<PAGE>

                                                                   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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                                                                               2

                  "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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                                                                               3

         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": J.P. Morgan Securities Inc.

                  "Loan Documents": as defined in the Corporate Credit
         Agreement.

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                                                                               4

                  "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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                                                                               5

         "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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                                                                               6

                  (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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                                                                              7

                  "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.

                  "Wells 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 Wells Fargo Bank (Texas),
         National Association, together with any Refinancing Indebtedness
         incurred in respect thereof.

                  "Wells 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 Wells 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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                                                                               8

                  "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

<PAGE>

                                                                               9

         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

<PAGE>

                                                                              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"

<PAGE>

                                                                              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

<PAGE>

                                                                              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"):

<PAGE>

                                                                              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 2000B, The Chase Manhattan
         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 2001B, The
         Chase Manhattan 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

<PAGE>

                                                                              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,

<PAGE>

                                                                              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

<PAGE>

                                                                              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.
<PAGE>

                                                                              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);

<PAGE>

                                                                              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:

<PAGE>

                                                                              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.

<PAGE>

                                                                              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.

<PAGE>

                                                                              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).

<PAGE>

                                                                              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 825 South Loop West, Houston, Texas property or (ii) the 11250
         Tanner Road, Houston, Texas 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

<PAGE>

                                                                              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.

<PAGE>

                                                                              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;

<PAGE>

                                                                              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

<PAGE>

                                                                              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
<PAGE>

                                                                              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:

<TABLE>
<CAPTION>
            Fiscal Quarter Ending                                      Ratio
-------------------------------------------------------------------------------
<S>                                                                 <C>
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
</TABLE>

                  (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:

<PAGE>

                                                                              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;

<PAGE>

                                                                              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;

<PAGE>

                                                                              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

<PAGE>

                                                                              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;

<PAGE>

                                                                              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

<PAGE>

                                                                              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:

<PAGE>

                                                                              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:

<PAGE>

                                                                              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

<PAGE>

                                                                              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:

<TABLE>
<CAPTION>
                                                 Aggregate Dollar amount of cash and net book value of
Time Period                                      other assets
------------------------------------------------------------------------------------------------------
<S>                                              <C>
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
</TABLE>

                           (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

<PAGE>

                                                                              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

<PAGE>

                                                                              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 Wells 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

<PAGE>

                                                                              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 Wells 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.

<PAGE>

                                                                              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.

<PAGE>
         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/  John E. Jackson
                                             -----------------------------------
                                        Name:    John E. Jackson
                                        Title:   Senior Vice President & CFO


                                        HANOVER COMPRESSION LIMITED PARTNERSHIP



                                        By:      /s/  John E. Jackson
                                             -----------------------------------
                                        Name:    John E. Jackson
                                        Title:   Senior Vice President & CFO


                                        JPMORGAN CHASE BANK, AS ADMINISTRATIVE
                                        AGENT AND AS A LENDER



                                        By:
                                               ---------------------------------
                                        Name:
                                               ---------------------------------
                                        Title:
                                               ---------------------------------


<PAGE>


         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/  Russell A. Johnson
                                               ---------------------------------
                                        Name:    Russell A. Johnson
                                               ---------------------------------
                                        Title:    Vice President
                                               ---------------------------------


<PAGE>

                                                 JPMorgan Chase Bank
                                        ----------------------------------------
                                        (Name of Lender)


                                        By:      /s/  Russell A. Johnson
                                             -----------------------------------
                                        Name:    Russell A. Johnson
                                        Title:   Vice President




<PAGE>




                                                 BANK ONE, NA
                                        ----------------------------------------
                                        (Name of Lender)


                                        By:      /s/  Helen A. Carr
                                             -----------------------------------
                                        Name:    Helen A. Carr
                                        Title:   First Vice President

<PAGE>
                                        HANOVER COMPRESSOR COMPANY
                                        AMENDMENT DATED AS OF DECEMBER __, 2003

                                            MHCB (USA) LEASING & FINANCE
                                            CORPORATION (successor by merger to
                                            FBTC LEASING CORP.)

                                            By:      /s/  Victor Mora
                                               ---------------------------------
                                            Name:    Victor Mora
                                            Title:   Vice President




<PAGE>

                                        HANOVER COMPRESSOR COMPANY
                                        AMENDMENT DATED AS OF DECEMBER 9th, 2003

                                            Citibank, N.A.


                                            By:      /s/  Joronne Jeter
                                               ---------------------------------
                                            Name:    Joronne Jeter
                                            Title:   Attorney-in-Fact



<PAGE>

                                        BANK HAPOALIM B.M.


                                        By:      /s/  James P. Surless
                                             -----------------------------------
                                                 Name:    James P. Surless
                                                 Title:   Vice President



                                        By:      /s/  Laura Anne Raffa
                                             -----------------------------------
                                                 Name:    Laura Anne Raffa
                                                 Title:   Senior Vice President
                                                          & Corporate Manager



<PAGE>
                                        ----------------------------------------
                                                 The Bank of Nova Scotia


                                        By:      /s/  William E. Zarrett
                                             -----------------------------------
                                                 Name:    William E. Zarrett
                                                 Title:   Managing Director



<PAGE>
                                        Guaranty Bank


                                        By:      /s/  Jim R. Hamilton
                                             -----------------------------------
                                                 Name:   Jim R. Hamilton
                                                 Title:  Senior Vice President


<PAGE>



                                        ARAB BANKING CORPORATION (B.S.C.)
                                        ----------------------------------------
                                        (Name of Lender)


                                        By:      /s/  Tarek Shellala
                                             -----------------------------------
                                                 Name:    Tarek Shellala
                                                 Title:   Vice President



                                        By:      /s/  Barbara C. Sanderson
                                             -----------------------------------
                                                 Name:    Barbara C. Sanderson
                                                 Title:   Vice President Head
                                                          of Credit



<PAGE>
                                                  National City Bank
                                         ---------------------------------------
                                         (Name of Lender)


                                         By:      /s/  Tom Gurbach
                                            ------------------------------------
                                                  Name:    Tom Gurbach
                                                  Title:   Vice President


<PAGE>

                                        BNP Paribas


                                        By:      /s/  Mark A. Cox
                                             -----------------------------------
                                                 Name:    Mark A. Cox
                                                 Title:   Director



                                        By:      /s/  Polly Schott
                                             -----------------------------------
                                                 Name:    Polly Schott
                                                 Title:   Vice President


<PAGE>


                                             The Royal Bank of Scotland plc
                                        ----------------------------------------
                                        (Name of Lender)


                                        By:      /s/  Patricia J. Dundee
                                             -----------------------------------
                                                 Name:    Patricia J. Dundee
                                                 Title:   Senior Vice President



<PAGE>
                                                  Scotiabank Inc.
                                        ----------------------------------------
                                        (Name of Lender)


                                        By:      /s/  William E. Zarrett
                                             ---------------------------
                                                 Name:    William E. Zarrett
                                                 Title:   Managing Director



<PAGE>

                                        HANOVER COMPRESSOR COMPANY
                                        AMENDMENT DATED AS OF DECEMBER 5, 2003


                                                 /s/ [Illegible]
                                        ----------------------------------------
                                        THE BANK OF TOKYO-MITSUBISHI, LTD.




<PAGE>
                                        Consented to:



                                        DZ Bank AG Deutsche
                                        Zentral-Genossenschaftsbank
                                        New York Branch


                                        By:   /s/  Mark K. Connelly
                                             -----------------------------------
                                              Name:    Mark K. Connelly
                                              Title:   Senior Vice President



                                        By:   /s/  Richard W. Wilbert
                                             -----------------------------------
                                              Name:    Richard W. Wilbert
                                              Title:   Vice President


<PAGE>

                                        MIZUHO CORPORATE BANK, LTD.


                                        By:      /s/  Jun Shimmachi
                                             -----------------------------------
                                                 Name:    Jun Shimmachi
                                                 Title:   Vice President


<PAGE>

                                        HANOVER COMPRESSOR COMPANY
                                        AMENDMENT DATED AS OF DECEMBER __, 2003


                                        COMERICA BANK


                                                 /s/  William S. Rogers
                                        ----------------------------------------
                                                 By:     William S. Rogers
                                                 Its:    Vice President



<PAGE>
                                        CREDIT SUISSE FIRST BOSTON
                                        acting through its Cayman Islands Branch


                                        By:      /s/  James P. Moran
                                             -----------------------------------
                                                 Name:    James P. Moran
                                                 Title:   Director



                                        By:      /s/  David J. Dodd
                                             -----------------------------------
                                                 Name:    David J. Dodd
                                                 Title:   Associate





<PAGE>
                                        WACHOVIA BANK, NATIONAL ASSOCIATION
                                        (Name of Lender)



                                        By:      /s/  David Humphreys
                                             -----------------------------------
                                                 Name:    David Humphreys
                                                 Title:   Vice President



<PAGE>
                                        NATEXIS BANQUES POPULAIRES



                                        By:     /s/  Timothy Polvado
                                             -----------------------------------
                                                Name:   Timothy Polvado
                                                Title:  Vice President / Manager



                                        By:     /s/  Louis P. Laville, III
                                            ------------------------------------
                                                Name:   Louis P. Laville, III
                                                Title:  Vice President / Manager


<PAGE>
                                                    SUNTRUST BANK
                                        ----------------------------------------
                                        (Name of Lender)


                                        By:    /s/  Joe McCreery
                                           -------------------------------------
                                                Name:   Joe McCreery
                                                Title:  Vice President

<PAGE>
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/ John E. Jackson
                                        ----------------------------------------
                                           Name:    John E. Jackson
                                           Title:   Vice President and Treasurer


<PAGE>

                                    HANOVER HL HOLDINGS, LLC
                                    HANOVER HL, LLC



                                    By:    /s/ Victoria L. Garrett
                                        ----------------------------------------
                                           Name:    Victoria L. Garrett
                                           Title:   Manager
<PAGE>

                                                                         ANNEX B

                                  PRICING GRID

                             Participation Agreement

<TABLE>
<CAPTION>
 Consolidated                      Applicable Margin-         Applicable Margin-
Leverage Ratio                     Eurodollar Loans             Base Rate Loans
--------------                     ----------------             ---------------
<S>                                <C>                        <C>
>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%
</TABLE>

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: