EXHIBIT 10.36
AMENDMENT
AMENDMENT, dated as of December 15, 2003 (this "Amendment"),
under (i) the Guarantee (the "2000B Guarantee") and the Credit Agreement (the
"2000B Credit Agreement"), as defined in the Participation Agreement, dated as
of October 27, 2000 (as the same may have been, amended, supplemented or
otherwise modified from time to time, the "2000B Participation Agreement"),
among Hanover Compression Limited Partnership (formerly known as Hanover
Compression Inc., "HCLP"), Hanover Equipment Trust 2000B, (the "2000B Lessor"),
Bank Hapoalim B.M. and FBTC Leasing Corp., as investors, the lenders parties
thereto (the "2000B Lenders") and JPMorgan Chase Bank (formerly known as The
Chase Manhattan Bank), a New York banking corporation, as the administrative
agent for the 2000B Lenders (the "Agent") and (ii) the Guarantee (the "2000A
Guarantee") and the Credit Agreement (the "2000A Credit Agreement"), as defined
in the Participation Agreement, dated as of March 13, 2000 (as the same may have
been, amended, supplemented or otherwise modified from time to time, the "2000A
Participation Agreement"), among HCLP, Hanover Equipment Trust 2000A (the "2000A
Lessor"), First Union National Bank and Scotiabanc Inc., as investors, the
lenders parties thereto (the "2000A Lenders") and the Agent, as agent for the
2000A Lenders. The 2000B Participation Agreement and the 2000A Participation
Agreement are collectively hereinafter referred to as the "Participation
Agreements". The 2000B Guarantee and the 2000A Guarantee are collectively
hereinafter referred to as the "Synthetic Guarantees", and the 2000B Credit
Agreement and the 2000A Credit Agreement are collectively referred to herein as
the "Synthetic Credit Agreements."
W I T N E S S E T H:
WHEREAS, Hanover and HCLP have requested that the Agent and
the Required Lenders under each of the Participation Agreements, Synthetic
Guarantees and Synthetic Credit Agreements amend certain of the provisions of
each of the Participation Agreements, Synthetic Guarantees and Synthetic Credit
Agreements; and
WHEREAS, the Agent and the Required Lenders under each of the
Participation Agreements, Synthetic Guarantees and Synthetic Credit Agreements
are agreeable to the requested amendments, but only on the terms and subject to
the conditions set forth herein;
NOW THEREFORE, in consideration of the premises herein
contained and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto hereby agree as follows:
I. Defined Terms. As used in this Amendment, terms
defined in the preamble hereof and the recitals hereto are used herein as so
defined, and terms defined in any of the Participation Agreements and the
Synthetic Guarantees and not defined herein are used herein as therein defined.
II. Amendments to the Synthetic Guarantees, Annex A of
the Participation Agreements and the Synthetic Credit Agreements.
1. Amendments to Annex A of the Participation
Agreements. (a) Annex A of each of the Participation Agreements is hereby
amended by adding the following defined terms in proper alphabetical order:
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"Administrative Agent": JPMorgan Chase Bank, a New York
banking corporation, in its capacity as administrative agent under the
Corporate Credit Agreement.
"BOCM": Banc One Capital Markets, Inc.
"Cayman Note": that certain Non-Recourse Promissory Note,
dated as of May 14, 2003, in the original principal amount of
$58,425,333.33, executed by Hanover Cayman Limited and payable to the
order of Schlumberger Surenco S.A.
"Co-Lead Arrangers": the collective reference to JPMorgan and
BOCM.
"Consolidated EBITDAR": with respect to any period,
Consolidated EBITDA for such period plus the Consolidated Lease Expense
of a Person for such period.
"Consolidated Intangibles": at any time, all amounts included
in Consolidated Net Worth of any Person at such time which, in
accordance with GAAP, would be classified as intangible assets on a
consolidated balance sheet of such Person and its Subsidiaries,
including, without limitation, goodwill (other than negative goodwill),
including (but without duplication) any amounts (however designated on
the balance sheet) representing the cost of acquisitions in excess of
underlying net tangible assets, and patents, trademarks, copyrights and
other intangibles.
"Consolidated Leverage Ratio": as defined in Section 11.1(c)
of the Guarantee.
"Consolidated Senior Indebtedness": at a particular date, as
to any Person, Consolidated Indebtedness of such Person and its
Subsidiaries other than (i) the 2001A Lease Guarantee, (ii) the 2001B
Lease Guarantee, (iii) the 2003 Notes Subordinated Guarantee, and (iv)
any unsecured subordinated debt or any subordinated guarantees not
included in clauses (i)-(iii) above and otherwise permitted herein.
"Consolidated Tangible Net Worth": at any date, an amount
equal to Consolidated Net Worth at such date less Consolidated
Intangibles at such date; provided, that for purposes of Section
11.1(a) of the Guarantee, this definition will not include (a) the
writedown of any of the Equipment Lease Transactions coming on-balance
sheet on or after July 1, 2003 or (b) the effects of marking to market
any portion of the expenses attributable to the Securities Litigation
Settlement.
"Corporate Credit Agreement": the Credit Agreement, dated
December 15, 2003 (as amended, supplemented or otherwise modified from
time to time), among Hanover, HCLP and several banks and other
financial institutions from time to time parties thereto and the
Agents.
"Corporate Credit Agreement Closing Date": December 15, 2003.
"Credit Parties": as defined in the Corporate Credit
Agreement.
"Exchange Act": as defined in Section 6.1(q) of the Credit
Agreement.
"Excluded Unqualified Subsidiary": any Unqualified Subsidiary
not organized under a jurisdiction of the United States in respect of
which either (a) the pledge of all of the Capital Stock of such
Subsidiary as Collateral or (b) the guaranteeing by such Subsidiary of
the Obligations, or the pledging of assets by such Subsidiary to secure
the Obligations, would, in the good faith judgment of Hanover, result
in adverse tax consequences to Hanover; provided, that
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notwithstanding the foregoing, Hanover Cayman Limited and Production
Operators Cayman Inc. shall be deemed to be Excluded Unqualified
Subsidiaries.
"Existing Credit Agreement": as defined in the Corporate
Credit Agreement.
"Final Maturity Date": December 29, 2006.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counter indemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "primary obligations") of
any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation
of the guaranteeing Person, whether or not contingent, (a) to purchase
any such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (d)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation 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 Hanover, as the case may be, in good faith.
"Hanover": Hanover Compressor Company, a Delaware corporation.
"Hanover Convertible Notes": senior unsecured convertible
notes to be offered and issued by Hanover on or before the Corporate
Credit Agreement Closing Date in an aggregate principal amount not to
exceed $[150,000,000], which shall be unguaranteed and the terms and
conditions of which shall be in form and substance reasonably
satisfactory to the Co-Lead Arrangers.
"HCLP": Hanover Compression Limited Partnership (formerly
known as Hanover Compression Inc.), a Delaware corporation.
"Holdings": Hanover Compressor Company, a Delaware
corporation.
"JPMorgan": X.X. Xxxxxx Securities Inc.
"Loan Documents": as defined in the Corporate Credit
Agreement.
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"Mortgaged Properties": the real properties listed on Schedule
1.1B of the Guarantee, as to which the Administrative Agent for the
benefit of the Lenders shall be granted a Lien pursuant to the
Mortgages.
"Mortgages": each of the mortgages and deeds of trust made by
any Guarantor in favor of, or for the benefit of, the Administrative
Agent for the benefit of the Lenders, substantially in the form of
Exhibit F to the Corporate Credit Agreement (with such changes thereto
as shall be advisable under the law of the jurisdiction in which such
mortgage or deed of trust is to be recorded), as the same may be
amended, supplemented or otherwise modified from time to time.
"1999 Synthetic Lease": 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 HCLP, as lessee.
"Net Unqualified Subsidiary Investments": Investments in
Unqualified Subsidiaries (whether existing, newly formed, or acquired)
made by Hanover and its Qualified Subsidiaries pursuant to the
provisions of Section 11.10(e) of the Guarantee. In order to calculate
the "net" amount of a particular Net Unqualified Subsidiary Investment
that is to be included in the amounts in the second column of the table
set forth in such Section 11.10(e), the following formula shall be
used: (a) the Dollar amount of cash and Cash Equivalents plus the net
book value (in Dollars) of other assets that, in each case, constitute
such Net Unqualified Subsidiary Investment, less, to the extent that
the result of such deduction would be zero or a positive number, (b)
the net amount (in Dollars, with the value of property other than cash
and Cash Equivalents being the net book value thereof) of the
dividends, distributions, loan repayments and other amounts
(representing a return on capital) received by Hanover and its
Qualified Subsidiaries from Unqualified Subsidiaries for the time
period from the Corporate Credit Agreement Closing Date through the
date of which such calculation is made, provided that the amounts
deducted pursuant to the foregoing clause (b) shall not include any
amounts that have previously been deducted in calculating the "net"
amount of any other Net Unqualified Subsidiary Investment.
"Non-Excluded Taxes": as defined in subsection 2.14(a).
"Non-U.S. Lender": as defined in Section 2.14(d) of the Credit
Agreement.
"Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or
similar levies arising from any payment made hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to,
the Credit Agreement or any other Credit Document.
"Performance Letter of Credit": any Letter of Credit issued to
support contractual obligations for supply, service or construction
contracts, including, but not limited to, bid, performance, advance
payment, warranty, retention, availability and defects liability
obligations.
"Permitted Credit Support": a guarantee or other credit
support provided by Hanover or any of its Qualified Subsidiaries as to
the Non-Recourse Indebtedness of Unqualified Subsidiaries to the extent
that (x) such guarantee or other credit support is included as
"Indebtedness" of Hanover or such Qualified Subsidiary for the purposes
of Section 11.2 of the Guarantee or as "Guarantee Obligations" of
Hanover or such Qualified Subsidiary for the purposes of Section 11.4
of the Guarantee, and (y) the creation, incurrence and existence of
such "Indebtedness" or
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"Guarantee Obligations" by Hanover or such Qualified Subsidiary is
permitted by the provisions of Section 11.2 or Section 11.4 of the
Guarantee, respectively.
"Permitted International Reorganization": a restructuring of
Hanover's international operations pursuant to which (a) Hanover or one
of its wholly-owned Subsidiaries may form one or more holding
companies, which shall be organized under the laws of a jurisdiction
outside of the United States, (b) the equity interests in existing
Hanover's Unqualified Subsidiaries may be conveyed, sold or otherwise
transferred to such newly-formed holding companies, and/or (c) certain
existing intercompany debt of such Unqualified Subsidiaries may be
converted to equity.
"POC Acquisition": as defined in the Corporate Credit
Agreement.
"Pro Forma Balance Sheet": as defined in Section 9.1(a) of the
Guarantee.
"Refinancing Indebtedness": any Indebtedness that exists (with
respect to any amendments, modifications or supplements thereof) or
that is incurred to refund, refinance, replace, exchange, renew, repay,
extend, modify, amend or supplement (including pursuant to any
defeasance or discharge mechanism) (collectively, "refinance",
"refinances" and "refinanced" shall have a correlative meaning) any
other specified Indebtedness, including any Indebtedness that
refinances Refinancing Indebtedness, provided, however, that:
(i) if the Stated Maturity (as such term is hereinafter
defined) of the Indebtedness being refinanced is
earlier than the Final Maturity Date, the Refinancing
Indebtedness has a Stated Maturity no earlier than
the Stated Maturity of the Indebtedness being
refinanced or (b) if the Stated Maturity of the
Indebtedness being refinanced is later than the Final
Maturity Date, the Refinancing Indebtedness has a
Stated Maturity of at least 91 days later than the
Final Maturity Date;
(ii) the Refinancing Indebtedness has an Average Life (as
such term is hereinafter defined) as the time such
Refinancing Indebtedness is incurred equal to or
greater than the Average Life of the Indebtedness
being refinanced;
(iii) such Refinancing Indebtedness is incurred in an
aggregate principal amount (or if issued with
original issue discount, an aggregate issue price)
that is equal to or less than the sum of the
aggregate principal amount (or if issued with
original issue discount, the aggregate accreted
value) then outstanding of the Indebtedness being
refinanced (plus, without duplication, any additional
Indebtedness incurred to pay interest or premiums
required by instruments governing such existing
Indebtedness and fees incurred in connection
therewith);
(iv) if the Indebtedness being refinanced is subordinated
in right of payment to any of the Obligations, such
Refinancing Indebtedness is subordinated in right of
payment to such Obligations on terms at least as
favorable to the Lenders as those contained in the
documentation governing the Indebtedness that is
being refinanced;
(v) after giving effect to the incurrence of such
Refinancing Indebtedness, no Default or Event of
Default would exist hereunder;
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(vi) the obligor(s) of such Refinancing Indebtedness shall
be no different than the obligors of the Indebtedness
being refinanced provided, that notwithstanding the
foregoing, Hanover shall be permitted to become the
obligor of Refinancing Indebtedness in which HCLP or
any of its Subsidiaries was the prior obligor;
(vii) the terms and conditions of such Refinancing
Indebtedness shall be no less favorable in any
material respect than the terms and conditions of the
Indebtedness being refinanced; and
(viii) the security interest(s) granted in connection with
such Refinancing Indebtedness, if any, shall not
cover more collateral, in any material respect, than
the security interest(s), if any, granted in
connection with the Indebtedness being refinanced.
As used in this definition the term "Stated Maturity" means, with
respect to any Indebtedness, the date specified in the documents or
instruments evidencing such Indebtedness as the fixed date on which the
payment of principal of such Indebtedness is due and payable, including
pursuant to any mandatory prepayment or redemption provision, but shall
not include any contingent obligations to repay, prepay, redeem or
repurchase any such principal prior to the date originally scheduled
for the payment thereof. As used in this definition, the term "Average
Life" means, as of the date of determination, with respect to any
Indebtedness, the quotient obtained by dividing (a) the sum of the
products of the numbers of years from the date of determination to the
dates of each successive scheduled principal payment of such
Indebtedness multiplied by the amount of such payment by (b) the sum of
all such payments.
"SEC": the Securities and Exchange Commission.
"Securities Litigation Settlement": that certain settlement
agreement, dated as of May 12, 2003, entered into by Hanover and the
other parties thereto pursuant to which certain securities class action
litigation and other litigation described therein is to be settled,
together with any other documents executed by Hanover and/or any of its
Subsidiaries in connection therewith so long as such documents do not
result in a material increase of the obligations of Hanover and its
Subsidiaries under the Securities Litigation Settlement.
"Subsidiary Guarantor": as defined in the Corporate Credit
Agreement.
"Title Insurance Company": as defined in Section 6.2(k) of the
Corporate Credit Agreement.
"2003 Notes": the senior, unsecured notes to be offered and
issued by Hanover on or before the Corporate Credit Agreement Closing
Date in an aggregate principal amount not to exceed $275,000,000, which
may be guaranteed on a subordinated basis by the Borrower and which
shall be in form and substance satisfactory to the Co-Lead Arrangers,
provided that any proceeds received from the issuance of the 2003 Notes
in excess of $200,000,000 shall be used to prepay the 2000A Synthetic
Lease and/or the 2000B Synthetic Lease.
"2003 Notes Subordinated Guarantee": the guarantee of HCLP of
the 2003 Notes, and any Refinancing Indebtedness in respect thereof;
provided, that such guarantee shall be subordinated to HCLP's
obligations under the Loan Documents in form and substance satisfactory
to the Co-Lead Arrangers.
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"Unrestricted Subsidiary": (i) any Subsidiary of HCLP that
exists on the Corporate Credit Agreement Closing Date and is so
designated as an Unrestricted Subsidiary by HCLP in writing to the
Agent, (ii) any Subsidiary of HCLP that at the time of determination
shall be an Unrestricted Subsidiary (as designated by the Board of
Directors of HCLP, as provided below), and (iii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any
Subsidiary of HCLP (including any newly acquired or newly formed
Subsidiary) to be an Unrestricted Subsidiary if all of the following
conditions apply and continue to apply following such designation: (a)
neither HCLP nor any of its Subsidiaries (other than another
Unrestricted Subsidiary) provides credit support for Indebtedness or
other obligations of such Unrestricted Subsidiary (including any
undertaking, agreement or instrument evidencing such Indebtedness or
obligations) except as permitted by Section 11.10 of the Guarantee and
(b) the Investments by HCLP or the Restricted Subsidiaries in such
Subsidiary made on or prior to the date of designation of such
Subsidiary as an Unrestricted Subsidiary shall not violate the
provisions described under Section 11.10 of the Guarantee and such
Unrestricted Subsidiary is not party to any agreement, contract,
arrangement or understanding at such time with HCLP or any other
Subsidiary (other than another Unrestricted Subsidiary) of HCLP unless
the terms of any such agreement, contract, arrangement or understanding
are no less favorable to HCLP or such other Subsidiary than those that
might be obtained at the time from Persons who are not Affiliates of
HCLP or, in the event such condition is not satisfied, the value of
such agreement, contract, arrangement or understanding to such
Unrestricted Subsidiary shall be deemed an Investment. Any such
designation by the Board of Directors shall be evidenced to the Agent
by filing with the Agent a resolution of the Board of Directors of HCLP
giving effect to such designation and an officer's certificate
certifying that such designation complies with the foregoing conditions
and any Investment by HCLP in such Unrestricted Subsidiary shall be
deemed the making of an Investment on the date of designation in an
amount equal to the greater of (1) the net book value of such
Investment or (2) the fair market value of such Investment as
determined in good faith by the Board of Directors (and evidenced by a
resolution of the Board of Directors). The Board of Directors may
designate any Unrestricted Subsidiary as a Subsidiary; provided (i)
that, if such Unrestricted Subsidiary has any Indebtedness, immediately
after giving effect to such designation, no Default or Event of Default
would result, and (ii) that all Indebtedness of such Subsidiary shall
be deemed to be incurred on the date such Unrestricted Subsidiary
becomes a Subsidiary. Unrestricted Subsidiaries shall be deemed to be
Affiliates of Hanover, HCLP and their Subsidiaries. Any Subsidiary of
an Unrestricted Subsidiary shall also be deemed to be an Unrestricted
Subsidiary. Any Subsidiary of Hanover that is not an Unrestricted
Subsidiary shall be a "Restricted Subsidiary". As used in this
definition, the term "Board of Directors" shall include any committees
that the Board of Directors has authorized to deal with Unrestricted
Subsidiaries.
"Xxxxx Fargo Credit Agreement": the Credit Agreement, dated as
of September 23, 1997 (as amended, supplemented or otherwise modified
from time to time), among Hanover and Xxxxx Fargo Bank (Texas),
National Association, together with any Refinancing Indebtedness
incurred in respect thereof.
"Xxxxx Fargo Term Note": that certain Term Note, dated as of
September 23, 1997, in the original principal amount of $5,000,000,
executed by Hanover and payable to the order of Xxxxx Fargo Bank
(Texas), National Association, together with any Refinancing
Indebtedness incurred in respect thereof.
(b) Annex A of each of the Participation Agreements is hereby
amended by deleting therefrom the definitions of the following defined terms and
substituting in place thereof the following new definitions:
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"Consolidated EBITDA": for any period, with respect to any
Person, the sum of, without duplication, (a) Consolidated Earnings
Before Interest and Taxes for such Person for such period plus (b) all
amounts attributable to depreciation and amortization, determined in
accordance with GAAP (to the extent such amounts have been deducted in
determining Consolidated Earnings Before Interest and Taxes for such
period) plus (c) all amounts classified as extraordinary charges for
such period (to the extent such amounts have been deducted in
determining Consolidated Earnings Before Interest and Taxes for such
period) plus (d) Designated Distributions (as such term is hereinafter
defined) plus (e) any non-recurring non-cash expenses or losses
(including, non-cash currency charges) (to the extent such amounts have
been deducted in determining Consolidated Earnings Before Interest and
Taxes for such period) plus (f) any non-recurring non-cash expenses or
losses attributable to the Securities Litigation Settlement (to the
extent such amounts have been deducted in determining Consolidated
Earnings Before Interest and Taxes for such period), and minus (a) any
increase in Consolidated Earnings Before Interest and Taxes to the
extent that such increase is a result of the actions underlying the
charges referred to in clause (e) above subsequent to the fiscal
quarter in which the relevant non-cash expenses or losses were
reflected as a charge in the statement of Consolidated Earnings Before
Interest and Taxes, all as determined on a consolidated basis and (b)
all amounts classified as extraordinary income for such period (to the
extent such amounts have been included in determining Consolidated
Earnings Before Interest and Taxes for such period); provided that, if
during such period such Person shall have made a Material Acquisition,
Consolidated EBITDA for such period shall be calculated after giving
pro forma effect to such Material Acquisition as if such Material
Acquisition had occurred on the first day of such period; provided
further that, the foregoing proviso shall have effect only if the Agent
has been furnished with unaudited, or, if available, audited,
consolidated financial statements of the acquired property for such
period, such financial statements to include the balance sheet and
statements of income and cash flows reflecting the historical
performance of the acquired property for such period to the extent
applicable. As used in this definition, "Material Acquisition" means
any acquisition of property or series of related acquisitions of
property that (a) constitutes assets or constitutes all or
substantially all of the equity interests of a Person and (b) involves
the payment of consideration of at least $15,000,000. In calculating
Consolidated EBITDA, the financial performance of Joint Ventures,
Unrestricted Subsidiaries and Unqualified Subsidiaries that have any
Non-Recourse Indebtedness outstanding shall be disregarded except as
provided in clause (d) above, with respect to "Designated
Distributions", which shall mean cash dividends and cash payments with
respect to intercompany Indebtedness, in each case received by Hanover
or any Restricted Subsidiary from any Joint Venture or from any
Unrestricted Subsidiary or Unqualified Subsidiary that has any
Non-Recourse Indebtedness outstanding (to the extent such amounts have
been deducted in determining Consolidated Earnings Before Interest and
Taxes for such period).
"Consolidated Indebtedness": at a particular date, as to any
Person, the sum of (without duplication) (a) all Indebtedness of such
Person and its Subsidiaries determined on a consolidated basis in
accordance with GAAP, excluding (i) Indebtedness in respect of
Financing Leases, (ii) for purposes of Sections 11.1(b) and (c) of the
Guarantee only, Non-Recourse Indebtedness and the Tranche B Balance
Sheet Loans and (iii) intercompany Indebtedness payable by HCLP and/or
any of its Subsidiaries to Havover, plus (b) (i) Guarantee Obligations
of such Person and its Subsidiaries in respect of Indebtedness of any
other Person (other than in respect of the Tranche B Balance Sheet
Loans) and (ii) the Equipment Lease Tranche A Loans.
"Consolidated Interest Expense": for any period, with respect
to any Person, the amount which, in conformity with GAAP, would be set
forth opposite the caption "interest expense" or any like caption
(including, without limitation, imputed interest included in Financing
Lease payments) on a consolidated income statement of such Person and
its Subsidiaries for such
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period, plus, (a) to the extent not so included, payments by such
Person and its Subsidiaries under the Equipment Leases attributable to
(i) interest payments under the Equipment Lease Tranche A Loans and
Equipment Lease Tranche B Loans and (ii) the yield to the Investors in
connection with the Equipment Lease Transactions and minus, (b) to the
extent so included (i) interest on Non-Recourse Indebtedness (to the
extent that the same would otherwise be included in Consolidated
Interest Expense) and (ii) for purposes of calculating the ratio in
Section 11.1(d) of the Guarantee only, payment in kind of interest on
each of the Hanover Zero Coupon Subordinated Notes, the Cayman Note,
the Note (as such term is defined in the Securities Litigation
Settlement) and the TIDES or the TIDES Debentures and any Refinancing
Indebtedness incurred in respect thereof.
"Consolidated Net Income": for any period as to any Person,
the consolidated net income (or loss) of such Person and its
Subsidiaries, determined on a consolidated basis in accordance with
GAAP, provided that for purposes of determining Consolidated Net
Income, (a) 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, in each case, be considered interest expense and
(b) the effects of marking to market any portion of the expenses
attributable to the Securities Litigation Settlement shall be
disregarded.
"Equipment Lease Credit Agreements": (i) the Credit Agreement
dated as of March 13, 2000 (as amended, supplemented or otherwise
modified from time to time), among Hanover Equipment Trust 2000A, as
borrower, the several lenders from time to time parties thereto,
Industrial Bank of Japan, LTD., as syndication agent, The Bank of Nova
Scotia, as documentation agent and The Chase Manhattan Bank, as agent,
(ii) the Credit Agreement dated as of October 27, 2000 (as amended,
supplemented or otherwise modified from time to time), among Hanover
Equipment Trust 2000B, as borrower, the several lenders from time to
time parties thereto, National Westminster Bank PLC, as managing agent,
Citibank, N.A., Credit Suisse First Boston and The Industrial Bank of
Japan, Ltd., as co-agents and The Chase Manhattan Bank, as agent, (iii)
the 2001A Equipment Lease Securities, (iv) the 2001B Equipment Lease
Securities, (v) the Indenture, dated as of August 30, 2001, among
Hanover Equipment Trust 2001A, the guarantors party thereto and the
initial purchasers named therein, (vi) the Indenture, dated as of
August 30, 2001, among Hanover Equipment Trust 2001B, the guarantors
party thereto and Wilmington Trust FSB, as indenture trustee and (vii)
any Credit Agreement or Indenture, in connection with and dated as of
the date of an Additional Participation Agreement (as amended,
supplemented or otherwise modified from time to time), among a Delaware
business trust, as borrower, and the several lenders from time to time
parties thereto.
"Equipment Lease Participation Agreements": (i) the
Participation Agreement dated March 13, 2000 (as amended, supplemented
or otherwise modified from time to time, the "2000A Participation
Agreement"), among HCLP, 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, (ii) the Participation Agreement dated as of
October 27, 2000 (as amended, supplemented or otherwise modified from
time to time, the "2000B Participation Agreement"), among HCLP, Hanover
Equipment Trust 2000B, Bank Hapoalim B.M. and FBTC Leasing Corp., as
investors, The Chase Manhattan Bank, as agent, and the lenders parties
thereto, (iii) the Participation Agreement dated as of August 31, 2001
(as amended, supplemented or otherwise modified from time to time, the
"2001A Participation Agreement"), among HCLP, Hanover Equipment Trust
2001A, General Electric Capital Corporation as investor, The Chase
Manhattan Bank, as agent, and the lenders parties thereto, (iv) the
Participation Agreement dated
10
as of August 31, 2001 (as amended, supplemented or otherwise modified
from time to time, the "2001B Participation Agreement"), among HCLP,
Hanover Equipment Trust 2001B, General Electric Capital Corporation as
investor, The Chase Manhattan Bank, as agent, and the lenders parties
thereto.
"Equipment Lease Tranche A Loans": the collective reference
to: (a) for the 2000A Synthetic Lease and the 2000B Synthetic Lease,
the loans to be made pursuant to each Equipment Lease Credit Agreement
and identified as the "Tranche A Loans" in Schedule 1.1 of each of the
Equipment Lease Credit Agreements, (b) for the 2001A Synthetic Lease,
the Tranche A Portion of the 2001A Equipment Lease Transaction, (c) for
the 2001B Synthetic Lease, the Tranche A Portion of the 2001B Equipment
Lease Transaction and (d) for any Additional Lease, either (i) the
loans to be made pursuant to such Equipment Lease Credit Agreement and
identified as the "Tranche A Loans" in Schedule 1.1 of such Equipment
Lease Credit Agreement or (ii) the "Tranche A Portion" of such
Equipment Lease Transaction.
"Equipment Lease Tranche B Loans": the collective reference
to: (a) for the 2000A Synthetic Lease and the 2000B Synthetic Lease,
the loans to be made pursuant to each Equipment Lease Credit Agreement
and identified as the "Tranche B Loans" in Schedule 1.1 of each of the
Equipment Lease Credit Agreements, (b) for the 2001A Synthetic Lease,
the Tranche B portion of the 2001A Equipment Lease Securities, (c) for
the 2001B Synthetic Lease, the Tranche B portion of the 2001B Equipment
Lease Securities and (d) for any Additional Lease, either (i) the loans
to be made pursuant to such Equipment Lease Credit Agreement and
identified as the "Tranche B Loans" in Schedule 1.1 of such Equipment
Lease Credit Agreement or (ii) the "Tranche B Portion" of such
Equipment Lease Transaction.
"Equipment Leases": (i) the Lease dated as of March 13, 2000
(as amended, supplemented or otherwise modified from time to time),
between Hanover Equipment Trust 2000A, as lessor, and HCLP, as lessee
(the "2000A Synthetic Lease"), (ii) the Lease dated as of October 27,
2000 (as amended, supplemented or otherwise modified from time to
time), between Hanover Equipment Trust 2000B, as lessor, and HCLP, as
lessee (the "2000B Synthetic Lease"), (iii) the Lease dated as of
August 31, 2001 (as amended, supplemented or otherwise modified from
time to time), between Hanover Equipment Trust 2001A, as lessor, and
HCLP, as lessee (the "2001A Synthetic Lease"), (iv) the Lease dated as
of August 31, 2001 (as amended, supplemented or otherwise modified from
time to time), between Hanover Equipment Trust 2001B, as lessor, and
HCLP, as lessee (the "2001B Synthetic Lease") and (v) any Lease in
connection with and dated as of the date of any Additional
Participation Agreement (as amended, supplemented or otherwise modified
from time to time), between a Delaware business trust, as lessor, and
HCLP, as lessee (the "Additional Lease").
"Indebtedness": of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than current liabilities
incurred in the ordinary course of business and payable in 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, (d)
all liabilities secured by any Lien (other than any Lien permitted
under Section 11.3 of the Guarantee) 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 and (e) the aggregate drawable amount of
letters of credit issued for the account of such Person provided, that
solely for the purposes of Section 11.1 of the Guarantee and
calculating the Pricing Grid, the definition of "Indebtedness"
11
shall not include Performance Letters of Credit. For purposes of
clarification, the obligations with respect to the Equipment Leases
shall not be deemed to constitute Indebtedness under the preceding
clause (d) solely by virtue of the grant by HCLP thereunder of a Lien
on its interest in the Equipment subject to such Equipment Lease to
secure HCLP's and the Guarantor's obligations in connection therewith.
"Non-Recourse Indebtedness": (i) Indebtedness of Unqualified
Subsidiaries (a) as to which neither Hanover nor any of its Qualified
Subsidiaries (x) provides any guarantee or credit support of any kind
(including any undertaking, guarantee, indemnity, agreement or
instrument that would constitute Indebtedness) other than Permitted
Credit Support, or (y) other than with respect to Permitted Credit
Support, is directly or indirectly liable (as guarantor or otherwise)
and (b) the explicit terms of which provide that, other than with
respect to Permitted Credit Support, there is no recourse against any
of the assets of Hanover or its Qualified Subsidiaries (other than the
Capital Stock of an Unqualified Subsidiary) or that, other than with
respect to Permitted Credit Support, recourse is limited to assets
which do not include the assets of Hanover or its Qualified
Subsidiaries (other than the Capital Stock of an Unqualified
Subsidiary) or (ii) Indebtedness of Unqualified Subsidiaries incurred
solely to finance the acquisition or construction of specific property
that is acquired after the Corporate Credit Agreement Closing Date;
provided, that payment of such Indebtedness is expressly stated to be
recourse solely to such specified property and the proceeds thereof and
such Indebtedness is incurred contemporaneously with the acquisition or
construction of such property.
"Permitted Business Acquisition": the formation of a new
Qualified 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 Qualified Subsidiary and all actions required to be
taken, if any, with respect to such acquired or newly formed Qualified
Subsidiary under the Credit Documents shall have been taken, (d)(i)
Hanover shall be in compliance, on a pro forma basis after giving
effect to such acquisition or formation, with the covenants contained
in Section 11.1 of the Guarantee computed as at the last day of the
fiscal quarter most recently ended prior to delivery of the certificate
required pursuant to this clause (i), and Hanover shall have delivered
to the Agent an officers' certificate to such effect concurrently with
the delivery of each certificate of a Responsible Officer pursuant to
Section 10.2(b) of the Guarantee, together with all relevant financial
information for such Person or assets and (ii) any acquired or newly
formed Qualified Subsidiary shall not be liable for any Indebtedness or
Guarantee Obligations (except for Indebtedness and Guarantee
Obligations permitted by Sections 11.2 and 11.4 of the Guarantee), and
(e) any acquired or newly formed Qualified Subsidiary (including
Subsidiaries thereof) shall not have (except for Indebtedness and
Guarantee Obligations permitted by Sections 11.2 and 11.4 of the
Guarantee) any material liabilities (contingent or otherwise),
including, without limitation, liabilities under Environmental Laws and
liabilities with respect to any Plan, and HCLP shall have delivered to
the Agent, concurrently with the delivery of each certificate of a
Responsible Officer pursuant to Section 10.2(b) of the Guarantee, a
certificate, signed by a Responsible Officer, that to the best of such
officer's knowledge, no such material liabilities exist.
Notwithstanding the foregoing, Investments by Unqualified Subsidiaries
of Hanover in Qualified Subsidiaries of Hanover (whether existing,
newly formed or acquired) shall be governed by
12
Section 11.10(f) of the Guarantee. The Lenders acknowledge that (a) the
equity investments and advances listed on Schedule 11.10B to the
Guarantee constitute Permitted Business Acquisitions, and (b) to the
extent that any such equity investments or advances listed on such
Schedule 11.10B to the Guarantee constitute Indebtedness, the creation,
incurrence, assumption or sufferance to exist of such Indebtedness is
in compliance with the provisions of Section 11.2 of the Guarantee.
"Reportable Event": any of the events set forth in Section
4043(l) of ERISA, other than those events as to which the thirty day
notice period is waived by the PBGC.
"Subordinated Debt": as to any Person, any unsecured
Indebtedness (including, with respect to HCLP, the 2001A Lease
Guarantee, the 2001B Lease Guarantee and the 2003 Notes Subordinated
Guarantee, and, with respect to Hanover, the TIDES Debentures and the
Hanover Zero Coupon Subordinated Notes) 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, Hanover and any Subsidiary may make regularly
scheduled interest payments in respect of such Indebtedness.
(c) Annex A of each of the Participation Agreements is hereby
amended by deleting therefrom all references to "HCC" and substituting "HCLP" in
its place.
(d) Annex A of each of the Participation Agreements is hereby
amended by deleting therefrom all references to "Holdings" and substituting
"Hanover" in its place.
(e) Annex A of each of the Participation Agreements is hereby
amended by deleting therefrom the definition of "Adjusted EBITDA Companies" and
adding the following in its place (and all references in the Credit Documents to
"Adjusted EBITDA Companies" shall be to "Adjusted EBITDAR Companies"):
"Adjusted EBITDAR Companies": HCLP and each of its
wholly-owned Subsidiaries which (i) is organized under a jurisdiction
of the United States, Canada, the United Kingdom and any other country
approved by the 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 Section 11.1 of
the Guarantee.
(f) Annex A of each of the Participation Agreements is hereby
amended by deleting therefrom the definition of "Consolidated Adjusted EBIDTA"
and adding the following in its place (and all references in the Credit
Documents to "Consolidated Adjusted EBITDA" shall be to "Consolidated Adjusted
EBITDAR"):
"Consolidated Adjusted EBITDAR": for any period, the sum of
Consolidated EBITDAR for the Adjusted EBITDAR Companies.
(g) Annex A of each of the Participation Agreements is hereby
amended by deleting therefrom the definition of "Current Ratio" and the
definition of "Consolidated Capitalization."
(h) Annex A of each of the Participation Agreements is hereby
amended by deleting therefrom the definition of "Equipment Guarantees" and
substituting the following in its place (and all references in the Credit
Documents to "Equipment Guarantees" shall be to "Equipment Lease Guarantees"):
13
"Equipment Lease Guarantees": (i) the Guarantee dated as of
March 13, 2000 (as amended, supplemented or otherwise modified from
time to time, the "2000A Lease Guarantee"), made by Hanover, HCLP and
certain of their subsidiaries listed on the signature pages thereto, in
favor of Hanover Equipment Trust 2000A, The Chase Manhattan Bank, as
agent, and certain lenders and investors, (ii) the Guarantee dated as
of October 27, 2000 (as amended, supplemented or otherwise modified
from time to time, the "2000B Lease Guarantee"), made by Hanover, HCLP
and certain of their subsidiaries listed on the signature pages
thereto, in favor of Hanover Equipment Trust 0000X, Xxx Xxxxx Xxxxxxxxx
Bank, as agent, and certain lenders and investors, (iii) the Guarantee
dated as of August 31, 2001 (as amended, supplemented or otherwise
modified from time to time, the "2001A Lease Guarantee"), made by
Hanover, HCLP and certain of their subsidiaries listed on the signature
pages thereto, in favor of Hanover Equipment Trust 2001A, The Chase
Manhattan Bank, as agent, and certain lenders and investors, (iv) the
Guarantee dated as of August 31, 2001 (as amended, supplemented or
otherwise modified from time to time, the "2001B Lease Guarantee"),
made by Hanover, HCLP and certain of their subsidiaries listed on the
signature pages thereto, in favor of Hanover Equipment Trust 0000X, Xxx
Xxxxx Xxxxxxxxx Bank, as agent, and certain lenders and investors and
(v) any Guarantee in connection with and dated as of the date of an
Additional Participation Agreement (as amended, supplemented or
otherwise modified from time to time), to be made by Hanover, HCLP and
certain of their subsidiaries that will be listed on the signature
pages thereto, in favor of a Delaware business trust, the agent and
certain Lenders and investors.
(i) Annex A of each of the Participation Agreements is hereby
amended by deleting therefrom the definition of "Holdings Subordinated Notes"
and substituting the following in its place (and all references in the Credit
Documents to "Holdings Subordinated Notes" shall be to "Hanover Zero Coupon
Subordinated Notes"):
"Hanover Zero Coupon Subordinated Notes": zero coupon
subordinated notes to be offered and issued by Hanover on or before the
Corporate Credit Agreement Closing Date in an aggregate principal
amount not to exceed $262,621,810, which shall be unguaranteed and the
terms and conditions of which shall be in form and substance reasonably
satisfactory to the Co-Lead Arrangers.
2. Amendments to Section 2 of each of the Synthetic
Credit Agreements. (a) Subsection 2.12 of each of the Synthetic Credit
Agreements is hereby amended by deleting such Section in its entirety and
inserting the following in its place:
2.12 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 Section
2.14 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
14
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, HCLP
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 Section, it shall promptly notify
HCLP, through the 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 Section submitted by such Lender, through the Agent,
to HCLP shall be conclusive in the absence of manifest error.
(b) In the event that any Lender shall have determined
that the adoption after the date hereof of or 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 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 or in respect of any Letter of Credit to
a level below that which such Lender or such corporation could have
achieved but for such adoption, 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 HCLP (with a
copy to the Agent) of a written request therefor, HCLP shall pay to
such Lender such additional amount or amounts as will compensate such
Lender or such corporation for such reduction.
(c) Notwithstanding anything to the contrary in this
Section, HCLP shall not be required to compensate a Lender pursuant to
this Section for any amounts incurred more than nine months prior to
the date that such Lender notifies HCLP of such Lender's intention to
claim compensation therefor; provided that, if the circumstances giving
rise to such claim have a retroactive effect, then such nine-month
period shall be extended to include the period of such retroactive
effect. The obligations of HCLP pursuant to this Section shall survive
the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
(b) Subsection 2.13 of each of the Synthetic Credit Agreements is
hereby amended by deleting such Section in its entirety and inserting the
following in its place:
2.13 Indemnity. HCLP 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
HCLP in payment when due of the principal amount of or interest on any
Eurodollar Loan, (b) default by HCLP in making a borrowing of,
conversion into or continuation of Eurodollar Loans after HCLP has
given a notice requesting the same in accordance with the provisions of
this Agreement, (c) default by HCLP in making any prepayment after HCLP
has given a notice thereof in accordance with the provisions of this
Agreement or (d) conversion of or 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,
15
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. Such indemnification may include
an amount equal to the excess, if any, of (i) the amount of interest
that would have accrued on the amount so prepaid, or not so borrowed,
converted or continued, for the period from the date of such prepayment
or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert
or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable
Margin included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Lender) that would have accrued to such
Lender on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank eurodollar
market. A certificate as to any amounts payable pursuant to this
Section submitted to HCLP by any Lender shall be conclusive in the
absence of manifest error. This covenant shall survive the termination
of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
(c) Subsection 2.14 of each of the Synthetic Credit Agreements is
hereby amended by deleting such Section in its entirety and inserting the
following in its place:
2.14 Taxes. (a) All payments made by HCLP 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 net income taxes and
franchise taxes (imposed in lieu of net income taxes) imposed on the
Agent or any Lender as a result of a present or former connection
between the Agent or such Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision
or taxing authority thereof or therein (other than any such connection
arising solely from the Agent or such Lender having executed, delivered
or performed its obligations or received a payment under, or enforced,
this Agreement or any other Credit Document). If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") or Other Taxes are required to be
withheld from any amounts payable to the Agent or any Lender hereunder,
the amounts so payable to the Agent or such Lender shall be increased
to the extent necessary to yield to the Agent or such Lender (after
payment of all Non-Excluded Taxes and Other Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts
specified in this Agreement, provided, however, that HCLP shall not be
required to increase any such amounts payable to any Lender with
respect to any Non-Excluded Taxes (i) that are attributable to such
Lender's failure to comply with the requirements of paragraph (d) or
(e) of this Section or (ii) that are United States withholding taxes
imposed on amounts payable to such Lender at the time such Lender
becomes a party to this Agreement, except to the extent that such
Lender's assignor (if any) was entitled, at the time of assignment, to
receive additional amounts from HCLP with respect to such Non-Excluded
Taxes pursuant to this paragraph.
(b) In addition, HCLP shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are
payable by HCLP, as promptly as possible thereafter HCLP shall send to
the Agent for its own account or for the account of the relevant
Lender, as the case may be, a certified copy of an original official
receipt received by HCLP showing payment thereof. If HCLP fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate
taxing authority or fails to remit to the Agent the required receipts
or other required documentary evidence, HCLP shall indemnify the Agent
and
16
the Lenders for any incremental taxes, interest or penalties that may
become payable by the Agent or any Lender as a result of any such
failure unless such failure was caused by the gross negligence or
willful misconduct of the Agent or such Lender.
(d) Each Lender (or Transferee) that is not a "U.S.
Person" as defined in Section 7701(a)(30) of the Code (a "Non-U.S.
Lender") shall deliver to HCLP and the Agent (or, in the case of a
Participant, to the Lender from which the related participation shall
have been purchased) two copies of either U.S. Internal Revenue Service
Form W-8BEN or Form W-8ECI, or, in the case of a Non-U.S. Lender
claiming exemption from U.S. federal withholding tax under Section
871(h) or 881(c) of the Code with respect to payments of "portfolio
interest", a statement substantially in the form of Exhibit H and a
Form W-8BEN, or any subsequent versions thereof or successors thereto,
properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding
tax on all payments by HCLP under this Agreement and the other Credit
Documents. Such forms shall be delivered by each Non-U.S. Lender on or
before the date it becomes a party to this Agreement (or, in the case
of any Participant, on or before the date such Participant purchases
the related participation). In addition, each Non-U.S. Lender shall
deliver such forms promptly upon the obsolescence or invalidity of any
form previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender
shall promptly notify HCLP at any time it determines that it is no
longer in a position to provide any previously delivered certificate to
HCLP (or any other form of certification adopted by the U.S. taxing
authorities for such purpose). Notwithstanding any other provision of
this paragraph, a Non-U.S. Lender shall not be required to deliver any
form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.
(e) A Lender that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the jurisdiction
in which HCLP is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to
HCLP (with a copy to the Agent), at the time or times prescribed by
applicable law or reasonably requested by HCLP, such properly completed
and executed documentation prescribed by applicable law as will permit
such payments to be made without withholding or at a reduced rate,
provided that such Lender is legally entitled to complete, execute and
deliver such documentation and in such Lender's judgment such
completion, execution or submission would not materially prejudice the
legal position of such Lender.
(f) If the Agent or any Lender determines, in its sole
discretion, that it has received a refund of any Non-Excluded Taxes or
Other Taxes as to which it has been indemnified by HCLP or with respect
to which HCLP has paid additional amounts pursuant to this Section
2.14, it shall pay over such refund to HCLP (but only to the extent of
indemnity payments made, or additional amounts paid, by HCLP under this
Section 2.14 with respect to the Non-Excluded Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the
Agent or such Lender and without interest (other than any interest paid
by the relevant Governmental Authority with respect to such refund);
provided, that HCLP, upon the request of the Agent or such Lender,
agrees to repay the amount paid over to HCLP (plus any penalties,
interest or other charges imposed by the relevant Governmental
Authority) to the Agent or such Lender in the event the Agent or such
Lender is required to repay such refund to such Governmental Authority.
This paragraph shall not be construed to require the Agent or any
Lender to make available its tax returns (or any other information
relating to its taxes which it deems confidential) to HCLP or any other
Person.
(g) The agreements in this Section shall survive the
termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
17
(d) Subsection 2.16 of each of the Synthetic Credit Agreements is
hereby amended by adding the following Section 2.16:
2.16 Change of Lending Office. Each Lender agrees that,
upon the occurrence of any event giving rise to the operation of
Section 2.12 or 2.14(a) with respect to such Lender, it will, if
requested by HCLP, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for
any Loans affected by such event with the object of avoiding the
consequences of such event; provided, that such designation is made on
terms that, in the sole judgment of such Lender, cause such Lender and
its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section shall
affect or postpone any of the obligations of HCLP or the rights of any
Lender pursuant to Section 2.12 or 2.14(a).
3. Amendments to Section 6 of each of the Synthetic
Credit Agreements. (a) Subsection 6.1(m) of each of the Synthetic Credit
Agreements is hereby amended by deleting such Section in its entirety and
inserting the following in its place:
(m) (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 HCLP
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) HCLP 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
reasonably be expected to have a Material Adverse Effect; or
(b) Subsection 6.1(p) of each of the Synthetic Credit Agreements
is hereby amended by inserting the word "or" at the end thereof.
(c) Section 6.1 is further amended by adding the following new
Section after Section 6.1(p) thereof:
(q) (i) A "change of control" (however denominated) with
respect to Hanover or HCLP shall have occurred under, or for purposes
of, the 2001A Equipment Lease Securities, the 2001B Equipment Lease
Securities, the Hanover Convertible Notes, the 2003 Notes, the 2008
Notes (or any refinancing thereof) or the Hanover Zero Coupon
Subordinated Notes; (ii) any "person" or "group" (as such terms are
used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")), shall become, or obtain rights
(whether by means or warrants, options or otherwise) to become, the
"beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the
Exchange Act), directly or indirectly, of more than 35% of the
outstanding common stock of Hanover; or (iii) Hanover shall cease to
own and control, beneficially, 100% of each class of outstanding
Capital Stock of HCLP free and clear of all Liens (except Liens created
by the Guarantee and Collateral Agreement);
18
4. Amendments to Section 1 of each of the Synthetic
Guarantees. (a) Section 1(b) of each Synthetic Guarantee is hereby amended by
deleting therefrom the following definitions: "Consolidated EBITDA",
"Consolidated Senior Indebtedness", "Equipment Lease Credit Agreements",
"Equipment Lease Participation Agreements", "Equipment Leases", "New Convertible
Notes", "POC Acquisition", "2008 Notes" and "Unrestricted Subsidiary". Each such
term shall have, if applicable, the meaning set forth in Annex A to the relevant
Participation Agreement.
(b) Section 1(b) of each Synthetic Guarantee is hereby
amended by deleting therefrom the following definitions: "Adjusted EBITDAR
Companies" and "Equipment Guarantees". All references in each Guarantee to
"Adjusted EBITDAR Companies" and "Equipment Guarantees" shall be to "Adjusted
EBITDAR Companies" and "Equipment Lease Guarantees", respectively, each as
defined in Annex A to the relevant Participation Agreement.
5. Amendments to Section 9 of each of the Synthetic
Guarantees. (a) Section 9.1(a) of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and substituting the following
in its place:
(a) The unaudited pro forma consolidated balance sheet of
Hanover and its consolidated Subsidiaries as at September 30, 2003 (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 (i) the Loans to be made and the
2003 Notes and the Hanover Convertible Notes to be issued on the
Corporate Credit Agreement Closing Date and the use of proceeds
thereof, (ii) the termination of the 1999 Synthetic Lease and the
Existing Credit Agreement and (iii) the payment of fees and expenses in
connection with the foregoing. The Pro Forma Balance Sheet has been
prepared based on the best information available to Hanover as of the
date of delivery thereof, and presents fairly in all material respects
on a pro forma basis the estimated financial position of Hanover and
its consolidated Subsidiaries as at September 30, 2003, assuming that
the events specified in the preceding sentence had actually occurred at
such date.
(b) Section 9.1(b) of each Synthetic Guarantee is hereby amended
by deleting therefrom all references to "three-month period" and substituting
"nine-month period" in its place.
(c) Section 9.3 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and substituting the following
in its place:
9.3 Corporate Existence; Compliance with Law. Each
Guarantor (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 or (with respect to any
Guarantor other than Hanover and HCLP) in good standing 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.
(d) Section 9.8 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and substituting the following
in its place:
19
9.8 Ownership of Property; Liens; Leases of Equipment.
Each of the Guarantors has good record and indefeasible title in fee
simple (except for exceptions to title as will not in the aggregate
materially interfere with the present or contemplated use of the
property affected thereby) to, or a valid leasehold interest in, all
its real property, and good title to all its other property, and none
of such property is subject to any Lien except as permitted by Section
11.3. As used herein, Equipment or Inventory leased by a Guarantor
under a Financing Lease shall be deemed "owned" by such Guarantor.
(e) Section 9.10 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and substituting the following
in its place:
9.10 Taxes. Each of the Guarantors has filed or caused to
be filed all tax returns which, to the knowledge of Hanover and HCLP,
are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of
its property and all other taxes, fees or other charges imposed on it
or any of its property by any Governmental Authority (other than any
the amount or validity of which are currently being contested in good
faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of any of the
Guarantors, as the case may be); no tax Lien has been filed against the
property of any Guarantor, and, to the knowledge of Hanover and HCLP,
no claim is being asserted, with respect to any such tax, fee or other
charge, except, in each case, for Governmental Authorities outside of
the United States, Canada or the European Union, where the failure to
file or cause to be filed such tax returns, the failure to pay such
taxes, assessments, fees or other charges, the existence of such tax
Liens, or the assertion of such claims would not reasonably be expected
to result in a Material Adverse Effect.
(f) Section 9.12 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and substituting the following
in its place:
9.12 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or
Section 302 of ERISA) has occurred during the five-year period prior to
the date on which this representation is made or deemed made with
respect to any Plan, and each Plan has complied in all material
respects with the applicable provisions of ERISA and the Code. No
termination of a Single Employer Plan has occurred and no Lien in favor
of the PBGC or a Plan has arisen during the five-year period prior to
the date on which this representation is deemed made. The present value
of all accrued benefits under each Single Employer Plan maintained by
HCLP, or any Commonly Controlled Entity (based on those assumptions
used to fund such 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 by a material amount. Neither HCLP nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer
Plan, and neither HCLP nor any Commonly Controlled Entity would become
subject to any material liability under ERISA if HCLP 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 HCLP 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 by a material amount.
20
(g) Section 9.14 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and substituting the following
in its place:
9.14 Subsidiaries. Immediately after giving effect to the
POC Acquisition, Hanover has no Subsidiaries other than as set forth on
Schedule 9.14. Except if a Guarantor, other than cash or Cash
Equivalents, substantially all tangible assets owned by any Unqualified
Subsidiary as of the date hereof are located within jurisdictions other
than the United States of America or any territory thereof.
(h) Section 9.15 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and substituting the following
in its place:
9.15 Environmental Matters. Each of the representations
and warranties set forth in paragraphs (a) through (e) of this Section
is true and correct with respect to each parcel of real property owned
or operated by any of the Guarantors (the "Properties"), except to the
extent that the facts and circumstances giving rise to any such failure
to be so true and correct would not reasonably be expected to have a
Material Adverse Effect:
(a) Except as set forth on Schedule 9.15, the
Properties do not contain, and have not previously
contained, in, on, or under, including, without
limitation, the soil and groundwater thereunder, any
Hazardous Substances in concentrations which violate
Environmental Laws.
(b) Except as set forth on Schedule 9.15, the
Properties and all operations and facilities at the
Properties are in compliance with all Environmental
Laws, and there is no Hazardous Substances
contamination or violation of any Environmental Law
which would reasonably be expected to interfere with
the continued operation of any of the Properties or
impair the fair saleable value of any thereof.
(c) Except as set forth on Schedule 9.15, none
of the Guarantors has received any complaint, notice
of violation, alleged violation, investigation or
advisory action or of potential liability or of
potential responsibility regarding environmental
protection matters or environmental permit compliance
with regard to the Properties which has not been
resolved, nor is HCLP aware that any Governmental
Authority is contemplating delivering to any
Guarantor any such notice.
(d) Hazardous Substances have not been
generated, treated, stored, disposed of, at, on or
under any of the Properties in concentrations that
violate Environmental Laws, nor have any Hazardous
Substances been transferred to any other location, in
violation of any Environmental Laws from the
Properties or as a result of the sale or lease of any
equipment or inventory of any Guarantor.
(e) There are no governmental, administrative
actions or judicial proceedings pending or
contemplated under any Environmental Laws to which
any Guarantor is or to HCLP's knowledge will be named
as a party with respect to the Properties, nor to
HCLP'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.
21
(i) Section 9.16 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and substituting the following
in its place:
9.16 Accuracy and Completeness of Information. The factual
statements contained in the Credit Documents and each other agreement,
instrument, certificate and document related thereto and any other
certificates or documents furnished or to be furnished to the Agent or
the Lenders by any Guarantor from time to time in connection with this
Agreement (in any case excluding any of the financial statements
referred to in Section 9.1(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; provided, that any financial information with respect
to Hanover's or HCLP's projections furnished to the Agent and/or the
Lenders were prepared in good faith on the basis of the assumptions
stated therein, which assumptions were believed by Hanover or Hanover
(as the case may be) to be reasonable in all material respects at the
time made.
(j) Section 9.17 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and substituting the following
in its place:
9.17 Senior Indebtedness. The obligations of Hanover
hereunder constitute "Senior Indebtedness" or "Senior Debt" under the
(i) if applicable, terms of the Hanover Zero Coupon Subordinated Notes,
(ii) if applicable, the documentation for the 2001A Equipment Lease
Transaction and (iii) if applicable, the documentation for the 2001B
Equipment Lease Transaction. The Obligations of HCLP constitute "Senior
Indebtedness" or "Guarantor Senior Indebtedness" (i) if applicable,
under the documentation for the 2001A Equipment Lease Transaction and
(ii) if applicable, under the documentation for the 2001B Equipment
Lease Transaction. The obligations of each Subsidiary under the
Guarantees constitute "Guarantor Senior Indebtedness" under the
documentation relating to the 2001A Equipment Lease Transaction (if
applicable) and to the 2001B Equipment Lease Transaction (if
applicable). From and after the date the 2003 Notes are issued, the
obligations of HCLP under the Guarantees will constitute "Guarantor
Senior Indebtedness" under the 2003 Notes Subordinated Guarantee.
(k) Section 9.18 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and substituting the following
in its place:
9.18 Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent,
for the benefit of the Lenders, a legal, valid and enforceable security
interest in the Collateral described therein and proceeds thereof. In
the case of the Pledged Stock described in the Guarantee and Collateral
Agreement, when stock certificates representing such Pledged Stock are
delivered to the Administrative Agent, and in the case of the other
Collateral described in the Guarantee and Collateral Agreement, when
financing statements and other filings specified on Schedule 9.18(a) in
appropriate form are filed in the offices specified on such Schedule
9.18 (a), the Guarantee and Collateral Agreement shall constitute a
fully perfected Lien on, and security interest in, all right, title and
interest of the Guarantors in such Collateral and the proceeds thereof,
as security for the Obligations (as defined in the Guarantee and
Collateral Agreement) to the extent that the aforementioned Lien on the
Collateral can be perfected through the filing of UCC financing
statements or through the delivery of Pledged Stock and Pledged Notes,
in each case prior and superior in right to any other Person (except,
in the case of Collateral other than Pledged Stock and Pledged Notes,
Liens permitted by Section 11.3).
22
(b) Each of the Mortgages is effective to create in favor
of the Administrative Agent, for the benefit of the Lenders, a legal,
valid and enforceable Lien on the Mortgaged Properties described
therein and proceeds thereof, and when the Mortgages are filed in the
offices specified on Schedule 9.18(b), each such Mortgage shall
constitute a fully perfected Lien on, and security interest in, all
right, title and interest of the Guarantors in the Mortgaged Properties
and the proceeds thereof, as security for the Obligations (as defined
in the relevant Mortgage), in each case prior and superior in right to
any other Person (except as permitted by such Mortgage). Schedule 1.1B
lists, as of the Corporate Credit Agreement Closing Date, each parcel
of owned real property and each leasehold interest in real property
located in the United States and held by Hanover or any of its
Subsidiaries that has a value, in the reasonable opinion of HCLP, in
excess of $1,000,000 provided that no Mortgage will be taken on each of
(i) the 000 Xxxxx Xxxx Xxxx, Xxxxxxx, Xxxxx property or (ii) the 00000
Xxxxxx Xxxx, Xxxxxxx, Xxxxx property, unless such property is not
disposed of within one year of the Corporate Credit Agreement Closing
Date.
(l) Section 9 is further amended by adding the following new
Section at the end thereof:
9.19 Regulation H. No Mortgage encumbers improved real
property that is located in an area that has been identified by the
Secretary of Housing and Urban Development as an area having special
flood hazards and in which flood insurance has been made available
under the National Flood Insurance Act of 1968.
(m) Section 9 is further amended by (i) substituting any reference
to "December 31, 1999" with "December 31, 2001", (ii) substituting any reference
to "December 31, 2000" with "December 31, 2002" and (iii) substituting any
reference to "September 30, 2001" with "September 30, 2003".
6. Amendments to Section 10 of each of the Synthetic
Guarantees. (a) Subsection 10.1 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and substituting the following
in its place:
10.1 Financial Statements. Furnish to each Lender and each
of the Investors:
(a) as soon as available for distribution to
shareholders and creditors generally, but in any event within
90 days (provided that, to the extent an extension is granted
by the SEC, up to 15 additional days may be taken) after the
end of each fiscal year of Hanover, a copy of the consolidated
balance sheet of Hanover and its consolidated Subsidiaries and
the related consolidating balance sheet schedule each as at
the end of such year and the related consolidated statement of
income of Hanover and consolidating schedule of income and
consolidated statement of owner's equity and of cash flows for
such year, setting forth in each case in comparative form the
figures for the previous year (provided, that such
consolidating statements shall not include statements of
owner's equity or cash flows and will not set forth in
comparative form the figures for the previous year but will
include a column for the consolidated balance sheet and
consolidated statement of income of HCLP and its
subsidiaries), the consolidated financial statements of
Hanover shall be 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;
and
(b) as soon as available, but in any event not
later than 45 days (provided that, to the extent an extension
is granted by the SEC, up to 5 additional days may be taken)
after the end of each of the first three quarterly periods of
each fiscal year of
23
Hanover, the unaudited consolidated balance sheet of Hanover
and its consolidated Subsidiaries and the related
consolidating balance sheet schedule of Hanover and its
Subsidiaries, each as at the end of such quarter, and the
related unaudited consolidated statements of income and cash
flows of Hanover and its consolidated Subsidiaries and the
related consolidating schedule of income and consolidated cash
flows of Hanover and its 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
(provided, that such consolidating statements shall not
include statements of cash flows and will not set forth in
comparative form the figures for the previous year but will
include a column for the consolidated balance sheet and
consolidated statement of income of HCLP and its
subsidiaries), certified by a Responsible Officer as being
fairly stated in all material respects when considered in
relation to the consolidated financial statements of Hanover
and its consolidated Subsidiaries or the consolidated
financial statements of HCLP and its Subsidiaries, as
applicable, (subject to normal year-end audit adjustments),
and setting forth in the consolidated balance sheet, statement
of income or cash flows a comparative of the figures for such
periods as shown on the consolidated budgets of Hanover 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).
(b) Subsection 10.2(c) of each of the Synthetic Guarantees is
hereby amended by deleting such Section in its entirety and substituting the
following in its place:
(c) not later than 45 days (provided that, to the extent
an extension is granted by the SEC, up to 5 additional days may be
taken) following the end of each fiscal year of Hanover, a copy of the
projections by Hanover of the operating budget and cash flow budget of
Hanover 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;
(c) Subsection 10.2(e) of each of the Synthetic Guarantees is
hereby amended by deleting such Section in its entirety and substituting the
following in its place:
(e) within 45 days (provided that, to the extent an
extension is granted by the SEC, up to 5 additional days may be taken)
after the end of each quarter in each fiscal year of Hanover, a
certificate of the principal financial officer of Hanover showing both
the Applicable Margin for the next quarter and the detailed
computations necessary to calculate the Applicable Margin (an
"Applicable Margin Certificate") and setting forth the aggregate
drawable amount of outstanding Letters of Credit issued under the
Corporate Credit Agreement and the aggregate drawable amount of other
letters of credit issued for the account of HCLP or its Subsidiaries,
in each case as of the last day of the immediately preceding quarter;
and
(d) Subsection 10.2(f) of each of the Synthetic Guarantees is
hereby amended by deleting such Section in its entirety and substituting the
following in its place:
(f) promptly, such additional financial and other
information as any Lender may from time to time reasonably request.
24
(e) Subsection 10.2(g) of each of the Synthetic Guarantees is
hereby amended by deleting such clause in its entirety.
(f) Subsection 10.3 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and substituting the following
in its place:
10.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the
case may be, all its material 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 Hanover or
any Subsidiary of Hanover, as the case may be.
(g) Subsection 10.4 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and substituting the following
in its place:
10.4 Conduct of Business and Maintenance of Existence.
Continue to engage in business of the same general type as now
conducted by it and preserve, renew and keep in full force and effect
its corporate existence and take all reasonable action to maintain all
material rights, privileges and franchises necessary or desirable in
the normal conduct of its business except as otherwise permitted
pursuant to Section 11.5; comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply
therewith would not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(h) Subsection 10.5 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and substituting the following
in its place:
10.5 Maintenance of Property; Insurance. (a) Keep and
maintain all property material to the conduct of its business in
accordance with prudent industry practice in all material respects,
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.
(i) Subsection 10.7 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and substituting the following
in its place:
10.7 Notices. Promptly give notice to the Investors, Agent
and each Lender of:
(a) the occurrence of any Default or Event of Default of
which any Responsible Officer of Hanover or HCLP has actual knowledge;
(b) any (i) default or event of default by Hanover 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
Hanover's knowledge any default or event of default by any third party
under or with respect to any Contractual Obligation of said third party
with Hanover 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 Hanover has
actual knowledge which may exist at any time between Hanover or any
Subsidiary of Hanover and any Governmental Authority, which in either
case, would reasonably be expected to have a Material Adverse Effect;
25
(c) any litigation or proceeding affecting Hanover or any
Subsidiary of Hanover of which Hanover 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, in each
case, 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 Hanover or any of its Subsidiaries has
actual knowledge thereof: (i) the occurrence or expected occurrence of
any Reportable Event with respect to any Plan, a failure to make any
required contribution to a Plan, the creation of any Lien in favor of
the PGBC or a 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, Hanover, HCLP or any Commonly Controlled Entity with respect to
the withdrawal from, or the termination, Reorganization or Insolvency
of any Plan (other than pursuant to Section 4041(b) of ERISA); 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 Section shall be accompanied by a
statement of a Responsible Officer setting forth details of the
occurrence referred to therein and stating what action Hanover proposes
to take with respect thereto.
(j) Subsection 10.8 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and substituting the following
in its place:
10.8 Environmental Laws. Comply in all material respects
with, and undertake all reasonable efforts to ensure material
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 in all material respects with
and maintain, any and all licenses, approvals, registrations or permits
required by Environmental Laws, and upon discovery of any material
non-compliance, undertake all reasonable efforts to attain full
material compliance;
(a) 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, in each case, 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;
(b) Defend, indemnify and hold harmless the
Agent and the Lenders, and their respective employees, agents,
officers and directors, from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown,
contingent or otherwise, arising out of, or in any way
relating to the violation of or noncompliance with any
Environmental Laws applicable to the real property owned or
operated by Hanover or any Subsidiary of Hanover, 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
26
(c) Maintain a program to identify and promote
substantial compliance with and to minimize prudently any
material liabilities or material potential liabilities under
any Environmental Law that may affect Hanover or any of its
Qualified Subsidiaries.
(k) Subsection 10.10 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and substituting the following
in its place:
10.10 Additional Collateral, etc. (a) With respect to any
new Subsidiary (other than an Excluded Unqualified Subsidiary) created
or acquired after the Corporate Credit Agreement Closing Date by
Hanover or any of its Qualified Subsidiaries (which, for the purposes
of this paragraph (b), shall include any existing Subsidiary that
ceases to be an Excluded Unqualified Subsidiary), promptly (i) execute
and deliver to the Administrative Agent such amendments to the
Guarantee and Collateral Agreement as the Administrative Agent deems
necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in
the Capital Stock of such new Subsidiary that is owned by Hanover or
any of its Subsidiaries, (ii) if requested by the Administrative Agent
or the Required Lenders, deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated
stock powers, in blank, executed and delivered by a duly authorized
officer of Hanover or the relevant Subsidiary, and (iii) cause such new
Subsidiary (A) to become a party to the Guarantee and Collateral
Agreement and (B) to take such actions necessary or advisable to grant
to the Administrative Agent for the benefit of the Lenders a perfected
first priority security interest in the Collateral described in the
Guarantee and Collateral Agreement with respect to such new Subsidiary,
including the filing of Uniform Commercial Code financing statements in
such jurisdictions as may be required by the Guarantee and Collateral
Agreement or by law or as may be requested by the Administrative Agent.
The parties hereto acknowledge that the Guarantee and Collateral
Agreement provides that each such Subsidiary shall be required to
pledge its assets as provided therein but shall not be required to
guarantee payment of obligations pursuant thereto unless (i) such
Subsidiary guarantees payment of all or any portion of the Guaranteed
Obligations, as defined in the 2001A Participation Agreement and the
2001B Participation Agreement, or (ii) such Subsidiary is requested to
become a guarantor by the Administrative Agent or the Required Lenders.
(b) With respect to any new Excluded Unqualified
Subsidiary created or acquired after the Corporate Credit Agreement
Closing Date by Hanover or any Subsidiary, promptly (i) execute and
deliver to the Administrative Agent such amendments to the Guarantee
and Collateral Agreement as the Administrative Agent deems necessary or
advisable to grant to the Administrative Agent, for the benefit of the
Lenders, a perfected first priority security interest in the Capital
Stock of such new Subsidiary that is owned by Hanover or any Subsidiary
that is not an Excluded Unqualified Subsidiary (provided that in no
event shall (a) more than 66% of the total outstanding voting Capital
Stock of any such new Subsidiary be required to be so pledged and (b)
the Capital Stock of Subsidiaries not directly owned by Hanover, HCLP
or any Qualified Subsidiary be required to be pledged), and (ii) if
requested by the Administrative Agent or the Required Lenders, deliver
to the Administrative Agent the certificates representing such Capital
Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of Hanover or the relevant
Subsidiary, and take such other action as may be necessary or, in the
opinion of the Administrative Agent, desirable to perfect the
Administrative Agent's security interest therein.
(c) With respect to any fee interest in any real
property located in the United States having a book value (together
with improvements thereof) of at least $1,000,000 acquired
27
after the Corporate Credit Agreement Closing Date by Hanover or any
Subsidiary (other than (x) any such real property subject to a Lien
expressly permitted by Section 8.3(p) and (y) real property acquired by
any Excluded Unqualified Subsidiary), promptly (i) execute and deliver
a first priority Mortgage, in favor of the Administrative Agent, for
the benefit of the Lenders, covering such real property, (ii) if
requested by the Administrative Agent, provide the Lenders with (x)
title and extended coverage insurance covering such real property in an
amount at least equal to the purchase price of such real property (or
such other amount as shall be reasonably specified by the
Administrative Agent) as well as a current ALTA survey thereof,
together with a surveyor's certificate and (y) any consents or
estoppels reasonably deemed necessary or advisable by the
Administrative Agent in connection with such Mortgage, each of the
foregoing in form and substance reasonably satisfactory to the
Administrative Agent and (iii) if requested by the Administrative
Agent, deliver to the Administrative Agent legal opinions relating to
the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
7. Amendments to Section 11 of each of the Synthetic
Guarantees. (a) Subsection 11.1 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and adding the following in its
place:
11.1 Financial Condition Covenants. (a) Minimum
Consolidated Tangible Net Worth. Permit Consolidated Tangible Net Worth
of HCLP to be less than $[_________]. [NOTE: such amount to equal 80%
of the Tangible Net Worth at closing].
(b) Consolidated Senior Indebtedness to Consolidated
Adjusted EBITDAR. Permit the ratio of Consolidated Senior Indebtedness
of HCLP to Consolidated Adjusted EBITDAR of HCLP for the four
consecutive fiscal quarters of HCLP most recently ended to be greater
than 3.75 to 1.0.
(c) Consolidated Indebtedness to Consolidated EBITDAR.
Permit the ratio of Consolidated Indebtedness of HCLP to Consolidated
EBITDAR of HCLP for the four consecutive fiscal quarters of HCLP ending
with any fiscal quarter set forth below (the "Consolidated Leverage
Ratio") to be greater than the ratio set forth below opposite such
fiscal quarter:
Fiscal Quarter Ending Ratio
-------------------------------------------------------------------------------
September 30, 2003 through September 30, 2005 4.25 to 1.0
-------------------------------------------------------------------------------
December 31, 2005 through March 31, 2006 4.00 to 1.0
-------------------------------------------------------------------------------
June 30, 2006 and thereafter 3.75 to 1.0
(d) Interest Coverage Ratio. Permit the ratio of
Consolidated EBITDAR of Hanover to Consolidated Interest Expense of
Hanover for the period of four consecutive fiscal quarters of Hanover
most recently ended to be less than 2.25 to 1.0.
(b) Subsection 11.2 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and adding the following in its
place:
28
11.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness in respect of the Loans, and
other obligations of the Credit Parties under the Corporate
Credit Agreement and the other Loan Documents;
(b) Indebtedness of Hanover or HCLP to any of
its Subsidiaries and of any such Subsidiary which is a Credit
Party to HCLP or any other Subsidiary of HCLP;
(c) Indebtedness outstanding as of the Corporate
Credit Agreement Closing Date and listed on Schedule 11.2(c)
and any Refinancing Indebtedness incurred in respect thereof;
(d) Indebtedness in respect of Financing Leases;
provided that, after giving effect thereto, Section 11.7 is
not contravened;
(e) Indebtedness in respect of Subordinated
Debt, the terms and conditions of which have been approved in
writing by the Agents and any Refinancing Indebtedness
incurred in respect thereof;
(f) Non-Recourse Indebtedness of Unqualified
Subsidiaries in an aggregate amount not to exceed $50,000,000
at any time, less the Dollar amount of any Permitted Credit
Support that is included in the calculation of any other
exception to this Section 11.2 or, with respect to any
Permitted Credit Support constituting a Guarantee Obligation,
in the calculation of any of the exceptions to Section 11.4;
(g) Indebtedness of a Person which becomes a
Subsidiary after the date hereof in an aggregate principal
amount not exceeding as to Hanover and its Subsidiaries
$20,000,000 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 Hanover or any of its Subsidiaries no Default
or Event of Default shall have occurred and be continuing;
(h) Indebtedness in respect of Equipment Lease
Tranche A Loans and any Refinancing Indebtedness incurred in
respect thereof;
(i) Indebtedness in respect of the 2008 Notes
and any Refinancing Indebtedness incurred in respect thereof;
(j) Indebtedness of Hanover evidenced by the
Hanover Zero Coupon Subordinated Notes and any Refinancing
Indebtedness incurred in respect thereof;
(k) Indebtedness of Hanover in respect of the
2003 Notes in an aggregate principal amount not to exceed
$275,000,000 (provided that any proceeds received from the
issuance of the 2003 Notes in excess of $200,000,000 shall be
used to prepay the 2000A Synthetic Lease and/or the 2000B
Synthetic Lease) and any Refinancing Indebtedness incurred in
respect thereof;
(l) Guarantee Obligations permitted by Section
11.4;
29
(m) Indebtedness of Hanover evidenced by the
Hanover Convertible Notes in an aggregate principal amount not
to exceed $[150,000,000] and any Refinancing Indebtedness
incurred in respect thereof;
(n) Indebtedness of Hanover or HCLP in an
aggregate principal amount not to exceed the amount required
to repurchase the Equipment subject to an Equipment Lease
(described in clause (i), (ii) or (iii) of the definition
thereof) pursuant to the purchase option set forth in Section
20 of such Equipment Lease, provided that the proceeds of such
Indebtedness are used solely to purchase such Equipment
pursuant to such purchase option (the "Equipment Lease
Refinancing");
(o) Investments permitted to be made pursuant to
Section 11.10 in the form of Indebtedness;
(p) to the extent constituting Indebtedness,
obligations under Derivatives permitted under Section 11.9;
(q) Indebtedness secured by Liens permitted by
Section 11.3(s) in an aggregate principal amount not to exceed
$25,000,000 at any one time outstanding;
(r) Indebtedness assumed by HCLP or any of its
Subsidiaries pursuant to the Permitted International
Reorganization and any Refinancing Indebtedness incurred in
respect thereof; and
(s) unsecured Indebtedness not otherwise
permitted by clauses (a)-(r) above not exceeding $40,000,000
in the aggregate at any time outstanding.
(c) Subsection 11.3 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and adding the following in its
place:
11.3 Limitation on Liens. Create, incur, assume or suffer
to exist any Lien upon any of its property, assets or revenues, whether
now owned or hereafter acquired, except for:
(a) Liens for taxes, assessments, governmental charges or
levies (but excluding judgment Liens) 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
Hanover or any Subsidiary of Hanover, as the case may be, in conformity
with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord'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;
30
(e) immaterial irregularities in title, 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 Hanover or any of its
Subsidiaries;
(f) leases or subleases granted to third Persons not
interfering in any material respect with the business of Hanover or any
of its Subsidiaries;
(g) Liens arising from UCC financing statements regarding
leases permitted by this Agreement, the other Equipment Leases or the
Corporate Credit Agreement;
(h) any interest or title of a lessor or sublessor under
any lease permitted by this Agreement, the other Equipment Leases or
the Corporate Credit Agreement;
(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 Hanover or any of
its Subsidiaries in the ordinary course of business;
(k) Liens created pursuant to Financing Leases permitted
pursuant to Section 11.2(d);
(l) Liens in existence on the Corporate Credit Agreement
Closing Date listed on Schedule 11.3(l), securing Indebtedness
permitted by Section 11.2(c) including any Refinancing Indebtedness
incurred in respect thereof, provided that no such Lien is spread to
cover any additional property after the Corporate Credit Agreement
Closing Date;
(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 Section 11.2(d) 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 Hanover 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 the assets of Unqualified Subsidiaries of
Hanover securing Indebtedness of such Unqualified Subsidiaries
permitted under Section 11.2(f);
(o) Liens securing Derivatives entered into by Hanover
and its Subsidiaries with a lender under this Agreement or the
Equipment Lease Transactions and which are permitted under Section
11.9;
(p) Liens on the property or assets of a Person which
becomes a Subsidiary after the date hereof securing Indebtedness
permitted by Section 11.2(g), 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
31
Person becomes a Subsidiary, and (iii) the amount of Indebtedness
secured thereby is not increased;
(q) Liens that arise in connection with the Equipment
Lease Transactions;
(r) Liens created pursuant to the Security Documents;
(s) Liens securing Indebtedness of HCLP or any other
Subsidiary incurred pursuant to Section 11.2(r) to finance the
acquisition of fixed or capital assets, provided that (i) such Liens
shall be created substantially simultaneously with the acquisition of
such fixed or capital assets, (ii) such Liens do not at any time
encumber any property other than the property financed by such
Indebtedness and (iii) the amount of Indebtedness secured thereby is
not increased;
(t) Liens not otherwise permitted in clauses (a)-(s)
above securing Indebtedness not exceeding $2,500,000 in the aggregate;
(u) judgment Liens against Hanover or any of its
Subsidiaries involving in the aggregate a liability (not paid or fully
covered by insurance) of less than $5,000,000 in the aggregate; and
(v) Liens on the property or assets of POC securing
Indebtedness permitted by Section 11.2; provided that (i) such Liens
existed at the time POC became a Subsidiary and were not created in
anticipation thereof, (ii) any such Lien is not spread to cover any
property or assets of POC after the time POC becomes a Subsidiary, and
(iii) the amount of Indebtedness, Guarantee Obligations and other
obligations secured thereby is not increased.
(d) Subsection 11.4 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and adding the following in its
place:
11.4 Limitation on Guarantee Obligations. Create, incur,
assume or suffer to exist any Guarantee Obligations except:
(a) the Guarantees (as defined in the Corporate Credit
Agreement) and the Equipment Lease Guarantees, and any Refinancing
Indebtedness incurred in respect thereof;
(b) up to $5,000,000 in the aggregate of Guarantee
Obligations of HCLP or any of its Subsidiaries in connection with
indebtedness incurred by customers of HCLP 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 HCLP or any of its Subsidiaries;
(c) Guarantee Obligations (in respect of obligations not
constituting Indebtedness) arising under agreements entered into by
HCLP or any of its Subsidiaries in the ordinary course of business;
(d) guarantees in respect of Indebtedness (other than
Subordinated Debt and the 2003 Notes) permitted under this Agreement;
(e) Guarantee Obligations of Hanover and any of its
Subsidiaries arising pursuant to the Equipment Lease Transactions, and
any Refinancing Indebtedness incurred in respect thereof;
32
(f) the Guarantor Obligations of HCLP in the nature of a
guarantee or indemnification for, in each case, performance obligations
(and not Indebtedness) as contemplated by the HMS Transactions;
(g) the Subordinated Guarantee Obligations of Hanover
arising under the TIDES Guarantees, and any Refinancing Indebtedness
incurred in respect thereof;
(h) the 2003 Notes Subordinated Guarantee; and
(i) Guarantee Obligations of Hanover and any of its
Subsidiaries arising pursuant to the Equipment Lease Refinancing, and
any Refinancing Indebtedness incurred in respect thereof.
Notwithstanding the foregoing, Subsidiaries of Hanover may not
provide Guarantee Obligations in respect of the 2008 Notes (or any
permitted refinancing thereof), the Hanover Convertible Notes, the
Hanover Zero Coupon Subordinated Notes or other indebtedness issued by
Hanover (other than the 2003 Notes and any Refinancing Indebtedness
incurred in respect thereof, the guarantees of which shall be
subordinated to the Obligations).
(e) Subsection 11.5 of each of the Synthetic Guarantees is hereby
amended by (i) deleting clauses (f) and (g) thereof in their entirety and (ii)
adding the following after clause (e) thereof:
(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;
(h) any merger, consolidation, amalgamation, liquidation,
winding up, dissolution, conveyance, sale, lease, assignment, transfer,
disposition or material change undertaken pursuant to the Permitted
International Reorganization;
(i) any Qualified or Unqualified Subsidiary that sells,
leases, assigns, transfers or otherwise disposes of substantially all
of its assets in accordance with the provisions of clauses (c) or (d)
above may then dissolve, liquidate or be wound up; and
(j) any merger, consolidation, amalgamation, liquidation,
winding up, dissolution, conveyance, sale, lease, assignment, transfer,
disposition or material change that is undertaken in a series of steps
and that, after giving effect to all such steps, would be permitted
under one or more of clauses (a) through (j) above.
(f) Subsection 11.6 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and adding the following in its
place:
11.6 Limitation on Sale or Lease of Assets. Convey, sell,
lease, assign, transfer or otherwise dispose of any of its property,
business or assets (including, without limitation, receivables and
leasehold interests), whether now owned or hereafter acquired, except:
(a) sales, transfers or other Dispositions of
personal property in the ordinary course of business when, in
the reasonable judgment of Hanover, such property is no
33
longer used or useful in the conduct of its business or the
business of its Subsidiaries, 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 $40,000,000 during any
fiscal year of Hanover;
(b) the sale of inventory and other similar
assets 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 HCLP or any of its Subsidiaries;
(c) the lease or sublease by HCLP or any of its
Subsidiaries as lessor of 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 Section 11.5 and Section
11.10;
(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 HCLP 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 HCLP 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 sale or exchange of natural gas
compressors to the Lessor in connection with the Equipment
Lease Transactions; and provided (i) that each such sale or
exchange is for fair market value and (ii) the aggregate fair
market value of natural gas compressors so sold or exchanged
after the Corporate Credit Agreement Closing Date does not
exceed $65,000,000 per fiscal year;
(h) the lease of assets as listed on Schedule
11.6(h);
(i) asset sales made on or after the Corporate
Credit Agreement Closing Date consisting of sales of assets
described on Schedule 11.6(i) hereto for fair market value;
(j) pursuant to the Permitted International
Reorganization; and
(k) the Disposition of other property having a
fair market value not to exceed $5,000,000 in the aggregate
for any fiscal year of HCLP.
(g) Subsection 11.8 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and adding the following in its
place:
34
11.8 Limitation on Dividends. Declare or pay any dividend
(other than dividends payable solely in common stock of such Person or
in options, warrants or rights to purchase such common stock) 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 Hanover or any Subsidiary of
Hanover (collectively, "Restricted Payments"), except that if no
Default or Event of Default exists or would reasonably be expected to
be caused thereby (i) Subsidiaries of Hanover may declare and pay
dividends to Hanover (to the extent necessary to pay interest on, or
redeem, the TIDES Debentures and any Refinancing Indebtedness incurred
in respect thereof or to cover operating expenses of Hanover) and other
shareholders of such Subsidiaries and the TIDES Trust may redeem the
TIDES as contemplated by the TIDES Declaration of Trust and any
Refinancing Indebtedness incurred in respect thereof, (ii) Hanover may
repurchase or redeem shares of Hanover common stock from its employees
and former employees so long as the aggregate amount of all such
repurchases since the Corporate Credit Agreement Closing Date does not
exceed $7,500,000, (iii) Subsidiaries of Hanover may declare and pay
dividends, or make distributions, to Hanover to the extent necessary to
allow Hanover to pay scheduled interest on the 2008 Notes and any
Refinancing Indebtedness incurred in respect thereof, (iv) Subsidiaries
of Hanover may declare and pay dividends, or make distributions, to
Hanover to the extent necessary to allow Hanover to pay interest when
due on the Hanover Convertible Notes and any Refinancing Indebtedness
incurred in respect thereof, (v) Subsidiaries of Hanover may declare
and pay dividends, or make distributions, to Hanover to the extent
necessary to allow Hanover to pay interest when due on the 2003 Notes
and any Refinancing Indebtedness incurred in respect thereof, and (vi)
any Subsidiary may make Restricted Payments to HCLP.
(h) Subsection 11.9 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and adding the following in its
place:
11.9 Limitation on Derivatives. Enter into or assume any
obligations with respect to any Derivatives except for (i) Derivatives
used by Hanover or any of its Subsidiaries in managing the interest
rate risk exposure, commodity risk exposure or foreign currency risk
exposure of Hanover and its Subsidiaries; provided, that the aggregate
amounts of the Derivatives permitted by this clause (i) shall not
exceed the aggregate amount of Indebtedness outstanding under this
Agreement and the Equipment Lease Transactions and (ii) existing
Derivatives of POC (so long as such Derivatives exist at the time POC
became a Subsidiary and were not created in anticipation thereof);
provided, further, that Derivatives entered into pursuant to clause (i)
or (ii) above must be entered into for non-speculative purposes. For
the purposes of clause (i), (x) in the case of Derivatives for managing
interest rate risk or foreign exchange risk, the "amount" thereof shall
be the aggregate notional amounts, and (y) in the case of Derivatives
for managing commodity risk exposure, the "amount" thereof shall be the
aggregate net amounts (including any net termination payments) required
to be paid to counterparties thereunder.
(i) Subsection 11.10 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and adding the following in its
place:
11.10 Limitation on Investments, Loans and Advances. Make
any advance, loan, extension of credit or capital contribution to, or
purchase any stock, bonds, notes, debentures or other securities of or
any assets constituting a business unit of, sell or contribute personal
property or other assets to, or make any other investment in (all of
the foregoing being herein collectively referred to as "Investments"),
any Person, except:
35
(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 Hanover and its Subsidiaries not to
exceed $1,000,000 at any one time outstanding;
(d) Investments by Hanover in its Subsidiaries
which are or become Credit Parties and investments by such
Subsidiaries which are or become Credit Parties in other
Subsidiaries of Hanover which are or become Credit Parties;
(e) Net Unqualified Subsidiary Investments not
to exceed, in the aggregate, for each time period specified in
the table set forth below, the cumulative amount specified in
such table, provided that (i) at the time of each such Net
Unqualified Subsidiary Investment, no Default or Event of
Default shall have occurred and be continuing or result from
such Net Unqualified Subsidiary Investment, (ii) all
transactions related to such Net Unqualified Subsidiary
Investment shall be consummated in accordance with applicable
law, (iii) with respect to any acquired or newly formed
Unqualified Subsidiary relating to such Net Unqualified
Subsidiary Investment, such acquired or newly formed
Unqualified Subsidiary shall take all actions required to be
taken, if any, with respect to such acquired or newly formed
Unqualified Subsidiary under the Credit Documents, (iv)
Hanover shall be in compliance, on a pro forma basis after
giving effect to such Net Unqualified Subsidiary Investment,
with the covenants contained in Section 11.1 computed as at
the last day of the fiscal quarter most recently ended prior
to the delivery of the certificate required pursuant to this
clause (iv), and Hanover shall have delivered to the Agent an
officer's certificate to such effect concurrently with the
delivery of each certificate of a Responsible Officer pursuant
to Section 10.2(b) hereof, together with all relevant
financial information with respect to such Net Unqualified
Subsidiary Investment, and (v) after giving effect to the
consummation of the transactions contemplated by such Net
Unqualified Subsidiary Investment, the Loans to be made and
the Letters of Credit to be issued under the Corporate Credit
Agreement, the sum of (A) the cash and Cash Equivalents (to
the extent such cash and Cash Equivalents are free of any
Liens other than customary bankers' liens, the Liens created
pursuant to the Security Documents and other Liens that are
expressly permitted to exist pursuant to the provisions of the
Security Documents) then held by Hanover and its Qualified
Subsidiaries and (B) the Available Commitments (as defined in
the Corporate Credit Agreement) of all the Lenders under the
Corporate Credit Agreement equals at least $60,000,000. In the
table set forth below, the column headed "Aggregate Dollar
amount of cash and net book value of other assets" refers to
the aggregate U.S. Dollar amount of cash and Cash Equivalents
and (in the case of property and assets other than cash and
Cash Equivalents) the net book value of such property and
other assets that, in each case, are transferred, contributed,
sold or otherwise conveyed by Hanover and its Qualified
Subsidiaries to such Unqualified Subsidiaries of Hanover as
Net Unqualified Subsidiary Investments during each time period
as indicated. For the avoidance of doubt, (I) the amounts
specified in the second column of the table set forth below
are "cumulative" amounts (by way of example, for the table
below, during the time period beginning on the Corporate
Credit Agreement Closing Date and ending on December 31, 2003,
Net Unqualified Subsidiary Investments of up to $25,000,000
may
36
be made, and, during the time period beginning on the
Corporate Credit Agreement Closing Date and ending on the
Final Maturity Date, Unqualified Subsidiary Investments of up
to $200,000,000 may be made), and (II) the Investments listed
in Schedule 11.10A shall not be included in the amounts in the
second column of the table set forth below:
Aggregate Dollar amount of cash and net book value of
Time Period other assets
------------------------------------------------------------------------------------------------------
Corporate Credit Agreement Closing Date $ 25,000,000
through Dec. 31, 2003
------------------------------------------------------------------------------------------------------
Corporate Credit Agreement Closing Date $ 75,000,000
through Dec. 31, 2004
------------------------------------------------------------------------------------------------------
Corporate Credit Agreement Closing date $150,000,000
through Dec. 31, 2005
------------------------------------------------------------------------------------------------------
Corporate Credit Agreement Closing Date $200,000,000
through the Final Maturity Date
(f) Investments by Unqualified Subsidiaries of
Hanover in other Unqualified Subsidiaries of Hanover (whether
existing, newly formed or acquired) or in Qualified
Subsidiaries (whether existing, newly formed or acquired) of
Hanover provided that (i) at the time of each such Investment,
no Default or Event of Default shall have occurred and be
continuing or result from such Investment, (ii) all
transactions related to such Investment shall be consummated
in accordance with applicable law, (iii) any such acquired or
newly formed Subsidiary shall take all actions required to be
taken, if any, with respect to such acquired or newly formed
Subsidiary under the Credit Documents, and (iv) Hanover shall
be in compliance, on a pro forma basis after giving effect to
such Investment, with the covenants contained in Section 11.1
computed as at the last day of the fiscal quarter most
recently ended prior to the delivery of the certificate
required pursuant to this clause (iv), and Hanover shall have
delivered to the Agent an officer's certificate to such effect
concurrently with the delivery of each certificate of a
Responsible Officer pursuant to Section 10.2(b) hereof,
together with all relevant financial information with respect
to such Investment;
(g) Investments constituting Permitted Business
Acquisitions so long as, (a) 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 under the Corporate Credit
Agreement, the sum of (i) the cash and Cash Equivalents (to
the extent such cash and Cash Equivalents are free of any
Liens other than customary bankers' liens, the Liens created
pursuant to the Security Documents and other Liens that are
expressly permitted to exist pursuant to the provisions of the
Security Documents) then held by Hanover and its Qualified
Subsidiaries and (ii) the Available Commitments (as defined in
the Corporate Credit Agreement) of all the Lenders under the
Corporate Credit Agreement at such time equals at least
$60,000,000 and (b) the aggregate amount of Investments
constituting Permitted Business Acquisitions for any fiscal
year shall not exceed $25,000,000 in the aggregate;
(h) Investments or acquisitions by Hanover 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
37
(a) after giving effect to the consummation of the
transactions contemplated by each such Investment or
acquisition, the Loans to be made and the Letters of Credit to
be issued under the Corporate Credit Agreement, the sum of (x)
the cash and Cash Equivalents (to the extent such cash and
Cash Equivalents are free of any Liens other than customary
bankers' liens, the Liens created pursuant to the Security
Documents and other Liens that are expressly permitted to
exist pursuant to the provisions of the Security Documents)
then held by Hanover and its Qualified Subsidiaries and (y)
the Available Commitments (as defined in the Corporate Credit
Agreement) of all the Lenders under the Corporate Credit
Agreement at such time equals at least $60,000,000 and (b) 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 Hanover and its Subsidiaries to acquire shares of capital
stock of Hanover not to exceed $8,000,000;
(j) the purchase by the TIDES Trust of the TIDES
Debentures, as contemplated under the TIDES Declaration of
Trust;
(k) (i) Investments in POC's Joint Ventures
existing on the date of consummation of the POC Acquisition
and (ii) Investments in POC's Joint Ventures pursuant to
commitments existing at the time of the POC Acquisition in an
aggregate amount not to exceed $10,000,000;
(l) Investments in Unqualified Subsidiaries
listed in Schedule 11.10A;
(m) Investments in Unrestricted Subsidiaries in
an aggregate amount not to exceed $1,000,000 at any one time;
and
(n) Investments undertaken pursuant to the
Permitted International Reorganization.
(j) Subsection 11.11 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and adding the following in its
place:
11.11 Limitation on Optional Payments and Modifications of
Debt Instruments. (i) Make any optional payment or optional prepayment
on or optional redemption, optional purchase or optional defeasance of
any portion of the Hanover Zero Coupon Subordinated Notes or any
Refinancing Indebtedness incurred in respect thereof (other than an
Offset Prepayment, as such term is defined in the Indenture related to
the Hanover Zero Coupon Subordinated Notes), the 2008 Notes or any
Refinancing Indebtedness incurred in respect thereof (other than
scheduled cash interest payments), the Hanover Convertible Notes or any
Refinancing Indebtedness incurred in respect thereof (other than
scheduled cash interest payments), the 2003 Notes or any Refinancing
Indebtedness incurred in respect thereof (other than scheduled cash
interest payments), the 2001A Equipment Lease Securities or any
Refinancing Indebtedness incurred in respect thereof (other than
scheduled cash interest payments, subject to applicable subordination
provisions), the 2001B Equipment Lease Securities or any Refinancing
Indebtedness incurred in respect thereof (other than scheduled cash
interest payments, subject to applicable subordination provisions),
lease and guarantee payments in respect of the 2001A Equipment Lease
Transaction or any Refinancing Indebtedness incurred in respect thereof
(other than scheduled lease payments, subject to applicable
subordination provisions), and lease and guarantee payments in respect
of the 2001B Equipment Lease Transaction or any Refinancing
Indebtedness incurred in
38
respect thereof (other than scheduled lease payments, subject to
applicable subordination provisions), (ii) make any optional payment or
optional prepayment in excess of $10,000,000 during any calendar year
on or redemption of any Indebtedness or Guarantee Obligations other
than (a) as permitted in clause (i) above, or (b) any optional payment,
prepayment or redemption of any Indebtedness or Guarantee Obligations
pursuant to the Equipment Lease Transactions (other than the 2001A
Equipment Lease Transaction and the 2001B Equipment Lease Transaction
or any Refinancing Indebtedness incurred in respect thereof) or (iii)
amend, modify or change, or consent or agree to any amendment,
modification or change to any of the terms of any Indebtedness or
Guarantee Obligations other than in connection with any Refinancing
Indebtedness that is permitted to be incurred (or exists) pursuant to
the provisions of Section 11.2.
(k) Subsection 11.13 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and adding the following in its
place:
11.13 Sale and Leaseback. Except for the transactions of a
type set forth on Schedule 11.13, enter into any arrangement with any
Person where Hanover or any of the Subsidiaries of Hanover is the
lessee of real or personal property which has been or is to be sold or
transferred by Hanover 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
Hanover or such Subsidiary (any of such arrangements, a "Sale and
Leaseback Transaction"), except that (i) HCLP 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 Section
11.2 is not contravened and (ii) HCLP may enter into Sale and Leaseback
Transactions as lessee for natural gas compressors in connection with
the Equipment Lease Transactions.
(l) Subsection 11.16 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and adding the following in its
place:
11.16 Nature of Business. (A) In the case of any
Subsidiary, 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,
desalinization plants and other related equipment, (d) the provision of
contract compression and related services, (e) the provision of gas
metering services as contemplated under the HMS Transactions, (f) the
provision of gas measurement and related services, (g) the design,
engineering, fabrication, maintenance, leasing, purchase and sale of 0-
to 50-megawatt skid-mounted, engine-driven generators, together with
services related thereto and (h) any activities related thereto which
are consistent with past practice and conducted in the ordinary course
of business; and (B) in the case of Hanover, notwithstanding anything
to the contrary contained herein, engage in any business other than (i)
the direct or indirect ownership of HCLP together with any activities
related thereto, (ii) the performance of its obligations under the
Credit Documents, (iii) the performance of its obligations under the
2008 Notes, the 2003 Notes, the Hanover Convertible Notes or the
Hanover Zero Coupon Subordinated Notes and, in each case, any
Refinancing Indebtedness incurred in respect thereof, (iv) the
performance of its obligations in connection with the TIDES, including,
without limitation, its obligations under the TIDES Indenture, the
TIDES Guarantees and the TIDES Declaration of Trust, (v) the
performance of its obligations under the documents executed in
connection with the Xxxxx Fargo Term Note, (vi) the formation and
ownership of Subsidiaries for the purpose of making acquisitions to the
extent permitted under the Credit Documents, (vii) the refinancing of
the 2008 Notes, (viii) any actions required by law or the rules of any
securities exchange on which its securities are listed and/or
39
traded, and (ix) any other actions that Hanover is expressly permitted
to take pursuant to the provisions of the Credit Documents.
(m) Subsection 11.17 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and adding the following in its
place:
11.17 Unqualified Subsidiaries. Permit any Unqualified
Subsidiary to directly or indirectly own any material assets (other
than cash or Cash Equivalents located in bank accounts) which are
located in the United States of America or any territory thereof.
(n) Subsection 11.18 of each of the Synthetic Guarantees is hereby
amended by deleting such Section in its entirety and adding the following after
Section 11.17:
11.18 Negative Pledge Clauses. Enter into or suffer to
exist or become effective any agreement that prohibits or limits the
ability of Hanover or any Subsidiary of Hanover to create, incur,
assume or suffer to exist any Lien upon any of its property or
revenues, whether now owned or hereafter acquired, to secure its
obligations under the Credit Documents to which it is a party other
than (a) the Corporate Credit Agreement and the other Loan Documents
(as defined in the Corporate Credit Agreement), (b) the Equipment Lease
Transactions, (c) any agreements governing any purchase money Liens or
capital lease obligations otherwise permitted hereby (in which case,
any prohibition or limitation shall only be effective against the
assets financed thereby), (d) the Xxxxx Fargo Credit Agreement, (e)
agreements entered into by Subsidiaries not directly owned by Hanover,
HCLP or any Qualified Subsidiary, (f) agreements entered into by
Unqualified Subsidiaries with respect to Non-Recourse Indebtedness and
(g) with respect to property or revenues that do not constitute
Collateral (as such term is defined in the Guarantee and Collateral
Agreement), negative pledges covering property or revenues with a de
minimis value; provided, that, notwithstanding Section 6.1 of the
Credit Agreement, any negative pledge clauses covering properties or
revenues that do not constitute Collateral may be cured within ninety
(90) days.
11.19 Clauses Restricting Subsidiary Distributions. Enter
into or suffer to exist or become effective any consensual encumbrance
or restriction on the ability of any Subsidiary of Hanover to (a) make
Restricted Payments in respect of any Capital Stock of such Subsidiary
held by, or pay any Indebtedness owed to, Hanover or any other
Subsidiary of Hanover, (b) make loans or advances to, or other
Investments in, Hanover or any other Subsidiary of Hanover or (c)
transfer any of its assets to Hanover or any other Subsidiary of
Hanover, except for (i) such encumbrances or restrictions existing
under or by reason of (x) any restrictions existing under the Corporate
Credit Agreement and the other Loan Documents (as defined in the
Corporate Credit Agreement) and the Equipment Lease Participation
Agreements and (y) any restrictions with respect to a Subsidiary
imposed pursuant to an agreement that has been entered into in
connection with the Disposition of all or substantially all of the
Capital Stock or assets of such Subsidiary, (ii) encumbrances or
restrictions which do not adversely affect the ability of Hanover and
its Subsidiaries to repay the Loans hereunder, (iii) agreements entered
into by Subsidiaries not directly owned by Hanover, HCLP or any
Qualified Subsidiary and (iv) agreements entered into by Unqualified
Subsidiaries with respect to Non-Recourse Indebtedness.
8. Amendment to Annex B to each of the Participation
Agreements. Annex B to each of the Participation Agreements is hereby amended by
deleting Annex B thereof in its entirety and adding Annex B attached hereto in
its place.
40
9. Effectiveness. This Amendment shall become effective
(the "Effective Date") upon fulfillment of the following conditions precedent:
(a) Hanover, HCLP and the Guarantors referred to below shall have delivered to
the Agent duly executed copies of this Amendment, (b) the Agent shall have
received duly executed copies of this Amendment from the Required Lenders under
the Synthetic Guarantees and (c) no Default or Event of Default shall have
occurred and be continuing on the date hereof after giving effect to this
Amendment.
10. Representations and Warranties. Hanover and HCLP
hereby represent and warrant that the representations and warranties contained
in the Operative Agreements (as defined in each of the Synthetic Guarantees)
will be, after giving effect to this Amendment, true and correct in all material
respects, as if made on and as of the date hereof (except those which expressly
speak as of a certain date).
11. Continuing Effect of the Participation Agreements and
Operative Agreements. This Amendment shall not constitute an amendment or waiver
of any other provision of the Operative Agreements not expressly referred to
herein and shall not be construed as a waiver or consent to any further or
future action on the part of HCLP, Hanover, the 2000B Lessor, the 2000A Lessor
or the 1999 Lessor that would require a waiver or consent of the Agent and/or
the 2000B Lenders, the 2000A Lenders or the 1999 Lenders. Except as expressly
amended hereby, the provisions of the Operative Agreements are and shall remain
in full force and effect.
12. Counterparts. This Amendment may be executed in
counterparts and all of the said counterparts taken together shall be deemed to
constitute one and the same instrument. Delivery of an executed signature page
of this Amendment by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.
13. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
14. Expenses. Hanover and HCLP agree to pay or reimburse
the Agent for all of its reasonable out-of-pocket costs and expenses incurred in
connection with the preparation, negotiation and execution of this Amendment,
including, without limitation, the fees and disbursements of counsel to the
Agent.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
written above.
HANOVER COMPRESSOR COMPANY
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President & CFO
HANOVER COMPRESSION LIMITED PARTNERSHIP
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President & CFO
JPMORGAN CHASE BANK, AS ADMINISTRATIVE
AGENT AND AS A LENDER
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
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 LIMITED PARTNERSHIP
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
JPMORGAN CHASE BANK, AS AGENT
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
---------------------------------
Title: Vice President
---------------------------------
JPMorgan Chase Bank
----------------------------------------
(Name of Lender)
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
BANK ONE, NA
----------------------------------------
(Name of Lender)
By: /s/ Xxxxx X. Xxxx
-----------------------------------
Name: Xxxxx X. Xxxx
Title: First Vice President
HANOVER COMPRESSOR COMPANY
AMENDMENT DATED AS OF DECEMBER __, 0000
XXXX (XXX) LEASING & FINANCE
CORPORATION (successor by merger to
FBTC LEASING CORP.)
By: /s/ Xxxxxx Xxxx
---------------------------------
Name: Xxxxxx Xxxx
Title: Vice President
HANOVER COMPRESSOR COMPANY
AMENDMENT DATED AS OF DECEMBER 9th, 2003
Citibank, N.A.
By: /s/ Joronne Xxxxx
---------------------------------
Name: Joronne Xxxxx
Title: Attorney-in-Fact
BANK HAPOALIM B.M.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
By: /s/ Xxxxx Xxxx Xxxxx
-----------------------------------
Name: Xxxxx Xxxx Xxxxx
Title: Senior Vice President
& Corporate Manager
----------------------------------------
The Bank of Nova Scotia
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
Guaranty Bank
By: /s/ Xxx X. Xxxxxxxx
-----------------------------------
Name: Xxx X. Xxxxxxxx
Title: Senior Vice President
ARAB BANKING CORPORATION (B.S.C.)
----------------------------------------
(Name of Lender)
By: /s/ Tarek Shellala
-----------------------------------
Name: Tarek Shellala
Title: Vice President
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President Head
of Credit
National City Bank
---------------------------------------
(Name of Lender)
By: /s/ Xxx Xxxxxxx
------------------------------------
Name: Xxx Xxxxxxx
Title: Vice President
BNP Paribas
By: /s/ Xxxx X. Xxx
-----------------------------------
Name: Xxxx X. Xxx
Title: Director
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
The Royal Bank of Scotland plc
----------------------------------------
(Name of Lender)
By: /s/ Xxxxxxxx X. Dundee
-----------------------------------
Name: Xxxxxxxx X. Dundee
Title: Senior Vice President
Scotiabank Inc.
----------------------------------------
(Name of Lender)
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
HANOVER COMPRESSOR COMPANY
AMENDMENT DATED AS OF DECEMBER 5, 2003
/s/ [Illegible]
----------------------------------------
THE BANK OF TOKYO-MITSUBISHI, LTD.
Consented to:
DZ Bank AG Deutsche
Zentral-Genossenschaftsbank
New York Branch
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
MIZUHO CORPORATE BANK, LTD.
By: /s/ Jun Shimmachi
-----------------------------------
Name: Jun Shimmachi
Title: Vice President
HANOVER COMPRESSOR COMPANY
AMENDMENT DATED AS OF DECEMBER __, 2003
COMERICA BANK
/s/ Xxxxxxx X. Xxxxxx
----------------------------------------
By: Xxxxxxx X. Xxxxxx
Its: Vice President
CREDIT SUISSE FIRST BOSTON
acting through its Cayman Islands Branch
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Director
By: /s/ Xxxxx X. Xxxx
-----------------------------------
Name: Xxxxx X. Xxxx
Title: Associate
WACHOVIA BANK, NATIONAL ASSOCIATION
(Name of Lender)
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Vice President
NATEXIS BANQUES POPULAIRES
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President / Manager
By: /s/ Xxxxx X. Xxxxxxx, III
------------------------------------
Name: Xxxxx X. Xxxxxxx, III
Title: Vice President / Manager
SUNTRUST BANK
----------------------------------------
(Name of Lender)
By: /s/ Xxx XxXxxxxx
-------------------------------------
Name: Xxx XxXxxxxx
Title: Vice President
Acknowledged and agreed to as of the date hereof:
ENERGY TRANSFER -- HANOVER VENTURES L.P.
GULF COAST DISMANTLING, INC.
HANOVER ASIA, INC.
HANOVER AUSTRALIA, L.L.C.
HANOVER COLOMBIA LEASING, LLC
HANOVER COMPRESSED NATURAL GAS SERVICES, LLC
HANOVER COMPRESSOR NIGERIA, INC.
HANOVER COMPRESSION GENERAL HOLDINGS, LLC
HANOVER ECUADOR L.L.C.
HANOVER GENERAL ENERGY TRANSFER, LLC
HANOVER IDR, INC.
HANOVER LIMITED ENERGY TRANSFER, LLC
HANOVER MEASUREMENT, LLC
HANOVER PARTNERS NIGERIA LLC
HANOVER POWER, LLC
HANOVER POWER (GATES), LLC
HANOVER SPE, L.L.C.
HANOVER/TRINIDAD, L.L.C.
HC CAYMAN LLC
HC LEASING, INC.
HCC HOLDINGS, INC.
HCL COLOMBIA, INC.
KOG, INC.
NIGERIAN LEASING, LLC
SOUTHWEST INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President and Treasurer
HANOVER HL HOLDINGS, LLC
HANOVER HL, LLC
By: /s/ Xxxxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Manager
ANNEX B
PRICING GRID
Participation Agreement
Consolidated Applicable Margin- Applicable Margin-
Leverage Ratio Eurodollar Loans Base Rate Loans
-------------- ---------------- ---------------
>4.0 to 1.0 3.50% 2.50%
< or =4.0 to 1.0 and 3.00% 2.00%
>3.0 to 1.0
< or =3.0 to 1.0 and 2.75% 1.75%
>2.0 to 1.0
< or =2.0 to 1.0 2.50% 1.50%
Changes in the Applicable Margin resulting from changes in the Consolidated
Leverage 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 Hanover is delivered to the Lenders pursuant to Section
10.2(f) of the Guarantee (but in any event not later than the 45th day after the
end of each of each quarter of each fiscal year) and shall remain in effect
until the next change to be effected pursuant to this paragraph. If any
Applicable Margin Certificate referred to above is not delivered within the time
periods specified above, then the Consolidated Leverage 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 Leverage Ratio pursuant to this Pricing Grid
shall be made for the periods and in the manner contemplated by Section 11.1(c)
of the Guarantee.
By:_________________________________
Title:
