or
are in the nature of, sales, use, rental, value added, transfer or
property taxes) that are imposed by any state or local jurisdiction or
taxing authority within any state or local jurisdiction and that are
based upon or measured by the gross or net income or gross or net
receipts from rental (including any minimum taxes, withholding taxes
or taxes on or measured by capital, net worth, excess profits or items
of tax preference or taxes that are capital stock, franchise or doing
business taxes) except that this clause (ii) shall not apply to (and
thus shall not exclude) any such Taxes imposed on a Tax Indemnitee by
a state (or any local taxing authority thereof or therein) where the
Equipment is located, possessed or used under the Lease unless the Tax
Indemnitee was subject to such tax in such jurisdiction without regard
to the transaction contemplated by the Operative Agreements; provided
that this clause (ii) shall not be interpreted to prevent a payment
from being made on an After Tax Basis if such payment is otherwise
required to be so made;
(iii) any interest or penalties imposed on a Tax Indemnitee
as a result of the failure of such Tax Indemnitee to file any return
or report timely and in the form prescribed by law or to pay any Tax
or imposition; provided that this clause (iii) shall not apply (x) if
such interest or penalties arise as a result of a position taken (or
requested to be taken) by the Lessee in a contest controlled by the
Lessee under Section 12.2(g) of the Participation Agreement or (y) to
any such interest or penalties that result from such Tax Indemnitee's
complying with the reporting procedures set forth in Section 12.2(d)
of the Participation Agreement;
(iv) any Taxes or impositions imposed on the Lessor that are
a result of the Lessor not being considered a "United States person"
as defined in Section 7701(a)(30) of the Code;
21
(v) any Taxes which are imposed on a Tax Indemnitee solely
as a result of the gross negligence or willful misconduct of such Tax
Indemnitee itself (as opposed to gross negligence or willful
misconduct imputed to such Tax Indemnitee), but not Taxes imposed as a
result of ordinary negligence of such Tax Indemnitee;
(vi) any Taxes or impositions imposed upon the Lessor with
respect to any voluntary transfer, sale, financing or other voluntary
disposition by the Lessor (other than a transfer contemplated and
permitted by the Operative Agreements, including any transfer in
connection with (1) the exercise by the Lessee of its Purchase Option,
(2) the occurrence of a Lease Event of Default or a Credit Agreement
Event of Default, or (3) a Casualty or Condemnation affecting the
Equipment) of any interest in the Equipment or any interest in, or
created pursuant to, the Operative Agreements) or any voluntary
transfer of any interest in the Lessor (other than in connection with
the existence of a Lease Event of Default or a Credit Agreement Event
of Default or any involuntary transfer of any of the foregoing
interests resulting from the bankruptcy or insolvency of the Lessor
(other than in connection with the existence of a Lease Event of
Default or a Credit Agreement Event of Default;
(vii) any gift, or inheritance, taxes;
(viii) Taxes imposed on the Tax Indemnitee or any person who
is a "disqualified person", within the meaning of Section 4975(e)(2)
of the Code, or a "party in interest", within the meaning of Section
3(14) of ERISA, by virtue of such person's relationship to the Tax
Indemnitee as the result of any prohibited transaction, within the
meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code,
involving the exercise of discretion or control by such Tax
Indemnitee; or
(ix) Taxes on, with respect to or measured by any trustee
fees for services rendered as trustee of the Trust.
Any Tax or imposition excluded from the defined term "Imposition" in any
one of the foregoing clauses (i) through (vii) shall not be construed as
constituting an Imposition by any provision of any other of the
aforementioned clauses.
"Indebtedness" shall mean, of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than current liabilities incurred in
the ordinary course of business and payable in
22
accordance with customary trade practices) or which is evidenced by a note,
bond, debenture or similar instrument, (b) all obligations of such Person
under Financing Leases, (c) all obligations of such Person in respect of
acceptances issued or created for the account of such Person and (d) all
liabilities secured by any Lien (other than any lien of a type described in
subsection 8.3(a) through (j)) on any property owned by such Person even
though it has not assumed or otherwise become liable for the payment
thereof, provided that all obligations of such Person with respect to
Equipment Lease Tranche A Loans shall be considered Indebtedness of such
Person.
"Indemnified Person" shall mean the Trust Company, in its individual
and its trust capacity, the Agent, the Lessor, the Investors, the Lenders
and their respective successors, assigns, directors, shareholders,
partners, officers, employees, agents and Affiliates.
"Initial Closing Date" shall mean June 15, 1999.
"Insolvent" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insurance Requirements" shall mean all terms and conditions of any
insurance policy required by the Lease to be maintained by the Lessee and
all requirements of the issuer of any such policy.
"Interest Period" shall mean, with respect to any Eurodollar Loan:
(a) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower in its notice of borrowing or notice of conversion, as
the case may be, given with respect thereto: and
(b) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such Eurodollar
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower by irrevocable notice to the Agent not less than three
Business Days prior to the last day of the then current Interest
Period with respect thereto;
provided that, the foregoing provisions relating to Interest Periods are
subject to the following:
(i) if any Interest Period pertaining to a Eurodollar Loan
would otherwise end on a day that is not a Business Day, such Interest
Period shall be
23
extended to the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another calendar
month in which event such Interest Period shall end on the immediately
preceding Business Day;
(ii) any Interest Period that would otherwise extend beyond
the Maturity Date shall end on the Maturity Date;
(iii) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(iv) Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
"Investment Company Act" shall mean the Investment Company Act of
1940, as amended, together with the rules and regulations promulgated
thereunder.
"Investments" shall have the meaning specified in Section 11.10 of
the Guarantee.
"Investors" shall mean Societe General Financial Corporation, a
Delaware corporation and FBTC Leasing Corp., a New York corporation.
"Investor Commitment" shall mean $6,000,000.
"Investor Commitment Fee" shall mean, on each Commitment Fee Payment
Date, an amount equal to the product of (i) the Available Investor
Commitment on such Commitment Fee Payment Date times (ii) the Applicable
Commitment Fee Rate
"Investor Contribution" shall have the meaning specified in Section
2.1 of the Participation Agreement.
"Investor Equipment Cost" shall mean with respect to a piece of
Equipment an amount equal to the Investor Contribution attributable to such
Equipment outstanding from time to time, if any.
"Investor Yield" shall mean an amount, as of any Payment Date,
sufficient to provide the Investors with an annual pre-tax yield on the
Investor Contribution of 325 basis points in excess of (i) the highest
Eurodollar Rate applicable to any then outstanding
24
Eurodollar Tranche or (ii) if no Eurodollar Tranche is then outstanding,
the rate of interest per annum on any then outstanding ABR Loan.
"L/C Obligations" shall mean, at any time, an amount equal to the sum
of (a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit which have not then been reimbursed pursuant to
subsection 4.5(a) of the Corporate Credit Agreement.
"Lease" shall mean the lease dated as of the Initial Closing Date
between the Lessor and the Lessee, together with any Lease Supplements
thereto, as amended, supplemented or otherwise modified from time to time
in accordance with the terms thereof or of any other Operative Agreement.
"Lease Default" shall mean any event or condition which, with the
lapse of time or the giving of notice, or both, would constitute a Lease
Event of Default.
"Lease Event of Default" shall have the meaning given to such term in
Section 17.1 of the Lease.
"Lease Secured Obligations" shall have the meaning set forth in
Section 28.1 of the Lease.
"Lease Supplement" shall mean each Lease Supplement substantially in
the form of Exhibit A to the Lease together with all attachments and
schedules thereto, as such Lease Supplement may be supplemented, amended or
modified from time to time.
"Legal Requirements" shall mean all Federal, state, county, municipal
and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions affecting any Equipment or
the use or alteration thereof, whether now or hereafter enacted and in
force, including any that require repairs, modifications or alterations in
or to any Equipment or in any way limit the use and enjoyment thereof and
any that may relate to Environmental Laws, and all permits, certificates of
occupancy, licenses, authorizations and regulations relating thereto, and
all covenants, agreements, restrictions and encumbrances contained in any
instruments which are either of record or known to the Lessee affecting any
Equipment.
"Lender Financing Statements" shall mean UCC financing statements
appropriately completed and executed by the Lessor, as debtor, for filing
in the appropriate state (and, where required by the UCC, county) offices
in the State in which each piece of Equipment is located in order to
perfect a security interest in favor of the
25
Agent in the Equipment, as the same may be supplemented, amended or
modified from time to time.
"Lenders" shall mean the several banks and other financial
institutions from time to time party to the Credit Agreement.
"Lessee" shall mean Hanover Compressor Company, a Delaware
corporation, as lessee under the Lease or its successor and assigns.
"Lessor" shall mean Hanover Equipment Trust 1999A, a Delaware business
trust or its successor and assigns.
"Lessor Financing Statements" shall mean UCC financing statements
appropriately completed and executed by the Lessee, as debtor, for filing
in the appropriate (state and, where required by the UCC, county) offices
in the State in which each piece of Equipment is located in order to
protect the Lessor's interest under the Lease as a security agreement, as
the same may be supplemented, amended or modified from time to time, as the
same shall be assigned to the Agent pursuant to appropriate UCC financing
statements.
"Lessor Lien" shall mean any Lien, true lease or sublease or
disposition of title arising as a result of (a) any claim against the
Lessor, the Trust Company, the Investors or any Affiliate of the Lessor,
the Trust Company and/or the Investors, not resulting from the transactions
contemplated by the Operative Agreements, (b) any act or omission of the
Lessor, the Trust Company, the Investors or any Affiliate of the Lessor,
the Trust Company and/or the Investors, which is not required by the
Operative Agreements or is in violation of any of the terms of the
Operative Agreements, (c) any claim against the Lessor, the Trust Company,
the Investors or any Affiliate of the Lessor, the Trust Company and/or the
Investors, with respect to Taxes or Transaction Expenses against which the
Lessee is not required to indemnify the Lessor, the Trust Company, the
Investors or any Affiliate of the Lessor, the Trust Company and/or the
Investors, pursuant to the Participation Agreement or (d) any claim against
the Lessor arising out of any transfer by the Lessor of all or any portion
of the interest of the Lessor in the Equipment, the Trust Estate or the
Operative Agreements other than the transfer of title to or possession of
the Equipment by the Lessor pursuant to and in accordance with the Lease,
the Credit Agreement or the Participation Agreement or pursuant to the
exercise of the remedies set forth in Section 17 of the Lease.
"Letters of Credit" shall have the meaning set forth in paragraph
4.1(a) of the Corporate Credit Agreement.
26
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), or preference,
priority or other security agreement or preferential arrangement of any
kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement, any Financing Lease having
substantially the same economic effect as any of the foregoing, and the
filing of any financing statement under the Uniform Commercial Code or
comparable law of any jurisdiction in respect of any of the foregoing).
"Limited Deficiency Amount" shall mean, with respect to each piece of
Equipment, the amount equal to the sum of the Termination Value with
respect to such piece of Equipment on each Payment Date less the Maximum
Residual Guarantee Amount as of such date with respect to such piece of
Equipment.
"Loan Year" shall mean a period of time from the Initial Closing Date
or any anniversary of the Initial Closing Date to the immediately
succeeding anniversary of the Initial Closing Date.
"Loans" shall have the meaning set forth in Section 2.l(a) of the
Credit Agreement.
"MAC" shall mean Meter Acquisition Company LP, LLLP, a Delaware
registered limited liability limited partnership, and its successors and
assigns.
"Managing Agents" shall mean the institutions listed on Schedule 1 to
the Participation Agreement or Schedule 2 to the Credit Agreement.
"Marketing Period" shall mean, if the Lessee has not given the
Maturity Date Election Notice in accordance with Section 20.2 of the
Lease, the period commencing on the date six months prior to the Maturity
Date and ending on the Maturity Date.
"Marketing Period Equity Return" shall mean the total of all amounts
received by the Lessor or the Investors during the Marketing Period with
respect to the Lessee's payment of the Purchase Option Price or the
proceeds of any sale of a piece of Equipment pursuant to Section 21 of the
Lease; provided that "Marketing Period Equity Return" shall in no event
include any payment made by the Lessee in respect of Investor Yield.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, operations, property or condition (financial or otherwise) of
HCC and its Subsidiaries taken as a whole, (b) the ability of HCC or any of
the Subsidiaries of HCC to perform their respective obligations under the
Operative Agreements to which each is a
27
party, or (c) the validity or enforceability of any of the Operative
Agreements to which each is a party or the rights or remedies of the Agent
or the Lenders thereunder.
"Material Subsidiary" shall mean, at any particular date, each
Subsidiary of HCC for which the aggregate value of all assets owned by such
Subsidiary is greater than $5,000,000.
"Maturity Date" shall mean the day immediately preceding the fifth
anniversary of the Initial Closing Date.
"Maturity Date Election Notice" shall have the meaning set forth in
Section 20.2 of the Lease.
"Maturity Date Purchase Option" shall mean the Lessee's option to
purchase all of the Equipment on the Maturity Date in accordance with
Section 20.2 of the Lease.
"Maximum Purchase Option Amount" shall mean 75% of the highest
Termination Value of all Equipment owned by the Lessor at any one time
during the period from the first anniversary of the Initial Closing Date to
6 months prior to the Maturity Date.
"Maximum Residual Guarantee Amount" for each piece of Equipment at any
time shall mean an amount equal to the product of (x) the Tranche A/B
Equipment Cost in respect of such Equipment at such time and (y) the
Tranche A Percentage in respect of such Equipment.
"Modifications" shall have the meaning set forth in Section 11.1(a)
of the Lease.
"Multiemployer Plan" shall mean a Plan which is a multiemployer plan
as defined in Section 4001(a)(3) of ERISA.
"Net Proceeds" shall mean all amounts paid in connection with any
Casualty or Condemnation, and all interest earned thereon, less the expense
of claiming and collecting such amounts, including all reasonable costs and
expenses in connection therewith for which the Agent or Lessor are entitled
to be reimbursed pursuant to the Lease.
"Net Sale Proceeds Shortfall" shall mean the amount by which the
proceeds of a sale of a piece of Equipment described in Section 21.1 of
the Lease (net of all expenses of sale) are less than the Limited
Deficiency Amount for such Equipment.
28
"Non-Excluded Taxes" shall have the meaning set forth in Section
2.15(a) of the Credit Agreement.
"Non-Recourse Indebtedness" shall mean Indebtedness (i) as to which
neither HCC nor any of its Qualified Subsidiaries (a) provides any
guarantee or credit support of any kind (including any undertaking,
guarantee, indemnity, agreement or instrument that would constitute
Indebtedness), or (b) is directly or indirectly liable (as guarantor or
otherwise) and (ii) the explicit terms of which provide that there is no
recourse against any of the assets of HCC or its Qualified Subsidiaries
(other than the Capital Stock of an Unqualified Subsidiary) or that
recourse is limited to assets which do not include the assets of HCC or its
Qualified Subsidiaries (other than the Capital Stock of an Unqualified
Subsidiary).
"Notes" shall mean the collective reference to the Tranche A Notes and
the Tranche B Notes.
"Obligations" shall mean the collective reference to (i) the unpaid
principal of and interest on the Notes and all other obligations and
liabilities of the Borrower to the Agent or the Lenders (including interest
accruing at the then applicable rate provided in the Credit Agreement after
the maturity of the Loans and interest accruing at the then applicable rate
provided in the Credit Agreement after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding),
whether direct or indirect, absolute or contingent, due or to become due,
now existing or hereafter incurred, which may arise under, out of, or in
connection with, the Credit Agreement, the Notes, the other Credit
Documents or any other document made, delivered or given in connection
therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including all
reasonable fees and disbursements of counsel to the Agent or to the Lenders
that are required to be paid by the Borrower pursuant to the terms of the
Credit Agreement or any other Credit Document), (ii) all amounts payable by
the Lessee under any of the Operative Agreements (including indemnities and
Commitment Fees) to the Agent and/or the Lenders and the Lessor and (iii)
all amounts owing by the Lessee to the Investors in respect of accrued and
unpaid Investor Yield and outstanding fundings of the Investor
Contribution.
"Officer's Certificate" shall mean a certificate signed by any
individual holding the office of secretary, vice president or higher, which
certificate shall certify as true and correct the subject matter being
certified to in such certificate.
29
"Operative Agreements" shall mean the following:
(a) the Participation Agreement;
(b) the Notes;
(c) the Lease and each Lease Supplement;
(d) the Assignment of Lease;
(e) the Credit Agreement;
(f) the Security Agreement;
(g) the UCC Financing Statements;
(h) the Guarantee;
(i) the Requisitions; and
(j) the Trust Agreement.
"Overdue Interest" shall mean any interest payable pursuant to Section
2.8(c) of the Credit Agreement.
"Overdue Rate" shall mean (i) with respect to Tranche A Basic Rent,
Tranche B Basic Rent and any other amount owed under or with respect to the
Credit Agreement or the Security Documents, the rate set forth in Section
2.8(c)(ii)(y) of the Credit Agreement, (ii) with respect to Investor Yield
the rate set forth in Section 2.8(c)(ii)(y) of the Credit Agreement and
(iii) with respect to the Investor Contribution and any other amount, the
amount referred to in Section 2.8(c)(ii)(x) of the Credit Agreement.
"Participant" shall have the meaning set forth in Section 9.6 of the
Credit Agreement.
"Participation Agreement" shall mean the Participation Agreement dated
as of the Initial Closing Date among the Lessee, the Lessor, the Investors,
the Agent and the Lenders, as it may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof or of any
other Operative Agreement.
"Payment Date" shall mean each Specified Interest Payment Date and any
other date on which a payment is otherwise due under the terms of the
Credit Agreement or, if all amounts due under the Credit Agreement have
been paid in full and the Credit Agreement has been terminated, the first
Business Day of each calendar month during the Term.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
30
"Permitted Business Acquisition" shall mean the formation of a new
Subsidiary or any acquisition of all or substantially all the assets of, or
50% or more of the shares of capital stock, partnership interests, joint
venture interests, limited liability company interests or other similar
equity interests in, or the acquisition of any compression and/or oil and
gas production equipment assets of, a Person or division or line of
business of a Person (or any subsequent investment made in a Person
previously acquired in a Permitted Business Acquisition), if immediately
after giving effect thereto: (a) no Default or Event of Default shall have
occurred and be continuing or would result therefrom, (b) all transactions
related thereto shall be consummated in accordance with applicable laws,
(c) such acquired or newly formed corporation, partnership, association or
other business entity shall be a Subsidiary and all actions required to be
taken, if any, with respect to such acquired or newly formed Subsidiary
under Section 10.9 of the Guarantee shall have been taken, (d)(i) HCC
shall be in compliance, on a pro forma basis after giving effect to such
acquisition or formation, with the covenants contained in Section 11.1 of
the Guarantee recomputed as at the last day of the most recently ended
fiscal quarter of HCC as if such acquisition had occurred on the first day
of each relevant period for testing such compliance, and HCC shall have
delivered to the Agent an Officers' Certificate to such effect, together
with all relevant financial information for such Person or assets and (ii)
any acquired or newly formed Subsidiary shall not be liable for any
Indebtedness or Guarantor Obligations (except for Indebtedness and
Guarantor Obligations permitted by Sections 11.2 and 11.4 of the
Guarantee), (e) any acquired or newly formed Subsidiary (including
Subsidiaries thereof) shall not have (except for Indebtedness and Guarantor
Obligations permitted by Sections 11.2 and 11.4 of the Guarantee) any
material liabilities (contingent or otherwise), including, without
limitation, liabilities under Environmental Laws and liabilities with
respect to any Plan, and HCC shall have delivered to the Agent a
certificate, signed by a Responsible Officer, that to the best of such
officer's knowledge, no such material liabilities exist.
"Permitted Exceptions" shall mean (i) Liens of the types described in
clauses (i), (ii), (iv) and (v) of the definition of Permitted Liens; (ii)
Liens for Taxes not yet due; (iii) Lessor Liens and (iv) all non-monetary
encumbrances, exceptions, restrictions, easements, rights of way,
servitudes, encroachments and irregularities in title, other than Liens
which, in the reasonable assessment of the Agent, materially impair the use
of the Equipment for its intended purpose.
"Permitted Liens" shall mean (i) the respective rights and interests
of the parties to the Operative Agreements as provided in the Operative
Agreements; (ii) the rights of any sublessee or assignee under a sublease
or an assignment or a compressor management agreement expressly permitted
by the terms of the Lease; (iii) Liens for Taxes that either are not yet
due or are being contested in accordance with the provisions of Section
12.2 of the Participation Agreement; (iv) Liens arising by operation of
law, materialmen's,
31
mechanics', workmen's, repairmen's, employees', warehousemen's and other
like Liens in connection with any Modifications or arising in the ordinary
course of business for amounts that either are not more than 30 days past
due or are being diligently contested in good faith by appropriate
proceedings, so long as such proceedings satisfy the conditions for the
continuation of proceedings to contest Taxes set forth in Section 12.2(g)
of the Participation Agreement; (v) Liens of any of the types referred to
in clause (iv) above that have been bonded for not less than the full
amount in dispute (or as to which other security arrangements satisfactory
to the Lessor have been made), which bonding (or arrangements) shall comply
with applicable Legal Requirements, and shall have effectively stayed any
execution or enforcement of such Liens; (vi) Liens arising out of judgments
or awards with respect to which appeals or other proceedings for review are
being prosecuted in good faith and for the payment of which adequate
reserves have been provided as required by GAAP or other appropriate
provisions have been made, so long as such proceedings have the effect of
staying the execution of such judgments or awards and satisfy the
conditions for the continuation of proceedings to contest Taxes set forth
in Section 12.2 of the Participation Agreement; (vii) Permitted
Exceptions; and (viii) Lessor Liens.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company,
trust, unincorporated organization, governmental authority or any other
entity.
"Plan" shall mean at a particular time, any employee benefit plan
which is covered by ERISA and in respect of which Lessee, or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Pricing Grid" means the pricing grid attached to the Participation
Agreement as Annex B.
"Properties" shall have the meaning set forth in Section 9.15 of the
Guarantee.
"Purchase Notice" shall have the meaning set forth in Section 20.1 of
the Lease.
"Purchase Option" shall have the meaning set forth in Section 20.1 of
the Lease.
"Purchase Option Price" shall have the meaning set forth in Section
20.1 of the Lease.
"Purchasing Lender" shall have the meaning specified in Section 9.7(a)
of the Credit Agreement.
32
"Qualified Subsidiary" shall mean each Subsidiary of the Lessee
organized under a jurisdiction of the United States and having assets
located primarily in the United States.
"Register" shall have the meaning set forth in Section 9.8(a) of the
Credit Agreement.
"Release" shall mean any release, pumping, pouring, emptying,
injecting, escaping, leaching, dumping, seepage, spill, leak, flow,
discharge, disposal or emission of a Hazardous Substance.
"Rent" shall mean, collectively, the Basic Rent and the Supplemental
Rent, in each case payable under the Lease.
"Reorganization" shall mean, with respect to any Multiemployer Plan,
the condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Replacement Equipment" shall have the meaning set forth in Section 30
of the Lease.
"Replacement Equipment Closing Date" shall mean each date on which the
Lessee substitutes Equipment with Replacement Equipment pursuant to Section
30 of the Lease.
"Reportable Event" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day notice
period is waived by the PBGC.
"Required Lenders" shall mean, at any time, the Lenders the Commitment
Percentages of which aggregate at least 51%.
"Requirement of Law" shall mean, as to any Person, the Certificate of
Incorporation, By-Laws, Articles of Association or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation
or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of
its property or to which such Person or any of its property is subject.
"Requisition" shall have the meaning set forth in Section 5.2(a) of
the Participation Agreement.
33
"Responsible Officer" shall mean the chief executive officer,
president, the executive vice president, treasurer or secretary of any
Person, or, with respect to financial matters, the chief financial officer
or treasurer of the applicable Person.
"Restructuring" shall mean both (i) the restructuring of HCC and the
creation of Holdings as the corporate parent of HCC effective on December
9, 1999 pursuant to Section 251(g) of the Delaware General Corporation Law,
and (ii) the merger of HCC into a newly formed limited partnership which is
a Subsidiary of Holdings (such partnership to be the surviving entity of
such merger).
"Sale and Leaseback Transaction" shall have the meaning ascribed to it
in subsection 11.13 of the Guarantee.
"Scheduled Interest Payment Date" shall mean (a) as to any ABR Loan,
the last day of each March, June, September and December to occur while
such Loan is outstanding and the Maturity Date, (b) as to any Eurodollar
Loan having an Interest Period of three months or less, the last day of
such Interest Period and (c) as to any Eurodollar Loan having an Interest
Period longer than three months, each day which is three months or a whole
multiple thereof, after the first day of such Interest Period and the last
day of such Interest Period.
"Securities Act" shall mean the Securities Act of 1933, as amended,
together with the rules and regulations promulgated thereunder.
"Security Agreement" shall mean that certain Security Agreement dated
as of the Initial Closing Date, made by the Lessor in favor of the Agent,
as amended, supplemented or otherwise modified from time to time.
"Security Documents" shall mean the collective reference to the
Security Agreement, the Lease, the Assignment of Lease and all other
security documents hereafter delivered to the Agent granting a Lien on any
asset or assets of any Person to secure the obligations and liabilities of
the Lessor under the Credit Agreement and/or under any of the other Credit
Documents or to secure any guarantee of any such obligations and
liabilities.
"Shared Rights" shall mean the rights retained by the Lessor, but not
to the exclusion of the Agent, pursuant to Section 8.3(ii) of the Credit
Agreement.
"Shareholder Subordinated Debt" shall mean all Subordinated Debt of
the HCC under the Shareholder Subordinated Loan Agreement.
34
"Shareholder Subordinated Loan Agreement" shall mean the Exchange and
Subordinated Loan Agreement, dated as of December 23, 1996, between HCC and
the lenders parties thereto, as amended, supplemented or otherwise modified
from time to time.
"Significant Casualty" shall mean a Casualty that in the reasonable,
good faith judgment of the Lessee (as evidenced by an Officer's
Certificate) either (a) renders the related Equipment unsuitable for
continued use for its intended purpose immediately prior to such Casualty
or (b) is so substantial in nature that restoration of such Equipment to
substantially its condition as existed immediately prior to such Casualty
would be impracticable or impossible.
"Significant Condemnation" shall mean a Condemnation that in the
reasonable, good faith judgment of the Lessee (as evidenced by an Officer's
Certificate) either (a) renders the Equipment unsuitable for continued use
for its intended purpose immediately prior to such Condemnation or (b) is
such that restoration of such Equipment to substantially its condition as
existed immediately prior to such Condemnation would be impracticable or
impossible.
"Single Employer Plan" shall mean any Plan which is covered by Title
IV of ERISA, but which is not a Multiemployer Plan.
"Specified Interest Payment Date" shall mean (a) any Scheduled
Interest Payment Date and (b) any date on which interest is payable
pursuant to Section 2.8(d)(ii) of the Credit Agreement in connection with
any prepayment of the Loans.
"Statutory Reserves" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is
the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Board and any other banking
authority to which the Agent is subject for new negotiable nonpersonal time
deposits in dollars of over $100,000 with maturities approximately equal to
the applicable Interest Period. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Subordinated Debt" shall mean, as to any Person, any unsecured
Indebtedness (including, with respect to HCC, the Shareholder Subordinated
Debt, and, with respect to Holdings, the TIDES Debentures) the terms of
which provide that such Indebtedness is subordinate and junior in right of
payment to the payment of all obligations and liabilities of such Person to
the Administrative Agent and the Lenders hereunder; provided, that
35
prior to an Event of Default, Holdings and any Subsidiary may make
regularly scheduled interest payments in respect of such Indebtedness.
"Subordinated Guarantee Obligation": as to any Person, any unsecured
Guarantee Obligation the terms of which provide that such Guarantee
Obligation is subordinate and junior in right to the payment of all the
obligations and liabilities of such Person to the Agent and the Lenders.
"Subsidiary" shall mean as to any Person, a corporation, partnership
or other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership of other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in any of the Operative Agreements shall refer to a
Subsidiary or Subsidiaries of Holdings.
"Supplement to Assignment of Lease" shall mean each Supplement to
Assignment of Lease substantially in the form of Exhibit G to the
Participation Agreement together with all attachments and schedules
thereto, as the same may be supplemented, amended or modified from time to
time.
"Supplemental Rent" shall mean all amounts, liabilities and
obligations (other than Basic Rent) which Lessee assumes or agrees to pay
to Lessor or any other Person under the Lease or under any of the other
Operative Agreements (other than the Guarantee made by the Guarantors in
favor of the Agent).
"Tax Indemnitee" shall mean the Lessor, the Investors, the Trust
Company, the Agent, each Lender and their Affiliates, successors, assignees
and assigns.
"Taxes" shall have the meaning set forth in the definition of
Impositions.
"Term" shall mean the Basic Term.
"Termination Date" shall have the meaning set forth in Section 16.2(a)
of the Lease.
"Termination Notice" shall have the meaning set forth in Section
16.1(a) of the Lease.
36
"Termination Value" shall mean with respect to all Equipment, as of
any determination date, an amount equal to the sum of (i) the aggregate
outstanding principal of the Notes, accrued and unpaid interest on the
Notes and any other amounts due under the Credit Agreement, plus (ii) the
aggregate outstanding amount of the Investor Contributions and all accrued
amounts due on account of the Investor Yield plus (iii) all other amounts
due and owing to the Investors, Agent or Lenders under any Operative
Agreements. "Termination Value" with respect to a particular piece of
Equipment shall mean an amount equal to the product of the Termination
Value of all the Equipment times a fraction, the numerator of which is the
Equipment Cost allocable to the particular piece of Equipment in question
and the denominator of which is the aggregate Equipment Cost for all
Equipment.
"TIDES" shall mean the Term Income Deferrable Equity Securities
(TIDES) (SM) issued pursuant to the TIDES Declaration of Trust.
"TIDES Declaration of Trust" shall mean the Amended and Restated
Declaration of Trust, dated as of December 15, 1999, by Holdings, the
holders of interests in the Trust from time to time and the trustees
thereof.
"TIDES Debentures" shall mean the unsecured debentures junior and
subordinate in right of payment to all the obligations and liabilities of
Holdings issued pursuant to the TIDES Indenture.
"TIDES Guarantees" means (i) the Preferred Securities Guarantee
Agreement, dated as of December 15, 1999, between Holdings and Wilmington
Trust Company, as guarantee trustee, and the Common Securities Guarantee
Agreement, dated as of December 15, 1999, by Holdings.
"TIDES Indenture" shall mean the Indenture, dated as of December 15,
1999, between Holdings and Wilmington Trust Company, as trustee thereunder.
"TIDES Trust" shall mean Hanover Compressor Capital Trust, a Delaware
business trust, and its successors and assigns.
"Total Condemnation" shall mean a Condemnation that involves a taking
of Lessor's entire title to a piece of Equipment.
"Tranche A Basic Rent" shall mean the interest due on the Tranche A
Loans on any Specified Interest Payment Date pursuant to the Credit
Agreement (but not including interest on overdue amounts under Section
2.8(c) of the Credit Agreement or otherwise).
37
"Tranche A Loan" shall have the meaning set forth in Section 2.3(b) of
the Credit Agreement.
"Tranche A Note" shall have the meaning set forth in Section 2.2 of
the Credit Agreement.
"Tranche A Percentage" shall mean, with respect to a piece of
Equipment, upon the date on which the Borrower first borrows any Loans in
connection with the payment of Tranche A/B Equipment Cost for such piece of
Equipment, the maximum percentage of the Tranche A/B Equipment Cost in
respect of such piece of Equipment which may be allocated to Tranche A
Loans as of such date without causing the Lease to be treated as a capital
lease for the purposes of Statement of Financial Accounting Standards
(SFAS) No. 13, as determined in good faith by the Lessee and certified to
the Agent in accordance with the terms of the Participation Agreement;
provided, however, in no event shall such percentage be less than 82.45% of
Equipment Costs. The Tranche A Percentage for a piece of Equipment, as
determined upon the date on which the Borrower first borrows any Loans in
connection with the payment of Tranche A/B Equipment Cost for such piece of
Equipment, shall be the Tranche A Percentage for such piece of Equipment at
all times thereafter.
"Tranche A/B Equipment Cost" shall mean, with respect to each piece of
Equipment at any date of determination, an amount equal to (a) the
aggregate principal amount of Loans made on or prior to such date with
respect to such piece of Equipment minus (b) the aggregate amount of
prepayments of the Loans allocated to reduce the Tranche A/B Equipment Cost
of such piece of Equipment pursuant to Section 2.5(d) of the Credit
Agreement.
"Tranche B Basic Rent" shall mean the scheduled interest due on the
Tranche B Loans on any Payment Date pursuant to the Credit Agreement (but
not including interest on overdue amounts under Section 2.8(c) of the
Credit Agreement or otherwise).
"Tranche B Deficit" shall have the meaning specified in Section 9.2 of
the Participation Agreement.
"Tranche B Loan" shall have the meaning set forth in Section 2.3(b) of
the Credit Agreement.
"Tranche B Note" shall have the meaning set forth in Section 2.2 of
the Credit Agreement.
"Tranche B Percentage" shall mean 100% minus the Tranche A Percentage.
38
"Transaction Expenses" shall mean:
(a) the reasonable out-of-pocket expenses, disbursement or
cost of Agent and Arranger incurred in connection with the
consummation of the transactions contemplated by the Operative
Agreements;
(b) the reasonable fees and reasonable out-of-pocket expenses
of the Trust Company in connection with the transactions contemplated
by the Operative Agreements, including, without limitation, the
initial and annual Trust Company's fee and all reasonable fees and
reasonable out-of pocket expenses of the Trust Company and any
necessary co-trustees (including reasonable counsel fees and expenses)
or any successor trustee, for acting as trustee under the Trust
Agreement;
(c) the fee payable to Arranger in connection with the
transactions contemplated by the Operative Agreements;
(d) any and all Taxes (to the extent provided in Section 11.2
of the Participation Agreement) and fees incurred in recording or
filing any Operative Agreement or any other transaction document, any
xxxx of sale, security agreement, notice or financing statement with
any public office, registry or governmental agency in connection with
the transactions contemplated by the Operative Agreements;
(e) any brokers' fees (with respect to brokers retained by or
with the prior consent of HCC) and any and all stamp, transfer and
other similar taxes, fees and excises, if any, including any interest
and penalties, which are payable in connection with the acquisition of
any piece of Equipment;
(f) all reasonable out-of-pocket costs and expenses incurred
in connection with the enforcement or preservation of any rights under
the Operative Agreements, including, without limitation, the
reasonable fees and disbursements of counsel to the Agent, each Lender
and the Investors;
(g) all reasonable out-of-pocket costs and expenses incurred
in connection with any amendment, supplement or modification to the
Operative Agreements requested by the Lessee or any Guarantors and any
other documents prepared in connection therewith, and the consummation
and administration of the transactions contemplated thereby,
including, without limitation, the reasonable fees and disbursements
of counsel to the Agent and the Investors; and
39
(h) all reasonable out-of-pocket costs and expenses incurred
by the Lessor, the Lessee, the Investors or the Agent in connection
with any purchase of the Equipment by the Lessee pursuant to the
Lease.
"Transferee" shall have the meaning set forth in Section 2.12 of the
Credit Agreement.
"Trust" shall mean the Lessor.
"Trustee" shall have the meaning set forth in the Trust Agreement.
"Trust Agreement" shall mean the Trust Agreement dated as of the
Initial Closing Date between the Investors and the Trust Company as
amended, supplemented and otherwise modified from time to time in
accordance with the terms thereof and of any other Operative Agreement.
"Trust Company" shall mean Wilmington Trust Company, in its individual
capacity, and any successor trustee under the Trust Agreement in its
individual capacity.
"Trust Estate" shall have the meaning set forth in the Trust
Agreement.
"Type" shall mean, as to any Loan, its nature as an ABR Loan or a
Eurodollar Loan.
"UCC Financing Statements" shall mean collectively the Lender
Financing Statements and the Lessor Financing Statements.
"Uniform Commercial Code" and "UCC" shall mean the Uniform Commercial
Code as in effect in any applicable jurisdiction.
"Unperfected Jurisdiction" shall mean any jurisdiction for which the
Agent has not received evidence in form and substance satisfactory to it
that all filings, recordings, registrations and other actions, including
the filing of duly executed Lessee Financing Statements and Lessor
Financing Statements, necessary to perfect the Liens created by the
Security Documents, have been completed for such jurisdiction (other than
filings or other actions required pursuant to Subsection 8.8 of the
Participation Agreement).
"Unqualified Subsidiary" shall mean any Subsidiary of the Lessee other
than Qualified Subsidiaries.
40
"Wear and Tear Payment" shall have the meaning set forth in Section
2.5(b) of the Credit Agreement.
ANNEX C
PRICING GRID
Participation Agreement
Applicable
Consolidated Applicable Margin- Applicable Margin- Commitment
Indebtedness Ratio Eurocurrency Loans Base Rate Loans Fee Rate
--------------------- ------------------ ------------------ ---------------
*4.0 to 1.0 1.75% .750% .375%
**4.0 to 1.0 and
*3.0 to 1.0 1.75% .750% .375%
**3.0 to 1.0 and
*2.0 to 1.0 1.50% .500% .300%
**2.0 to 1.0 and
*1.0 to 1.0 1.25% .500% .300%
**l.0 to 1.0 1.00% 0% .250%
Changes in the Applicable Margin or in the Applicable Commitment Fee Rate
resulting from changes in the Consolidated Indebtedness Ratio shall become
effective on each date which is the start of the succeeding fiscal quarter
(each, an "Adjustment Date") for which an Applicable Margin Certificate of
Holdings is delivered to the Lenders pursuant to Section 10.2(f) of the
Guarantee (but in any event not later than the 45th day after the end of each of
each quarter of each fiscal year) and shall remain in effect until the next
change to be effected pursuant to this paragraph. If any Applicable Margin
Certificate referred to above is not delivered within the time periods specified
above, then the Consolidated Indebtedness Ratio as at the end of the fiscal
period that would have been covered thereby shall for the purposes of this
definition be deemed to be greater than 4.0 to 1.0. In addition, at all times
while an Event of Default shall have occurred and be continuing, the highest
rate set forth in each column of the Pricing Grid shall apply. Each
determination of the Consolidated Indebtedness Ratio pursuant to this Pricing
Grid shall be made for the periods and in the manner contemplated by Section
11.1(d) of the Guarantee.
* Greater Than
** Less Than or equal to
