exv10w1



 





Exhibit 10.1




EXECUTION VERSION




FIRST AMENDMENT AND CONSENT




          FIRST AMENDMENT AND CONSENT, dated as of June 27, 2006 (this “Amendment”), with
respect to the Credit Agreement, dated as of November 21, 2005 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”; unless otherwise defined
herein, capitalized terms which are defined in the Credit Agreement are used herein as defined
therein), among Hanover Compressor Company, a Delaware corporation (“Hanover”), Hanover
Compression Limited Partnership, a Delaware limited partnership (“HCLP”; and, together with
Hanover, the “Borrowers”), the several banks and other financial institutions or entities
from time to time parties thereto (the “Lenders”), The Royal Bank of Scotland plc, as
syndication agent and JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the
“Administrative Agent”).




W I T N E S S E T H:




          WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make, and have made,
certain loans and other extensions of credit to the Borrowers; and




          WHEREAS, the Borrowers have requested, and, upon this Amendment becoming effective, the
Lenders have agreed, that certain provisions of the Credit Agreement be amended in the manner
provided for in this Amendment;




          NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in consideration of the premises contained herein, the parties hereto hereby
agree as follows:



SECTION I   AMENDMENTS




     1.1.   Amendments to Section 1.1. (a) Section 1.1 of the Credit Agreement is hereby
amended by inserting the following defined term in appropriate alphabetical order:




     “Bridge Financing”: the collective reference to (i) any proposed interim
borrowing by Hanover of senior unsecured loans from one or more banks or other financial
institutions, the proceeds of which will be used to finance, in whole or in part, the
redemption or purchase of other Indebtedness of Hanover or HCLP (the “Original
Refinanced Indebtedness”), (ii) any senior unsecured debt securities of Hanover issued
to refinance such Original Refinanced Indebtedness, and (iii) any senior subordinated
Guarantee Obligations of the Indebtedness described in clauses (i) and (ii) above by HCLP
and any one or more of the Subsidiary Guarantors; and which Indebtedness would not otherwise
constitute “Refinancing Indebtedness” by virtue of clauses (i), (ii), (iv) or (vii) of the
definition thereof, but which either (A) by its terms is convertible into Indebtedness that
will constitute “Refinancing Indebtedness” of the Original Refinanced Indebtedness or (B) is
repaid within 365 days with the proceeds of Indebtedness that constitutes “Refinancing
Indebtedness” of the Original Refinanced Indebtedness.



     (b) Section 1.1 of the Credit Agreement is hereby further amended by deleting the term “HCLP”
set forth in the definition of “Euro Revolving Commitment” and substituting in lieu thereof the
term “the Borrowers”.



 









 





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          (c) Section 1.1 of the Credit Agreement is hereby further amended by deleting the term “HCLP”
set forth in the definition of “London Funding Office” and substituting in lieu thereof the term
“the Borrowers”.




          (d) Section 1.1 of the Credit Agreement is hereby further amended by inserting in clause (vi)
of the definition of “Refinancing Indebtedness” immediately after the phrase “being refinanced” the
phrase “(it being understood that such obligors may have different capacities (e.g., a borrower may
become a guarantor)”.




     1.2.   Amendment to Section 2.1. Section 2.1 of the Credit Agreement is hereby
amended by deleting the term “HCLP” in both places where it appears in subsection 2.1(b) and in
each case substituting in lieu thereof the term “each Borrower”.



     1.3.   Amendment to Section 2.2. Section 2.2 of the Credit Agreement is hereby
amended by deleting subsection (b) thereof in its entirety and substituting in lieu thereof the
following:




     “(b) Each Borrower may borrow Euro Revolving Loans during the Revolving
Commitment Period on any Business Day; provided, that the relevant Borrower shall
give the Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 11:00 A.M., London time three Business Days prior to the
requested Borrowing Date), specifying (i) the amount to be borrowed, (ii) the requested
Borrowing Date and (iii) the length of the initial Interest Period therefor. Each borrowing
of Euro Revolving Loans shall be in an amount equal to €500,000 or a whole multiple of
€100,000 in excess thereof. Upon receipt of any such notice from the relevant Borrower, the
Administrative Agent shall promptly notify each Revolving Lender thereof. Each Revolving
Lender will make the amount of its pro rata share of each Euro borrowing available to the
Administrative Agent for the account of the relevant Borrower at the London office of the
Administrative Agent specified in Section 11.2 prior to 12:00 noon, London time on the
Borrowing Date requested by relevant Borrower in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the relevant Borrower
by the Administrative Agent crediting the account of the relevant Borrower on the books of
such office with the aggregate of the amounts made available to the Administrative Agent by
the Revolving Lenders and in like funds as received by the Administrative Agent.”



     1.4.   Amendment to Section 3.2. Section 3.2 of the Credit Agreement is hereby
amended by deleting the term “HCLP” set forth in subsection (b) thereof and substituting in lieu
thereof the term “Each Borrower”.



     1.5.   Amendment to Section 3.4. Section 3.4 of the Credit Agreement is hereby
amended by deleting the term “HCLP” set forth in subsection (e) thereof and substituting in lieu
thereof the term “the Borrowers”.



     1.6.   Amendment to Section 3.9. Section 3.9 of the Credit Agreement is hereby
amended by deleting the term “HCLP” in both places in which it appears in subsection 3.9(b) and in
each case substituting in lieu thereof the term “the relevant Borrower”.



     1.7.   Amendment to Section 7.2. Section 7.2 of the Credit Agreement is hereby
amended by deleting from paragraph (a) the phrase “8.3(u)” and substituting therefor the phrase
“8.3(t)” and the phrase “8.6(g) and (j)” and substituting therefor the phrase “8.6(g) and (k)”.



 









 





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     1.8.   Amendment to Section 8.2. Section 8.2 of the Credit Agreement is hereby
amended by inserting the words “any Bridge Financing or” prior to the phrase “Refinancing
Indebtedness” each time such phrase appears in clauses (c), (h) and (j) of Section 8.2.



     1.9.   Consent to Purchase/Redeem TIDES and TIDES Debentures. Hanover has notified
the Lenders that the TIDES Trust may consider issuing a notice of redemption to the holders of the
TIDES in whole or in part, with the expectation that when any such notice is issued, as a result
thereof, the TIDES will be converted into common stock of Hanover. In connection therewith, Hanover
would intend to concurrently issue a notice of redemption to the TIDES Trust to redeem the TIDES
Debentures in whole or in part, with the expectation that, as a result thereof, the TIDES
Debentures will be converted into common stock of Hanover (the foregoing, collectively, the “TIDES
Redemption”). The Required Lenders hereby agree that, notwithstanding the foregoing or any other
restriction in the Credit Agreement, Hanover may, as long as no Default or Event of Default then
exists, consummate the TIDES Redemption, or a series of TIDES Redemptions, and pay cash
consideration (including the proceeds of Revolving Loans) to finance the TIDES Redemption to the
extent the holders of the TIDES do not elect to convert their TIDES into common stock of Hanover
and the TIDES Trust and correspondingly Hanover are then required to redeem the TIDES for cash, as
long as (a) the aggregate amount of TIDES to be redeemed does not exceed the maximum amount
permitted under applicable Contractual Obligations of Hanover and its Subsidiaries at the time of
the commencement of such TIDES Redemptions, (b) at the commencement of such TIDES redemptions the
per share price of common stock of Hanover is greater than 110% of the conversion price set forth
in the TIDES Declaration of Trust and the TIDES Indenture and (c) immediately after giving effect
to any such redemption, the sum of (i) aggregate Available Revolving Commitments of all Revolving
Lenders plus (ii) the aggregate amount of cash then held by Hanover, HCLP and the Restricted
Subsidiaries is at least $50,000,000.



SECTION II   MISCELLANEOUS




     2.1.   Conditions to Effectiveness of Amendment. This Amendment shall become
effective as of the date first set forth above upon the Administrative Agent receiving counterparts
of this Amendment duly executed and delivered by the Borrowers, the other Guarantors, the
Administrative Agent, Required Lenders and, with respect to provisions of this Amendment that
permit Hanover to become a Borrower under the Euro Revolving Facility, each Euro Revolving Lender.



     2.2.   Representations and Warranties. Each Borrower represents and warrants to the
Administrative Agent and the Lenders that as of the effective date of this Amendment: (a) this
Amendment constitutes the legal, valid and binding obligation of such Credit Party, enforceable
against it in accordance with its terms, except as such enforcement may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws affecting creditors’
rights generally, by general equitable principles (whether enforcement is sought by proceedings in
equity or at law) and an implied covenant of good faith and fair dealing; and (b) no Default or
Event of Default shall have occurred and be continuing as of the date hereof.



     2.3.   Counterparts. This Amendment may be executed by one or more of the parties to
this Amendment on any number of separate counterparts (including by facsimile transmission), and
all of said counterparts taken together shall be deemed to constitute one and the same instrument.
A set of the copies of this Amendment signed by all the parties shall be lodged with the Borrowers
and the Administrative Agent. The execution and delivery of the Amendment by any Lender shall be
binding upon each of its successors and assigns (including transferees of its commitments and Loans
in whole or in part prior to effectiveness hereof) and binding in respect of all of its commitments
and Loans, including any acquired subsequent to its execution and delivery hereof and prior to the
effectiveness hereof.



 









 





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     2.4.   Continuing Effect; No Other Amendments. Except to the extent the Credit
Agreement is expressly modified hereby, all of the terms and provisions of the Credit Agreement and
the other Loan Documents are and shall remain in full force and effect. This Amendment shall
constitute a Loan Document.



     2.5.   Payment of Expenses. Each of the Borrowers agrees to pay and reimburse the
Administrative Agent for all of its out-of-pocket costs and reasonable expenses incurred to date in
connection with this Amendment and the other Loan Documents, including, without limitation, the
reasonable fees and disbursements of legal counsel to the Administrative Agent.



     2.6.   GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.



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     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and
delivered by their respective proper and duly authorized officers as of the day and year first
above written.



	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	HANOVER COMPRESSOR COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ LEE E. BECKELMAN	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Lee E. Beckelman	 	 
	 	 	 	 	Title: Vice President – Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	HANOVER COMPRESSION LIMITED PARTNERSHIP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ LEE E. BECKELMAN	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Lee E. Beckelman	 	 
	 	 	 	 	Title: Vice President – Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A., as Administrative Agent and as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ ROBERT TRABAND	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Robert Traband	 	 
	 	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	THE ROYAL BANK OF SCOTLAND PLC, as Syndication Agent and as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ MATTHEW MAIN	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Matthew Main	 	 
	 	 	 	 	Title: Managing Director	 	 






Signature Page to Hanover First Amendment





 









 








	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as US Revolving Lender and Euro Revolving Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ CLAIRE LIU	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Claire Liu	 	 
	 	 	 	 	Title: Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	THE BANK OF NOVA SCOTIA, as US Revolving Lender and Euro Revolving Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ V. H. GIBSON	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Name: V. H. Gibson	 	 
	 	 	 	 	Title: Assistant Manager	 	 
	 
	 	 	 	 	 	 
	 	 	CALYON NEW YORK BRANCH, as US Revolving Lender and Euro Revolving Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ MICHAEL WILLIS	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Michael Willis	 	 
	 	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ DENNIS E. PETITO	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Dennis E. Petito	 	 
	 	 	 	 	Title: Managing Director	 	 
	 
	 	 	 	 	 	 
	 	 	CITICORP NORTH AMERICA, INC., as US Revolving Lender and Euro Revolving Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ SHIRLEY BURROW	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Shirely Burrow	 	 
	 	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, as US Revolving Lender and Euro Revolving Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ VANESSA GOMEZ	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Vanessa Gomez	 	 
	 	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ NUPUR KUMAR	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Nupur Kumar	 	 
	 	 	 	 	Title: Associate	 	 






Signature Page to Hanover First Amendment





 









 








	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	DEUTSCHE BANK AG, NEW YORK BRANCH, as US Revolving Lender and Euro Revolving Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ SAAD IQBAL	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Saad Iqbal	 	 
	 	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ EVELYN THIERRY	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Evelyn Thierry	 	 
	 	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	FORTIS CAPITAL CORP., as US Revolving Lender and Euro Revolving Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ JOHN W. DEEGAN	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Name: John W. Deegan	 	 
	 	 	 	 	Title: Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ C. TOBIAS BACKER	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Name: C. Tobias Backer	 	 
	 	 	 	 	Title: Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	MORGAN STANLEY BANK, as US Revolving Lender and Euro Revolving Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ DANIEL TWENGE	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Daniel Twenge	 	 
	 	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	NATEXIS BANQUES POPULARES, as US Revolving Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ DANIEL PAYER	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Daniel Payer	 	 
	 	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ TIMOTHY L. POLVADO	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Timothy L. Polvado	 	 
	 	 	 	 	Title: Vice President and Group Manager	 	 
	 
	 	 	 	 	 	 
	 	 	NATIONAL CITY BANK, as US Revolving Lender and Euro Revolving Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ STEPHEN MONTO	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Stephen Monto	 	 
	 	 	 	 	Title: Vice President	 	 






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	 	 	SUNTRUST BANK, as US Revolving Lender and Euro Revolving Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ JOSEPH M. MCCREERY	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Joseph M. McCreery	 	 
	 	 	 	 	Title: Director	 	 
	 
	 	 	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION, as US Revolving Lender and Euro Revolving Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ CHRIS HEWITT	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Chris Hewitt	 	 
	 	 	 	 	Title: Vice President	 	 
	 	 	 
	 	 	WELLS FARGO BANK, N.A., as US Revolving Lender and Euro Revolving Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ PHILIP C. LAUINGER III	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Philip C. Lauinger III	 	 
	 	 	 	 	Title: Vice President	 	 






Signature Page to Hanover First Amendment




 









 








          THE UNDERSIGNED GUARANTORS HEREBY CONSENT AND AGREE TO THE FOREGOING AMENDMENT AS OF THE
DATE HEREOF.




	 	 	 
	 

	 	EQUITY LEASING CORPORATION
	 

	 	ENERGY TRANSFER – HANOVER VENTURES L.P.
	 

	 	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 PARTNERS NIGERIA LLC
	 

	 	HANOVER SPE L.L.C.
	 

	 	HANOVER/TRINIDAD, L.L.C.
	 

	 	HC CAYMAN LLC
	 

	 	HC LEASING, INC.
	 

	 	HCL COLOMBIA, INC.
	 

	 	KOG, INC.
	 

	 	NIGERIAN LEASING, LLC
	 

	 	SOUTHWEST INDUSTRIES, INC.






	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	By:
	 	/S/ LEE E. BECKELMAN	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Lee E. Beckelman	 	 
	 

	 	 	 	Title: Vice President & Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	HANOVER HL HOLDINGS, LLC	 	 
	 	 	HANOVER HL, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ CHARLES R. SCOTT	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Charles R. Scott	 	 
	 

	 	 	 	Title: Manager	 	 






Signature Page to Hanover First Amendment