<PAGE>   1
                                                                 EXHIBIT 10.35


                           HANOVER COMPRESSOR COMPANY
                         $200,000,000 CREDIT AGREEMENT,
                         DATED AS OF DECEMBER 15, 1997

                         AMENDMENTS FIRST THROUGH THIRD
                           INDEX OF CLOSING DOCUMENTS

<TABLE>
<CAPTION>
DOCUMENT                                                                     TAB
<S>                                                                          <C>
1.   Waiver and First Amendment, with Annexes
     attached thereto, dated as of June 10, 1998 ............................ 1

2.   Letter Agreement, dated June 1, 1998,    
     waiving defaults under and amending the
     Exchange and Subordinated Loan Agreement ............................... 2
 
3.   Letter Agreement, dated June 10, 1998,    
     committing Chase to additional loans ................................... 3
 
4.   Promissory Note, dated June 10, 1998 ................................... 4

5.   Resolutions of the Company and Subsidiaries,
     dated as of June 10, 1998 .............................................. 5

6.   Second Amendment, dated as of June 29, 1998 ............................ 6

7.   Synthetic Lease Summary of Terms and Conditions
     (Annex I to the Second Amendment) ...................................... 7

8.   Third Amendment, dated as of July 28, 1998 ............................. 8
</TABLE>
 

<PAGE>   2
                           WAIVER AND FIRST AMENDMENT


         WAIVER AND FIRST AMENDMENT, dated as of June 10, 1998 (this "Waiver 
and Amendment"), to the Credit Agreement, dated as of December 15, 1997 (as the
same may be amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among HANOVER COMPRESSOR COMPANY, a Delaware corporation
("HCC"), the several banks and other financial institutions from time to time
parties thereto (the "Lenders") and THE CHASE MANHATTAN BANK, a New York banking
corporation, as the administrative agent for the Lenders (in such capacity, the
"Administrative Agent").

                               W I T N E S S E T H:

         WHEREAS, HCC, the Lenders and the Administrative Agent are parties to 
the Credit Agreement; and

         WHEREAS, HCC has requested that the Administrative Agent and the 
Required Lenders amend (i) the indebtedness covenant in the Credit Agreement so 
as to permit HCC to incur additional indebtedness up to $35,000,000 and (ii) 
certain Schedules to the Credit Agreement; and

         WHEREAS, HCC has requested that the Administrative Agent and the 
Required Lenders agree to waive any failure by HCC to comply with certain 
provisions of the Credit Agreement, upon the terms and subject to the 
conditions set forth herein; and

         WHEREAS, the Administrative Agent and the Required Lenders are 
agreeable to the requested amendments and waivers, 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:

         1.  Defined Terms. Unless otherwise defined herein, capitalized terms 
used herein which are defined in the Credit Agreement are used herein as 
therein defined.

         2.  Amendment to Subsection 1.1 (Defined Terms). (a) Subsection 1.1 of 
the Credit Agreement is hereby amended by inserting the following new 
definition in the appropriate alphabetical order:

         "Chase Letter Agreement": the $30,000,000 Letter Agreement, dated June 
10, 1998, between The Chase Manhattan Bank and HCC.



         
<PAGE>   3
         3.  Amendment to Schedule II. Schedule II of the Credit Agreement is 
hereby amended by deleting it in its entirety and substituting in place thereof 
Annex A attached hereto.

         4.  Amendment to Schedule IX. Schedule IX of the Credit Agreement is 
hereby amended by deleting it in its entirety and substituting in place thereof 
Annex B attached hereto.

         5.  Waiver of Subsection 7.7(a). The Administrative Agent and the 
Required Lenders hereby waive any violation of subsection 7.7(a) of the Credit 
Agreement as a result of any failure by HCC prior to the date hereof to give 
notice to the Administrative Agent and each Lender of HCC's defaults under 
subsection 5.6, Section 6 and subsections 7.1(c), (d) and (k) of the 
Shareholder Subordinated Loan Agreement.

         6.  Amendment to Subsection 8.2 (Limitation on Indebtedness). 
Subsection 8.2 of the Credit Agreement is hereby amended by deleting paragraph 
(i) therefrom and substituting in place thereof the following:

         "(i) Indebtedness not contemplated by clauses (a)-(h) above not 
    exceeding (i) $35,000,000 in the aggregate at any time outstanding until the
    earlier of (A) September 10, 1998 and (B) the date of the initial extension
    of credit made under the proposed approximate $194,000,000 equipment lease
    transaction being arranged by Chase Securities Inc. for HCC, and (ii)
    thereafter $5,000,000 in the aggregate at any time outstanding."

         7.  Waiver of Subsection 8.10 (Limitation on Investments, Loans and 
Advances). The Administrative Agent and the Required Lenders hereby waive 
compliance with subsection 8.10(g) of the Credit Agreement for the period 
commencing the date hereof and ending on the date that the loans made by The 
Chase Manhattan Bank to HCC under the Chase Letter Agreement are required to be 
paid or prepaid in full, provided that (i) all acquisitions made by HCC and/or 
its Subsidiaries in connection with all such Permitted Business Acquisitions 
does not exceed $35,000,000.

         8.  Waiver of Subsection 9(f). The Administrative Agent and the 
Required Lenders hereby waive any violation prior to the date hereof of 
subsection (9)(f)(ii) of the Credit Agreement as a result of HCC's defaults 
under subsection 5.6, Section 6 and subsections 7.1(c),(d) and (k) of the 
Shareholder Subordinated Loan Agreement.

         9.  Effectiveness. This Waiver and Amendment shall become effective on 
June 10, 1998 subject to the fulfillment of the following conditions: (a) HCC 
and each of its Subsidiaries listed on the signature pages hereto shall have 
delivered to the Administrative Agent duly executed copies of this Waiver and 
Amendment, (b) the Administrative Agent shall have received duly executed 
copies of this Waiver and Amendment from the Required




<PAGE>   4
                                                                               3

Lenders, (c) the Administrative Agent shall have received evidence reasonably 
satisfactory to it that the lenders under the Shareholder Subordinated Loan 
Agreement have waived HCC's defaults under subsection 5.6, Section 6 and 
subsections 7.1(c), (d) and (k) of the Shareholder Subordinated Loan Agreement 
and (d) no Default or Event of Default shall have occurred and be continuing on 
the date hereof after giving effect to this Waiver and Amendment.

         10.   Representations and Warranties.  HCC hereby represents and 
warrants that the representations and warranties contained in the Credit 
Agreement (except those which expressly speak as of a certain date) will be, 
after giving effect to this Waiver and Amendment, true and correct in all 
material respects, as if made on and as of the date hereof.

         11.   Continuing Effect of Credit Agreement. This Waiver and Amendment 
shall not constitute an amendment or waiver of any other provision of the 
Credit Agreement or the Loan Documents 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 HCC that would require a waiver or consent of the Administrative 
Agent and/or the Lenders. Except as expressly amended hereby, the provisions of 
the Credit Agreement and the Loan Documents are and shall remain in full force 
and effect.

         12.   Counterparts. This Waiver and 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 Waiver and Amendment by facsimile transmission shall be effective as 
delivery of a manually executed counterpart hereof.

         13.   GOVERNING LAW.  THIS WAIVER AND AMENDMENT SHALL BE GOVERNED BY, 
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW 
YORK.

         14.   Expenses. HCC agrees to pay or reimburse the Administrative 
Agent for all of their out-of-pocket costs and expenses incurred in connection 
with the preparation, negotiation and execution of this Waiver and Amendment, 
including, without limitation, the fees and disbursements of counsel to the 
Administrative Agent.

<PAGE>   5


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



                                         HANOVER COMPRESSOR COMPANY

                                        BY: /s/ CURTIS BEDRICH
                                           --------------------------
                                         Name:  Curtis Bedrich
                                         Title: Treasurer    

                                        THE CHASE MANHATTAN BANK (formerly known
                                        as Chemical Bank), as Administrative
                                        Agent and as a Lender

                                        BY: /s/ [ILLEGIBLE] 
                                           --------------------------
                                         Name:
                                         Title:

                                        THE BANK OF NOVA SCOTIA

                                        BY: /s/ [ILLEGIBLE]
                                           --------------------------
                                         Name: [ILLEGIBLE]
                                         Title: Senior Manager, Loan Operations

                                        CREDIT LYONNAIS, NEW YORK BRANCH

                                        BY: /s/ PHILIPPE SOUSTRA
                                            --------------------------
                                         Name: Philippe Soustra
                                         Title: Senior Vice President

                                        WELLS FARGO BANK (TEXAS), NATIONAL
                                        ASSOCIATION

                                        BY:
                                           --------------------------
                                         Name:
                                         Title:

<PAGE>   6

                                        BANQUE PARIBAS

                                        BY: /s/ BARTON D. SCHOUEST 
                                            -----------------------------
                                         Name:  Barton D. Schouest  
                                         Title: Managing Director


                                        BY: /s/ BETSY R. JOCHER
                                            -----------------------------
                                         Name:  Betsy R. Jocher
                                         Title: Assistant Vice President



                                        FIRST UNION BANK

                                        BY: /s/ ROBERT R. WETTEROFF 
                                            -----------------------------
                                         Name:  Robert R. Wetteroff
                                         Title: Senior Vice President


                                        BANKERS TRUST COMPANY

                                        BY: 
                                           -----------------------------
                                         Name:
                                         Title:

Acknowledged and agreed to as of
the date hereof:


HANOVER MAINTECH, INC.

BY: /s/ CURTIS BEDRICH
   -----------------------------
 Name:  Curtis Bedrich 
 Title: Treasurer


HANOVER/SMITH, INC.

BY: /s/ CURTIS BEDRICH
   -----------------------------
 Name:  Curtis Bedrich 
 Title: Treasurer


HANOVER LAND COMPANY

BY: /s/ CURTIS BEDRICH
   -----------------------------
 Name:  Curtis Bedrich 
 Title: Treasurer
<PAGE>   7
                                                                         ANNEX A



<TABLE>
<CAPTION>
SCHEDULE II                   SUBSIDIARIES
-----------                   ------------
<S>                 <C>
    1.              Hanover Acquisition Corporation, a Texas corporation and a wholly-owned
                    Subsidiary of HCC.

    2.              Hanover Compressor Colombia, Inc., a Delaware corporation and a wholly-owned
                    Subsidiary of HCC.

    3.              Hanover Land Company, a Texas corporation and a wholly-owned Subsidiary of HCC
                    (initial Credit Party).

    4.              Hanover Maintech, Inc. (f/k/a Maintech Enterprises, Inc.), a Texas corporation
                    and a wholly-owned Subsidiary of HCC (initial Credit Party).

    5.              Hanover/Smith, Inc., a Delaware corporation and a wholly-owned Subsidiary of HCC
                    (initial Credit Party).

    6.              HCC owns 33% of the issued and outstanding stock of Warsila Compression Systems
                    GmbH, a German Company.

    7.              H.C.C. Compressor de Venezuela, C.A., a Venezuelan corporation ("H.C.C.
                    Venezuela") and a wholly-owned Subsidiary of HCC.

    8.              Hanover-PGN Compressor, C.A., a Venezuelan corporation and a wholly-owned
                    Subsidiary of H.C.C. Venezuela.

    9.              HCC owns 99.992% of the issued and outstanding stock of Contract Compression
                    International Argentina, S.A., an Argentinean corporation ("CCIA"). HMI owns the
                    remaining 0.008% of CCIA stock.

    10.             Hanover Compressor Holding Company NL B.V., a Dutch company ("Hanover Holding")
                    and a wholly-owned Subsidiary of HCC.

    11.             Hanover Cayman Limited, a Cayman Islands company ("Hanover Cayman") and a
                    wholly-owned Subsidiary of HCC.

    12.             Hanover Holding owns 99.99% of the issued and outstanding stock of Hanover
                    Compressor Company Bolivia, Ltd., a Bolivian company ("HCC Bolivia"). Hanover
                    Cayman owns the remaining 0.01% of HCC Bolivia stock.

    13.             Hanover Cayman owns 60% of the issued and outstanding stock of Hanover/Enron
                    Venezuela, Ltd., a Cayman Islands company.
</TABLE>
<PAGE>   8
<TABLE>
<S>                 <C>

    14.             HCC owns 99.99% of the membership interests of Hanover Compressor Mexico SRL, a
                    Mexican limited liability company ("Hanover Mexico"). Hanover Cayman owns the
                    remaining 0.01% of said membership interests.

    15.             Hanover Compressor Sucursal Mexico, a Mexican branch and a wholly-owned
                    Subsidiary of HCC.

    16.             HCC owns 51% of Hanover/Cosacol Consortium, a Columbian consortium.

    17.             HCC owns 51% of Hanover Compressor Colombia Ltd., a Colombian limitada.

    18.             HCC owns 99% of the membership interests of 3013442 Nova Scotia Co., a Nova
                    Scotia unlimited liability company. HMI owns the remaining 1% of said membership
                    interests.

    19.             Wagner Equipment, Inc., a Texas corporation and a wholly-owned Subsidiary of HCC.*

    20.             Gas Tech Compression Services, Inc., a Texas corporation and a wholly-owned
                    Subsidiary of HCC.*

    21.             HCC owns 35% of Collicutt's Mechanical Services, Ltd., a Canadian corporation.

    22.             Astra Resources International, Inc., a Texas corporation and a wholly-owned
                    subsidiary of Hanover Acquisition Corporation.

    23.             HCC Acquisition, Inc., a Texas corporation and a wholly-owned subsidiary of HCC.

    24.             Regina Corporation, a Delaware corporation and a wholly-owned subsidiary of HCC.

    25.             Hanover International Trade Corporation a West Indies (Barbados) corporation.
</TABLE>



---------------------

    *   The assets of this entity have been transferred to HCC and it is now an
        inactive corporation.

                                       2




     
<PAGE>   9
                                                                         ANNEX B



SCHEDULE IX    ENVIRONMENTAL


BRIGHTON, COLORADO

1.   This is leased facility while HCC is in the process of shutting down. The
     existing property has been documented as having elevated levels of TPH and
     some metals in the surface soils prior to HCC's acquisition of the
     EconoFlow assets. Since the acquisition HCC has conducted no activities
     that would result in increased level of TPH or soil contamination. The
     documented levels are the responsibility of the property owner.


BRYAN, TEXAS

1.   Leased facility at 4511 Highway 21 E. Bryan, Texas 77808. Preliminary Phase
     II surface soil and water testing has been conducted. There are elevated
     levels of TPH and some metals in the surface soil which relate to periods
     prior to HCC's occupancy. A letter is being sent to the lessor regarding
     those elevated levels of TPH and the surface soil conditions of response as
     to compliance according to state and federal regulations. A Notice of
     Violation was issued because no permit was issued prior to the commencement
     of painting operations. The matter was resolved when the PI-7 was received
     and an exemption was granted.


COLUMBUS, TEXAS

1.   Environmental Management Services ("EMS"), an environmental consultant to
     HCC, is submitting an Application to Amend an existing Air Permit to the
     TNRCC regarding sand blasting and painting, operations at the facility in
     order to update permit conditions. The applications is slated for submittal
     June 1, 1998. HCC/Smith has submitted a Notice of Intent ("NOI") to apply
     for a stormwater permit. EMS has completed two quarterly stormwater
     sampling events, which were within EPA discharge limits. EMS is currently
     waiting on further rain to conduct its final sampling. EMS has also
     prepared a Pollution Prevention Plan as required by the EPA Stormwater
     Permitting Rules. The final EPA stormwater permit application will also be
     submitted June 1, 1998.

2.   EMS completed a Site Remediation and Cleanup Proposal with respect to
     metals and TPH contamination in the soils at the Columbus facility, which
     results from previous tenant activities. GeoMonitoring Services ("GMS"),
     another environmental consultant to HCC, recently completed a Voluntary
     Cleanup Plan ("VCP") to address residual levels of contamination. GMS has
     recommended to HCC that it delay implementation of the VCP until recently
     proposed TNRCC rules as finalized.


EAST BERNARD, TEXAS

1.   Remediation was conducted at the East Bernard facility by an FDIC
     consultant firm prior to occupancy by HCC; however, a final certification
     of completion was not issued for a non-hazardous landfill remediation
     located on the property. Webster Capital has

<PAGE>   10

     indemnified HCC regarding potential environmental liabilities relating to
     the closed landfill. 

2.   Potable water at this facility may need to be tested and certified.

3.   An underground separator at this facility may need to be registered as a
     UST with possible overflow discharge.

4.   A spill control and contingency planning document for an 8,000 gallon
     above-ground tank is required for this facility. Plans are under way to
     relocate this tank to another facility.

FARMINGTON, NEW MEXICO
----------------------

1.   This is a leased facility that has limited surface soil oil staining. HCC
     is fabricating a new facility approximately a mile away to be opened in the
     summer of 1998. Once HCC has relocated, HCC will complete any required
     cleanup of the property in accordance with applicable law.

HOUSTON (NORTH HOUSTON ROSSLYN), TEXAS
--------------------------------------

1.   The City of Houston issued a Notice of Violation ("NOV") to HCC in 1996
     with respect to painting and sand blasting at this facility. HCC has taken
     measures to comply with applicable TNRCC requirements and has submitted
     documentation of such compliance. However, since the City of Houston is not
     required to issue a final resolution letter, it has not done so, and
     subsequently, a second NOV was issued by the City of Houston on August 4,
     1997. On August 22, 1997, the second NOV was deleted by the City of Houston
     as not valid. HCC filed an application for and received a PI-7 and operates
     thereunder.

2.   HCC purchased the property adjoining the North Houston Rosslyn facility
     from George M. Construction, Inc. ("GMCI"). HCC leased the property back to
     GMCI through December 1998. The property contains stockpiled soils, waste
     oil drums, used transformers, used tires, telephone poles, scrap equipment
     and other debris that will be removed prior to HCC taking possession of the
     property. GMCI is required to clean-up the property prior to the expiration
     of its Lease.

HOUSTON (SOUTH LOOP), TEXAS
---------------------------

1.   This leased facility has limited soil and groundwater contamination based
     on a preliminary Phase II investigation by GMS. Waukesha/Pearce, Inc.
     ("WPI") is responsible for any environmental contamination and related
     clean-up. HCC is in negotiations with WPI to install four permanent
     groundwater monitoring wells and conduct additional groundwater and soil
     testing at the facility based on GMS' test results.


                                       2
<PAGE>   11


     HCC is also asking WPI to bioremediate soils in contaminated area near the
     main building and to remove soils around the paint and waste storage areas.

GENERAL FACILITIES DISCLOSURE
-----------------------------

     HCC has acquired air permits or received approval of standard exemptions
for painting and/or sandblasting activities at East Bernard, Midland,
Bridgeport, Victoria and Bryan, Kilgore. Yukon and Ft. Smith (Pocola, OK) are
exempted from air permitting under applicable law.

     HCC has not acquired stormwater permits for any of its facilities, but has
determined that these permits are only required at its manufacturing facilities
in Columbus and Houston. Stormwater permitting applications at these facilities
are currently being prepared or evaluated. The other facilities are
reconditioning facilities and not fabricating facilities and permitting is not
required.

     Underground storage tanks formerly containing waste oils, glycols and wash
waters have been removed from the Houston, Columbus and Oklahoma City
facilities. Minor releases associated with these tanks were detected in
surrounding soils, but were below applicable risk-based cleanup levels. None of
these tanks are used by HCC.

     The following lube/oil antifreeze storage tanks are above 1,100 gallon
capacity and therefore may require permitting: Deweyville (8,000 gallon);
Lafayette (8,000 gallon); Wilburton (2 at 8,800 gallons, 2 at 2,000 gallons);
East Bernard (8,000 gallon); Refugio (6,000 gallon, 4,000 gallon and 2,000
gallon); Sterling City.

     Most HCC facilities (including, but not limited to, Houston, Columbus,
Lafayette, Fort Smith, Oklahoma City, Victoria and Bridgeport) have sumps which
are typically associated with cleaning, painting, ballasting, testing and
fabrication operations. HCC does not believe any of the sumps operated at their
facilities are USTs as defined under the EPA definition under RCRA. These sumps
may require state registration or the filing of Notice of Registrations with the
appropriate state or federal agency.

     HCC contracts with various solvent, oil and waste handling and disposal
companies to dispose of used oils, glycols, equipment wash waters and other
wastewaters or sediments. We are not aware of any violations or notices of
non-compliance relating to the off-site disposal or re-use of such waste
materials.


                                       3
<PAGE>   12
                           HANOVER COMPRESSOR COMPANY
                         12001 NORTH HOUSTON - ROSSLYN
                              HOUSTON, TEXAS 77046



                                  June 1, 1998



To the Holders of Hanover Compressor
Company's Subordinated Notes due
December 21, 2000

     Re:  Hanover Compressor Company ("HCC")

     Reference is made to the Exchange and Subordinated Loan Agreement dated as 
of December 23, 1996 (the "SUB DEBT AGREEMENT") among HCC and the parties 
listed on the signature pages thereof as Lenders. Capitalized terms not 
otherwise defined herein have the meanings ascribed to them in the Sub Debt 
Agreement.

     As you may recall, the negative covenants set forth in Section 6 of the 
Sub Debt Agreement are tied directly to the negative covenants in the Second 
Amended and Restated Credit Agreement, dated as of December 15, 1995 among HCC,
The Chase Manhattan Bank, as agent and the banks parties thereto, as amended 
(the "OLD SENIOR CREDIT AGREEMENT"). In December of 1997, HCC terminated the 
Old Senior Credit Agreement and simultaneously entered into a Credit 
Agreement dated as of December 15, 1997 among HCC, The Chase Manhattan Bank, as 
Administrative Agent and the several lenders parties thereto (the "EXISTING 
SENIOR CREDIT AGREEMENT"), which provides HCC with a $200,000,000 unsecured 
revolving line of credit. In connection with the negotiation of the Existing 
Senior Credit Agreement, HCC was able to improve the terms of a number of 
covenants and events of default as compared to those in the Old Senior Credit 
Agreement. These improvements recognized the expanding, more mature nature of 
HCC's business and its status as a public company.

     Due to the fact that Section 6 of the Sub Debt Agreement did not 
automatically incorporate the more flexible covenants in the Existing Senior 
Credit Agreement (because it was a new agreement and not an amendment of the 
Old Senior Credit Agreement) there are a number of inconsistencies between the 
negative covenants in Section 6 of the Sub Debt Agreement and the negative 
covenants in Section 8 of the Existing Senior Credit Agreement. As HCC has been 
operating in a manner consistent with the Existing Senior Credit Agreement's 
more flexible covenants certain technical Events of Default may have occurred 
under the terms of the Sub Debt Agreement.


<PAGE>   13
June 1, 1998
Page 2



     In order to avoid (i) the occurrence and continuation of Defaults and 
Events of Default under the Sub Debt Agreement (and related defaults under the 
Existing Senior Credit Agreement) and (ii) inconsistencies between the Sub Debt 
Agreement and the Existing Senior Credit Agreement, HCC hereby requests that 
the Lenders agree as follows:

     (a)  to waive any and all Defaults and Events of Default that exist under 
the Sub Debt Agreement arising out of or related to actions or omissions of HCC 
and its Subsidiaries that were permitted by the negative covenants in the 
Existing Senior Credit Agreement;

     (b)  to waive any Events of Default caused by the breach of the covenants 
in Sections 5.6(a) and 5.6(b)(i) of the Sub Debt Agreement due to the failure 
of HCC to timely notify the Lender of any default or Event of Default waived in 
clause (a) above;

     (c)  to amend Section 1.1 of the Sub Debt Agreement to delete the text of 
the definition of "Senior Loan Agreements" in its entirety and substitute the 
following in lieu thereof:

     "SENIOR LOAN AGREEMENTS": that certain Credit Agreement dated as of
     December 15, 1997 (as amended), by and among the Company and The Chase
     Manhattan Bank administrative agent for the banks parties thereto and any
     successor agreements under any restructuring, refinancing, replacement, or
     succession thereof, or any other new creditor facility provided by
     institutional lenders for the benefit of the Company, its Subsidiaries, or
     their respective successors and assigns as such agreements may be amended,
     restated modified or supplemented from time to time, including, without
     limitation, amendments, modifications, supplements and restatements thereof
     giving effect to increases, renewals, extensions, refundings, deferrals,
     restructurings, replacements or refinancing of, or additions to, the
     arrangements provided in such Agreements (whether provided by the original
     lenders and administrative agent under such Credit Agreement or any
     successor agent or other lenders).

     (d)  to amend Section 5.6 of the Sub Debt Agreement by deleting the text 
of that Section in its entirety and substituting the text of Section 7.7 of the 
Existing Senior Credit Agreement, mutatis mutandis, in lieu thereof; provided, 
that to the extent Section 7.7 of the Existing Senior Credit Agreement is 
hereafter amended, supplemented, waived, or deleted, the text of Section 5.6 of 
the Sub Debt Agreement shall be deemed to be so amended, waived, supplemented 
or deleted;

     (e)  to amend Section 6 of the Sub Debt Agreement by deleting the text of 
that Section





<PAGE>   14




June 1, 1998
Page 3



in its entirety and substituting the following in lieu thereof:

     "So long as the Notes remain outstanding and unpaid, or any other amount is
     owing to the Lenders hereunder, the Company shall not, and shall not permit
     any of its Subsidiaries to, directly or indirectly take any action, omit to
     take any action, or permit to exist any circumstances, that would cause the
     Company to fail to comply with the negative covenants set forth in the
     Senior Loan Agreements, with such amendments, supplements and other changes
     to such negative covenants, and such consents, waivers or other
     modifications and other changes to such negative covenants, and such
     consents, waivers or other modifications granted in connection therewith,
     as shall be adopted or granted pursuant to the terms of such Senior Loan
     Agreements. The obligations of the Company set forth in this Section 6
     shall continue notwithstanding the termination of such Senior Loan
     Agreements; provided, however, in the event that the Company is bound by
     more than one Senior Loan Agreement and the negative covenants in such
     Senior Loan Agreements conflict, the negative covenants that provide the
     Company with the greatest flexibility will govern and bind the Company for
     the purposes of this Section 6."

     (f)  to amend Sections 7(e), 7(h) and 7(i) of the Sub Debt Agreement to
delete the references to "$2,500,000" therein and substitute "$5,000,000" in
lieu thereof;

     (g)  to amend Section 9.2 of the Sub Debt Agreement to delete the
telecopier number for HCC listed therein and substituting "(281) 447-0821" in
lieu thereof;

     (h)  to amend Section 9 of the Sub Debt Agreement by adding a new Section
9.16 thereto as follows:

     "9.16 Conflicts with Senior Loan Agreements. In the event that any
     provisions of this Agreement conflicts with any provisions of the Senior
     Loan Agreements, the provisions of this Agreement shall be deemed amended,
     supplement or waived to the extent necessary to avoid such conflict."

     The effectiveness of the waivers and amendment set forth herein is subject
to the approval by each Lender of the terms hereof, which approval shall be
indicated by the execution by all such Lenders of counterparts of this letter.

     Except as specifically set forth herein, the Sub Debt Agreement shall
remain in full force and effect in accordance with its terms, without any
further amendment, modification or waiver
<PAGE>   15
June 1, 1998
Page 4


of any provision thereof.


         This letter may be executed by one or more of the parties hereto on any
number of separate counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument. This letter may be
executed and delivered by telecopier.

         THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.

         If you are in agreement with the foregoing, please execute a copy of
this letter in the space indicated below, which signature will constitute
acceptance of the terms hereof and will implement the waivers and amendments
described above (subject to the condition to effectiveness described above), and
return it no later than Friday, June 5, 1998 by facsimile to 312/269-1747,
Attention: Richard S. Meller, with a hard copy to follow by U.S. Mail addressed
as follows:

                               Neal, Gerber & Eisenberg
                               Two North LaSalle, Suite 2100
                               Chicago, Illinois 60602
                               Attention: Richard S. Meller

         If you have any questions regarding the foregoing please contact Curtis
Bedrich at 281/447-8787 or Michael A. Pucker at 312/269-8444.

                                       Very truly yours,


                                       HANOVER COMPRESSOR COMPANY


                                       By: /s/ CURTIS BEDRICH
                                          --------------------------------------
                                               Curtis Bedrich,
                                               Chief Financial Officer




                               Agreed to and Accepted as of June 1, 1998:
<PAGE>   16
June 1, 1998
Page 5



                                      GKH INVESTMENTS, L.P., a Delaware limited
                                      partnership

                                      By: GKH PARTNERS, L.P., a Delaware
                                      limited partnership, its general partner

                                      By: JAKK Holding Corp., a general partner

                                      By: /s/ MELVYN N. KLEIN 
                                          ------------------------------
                                          Melvyn N. Klein, President


                                      GKH PARTNERS, L.P., a Delaware limited
                                      partnership

                                      By: JAKK Holding Corp., a general partner

                                      By: /s/ MELVYN N. KLEIN 
                                          ------------------------------
                                          Melvyn N. Klein, President


                                      IPP95, L.P.

                                      By: WESINVEST, Inc., its general partner

                                      By: /s/ [ILLEGIBLE]
                                          -------------------------------
                                          Title: [ILLEGIBLE]
<PAGE>   17
June 1, 1998
Page 6




                                   HANNA INVESTMENT GROUP II

                                   By:  /s/ JIM L. HANNA
                                        --------------------------------
                                          Title:  Managing Partner


                                   OTTO CANDIES, INC. 

                                   By:  /s/ PHYLLIS S. HOJEL
                                        --------------------------------
                                          Title:  Agent


                                   HERBERT E. WARE, JR. PROPERTIES, INC.

                                   By:  /s/ HERBERT E. WARE, JR.
                                        --------------------------------
                                          Title:  President



                                        /s/ PHYLLIS S. HOJEL 
                                        --------------------------------
                                            PHYLLIS S. HOJEL 


                                        /s/ TED COLLINS, JR. 
                                        --------------------------------
                                            TED COLLINS, JR.


                                        /s/ L. O. WARD
                                        --------------------------------
                                            L. O. WARD


<PAGE>   18
[CHASE LOGO]

                                                                   June 10, 1998

Hanover Compressor Company 
12001 North Houston-Rosslyn 
Houston, Texas 77096 

Dear Sirs:

         The Chase Manhattan Bank ("Chase") is pleased to inform you of its
agreement, subject to the terms and conditions hereof, to make loans to Hanover
Compressor Company ("HCC") from time to time through September 10, 1998, in an
aggregate principal amount not to exceed $30,000,000 at any one time outstanding
(the "Loans"). The Loans to be made under this letter agreement (the "Letter
Agreement") are in addition to loans Chase is committed to make under the Credit
Agreement, dated as of December 15, 1997, as amended by the Waiver and First
Amendment thereto, dated as of June 10, 1998 (the "Credit Agreement") among HCC,
the several Lenders party thereto and The Chase Manhattan Bank, as
Administrative Agent, Except as otherwise defined herein, all capitalized terms
used in the Credit Agreement are used herein with their defined meanings.

         The Loans to be made under this Letter Agreement will be governed by
the same terms and provisions of the Credit Agreement as if Chase were the sole
Lender thereunder, the functions of the Administrative Agent were performed by
Chase and the


<PAGE>   19

Hanover Compressor Company            -2-                          June 10, 1998





Loans were made under the Credit Agreement. The Applicable Margin for the Loans
and Applicable Commitment Fee Rate for the Bank's agreement to make the Loans
hereunder will be the rates as provided in the Credit Agreement. The Loans under
this Letter Agreement will be evidenced by the promissory note attached hereto
as Exhibit A (the "Note"). All Loans shall be paid in full no later than
September 10, 1998 (the "Final Maturity Date"). In addition, HCC shall prepay
the Loans in full (together with all interest and any other amounts described in
subsection 3.13 of the Credit Agreement with respect to such Loans) on the date
that the initial extension of credit is made under the proposed approximate
$194,000,000 equipment lease transaction being arranged by Chase Securities Inc.
So long as the Loans are available to HCC pursuant to the terms hereof, HCC may
borrow, prepay and reborrow the Loans in whole or in part.

         In furtherance of the foregoing, the provisions of the Credit Agreement
(other than subsections 2.1, 3.6, 3.14, Section 4, subsection 6.1, Section 10
and subsections 11.5(a) and 11.7(a)) are hereby incorporated by reference,
mutatis mutandis. Notwithstanding anything to the contrary contained herein, no
amendment, modification or waiver of any provision of the Credit Agreement after
the date hereof shall be effective under this Letter Agreement unless consented
to by Chase thereunder.

         In order to induce Chase to enter into this Letter Agreement and make
the Loans provided for herein, HCC hereby confirms that the representations and
warranties as incorporated herein from the Credit Agreement are true and correct
in all material respects on the date hereof (except for (i) the representations
and warranties or parts

<PAGE>   20

Hanover Compressor Company            -3-                          June 10, 1998



thereof that, by their terms, expressly relate solely to a specific date, in
which case such representations or warranties or parts thereof shall be true and
correct in all material respects as of such specific date and (ii) to the extent
updated in connection with the Waiver and First Amendment dated as of June 10,
1998).

         This Letter Agreement and Chase's obligations to make Loans hereunder
shall become effective upon Chase's receipt of (i) a copy of this Letter
Agreement and the Note executed by a Responsible Officer of HCC and each
Subsidiary Guarantor listed below and (ii) a copy of resolutions authorizing
HCC's execution, delivery and performance of this Letter Agreement and the Note.

         This Letter Agreement may be executed in counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Letter Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof.

         THIS LETTER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

         HCC agrees to pay or reimburse Chase for all of Chase's reasonable
out-of-pocket costs and expenses incurred in connection with the preparation,
negotiation and execution of this Letter Agreement, including, without
limitation, the reasonable fees and disbursements of counsel to Chase.

<PAGE>   21



Hanover Compressor Company            -4-                          June 10, 1998



         If you are in agreement with the foregoing, please execute a copy of
this letter in the space provided below, whereupon this Letter Agreement shall
become an agreement among us as of the day and year first above written.

                                             Very truly yours,

                                             THE CHASE MANHATTAN BANK

                                             By: /s/ PETER M. LING
                                                 -------------------------------
                                             Title: Peter M. Ling
                                                    Vice President

Agreed to and Accepted:

HANOVER COMPRESSOR COMPANY

By:  /s/ CURTIS BEDRICH
   ---------------------------
   Title:  Treasurer


         Each of the undersigned hereby acknowledges receipt of the foregoing
Letter Agreement and hereby, jointly and severally, unconditionally and
irrevocably guarantees to Chase the prompt, complete payment and performance by
HCC when due (whether at stated maturity, by acceleration or otherwise) of the
unpaid principal of and interest on the Loans and all other obligations and
liabilities of HCC to Chase (including, without limitation, interest accruing at
the then applicable rate provided in the Letter Agreement after the maturity of
the Loans and interest accruing at the then applicable rate provided in the
Letter Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
HCC,

<PAGE>   22



Hanover Compressor Company            -5-                          June 10, 1998



whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding), whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter incurred, which may arise under, out of,
or in connection with, the Letter Agreement, the Note, or any other document
made, delivered or given in connection therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and disbursements
of counsel to Chase that are required to be paid by HCC).

         The terms and provisions of the foregoing guarantee shall be subject to
the same terms and conditions of the Subsidiaries' Guarantee dated as of
December 15, 1997 made by each of the undersigned as if such provisions were
herein incorporated mutatis mutandis, provided that the term Obligations shall
refer specifically and only to the obligations described in the immediately
preceding paragraph.

<PAGE>   23

Hanover Compressor Company            -6-                          June 10, 1998



         IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
to be duly executed and delivered by its duly authorized officer as of the day
and year first above written.

HANOVER/SMITH, INC.                         HANOVER MAINTECH, INC.


By /s/ CURTIS BEDRICH                       By /s/ CURTIS BEDRICH
  ---------------------------------           ---------------------------------
  Name: Curtis Bedrich                         Name: Curtis Bedrich
  Title: Treasurer                             Title: Treasurer

Address for Notices:                        Address for Notices:
12001 North Houston Rosslyn                 12001 North Houston Rosslyn
Houston, Texas 77086                        Houston, Texas 77086
Attn: Chief Financial Officer               Attn: Chief Financial Officer
Fax: 281-447-8781                           Fax: 281-447-8781


HANOVER LAND COMPANY

By /s/ CURTIS BEDRICH
  ---------------------------------
  Name: Curtis Bedrich
  Title: Treasurer

Address for Notices:
12001 North Houston Rosslyn
Houston, Texas 77086
Attn: Chief Financial Officer
Fax: 281-447-8781

<PAGE>   24
                                                                       EXHIBIT A







                                 PROMISSORY NOTE


$30,000,000                                                   New York, New York
                                                                   June 10, 1998


     FOR VALUE RECEIVED, the undersigned, Hanover Compressor Company, a Delaware
corporation ("HCC"), hereby unconditionally promises to pay to the order of The
Chase Manhattan Bank ("The Bank") at its office located at 270 Park Avenue, New
York, New York 10017, in lawful money of the United States of America and in
immediately available funds, on the Final Maturity Date the principal amount of
(a) THIRTY MILLION DOLLARS ($30,000,000), or, if less, (b) the aggregate unpaid
principal amount of all Loans made by the Bank to HCC pursuant to the Letter
Agreement, as hereinafter defined. HCC further agrees to pay interest in like
money at such office on the unpaid principal amount hereof from time to time
outstanding at the rates and on the dates specified in the Letter Agreement.

     The holder of this Note is authorized to endorse on the schedules annexed 
hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof the date, Type and amount of each Loan
made pursuant to the Letter Agreement and the date and amount of each payment or
repayment of principal thereof, each continuation thereof, each conversion of
all or a portion thereof to another Type and, in the case of Eurodollar Loans,
the length of each Interest Period with respect thereto. Each such endorsement
shall constitute prima facie evidence of the accuracy of the information
endorsed. The failure to make any such endorsement shall not affect the
obligations of HCC in respect of such Loan.

     This Note (a) is the Note referred to in the Letter Agreement dated June 
10, 1998 (as further amended, supplemented or otherwise modified from time to 
time, the "Letter Agreement"), between HCC and the Bank, (b) is subject to the 
provisions of the Letter Agreement and (c) is subject to optional and mandatory 
prepayment in whole or in part as provided in the Letter Agreement. This Note 
is guaranteed as provided in the Letter Agreement. Reference is hereby made to 
the Letter Agreement for a description of the nature and extent of the 
guarantees, the terms and conditions upon which each guarantee was granted and 
the rights of the holder of this Note in respect thereof.
<PAGE>   25
                                                                               2



         Upon the occurrence of any one or more of the Events of default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Letter Agreement.

         All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.

         Unless otherwise defined herein, terms defined in the Letter Agreement
and used herein shall have the meanings given to them in the Letter Agreement.

         THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.



                                       HANOVER COMPRESSOR COMPANY


                                       By: /s/ CURTIS BEDRICH
                                           -------------------------------------
                                       Name: Curtis Bedrich
                                             -----------------------------------
                                       Title: Treasurer
                                              ----------------------------------
<PAGE>   26
                                                                               3

                                                                      SCHEDULE A
                                                              TO PROMISSORY NOTE


                 LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
                                                            AMOUNT OF ABR
                           AMOUNT           AMOUNT OF      LOANS CONVERTED    UNPAID PRINCIPAL
        AMOUNT OF ABR   CONVERTED TO    PRINCIPAL OF ABR          TO           BALANCE OF ABR    NOTATION                
DATE        LOANS        ABR LOANS         LOANS REPAID    EURODOLLAR LOANS        LOANS         MADE BY
----------------------------------------------------------------------------------------------------------
<S>     <C>             <C>             <C>                <C>                <C>                <C>

----------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>   27
                                                                               4
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
                                                            AMOUNT OF ABR
                           AMOUNT           AMOUNT OF      LOANS CONVERTED    UNPAID PRINCIPAL
        AMOUNT OF ABR   CONVERTED TO    PRINCIPAL OF ABR          TO           BALANCE OF ABR    NOTATION                
DATE        LOANS        ABR LOANS         LOANS REPAID    EURODOLLAR LOANS        LOANS         MADE BY
----------------------------------------------------------------------------------------------------------
<S>     <C>             <C>             <C>                <C>                <C>                <C>

==========================================================================================================
</TABLE>
<PAGE>   28
                                                                      SCHEDULE B
                                                              TO PROMISSORY NOTE


      LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                                          Amount of       Unpaid
                           Amount      Interest Period      Amount of     Eurodollar     Principal
           Amount of    Converted to    and Eurodollar     Principal of     Loans        Balance of
          Eurodollar     Eurodollar       Rate with         Eurodollar   Converted to    Eurodollar     Notation
Date         Loans         Loans       Respect Thereto     Loans Repaid    ABR Loans       Loans        Made By
-------------------------------------------------------------------------------------------------------------------
<S>       <C>            <C>            <C>                 <C>            <C>            <C>            <C>
-------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------

===================================================================================================================
</TABLE>
<PAGE>   29



                           HANOVER COMPRESSOR COMPANY

                            SECRETARY'S CERTIFICATE

         I, Richard S. Meller, do hereby certify that I am the Secretary of
Hanover Compressor Company, a Delaware corporation (the "Corporation"), and that
I have been duly appointed and qualified and am presently serving in the
capacity of Secretary of the Corporation in accordance with the By-laws of the
Corporation. I hereby further certify as follows:

         1. Annexed hereto as Exhibit A are true and correct copy of the
resolutions duly adopted by the Board of Directors of the Corporation. The
resolutions set forth in Exhibit A have not been altered, amended, modified,
revoked or rescinded and are in full force and effect on the date hereof.

         IN WITNESS WHEREOF, I have set my hand hereto as of the 15th day of
July, 1998.


                                           /s/ RICHARD S. MELLER
                                           -------------------------------------
                                           Richard S. Meller, Secretary

<PAGE>   30




                                                                       EXHIBIT A

APPROVAL OF SUPPLEMENTAL $30 MILLION SHORT TERM CREDIT FACILITY.

         Mr. Bedrich presented to the Board a proposal for a supplemental $30
million short term credit facility from the Chase Manhattan Bank. After motion
duly made and seconded, the Board approved the following resolutions:

                 RESOLVED, that a new $30 million credit facility (the
                 "Supplemental Credit Facility") with The Chase Manhattan Bank
                 ("Chase") in the form of Exhibit C hereto together with the
                 amendment to the Company's $200 million revolving credit
                 facility (the "Amendment") permitting the Supplemental Credit
                 Facility in the form of Exhibit D hereto is hereby authorized
                 and approved.

                 FURTHER RESOLVED, that the proper officers of the Company be,
                 and they hereby are, authorized and directed on behalf of the
                 Company to execute any and all agreements, instruments and
                 documents and to do or cause to be done all such further acts
                 and things as they may deem necessary or advisable in order to
                 carry into effect the tenor and purport of the above
                 resolutions; and that all actions taken by the officers of the
                 Company and all actions heretofore taken by the officers, be
                 and they hereby are, ratified, approved, adopted and confirmed;

                 FURTHER RESOLVED, that whenever it is provided in these
                 resolutions that any officer or officers of the Company may
                 execute any document or other instrument or take such other
                 action as he or they may or shall deem, or determine to be,
                 advisable or in the best interests of the Company or as he or
                 they may or shall approve, the fact that such officer or
                 officers shall execute such document or other instrument or
                 take such other action shall be deemed to be conclusive
                 evidence that such officer or officers deem and determine the
                 execution of such document or other instrument or the taking of
                 such other action to be advisable and in the best interests of
                 the Company and approve such action; and

                 FURTHER RESOLVED, that for purposes of these resolutions the
                 "proper officers of the Company" shall be deemed to be the
                 Chairman of the Board, the President and Chief Executive
                 Officer, the Executive Vice President and the Chief Financial
                 Officer and Treasurer of the Company, unless applicable
                 statutes, rules or regulations applicable to the Company
                 require action by a particular officer or officers of the
                 Company, in which event the term "proper officers of the
                 Company" shall be deemed to include any such officer or 
                 officers and the action of any proper officer


<PAGE>   31





                  of the Company may be attested to or verified under the
                  corporate seal of the Company by the Secretary of the Company.

SYNTHETIC LEASE FINANCING

         Mr. Bedrich then presented to the Board plans for a synthetic lease
financing facility in the amount of $200 million and reviewed the terms thereof
and attached hereto as Exhibit E. After discussion and a motion duly made and
seconded, the Board unanimously adopted the following resolutions:

                  RESOLVED, that the lease transaction described in Exhibit E
                  attached hereto, is hereby authorized and approved, including
                  without limitation, the sale of compressors and related
                  equipment, the lease of such compressors and related equipment
                  and the guaranty all as contemplated therein.

                  FURTHER RESOLVED, that the proper officers of the Company be,
                  and they hereby are, authorized and directed on behalf of the
                  Company to execute any and all agreements, instruments and
                  documents and to do or cause to be done all such further acts
                  and things as they may deem necessary or advisable in order to
                  carry into effect the tenor and purport of the above
                  resolutions; and that all actions taken by the officers of the
                  Company and all actions heretofore taken by the officers, be
                  and the hereby are, ratified, approved, adopted and confirmed;

                  FURTHER RESOLVED, that whenever it is provided in these
                  resolutions that any officer or officers of the Company may
                  execute any document or other instrument or take such other
                  action as he or they may or shall deem, or determine to be,
                  advisable or in the best interests of the Company or as he or
                  they may or shall approve, the fact that such officer or
                  officers shall execute such document or other instrument or
                  take such other action shall be deemed to be conclusive
                  evidence that such officer or officers deem and determine the
                  execution of such document or other instrument or the taking
                  of such other action to be advisable and in the best interests
                  of the Company and approve such action; and

                  FURTHER RESOLVED, that for purposes of these resolutions the
                  "proper officers of the Company" shall be deemed to be the
                  Chairman of the Board, the President and Chief Executive
                  Officer, the Executive Vice President and the Chief Financial
                  Officer and Treasurer of the Company, unless applicable
                  statutes, rules or regulations applicable to the Company
                  require action by a particular officer or officers of the
                  Company, in which event the



<PAGE>   32


                  term "proper officers of the Company" shall be deemed to
                  include any such officer or officers and the action of any
                  proper officer of the Company may be attested to or verified
                  under the corporate seal of the Company by the Secretary of
                  the Company.







<PAGE>   33





                                                                       EXHIBIT C

          See tab 3 of this set of Closing Documents, "Letter Agreement, dated
June 10 1998, committing Chase to additional loans."




<PAGE>   34





                                                                       EXHIBIT D

         See tab 1 of this set of Closing Documents, "Waiver and First
Amendment, with Annexes attached thereto, dated as of June 10, 1998."







<PAGE>   35




                                                                       EXHIBIT E

         See tab 7 of this set of Closing Documents, "Synthetic Lease Summary of
Terms and Conditions (Annex I to the Second Amendment)."





<PAGE>   36



                              HANOVER/SMITH, INC.

                            SECRETARY'S CERTIFICATE

         I, Richard S. Meller, do hereby certify that I am the Secretary of
Hanover/Smith, Inc., a Texas corporation (the "Corporation"), and that I have
been duly appointed and qualified and am presently serving in the capacity of
Secretary of the Corporation in accordance with the By-laws of the Corporation.
I hereby further certify as follows:

         1. Annexed hereto as Exhibit A are true and correct copy of the
resolutions duly adopted by the Board of Directors of the Corporation. The
resolutions set forth in Exhibit A have not been altered, amended, modified,
revoked or rescinded and are in full force and effect on the date hereof.

         IN WITNESS WHEREOF, I have set my hand hereto as of the 15th day of
July, 1998.


                                           /s/ RICHARD S. MELLER
                                           -------------------------------------
                                           Richard S. Meller, Secretary

<PAGE>   37




                                                                       EXHIBIT A

                           UNANIMOUS WRITTEN CONSENT
                          OF THE BOARD OF DIRECTORS OF
                              HANOVER/SMITH, INC.


         The undersigned, being all of the directors of HANOVER/SMITH, INC., a
Delaware corporation (the "Corporation"), in lieu of a special meeting of the
Board of Directors and pursuant to the authority of Section 141(f) of the
Delaware General Corporation Law, hereby consent to, authorize and adopt the
following resolutions with the same force and effect as if the undersigned were
personally present at a meeting of the Board of Directors of the Corporation and
had voted for the same:


                 RESOLVED, that a new $30 million credit facility (the
                 "Supplemental Credit Facility") with The Chase Manhattan Bank
                 ("Chase") in the form of Exhibit A hereto together with the
                 amendment to the Company's $200 million revolving credit
                 facility (the "Amendment") permitting the Supplemental Credit
                 Facility in the form of Exhibit B hereto is hereby authorized
                 and approved.

                 FURTHER RESOLVED, that the proper officers of the Company be,
                 and they hereby are, authorized and directed on behalf of the
                 Company to execute any and all agreements, instruments and
                 documents and to do or cause to be done all such further acts
                 and things as they may deem necessary or advisable in order to
                 carry into effect the tenor and purport of the above
                 resolutions; and that all actions taken by the officers of the
                 Company and all actions heretofore taken by the officers, be
                 and they hereby are, ratified, approved, adopted and confirmed;

                 FURTHER RESOLVED, that whenever it is provided in these
                 resolutions that any officer or officers of the Company may
                 execute any document or other instrument or take such other
                 action as he or they may or shall deem, or determine to be,
                 advisable or in the best interests of the Company or as he or
                 they may or shall approve, the fact that such officer or
                 officers shall execute such document or other instrument or
                 take such other action shall be deemed to be conclusive
                 evidence that such officer or officers deem and determine the
                 execution of such document or other instrument or the taking of
                 such other action to be advisable and in the best interests of
                 the Company and approve such action; and

                 FURTHER RESOLVED, that for purposes of these resolutions the
                 "proper officers of the Company" shall be deemed to be the
                 Chairman of the Board, the President and Chief Executive
                 Officer, the Executive Vice President and the Chief Financial
                 Officer and Treasurer of the Company, unless applicable
                 statutes, 

<PAGE>   38

                  rules or regulations applicable to the Company require action
                  by a particular officer or officers of the Company, in which
                  event the term "proper officers of the Company" shall be
                  deemed to include any such officer or officers and the action
                  of any proper officer of the Company may be attested to or
                  verified under the corporate seal of the Company by the
                  Secretary of the Company.

                  FURTHER RESOLVED, that the lease transaction described in
                  Exhibit C attached hereto, is hereby authorized and approved,
                  including without limitation, the sale of compressors and
                  related equipment, the lease of such compressors and related
                  equipment and the guaranty all as contemplated therein.

                  FURTHER RESOLVED, that the proper officers of the Company be,
                  and they hereby are, authorized and directed on behalf of the
                  Company to execute any and all agreements, instruments and
                  documents and to do or cause to be done all such further acts
                  and things as they may deem necessary or advisable in order to
                  carry into effect the tenor and purport of the above
                  resolutions; and that all actions taken by the officers of the
                  Company and all actions heretofore taken by the officers, be
                  and they hereby are, ratified, approved, adopted and
                  confirmed;

                  FURTHER RESOLVED, that whenever it is provided in these
                  resolutions that any officer or officers of the Company may
                  execute any document or other instrument or take such other
                  action as he or they may or shall deem, or determine to be,
                  advisable or in the best interests of the Company or as he or
                  they may or shall approve, the fact that such officer or
                  officers shall execute such document or other instrument or
                  take such other action shall be deemed to be conclusive
                  evidence that such officer or officers deem and determine the
                  execution of such document or other instrument or the taking
                  of such other action to be advisable and in the best interests
                  of the Company and approve such action; and



                                      -2-
<PAGE>   39


                  FURTHER RESOLVED, that for purposes of these resolutions the
                  "proper officers of the Company" shall be deemed to be the
                  Chairman of the Board, the President and Chief Executive
                  Officer, the Executive Vice President and the Chief Financial
                  Officer and Treasurer of the Company, unless applicable
                  statutes, rules or regulations applicable to the Company
                  require action by a particular officer or officers of the
                  Company, in which event the term "proper officers of the
                  Company" shall be deemed to include any such officer or
                  officers and the action of any proper officer of the Company
                  may be attested to or verified under the corporate seal of the
                  Company by the Secretary of the Company.


Dated: May 20, 1998

                                     /s/ MICHAEL J. MCGHAN
                                     -------------------------------------------
                                     Michael J. McGhan



                                     /s/ WILLIAM S. GOLDBERG
                                     -------------------------------------------
                                     William S. Goldberg



                                     /s/ CURTIS BEDRICH
                                     -------------------------------------------
                                     Curtis Bedrich


                                     BEING ALL OF THE DIRECTORS OF THE
                                     CORPORATION



                                      -3-
<PAGE>   40





                                                                       EXHIBIT A

          See tab 3 of this set of Closing Documents, "Letter Agreement, dated
June 10 1998, committing Chase to additional loans."




<PAGE>   41





                                                                       EXHIBIT B

         See tab 1 of this set of Closing Documents, "Waiver and First
Amendment, with Annexes attached thereto, dated as of June 10, 1998."







<PAGE>   42




                                                                       EXHIBIT C

         See tab 7 of this set of Closing Documents, "Synthetic Lease Summary of
Terms and Conditions (Annex I to the Second Amendment)."





<PAGE>   43




                              HANOVER LAND COMPANY

                            SECRETARY'S CERTIFICATE

         I, Richard S. Meller, do hereby certify that I am the Secretary of
Hanover Land Company, a Texas corporation (the "Corporation"), and that
I have been duly appointed and qualified and am presently serving in the
capacity of Secretary of the Corporation in accordance with the By-laws of the
Corporation. I hereby further certify as follows:

         1. Annexed hereto as Exhibit A are true and correct copy of the
resolutions duly adopted by the Board of Directors of the Corporation. The
resolutions set forth in Exhibit A have not been altered, amended, modified,
revoked or rescinded and are in full force and effect on the date hereof.

         IN WITNESS WHEREOF, I have set my hand hereto as of the 15th day of
July, 1998.


                                           /s/ RICHARD S. MELLER
                                           -------------------------------------
                                           Richard S. Meller, Secretary

<PAGE>   44




                                                                       EXHIBIT A

                           UNANIMOUS WRITTEN CONSENT
                          OF THE BOARD OF DIRECTORS OF
                              HANOVER LAND COMPANY


         The undersigned, being all of the directors of HANOVER LAND COMPANY, a
Texas corporation (the "Corporation"), in lieu of a special meeting of the Board
of Directors and pursuant to the authority of Section 9.10 of the Texas Business
Corporation Act, hereby consent to, authorize and adopt the following
resolutions with the same force and effect as if the undersigned were personally
present at a meeting of the Board of Directors of the Corporation and had voted
for the same:


                 RESOLVED, that a new $30 million credit facility (the
                 "Supplemental Credit Facility") with The Chase Manhattan Bank
                 ("Chase") in the form of Exhibit A hereto together with the
                 amendment to the Company's $200 million revolving credit
                 facility (the "Amendment") permitting the Supplemental Credit
                 Facility in the form of Exhibit B hereto is hereby authorized
                 and approved.

                 FURTHER RESOLVED, that the proper officers of the Company be,
                 and they hereby are, authorized and directed on behalf of the
                 Company to execute any and all agreements, instruments and
                 documents and to do or cause to be done all such further acts
                 and things as they may deem necessary or advisable in order to
                 carry into effect the tenor and purport of the above
                 resolutions; and that all actions taken by the officers of the
                 Company and all actions heretofore taken by the officers, be
                 and they hereby are, ratified, approved, adopted and confirmed;

                 FURTHER RESOLVED, that whenever it is provided in these
                 resolutions that any officer or officers of the Company may
                 execute any document or other instrument or take such other
                 action as he or they may or shall deem, or determine to be,
                 advisable or in the best interests of the Company or as he or
                 they may or shall approve, the fact that such officer or
                 officers shall execute such document or other instrument or
                 take such other action shall be deemed to be conclusive
                 evidence that such officer or officers deem and determine the
                 execution of such document or other instrument or the taking of
                 such other action to be advisable and in the best interests of
                 the Company and approve such action; and

                 FURTHER RESOLVED, that for purposes of these resolutions the
                 "proper officers of the Company" shall be deemed to be the
                 Chairman of the Board, the President and Chief Executive
                 Officer, the Executive Vice President and the Chief Financial
                 Officer and Treasurer of the Company, unless applicable
                 statutes, 

<PAGE>   45

                  rules or regulations applicable to the Company require action
                  by a particular officer or officers of the Company, in which
                  event the term "proper officers of the Company" shall be
                  deemed to include any such officer or officers and the action
                  of any proper officer of the Company may be attested to or
                  verified under the corporate seal of the Company by the
                  Secretary of the Company.

                  FURTHER RESOLVED, that the lease transaction described in
                  Exhibit C attached hereto, is hereby authorized and approved,
                  including without limitation, the sale of compressors and
                  related equipment, the lease of such compressors and related
                  equipment and the guaranty all as contemplated therein.

                  FURTHER RESOLVED, that the proper officers of the Company be,
                  and they hereby are, authorized and directed on behalf of the
                  Company to execute any and all agreements, instruments and
                  documents and to do or cause to be done all such further acts
                  and things as they may deem necessary or advisable in order to
                  carry into effect the tenor and purport of the above
                  resolutions; and that all actions taken by the officers of the
                  Company and all actions heretofore taken by the officers, be
                  and they hereby are, ratified, approved, adopted and
                  confirmed;

                  FURTHER RESOLVED, that whenever it is provided in these
                  resolutions that any officer or officers of the Company may
                  execute any document or other instrument or take such other
                  action as he or they may or shall deem, or determine to be,
                  advisable or in the best interests of the Company or as he or
                  they may or shall approve, the fact that such officer or
                  officers shall execute such document or other instrument or
                  take such other action shall be deemed to be conclusive
                  evidence that such officer or officers deem and determine the
                  execution of such document or other instrument or the taking
                  of such other action to be advisable and in the best interests
                  of the Company and approve such action; and



                                      -2-
<PAGE>   46


                  FURTHER RESOLVED, that for purposes of these resolutions the
                  "proper officers of the Company" shall be deemed to be the
                  Chairman of the Board, the President and Chief Executive
                  Officer, the Executive Vice President and the Chief Financial
                  Officer and Treasurer of the Company, unless applicable
                  statutes, rules or regulations applicable to the Company
                  require action by a particular officer or officers of the
                  Company, in which event the term "proper officers of the
                  Company" shall be deemed to include any such officer or
                  officers and the action of any proper officer of the Company
                  may be attested to or verified under the corporate seal of the
                  Company by the Secretary of the Company.


Dated: May 20, 1998

                                     /s/ MICHAEL J. MCGHAN
                                     -------------------------------------------
                                     Michael J. McGhan



                                     /s/ WILLIAM S. GOLDBERG
                                     -------------------------------------------
                                     William S. Goldberg


                                     BEING ALL OF THE DIRECTORS OF THE
                                     CORPORATION


                                      -3-
<PAGE>   47





                                                                       EXHIBIT A

          See tab 3 of this set of Closing Documents, "Letter Agreement, dated
June 10 1998, committing Chase to additional loans."




<PAGE>   48





                                                                       EXHIBIT B

         See tab 1 of this set of Closing Documents, "Waiver and First
Amendment, with Annexes attached thereto, dated as of June 10, 1998."







<PAGE>   49




                                                                       EXHIBIT C

         See tab 7 of this set of Closing Documents, "Synthetic Lease Summary of
Terms and Conditions (Annex I to the Second Amendment)."





<PAGE>   50




                           MAINTECH ENTERPRISES, INC.

                            SECRETARY'S CERTIFICATE

         I, Richard S. Meller, do hereby certify that I am the Secretary of
Maintech Enterprises, Inc., a Texas corporation (the "Corporation"), and that
I have been duly appointed and qualified and am presently serving in the
capacity of Secretary of the Corporation in accordance with the By-laws of the
Corporation. I hereby further certify as follows:

         1. Annexed hereto as Exhibit A are true and correct copy of the
resolutions duly adopted by the Board of Directors of the Corporation. The
resolutions set forth in Exhibit A have not been altered, amended, modified,
revoked or rescinded and are in full force and effect on the date hereof.

         IN WITNESS WHEREOF, I have set my hand hereto as of the 15th day of
July, 1998.


                                           /s/ RICHARD S. MELLER
                                           -------------------------------------
                                           Richard S. Meller, Secretary

<PAGE>   51




                                                                       EXHIBIT A

                           UNANIMOUS WRITTEN CONSENT
                          OF THE BOARD OF DIRECTORS OF
                           MAINTECH ENTERPRISES, INC.


         The undersigned, being all of the directors of MAINTECH ENTERPRISES,
INC., a Texas corporation (the "Corporation"), in lieu of a special meeting of
the Board of Directors and pursuant to the authority of Section 9.10 of the
Texas Business Corporation Act, hereby consent to, authorize and adopt the
following resolutions with the same force and effect as if the undersigned were
personally present at a meeting of the Board of Directors of the Corporation and
had voted for the same:


                 RESOLVED, that a new $30 million credit facility (the
                 "Supplemental Credit Facility") with The Chase Manhattan Bank
                 ("Chase") in the form of Exhibit A hereto together with the
                 amendment to the Company's $200 million revolving credit
                 facility (the "Amendment") permitting the Supplemental Credit
                 Facility in the form of Exhibit B hereto is hereby authorized
                 and approved.

                 FURTHER RESOLVED, that the proper officers of the Company be,
                 and they hereby are, authorized and directed on behalf of the
                 Company to execute any and all agreements, instruments and
                 documents and to do or cause to be done all such further acts
                 and things as they may deem necessary or advisable in order to
                 carry into effect the tenor and purport of the above
                 resolutions; and that all actions taken by the officers of the
                 Company and all actions heretofore taken by the officers, be
                 and they hereby are, ratified, approved, adopted and confirmed;

                 FURTHER RESOLVED, that whenever it is provided in these
                 resolutions that any officer or officers of the Company may
                 execute any document or other instrument or take such other
                 action as he or they may or shall deem, or determine to be,
                 advisable or in the best interests of the Company or as he or
                 they may or shall approve, the fact that such officer or
                 officers shall execute such document or other instrument or
                 take such other action shall be deemed to be conclusive
                 evidence that such officer or officers deem and determine the
                 execution of such document or other instrument or the taking of
                 such other action to be advisable and in the best interests of
                 the Company and approve such action; and

                 FURTHER RESOLVED, that for purposes of these resolutions the
                 "proper officers of the Company" shall be deemed to be the
                 Chairman of the Board, the President and Chief Executive
                 Officer, the Executive Vice President and the Chief Financial
                 Officer and Treasurer of the Company, unless applicable
                 statutes, 

<PAGE>   52

                  rules or regulations applicable to the Company require action
                  by a particular officer or officers of the Company, in which
                  event the term "proper officers of the Company" shall be
                  deemed to include any such officer or officers and the action
                  of any proper officer of the Company may be attested to or
                  verified under the corporate seal of the Company by the
                  Secretary of the Company.

                  FURTHER RESOLVED, that the lease transaction described in
                  Exhibit C attached hereto, is hereby authorized and approved,
                  including without limitation, the sale of compressors and
                  related equipment, the lease of such compressors and related
                  equipment and the guaranty all as contemplated therein.

                  FURTHER RESOLVED, that the proper officers of the Company be,
                  and they hereby are, authorized and directed on behalf of the
                  Company to execute any and all agreements, instruments and
                  documents and to do or cause to be done all such further acts
                  and things as they may deem necessary or advisable in order to
                  carry into effect the tenor and purport of the above
                  resolutions; and that all actions taken by the officers of the
                  Company and all actions heretofore taken by the officers, be
                  and they hereby are, ratified, approved, adopted and
                  confirmed;

                  FURTHER RESOLVED, that whenever it is provided in these
                  resolutions that any officer or officers of the Company may
                  execute any document or other instrument or take such other
                  action as he or they may or shall deem, or determine to be,
                  advisable or in the best interests of the Company or as he or
                  they may or shall approve, the fact that such officer or
                  officers shall execute such document or other instrument or
                  take such other action shall be deemed to be conclusive
                  evidence that such officer or officers deem and determine the
                  execution of such document or other instrument or the taking
                  of such other action to be advisable and in the best interests
                  of the Company and approve such action; and



                                      -2-
<PAGE>   53


                  FURTHER RESOLVED, that for purposes of these resolutions the
                  "proper officers of the Company" shall be deemed to be the
                  Chairman of the Board, the President and Chief Executive
                  Officer, the Executive Vice President and the Chief Financial
                  Officer and Treasurer of the Company, unless applicable
                  statutes, rules or regulations applicable to the Company
                  require action by a particular officer or officers of the
                  Company, in which event the term "proper officers of the
                  Company" shall be deemed to include any such officer or
                  officers and the action of any proper officer of the Company
                  may be attested to or verified under the corporate seal of the
                  Company by the Secretary of the Company.


Dated: May 20, 1998

                                     /s/ MICHAEL J. MCGHAN
                                     -------------------------------------------
                                     Michael J. McGhan



                                     /s/ WILLIAM S. GOLDBERG
                                     -------------------------------------------
                                     William S. Goldberg



                                     /s/ CURTIS BEDRICH
                                     -------------------------------------------
                                     Curtis Bedrich



                                     BEING ALL THE DIRECTORS OF THE
                                     CORPORATION


                                      -3-
<PAGE>   54





                                                                       EXHIBIT A

          See tab 3 of this set of Closing Documents, "Letter Agreement, dated
June 10 1998, committing Chase to additional loans."




<PAGE>   55





                                                                       EXHIBIT B

         See tab 1 of this set of Closing Documents, "Waiver and First
Amendment, with Annexes attached thereto, dated as of June 10, 1998.







<PAGE>   56




                                                                       EXHIBIT C

         See tab 7 of this set of Closing Documents, "Synthetic Lease Summary of
Terms and Conditions (Annex I to the Second Amendment)."


<PAGE>   57

                                                                  EXECUTION COPY

                                SECOND AMENDMENT

         SECOND AMENDMENT, dated as of June 29, 1998 (this "Amendment"), to the
Credit Agreement, dated as of December 15, 1997 (as the same may be amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among HANOVER COMPRESSOR COMPANY, a Delaware corporation ("HCC") the several
banks and other financial institutions from time to time parties thereto (the
"Lenders") and THE CHASE MANHATTAN BANK, a New York banking corporation, as the
administrative agent for the Lenders (in such capacity, the "Administrative
Agent").

                              W I T N E S S E T H:

         WHEREAS, HCC, the Lenders and the Administrative Agent are parties to
the Credit Agreement; and

         WHEREAS, HCC has requested that the Administrative Agent and the
Required Lenders amend certain definitions and covenants in the Credit Agreement
so as to permit HCC to enter into transactions involving Equipment Leases (as
hereinafter defined); and

         WHEREAS, the Administrative Agent and the Required Lenders 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:

         1. Defined Terms. Unless otherwise defined herein, capitalized terms 
used herein which are defined in the Credit Agreement are used herein as
therein defined.

         2. Amendment to Subsection 1.1 (Defined Terms), (a) Subsection 1.1 of
the Credit Agreement is hereby amended by deleting therefrom the definitions of
the following defined terms in their respective entireties and substituting in
place thereof the following new definitions:


         "Consolidated Earnings Before Interest and Taxes": for any
    period, with respect to HCC and its Subsidiaries, the sum of (a)
    Consolidated Net Income for such period, (b) all amounts attributable
    to provision for taxes measured by income (to the extent that such
    amounts have been deducted in determining Consolidated Net Income for
    such period) and (c) Consolidated Interest Expense for such period (to
    the extent

<PAGE>   58

                                                                               2


         that such amounts have been deducted in determining Consolidated Net
         Income for such period).

                  "Consolidated Interest Expense": for any period, with respect
         to any HCC and its Subsidiaries, 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 HCC
         and its Subsidiaries for such period, plus, to the extent not so
         included, payments by HCC under the Equipment Lease 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 Transaction.

                  "Consolidated Lease Expense": for any period as to HCC and its
         Subsidiaries, the aggregate rental obligations of HCC and its
         Subsidiaries determined on a consolidated basis payable in respect of
         such period under leases of real and/or personal property (net of
         income from sub-leases thereof, but including taxes, insurance,
         maintenance and similar expenses which the lessee is obligated to pay
         under the terms of said leases), whether or not such obligations are
         reflected as liabilities or commitments on a consolidated balance sheet
         of such Person and its Subsidiaries or in the notes thereto, and
         whether or not such leases constitute Financing Leases, but excluding
         obligations of HCC with respect to the Equipment Lease.

                  "Consolidated Net Income": for any period as to HCC and its
         Subsidiaries, 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, 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 
         Transaction shall be considered interest expense.

                  "Current Ratio": at a particular date, for HCC and its
         Subsidiaries the quotient of the consolidated current assets of HCC
         and its Subsidiaries at such time, to the consolidated current
         liabilities of HCC, and its Subsidiaries at such time less the current
         portion of long-term debt (all determined in accordance with GAAP at
         such time), provided that for purposes of calculating the Current
         Ratio, current liabilities of the Lessor which are then accrued but
         unpaid with respect to the Equipment Lease Tranche A Loans shall be
         included as current liabilities of HCC.

                  "Financing Lease": any lease of property, real or personal,
         the obligations of the lessee in respect of which are required in
         accordance with GAAP to be capitalized on a balance sheet of the
         lessee, and excluding all obligations with respect to the Equipment
         Lease.

                  "Indebtedness": of HCC and its Subsidiaries at any date, (a)
         all indebtedness of HCC and its Subsidiaries for borrowed money or for
         the deferred purchase price of

<PAGE>   59

                                                                               3


         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 HCC and its Subsidiaries
         under Financing Leases, (c) all obligations of HCC and its
         Subsidiaries in respect of acceptances issued or created for the
         account of HCC and its Subsidiaries and (d) all liabilities secured by
         any Lien (other than any lien of a type described in subsection 8.3(a)
         through (j) on any property owned by HCC or its Subsidiaries even
         though HCC and its Subsidiaries have not assumed or otherwise become
         liable for the payment thereof, provided that all obligations of the
         Lessor with respect to Equipment Lease Tranche A Loans shall be
         considered Indebtedness of HCC.

                  (b) Subsection 1.1 of the Credit Agreement is hereby amended
by inserting the following new definitions in the appropriate alphabetical
order:

                  "Equipment Lease": the lease to be entered into by HCC, as
         lessee, in connection with the Equipment Lease Transaction as described
         in Annex I to this Amendment.

                  "Equipment Lease Transaction": the transaction whereby HCC
         leases natural gas compressors from the Lessor as described in Annex I
         to this Amendment.

                  "Equipment Lease Tranche A Loans": the loans to be made to the
         Lessor in connection with the Equipment Lease Transaction and
         identified as the "Tranche A Loans" as described in Annex I to this
         Amendment.

                  "Equipment Lease Tranche B Loans": the loans to be made to the
         Lessor in connection with the Equipment Lease Transaction and
         identified as the "Tranche B Loans" as described in Annex I to this
         Amendment.

                  "Investor": the parties that hold the beneficial interest in
         the Lessor.

                  "Lessor": the lessor under the Equipment Lease.

                  "Sale and Leaseback Transaction": as defined in subsection
         8.13.

                  3. Amendment to Subsection 8.2 (Limitation on Indebtedness).
Subsection 8.2 of the Credit Agreement is hereby amended by deleting paragraph
(i) therefrom and substituting in place thereof the following:

                  "(i) Indebtedness in respect of Equipment Lease Tranche A
         Loans; and

                  (j) Indebtedness not contemplated by clauses (a)-(i) above not
         exceeding (i) $35,000,000 in the aggregate at any time outstanding
         until the earlier of (A) September 10, 1998 and (B) the date of the
         initial extension of credit made under the

<PAGE>   60

                                                                               4


         Equipment Lease Transaction, and (ii) thereafter $5,000,000 in the
         aggregate at any time outstanding."

                  4. Amendment to Subsection 8.3 (Limitation on Liens).
Subsection 8.3 of the Credit Agreement is hereby amended by deleting paragraph
(s) therefrom and substituting in place thereof the following:

                  "(s) Liens that arise in connection with the Equipment Lease
         Transaction; and

                  (t) Liens not otherwise permitted in clauses (a)-(s) above
         securing Indebtedness not exceeding $2,500,000 in the aggregate."

                  5. Amendment to Subsection 8.4 (Limitation on Guarantee
Obligations). Subsection 8.4 of the Credit Agreement is hereby amended by
deleting paragraph (e) therefrom and substituting in place thereof the
following:

                  "(e) guarantees in respect of Indebtedness (other than
         Subordinated Debt) permitted under this Agreement; and

                  (f) Guarantee Obligations arising pursuant to the Equipment
         Lease Transaction."

                  6. Amendment to Subsection 8.6 (Limitation on Sale or Lease of
Assets). Subsection 8.6 of the Credit Agreement is hereby amended by deleting
paragraph (g) therefrom and substituting in place thereof the following:

                  "(g) the lease by the Real Estate Subsidiary or any other
         Qualified Subsidiary as lessor of real estate properties to HCC or any
         Qualified Subsidiary of HCC for use by HCC or such Qualified Subsidiary
         as the site of its offices and facilities; and

                  (h) the sale of natural gas compressors to the Lessor in
         connection with the Equipment Lease Transaction."

                  7. Amendment to Subsection 8.11 (Limitation on Optional
Payments and Modifications of Debt Instruments). Subsection 8.11 of the Credit
Agreement is hereby amended by deleting it in its entirety and substituting in
place thereof the following:

                  8.11 Limitation on Optional Payments and Modifications of Debt
         Instruments. (i) Make any optional payment or prepayment on or
         redemption of any portion of the Shareholder Subordinated Debt or (ii)
         with respect to any Indebtedness other than the Shareholder
         Subordinated Debt and Indebtedness under the Equipment Lease
         Transaction, (a) make any optional payment or prepayment in excess of
         $10,000,000 during any calendar year on or redemption of any
         Indebtedness (other than Indebtedness pursuant to this Agreement) or
         (b) amend, modify or change, or consent or agree to any amendment,
         modification or change to any of the terms of any such Indebtedness
         (other than any such amendment, modification or change which would

<PAGE>   61


                                                                               5

         extend the maturity or reduce the amount of any payment of principal
         thereof or which would reduce the rate or extend the date for payment
         of interest thereon, or any amendment or waiver which would render the
         terms of such Indebtedness less restrictive)."

                  8. Amendment of Subsection 8.13 (Sale and Leaseback).
Subsection 8.13 of the Credit Agreement is hereby amended by deleting it in its
entirety and substituting in place thereof the following:

                  "8.13 Sale and Leaseback. Except for the transactions of a
         type set forth on Schedule VI, enter into any arrangement with any
         Person where HCC or any of the Subsidiaries of HCC is the lessee of
         real or personal property which has been or is to be sold or
         transferred by HCC 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 HCC or such
         Subsidiary (any of such arrangements, a "Sale and Leaseback
         Transaction"), except that (i) HCC and its Subsidiaries may enter into
         Financing Leases as lessee for natural gas compressors and oil and gas
         production equipment if after giving effect thereto subsection 8.2 is
         not contravened and (ii) HCC may enter into Sale and Leaseback
         Transactions as lessee for natural gas compressors in connection with
         the Equipment Lease Transaction,"

                  9. Effectiveness, This Amendment shall become effective upon
fulfillment of the following conditions precedent: (a) HCC and each of its
Subsidiaries listed on the signature pages hereto shall have delivered to the
Administrative Agent duly executed copies of this Amendment, (b) the
Administrative Agent shall have received duly executed copies of this Amendment
from the Required Lenders 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. HCC hereby represents
and warrants that the representations and warranties contained in the Credit
Agreement (except those which expressly speak as of a certain date) 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.

                  11. Continuing Effect of Credit Agreement. This Amendment
shall not constitute an amendment or waiver of any other provision of the Credit
Agreement or the Loan Documents 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 HCC that would require a waiver or consent of the Administrative Agent and/or
the Lenders. Except as expressly amended hereby, the provisions of the Credit
Agreement and the Loan Documents 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.


<PAGE>   62

                                                                               6

                  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. HCC agrees to pay or reimburse the
Administrative Agent for all of their 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
Administrative Agent.


<PAGE>   63

                                                                               7

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


                                      HANOVER COMPRESSOR COMPANY

                                      BY:  /s/ CURTIS BEDRICH
                                           ----------------------------------
                                           Name: Curtis Bedrich
                                           Title: Treasurer

                                      THE CHASE MANHATTAN BANK (formerly 
                                      known as Chemical Bank), as Administrative
                                      Agent and as a Lender

                                      BY:  /s/ PETER M. LING
                                           ----------------------------------
                                           Name: Peter M. Ling
                                           Title: Vice President


                                      THE BANK OF NOVA SCOTIA


                                      BY:  /s/ F.O.R. ASHBY
                                           ----------------------------------
                                           Name: F.O.R. Ashby
                                           Title: Senior Manager
                                                  Loan Operations


                                      CREDIT LYONNAIS, NEW YORK BRANCH

                                      BY:  /s/ PASCAL POURELLE
                                           ----------------------------------
                                           Name: Pascal Pourelle
                                           Title: Executive Vice President


                                      WELLS FARGO BANK (TEXAS), NATIONAL
                                      ASSOCIATION

                                      BY:  /s/ THEODORE M. NOWAK
                                           ----------------------------------
                                           Name: Theodore M. Nowak
                                           Title: Vice President

<PAGE>   64

                                                                               8


                                      BANQUE PARIBAS

                                      BY:  /s/ MICHAEL H. FIUZAT
                                           ----------------------------------
                                           Name: Michael H. Fiuzat
                                           Title: Vice President


                                      FIRST UNION BANK

                                      BY:  /s/ ROBERT R. WETTEROFF
                                           ----------------------------------
                                           Name: Robert r. Wetteroff
                                           Title: Senior Vice President



Acknowledged and agreed to as
of the date hereof:

HANOVER MAINTECH, INC.

By: /s/ CURTIS BEDRICH
   ----------------------------------
   Name: Curtis Bedrich
   Title: Treasurer


HANOVER/SMITH, INC.


By: /s/ CURTIS BEDRICH
   ----------------------------------
   Name: Curtis Bedrich
   Title: Treasurer


HANOVER LAND COMPANY

By: /s/ CURTIS BEDRICH
   ----------------------------------
   Name: Curtis Bedrich
   Title: Treasurer

<PAGE>   65
                                                                         ANNEX I

CONFIDENTIAL                                         HANOVER COMPRESSOR COMPANY
-------------------------------------------------------------------------------
SUMMARY OF PRINCIPAL TERMS AND CONDITIONS

THIS SUMMARY OF PRINCIPAL TERMS AND CONDITIONS DOES NOT CONSTITUTE A 
COMMITMENT, OR A PROMISE TO COMMIT, ON THE PART OF THE CHASE MANHATTAN BANK OR 
CHASE SECURITIES INC. ANY AGREEMENT, COMMITMENT, ASSURANCE OR INTENTION ON 
BEHALF OF THE CHASE MANHATTAN BANK OR CHASE SECURITIES INC. SHALL BE EFFECTIVE 
ONLY IF IN WRITING AND DULY EXECUTED ON BEHALF OF THE CHASE MANHATTAN BANK OR 
CHASE SECURITIES INC., AS THE CASE MAY BE.

PART I -- PARTIES

LESSEE:                      Hanover Compressor Company ("Hanover Compressor" 
                             or the "Lessee"). 


INVESTOR:                    A party or parties acceptable to Hanover 
                             Compressor and Chase that will hold the beneficial 
                             interest in the Lessor (the "Investor").


LESSOR:                      A Delaware business trust established for the 
                             benefit of the Investor (the "Lessor"). The trust 
                             will be managed by a bank or trust company 
                             acceptable to the Agent and to the Company, (the 
                             "Trustee"). The Lessor shall own the Equipment, 
                             borrow the Loans and execute a lease for all the 
                             Equipment (the "Lease") with the Lessee.


GUARANTOR:                   Hanover Compressor and all guarantors (the 
                             "Guarantors") under the Lessee's existing senior 
                             credit facility dated December 15, 1997 (the 
                             "Senior Credit Facility").


LENDERS:                     A syndicate of financial institutions (the 
                             "Lenders") providing the Loans (as defined below) 
                             to the Lessor to fund 97% of the Equipment Cost.


AGENT:                       The Chase Manhattan Bank ("Chase") will act as 
                             administrative agent (in such capacity, the 
                             "Agent") for the Lenders.


ARRANGER:                    Chase Securities Inc. ("CSI") will act as 
                             syndication agent and arranger for the Loans and 
                             the Investor Contribution (as defined below).


PART II -- THE EQUIPMENT


EQUIPMENT:                   Compressors identified by the Lessee (the 
                             "Equipment"). The Lessee will furnish to the Agent 
                             an inventory of the compressors (the "Inventory") 
                             every six months throughout the term of the Lease. 
                             The Inventory will include a comprehensive list of 
                             all the compressors in the Lease and the location 
                             of each unit.


EQUIPMENT COST:              As used herein. the "Equipment Cost" means all 
                             cost and expenses of any kind or character 
                             incurred to acquire such Equipment. The Equipment 
                             Cost is expected to be approximately $200,000,000.

                             There shall be no limit on the number of items of 
                             Equipment or the value or the cost of acquisition 
                             thereof provided, however, that the aggregate 
                             Equipment Cost subject to the financing 
                             contemplated hereby must at all times equal the 
                             aggregate outstanding principal amount of the 
                             Loans (as defined below) and the unrecovered 
                             Investor Contribution.

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[CHASE LOGO]                         1                    CHASE SECURITIES INC.




<PAGE>   66
CONFIDENTIAL                                          HANOVER COMPRESSOR COMPANY
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PART III -- TRANSACTION STRUCTURE



STRUCTURE OF THE
FINANCING:                    The Investor will contribute 3% of the Equipment 
                              Cost and the Lessor will agree to borrow from the 
                              Lenders, and the Lenders will agree to lend to 
                              the Lessor, on a non-recourse basis, 97% of the 
                              Equipment Cost, up to a maximum of $194,000,000 
                              aggregate principal amount of Loans outstanding 
                              at any time. The Investor will fund its 3% 
                              portion of the Equipment Cost simultaneously and 
                              pro rata with the funding by the Lenders. The 
                              Investor contribution will not be more than 
                              $6,000,000.

APPRAISAL:                    Prior to the acquisition by the Lessor of any 
                              Equipment, the Lessee will deliver to the Agent 
                              and the Investor an appraisal with respect to 
                              such Equipment from an independent appraiser (the 
                              "Appraisal") satisfactory to the Agent, which 
                              will be in form and substance satisfactory to the 
                              Lenders, the Agent, and the Investor.

PARTICIPATION
AGREEMENT:                    On the Closing Date, the Lessor, the Trustee, the 
                              Agent, the Investor, the Lenders and the Lessee 
                              will enter into a participation agreement (the 
                              "Participation Agreement") which will include, 
                              among other things, similar representations, 
                              warranties, indemnities and terms and conditions 
                              as those found in the Senior Credit Facility in 
                              addition to other terms and conditions typically 
                              found in similar synthetic lease financing 
                              facilities.

PART IV -- THE LOANS:

STRUCTURE:                    The Loans will be advanced pursuant to a Credit 
                              Agreement (the "Credit Agreement") among the 
                              Lessor, as borrower, the Lenders and the Agent. 
                              The Lenders will commit under the Credit 
                              Agreement to make Loans to the Lessor to fund 97% 
                              of the Equipment Costs as incurred or invoiced. 
                              The Lenders' commitments will be in the nature of 
                              a revolving credit facility commencing on the 
                              Closing Date and ending upon the first 
                              anniversary thereof (the "Revolving Period"). 
                              After that, the Lenders' commitments will be in 
                              the nature of a term loan credit facility 
                              maturing on the fifth anniversary of the Closing 
                              Date. Loans to fund Equipment Cost will be 
                              separated into two tranches, with Loans, in the 
                              aggregate, equal to the Maximum Residual 
                              Guarantee Amount (as defined below) being 
                              advanced as Tranche A Loans (the "Tranche A 
                              Loans") and the balance of the Loans being 
                              advanced as Tranche B Loans (the "Tranche B 
                              Loans"; collectively with the Tranche A Loans, 
                              the "Loans"). The Lenders will make Tranche A 
                              Loans and Tranche B Loans ratably according to 
                              their respective commitments. Hanover Compressor 
                              will agree to maintain a ratio of aggregate 
                              Tranche A Loans to the Equipment Cost of not less 
                              than 85.0% and not more than 89.9%.

PURPOSE:                      To finance a maximum of 97% of the Equipment Cost.

MATURITY:                     5 years after the Closing Date (the "Maturity 
                              Date").



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[CHASE LOGO]

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CONFIDENTIAL                                          HANOVER COMPRESSOR COMPANY
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REPAYMENT:                The Loans will be payable in full on the Maturity Date
                          and will not be subject to any amortization prior
                          thereto depending upon the results of the Appraisal.
                          The Loans may be prepaid at any time (without premium
                          or penalty, other than "break funding" costs with
                          respect to Eurodollar Loans) and shall be repaid in
                          the event of (i) any sale of Equipment (pursuant to a
                          purchase option under the Lease or otherwise), (ii)
                          any Event of Loss (as defined below) with respect to
                          Equipment (subject to the Lessee's rights to restore
                          or rebuild such Equipment, as described below) or
                          (iii) the termination of the Lease with respect to any
                          Equipment (pursuant to an early termination option
                          under the Lease or otherwise). If any such event
                          occurs with respect to one or more items (but less
                          than all) of the Equipment, then the principal amount
                          of the Loans that must be repaid will be limited to
                          the portion of the outstanding Loans allocable to the
                          affected Equipment (i.e., 97% of the total Equipment
                          Cost of the affected Equipment).

SOURCE OF REPAYMENT:      On the Maturity Date, if the Lessee has exercised its
                          purchase option to purchase all of the Equipment
                          (having provided notice to the Lessor six months prior
                          to the Maturity Date), all the Loans and the
                          Investor's unrecovered equity investment (the
                          "Investor Contribution") will be repaid from the
                          proceeds of such purchase. If the Lessee does not
                          exercise its option to purchase the Equipment on the
                          Maturity Date, the following provisions shall apply:

                          (a) the Lessee shall market and use its best efforts
                          to sell the Equipment on the Lessor's behalf on or
                          prior to the Maturity Date;

                          (b) if the Equipment is sold to a third party, after
                          the Lessee makes a rent payment equal to the Maximum
                          Residual Guarantee Amount, the proceeds will be
                          applied first, to the payment of the Tranche B Loans
                          and accrued interest on the Tranche B Loans, and,
                          second, to the payment of the Investor Contribution
                          and accrued Investor Yield. Excess proceeds will be
                          returned to the Lessee;

                          (c) in the event that the Equipment has not been sold
                          on or prior to the Maturity Date, (i) the Lessee shall
                          pay to the Agent (as assignee of the Lessor) the
                          Maximum Residual Guarantee Amount, which shall be
                          applied to pay the Tranche A Loans in full; and (ii)
                          the Lessee shall surrender possession of the Equipment
                          to the Lessor.

FEES AND INTEREST RATES:  As set forth in Annex I.

GUARANTEE:                Independent of the obligations of the Lessee under the
                          Lease, the Guarantor will execute and deliver a
                          guarantee (the "Guarantee") in favor of the Agent for
                          the benefit of the Lenders, pursuant to which the
                          Guarantor will unconditionally guarantee the payment
                          when due of all amounts required to be paid by the
                          Lessor under the Credit Agreement, including the
                          Loans; provided that the Guarantor will not be
                          required to make any payment under the Guarantee in
                          respect of the Tranche B Loan principal or Investor
                          Contribution unless an Event of Default under the
                          Lease has occurred and is continuing.



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[CHASE LOGO]                           3                   Chase Securities Inc.
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CONFIDENTIAL                                          HANOVER COMPRESSOR COMPANY
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COLLATERAL:                   The obligations of the Lessor under the Credit
                              Agreement will be secured by perfected and
                              first-priority security interests in the Lessors
                              interest in and liens on all of the assets of the
                              Lessor, including an absolute and present
                              assignment of the Lease. The Lenders, however,
                              acknowledge that, due to the right of the Lessee
                              to relocate the Equipment, certain of the
                              Equipment may not be subject to such perfected and
                              first priority security interest for a period of
                              time not to exceed six months. The Lessor and the
                              Lessee shall execute and deliver all necessary
                              financing statements to perfect and create a first
                              priority security interest in such Equipment
                              simultaneously with the delivery of the inventory
                              required to be delivered to the Agent every six
                              months. The Equipment will be released from such
                              liens and security interests upon the purchase by
                              the Lessee, or its assignee, of such Equipment and
                              the payment by the Lessee of the Loans allocable
                              to such Equipment and all other amounts due to 
                              the Lenders and the Agent with respect to such 
                              Equipment.

CERTAIN CONDITIONS:           The obligations of the Lenders to make Loans under
                              the Credit Agreement will be subject to the
                              following conditions: (i) receipt by the Agent of
                              a borrowing certificate, (ii) accuracy of
                              representations, (iii) absence of defaults, (iv)
                              an appraisal of the Equipment reasonably
                              satisfactory to the Agent, the Lender and the
                              Investor, and (v) evidence of perfection of liens
                              (subject to agreed exceptions) and other
                              appropriate documentation. The Lessee will warrant
                              to the Agent and the Lenders title to the
                              Equipment.

PARTICIPATIONS:               Lenders will be permitted to assign Loans, notes
                              and commitments to other financial institutions
                              without the consent of the Lessor; provided that,
                              except in the case of assignments to another
                              Lender or an affiliate of a Lender, the Lessee's
                              consent will be required for an assignment (which
                              consent will not be unreasonably withheld).
                              Assignments will be by novation.

                              Lenders will be permitted to participate in Loans,
                              notes and commitments to other financial
                              institutions.

                              All assignments and participations will be on
                              terms substantially the same as contained in the
                              Senior Credit Facility.

REQUIRED LENDERS:             51%

FINANCIAL COVENANTS:          To include, without limitation.
                     
                              (a) maintenance of a ratio of indebtedness to
                              capitalization at a level not greater than 
                              0.65 : 100;
  
                              (b) maintenance of a ratio of total current assets
                              to total current liabilities at a level not less
                              than 1.00 : 1.00;  
 
                              (c) maintenance of a ratio of U.S. EBITDA to
                              indebtedness at a level not less than 1.00 : 4.50:
                              and
 
                              (d) maintenance of a ratio of EBITDA to interest
                              expense (including rental payments) at a level not
                              less than 2.50 : 1.00.

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[CHASE LOGO]                                               CHASE SECURITIES INC.
<PAGE>   69
CONFIDENTIAL                                          HANOVER COMPRESSOR COMPANY
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OTHER TERMS AND
CONDITIONS:                   The Credit Agreement will contain similar 
                              representations, warranties, indemnities and 
                              terms and conditions as those found in the Senior
                              Credit Facility, as amended and restated, in 
                              addition to other terms and conditions typically 
                              found in similar synthetic lease financing 
                              facilities.


PART V - INVESTOR
CONTRIBUTION:                 

AMOUNT:                       The Investor will advance 3% of the Equipment 
                              Cost, up to $6,000,000 at anytime outstanding, 
                              simultaneously and pro rata with the Loans made 
                              by the Lenders.

PURPOSE:                      To finance 3% of the Equipment Cost.

YIELD:                        The Investor will receive a current yield, paid 
                              from rent, in amounts to be agreed to prior to 
                              the Closing Date between the Lessee and the    
                              Investor (the "Investor Yield").               

CERTAIN TERMS:                The Lessor will be obligated to distribute to 
                              the Investor any  rent and other payments due
                              under the Lease by the Lessee and received by
                              the Lessor for the benefit of the Investor to
                              the extent that said amounts are in excess of
                              payments due to the Lenders thereunder. Like the
                              Loans, the Investor Contribution will be in the
                              nature of a revolving credit facility up until
                              the first anniversary of the Closing Date. After
                              that, it will be in the nature of a term credit
                              facility. In any case, at no time shall the
                              Investor Contribution be in an amount that is
                              less than 3% of the outstanding Equipment Cost.

PART VI - TERMS AND CONDITIONS OF THE LEASE:

GENERAL:                      The Lease will be executed on the Closing Date.

BASIC LEASE TERM:             The term for the Lease will commence (the "Lease 
                              Commencement Date") on the Closing Date. The term 
                              of the Lease (the "Lease Term") for all the 
                              Equipment will expire on the Maturity Date.

                              The Lease will provide that it will terminate
                              early as to all Equipment as of any rent payment
                              date on which the Loans mature.

NET LEASE:                    The Lease will be a triple net lease whereby the 
                              Lessee is responsible for the operation and 
                              maintenance, insurance and other expenses 
                              relating to the Equipment and is unconditionally 
                              obligated to pay all rent coming due during the 
                              Lease Term without offset.

RENT PAYMENTS:                During the Lease Term, the Lessee will make rent 
                              payments ("Basic Rent Payments") as follows: (i) 
                              on each Interest Payment Date, an amount equal to 
                              such payment then due plus (ii) a yield to the 
                              Investor on the Investor Contribution, at times 
                              and in amounts agreed between the Lessee and the 
                              Investor. Further, during the Lease Term with 
                              respect to the Equipment, the Lessee will make 
                              rent payments ("Supplemental Rent Payments") from 
                              time to time in an amount sufficient to allow the 
                              Lessor to pay all amounts due to the Lenders and 
                              the Agent under the Credit Agreement, including 
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[CHASE LOGO]                           5                   CHASE SECURITIES INC.
<PAGE>   70
CONFIDENTIAL                                        HANOVER COMPRESSOR COMPANY
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                              commitment fees, cost and yield protection
                              provisions, indemnities and expenses.             

                              On the Maturity Date the Lessee will pay (in
                              addition to Basic Rent and Supplemental Rent) an
                              amount equal to the maximum amount permitted under
                              SFAS No. 13 which permits the lessee to account
                              for the lease as an operating lease (but in no
                              event less than 85.0% nor more than 89.9% of the
                              Equipment Cost). The amount referred to in the
                              preceding sentence shall be referred to as the
                              "Maximum Residual Guarantee Amount". The Maximum
                              Residual Guarantee Amount payments will be used
                              only to repay Tranche A Loans. The foregoing
                              amounts shall not be required to be paid in
                              respect of Equipment if the Lessee exercises its
                              purchase option under the Lease to purchase such
                              Equipment or otherwise pays the Termination Value
                              (as defined below).

TERMINATION VALUE:            The total termination value (the "Termination 
                              Value") at any time will be an amount equal to the
                              sum of the aggregate outstanding principal amount
                              of the Loans, any accrued interest to the date of
                              payment, the unrecovered Investor Contribution and
                              the unpaid Investor Yield and all other amounts
                              due by Lessee under any of the operative
                              agreements. If it is necessary to compute the
                              Termination Value for a particular item(s) of
                              Equipment, the total Termination Value will be
                              allocated among the Equipment based upon the
                              relative Equipment Cost of each item.

PURCHASE OPTIONS
AND EARLY TERMINATION
RIGHTS:                       The Lease will permit the Lessee, at its option,
                              to purchase at any time 6 months prior to the
                              Maturity Date all of the Equipment and terminate
                              the Lease with respect to the Equipment upon the
                              payment of the Termination Value. In the event the
                              Lessee wants to purchase less than all of the
                              Equipment, no Default or Event of Default shall
                              have occurred and be continuing. By giving written
                              notice to the Lessor 6 months prior to the
                              Maturity Date, the Lessee will have the option to
                              purchase, or designate another person to purchase,
                              on the Maturity Date all, but not less than all,
                              the Equipment then subject to the Lease.  If six
                              months prior to the Maturity Date, the aggregate
                              Termination Value of all Equipment then held by
                              the Lessor is less than 75% of the highest
                              Termination Value of all Equipment held by the
                              Lessor at any one time during the period starting
                              at the first anniversary of the Closing Date and
                              ending six months prior to the Maturity Date, then
                              the Lessee will be required to purchase, or cause
                              its designee to purchase, all remaining Equipment
                              on the Maturity Date. 

EVENT OF LOSS:                An Event of Loss means any of the following 
                              events: (i) destruction, damage beyond repair or 
                              rendition of the affected Equipment permanently 
                              unfit for the Lessee's normal use for any reason 
                              whatsoever; or (ii) the condemnation, 
                              confiscation or seizure of in whole or in any 
                              significant part of the affected Equipment, or 
                              requisition of title to, or use of, any 
                              significant part of the affected Equipment 
                              rendering such affected Equipment permanently 
                              unfit for the Lessee's normal use: or (iii) the 
                              occurrence or discovery of certain environmental 
                              conditions or events affecting the Equipment, the 
                              estimated cost to remediate would exceed 10% of 
                              the Equipment Cost for such Equipment.

                              Upon the occurrence of an Event of Loss, the 
                              Lessee, at its election, shall either: (i) 
                              purchase the affected Equipment by paying or 
                              causing to be paid

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[CHASE LOGO]                  6                           Chase Securities Inc.
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CONFIDENTIAL                                          HANOVER COMPRESSOR COMPANY
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                              the Termination Value of the affected Equipment
                              (upon such payment, title to the affected
                              Equipment will be transferred to the Lessee or its
                              designee); or (ii) rebuild and restore the
                              affected Equipment to like kind, value and quality
                              immediately prior to the time of the Event of
                              Loss, in which case the Lease of the affected
                              Equipment will continue and the rent payable under
                              the Lease will not be reduced; provided that if in
                              the Lessee's reasonable judgment the Equipment
                              cannot be rebuilt prior to the Maturity Date, then
                              the Lessee will purchase the affected Equipment
                              pursuant to clause (i). Except as set forth above,
                              proceeds from insurance or condemnation will be
                              used to repay the Loans and excess insurance
                              proceeds or condemnation awards will be paid to
                              the Lessee unless an Event of Default has
                              occurred and is continuing.

REMARKETING AND
RETURN:                       In the event that the Lessee does not exercise 
                              its option to purchase all of the Equipment, then 
                              not later than 6 months prior to the Maturity 
                              Date the Lessee will be required to use its best
                              efforts to remarket the Equipment on the Lessor's
                              behalf and consummate a sale of all of the
                              Equipment on or prior to the Maturity Date. The
                              proceeds from the sale of the Equipment will be
                              applied to, first, repay the Tranche B Loans and
                              second, repay the unrecovered Investor
                              Contribution. On the date of sale of the
                              Equipment, a Maximum Residual Guarantee Payment
                              will be made to repay in full the Tranche A Loans.
                              Excess proceeds will be returned to Lessee on the
                              Maturity Date. If the sale proceeds from the
                              Equipment is less than the sum of the amount
                              necessary to pay the Tranche B Loans and the
                              unrecovered Investor Contribution, then Lessee
                              shall be liable for an assessment of additional
                              rent with respect to actual excess wear and tear
                              of the Equipment, as determined by an appraisal
                              procedure up to such sum; provided, however, that
                              such assessment shall under no circumstances
                              prevent the Lessee from accounting for the Lease
                              as an operating lease under SFAS No. 13.

                              If the Lessee is unable to sell the Equipment on 
                              or prior to the Maturity Date, then the Lessee 
                              shall pay the Maximum Residual Guarantee Amount 
                              and shall surrender possession of the Equipment 
                              to the Lessor on the Maturity Date.

ASSIGNMENT AND
SUBLETTING:                   The Lease will permit the Lessee to sublease the 
                              Equipment but will prohibit assignment. 
                              Notwithstanding any sublease, the Lessee will 
                              remain primarily liable for the performance of 
                              all of its obligations under the Lease.

QUIET ENJOYMENT:              The Lessee will have the right to peaceably and 
                              quietly hold, possess and use the Equipment 
                              during the Lease Term prior to the Maturity Date 
                              so long as no Event of Default shall have 
                              occurred and be continuing under the Lease.

MAINTENANCE:                  The Lessee will cause the Equipment to be 
                              maintained and repaired in good condition, 
                              ordinary wear and tear excepted. The Equipment 
                              will be maintained at all times in accordance 
                              with applicable law, including without limitation 
                              all environmental laws, and in accordance with 
                              all insurance requirements.

INSURANCE:                    The Lessee will carry and maintain with respect 
                              to the Equipment commercial general liability and 
                              property insurance in amounts and on terms 
                              reasonably satisfactory to the Agent. Each 
                              liability policy and equipment policy shall be 
                              primary without right of contribution from any 
                              other insurance carried by the parties to the 
                              transaction.


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[CHASE LOGO]
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CONFIDENTIAL                                          HANOVER COMPRESSOR COMPANY
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MODIFICATIONS:         The Lessee will have the right to make modifications, 
                       alterations or renovations to the Equipment (the 
                       "Modifications") so long as such Modifications do not 
                       impair the value, utility or the useful life of the 
                       Equipment. The Lessee will also be required to make any
                       Modifications that are required by law or by any 
                       governmental or regulatory authority having jurisdiction
                       over the Equipment. Title will vest with the Lessor with
                       respect to all required Modifications and to all other 
                       Modifications that are not severable from the Equipment
                       without damage or other loss of value. Title to all other
                       Modifications will vest with the Lessee.

GENERAL INDEMNITIES:   The Lessee will indemnify, on an after-tax basis, the 
                       Lessor, the Trust Company, the Investor, the Lenders and
                       the Agent and any of such parties' assignees, affiliates 
                       and their officers (the "Indemnified Persons") from and
                       against liabilities, losses or expenses which may be 
                       asserted against any such person arising out of (i) the
                       ownership, leasing, maintenance, use, or possession of 
                       the Equipment, and (ii) the transactions in connection 
                       with the Lease and the Loans. The General Indemnity 
                       will exclude claims that are attributable to the gross 
                       negligence or willful misconduct of the applicable 
                       indemnified party or its affiliates, representatives
                       or agents. There will be no structural indemnity with 
                       respect to the tax characterization or accounting 
                       treatment of the Lease.

TAX INDEMNIFICATION:   The Lessee will indemnify, on an after tax basis, the 
                       Indemnified Persons against and will agree to pay any and
                       all taxes payable as a result of ownership, rental, 
                       operation, use, maintenance or sale of the Equipment,
                       including, but not limited to, rental, withholding,
                       sales, use, gross receipts, personal equipment, 
                       franchise, excise, value added or other taxes, but 
                       excluding (i) federal net income taxes and (ii) state and
                       local net income taxes except taxes imposed by the state
                       where the Equipment are located.

ENVIRONMENTAL
INDEMNIFICATION:       The Lessee will indemnify the Indemnified Persons from 
                       and against liabilities, losses or expenses arising out 
                       of or related to any pre-existing condition, or any 
                       activity, occurrence or other condition that violates or
                       threatens to violate or results in non-compliance with
                       any environmental law.

OTHER TERMS AND
CONDITIONS:            The Lease, Participation Agreement and Guarantee will 
                       contain representations, warranties, covenants, 
                       indemnities and Events of Default similar to those 
                       contained in the Senior Credit Facility, as amended and 
                       restated.

LEASE COLLATERAL:      The Lessee will secure its obligations under the Lease by
                       granting to Lessor a first perfected security interest 
                       and lien on Lessee's right, title and interest in the 
                       Lease, all other operative documents, the Equipment and
                       all proceeds therefrom, and will file appropriate UCC
                       financing statements as required by the Agent.

PART VII -- GENERAL PROVISIONS

CLOSING CONDITIONS:    The obligations of the Lessee, the Lessor, the Investor
                       and the Lenders to enter into agreements contemplated 
                       hereby on or prior to the Closing Date will be subject 
                       to certain further conditions which include the 
                       following:

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[CHASE LOGO]
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<PAGE>   73

CONFIDENTIAL                                         HANOVER COMPRESSOR COMPANY
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                       (i)   execution of documentation satisfactory to the 
                             parties;

                       (ii)  receipt of legal opinions satisfactory to the 
                             parties;

                       (iii) receipt of any required consents or waivers under 
                             Hanover Compressor's existing debt instruments; and

                       (iv)  other customary conditions to closing for a 
                             transaction of this type.

TRANSACTION EXPENSES:  The Lessee will pay as transaction expenses all fees and 
                       out-of-pocket expenses associated with the negotiation 
                       and preparation of the documents, including, but not 
                       limited to, the reasonable fees of outside legal counsel 
                       for the Lessor, the Lessee, the Investor and the Agent, 
                       the syndication and arrangement fees and reasonable 
                       out-of-pocket expenses of CSI, commitment fees of the 
                       Lenders, any applicable recording costs of the 
                       documentation, and reasonable fees and expenses of the 
                       Trustee.      

DOCUMENTATION:         Documentation for the transaction will be prepared by 
                       Simpson Thacher & Bartlett, counsel to Chase.

EVENTS OF DEFAULT:     The Credit Agreement will contain Events of Defaults 
                       similar to those found in the Senior Credit Facility, 
                       as amended and restated, and usual for facilities of 
                       this type, including a cross default to the Lease, the 
                       Guarantee and other debt instruments of Hanover 
                       Compressor. The Lessee may cure any Equipment-related 
                       default under the Lease and the Guarantee by purchasing 
                       such Equipment for Termination Value.

GOVERNING LAW:         All documents will be governed by the laws of the State 
                       of New York.








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[CHASE LOGO]                         9                    CHASE SECURITIES INC.
<PAGE>   74

CONFIDENTIAL                                         HANOVER COMPRESSOR COMPANY
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                                    ANNEX I
                           INTEREST AND CERTAIN FEES


INTEREST RATE
OPTIONS:                 The Lessor, at the direction of the Lessee, may elect 
                         that all or a portion of the Loans bear interest at a 
                         rate per annum equal to:

                              the ABR plus the Applicable Margin; or

                              the Eurodollar Rate plus the Applicable Margin.

                              As used herein;

                         "ABR" means the highest of (i) the rate of interest 
                         publicly announced by Chase as its prime rate in 
                         effect at its principal office in New York City (the 
                         "Prime Rate"), (ii) the secondary market rate for 
                         certificates of deposit (grossed up for maximum 
                         statutory reserve requirements) plus 1% and (iii) the 
                         federal funds effective rate from time to time plus 
                         0.5%.

                         "Applicable Margin" means a percentage determined in 
                         accordance with the pricing grid attached hereto as 
                         Annex I-A.

                         "Eurodollar Rate" means the rate (grossed-up for 
                         maximum statutory reserve requirements for 
                         eurocurrency liabilities) at which eurodollar deposits 
                         for one, two, three or six months (as selected by the 
                         Lessor, at the direction of the Lessee) are offered to 
                         Chase in the interbank eurodollar market in the 
                         approximate amount of Chase's share of the relevant 
                         Loan.


INTEREST PAYMENT
DATES:                   In the case of Loans bearing interest based upon the 
                         ABR ("ABR Loans"), quarterly in arrears.

                         In the case of Loans bearing interest based upon the 
                         Eurodollar Rate ("Eurodollar Loans"), on the last day
                         of each relevant interest period and, in the case of
                         any interest period longer than three months, on each
                         successive date three months after the first day of 
                         such interest period.

REVOLVING COMMITMENT
FEES:                    The Lessor shall pay a revolving commitment fee 
                         calculated at the rate per annum on the average daily 
                         unused portion of the Loans and the Investor 
                         Contribution during the Revolving Period, payable 
                         quarterly in arrears as shown on the pricing grid 
                         below.


DEFAULT RATE:            At any time when the Lessor is in default in the 
                         payment of any amount due under the Credit Agreement, 
                         the principal of all Loans shall bear interest at 2% 
                         above the rate otherwise applicable thereto. Overdue 
                         interest, fees and other amounts shall bear interest 
                         at 2% above the rate applicable to ABR Loans.


RATE AND FEE BASIS:      All per annum rates shall be calculated on the basis 
                         of a year of 365/366 days for actual days elapsed.



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[CHASE LOGO]                       10                     CHASE SECURITIES INC.
<PAGE>   75
CONFIDENTIAL                                          HANOVER COMPRESSOR COMPANY
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                                   ANNEX I-A

                        APPLICABLE MARGIN/COMMITMENT FEE

For Loans, the rate per annum set forth below opposite the ratio of indebtedness
to EBITDA:

                                  Debt/EBITDA

<TABLE>
<CAPTION>
RATIO                   ABR LOANS           EURODOLLAR LOANS           COMMITMENT FEE
-----                   ---------           ----------------           --------------
<S>                      <C>                 <C>                         <C>
<1.00                      0.00%                 0.75%                   .1875%
-
>1.00 and < or = 2.00      0.00%                 1.00%                     .25%
           
>2.00 and < or = 3.00      0.50%                 1.25%                     .30%
            
>3.00 and < or = 4.00      0.50%                 1.50%                     .30%
           
>4.00                      0.75%                 1.75%                    .375%
</TABLE>


--------------------------------------------------------------------------------
[CHASE LOGO]                                               CHASE SECURITIES INC.

                                       11
<PAGE>   76



                                                                  EXECUTION COPY

                                 THIRD AMENDMENT

                  THIRD AMENDMENT, dated as of July 28, 1998 (this "Amendment"),
to the Credit Agreement, dated as of December 15, 1997, as amended by the Waiver
and First Amendment, dated as of June 10, 1998 and the Second Amendment, dated
as of June 29, 1998 (as the same may be further amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among HANOVER
COMPRESSOR COMPANY, a Delaware corporation ("HCC"), the several banks and other
financial institutions from time to time parties thereto (the "Lenders") and THE
CHASE MANHATTAN BANK, a New York banking corporation, as the administrative
agent for the Lenders (in such capacity, the "Administrative Agent").

                              W I T N E S S E T H:

                  WHEREAS, HCC, the Lenders and the Administrative Agent are
parties to the Credit Agreement; and

                  WHEREAS, HCC has requested that the Administrative Agent and
the Required Lenders amend certain covenants in the Credit Agreement in
connection with (i) required amendments to the Subsidiaries' Guarantee (as
hereinafter defined) and (ii) guidelines concerning capital stock owned by
employees, officers and directors; and

                  WHEREAS, the Administrative Agent and the Required Lenders 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: 

                  1. Defined Terms. Unless otherwise defined herein, capitalized
terms used herein which are defined in the Credit Agreement are used herein as
therein defined.

                  2. Amendment to Subsection 7.9 (Subsequent Guarantees).
Subsection 7.9 of the Credit Agreement is hereby amended by deleting it in its
entirety and substituting in place thereof the following:

                  "7.9 Subsequent Guarantees. HCC shall cause each Qualified
         Subsidiary of HCC for which the aggregate value of all assets owned by
         such Qualified Subsidiary is or becomes greater than $20,000,000, to
         execute an amendment to the Subsidiaries' Guarantee, substantially in
         the form of Exhibit A to the Subsidiaries' Guarantee within

<PAGE>   77


                                                                               2

         one year after the later of (i) the date on which such Qualified
         Subsidiary becomes a Subsidiary of HCC and (ii) the date on which such
         Qualified Subsidiary's assets attain an aggregate value in excess of
         $20,000,000; provided, however, that if during such one-year period the
         aggregate value of such Qualified Subsidiary's assets is or becomes
         $20,000,000 or less, such Qualified Subsidiary shall not be required to
         become a party to the Subsidiaries' Guarantee."

                  3. Amendment to Subsection 8.8 (Limitation on Dividends).
Subsection 8.8 of the Credit Agreement is hereby amended by deleting the amount
"$2,500,000" from clause (ii) thereof and substituting in place thereof the
amount "7,500,000".

                  4. Amendment to Subsection 5,10 (Limitation on investments,
Loans and Advances). Subsection 8.10 of the Credit Agreement is hereby amended 
by deleting paragraph (i) therefrom and substituting in place thereof the
following:

                  "(i) Loans to employees, officers and directors of HCC and its
         Subsidiaries to acquire shares of capital stock of HCC not to exceed
         $20,000,000."

                  5. Effectiveness. This Amendment shall become effective upon
fulfillment of the following conditions precedent: (a) HCC and each of its
Subsidiaries listed on the signature pages hereto shall have delivered to the
Administrative Agent duly executed copies of this Amendment, (b) the
Administrative Agent shall have received duly executed copies of this Amendment
from the Required Lenders and (c) no Default or Event of Default shall have
occurred and be continuing on the date hereof after giving affect to this
Amendment.

                  6. Representations and Warranties. HCC hereby represents and
warrants that the representations and warranties contained in the Credit
Agreement (except those which expressly speak as of a certain date) 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

                  7. Continuing Effect of Credit Agreement. This Amendment shall
not constitute an amendment or waiver of any other provision of the Credit
Agreement or the Loan Documents 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 HCC that would require a waiver or consent of the Administrative Agent and/or
the Lenders. Except as expressly amended hereby, the provisions of the Credit
Agreement and the Loan Documents are and shall remain in full force and effect.

                  8. 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.

                  9. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

<PAGE>   78


                                                                               3



                  10. Expenses. HCC agrees to pay or reimburse the
Administrative Agent for all of their 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
Administrative Agent.

<PAGE>   79


                                                                               4

                  IN WITNESS WHEREOF, the parties have caused this Amendment to
be executed and delivered by their duly authorized officers of the date first
written above.


                                      HANOVER COMPRESSOR COMPANY

                                      BY:  /s/ CURTIS BEDRICH
                                           ----------------------------------
                                           Name: Curtis Bedrich
                                           Title: Treasurer

                                      THE CHASE MANHATTAN BANK (formerly 
                                      known as Chemical Bank), as Administrative
                                      Agent and as a Lender

                                      BY:  /s/ PETER M. LING
                                           ----------------------------------
                                           Name: Peter M. Ling
                                           Title: Vice President


                                      THE BANK OF NOVA SCOTIA


                                      BY:  /s/ F.O.R. ASHBY
                                           ----------------------------------
                                           Name: F.O.R. Ashby
                                           Title: Senior Manager
                                                  Loan Operations


                                      CREDIT LYONNAIS, NEW YORK BRANCH

                                      BY:  /s/ PHILIPPE SOUSTRA
                                           ----------------------------------
                                           Name: Philippe Soustra
                                           Title: Senior Vice President


                                      WELLS FARGO BANK (TEXAS), NATIONAL
                                      ASSOCIATION

                                      BY:  /s/ THEODORE M. NOWAK
                                           ----------------------------------
                                           Name: Theodore M. Nowak
                                           Title: Vice President

<PAGE>   80

                                                                               5


                                      BANQUE PARIBAS

                                      BY:  /s/ MICHAEL H. FIUZAT
                                           ----------------------------------
                                           Name: Michael H. Fiuzat
                                           Title: Vice President


                                      FIRST UNION BANK

                                      BY:  /s/ ROBERT R. WETTEROFF
                                           ----------------------------------
                                           Name: Robert R. Wetteroff
                                           Title: Senior Vice President



                                      BANKERS TRUST COMPANY

                                      BY:  /s/ MARCUS M. TARKINGTON
                                           ----------------------------------
                                           Name: Marcus M. Tarkington
                                           Title: Principal


Acknowledged and agreed to as
of the date hereof:

HANOVER MAINTECH, INC.

By: /s/ CURTIS BEDRICH
   ----------------------------------
   Name: Curtis Bedrich
   Title: Treasurer


HANOVER/SMITH, INC.

By: /s/ CURTIS BEDRICH
   ----------------------------------
   Name: Curtis Bedrich
   Title: Treasurer


HANOVER LAND COMPANY

By: /s/ CURTIS BEDRICH
   ----------------------------------
   Name: Curtis Bedrich
   Title: Treasurer