EXHIBIT 10.1
EXECUTION COPY
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$200,000,000
CREDIT AGREEMENT
among
HANOVER COMPRESSOR COMPANY,
HANOVER COMPRESSION INC.,
THE CHASE MANHATTAN BANK
as ADMINISTRATIVE AGENT,
and
THE SEVERAL LENDERS PARTIES HERETO
Dated as of December 15, 1997
as
amended and restated through March 13, 2000
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TABLE OF CONTENTS
Page
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" ............................Aggregate Outstanding Extensions of Credit 2
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" ...........................................................Application 3
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" ...........................................Commercial Letter of Credit 4
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" ............................................................Commitment 4
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" ........................................................Issuing Lender 12
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" ........................................................L/C Commitment 12
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" ..................................................L/C Fee Payment Date 12
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" .......................................................L/C Obligations 12
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" ......................................................L/C Participants 12
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" .....................................................Letters of Credit 12
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" ..............................................Reimbursement Obligation 15
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" ..............................................Standby Letter of Credit 16
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Page
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-ii-
Page
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Annexes
A Pricing Grid
Schedules
Schedule 1.1A Lenders and Commitments
Schedule 5.2 Material Changes
Schedule 5.4 Required Consents
Schedule 5.14 Subsidiaries
Schedule 5.16 Environmental
Schedule 8.2(c) Existing Indebtedness
Schedule 8.3(l) Existing Liens
Schedule 8.3(n) Additional Existing Liens
Schedule 8.3(t) Additional Liens
Schedule 8.6(i) Lease of Assets
Schedule 8.12 Affiliate Transactions
Schedule 8.13 Sale and Leaseback Transactions
Exhibits
Exhibit A Form of Revolving Credit Note
Exhibit B Subsidiaries' Guarantee
Exhibit C Form of Assignment and Acceptance
Exhibit D Holdings Guarantee
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CREDIT AGREEMENT, dated as of December 15, 1997 (this "Agreement"),
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as amended and restated through March 13, 2000, among Hanover Compressor
Company, a Delaware corporation ("Holdings"), Hanover Compression Inc. ("HCC")
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the several banks and other financial institutions from time to time parties to
this Agreement (the "Lenders") and The Chase Manhattan Bank, a New York banking
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corporation (formerly known as Chemical Bank), as agent for the Lenders
hereunder (in such capacity, the "Administrative Agent").
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W I T N E S S E T H :
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WHEREAS, Holdings and HCC are parties to the Credit Agreement, dated
as of December 15, 1997 (as heretofore amended, supplemented or otherwise
modified, the "Existing Credit Agreement"), with the several banks and other
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financial institutions from time to time parties thereto and The Chase Manhattan
Bank, as agent; and
WHEREAS, Holdings and HCC propose to structure a lease financing (the
"Financing") of certain equipment; and
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WHEREAS, in connection with the Financing, Holdings and HCC have
requested that the Existing Credit Agreement be amended and restated;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the parties hereto agree that on the Closing Date,
as provided in subsection 11.16, the Existing Credit Agreement shall be amended
and restated in its entirety as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
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shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if necessary,
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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
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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
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(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-
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Month Secondary CD Rate" shall mean, for any day, the secondary market rate
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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
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Reserve Lender 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 Administrative
Agent from three New York City negotiable certificate of deposit dealers of
recognized standing selected by it; and "Federal Funds Effective Rate"
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shall mean, for any day, the 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 Administrative
Agent from three federal funds brokers of recognized standing selected by
it. If for any reason the Administrative 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 Administrative
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": Loans the rate of interest applicable to which is based
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upon the ABR.
Adjustment Date": as defined in the Pricing Grid.
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"Adjusted EBITDA Companies": Holdings and each of its wholly-owned
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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 8.1(c).
"Affiliate": as to any Person, any other Person (other than a
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Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. 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.
"Aggregate Outstanding Extensions of Credit": as to any Lender at any
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time, an amount equal to the sum of (a) the aggregate principal amount of
all Loans made by such
Lender then outstanding and (b) such Lender's Commitment Percentage of the
L/C Obligations then outstanding.
"Agreement": this Credit Agreement, as amended, supplemented or
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otherwise modified from time to time.
"Amended and Restated Effective Date": the date on which all the
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conditions precedent specified in Section 6.2 shall have been satisfied.
"Applicable Commitment Fee Rate": for each day, the rate per annum
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determined pursuant to the Pricing Grid.
"Applicable Margin": for each day, the rate per annum determined
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pursuant to the Pricing Grid.
"Applicable Margin Certificate": as defined in subsection 7.2(f).
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"Application": an application, in such form as the Issuing Lender may
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specify from time to time, requesting the Issuing Lender to open a Letter
of Credit.
"Available Commitment": as to any Lender, at any time, an amount equal
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to the excess, if any, of (a) such Lender's Commitment over (b) such
Lender's Aggregate Outstanding Extensions of Credit.
"Benefitted Lender": as defined in subsection 11.7(a).
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"Borrowing Date": any Business Day specified in a notice pursuant to
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subsection 2.3, as a date on which HCC requests the Lenders to make Loans
hereunder.
"Business Day": a day other than a Saturday, Sunday or other day on
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which commercial banks in New York City are authorized or required by law
to close.
"Capital Stock": any and all shares, interests, participations or
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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.
"Cash Equivalents": (a) securities with maturities of one year or less
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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
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Services, Inc. ("Moody's"), (e) securities with maturities of one year or
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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.
"C/D Assessment Rate": for any day the net annual assessment rate
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(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
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made in Dollars at offices of Chase in the United States.
"C/D Reserve Percentage": for any day as applied to any calculation of
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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.
"Chase": The Chase Manhattan Bank, a New York banking corporation.
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"Closing Date": December 15, 1997.
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"Code": the Internal Revenue Code of 1986, as amended from time to
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time.
"Commercial Letter of Credit": as defined in subsection 4.1(b)(i)(2).
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"Commitment": as to any Lender, the obligation of such Lender to make
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Loans to and/or issue or participate in Letters of Credit issued on behalf
of HCC hereunder in an aggregate principal and/or face amount at any one
time outstanding not to exceed the amount set forth opposite such Lender's
name on Schedule 1.1A, as such amount may be reduced from time to time in
accordance with the terms of this Agreement; collectively, as to all of the
Lenders, the "Commitments".
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"Commitment Percentage": as to any Lender at any time, the percentage
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of the aggregate Commitments then constituted by such Lender's Commitment.
"Commitment Period": the period from and including the date hereof to
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but not including the Final Maturity Date or such earlier date on which the
Commitments shall terminate as provided herein.
"Commonly Controlled Entity": an entity, whether or not incorporated,
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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.
"Consolidated Adjusted EBITDA": for any period, the sum of
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Consolidated EBITDA for the Adjusted EBITDA Companies.
"Consolidated Capitalization": at a particular date, as to any Person,
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the sum of (a) Consolidated Net Worth and (b) the amount of Consolidated
Indebtedness at such date.
"Consolidated Earnings Before Interest and Taxes": for any period,
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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": for any period, with respect to any Person, the
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sum of (a) Consolidated Earnings Before Interest and Taxes for such Person
for such period plus, (b) all amounts attributable to depreciation and
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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
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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
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such period (to the extent such amounts have been included in determining
Consolidated Earnings Before Interest and Taxes for such period).
"Consolidated Indebtedness": at a particular date, as to any Person,
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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": as defined in subsection 8.1(d).
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"Consolidated Interest Expense": for any period, with respect to any
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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, payments by such Person
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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 Investors in connection
with the Equipment Lease Transactions.
"Consolidated Lease Expense": for any period as to any Person, the
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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": for any period as to any Person, the
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consolidated net income (or loss) of such Person and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP, provided that
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for purposes of determining Consolidated Net Income, payments under
Equipment Leases attributable to (i) Equipment Lease Tranche A Loans and
Equipment Lease Tranche B Loans and (ii) the yield to the Investors in
connection with the Equipment Lease Transactions shall be considered
interest expense.
"Consolidated Net Worth": at a particular date, as to any Person, the
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amount which would 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": as to any Person, any provision of any
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security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Credit Parties": the collective reference to (i) Holdings, HCC, HMI,
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Hanover/Xxxxx and the Real Estate Subsidiary [other subs?] and (ii) from
time to time any other Subsidiary of Holdings for so long as such
Subsidiary guarantees the Loans and other obligations of HCC hereunder and
under the Notes, and which guarantees shall be under documents
substantially similar to the Guarantees executed on the Closing Date.
"Current Ratio": at a particular date, as to any Person and its
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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,
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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": any of the events specified in Section 9, whether or not
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any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Derivatives": any swap, hedge, cap, collar, or similar arrangement
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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
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leaseback, assignment, conveyance, transfer or other disposition thereof.
The terms "Dispose" and "Disposed of" shall have correlative meanings.
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"Dollars" and "$": dollars in lawful currency of the United States of
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America.
"Environmental Laws": any and all Federal, state, local or municipal
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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 Materials, as
now or may at any time hereafter be in effect.
"Equipment Guarantees": (i) the Guarantee dated as of July 22, 1998
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(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 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, and certain of their Subsidiaries listed on the signature
pages thereto, in favor of Hanover Equipment Trust 1999A and The Chase
Manhattan Bank, as agent and (iii) the Guarantee dated as of March 8, 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 2000A and The Chase
Manhattan Bank, as agent.
"Equipment Lease Credit Agreements": (i) the Credit Agreement dated as
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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 8, 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, the Industrial Bank of Japan, LTD., as syndication
agent, The Bank of Nova Scotia, a documentation agent and The Chase
Manhattan Bank, as agent.
"Equipment Lease Participation Agreements": (i) the Participation
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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 8, 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.
" Equipment Lease Tranche A Loans": the loans to be made pursuant to
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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": the loans to be made pursuant to
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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": the transactions whereby HCC leases
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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
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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 8, 2000
(as amended, supplemented or otherwise modified from time to time), between
Hanover Equipment Trust 2000A, as lessor, and HCC, as lessee.
" ERISA": the Employee Retirement Income Security Act of 1974, as
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amended from time to time.
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" Eurocurrency Reserve Requirements": for any day as applied to a
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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 of Governors of the
Federal Reserve System 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 such Board) maintained by a member bank of such System.
" Eurodollar Base Rate": with respect to each day during each Interest
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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": Loans the rate of interest applicable to which is
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based upon the Eurodollar Rate.
" Eurodollar Rate": with respect to each day during each Interest
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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
" Event of Default": any of the events specified in Section 9, provided
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that any requirement for the giving of notice, the lapse of time, or both,
or any other condition, has been satisfied.
" Existing Credit Agreement": as defined in the recitals hereto.
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" Final Maturity Date": December 15, 2002.
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" Financing Lease": any lease of property, real or personal, the
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obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee, but excluding
all obligations with respect to any Equipment Leases.
" GAAP": generally accepted accounting principles in the United States
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of America consistent with those utilized in preparing the audited
financial statements referred to in subsection 6.1.
" Governmental Authority": any nation or government, any state or other
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political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
""
" Guarantee Obligation": as to any Person (the "guaranteeing person"),
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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
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(the "primary obligor") in any manner, whether directly or indirectly,
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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 Guarantee Obligation
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shall not include endorsements of instruments for deposit or collection in
the ordinary course of business. The amount of any Guarantee 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 Guarantee 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 Guarantee 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 Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined
by Holdings, as the case may be, in good faith.
" Guarantees": collectively, the Subsidiaries' Guarantee, the Holdings
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Guarantee and any other guarantees of the Loans and the other obligations
of HCC hereunder.
" Hanover Acquisition": Hanover Acquisition Corp., a Texas corporation.
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" Hazardous Materials": any hazardous materials, hazardous waste,
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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": Hanover Measurement Services Company, L.P., a Delaware limited
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partnership, and it's successors and assigns.
" HMS Entities": HMS, Meter Acquisition Company LP, LLLP, a Delaware
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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": the transactions described in the Common Agreement,
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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": Hanover Compressor Company, a Delaware corporation, the
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parent company of HCC.
" Holdings Guarantee": the Holdings Guarantee made by Holdings in favor
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of the Administrative Agent for the benefits of the Lenders, substantially
in the form of Exhibit D, as amended, supplemented or otherwise modified
from time to time.
" HPL": Houston Pipe Line Company, a Delaware corporation, and its
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successors and assigns.
" Indebtedness": of any Person at any date, (a) all indebtedness of
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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 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 liabilities": as defined in subsection 11.5.
-----------------------
" Insolvency": with respect to any Multiemployer Plan, the condition
----------
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
" Insolvent": pertaining to a condition of Insolvency.
---------
" Intellectual Property": as defined in subsection 5.9.
---------------------
" Interest Payment Date": (a) as to any ABR Loan, the last day of each
---------------------
March, June, September and December to occur while such Loan is
outstanding, (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.
" Interest Period": 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 HCC 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
next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three or six months thereafter, as selected by HCC by
irrevocable notice to the Administrative Agent not less than three
Working Days prior to the last day of the then current Interest Period
with respect thereto;
provided that, all of the foregoing provisions relating to the
--------
Interest Periods are subject to the following:
(i) if an Interest Period pertaining to a Eurodollar Loan
would otherwise end on a day that is not a Working Day, such
Interest Period shall be extended to the next succeeding Working
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 Working
Day;
(ii) any Interest Period that would otherwise extend beyond
the Final Maturity Date shall end on the Final Maturity Date;
(iii) any Interest Period pertaining to a Eurodollar Loan
that begins on the last Working 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 Working Day of a calendar month; and
(iv) HCC shall select Interest Periods so as not to require
a payment or prepayment of any Eurodollar Loan during an Interest
Period for such Loan.
" Investments": as defined in subsection 8.10.
-----------
" Investors": the parties that hold the beneficial interest in the
---------
respective Lessors.
" Issuing Lender": Chase, in its capacity as issuer of any Letter of
--------------
Credit.
" L/C Commitment": $25,000,000.
--------------
" L/C Fee Payment Date": the last day of each March, June, September
--------------------
and December.
""
" L/C Obligations": 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).
" L/C Participants": the collective reference to all the Lenders other
----------------
than the Issuing Lender.
" Lessors": the lessors under the Equipment Leases.
-------
" Letters of Credit": as defined in subsection 4.1(a).
-----------------
" Lien": 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).
" Loan": any loan made by any Lender pursuant to this Agreement.
----
" Loan Documents": this Agreement, the Notes, the Applications and the
--------------
Guarantees.
" MAC": Meter Acquisition Company LP, LLLP, a Delaware registered
---
limited liability limited partnership, and its successors and assigns.
" Majority Lenders": at any time, Lenders the Commitment Percentages of
----------------
which aggregate more than 50%.
" Material Adverse Effect": a material adverse effect on (a) the
-----------------------
business, operations, property or condition (financial or otherwise) of
Holdings and its Subsidiaries taken as a whole, (b) the ability of Holdings
or any of the Subsidiaries of Holdings to perform their respective
obligations under this Agreement, the Notes, or the Guarantees, or (c) the
validity or enforceability of this Agreement or any of the Notes or any
Application or the rights or remedies of the Administrative Agent or the
Lenders hereunder or thereunder.
" Material Subsidiary": at any particular date, each Subsidiary of
-------------------
Holdings for which the aggregate value of all assets owned by such
Subsidiary is greater than $5,000,000.
" Multiemployer Plan": a Plan which is a multiemployer plan as defined
------------------
in Section 4001(a)(3) of ERISA.
""
" Non-Recourse Indebtedness": Indebtedness (i) as to which neither
-------------------------
Holdings 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 Holdings 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 Holdings or its Qualified
Subsidiaries (other than the Capital Stock of an Unqualified Subsidiary).
" Note": any note made by HCC to any Lender pursuant to this Agreement;
----
collectively the "Notes".
-----
" Obligations": the unpaid principal of and interest on (including
-----------
interest accruing after the maturity of the Loans and Reimbursement
Obligations and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to HCC, whether or not a claim
for post-filing or post-petition interest is allowed in such proceeding)
the Loans and all other obligations and liabilities of HCC to the
Administrative Agent or to any Lender, whether direct or indirect, absolute
or contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, this Agreement, any
other Loan Document, the Letters of Credit or any other document made,
delivered or given in connection herewith or therewith, whether on account
of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including all fees, charges and disbursements of counsel
to the Administrative Agent or to any Lender that are required to be paid
by the Borrower pursuant hereto) or otherwise.
" Participant": as defined in subsection 11.6(b).
-----------
" PBGC": the Pension Benefit Guaranty Corporation established pursuant
----
to Subtitle A of Title IV of ERISA.
""
" Permitted Business Acquisition": 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 subsection
7.9 shall have been taken, (d)(i) Holdings shall be in compliance, on a pro
---
forma basis after giving effect to such acquisition or formation, with the
-----
covenants contained in subsection 8.1 recomputed as at the last day of the
most recently ended fiscal quarter of Holdings as if such acquisition had
occurred on the first day of each relevant period for testing such
compliance, and Holdings shall have delivered to the Administrative 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
Guarantee Obligations (except for Indebtedness and Guarantee Obligations
permitted by subsections 8.2 and 8.4), and (e) any acquired or newly formed
Subsidiary (including Subsidiaries thereof) shall not have (except for
Indebtedness and Guarantee Obligations permitted by subsections 8.2 and
8.4) any material liabilities (contingent or otherwise), including, without
limitation, liabilities under Environmental Laws and liabilities with
respect to any Plan, and the Borrower shall have delivered to the
Administrative Agent a certificate, signed by a Responsible Officer, that
to the best of such officer's knowledge, no such material liabilities
exist.
" Person": an individual, partnership, corporation, limited liability
------
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.
" Plan": at a particular time, any employee benefit plan which is
----
covered by ERISA and in respect of which HCC, 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": the pricing grid attached hereto as Annex A.
------------
" Properties": as defined in subsection 5.16.
----------
" Purchasing Lenders": as defined in subsection 11.6(c).
------------------
" Qualified Subsidiary": each Subsidiary of Holdings organized under a
--------------------
jurisdiction of the United States and having assets located primarily in
the United States.
" Register": as defined in subsection 11.6(d).
--------
" Regulation U": Regulation U of the Board of Governors of the Federal
------------
Reserve System.
" Reimbursement Obligation": the obligation of HCC to reimburse the
------------------------
Issuing Lender pursuant to subsection 4.5(a) for amounts drawn under
Letters of Credit.
" Reorganization": with respect to any Multiemployer Plan, the
--------------
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
""
" Reportable Event": any of the events set forth in Section 4043(b) of
----------------
ERISA, other than those events as to which the thirty day notice period is
waived by the PBGC.
" Required Lenders": at any time, Lenders the Commitment Percentages of
----------------
which aggregate at least 60%.
" Requirement of Law": as to any Person, the Certificate of
------------------
Incorporation and By-laws 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.
" Responsible Officer": the chief executive officer, president, the
-------------------
executive vice president, treasurer or secretary of the applicable Credit
Party, or, with respect to financial matters, the chief financial officer
or treasurer of the applicable Credit Party.
" Restructuring": includes 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).
" Revolving Credit Loans": as defined in subsection 2.1.
----------------------
" Sale and Leaseback Transaction": as defined in subsection 8.13.
------------------------------
" Shareholder Subordinated Debt": shall mean all Subordinated Debt of
-----------------------------
HCC under the Shareholder Subordinated Loan Agreement.
" Shareholder Subordinated Loan Agreement": shall mean the Exchange and
---------------------------------------
Subordinated Loan Agreement, dated as of December 23, 1996, between
Holdings and the lenders parties thereto, as amended, supplemented or
otherwise modified from time to time.
" Single Employer Plan": any Plan which is covered by Title IV of
--------------------
ERISA, but which is not a Multiemployer Plan.
" Standby Letter of Credit": as defined in paragraph 4.1(b)(i)(A).
------------------------
""
" Subordinated Debt": 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 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.
" Subsidiaries' Guarantee": the Subsidiaries' Guarantee made by Hanover
-----------------------
General Holdings, Inc., Hanover Compressor Limited Holdings, LLC, Hanover
Maintech Limited Partnership, Hanover/Xxxxx Limited Partnership, Hanover
Land Limited Partnership, Hanover Maintech Limited Partnership in favor of
the Administrative Agent for the benefit of the Lenders, substantially in
the form of Exhibit B, as amended, supplemented or otherwise modified from
time to time.
" Subsidiary": 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 this Agreement shall refer to a Subsidiary or
Subsidiaries of Holdings.
" TIDES": shall mean the Term Income Deferrable Equity Securities
-----
(TIDES)[_] 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": 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": Hanover Compressor Capital Trust, a Delaware business
-----------
trust, and its successors and assigns.
" Tranche": the collective reference to Eurodollar Loans the 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).
" Transferee": as defined in subsection 11.6(f).
----------
" Type": as to any Loan, its nature as an ABR Loan or a Eurodollar
----
Loan.
" Uniform Customs": the Uniform Customs and Practice for Documentary
---------------
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended, revised or replaced from time to time.
" Unqualified Subsidiary": any Subsidiary of Holdings other than
----------------------
Qualified Subsidiaries.
" Working Day": any Business Day on which dealings in foreign
-----------
currencies and exchange between banks may be carried on in London, England.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
-----------------------------
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Notes or any certificate or other document made or delivered
pursuant hereto.
(a) As used herein and in the Notes, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to HCC and
its Subsidiaries not defined in subsection 1.1 and accounting terms partly
defined in subsection 1.1, to the extent not defined, shall have the respective
meanings given to them under GAAP.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(e) For purposes of determining compliance with the covenants
contained in Subsection 7.1 and 8.1, the term "Holdings" shall be deemed a
reference to HCC for any period which is prior to December 9, 1999, covered by
such covenants.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the terms and
----------------------------
conditions hereof, each Lender severally agrees to make revolving credit loans
("Revolving Credit Loans") to HCC from time to time during the Commitment Period
----------------------
in an aggregate principal amount at any one time outstanding which, when added
to such Lender's Commitment Percentage of the then outstanding L/C Obligations,
does not exceed the amount of such Lender's Commitment. During the Commitment
Period, HCC may use the Commitments by borrowing, prepaying the Revolving Credit
Loans in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as determined
by HCC and notified to the Administrative Agent in accordance with subsections
2.2 and 3.5, provided that no Revolving Credit Loan shall be made as a
--------
Eurodollar Loan after the day that is one month prior to the Final Maturity
Date.
(c) Revolving Credit Loans made under (and as defined in) the
Existing Credit Agreement prior to the Amended and Restated Effective Date and
outstanding on such date shall constitute Revolving Credit Loans hereunder.
2.2 Procedure for Revolving Credit Borrowing. HCC may borrow under
----------------------------------------
the Commitments during the Commitment Period on any Working Day, if all or any
part of the requested Revolving Credit Loans are to be initially Eurodollar
Loans, or on any Business Day,
otherwise, provided that HCC shall give the Administrative Agent irrevocable
--------
notice (which notice must be received by the Administrative Agent prior to 11:00
A.M., New York City time, (a) three Working Days prior to the requested
Borrowing Date, if all or any part of the requested Revolving Credit Loans are
to be initially Eurodollar Loans, or (b) one Business Day prior to the requested
Borrowing Date, otherwise), specifying (i) the amount to be borrowed, (ii) the
requested Borrowing Date, (iii) whether the borrowing is to be of Eurodollar
Loans, ABR Loans, or a combination thereof and (iv) if the borrowing is to be
entirely or partly of Eurodollar Loans, the amount of such Type of Loan and the
length of the initial Interest Period therefor. Each borrowing under the
Commitments shall be in an amount equal to (x) in the case of ABR Loans,
$200,000 or a whole multiple of $100,000 in excess thereof (or, if the then
Available Commitments are less than $200,000, such lesser amount) and (y) in the
case of Eurodollar Loans, $500,000 or a whole multiple of $100,000 in excess
thereof. Upon receipt of any such notice from HCC, the Administrative Agent
shall promptly notify each Lender thereof. Each Lender will make the amount of
its pro rata share of each borrowing available to the Administrative Agent for
the account of HCC at the office of the Administrative Agent specified in
subsection 11.2 prior to 12:00 noon, New York City time, on the Borrowing Date
requested by HCC in funds immediately available to the Administrative Agent.
Such borrowing will then be made available to HCC by the Administrative Agent
crediting the account of HCC on the books of such office with the aggregate of
the amounts made available to the Administrative Agent by the Lenders and in
like funds as received by the Administrative Agent.
SECTION 3. INTEREST RATE PROVISIONS, FEES, CONVERSIONS AND PAYMENTS
3.1 Interest Rates and Payments Dates. (a) Each Eurodollar Loan
---------------------------------
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(a) Each ABR Loan shall bear interest at a rate per annum equal to
ABR plus the Applicable Margin.
(b) If all or a portion of (i) the principal amount of any Loan or
(ii) any interest payable thereon shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum which is (x) in the case of overdue principal, 2%
above the rate that would otherwise be applicable thereto pursuant to the
foregoing provisions of this subsection or (y) in the case of overdue interest,
to the extent permitted by law, 2% above the rate described in paragraph (b) of
this subsection, in each case from the date of such non-payment until such
amount is paid in full (as well after as before judgment).
(c) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this
subsection shall be payable on demand.
3.2 Commitment Fee; Other Fees and Compensation. (a) HCC agrees
-------------------------------------------
to pay to the Administrative Agent for the account of each Lender a commitment
fee for the period from and including the first day of the Commitment Period to
the Final Maturity Date, computed at the rate per annum equal to the Applicable
Commitment Fee Rate on the average daily amount of
the Available Commitment of such Lender during the period for which payment is
made. Such commitment fee shall be payable quarterly in arrears on the last day
of each March, June, September and December and on the Final Maturity Date or
such earlier date as the Commitments shall terminate as provided herein,
commencing on December 31, 1997.
(a) HCC agrees to pay to the Administrative Agent the fees and
other compensation, in the amounts and on the dates specified in the fee letter
separately agreed to between HCC and the Administrative Agent.
3.3 Termination or Reduction of the Commitments. HCC shall have
-------------------------------------------
the right during the Commitment Period, upon not less than five Business Days'
notice to the Administrative Agent by HCC to terminate the Commitments or, from
time to time, to reduce the amount of the Commitments, provided that no such
--------
termination or reduction shall be permitted if, after giving effect thereto and
to any prepayments of the Revolving Credit Loans made on the effective date
thereof, the aggregate principal amount of the Revolving Credit Loans then
outstanding, when added to the then outstanding L/C Obligations, would exceed
the Commitments then in effect. Any such reduction shall be in an amount equal
to $100,000 or a whole multiple thereof and shall reduce permanently the
Commitments then in effect.
3.4 Optional Prepayments and other Repayments. (a) HCC may at any
-----------------------------------------
time and from time to time, prepay the Loans, in whole or in part, without
premium or penalty, upon at least three Working Days' irrevocable notice, in the
case of Eurodollar Loans, and one Business Day's irrevocable notice, in the case
of ABR Loans, by HCC to the Administrative Agent, specifying the date and amount
of prepayment and whether the prepayment is of Eurodollar Loans, ABR Loans or a
combination thereof, and if of a combination thereof, the amount allocable to
each. If any such prepayment with respect to a Eurodollar Loan is made on a day
other than the last day of an Interest Period, such prepayment shall be
accompanied by any amounts required to be paid pursuant to subsection 3.13.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each Lender thereof. If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein. Partial
prepayments shall be in an aggregate principal amount of $200,000 or a whole
multiple of $100,000 in excess thereof.
(a) HCC shall repay at any time, and there shall be due and payable
at such time, such principal amount (together with accrued interest thereon), if
any, of outstanding Revolving Credit Loans as may be necessary so that, after
such repayment, the aggregate unpaid principal amount of Revolving Credit Loans
does not exceed the Commitments in effect at such time after giving effect to
any reduction in the Commitments pursuant to subsection 3.3.
3.5 Conversion and Continuation Options. (a) HCC may elect from
-----------------------------------
time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
--------
made on the last day of an Interest Period with respect thereto. HCC may elect
from time to time to convert ABR Loans to Eurodollar Loans by giving the
Administrative Agent at least three Working Days' prior irrevocable notice of
such election. Any such notice of conversion to Eurodollar Loans shall specify
the length of the initial Interest Period or Interest Periods therefor. Upon
receipt of any such notice the Administrative Agent
shall promptly notify each Lender thereof. All or any part of outstanding
Eurodollar Loans and ABR Rate Loans may be converted as provided herein,
provided that (i) no Loan may be converted into a Eurodollar Loan when any Event
--------
of Default has occurred and is continuing and the Administrative Agent has
determined that such a conversion is not appropriate, (ii) any such conversion
may only be made if, after giving effect thereof, subsection 3.6 shall not have
been contravened and (iii) no Loan may be converted into a Eurodollar Loan after
the date that is one month prior to the Final Maturity Date.
(a) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by HCC
giving notice to the Administrative Agent, in accordance with the applicable
provisions of the term "Interest Period" set forth in subsection 1.1, of the
length of the next Interest Period to be applicable to such Loans, provided that
--------
no Eurodollar Loan may be continued as such (i) when any Event of Default has
occurred and is continuing and the Administrative Agent has determined that such
a continuation is not appropriate, (ii) if, after giving effect thereto,
subsection 3.6 would be contravened or (iii) after the date that is one month
prior to the Final Maturity Date and provided, further, that if HCC shall fail
-------- -------
to give any required notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding proviso such Loans shall
be automatically converted to ABR Loans on the last day of such then expiring
Interest Period.
3.6 Minimum Amounts. All borrowings, conversions and continuations
---------------
of Loans hereunder and all selections of Interest Periods hereunder shall be in
such amounts and be made pursuant to such elections so that, after giving effect
thereto, the aggregate principal amount of the Loans comprising each Eurodollar
Tranche shall be equal to $500,000 or a whole multiple of $100,000 in excess
thereof.
3.7 Computation of Interest and Fees. (a) Commitment fees and
--------------------------------
interest on ABR Loans shall be calculated on the basis of a 365- (or 366-, as
the case may be) day year for the actual days elapsed, and interest on
Eurodollar Loans shall be calculated on the basis of a 360 day year for the
actual days elapsed. The Administrative Agent shall as soon as practicable
notify HCC and the Lenders of each determination of a Eurodollar Rate. Any
change in the interest rate on a Loan resulting from a change in the ABR, the
Eurocurrency Reserve Requirements, the C/D Assessment Rate or the C/D Reserve
Percentage shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify HCC and the Lenders of the effective date and the amount of
each such change in interest rate.
(a) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on HCC and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the HCC, deliver to HCC a
statement showing the quotations used by the Administrative Agent in determining
any interest rate pursuant to subsection 3.1(a).
3.8 Inability to Determine Interest Rate. In the event that prior
------------------------------------
to the first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon HCC absent manifest error)
that, by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or
(b) the Administrative Agent shall have received notice from the
Majority Lenders that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the costs to such
Lenders (as conclusively certified by such Lenders) of making or maintaining
their affected Loans during such Interest Period,
the Administrative Agent shall give telex, telecopy or telephonic notice thereof
to HCC and the Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (y) any Loans that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
converted to or continued as ABR Loans and (z) any outstanding Eurodollar Loans
shall be converted, on the first day of such Interest Period, to ABR Loans.
Until such notice has been withdrawn by the Administrative Agent, no further
Eurodollar Loans shall be made or continued as such, nor shall HCC have the
right to convert Loans to Eurodollar Loans.
3.9 Pro Rata Treatment and Payments. (a) Each borrowing by HCC
-------------------------------
from the Lenders hereunder, each payment by HCC on account of any commitment fee
hereunder and any reduction of the Commitments of the Lenders shall be made pro
rata according to the respective Commitment Percentages of the Lenders. Each
payment (including each prepayment) by HCC on account of principal of and
interest on the Loans shall be made pro rata according to the respective
outstanding principal amounts of the Loans then held by the Lenders. All
payments (including prepayments) to be made by HCC hereunder, whether on account
of principal, interest, fees or otherwise, shall be made without set off or
counterclaim and shall be made prior to 12:00 Noon, New York City time, on the
due date thereof to the Administrative Agent, for the account of the Lenders, at
the Administrative Agent's office specified in subsection 11.2 in Dollars and in
immediately available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension. If any payment on a Eurodollar Loan becomes due and payable on a day
other than a Working Day, the maturity thereof shall be extended to the next
succeeding Working Day unless the result of such extension would be to extend
such payment into another calendar month, in which event such payment shall be
made on the immediately preceding Working Day.
(a) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a Borrowing Date that such Lender will not make
the amount that would constitute its Commitment Percentage of the borrowing on
such date available to the Administrative Agent, the Administrative Agent may
assume that such Lender has made such amount available to the Administrative
Agent on such Borrowing Date, and the Administrative Agent may, in reliance upon
such assumption, make available to HCC a corresponding amount. If such amount is
made available to the Administrative Agent on a date after such Borrowing
Date, such Lender shall pay to the Administrative Agent on demand an amount
equal to the product of (i) the daily average Federal funds rate during such
period as quoted by the Administrative Agent, times (ii) the amount of such
Lender's Commitment Percentage of such borrowing, times (iii) a fraction the
numerator of which is the number of days that elapse from and including such
Borrowing Date to the date on which such Lender's Commitment Percentage of such
borrowing shall have become immediately available to the Administrative Agent
and the denominator of which is 360. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this subsection
shall be conclusive in the absence of manifest error. If such Lender's
Commitment Percentage of such borrowing is not in fact made available to the
Administrative Agent by such Lender within three Business Days of such Borrowing
Date, the Administrative Agent shall be entitled to recover such amount with
interest thereon at the rate per annum applicable to such Loan, on demand, from
HCC and any such payment by HCC shall not constitute a waiver of any right or
remedy HCC may have with respect to any such Lender.
3.10 Illegality. Notwithstanding any other provision herein, if any
----------
change in any Requirement of Law or in the interpretation or application thereof
shall make it unlawful for any Lender to make or maintain Eurodollar Loans as
contemplated by this Agreement, (a) the commitment of such Lender hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert ABR Loans
to Eurodollar Loans shall forthwith be canceled and (b) such Lender's Loans then
outstanding as Eurodollar Loans, if any, shall be converted automatically to ABR
Loans on the respective last days of the then current Interest Periods with
respect to such Loans or within such earlier period as required by law. If any
such conversion of a Eurodollar Loan occurs on a day which is not the last day
of the then current Interest Period with respect thereto, HCC shall pay to such
Lender such amounts, if any, as may be required pursuant to subsection 3.13.
3.11 Requirements of Law. (a) In the event that any change in any
-------------------
Requirement of Law as in existence on the date hereof or in the interpretation
or application thereof or compliance by any Lender with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement, any Note, any Letter of Credit, any Application
or any Eurodollar Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for taxes covered by
subsection 3.12 and changes in the rate of tax on the overall net income of
such Lender or tax imposed in lieu of net income taxes);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, HCC shall promptly pay such Lender, upon its
demand, any additional amounts necessary to compensate such Lender for such
increased cost or reduced amount receivable. If any Lender becomes entitled to
claim any additional amounts pursuant to this subsection, it shall promptly
notify HCC, through the Administrative Agent, by delivery of a certificate
setting forth the amounts due and a description of the event by reason of which
it has become so entitled. A certificate as to any additional amounts payable
pursuant to this subsection submitted by such Lender, through the Administrative
Agent, to HCC shall be conclusive in the absence of manifest error. This
covenant shall survive the termination of this Agreement and all other amounts
payable hereunder.
(b) In the event that any Lender shall have determined that any
change in any Requirement of Law as in existence on the date hereof regarding
capital adequacy or in the interpretation or application thereof or compliance
by such Lender or any corporation controlling such Lender with any request or
directive regarding capital adequacy (whether or not having the force of law)
from any Governmental Authority made subsequent to the date hereof does or shall
have the effect of reducing the rate of return on such Lender's or such
corporation's capital as a consequence of its obligations hereunder or under any
Letter of Credit to a level below that which such Lender or such corporation
could have achieved but for such change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to HCC (with a copy to the Administrative Agent) of a
written request therefore, HCC shall pay to such Lender such additional amount
or amounts as will compensate such Lender for such reduction.
3.12 Taxes. (a) All payments made by HCC under this Agreement
-----
shall be made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority,
excluding, in the case of the Administrative Agent and each Lender, net income
taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the
Administrative Agent or such Lender, as the case may be, as a result of a
present or former connection between the jurisdiction of the government or
taxing authority imposing such tax and the Administrative Agent or such Lender
(excluding a connection arising solely from the Administrative Agent or such
Lender having executed, delivered, performed its obligations or received a
payment under, or enforced, this Agreement) or any political subdivision or
taxing authority thereof or therein (all such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions and withholdings being hereinafter
called "Taxes"). If any Taxes are required to be withheld from any amounts
-----
payable to the Administrative Agent or any Lender hereunder, the amounts so
payable to the Administrative Agent or such Lender shall be increased to the
extent necessary to yield to the Administrative Agent or such Lender (after
payment of all Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts specified in this Agreement. Whenever any Taxes are
payable by HCC, as promptly as possible thereafter HCC shall send to the
Administrative Agent for its own account or for the account of such
Lender, as the case may be, a certified copy of an original official receipt
received by HCC showing payment thereof. If HCC fails to pay any Taxes when due
to the appropriate taxing authority or fails to remit to the Administrative
Agent the required receipts or other required documentary evidence, HCC shall
indemnify the Administrative Agent and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Administrative Agent or any
Lender as a result of any such failure. The agreements in this subsection shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder. Notwithstanding the foregoing, before making
any demand for payment under this Section 3.12(a) each Lender agrees to use
commercially reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to designate a different lender office if the
making of such a designation would avoid the need for, or reduce the amount of,
such payments required under this Section 3.12(a).
(a) Each Lender, including, without limitation, each Purchasing
Lender, that is not incorporated under the laws of the United States of America
or a state thereof agrees that prior to the first Interest Payment Date or, in
the case of a Purchasing Lender, the first Interest Payment Date to occur
subsequent to the date it becomes a party hereto it will deliver to HCC and the
Administrative Agent (i) two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224 or successor applicable form, as the case may
be, and (ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable
form. Each such Lender also agrees to deliver to HCC and the Administrative
Agent two further copies of the said Form 1001 or 4224 and Form W-8 or W-9, or
successor applicable forms or other manner of certification, as the case may be,
on or before the date that any such form expires or becomes obsolete or after
the occurrence of any event requiring a change in the most recent form
previously delivered by it to HCC and such extensions or renewals thereof as may
reasonably be requested by HCC or the Administrative Agent, unless in any such
case an event (including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such form with
respect to it and such Lender so advises HCC and the Administrative Agent. Such
Lender shall certify (i) in the case of a Form 1001 or 4224, that it is entitled
to receive payments under this Agreement without deduction or withholding of any
United States federal income taxes and (ii) in the case of a Form W-8 or W-9,
that it is entitled to an exemption from United States backup withholding tax.
Each Lender which fails to provide to HCC in a timely manner such forms shall
reimburse HCC upon demand for any penalties paid by HCC as a result of any
failure of HCC to withhold the required amounts, that are caused by such
Lender's failure to provide the required forms in a timely manner.
3.13 Indemnity. HCC agrees to indemnify each Lender and to hold
---------
each Lender harmless from any reasonable loss or expenses which such Lender may
sustain or incur as a consequence of (a) default by HCC in payment when due of
the principal amount of or interest on any Eurodollar Loan, (b) default by HCC
in making a borrowing of, conversion into or continuation of Eurodollar Loans
after HCC has given a notice requesting the same in accordance with the
provisions of this Agreement, (c) default by HCC in making any prepayment after
HCC has given a notice thereof in accordance with the provisions of this
Agreement or (d) the making of a prepayment of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect thereto, including,
without limitation, in each case, any
such loss or expense arising from the reemployment of funds obtained by it or
from fees payable to terminate the deposits from which such funds were obtained.
This covenant shall survive the termination of this Agreement, the Loans and all
other amounts payable hereunder.
3.14 Replacement of Lenders. If any Lender requests compensation
----------------------
under subsection 3.11, or if HCC is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
subsection 3.12, or if any Lender defaults in its obligation to fund Loans
hereunder, then HCC may, at its sole expense and effort, upon notice to such
Lender and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 11.6), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) HCC shall have
--------
received the prior written consent of the Administrative Agent, which consent
shall not unreasonably be withheld, (ii) such Lender shall have received payment
of an amount equal to the outstanding principal of its Loans and participations
in Letters of Credit, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or HCC (in the case of all
other amounts) and (iii) in the case of any such assignment resulting from a
claim for compensation under subsection 3.11 or payments required to be made
pursuant to subsection 3.12, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling HCC to require such assignment
and delegation cease to apply.
SECTION 4. LETTERS OF CREDIT
4.1 L/C Commitment. (a) Subject to the terms and conditions
--------------
hereof, the Issuing Lender, in reliance on the agreements of the other Lenders
set forth in subsection 4.4(a), agrees to issue letters of credit ("Letters of
----------
Credit") for the account of HCC on any Business Day during the Commitment Period
------
in such form as may be approved from time to time by the Issuing Lender;
provided that the Issuing Lender shall have no obligation to issue any Letter of
--------
Credit if, after giving effect to such issuance, the L/C Obligations would
exceed the L/C Commitment or the Available Commitment.
(a) Each Letter of Credit shall:
(i) be denominated in Dollars and shall be either (A) a standby
letter of credit issued to support obligations of HCC or its Subsidiaries
(a "Standby Letter of Credit"), or (B) a commercial letter of credit issued
------------------------
in respect of the purchase of goods or services by HCC and its Subsidiaries
in the ordinary course of business (a "Commercial Letter of Credit") and
---------------------------
(ii) expire at or prior to the close of business on the earlier of
(i) the date one year after the date of the issuance of such Letter of
Credit (or, in the case of any renewal or extension thereof, one year after
such renewal or extension) and (ii) the date that is five Business Days
prior to the Termination Date.
(b) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New
York.
(c) The Issuing Lender shall not at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
the Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
4.2 Procedure for Issuance of Letters of Credit. HCC may from time
-------------------------------------------
to time request that the Issuing Lender issue a Letter of Credit by delivering
to the Issuing Lender at its address for notices specified herein an Application
therefor, completed to the satisfaction of the Issuing Lender, and such other
certificates, documents and other papers and information as the Issuing Lender
may reasonably request. Upon receipt of any Application, the Issuing Lender will
process such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed by the Issuing
Lender and HCC. The Issuing Lender shall furnish a copy of such Letter of Credit
to HCC promptly following the issuance thereof.
4.3 Fees, Commissions and Other Charges. (a) HCC shall pay to the
-----------------------------------
Administrative Agent, for the account of the Issuing Lender and the L/C
Participants, a letter of credit commission with respect to each Letter of
Credit, computed for the period from the date such Letter of Credit is issued to
the date upon which the next such payment is due hereunder at the rate per annum
equal to the Applicable Margin in effect from time to time for Eurodollar Loans,
calculated on the basis of a 365 (or 366-, as the case may be) day year, of the
daily aggregate amount available to be drawn under such Letter of Credit for the
period covered by such payment. In addition, HCC shall pay to the Issuer a
fronting fee in the amount equal to .125% of the face amount of such Letter of
Credit. Such commissions shall be payable in arrears on each L/C Fee Payment
Date (and the Termination Date) and shall be nonrefundable.
(a) In addition to the foregoing fees and commissions, HCC shall
pay or reimburse the Issuing Lender for such reasonable, normal and customary
costs and expenses as are actually incurred or charged by the Issuing Lender in
issuing, effecting payment under, amending or otherwise administering any Letter
of Credit.
(b) The Administrative Agent shall, promptly following its receipt
thereof, distribute to the Issuing Lender and the L/C Participants all fees and
commissions received by the Administrative Agent for their respective accounts
pursuant to this subsection.
4.4 L/C Participations. (a) The Issuing Lender irrevocably agrees
------------------
to grant and hereby grants to each L/C Participant, and, to induce the Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from the Issuing
Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's
Commitment Percentage in the Issuing Lender's obligations and rights under each
Letter of Credit issued hereunder and the amount of each draft paid by the
Issuing Lender thereunder. Each L/C Participant unconditionally and irrevocably
agrees with the Issuing Lender that, if a draft is paid under any Letter of
Credit for which the Issuing Lender is not reimbursed in full by HCC in
accordance with the terms of this Agreement, such L/C Participant shall pay to
the Issuing Lender upon demand at the Issuing Lender's address for notices
specified herein an amount equal to such L/C Participant's Commitment Percentage
of the amount of such draft, or any part thereof, which is not so reimbursed.
(a) If any amount required to be paid by any L/C Participant to the
Issuing Lender pursuant to paragraph 4.4(a) in respect of any unreimbursed
portion of any payment made by the Issuing Lender under any Letter of Credit is
paid to the Issuing Lender within three Business Days after the date such
payment is due, such L/C Participant shall pay to the Issuing Lender on demand
an amount equal to the product of (1) such amount, times (2) the daily average
Federal funds rate, as quoted by the Issuing Lender, during the period from and
including the date such payment is required to the date on which such payment is
immediately available to the Issuing Lender, times (3) a fraction the numerator
of which is the number of days that elapse during such period and the
denominator of which is 360. If any such amount required to be paid by any L/C
Participant pursuant to paragraph 4.4(a) is not in fact made available to the
Issuing Lender by such L/C Participant within three Business Days after the date
such payment is due, the Issuing Lender shall be entitled to recover from such
L/C Participant, on demand, such amount with interest thereon calculated from
such due date at the rate per annum applicable to ABR Loans hereunder. A
certificate of the Issuing Lender submitted to any L/C Participant with respect
to any amounts owing under this subsection shall be conclusive in the absence of
manifest error.
(b) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its pro
rata share of such payment in accordance with subsection 4.4(a), the Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from HCC or otherwise), or any payment of interest on account thereof, the
Issuing Lender will distribute to such L/C Participant its pro rata share
thereof; provided, however, that in the event that any such payment received by
-------- -------
the Issuing Lender shall be required to be returned by the Issuing Lender, such
L/C Participant shall return to the Issuing Lender the portion thereof
previously distributed by the Issuing Lender to it.
4.5 Reimbursement Obligation of HCC. (a) HCC agrees to reimburse
-------------------------------
the Issuing Lender on each date on which the Issuing Lender notifies HCC of the
date and amount of a draft presented under any Letter of Credit and paid by the
Issuing Lender for the amount of (i) such draft so paid and (ii) any taxes,
fees, charges or other costs or expenses reasonably incurred by the Issuing
Lender in connection with such payment. Each such payment shall be made to the
Issuing Lender at its address for notices specified herein in Dollars and in
immediately available funds.
(a) Interest shall be payable on any and all amounts remaining
unpaid by HCC under this subsection from the date such amounts become payable
(whether at stated maturity, by acceleration or otherwise) until payment in full
at the rate which would be payable on any outstanding ABR Loans which were then
overdue.
(b) Each drawing under any Letter of Credit shall constitute a
request by HCC to the Administrative Agent for a borrowing pursuant to
subsection 2.4 (Procedure for Revolving Credit Borrowing) of ABR Loans in the
amount of such drawing. The Borrowing Date with respect to such borrowing shall
be the date of such drawing.
4.6 Obligations Absolute. (a) HCC's obligations under this
--------------------
Section 4 shall be absolute and unconditional under any and all circumstances
and irrespective of any set-off, counterclaim or defense to payment which HCC
may have or have had against the Issuing Lender or any beneficiary of a Letter
of Credit.
(a) HCC also agrees with the Issuing Lender that the Issuing Lender
shall not be responsible for, and HCC's Reimbursement Obligations under
subsection 4.5(a) shall not be affected by, among other things, (i) the validity
or genuineness of documents or of any endorsements thereon, even though such
documents shall in fact prove to be invalid, fraudulent or forged, or (ii) any
dispute between or among HCC and any beneficiary of any Letter of Credit or any
other party to which such Letter of Credit may be transferred or (iii) any
claims whatsoever of HCC against any beneficiary of such Letter of Credit or any
such transferee.
(b) The Issuing Lender shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions caused by the Issuing Lender's gross negligence or willful
misconduct.
(c) HCC agrees that any action taken or omitted by the Issuing
Lender under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in the Uniform Commercial
Code of the State of New York, shall be binding on HCC and shall not result in
any liability of the Issuing Lender to HCC.
4.7 Letter of Credit Payments. If any draft shall be presented for
-------------------------
payment under any Letter of Credit, the Issuing Lender shall promptly notify HCC
of the date and amount thereof. The responsibility of the Issuing Lender to HCC
in connection with any draft presented for payment under any Letter of Credit
shall, in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment
are in conformity with such Letter of Credit.
4.8 Application. To the extent that any provision of any
-----------
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 4, the provisions of this Section 4 shall apply.
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement and
to make Loans and issue or participate in the Letters of Credit, Holdings and
HCC hereby jointly and severally represent and warrant to the Administrative
Agent and each Lender that:
5.1 Financial Condition. (a) The unaudited pro forma consolidated
------------------- --- -----
balance sheet of HCC and its consolidated Subsidiaries as at September 30, 1999
(the "Pro Forma Balance Sheet"), copies of which have heretofore been furnished
-----------------------
to each Lender, has been prepared giving effect (as if such events had occurred
on such date) to the consummation of the TIDES issuance. The Pro Forma Balance
Sheet has been prepared based on the best information available to Holdings and
HCC as of the date of delivery thereof, and presents fairly in all material
respects on a pro forma basis the estimated financial position of HCC and its
--- -----
consolidated Subsidiaries as at September 30, 1999, assuming that the events
specified in the preceding sentence had actually occurred at such date.
(a) The audited consolidated balance sheets of HCC as at December
31, 1997 and December 31, 1998, and the related consolidated statements of
income and of cash flows for the fiscal years ended on such dates, reported on
by and accompanied by an unqualified report from PricewaterhouseCoopers LLP,
present fairly in all material respects the consolidated financial condition of
HCC as at such date, and the consolidated results of its operations and its
consolidated cash flows for the respective fiscal years then ended. The
unaudited consolidated balance sheet of HCC as at March 31, 1999 and June 30,
1999, and the related unaudited consolidated statements of income and cash flows
for the three and six-month periods ended on such date, present fairly in all
material respects the consolidated financial condition of HCC as at such date,
and the consolidated results of its operations and its consolidated cash flows
for the three and six-month periods then ended (subject to normal year-end audit
adjustments). All such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by the aforementioned firm
of accountants and disclosed therein). Holdings, HCC and its Subsidiaries do not
have any material Guarantee Obligations, contingent liabilities and liabilities
for taxes, or any long-term leases or unusual forward or long-term commitments,
including any interest rate or foreign currency swap or exchange transaction or
other obligation in respect of derivatives, that are not reflected in the most
recent financial statements referred to in this paragraph. During the period
from September 30, 1999 to and including the date hereof there has been no
Disposition by Holdings or any of its Subsidiaries, as applicable, of any
material part of their business or property (other than to Holdings or any of
its Subsidiaries).
5.2 No Change. Since September 30, 1999 (a) there has been no
---------
development or event nor any prospective development or event, which has had or
would reasonably be expected to have a Material Adverse Effect and (b) except as
disclosed on Schedule 5.2 to this Agreement, as of the date of this Agreement,
no dividends or other distributions have been declared, paid or made upon the
Capital Stock of Holdings or HCC nor has any of the Capital Stock of Holdings or
HCC (other than in connection with the Restructuring) been redeemed, retired,
purchased or otherwise acquired for value by Holdings or any of its respective
Subsidiaries.
5.3 Corporate Existence; Compliance with Law. Each Credit Party
----------------------------------------
(a) is duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, (b) has the corporate power and authority,
and the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not reasonably
be expected to have a Material Adverse Effect, and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
would not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
5.4 Corporate Power; Authorization; Enforceable Obligations. Each
-------------------------------------------------------
Credit Party has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents to which it is a party. HCC has
the corporate power and authority, and the legal right, to borrow hereunder and
has taken all necessary corporate action to authorize the borrowings on the
terms and conditions of this Agreement, and the Applications. Each Credit Party
has taken all necessary corporate action to authorize the execution, delivery
and performance of the Loan Documents to which it is a party. No consent or
authorization of, filing with or other act by or in respect of, any Governmental
Authority or any other Person (other than consents or authorizations the failure
to obtain would not, in the aggregate, reasonably be expected to have a Material
Adverse Effect) is required in connection with the borrowings hereunder or with
the execution, delivery, performance, validity or enforceability of this
Agreement, the Applications or any of the other Loan Documents, except consents,
authorizations, filings and notices described in Schedule 5.4, which consents,
authorizations, filings and notices have been obtained or made and are in full
force and effect. This Agreement has been, and, each Application and each other
Loan Document will be, duly executed and delivered on behalf of the Credit
Parties party thereto. This Agreement constitutes, and each Note, each
Application and each other Loan Document when executed and delivered will
constitute, a legal, valid and binding obligation of the Credit Parties party
thereto enforceable against such Credit Parties in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
5.5 No Legal Bar. The execution, delivery and performance of this
------------
Agreement, the Applications, and the other Loan Documents, the borrowings
hereunder and the use of the proceeds thereof will not violate any Requirement
of Law or Contractual Obligation of any Credit Party thereto and will not result
in, or require, the creation or imposition of any Lien on any of their
respective properties or revenues pursuant to any such Requirement of Law or
Contractual Obligation, except as contemplated hereby or thereby and except to
the extent any such violation or creation or imposition of a Lien would not
reasonably be expected to have a Material Adverse Effect.
5.6 No Material Litigation. Except as set forth in HCC's Form 10-
----------------------
Q, filed with respect to the period ending September 30, 1999, no litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the knowledge of Holdings or HCC, threatened by or
against any Credit Party or against any of their respective properties or
revenues (a) with respect to this Agreement, or the other Loan Documents or any
of the transactions contemplated hereby, or (b) which would reasonably be
expected to have a Material Adverse Effect.
5.7 No Default. None of the Credit Parties nor any of their
----------
respective Subsidiaries is in default under or with respect to any of their
respective Contractual Obligations in any respect which if not cured would
reasonably be expected to have a Material Adverse Effect. No Default or Event
of Default has occurred and is continuing.
5.8 Ownership of Property; Liens; Leases of Equipment. Each of the
-------------------------------------------------
Credit Parties has good record and marketable title in fee simple (except for
exceptions to title as will not in the aggregate materially interfere with the
present or contemplated use of the property affected thereby) to, or a valid
leasehold interest in, all its real property, and good title to all its other
property, and none of such property is subject to any Lien except as permitted
by subsection 8.3. None of the Equipment or Inventory (as defined in the
Uniform Commercial Code) owned by any Credit Party has been leased by such
Credit Party as lessor, except pursuant to operating leases (which do not
constitute Financing Leases). As used herein, Equipment or Inventory leased by
a Credit Party under a Financing Lease shall be deemed "owned" by such Credit
Party.
5.9 Intellectual Property. Each Credit Party owns, or is licensed
---------------------
to use, all trademarks, tradenames, trade secrets, copyrights, technology, know-
how and processes necessary for the conduct of its business as currently
conducted except for those the failure to own or license which would not
reasonably be expected to have a Material Adverse Effect (the "Intellectual
------------
Property"). To the knowledge of Holdings or HCC, no claim has been asserted and
--------
is pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does Holdings or HCC know of any valid basis for any such claim,
which would reasonably be expected to have a Material Adverse Effect. The use
of such Intellectual Property by the Credit Parties does not infringe on the
rights of any Person, except for such claims and infringements that, in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
5.10 Taxes. Each of the Credit Parties has filed or caused to be
-----
filed all tax returns which, to the knowledge of Holdings and HCC, are required
to be filed and has paid all taxes shown to be due and payable on said returns
or on any assessments made against it or any of its property and all other
taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of any of the Credit Parties, as the case may be); no tax Lien has been
filed against the property of any Credit Party, and, to the knowledge of
Holdings and HCC, no claim is being asserted, with respect to any such tax, fee
or other charge.
5.11 Federal Regulations. No part of the proceeds of any Loans will
-------------------
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect or for any purpose which violates the provisions of the Regulations of
such Board of Governors. If requested by any Lender or the Administrative
Agent, HCC will furnish to the Administrative Agent and each Lender a statement
to the foregoing effect in conformity with the requirements of FR Form U-1
referred to in said Regulation U.
5.12 ERISA. Neither a Reportable Event nor an "accumulated funding
-----
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred and no lien
in favor of the PBGC or a Plan has arisen during the five-year period prior to
the date as of which this representation is deemed made. The present value of
all accrued benefits under each Single Employer Plan maintained by HCC, or any
Commonly Controlled Entity (based on those assumptions used to fund the Plans)
did not, as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets of such
Plan allocable to such accrued benefits. Neither HCC nor any Commonly
Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan, and neither HCC nor any Commonly Controlled Entity would
become subject to any liability under ERISA if HCC or any such Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans as of
the valuation date most closely preceding the date on which this representation
is made or deemed made. No such Multiemployer Plan is in Reorganization or
Insolvent. The present value (determined using actuarial and other assumptions
which are reasonable in respect of the benefits provided and the employees
participating) of the liability of HCC and each Commonly Controlled Entity for
post retirement benefits to be provided to their current and former employees
under Plans which are welfare benefit plans (as defined in Section 3(1) of
ERISA) does not, in the aggregate, exceed the assets under all such Plans
allocable to such benefits.
5.13 Investment Company Act; Other Regulations. None of the Credit
-----------------------------------------
Parties is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
None of the Credit Parties is subject to regulation under any Federal or State
statute or regulation which limits its ability to incur Indebtedness or change
rates or change tariffs. None of the Credit Parties are "holding companies" or
"subsidiary companies" of a "holding company" or a "subsidiary company" of a
"holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
5.14 Subsidiaries. As of the Closing Date, Holdings has no
------------
Subsidiaries other than as set forth on Schedule 5.14. Except if a Credit
Party, other than cash or Cash Equivalents located in bank accounts at Chase,
none of the assets owned by any Unqualified Subsidiary as of the date hereof are
located within the United States of America or any territory thereof.
5.15 Purpose of Loans. The proceeds of the Loans shall be used for
----------------
the working capital and general corporate purposes of HCC and its Subsidiaries.
5.16 Environmental Matters. Each of the representations and
---------------------
warranties set forth in paragraphs (a) through (f) of this subsection is true
and correct with respect to each parcel of real property owned or operated by
any of the Credit Parties (the "Properties"), except to the extent that the
----------
facts and circumstances giving rise to any such failure to be so true and
correct would not reasonably be expected to have a Material Adverse Effect:
(a) Except as set forth on Schedule 5.16, the Properties do not
contain, and have not previously contained, in, on, or under, including, without
limitation, the soil and groundwater thereunder, any Hazardous Materials in
concentrations which violate Environmental Laws.
(b) Except as set forth on Schedule 5.16, the Properties and all
operations and facilities at the Properties are in compliance with all
Environmental Laws, and there is no Hazardous Materials contamination or
violation of any Environmental Law which would reasonably be expected to
interfere with the continued operation of any of the Properties or impair the
fair saleable value of any thereof.
(c) Except as set forth on Schedule 5.16, none of the Credit
Parties has received any complaint, notice of violation, alleged violation,
investigation or advisory action or of potential liability or of potential
responsibility regarding environmental protection matters or environmental
permit compliance with regard to the Properties which has not been resolved, nor
is HCC aware that any Governmental Authority is contemplating delivering to any
Credit Party any such notice.
(d) Hazardous Materials have not been generated, treated, stored,
disposed of, at, on or under any of the Properties in concentrations that
violate Environmental Laws, nor have any Hazardous Materials been transferred to
any other location, in violation of any Environmental Laws from the Properties
or as a result of the sale or lease of any equipment or inventory of any Credit
Party.
(e) There are no governmental, administrative actions or judicial
proceedings pending or contemplated under any Environmental Laws to which any
Credit Party is or to HCC's knowledge will be named as a party with respect to
the Properties, nor to HCC's knowledge are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to any of the Properties.
5.17 Accuracy and Completeness of Information. The factual
----------------------------------------
statements contained in the Loan Documents and each other agreement, instrument,
certificate and document related thereto and any other certificates or documents
furnished or to be furnished to the Administrative Agent or the Lenders by any
Credit Party from time to time in connection with this Agreement (in any case
excluding any of the financial statements referred to in Section 5.1(a) hereof),
taken as a whole, and taking into consideration all corrections or substituted
documents, do not and will not, as of the date when made, contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained therein not misleading in light of the
circumstances in which the same were made, all except as otherwise qualified
herein.
5.18 Year 2000. The Year 2000 date change has not resulted in
---------
disruption of Holdings' and its Subsidiaries' computer hardware, software,
databases, systems and other equipment containing embedded microchips (including
systems and equipment supplied by others or with which Holdings' or its
Subsidiaries' systems interface), or to Holdings' or its Subsidiaries'
operations or business systems, or to the best of Holdings' and its
Subsidiaries' knowledge, to the operations or business systems of Holdings'
major vendors, customers,
suppliers and counterparties. Holdings has no reason to believe that liabilities
and expenditures related to the Year 2000 date-change (including, without
limitation, costs caused by reprogramming errors, the failure of others' systems
or equipment, and the potential liability, if any, of Holdings or its
Subsidiaries for Year 2000 related costs incurred or disruption experienced by
others) will result in a Default or a Material Adverse Effect.
5.19 Senior Indebtedness. The Obligations constitute "Senior
-------------------
Indebtedness" of HCC under and as defined in the Shareholder Subordinated Loan
Agreement. The obligations of Holdings, HCC and their Subsidiaries under the
Guarantees and Equipment Guarantees constitute "Senior Indebtedness" of such
applicable Loan Party under and as defined in the Shareholder Subordinated Loan
Agreement.
5.20 Representations and Warranties in Existing Credit Agreement.
-----------------------------------------------------------
The representations and warranties contained in Section 5 of the Existing Credit
Agreement and in any amendment, consent or waiver thereto were true and correct
in all material respects on and as of the dates when made pursuant to the
Existing Credit Agreement.
SECTION 6. CONDITIONS PRECEDENT
6.1 Conditions to Each Extension of Credit. The agreement of each
--------------------------------------
Lender to make any extension of credit requested to be made by it on any date is
subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
------------------------------
warranties made by the Credit Parties in or pursuant to the Loan Documents shall
be true and correct in all material respects on and as of such date as if made
on and as of such date (unless any such representations and warranties
specifically refer to another date).
(b) No Default. No Default or Event of Default shall have
----------
occurred and be continuing on such date or after giving effect to the extensions
of credit requested to be made on such date.
(c) Additional Documents. The Administrative Agent shall have
--------------------
received each additional document, instrument or item of information reasonably
requested by it to further effect the purposes of this Agreement, including,
without limitation, a copy of any debt instrument, security agreement or other
material contract to which any Credit Party may be a party.
(d) Additional Matters. All corporate and other proceedings, and
------------------
all documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement shall be reasonably satisfactory in
form and substance to the Administrative Agent, and the Administrative Agent
shall have received such other documents in respect of any aspect or consequence
of the transactions contemplated hereby or thereby as it shall reasonably
request to further effect the purposes of this Agreement.
Each borrowing by and Letter of Credit issued on behalf of HCC hereunder shall
constitute a representation and warranty by HCC as of the date of such Loan that
the conditions contained in this subsection 6.1 have been satisfied.
6.2 Conditions to Amended and Restated Effective Date. The Amended
-------------------------------------------------
and Restated Effective Date shall be the date of satisfaction of the following
conditions precedent:
(a) Agreement; Consents. The Administrative Agent shall have
-------------------
executed this Agreement and shall have received counterparts hereof executed by
Holdings and HCC, and duly acknowledged and agreed to by each of [NEW
GUARANTORS]. The Administrative Agent shall have received a Subsidiaries'
Guarantee executed by each Credit Party other than Holdings and HCC.
(b) Fees. The Lenders and the Administrative Agent shall have
----
received all fees required to be paid, and all expenses for which invoices have
been presented (including reasonable fees, disbursements and other charges of
counsel to the Agents), on or before the Amended and Restated Effective Date.
(c) Resolutions. The Administrative Agent shall have received,
-----------
with a counterpart for each Lender, a copy of the resolutions, in form and
substance satisfactory to the Administrative Agent, of the Board of Directors of
each Credit Party authorizing the execution of this Agreement and the
performance of HCC's obligations hereunder and any borrowings hereunder from
time to time, certified by the Secretary or an Assistant Secretary of each such
Credit Party, as of the Amended and Restated Effective Date, which certificate
shall state that the resolutions thereby certified have not been amended,
modified, revoked or rescinded as of the date of such certificate.
(d) Incumbency Certificate. The Administrative Agent shall have
----------------------
received, to the extent that it has not previously received, a certificate of
the Secretary or Assistant Secretary of each Credit Party, dated the Amended and
Restated Effective Date, as to the authority, incumbency and signature of each
of the officers signing this Agreement, and any other instrument or document
delivered by such Credit Party in connection herewith, together with evidence of
the incumbency of such Secretary or Assistant Secretary.
(e) Legal Opinions. The Administrative Agent shall have received
--------------
such executed legal opinions of HCC and Holdings which the Administrative Agent
shall reasonably request.
SECTION 7. AFFIRMATIVE COVENANTS
Holdings hereby agrees that, so long as the Commitments remain in
effect, any Note or any Letter of Credit remains outstanding and unpaid or any
other amount is owing to any Lender or the Administrative Agent hereunder,
Holdings shall and Holdings (except in the case of delivery of financial
information, reports, certificates and notices) shall cause each of its
Subsidiaries to:
7.1 Financial Statements. Furnish to each Lender:
--------------------
(a) as soon as available for distribution to shareholders and
creditors generally, but in any event within 120 days after the end of each
fiscal year of Holdings, a copy of the consolidated balance sheet of Holdings
and its consolidated Subsidiaries, as at the end of such year and the related
consolidated statements of income and retained earnings and of cash flows for
such year, setting forth in each case in comparative form the figures for the
previous year, reported on without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by
PricewaterhouseCoopers or other independent certified public accountants of
nationally recognized standing not unacceptable to the Required Lenders;
(b) as soon as available for distribution to shareholders and
creditors generally, but in any event within 90 days after the end of each
fiscal year of Holdings, a copy of the unaudited consolidated balance sheet of
Holdings and its consolidated Subsidiaries, as at the end of such year, and the
related unaudited consolidated statements of income and retained earnings and of
cash flows for such year, in each case setting forth in comparative form the
figures for the corresponding period of the previous year and the figures for
such period as shown on the budgets of Holdings for such year; and
(c) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal year
of Holdings, the unaudited consolidated balance sheet of Holdings and its
consolidated Subsidiaries, as at the end of such quarter, and the related
unaudited consolidated statements of income and retained earnings and of cash
flows of Holdings and its consolidated Subsidiaries, for such quarter and the
portion of the fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures for the corresponding period of the
previous year, certified by a Responsible Officer as being fairly stated in all
material respects when considered in relation to the consolidated financial
statements of Holdings and its consolidated Subsidiaries, (subject to normal
year-end audit adjustments), and in each case setting forth in comparative form
the figures for such periods as shown on the budgets of such Person for such
year;
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
7.2 Certificates; Other Information. Furnish to each Lender:
-------------------------------
(a) concurrently with the delivery of the financial statements
referred to in subsection 7.1(a), a certificate of the independent certified
public accountants reporting on such financial statements stating that in making
the examination necessary therefor no knowledge was obtained of any Default or
Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 7.1(a) and 7.1(c), a certificate of a Responsible
Officer stating that, to the best of such Officer's knowledge, Holdings during
such period has observed or performed all of its covenants and other agreements,
and satisfied every material condition, contained in this
Agreement and the other Loan Documents to which it is a party to be observed,
performed or satisfied by it, and that such Officer has obtained no knowledge of
any Default or Event of Default except as specified in such certificate;
(c) not later than 45 days following the end of each fiscal year of
Holdings, a copy of the projections by Holdings of the operating budget and cash
flow budget of Holdings and its Subsidiaries for the succeeding fiscal year,
such projections to be accompanied by a certificate of a Responsible Officer to
the effect that such projections have been prepared on the basis of reasonable
assumptions and that such Officer has no reason to believe they are incorrect or
misleading in any material respect;
(d) (i) within five days after the same are sent, copies of all
financial statements and reports which Holdings, if at such time any class of
such Person's securities are held by the public, sends to its stockholders
generally, or, if otherwise, such financial statements and reports as are made
generally available to the public, and (ii) within five days after the same are
filed, copies of all financial statements and reports which HCC may make to, or
file with, the Securities and Exchange Commission or any successor or analogous
Governmental Authority;
(e) concurrently with the delivery of the financial statements
referred to in subsections 7.1(b) and (c), a management summary describing and
analyzing the performance of Holdings and its Subsidiaries during the periods
covered by such financial statements;
(f) within 45 days after the end of each quarter in each fiscal
year of Holdings, a certificate of the principal financial officer of Holdings
showing both the Applicable Margin for the next quarter and the detailed
computations necessary to calculate the Applicable Margin (an "Applicable Margin
-----------------
Certificate"); and
-----------
(g) promptly, such additional financial and other information as
any Lender may from time to time reasonably request.
7.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
----------------------
or before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
Holdings or any Subsidiary of Holdings, as the case may be.
7.4 Conduct of Business and Maintenance of Existence. Continue to
------------------------------------------------
engage in business of the same general type as now conducted by it and preserve,
renew and keep in full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business except as otherwise permitted
pursuant to subsection 8.5; comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith would
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
7.5 Maintenance of Property; Insurance. (a) Keep and maintain all
----------------------------------
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (b) maintain, with financially
sound and reputable insurance companies,
insurance in such amounts and against such risks as are customarily maintained
by companies engaged in the same or similar businesses operating in the same or
similar locations.
7.6 Inspection of Property; Books and Records; Discussions. Keep
------------------------------------------------------
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of Holdings and
Subsidiaries of Holdings with officers and employees of Holdings and
Subsidiaries of Holdings and with its independent certified public accountants;
provided, however, that no such visit, inspection or examination or discussion
--------
shall unreasonably disrupt or interfere with normal operations of Holdings or
any of its Subsidiaries and any such representatives of the Administrative Agent
and the Lenders shall be accompanied by a Responsible Officer of Holdings. No
failure to comply with any request for the exercise of rights hereunder shall be
cause for any Event of Default unless such request is submitted in writing to
Holdings with reference to this Section 7.6.
7.7 Notices. Promptly give notice to the Administrative Agent and
-------
each Lender of:
(a) the occurrence of any Default or Event of Default of which
Holdings has actual knowledge;
(b) any (i) default or event of default by Holdings or any of its
Subsidiaries under or with respect to any of their respective Contractual
Obligations in any respect which, if not cured, would reasonably be expected to
have a Material Adverse Effect, or to Holdings' knowledge any default or event
of default by any third party under or with respect to any Contractual
Obligation of said third party with Holdings or any of its Subsidiaries in a
respect which, if not cured, would reasonably be expected to have a Material
Adverse Effect (ii) litigation, investigation or proceeding of which Holdings
has actual knowledge which may exist at any time between Holdings or any
Subsidiary of Holdings and any Governmental Authority, which in either case, if
not cured or if adversely determined, as the case may be, would reasonably be
expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting Holdings or any
Subsidiary of Holdings of which Holdings has actual knowledge in which the
amount involved is $5,000,000 or more and not covered by insurance or in which
injunctive or similar relief is sought and which if adversely determined would
reasonably be expected to have a Material Adverse Effect;
(d) the following events, as soon as possible and in any event
within 30 days after Holdings has actual knowledge thereof: (i) the occurrence
or expected occurrence of any Reportable Event with respect to any Plan, or any
withdrawal from, or the termination, Reorganization or Insolvency of any
Multiemployer Plan or (ii) the institution of proceedings or the taking of any
other action by the PBGC or Holdings, any Commonly Controlled Entity with
respect to the termination of any Single Employer Plan; and
(e) a development or event which has had or would reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action Holdings proposes to take with respect thereto.
7.8 Environmental Laws.
------------------
(a) Comply in all material respects with, and undertake all
reasonable efforts to ensure compliance by all tenants and subtenants, if any,
with, all Environmental Laws and obtain and comply in all material respects with
and maintain, and undertake all reasonable efforts to ensure that all tenants
and subtenants obtain and comply with and maintain, any and all licenses,
approvals, registrations or permits required by Environmental Laws, and upon
discovery of any non-compliance or suspected non-compliance, undertake all
reasonable efforts to attain full compliance;
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities respecting Environmental
Laws, except to the extent that the failure to so conduct, complete or take such
actions, or to comply with such orders and directives, would not in the
aggregate reasonably be expected to have a Material Adverse Effect;
(c) Defend, indemnify and hold harmless the Administrative Agent
and the Lenders, and their respective employees, agents, officers and directors,
from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way relating to the
violation of or noncompliance with any Environmental Laws applicable to the real
property owned or operated by Holdings or any Subsidiary of Holdings, or any
orders, requirements or demands of Governmental Authorities related thereto,
including, without limitation, reasonable attorney's and consultant's fees,
investigation and laboratory fees, court costs and litigation expenses, except
to the extent that any of the foregoing arise out of the gross negligence or
willful misconduct of the party seeking indemnification therefor; and
(d) Maintain a program to identify and promote substantial
compliance with and to minimize prudently any liabilities or potential
liabilities under any Environmental Law that may affect Holdings or any of
its Qualified Subsidiaries.
7.9 Subsequent Guarantees. Holdings shall cause each Qualified
---------------------
Subsidiary (other than HCC, the TIDES Trust, HMS and MAC) of Holdings for which
the aggregate value of all assets owned by such Qualified Subsidiary is or
becomes greater than $20,000,000, to execute an amendment to the Subsidiaries'
Guarantee pursuant to which it will become a guarantor under the Subsidiaries'
Guarantee within one year after the later of (i) the date on which such
Qualified Subsidiary becomes a Subsidiary of Holdings and (ii) the date on which
such Qualified Subsidiary's assets attain an aggregate value in excess of
$20,000,000; provided, however, that if during such one-year period the
-------- -------
aggregate value of such Qualified Subsidiary's
assets is or becomes $20,000,000 or less, such Qualified Subsidiary shall not be
required to become a party to the Subsidiaries' Guarantee.
SECTION 8. NEGATIVE COVENANTS
Holdings hereby agrees that, so long as the Commitments remain in
effect, any Note or any Letter of Credit remains outstanding and unpaid or any
other amount is owing to any Lender or the Administrative Agent hereunder,
Holdings shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:
8.1 Financial Condition Covenants. (a) Maintenance of
----------------------------- --------------
Consolidated Indebtedness to Consolidated Capitalization. Permit the ratio
--------------------------------------------------------
(expressed as a percentage) of Consolidated Indebtedness to Consolidated
Capitalization of Holdings as at the end of any of Holdings' fiscal quarters to
be greater than .65 to 1.0; provided that for purposes of calculating the
--------
numerator of the foregoing ratio, Consolidated Indebtedness shall exclude
seventy percent (70%) of the Indebtedness in respect of the TIDES Debentures.
(a) Current Ratio. Permit the Current Ratio of Holdings at the
-------------
end of any of Holdings' fiscal quarters to be less than 1.0 to 1.0.
(b) Consolidated Indebtedness to Consolidated Adjusted EBITDA.
---------------------------------------------------------
Permit the ratio of Consolidated Indebtedness of Holdings to Consolidated
Adjusted EBITDA for the four consecutive fiscal quarters of Holdings most
recently ended to be greater than 5.25 to 1.0; provided that for purposes of
--------
calculating the numerator of the foregoing ratio, Consolidated Indebtedness of
Holdings shall exclude seventy percent (70%) of the Indebtedness in respect of
the TIDES Debentures.
(d) Consolidated Indebtedness to Consolidated EBITDA. Permit the
------------------------------------------------
ratio of Consolidated Indebtedness to Consolidated EBITDA of Holdings for the
four consecutive fiscal quarters of Holdings most recently ended ("Consolidated
------------
Indebtedness Ratio") to be greater than 4.0 to 1.0; provided that for purposes
------------------ --------
of calculating the numerator of the foregoing ratio, Consolidated Indebtedness
of Holdings shall exclude seventy percent (70%) of the Indebtedness in respect
of the TIDES Debentures.
(e) Interest Coverage Ratio. Permit the ratio of Consolidated
-----------------------
EBITDA to Consolidated Interest Expense of Holdings for the period of four
consecutive fiscal quarters of Holdings most recently ended to be less than 2.5
to 1.0.; provided that for purposes of calculating the foregoing ratio,
--------
Consolidated Interest Expense of Holdings shall exclude any accrued but unpaid
interest to the TIDES or TIDES Debentures.
8.2 Limitation on Indebtedness. Create, incur, assume or suffer to
--------------------------
exist any Indebtedness, except:
(a) Indebtedness in respect of the Loans, and other obligations of
the Credit Parties under this Agreement and the other Loan Documents;
(b) Indebtedness of HCC to any of its Subsidiaries and of any such
Subsidiary which is a Credit Party to HCC or any other Subsidiary of HCC;
(c) Indebtedness outstanding on the Closing Date and listed on
Schedule 8.2(c) and all extensions, renewals, replacements, refinancings and
modifications thereof permitted hereunder;
(d) Indebtedness of Holdings and any of its Subsidiaries in an
aggregate amount not to exceed $10,000,000 at any time outstanding which is
recourse only to the assets of HCC or any Subsidiaries acquired or financed with
the proceeds of such Indebtedness;
(e) Indebtedness in respect of Financing Leases provided that,
--------
after giving effect thereto, subsection 8.7 is not contravened;
(f) Indebtedness in respect of Subordinated Debt, the terms and
conditions of which have been approved in writing by the Required Lenders and
all extensions, renewals, replacements, refinancings and modifications thereof
permitted hereunder;
(g) Indebtedness of Unqualified Subsidiaries of Holdings; provided
that any such Indebtedness is Non-Recourse Indebtedness;
(h) Indebtedness of a Person which becomes a Subsidiary after the
date hereof in an aggregate principal amount not exceeding as to Holdings and
its Subsidiaries $10,000,000 at any time outstanding, provided that (i) such
--------
indebtedness existed at the time such Person became a Subsidiary and was not
created in anticipation thereof and (ii) immediately after giving effect to the
acquisition of such Person by Holdings or any of its Subsidiaries no Default or
Event of Default shall have occurred and be continuing;
(i) Indebtedness in respect of Equipment Lease Tranche A Loans; and
(j) Indebtedness not contemplated by clauses (a)-(i) above not
exceeding $5,000,000 in the aggregate at any time outstanding.
8.3 Limitation on Liens. Create, incur, assume or suffer to exist
-------------------
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings, provided that adequate reserves with
--------
respect thereto are maintained on the books of Holdings or any Subsidiary of
Holdings, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 60 days or which are being contested
in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self insurance
arrangements;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case materially
detract from the value of the property subject thereto or materially interfere
with the ordinary conduct of the business of Holdings or any of its
Subsidiaries;
(f) leases or subleases granted to third Persons not interfering in
any material respect with the business of Holdings or any of its Subsidiaries;
(g) Liens arising from UCC financing statements regarding leases
permitted by this Agreement or the Equipment Leases;
(h) any interest or title of a lessor or sublessor under any lease
permitted by this Agreement or the Equipment Leases;
(i) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of custom duties in connection with the
importation of goods so long as such Liens attach only to the imported goods;
(j) Liens arising out of consignment or similar arrangements for
the sale of goods entered into by Holdings or any of its Subsidiaries in the
ordinary course of business;
(k) Liens created pursuant to Financing Leases permitted pursuant
to Section 8.2(e);
(l) Liens in existence on the Closing Date listed on Schedule
8.3(l), securing Indebtedness permitted by subsection 8.2(c), provided that no
--------
such Lien is spread to cover any additional property after the Closing Date and
that the amount of Indebtedness secured thereby is not increased;
(m) Liens on (i) natural gas compressors and related equipment, and
usual accessories and improvements and proceeds thereof, and (ii) oil and gas
production equipment, in each case, the acquisition of which were financed with
the proceeds of the Indebtedness permitted by subsection 8.2(e) and which
secures only such Indebtedness, provided that any such Lien is placed upon such
--------
natural gas compressor or related equipment or such oil and gas production
equipment at the time of the acquisition of such natural gas compressors or
related equipment or such oil and gas production equipment by Holdings or any of
its Subsidiaries and the Lien extends to no other property, and provided,
--------
further, that no such Lien is spread to cover
-------
any additional property after the date such Lien attaches and that the amount of
Indebtedness secured thereby is not increased;
(n) Liens on assets of Holdings, HMI, Hanover/Xxxxx and the Real
Estate Subsidiary listed on Schedule 8.3(n), provided that no such Lien is
--------
spread to cover any additional property after the Closing Date and that the
amount of Indebtedness secured thereby is not increased;
(o) Liens on the assets of Unqualified Subsidiaries of Holdings
securing Indebtedness of such Unqualified Subsidiaries permitted under Section
8.2(g);
(p) Liens securing Derivatives entered into by Holdings and its
Subsidiaries which are permitted hereunder;
(q) Liens securing Indebtedness of Holdings or any Subsidiary
permitted under subsection 8.2(d) so long as such Liens attach only to the
assets acquired or financed pursuant to such subsection;
(r) Liens on the property or assets of a Person which becomes a
Subsidiary after the date hereof securing Indebtedness permitted by subsection
8.2(h), provided that (i) such Liens existed at the time such Person became a
--------
Subsidiary and were not created in anticipation thereof, (ii) any such Lien is
not spread to cover any property or assets of such Person after the time such
Person becomes a Subsidiary, and (iii) the amount of Indebtedness secured
thereby is not increased;
(s) Liens that arise in connection with the Equipment Lease
Transactions;
(t) Liens listed on Schedule 8.3(t); and
(u) Liens not otherwise permitted in clauses (a)-(t) above securing
Indebtedness not exceeding $2,500,000 in the aggregate.
8.4 Limitation on Guarantee Obligations. Create, incur, assume or
-----------------------------------
suffer to exist any Guarantee Obligation except:
(a) the Guarantees and the Equipment Lease Guarantees;
(b) up to $5,000,000 in the aggregate of Guarantee Obligations of
HCC or any of its Subsidiaries in connection with indebtedness incurred by
customers of HCC or any of its Subsidiaries; provided, that the proceeds of any
--------
such indebtedness shall be used by such customers to purchase natural gas
compressors or oil and gas production equipment from HCC or any of its
Subsidiaries;
(c) Guarantee Obligations (in respect of obligations not
constituting Indebtedness) arising under agreements entered into by HCC or any
of its Subsidiaries in the ordinary course of business;
(d) guarantees in respect of Indebtedness (other than Subordinated
Debt) permitted under this Agreement;
(f) Guarantee Obligations of Holdings and any of its Subsidiaries
arising pursuant to the Equipment Lease Transactions;
(g) the Guarantor Obligations of HCC in the nature of a guarantee
or indemnification for, in each case, performance obligations (and not
Indebtedness) as contemplated by the HMS Transactions; and
(h) the Subordinated Guarantee Obligations of Holdings arising
under the TIDES Guarantees.
8.5 Limitations on Fundamental Changes. Enter into any merger,
----------------------------------
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:
(a) any Qualified Subsidiary may be merged or consolidated with or
into any other Qualified Subsidiary; provided, that a Qualified Subsidiary shall
--------
be the continuing or surviving corporation;
(b) Holdings or any Qualified Subsidiary may be merged or
consolidated with any other Person organized under a jurisdiction of the United
States with assets held primarily in the United States; provided, that Holdings
--------
or such Qualified Subsidiary shall be the continuing or surviving corporation;
the Administrative Agent is provided with written notice, and after giving
effect thereto no Default or Event of Default would exist or reasonably be
expected to be caused thereby;
(c) any Qualified Subsidiary may sell, lease, assign, transfer or
otherwise dispose of any or all of its assets to Holdings or any Qualified
Subsidiary;
(d) any Unqualified Subsidiary may be merged or consolidated with
or into any other Person and/or may sell, lease, assign, transfer or otherwise
dispose of any of its assets (upon voluntary liquidation or otherwise) to any
other Person provided that, if merged or consolidated with or into a Qualified
--------
Subsidiary, the Qualified Subsidiary will remain as a 'Qualified Subsidiary'
after the merger;
(e) pursuant to the Equipment Lease Transactions;
(f) the TIDES Trust may wind up or dissolve itself (or suffer a
liquidation or dissolution), or convey, assign, transfer or otherwise dispose
of, all or substantially all of its property, business or assets, as
contemplated by the TIDES Declaration of Trust;
(g) any of the HMS Entities may wind up, dissolve (or suffer a
liquidation or dissolution), or convey, assign, transfer or otherwise dispose
of, all or substantially all of its property, business or assets; and
(h) HCC may merge with another Subsidiary of Holdings in connection
with the Restructuring.
8.6 Limitation on Sale or Lease of Assets. Convey, sell, lease,
-------------------------------------
assign, transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, except:
(a) obsolete or worn out property disposed of in the ordinary
course of business, provided that the aggregate value of obsolete or worn out
natural gas compressors and oil and gas production equipment disposed of in the
ordinary course of business does not exceed $5,000,000 during any fiscal year of
Holdings;
(b) the sale of inventory in the ordinary course of business,
provided that if such inventory is comprised of natural gas compressors or oil
and gas production equipment, such natural gas compressors or oil and gas
production equipment were never part of the natural gas compressors or oil and
gas production equipment leased or held for lease by HCC or any of its
Subsidiaries;
(c) the lease or sublease by HCC or any of its Subsidiaries as
lessor of natural gas compressors and oil and gas production equipment in the
ordinary course of business under operating leases (which do not constitute
Financing Leases);
(d) the sale or discount without recourse of defaulted accounts
receivable arising in the ordinary course of business in connection with the
compromise or collection thereof;
(e) as permitted by subsection 8.5;
(f) the sale of natural gas compressors and oil and gas production
equipment, other than disposals and sales covered by clauses (a) and (b) above,
provided that the fair market value of natural gas compressors and oil and gas
--------
production equipment sold during the term of this Agreement does not exceed ten
percent of the aggregate fair market value of all natural gas compressors and
oil and gas production equipment owned by HCC and its Qualified Subsidiaries;
provided further that if the proceeds are reinvested in natural gas compressors
-------- -------
or oil and gas production equipment to be owned by HCC or its Qualified
Subsidiaries within nine months after the sale of the assets which produced such
proceeds, such proceeds shall not be included for purposes of this covenant;
(g) the lease by the Real Estate Subsidiary or any other Qualified
Subsidiary as lessor of real estate properties to HCC or any Qualified
Subsidiary of HCC for use by HCC or such Qualified Subsidiary as the site of its
offices and facilities;
(h) the sale of natural gas compressors to the Lessor in connection
with the Equipment Lease Transactions; and
(i) the lease of assets as listed on Schedule 8.6(i).
8.7 Limitation on Leases. Permit Consolidated Lease Expense for
--------------------
any fiscal year of Holdings to exceed $10,000,000.
8.8 Limitation on Dividends. Declare or pay any dividend (other
-----------------------
than dividends payable solely in common stock of such Person) on, or make any
payment on account of, or set
apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any shares of any
class of Capital Stock of such Person or any warrants or options to purchase any
such Stock, whether now or hereafter outstanding, or make any other distribution
in respect thereof, either directly or indirectly, whether in cash or property
or in obligations of Holdings or any Subsidiary of Holdings, except that if no
Default or Event of Default exists or would reasonably be expected to be caused
thereby (i) Subsidiaries of Holdings may declare and pay dividends to Holdings
(to the extent necessary to pay interest on, or redeem, the TIDES Debentures or
to cover operating expenses of Holdings) and other shareholders of such
Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the
TIDES Declaration of Trust, (ii) Holdings may repurchase or redeem shares of
Holdings common stock from its employees and former employees so long as the
aggregate amount of all such repurchases since the Closing Date does not exceed
$7,500,000, (iii) Holdings may make open market repurchases of shares of
Holdings common stock so long as the aggregate amount of all such repurchases
since the Closing Date does not exceed $25,000,000, (iv) Holdings may declare or
pay dividends on and make mandatory stock repurchases (pursuant to the terms of
the applicable certificate of designation) of its preferred stock, if any, and
(v) Holdings may declare or pay dividends on shares of Holdings common stock,
provided that the aggregate amount of such declarations or payments pursuant to
--------
this clause (v) above does not exceed 25% of the Consolidated Net Income of
Holdings for the period (taken as one accounting period) from the beginning of
the first fiscal quarter commencing after the Closing Date to the end of
Holdings' most recently ended fiscal quarter for which financial statements have
been delivered to the Administrative Agent and the Lenders pursuant to
subsection 7.1 at or prior to the time of such declaration or payment.
8.9 Limitation on Derivatives. Enter into or assume any
-------------------------
obligations with respect to any Derivatives except for Derivatives used by
Holdings or any of its Subsidiaries in reducing the interest rate risk exposure
or foreign currency risk exposure of Holdings and its Subsidiaries which have
been provided by a lender under this Agreement or the Equipment Lease
Transactions; provided, that the aggregate notional amounts of such Derivatives
--------
shall not exceed the aggregate amount of loans outstanding under this Agreement
and the Equipment Lease Transactions.
8.10 Limitation on Investments, Loans and Advances. Make any
---------------------------------------------
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in (all of the
foregoing being herein collectively referred to as "Investments"), any Person,
-----------
except:
(a) extensions of trade credit in the ordinary course of business;
(b) Investments in Cash Equivalents;
(c) loans and advances to employees of such Person or its
Subsidiaries for travel, entertainment and relocation expenses in the ordinary
course of business in an aggregate amount for Holdings and its Subsidiaries not
to exceed $250,000 at any one time outstanding;
(d) Investments by Holdings in its Subsidiaries which are or become
Credit Parties and investments by such Subsidiaries which are or become Credit
Parties in Holdings and in other Subsidiaries of Holdings which are or become
Credit Parties;
(e) Investments by Holdings in the Real Estate Subsidiary in an
aggregate amount not to exceed $5,000,000 plus amounts necessary to maintain and
operate the real property and improvements thereon owned by the Real Estate
Subsidiary;
(f) Investments in Unqualified Subsidiaries of Holdings not to
exceed $20,000,000 in the aggregate;
(g) Investments constituting Permitted Business Acquisitions so
long as, after giving effect to the consummation of the transactions
contemplated by each Permitted Business Acquisition, the Loans to be made and
the Letters of Credit to be issued hereunder and the loans to be made under the
Equipment Lease Credit Agreements in connection therewith, the sum of (i) the
cash and Cash Equivalents then held by Holdings and (ii) an amount equal to the
difference between (A) the aggregate Commitments hereunder and the aggregate
Commitments and the aggregate Investor Commitments under the Equipment Lease
Participation Agreements in effect at such time and (B) the Aggregate
Outstanding Extensions of Credit of all the Lenders hereunder and the Available
Commitments and Available Investment Commitments under the Equipment Lease
Participation Agreements at such time, equals at least $20,000,000;
(h) Investments or acquisitions by Holdings or its Subsidiaries in
(i) up to 50% of the shares of capital stock, partnership interests, joint
venture interests, limited liability company interests or other similar equity
interests in, a Person (other than a Subsidiary), or (ii) loans or advances to a
Person (other than a Subsidiary), provided that the aggregate amount of all such
--------
loans, advances, investments or acquisitions does not exceed $25,000,000 in any
fiscal year;
(i) Loans to employees, officers and directors of Holdings and its
Subsidiaries to acquire shares of capital stock of Holdings not to exceed
$20,000,000; and
(j) the purchase by the TIDES Trust of the TIDES Debentures, as
contemplated under the TIDES Declaration of Trust.
8.11 Limitation on Optional Payments and Modifications of Debt
---------------------------------------------------------
Instruments. (i) Make any optional payment or prepayment on or redemption,
-----------
purchase or defeasance of any portion of the Shareholder Subordinated Debt,
(ii) make any optional payment or prepayment in excess of $10,000,000 during any
calendar year on or redemption of any Indebtedness other than (a) redemptions of
any portion of the TIDES Debentures pursuant to the TIDES Indenture or
redemptions of any portion of the TIDES pursuant to the TIDES Declaration of
Trust or (b) any optional payment, prepayment or redemption of any Indebtedness
pursuant to the Corporate Credit Agreement, the Equipment Lease Credit
Agreements or (iii) amend, modify or change, or consent or agree to any
amendment, modification or change to any of the terms of any Indebtedness other
than (a) any Indebtedness pursuant to the Corporate Credit Agreement, the
Equipment Lease Credit Agreements or (b) any amendment, modification or change
which would extend the maturity or reduce the amount of any payment of principal
thereof or which would reduce the rate or extend the date for payment of
interest thereon, or any amendment or waiver which would render the terms of
such Indebtedness less restrictive.
8.12 Transactions with Affiliates. Except for transactions of a
----------------------------
type set forth on Schedule 8.12, enter into any transaction, including, without
limitation, any purchase, sale, lease or exchange of property or the rendering
of any service, with any Affiliate unless such transaction is otherwise
permitted under this Agreement, is in the ordinary course of Holdings' or such
Subsidiary's business and is upon fair and reasonable terms no less favorable to
Holdings or such Subsidiary, as the case may be, than it would obtain in a
comparable arm's length transaction with a Person not an Affiliate.
8.13 Sale and Leaseback. Except for the transactions of a type set
------------------
forth on Schedule 8.13, enter into any arrangement with any Person where
Holdings or any of the Subsidiaries of Holdings is the lessee of real or
personal property which has been or is to be sold or transferred by Holdings or
such Subsidiary to such Person or to any other Person to whom funds have been or
are to be advanced by such Person on the security of such property or rental
obligations of Holdings or such Subsidiary (any of such arrangements, a "Sale
----
and Leaseback Transaction"), except that (i) HCC and its Subsidiaries may enter
-------------------------
into Financing Leases as lessee for natural gas compressors and oil and gas
production equipment if after giving effect thereto subsection 8.2 is not
contravened and (ii) HCC may enter into Sale and Leaseback Transactions as
lessee for natural gas compressors in connection with the Equipment Lease
Transactions.
8.14 Corporate Documents. Amend its Certificate of Incorporation in
-------------------
any way adverse to the interests of the Administrative Agent and the Lenders.
8.15 Fiscal Year. Permit the fiscal year of Holdings to end on a
-----------
day other than December 31.
8.16 Nature of Business. Engage in any business other than (a) the
------------------
leasing, maintenance, purchase, sale and operation of natural gas compressor
units and oil and gas production equipment, (b) the design, engineering and
fabrication of natural gas compressor units, (c) the design, engineering and
fabrication of oil and gas production equipment, (d) the provision of contract
compression and related services, (e) the provision of gas metering services as
contemplated under the HMS Transactions, and (f) any activities related thereto
which are consistent with past practice and conducted in the ordinary course of
business.
8.17 Unqualified Subsidiaries. Permit any Unqualified Subsidiary to
------------------------
directly or indirectly own any assets (other than cash or Cash Equivalents
located in bank accounts at Chase) which are located in the United States of
America or any territory thereof.
SECTION 9. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) Holdings shall fail to pay any principal of any Note or any
Reimbursement Obligation when due in accordance with the terms thereof or
hereof; or Holdings shall fail to pay any interest on any Note, or any other
amount payable hereunder, within five days after any such interest or other
amount becomes due in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by any Credit
Party herein or in any other Loan Document or which is contained in any
certificate, document or financial or other statement furnished at any time
under or in connection with this Agreement or any other Loan Document shall
prove to have been incorrect in any material respect on or as of the date made
or deemed made; or
(c) Holdings shall default in the observance or performance of any
agreement contained in Section 8 of this Agreement; or
(d) Holdings shall default in the observance or performance of any
other agreement contained in this Agreement (other than as provided in
paragraphs (a) through (c) of this Section 9) and such default shall continue
unremedied for a period of 30 days; or
(e) The Subsidiaries' Guarantee or the Holdings Guarantee shall, at
any time, cease to be in full force and effect (unless released by the
Administrative Agent) or shall be declared null and void, or the validity or
enforceability thereof shall be contested by any Credit Party; or
(f) Holdings or any of the Subsidiaries of Holdings shall (i) default
in any payment of principal of or interest of any Indebtedness (including any
Guarantee Obligation, but excluding the Loans) or in the payment of any
Guarantee Obligation, in excess of $5,000,000 in the aggregate, beyond the
period of grace (not to exceed 30 days), if any, provided in the instrument or
agreement under which such Indebtedness or Guarantee Obligation was created; or
(ii) default in the observance or performance of any other agreement or
condition relating to any such Indebtedness or Guarantee Obligation in excess of
$5,000,000 or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries of such
Guarantee Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity or such
Guarantee Obligation to become payable; or
(g) (i) Holdings or any Material Subsidiary shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its assets, or any of Holdings or
any Material Subsidiary shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against any of Holdings or any
Material Subsidiary any case, proceeding or other action of a nature referred to
in clause (i) above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against any
of Holdings or any Material Subsidiary any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results in the
entry of an order for any such relief
which shall not have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) any of Holdings or any
Material Subsidiary shall take any action for the purpose of effecting its
consent to, approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) any of Holdings or any Material Subsidiary
shall generally not, or shall admit in writing its inability to, pay its debts
as they become due; or
(h) (i) Any Person shall engage in any non-exempt "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan or any lien shall arise on the assets of HCC or any Commonly Controlled
Entity in favor of PBGC or a Plan, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Lenders, likely to result
in the termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) HCC
or any Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist, with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could subject HCC or
any of its Subsidiaries to any tax, penalty or other liabilities in the
aggregate material in relation to the business, operations, property or
financial or other condition of HCC and its Subsidiaries taken as a whole; or
(i) One or more judgments or decrees shall be entered against
Holdings or any of the Subsidiaries of Holdings involving in the aggregate a
liability (not paid or fully covered by insurance) of $5,000,000 or more and all
such judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 60 days from the entry thereof; or
(j) If at any time, Holdings or any of the Subsidiaries of Holdings
shall become liable for remediation and/or environmental compliance expenses
and/or fines, penalties or other charges which, in the aggregate, are in excess
of $5,000,000;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (g) above with respect to HCC or Holdings the
Commitments shall immediately terminate automatically and the Loans hereunder
(with accrued interest thereon) and all other amounts owing under this Agreement
(including, without limitation, all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder) shall immediately become due and payable, and
(B) if such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to HCC declare the Commitments to be
terminated forthwith, whereupon the Commitments shall immediately terminate; and
(ii) with the consent of the Required Lenders, the Administrative Agent may, or
upon the request of the Required Lenders, the Administrative Agent shall, by
notice of default to HCC declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing
under this Agreement (including, without limitation, all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) to be due and
payable forthwith, whereupon the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to the
preceding sentence, HCC shall at such time deposit in a cash collateral account
opened by the Administrative Agent an amount equal to the aggregate then undrawn
and unexpired amount of such Letters of Credit. HCC hereby grants to the
Administrative Agent, for the benefit of the Issuing Lender and the L/C
Participants, a security interest in such cash collateral to secure all
obligations of HCC under this Agreement and the other Loan Documents. Amounts
held in such cash collateral account shall be applied by the Administrative
Agent first to the payment of drafts drawn under such Letters of Credit. HCC
shall execute and deliver to the Administrative Agent, for the account of the
Issuing Lender and the L/C Participants, such further documents and instruments
as the Administrative Agent may request to evidence the creation and perfection
of the within security interest in such cash collateral account. Except as
expressly provided above in this Section, presentment, demand, protest and all
other notices of any kind are hereby expressly waived.
SECTION 10. THE ADMINISTRATIVE AGENT
10.1 Appointment. Each Lender hereby irrevocably designates and
-----------
appoints Chase as the Administrative Agent of such Lender under this Agreement
and the other Loan Documents, and each such Lender irrevocably authorizes Chase,
as the Administrative Agent for such Lender, to take such action on its behalf
under the provisions of this Agreement and the other Loan Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
10.2 Delegation of Duties. The Administrative Agent may execute any
--------------------
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
10.3 Exculpatory Provisions. Neither the Administrative Agent nor
----------------------
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by any Credit Party
or any officer thereof contained in this Agreement or any other Loan Document or
in any certificate, report, statement
or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Credit Party to perform its obligations hereunder or
thereunder. The Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Credit Party.
10.4 Reliance by Administrative Agent. The Administrative Agent
--------------------------------
shall be entitled to rely, and shall be fully protected in relying, upon any
Note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to any
Credit Party), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Loans.
10.5 Notice of Default. The Administrative Agent shall not be
-----------------
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or HCC referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders; provided that unless and until the
--------
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
10.6 Non-Reliance on Administrative Agent and Other Lenders. Each
------------------------------------------------------
Lender expressly acknowledges that neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
any Credit Party shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of HCC and each other Credit
Party and made its own decision to make its Loans hereunder and enter into this
Agreement. Each Lender also represents that it will, independently and without
reliance upon the Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of HCC
and each other Credit Party. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of any Credit Party which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
10.7 Indemnification. The Lenders agree to indemnify the
---------------
Administrative Agent in its capacity as such (to the extent not reimbursed by
HCC, or the other Credit Parties and without limiting the obligation of HCC, and
each other Credit Party to do so), ratably according to the respective amounts
of their original Commitments, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against the Administrative Agent in any
way relating to or arising out of this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Administrative Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
--------
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Administrative
Agent's gross negligence or willful misconduct. The agreements in this
subsection shall survive the payment of the Loans and all other amounts payable
hereunder.
10.8 Administrative Agent in Its Individual Capacity. The
-----------------------------------------------
Administrative Agent and its Affiliates may make loans to, accept deposits from,
hold equity securities of, and generally engage in any kind of business with any
Credit Party as though the Administrative Agent were not the Administrative
Agent hereunder and under the other Loan Documents. With respect to its Loans
made or renewed by it and any Note issued to it and with respect to any Letter
of Credit issued or participated in by it, the Administrative Agent shall have
the same rights and powers under this Agreement and the other Loan Documents as
any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
10.9 Successor Administrative Agent. The Administrative Agent may
------------------------------
resign as Administrative Agent upon 10 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders,
which successor agent shall be subject to the approval of HCC. Upon receipt of
such approval from HCC, such successor agent shall succeed to the rights, powers
and duties of the Administrative Agent, and the term "Administrative Agent"
shall mean such successor agent effective upon its appointment, and the former
Administrative Agent's rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Notes. After any retiring Administrative Agent's resignation as
Administrative Agent, the provisions of this subsection shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.
SECTION 11. MISCELLANEOUS
11.1 Amendments and Waivers. Neither this Agreement, any other Loan
----------------------
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. With the
written consent of the Required Lenders, the Administrative Agent, HCC and any
other Credit Party thereto, may, from time to time, enter into written
amendments, supplements or modifications hereto and to the other Loan Documents
for the purpose of adding any provisions to this Agreement or the other Loan
Documents or changing in any manner the rights of the Lenders or of the Credit
Parties party thereto hereunder or thereunder or waiving, on such terms and
conditions as the Administrative Agent may specify in such instrument, any of
the requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
-------- -------
and no such amendment, supplement or modification shall (a) reduce the amount or
extend the maturity of any Loan or any installment thereof, or reduce the rate
or extend the time of payment of interest thereon, or reduce any fee payable to
any Lender hereunder, or change the amount of any Lender's Commitments, in each
case without the consent of the Lender affected thereby, or (b) amend, modify or
waive any provision of this subsection or reduce the percentage specified in the
definition of Required Lenders or Majority Lenders, or consent to the assignment
or transfer by any Credit Party of any of its rights and obligations under this
Agreement and the other Loan Documents, in each case without the written consent
of all the Lenders (except as contemplated by this Agreement), or (c) amend,
modify or waive any provision of Section 10 without the written consent of the
then Administrative Agent. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon each of the Credit Parties, the Lenders, the Administrative Agent and all
future holders of the Loans. In the case of any waiver, each of the Credit
Parties, the Lenders and the Administrative Agent shall be restored to their
former position and rights hereunder and under any other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
11.2 Notices. All notices, requests and demands to or upon the
-------
respective parties hereto to be effective shall be in writing (including by
telecopy, telegraph or telex), and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made when delivered by hand, or three
days after being deposited in the mail, postage prepaid, or, in the case of
telecopy notice or overnight courier service, when received, or, in the case of
telegraphic
notice, when delivered to the telegraph company, or, in the case of telex
notice, when sent, answerback received, addressed as follows in the case of
Holdings, HCC and the Administrative Agent, and as set forth in Schedule 1.1A in
the case of the other parties hereto, or to such other address as may be
hereafter notified by the respective parties hereto:
Holdings and HCC: Hanover Compressor Company
00000 Xxxxx Xxxxxxx-Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
The Administrative Agent: The Chase Manhattan Bank
One Chase Xxxxxxxxx Xxxxx, Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Agency Services
Telecopy: 000-000-0000
with a copy to: The Chase Manhattan Bank
000 Xxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Global Oil and Gas
Telecopy: 000-000-0000
provided that any notice, request or demand to or upon the Administrative Agent
--------
or the Lenders pursuant to subsection 2.4, 3.3, 3.4, 3.5 or 3.9 shall not be
effective until received. A copy of any notice, request or demand to or upon
any Credit Party pursuant to this Agreement or any other Loan Document (other
than any such requests made in the ordinary course of administering this
Agreement and the other Loan Documents) shall also be delivered to Xxxxxx &
Xxxxxxx, Sears Tower, Suite 5800, 000 Xxxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000, attention: Xxxxxxx X. Xxxxxx, Esq. (telecopy: (000) 000-0000).
11.3 No Waiver; Cumulative Remedies. No failure to exercise and no
------------------------------
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
11.4 Survival of Representations and Warranties. All
------------------------------------------
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement and the making of the Loans and
other extensions of credit hereunder.
11.5 Payment of Expenses and Taxes. HCC agrees (a) to pay or
-----------------------------
reimburse the Administrative Agent for all its reasonable out-of-pocket costs
and expenses incurred in connection with the development, preparation and
execution of, and any amendment, supplement
or modification to, this Agreement, the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation of
the transactions contemplated hereby and thereby, including, without limitation,
the reasonable fees and disbursements of counsel to the Administrative Agent,
(b) to pay or reimburse each Lender and the Administrative Agent for all its
reasonable costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including, without limitation, reasonable fees and
disbursements of counsel to the Administrative Agent and to the several Lenders,
and (c) to pay, indemnify, and hold each Lender and the Administrative Agent
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (d) to pay, indemnify, and hold each Lender and
the Administrative Agent and their respective directors, officers, employees and
agents harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, the
Notes, the other Loan Documents and any such other documents or the use or the
proposed use of proceeds thereof (all the foregoing, collectively, the
"indemnified liabilities"), provided, that HCC shall not have any obligation
----------------------- --------
hereunder to the Administrative Agent or any Lender with respect to indemnified
liabilities arising from (i) the gross negligence or willful misconduct of the
Administrative Agent or any such Lender, (ii) legal proceedings commenced
against the Administrative Agent or any such Lender by any security holder or
creditor thereof arising out of and based upon rights afforded any such security
holder or creditor solely in its capacity as such, or (iii) legal proceedings
commenced against the Administrative Agent or any such Lender by any other
Lender or by any Transferee (as defined in subsection 11.6). The agreements in
this subsection shall survive repayment of the Loans and all other amounts
payable hereunder and under the other Loan Documents.
11.6 Successors and Assigns; Participations; Purchasing Lenders.
----------------------------------------------------------
(a) This Agreement shall be binding upon and inure to the benefit of Holdings,
HCC, the Lenders, the Administrative Agent, all future holders of the Loans and
their respective successors and assigns, except that HCC may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
(a) 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 Loan Documents, 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 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 Loan Documents, and the
Credit Parties and the Administrative 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 Loan Documents. HCC 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 an 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 11.7. HCC also agrees that each Participant shall be
entitled to the benefits of subsections 3.9, 3.11, 3.12 and 11.5 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.
(b) 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 HCC and the
Administrative 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 Loan Documents pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit D, 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 HCC and the Administrative Agent) and
delivered to the Administrative 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. 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 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.
(c) The Administrative Agent shall, on behalf of HCC, maintain at its
address referred to in subsection 11.2 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 HCC, each other
Credit Party, the Administrative 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.
(d) 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 HCC and the Administrative
Agent) together with payment to the Administrative Agent of a registration and
processing fee of $3,500, the Administrative 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.
(e) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this Section 11.6 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.
(f) HCC, 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.
(g) Holdings and HCC 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 Credit Party and its affiliates which has been delivered to such
Lender by or on behalf of Holdings or HCC pursuant to this Agreement or which
has been delivered to such Lender by or on behalf of Holdings or HCC in
connection with such Lender's credit evaluation of the Credit Parties and their
affiliates prior to becoming a party to this Agreement.
(h) 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 Administrative
Agent and HCC) that under applicable law and treaties no taxes will be required
to be withheld by the Administrative Agent, HCC 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 Administrative Agent and HCC) 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 Administrative Agent and HCC) to
provide the transferor Lender (and, in the case of any Purchasing Lender
registered in the Register, the Administrative Agent and HCC) 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.
(i) Nothing herein shall prohibit any Lender from pledging or
assigning any Note to any Federal Reserve Lender in accordance with applicable
law.
11.7 Adjustments; Set-off. (a) If any Lender (a "Benefitted
-------------------- ----------
Lender") shall at any time receive any payment of all or part of its Loans or
------
the Reimbursement Obligations owing to it, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in Section 9(g), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender's Loans or
Reimbursement Obligations, or interest thereon, such benefitted Lender shall
purchase for cash from the other Lenders such portion of each such other
Lender's Loans or the Reimbursement Obligations owing to it, or shall provide
such other Lenders with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such benefitted Lender to share the
excess payment or benefits of such collateral or proceeds ratably with each of
the Lenders; provided, however, that if all or any portion of such excess
-------- -------
payment or benefits is thereafter recovered from such benefitted Lender, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest. HCC agrees that each Lender
so purchasing a portion of another Lender's Loans may exercise all rights of
payment (including, without limitation, rights of set-off) with respect to such
portion as fully as if such Lender were the direct holder of such portion.
(a) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to HCC, any such
notice being expressly waived by HCC to the extent permitted by applicable law,
upon any amount becoming due and payable by HCC hereunder (whether at the stated
maturity, by acceleration or otherwise) to set-off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender to or
for the credit or the account of HCC. Each Lender agrees promptly to notify HCC,
the Administrative Agent after any such set-off and
application made by such Lender, provided that the failure to give such notice
--------
shall not affect the validity of such set-off and application.
11.8 Counterparts. This Agreement may be executed by one or more of
------------
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with HCC and the Administrative Agent.
11.9 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.10 Integration. This Agreement represents the agreement of
-----------
Holdings, HCC, the Administrative Agent and the Lenders with respect to the
subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Administrative Agent or any Lender relative to subject
matter hereof not expressly set forth or referred to herein or in the other Loan
Documents and the fee letter referred to in subsection 3.2.
11.11 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
-------------
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
11.12 Submission To Jurisdiction; Waivers. Each of Holdings and HCC
-----------------------------------
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgement in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to such Person at its
address set forth in subsection 11.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the right
to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this subsection any special, exemplary, punitive or consequential damages.
11.13 Acknowledgments. Each of Holdings and HCC hereby acknowledge
---------------
that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship to any Credit Party, and the relationship between Administrative
Agent and Lenders, on one hand, and Holdings and HCC, on the other hand, is
solely that of debtor and creditor; and
(c) no joint venture exists among the Lenders or among any Credit
Party and the Lenders.
11.14 WAIVERS OF JURY TRIAL. EACH OF HOLDINGS, HCC, THE
---------------------
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR THE NOTES OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
11.15 Usury. It is expressly stipulated and agreed to be the intent
-----
of Holdings, HCC, the Administrative Agent and the Lenders at all times to
comply with the applicable law governing the maximum rate or amount of interest
payable on or in connection with the Loans. If the applicable law is ever
judicially interpreted so as to render usurious any amount or compensation
called for under this Agreement or any of the other Loan Documents, or
contracted for, charged, taken, reserved or received with respect to any of the
Loans, or if acceleration of the maturity of any of the Loans, any prepayment by
HCC, or any other circumstance whatsoever, results in the Lenders, or any of
them, having been paid any interest in excess of that permitted by applicable
law, then it is the express intent of HCC, the Administrative Agent and the
Lenders that all excess amounts theretofore collected by the Lenders be credited
on the principal balances of the Loans (or, if the Loans have been or would
thereby be paid in full, refunded to HCC), and the other applicable Loan
Documents immediately be deemed reformed and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution of any
new document, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder and thereunder.
The right to accelerate the maturity of any or all of the Loans does not include
the right to accelerate any interest which has not otherwise accrued on the date
of such acceleration, and the Lenders do not intend to collect any unearned
interest in the event of acceleration. All sums or other compensation paid or
agreed to be paid to the Lenders for the use, forbearance or detention of the
indebtedness evidenced hereby shall, to the extent permitted by applicable law,
be amortized, prorated, allocated and spread with respect to all of the Loans
throughout the full term of such indebtedness until payment in full of all such
indebtedness so that the rate or amount of interest on account of such
indebtedness under all of the Loans does not exceed the Maximum Lawful Rate or
maximum amount of interest permitted under applicable law. The
term "Maximum Lawful Rate" as used herein as to any Lender means the maximum
non-usurious rate of interest which may be lawfully contracted for, charged,
taken, reserved, or received by such Lender from HCC in connection with the
Loans evidenced hereby under applicable law. The provisions of this Section
11.15 shall control all agreements between HCC and the Lenders.
11.16 Effect of Amendment and Restatement of the Existing Credit
----------------------------------------------------------
Agreement. On the Closing Date, the Existing Credit Agreement shall be amended,
---------
restated and superseded in its entirety. The parties hereto acknowledge and
agree that (a) this Agreement and the other Loan Documents, whether executed and
delivered in connection herewith or otherwise, do not constitute a novation,
payment and reborrowing, or termination of the Obligations under the Existing
Credit Agreement as in effect prior to the Closing Date; (b) such Obligations
are in all respects continuing (as amended and restated hereby) with only the
terms thereof being modified as provided in this Agreement; and (c) upon the
effectiveness of this Agreement all Loans of Lenders outstanding under the
Existing Credit Agreement immediately before the effectiveness of this Agreement
will be converted into Loans of such Lenders hereunder on the terms and
conditions set forth in this Agreement.
11.17 Conflicts. In the event that there exists a conflict between
---------
provisions in this Agreement and provisions in any other Loan Document, the
provisions of this Agreement shall control.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed and delivered by their duly authorized officers as of the date first
written above.
HANOVER COMPRESSOR COMPANY
BY: ________________________
Name:
Title:
HANOVER COMPRESSION INC. (formerly known as
Hanover Compressor Company)
BY: ________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a Lender
BY: ________________________
Name:
Title:
THE BANK OF NOVA SCOTIA
BY: ________________________
Name:
Title:
CREDIT LYONNAIS, NEW YORK BRANCH
BY: ________________________
Name:
Title:
XXXXX FARGO BANK (TEXAS) N.A.
BY: ________________________
Name:
Title:
PARIBAS
BY: ________________________
Name:
Title:
BY: ________________________
Name:
Title:
FIRST UNION NATIONAL BANK
BY: ________________________
Name:
Title:
BANKERS TRUST COMPANY
BY: ________________________
Name:
Title:
Acknowledged and agreed to
as of the date hereof:
HANOVER COMPRESSOR LIMITED HOLDINGS, LLC,
as a Guarantor
by Hanover General Holdings, Inc.,
as sole member
By: _____________________________
Name:
Title:
HANOVER MAINTECH LIMITED PARTNERSHIP,
as a Guarantor
by Hanover General Holdings, Inc.,
as general partner
By: _____________________________
Name:
Title:
HANOVER/XXXXX LIMITED PARTNERSHIP,
as a Guarantor
by Hanover General Holdings, Inc.,
as general partner
By: _____________________________
Name:
Title:
HANOVER LAND LIMITED PARTNERSHIP,
as a Guarantor
by Hanover General Holdings, Inc.,
general partner
By: _____________________________
Name:
Title:
ANNEX A
PRICING GRID
Revolving Credit Facility
-------------------------
Applicable
Consolidated Applicable Margin- Applicable Margin- Commitment
Indebtedness Ratio Eurocurrency Loans Base Rate Loans Fee Rate
------------------ ------------------ --------------- --------
*4.0 to 1.0 1.50% .500% .375%
**4.0 to 1.0 and 1.25% .250% .300%
*3.0 to 1.0
**3.0 to 1.0 and 1.00% .250% .250%
*2.0 to 1.0
**2.0 to 1.0 and .750% 0% .250%
*1.0 to 1.0
**1.0 to 1.0 .500% 0% .1875%
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 7.2(f) (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 8.1(d).
* Greater than
** Less than or equal to
HANOVER COMPRESSOR COMPANY
CREDIT AGREEMENT DISCLOSURE SCHEDULES
-------------------------------------
General Comments with respect to HCC Disclosure Schedule:
---------------------------------------------------------
While HCC has endeavored to identify under each Schedule and (by way of
enumeration or cross reference) the particular items relevant thereto, items
listed under one Schedule may be relevant to another Schedule. Accordingly,
items listed under each Schedule are hereby incorporated by reference in each
other Schedule, but only to the extent relevant to such other Schedule.
Capitalized terms used herein and not otherwise defined have the meanings
ascribed to them in the Agreement.
SCHEDULE 1.1A
LENDERS AND COMMITMENTS
-----------------------
Name and Address Commitment
of Lender Percentage Commitment
-------------- ----------- --------------
The Chase Manhattan Bank 20.0% $40,000,000.00
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxx
Telecopy: (000) 000-0000
with a copy to:
Credit Lyonnais 17.5% 35,000,000.00
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Telecopy: (000) 000-0000
Xxxxx Fargo Bank (Texas), 17.5% 35,000,000.00
National Association
0000 Xxxxxxxxx, 0/xx/ Xxxxx Xxxxxx Group
Xxxxxxx, Xxxxx 00000
Attention: Xxx Xxxxxxx
Telecopy: (000) 000-0000
The Bank of Nova Scotia 15.0% 30,000,000.00
000 Xxxxxxxxx Xxxxxx Xxxxxxxxx,
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxx
Telecopy: (000) 000-0000
Paribas 12.5% 25,000,000.00
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxxxxx
Telecopy: (000) 000-0000
First Union National Bank
0000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxx
Telecopy: (000) 000-0000 12.5% 25,000,000.00
Bankers Trust Company
c/o Deutsche Bank
000 Xxxxxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxxx
Telecopy: (000) 000-0000 5.0% 10,000,000.00
----------- ------ -----------------
Total 100% $200,000,000.00
SCHEDULE 5.2 MATERIAL CHANGES
------------ ----------------
SCHEDULE 5.4 REQUIRED CONSENTS
------------ -----------------
SCHEDULE 5.16 ENVIRONMENTAL
------------- -------------
SCHEDULE 8.2(c) EXISTING INDEBTEDNESS
--------------- ---------------------
SCHEDULE 8.3(l) EXISTING LIENS
--------------- --------------
SCHEDULE 8.3(n) ADDITIONAL EXISTING LIENS
--------------- -------------------------
SCHEDULE 8.3(t) ADDITIONAL LIENS
---------------------------------
ADDITIONAL LIENS
SCHEDULE 8.6(i) LEASE OF ASSETS
--------------------------------
LEASE OF ASSETS
SCHEDULE 8.12 AFFILIATE TRANSACTIONS
------------- ----------------------
SCHEDULE 8.13 SALE AND LEASEBACK TRANSACTIONS
------------- -------------------------------
EXHIBIT A
FORM OF REVOLVING CREDIT NOTE
$______ New York, New York
_________ ___, ___
FOR VALUE RECEIVED, the undersigned, Hanover Compression Inc., a Delaware
corporation ("HCC"), hereby unconditionally promises to pay to the order of
---
_________________ (the "Lender") at the office of The Chase Manhattan Bank,
------
located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, in lawful money of the
United States of America and in immediately available funds, on the Final
Maturity Date the principal amount of (a) ______________________ DOLLARS
($_____________), or, if less, (b) the aggregate unpaid principal amount of all
Revolving Credit Loans made by the Lender to HCC pursuant to subsection 2.1(a)
of the Credit Agreement, as hereinafter defined. HCC further agrees to pay
interest in like money at such office on the unpaid principal amount hereof from
time to time outstanding at the rates and on the dates specified in subsections
3.1 and 3.5 of such Credit Agreement.
The holder of this Note is authorized to endorse on the schedules annexed
hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof the date, Type and amount of each
Revolving Credit Loan made pursuant to the Credit Agreement and the date and
amount of each payment or prepayment of principal thereof, each continuation
thereof, each conversion of all or a portion thereof to another Type and, in the
case of Eurodollar Loans, the length of each Interest Period with respect
thereto. Each such endorsement shall constitute prima facie evidence of the
----- -----
accuracy of the information endorsed. The failure to make any such endorsement
shall not affect the obligations of HCC in respect of such Revolving Credit
Loan.
This Note (a) is one of the Notes referred to in the Amended and Restated
Credit Agreement dated as of March 13, 2000 (as further amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among Holdings,
----------------
HCC, the Lender, the other lenders and financial institutions from time to time
parties thereto and The Chase Manhattan Lender, as administrative agent, (b) is
subject to the provisions of the Credit Agreement and (c) is subject to optional
and mandatory prepayment in whole or in part as provided in the Credit
Agreement. This Note is guaranteed as provided in the Loan Documents. Reference
is hereby made to the Loan Documents for a description of the nature and extent
of the guarantees, the terms and conditions upon which each guarantee was
granted and the rights of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE CREDIT
AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND IN ACCORDANCE
WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 11.6 OF THE CREDIT
AGREEMENT.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
HANOVER COMPRESSION INC.
By: ________________________________
Name: ______________________________
Title: _____________________________
Schedule A
to Revolving Credit Note
------------------------
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
----------------------------------------------
Amount Amount of Amount of ABR Unpaid Principal
Amount of ABR Converted to Principal of ABR Loans Converted to Balance of ABR Notation
Date Loans ABR Loans Loans Repaid Eurodollar Loans Loans Made By
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Schedule B
to Revolving Credit Note
------------------------
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
--------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
Interest Period Amount of Amount of Unpaid
Amount of Amount and Eurodollar Principal of Eurodollar Principal
Date Eurodollar Converted to Rate with Eurodollar Loans Balance of
Loans Eurodollar Respect Thereto Loans Repaid Converted to Eurodollar Notation
Loans ABR Loans Loans Made By
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