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EXHIBIT 10.1
XXXXX
Xxxx 00, 0000
Xxxxxxx Compressor Company
00000 Xxxxx Xxxxxxx-Xxxxxxx
Xxxxxxx, Xxxxx 00000
Dear Sirs:
The Chase Manhattan Bank ("Chase") is pleased to inform you of its
agreement, subject to the terms and conditions hereof, to make loans to Hanover
Compressor Company ("HCC") from time to time through September 10, 1998, in an
aggregate principal amount not to exceed $30,000,000 at any one time outstanding
(the "Loans"). The Loans to be made under this letter agreement (the "Letter
Agreement") are in addition to loans Chase is committed to make under the Credit
Agreement, dated as of December 15, 1997, as amended by the Waiver and First
Amendment thereto, dated as of June 10, 1998 (the "Credit Agreement") among HCC,
the several Lenders party thereto and The Chase Manhattan Bank, as
Administrative Agent. Except as otherwise defined herein, all capitalized terms
used in the Credit Agreement are used herein with their defined meanings.
The Loans to be made under this Letter Agreement will be governed by the
same terms and provisions of the Credit Agreement as if Chase were the sole
Lender thereunder, the functions of the Administrative Agent were performed by
Chase and the
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Hanover Compressor Company -2- June 10, 1998
Loans were made under the Credit Agreement. The Applicable Margin for the Loans
and Applicable Commitment Fee Rate for the Bank's agreement to make the Loans
hereunder will be the rates as provided in the Credit Agreement. The Loans
under this Letter Agreement will be evidenced by the promissory note attached
hereto as Exhibit A (the "Note"). All Loans shall be paid in fall no later than
September 10, 1998 (the "Final Maturity Date'). In addition, HCC shall prepay
the Loans in full (together with all interest and any other amounts described
in subsection 3.13 of the Credit Agreement with respect to such Loans) on the
date that the initial extension of credit is made under the proposed
approximate $194,000,000 equipment lease transaction being arranged by Chase
Securities Inc. So long as the Loans are available to HCC pursuant to the terms
hereof, HCC may borrow, prepay and reborrow the Loans in whole or in part.
In furtherance of the foregoing, the provisions of the Credit Agreement
(other than subsections 2.1, 3.6, 3.14, Section 4, subsection 6.1, Section 10
and subsections 11.5(a) and 11.7(a)) are hereby incorporated by reference,
mutatis mutandis. Notwithstanding anything to the contrary contained herein, no
amendment, modification or waiver of any provision of the Credit Agreement after
the date hereof shall be effective under this Letter Agreement unless consented
to by Chase thereunder.
In order to induce Chase to enter into this Letter Agreement and make the
Loans provided for herein, HCC hereby confirms that the representations and
warranties as incorporated herein from the Credit Agreement are true and correct
in all material respects on the date hereof (except for (i) the representations
and
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Hanover Compressor Company -3- June 10, 1998
warranties or parts thereof that, by their terms, expressly relate solely to a
specific date, in which case such representations or warranties or parts
thereof shall be true and correct in all material respects as of such specific
date and (ii) to the extent updated in connection with the Waiver and First
Amendment dated as of June 10, 1998).
This Letter Agreement and Chase's obligations to make Loans hereunder shall
become effective upon Chase's receipt of (i) a copy of this Letter Agreement
and the Note executed by a Responsible Officer of HCC and each Subsidiary
Guarantor listed below and (ii) a copy of resolutions authorizing HCC's
execution, delivery and performance of this Letter Agreement and the Note.
This Letter Agreement may be executed in counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Letter Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof.
THIS LETTER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
HCC agrees to pay or reimburse Chase for all of Chase's reasonable
out-of-pocket costs and expenses incurred in connection with the preparation,
negotiation and execution of this Letter Agreement, including, without
limitation, the reasonable fees and disbursements of counsel to Chase.
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Hanover Compressor Company -4- June 10, 1998
If you are in agreement with the foregoing, please execute a copy of this
letter in the space provided below, whereupon this Letter Agreement shall
become an agreement among us as of the day and year first above written.
Very truly yours,
THE CHASE MANHATTAN BANK
By: \S\ Xxxxx X. Xxxx
--------------------------
Title: Xxxxx X. Xxxx
Vice President
Agreed to and Accepted:
HANOVER COMPRESSOR COMPANY
By: \S\ Xxxxxx Xxxxxxx
-----------------------
Title: Treasurer
Each of the undersigned hereby acknowledges receipt of the foregoing Letter
Agreement and hereby, jointly and severally, unconditionally and irrevocably
guarantees to Chase the prompt, complete payment and performance by HCC when
due (whether at stated maturity, by acceleration or otherwise) of the unpaid
principal of and interest on the Loans and all other obligations and
liabilities of HCC to Chase (including, without limitation, interest accruing
at the then applicable rate provided in the Letter Agreement after the maturity
of the Loans and interest accruing at the then applicable rate provided in the
Letter Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating
to Hcc,
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Hanover Compressor Company -5- June 10, 1998
whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding), whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred, which may
arise under, out of, or in connection with, the Letter Agreement, the Note, or
any other document made, delivered or given in connection therewith, whether on
account of principal, interest, reimbursement obligations, fees, indemnities.
costs, expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to Chase that are required to be paid by HCC).
The terms and provisions of the foregoing guarantee shall be subject to the
same terms and conditions of the Subsidiaries' Guarantee dated as of December
15, 1997 made by each of the undersigned as if such provisions were herein
incorporated mutatis mutandis, provided that the term Obligations shall refer
specifically and only to the obligations described in the immediately preceding
paragraph.
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Hanover Compressor Company June 10, 1998
IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be
duly executed and delivered by its duly authorized officer as of the day and
year first above written.
HANOVER/XXXXX, INC.
By \S\ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Treasurer
Address for Notices:
00000 Xxxxx Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Chief Financial Officer
Fax: 000-000-0000
HANOVER LAND COMPANY
By \S\ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Treasurer
Address for Notices:
00000 Xxxxx Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Chief Financial Officer
Fax: 000-000-0000
HANOVER MAINTECH, INC.
By: \S\ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Treasurer
Address for Notices:
00000 Xxxxx Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Chief Financial Officer
Fax: 000-000-0000
