Document:

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                                                                   EXHIBIT 10.61

                           HANOVER COMPRESSOR COMPANY

                          SUBORDINATED PROMISSORY NOTE

$150,000,000                                                     August 31, 2001

        FOR VALUE RECEIVED, the undersigned, HANOVER COMPRESSOR COMPANY (herein
called the "Company"), a corporation organized and existing under the laws of
the State of Delaware, with its principal place of business located at 12001
North Houston Rosslyn, Houston, Texas 77086, hereby unconditionally promises to
pay, subject to the subordination provisions of Section 8, to the order of CAMCO
INTERNATIONAL INC., a Delaware corporation or its assigns (including any
assignee or transferee of, or other holder of, this Note, the "Seller"), at such
place as the Seller may from time to time designate in writing, the principal
sum of ONE HUNDRED FIFTY MILLION DOLLARS on December 31, 2005 (the "Maturity
Date"), with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) on the unpaid balance thereof at the Interest Rate (as hereinafter
defined) (or, during any period when an Event of Default (as hereinafter
defined) shall be in existence, the Default Rate (as hereinafter defined)) from
the date hereof, payable semi-annually, on the last day of June and December in
each year (each, an "Interest Payment Date"), commencing on December 31, 2001,
until the principal hereof shall have become due and payable, and (b) to the
extent permitted by applicable law on any overdue payment (including any overdue
prepayment) of principal and any overdue payment of interest, payable
semi-annually as aforesaid (or, at the option of the Seller, on demand), at a
rate per annum from time to time equal to the Default Rate. Payments of
principal of and interest on this Note are to be made in lawful money of the
United States of America. Notwithstanding the foregoing, except in connection
with an Offset Interest Payment (as hereinafter defined), an Offset Prepayment
(as hereinafter defined), a Section 4.2 Required Prepayment (as hereinafter
defined) or payment on the Maturity Date, interest on this Note shall be payable
only in kind and not in cash or other property. On each Interest Payment Date,
accrued interest that is then unpaid and that has not been previously added to
the principal amount of this Note shall be added to the principal amount of this
Note and amounts so added shall thereafter be deemed to be a part of the
principal amount of this Note (the "PIK Interest Portion"); provided, however,
that if on or prior to an Interest Payment Date the Seller shall have delivered
to the Company a written notice of its election to have all or a portion of such
accrued interest paid by means of an Offset Interest Payment, only that portion
of such accrued interest that exceeds the amount of such Offset Interest Payment
shall be added to the principal amount of this Note. This Note is referred to
in, and was executed and delivered in connection with, that certain Stock
Purchase Agreement dated as of June 28, 2001 (the "Stock Purchase Agreement") by
and among Schlumberger Technology Corporation, a Texas corporation, Schlumberger
Oilfield Holdings LTD., a British Virgin Islands corporation,

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Schlumberger Surenco S.A., a Panamanian corporation, the Seller, the Company and
Hanover Compression Limited Partnership, a Delaware limited partnership.

SECTION 1.      DEFINITIONS.

        "Alliance Agreement" shall mean that certain Most Favored Supplier and
Alliance Agreement dated as of August 31, 2001 by and between Schlumberger
Oilfield Holdings Limited, Schlumberger Technology Corporation and Hanover
Compression Limited Partnership, as amended, restated, supplemented, waived,
replaced, restructured or otherwise modified from time to time; provided that,
in case of any replacement agreement, the parties to the Alliance Agreement
shall have agreed in writing that such replacement agreement replaces all or a
portion of the Alliance Agreement.

        "Bank Agent" shall mean with respect to any Senior Debt Agreement, the
lead agent for the lenders and/or creditors thereunder.

        "Bankruptcy Code" shall mean the Bankruptcy Reform Act of 1978, as
codified under Title 11 of the United States Code, and the Bankruptcy Rules
promulgated thereunder, as the same may be in effect from time to time.

        "Capital Lease" shall mean, at any time, a lease with respect to which
the lessee is required concurrently to recognize the acquisition of an asset and
the incurrence of a liability in accordance with GAAP.

        "Company" is defined in the first paragraph of this Note.

        "Credit Agreement" shall mean that certain Credit Agreement, dated as of
December 15, 1997, as amended and restated through March 13, 2000, among the
Company, certain of its Subsidiaries named therein from time to time, the
lenders named therein and The Chase Manhattan Bank, as administrative agent,
together with any Guaranties thereof by the Company or its Subsidiaries, in each
case, as amended, restated, supplemented, waived, replaced (whether or not upon
termination and whether with the original lenders or otherwise), restructured,
refinanced, increased or otherwise modified from time to time.

        "Default" shall mean an event or condition the occurrence or existence
of which would, with the lapse of time or the giving of notice or both, become
an Event of Default.

        "Default Rate" shall mean that rate of interest that is 2% per annum
above the then applicable Interest Rate.

        "Event of Default" is defined in Section 6.

        "GAAP" shall mean generally accepted accounting principles as in effect
from time to time in the United States of America.

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        "Governmental Authority" shall mean

                (a)     the government of

                        (1)     the United States of America or any State or
                other political subdivision thereof, or

                        (2)     any jurisdiction in which the Company conducts
                all or any part of its business, or which asserts jurisdiction
                over any properties of the Company, or

                (b)     any entity exercising executive, legislative, judicial,
        regulatory or administrative functions of, or pertaining to, any such
        government.

        "Guaranty" shall mean, with respect to any Person, any obligation
(except the endorsement in the ordinary course of business of negotiable
instruments for deposit or collection) of such Person guaranteeing or in effect
guaranteeing any Indebtedness, dividend or other obligation of any other Person
in any manner, whether directly or indirectly, including, without limitation,
obligations incurred through an agreement, contingent or otherwise, by such
Person:

                (a)     to purchase such Indebtedness or obligation or any
        property constituting security therefor;

                (b)     to advance or supply funds (1) for the purchase or
        payment of such Indebtedness or obligation, or (2) to maintain any
        working capital or other balance sheet condition or any income statement
        condition of any other Person or otherwise to advance or make available
        funds for the purchase or payment of such Indebtedness or obligation;

                (c)     to lease properties or to purchase properties or
        services primarily for the purpose of assuring the owner of such
        Indebtedness or obligation of the ability of any other Person to make
        payment of the Indebtedness or obligation; or

                (d)     otherwise to assure the owner of such Indebtedness or
        obligation against loss in respect thereof.

In any computation of the Indebtedness or other liabilities of the obligor under
any Guaranty, the Indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.

        "Indebtedness" with respect to any Person shall mean, at any time,
without duplication,

                (a)     its liabilities for borrowed money and its redemption
        obligations in respect of mandatorily redeemable preferred stock;

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                (b)     its liabilities for the deferred purchase price of
        property acquired by such Person (excluding accounts payable arising in
        the ordinary course of business but including all liabilities created or
        arising under any conditional sale or other title retention agreement
        with respect to any such property);

                (c)     all liabilities appearing on its balance sheet in
        accordance with GAAP in respect of Capital Leases;

                (d)     all liabilities for borrowed money secured by any Lien
        with respect to any property owned by such Person (whether or not it has
        assumed or otherwise become liable for such liabilities);

                (e)     all its liabilities in respect of letters of credit or
        instruments serving a similar function issued or accepted for its
        account by banks and other financial institutions (whether or not
        representing obligations for borrowed money);

                (f)     swaps of such Person;

                (g)     the principal or lease balance outstanding under
        Synthetic Leases; and

                (h)     any Guaranty of such Person with respect to liabilities
        of a type described in any of clauses (a) through (g) hereof.

        Indebtedness of any Person shall include all obligations of such Person
of the character described in clauses (a) through (h) to the extent such Person
remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.

        "Insolvency Proceeding" shall mean (a) any case, action, or proceeding
before any court or other Governmental Authority having jurisdiction over the
applicable Person or its assets relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up, or relief of
debtors or (b) any general assignment for the benefit of creditors, composition,
marshaling of assets for creditors, or other similar arrangement in respect of
its creditors generally or any substantial portion of its creditors; in each
case whether undertaken under Federal (including the Bankruptcy Code), state, or
foreign law.

        "Interest Payment Date" is defined in the first paragraph of this Note.

        "Interest Rate" shall mean (a) for the period from and after the date
hereof to and including February 28, 2002, a rate of interest equal to 8.50% per
annum, (b) for the period from and after March 1, 2002 to and including, August
31, 2002, a rate of interest equal to 10.50% per annum, (c) for the period from
and after September 1, 2002 to and including February 28, 2003, a rate of
interest equal to 12.50% per annum, (d) for the period from and after March 1,
2003 to and including February 29, 2004, a rate of interest equal to 13.50% per
annum, (e) for the period from and after March 1, 2004 to and

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including February 28, 2005, a rate of interest equal to 14.50% per annum and
(f) for the period from and after March 1, 2005 to and including December 31,
2005, a rate of interest equal to 15.50% per annum.

        "Lien" shall mean, with respect to any Person, any mortgage, lien,
pledge, charge, security interest or other encumbrance, or any interest or title
of any vendor, lessor, lender or other secured party to or of such Person under
any conditional sale or other title retention agreement or Capital Lease, upon
or with respect to any property or asset of such Person (including in the case
of stock, stockholder agreements, voting trust agreements and all similar
arrangements).

        "Material Adverse Effect" shall mean a material adverse effect on (a)
the business, operations, affairs, financial condition, assets or properties of
the Company and its Subsidiaries taken as a whole, or (b) the ability of the
Company to perform its obligations under this Note or (c) the validity or
enforceability of this Note.

        "Maturity Date" is defined in the first paragraph of this Note.

        "Non-Payment Default" shall mean any default or event of default by the
Company or its Subsidiaries under any Senior Debt Agreement, not constituting a
Payment Default.

        "Offset Interest Payment" shall mean a payment of all or a portion of
the interest then due and payable on this Note by means of an offset against an
equal amount of sums that the Seller has identified to the Company in writing as
being due and payable by the Seller or any of its affiliates to the Company or
any of its affiliates in respect of any products or services provided to the
Seller or any of its affiliates in accordance with the Company's "Most Favored
Supplier Status" established pursuant to Section 3.4 of the Alliance Agreement
and which sums the Company has not, in good faith and within five business days
after the identification thereof, claimed, in a writing delivered to the Seller,
not to have been incurred in accordance with the Company's "Most Favored
Supplier Status."

        "Offset Prepayment" shall mean a prepayment of the PIK Interest Portion
of the principal of this Note together with accrued interest thereon by means of
an offset against an equal amount of sums that the Seller has identified to the
Company in writing as being due and payable by the Seller or any of its
affiliates to the Company or any of its affiliates in respect of any products or
services provided to the Seller or any of its affiliates in accordance with the
Company's "Most Favored Supplier Status" established pursuant to Section 3.4 of
the Alliance Agreement and which sums the Company has not, in good faith and
within five business days after the identification thereof, claimed, in a
writing delivered to the Seller, not to have been incurred in accordance with
the Company's "Most Favored Supplier Status."

        "pay this Note" is defined in Section 8.1 of this Note.

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        "Payment Default" shall mean any default or event of default by the
Company or its Subsidiaries in any payment of the principal of or interest on
any Senior Debt when the same becomes due and payable, whether at maturity or at
a date fixed for prepayment or by declaration or acceleration or otherwise.

        "Person" shall mean an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.

        "PIK Interest Portion" is defined in the first paragraph of this Note.

        "Reorganization Securities" shall mean (a) debt securities that are
issued pursuant to an Insolvency Proceeding (1) that do not impair or materially
alter the rights of the holders of any Senior Debt outstanding at the time of
issuance thereof or any debt securities issued in exchange for such Senior Debt
in such Insolvency Proceeding set forth in Section 8 and (2) the payment of
which is subordinate and junior at least to the extent provided in Section 8 to
the payment of all Senior Debt outstanding at the time of the issuance thereof
and to the payment of all debt securities issued in exchange for such Senior
Debt in such Insolvency Proceeding (whether such subordination is effected by
the terms of such securities, an order or decree issued in such Insolvency
Proceeding, by agreement of the Seller or otherwise) or (b) equity securities
that are issued pursuant to an Insolvency Proceeding; provided, in either case,
that (x) such securities are authorized by an order or decree made by a court of
competent jurisdiction in such Insolvency Proceeding (which order or decree
states that the authorization of such securities is intended to give effect to
the subordination of the Subordinated Obligations pursuant to Section 8 hereof)
and (y) this Note and such securities are not treated as the same class of
securities as any Senior Debt outstanding at the time of the issuance thereof or
any securities issued in exchange for such Senior Debt in such Insolvency
Proceeding.

        "Responsible Officer" shall mean any Senior Financial Officer and any
other officer of the Company with responsibility for the administration of the
relevant portion of this Note.

        "Section 4.2 Prepayment Event" is defined in Section 4.2.

        "Section 4.2 Required Prepayment" is defined in Section 4.2.

        "Seller" is defined in the first paragraph of this Note.

        "Senior Debt" shall mean all payment obligations (whether now
outstanding or hereafter incurred) of the Company in respect of (a) Indebtedness
of the Company other than (1) this Note, (2) any Indebtedness that by its terms
is expressly subordinated to this Note, (3) any Indebtedness (i) incurred by the
Company that represents all or a portion of the consideration for the
acquisition of all or a portion of the capital stock or assets of any Person and
(ii) which is owing to the Person that sold or otherwise transferred such
capital stock or assets or to an affiliate of such Person and (4) any
Indebtedness incurred

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by the Company after the date hereof in contravention of the provisions of
Section 5.3, (b) interest (including default interest) and premium on the
outstanding Indebtedness referred to in clause (a) above, (c) the fees and
commissions (including commitment, agency and letter of credit fees and
commissions) payable pursuant to the Senior Debt Agreements, (d) all other
payment obligations (including costs, expenses, penalties, indemnifications,
damages, liabilities or otherwise on the Company) owing under or arising
pursuant to the Senior Debt Agreements not of the type described in clauses (a)
through (c) above, and (e) post-petition interest on the Indebtedness referred
to in clauses (a) through (d) above accruing subsequent to the commencement of a
proceeding under the Bankruptcy Code (whether or not such interest is allowed as
a claim in such proceeding). Without limiting the foregoing, Senior Debt shall
include all payment obligations of the Company under the Credit Agreement, the
Synthetic Leases and the Synthetic Lease Guaranties. Senior Debt shall not
include trade accounts payable, tax claims or assessments.

        "Senior Debt Agreement" shall mean each instrument or agreement
evidencing or governing the Indebtedness referred to in clause (a) of the
definition of Senior Debt.

        "Senior Debt Default" shall mean a Non-Payment Default or a Payment
Default.

        "Senior Financial Officer" shall mean the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company.

        "Subordinated Obligation" is defined in Section 8.1 of this Note.

        "Subsidiary" shall mean, as to any Person, any corporation, association
or other business entity in which such Person or one or more of its Subsidiaries
or such Person and one or more of its Subsidiaries owns sufficient equity or
voting interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.

        "Synthetic Lease" shall mean any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet financing
product, where such transaction is considered debt for borrowed money for tax
purposes but is classified as an operating lease in accordance with GAAP.

        "Synthetic Lease Guaranties" shall mean Guaranties by the Company of the
obligations of one or more of its Subsidiaries under Synthetic Leases and the
related financing agreements (including credit agreements and debt instruments)
as such Guaranties may be amended, restated, supplemented, waived, replaced
(whether or not

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upon termination and whether with the original lenders or otherwise),
restructured, refinanced, increased or otherwise modified from time to time.

        "Voidable Transfer" is defined in Section 8.5 of this Note.

SECTION 2.      REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

        The Company represents and warrants to the Seller that:

        Section 2.1. Organization; Power and Authority. The Company is a
corporation duly organized validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and authority to own or hold under lease the properties
it owns or holds under lease, to transact the business it transacts, to execute
and deliver this Note and to perform the provisions of this Note.

        Section 2.2. Authorization, Etc. This Note has been duly authorized by
all necessary corporate action on the part of the Company, and this Note
constitutes the legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by (a) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and (b) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

        Section 2.3. Compliance with Laws, Other Instruments, Etc. The
execution, delivery and performance by the Company of this Note will not (a)
contravene, result in any breach of, or constitute a default under, or result in
the creation of any Lien in respect of any property of the Company under (1) its
corporate charter or by-laws or (2), any material indenture, mortgage, deed of
trust, loan, purchase or credit agreement, lease or any other material agreement
or instrument to which the Company is bound or by which the Company or any of
its properties may be bound or affected, (b) conflict with or result in a breach
of any of the terms, conditions or provisions of any order, judgment, decree, or
ruling of any court, arbitrator or Governmental Authority applicable to the
Company or (c) violate any provision of any statute or other rule or regulation
of any Governmental Authority applicable to the Company.

        Section 2.4. Governmental Authorizations, Etc. No material consent,
approval or authorization of, or registration, filing or declaration with, any
Governmental Authority is required in connection with the execution, delivery or
performance by the Company of this Note other than those that have been
previously obtained and, on the date of this Note, remain in full force and
effect.

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        Section 2.5. No Default under Section 8.1(d) of the Credit Agreement. On
the date of this Note, the Company is not in default and no waiver of default is
currently in effect under Section 8.1(d) of the Credit Agreement.

SECTION 3.      INFORMATION AS TO COMPANY.

        Section 3.1. Notices of Default. Promptly, and in any event within 15
days after a Responsible Officer becoming aware of the existence of any Default,
Event of Default or Senior Debt Default or that any Person has taken any action
with respect to a Senior Debt Default, the Company shall deliver to the Seller a
written notice specifying the nature and period of existence thereof and what
action the Company is taking or proposes to take with respect thereto.

        Section 3.2. Requested Information. With reasonable promptness, the
Company shall deliver to the Seller such data and information relating to the
business, operations, affairs, financial condition, assets or properties of the
Company or any of its Subsidiaries or relating to the ability of the Company to
perform its obligations under this Note as from time to time may be reasonably
requested by the Seller.

SECTION 4.      PREPAYMENT.

        Section 4.1. Required Prepayments.

                (a)     Except in accordance with the provisions of Section 4.2
        and Section 4.3, this Note shall not be subject to any required
        prepayment prior to the Maturity Date.

                (b)     On the Maturity Date, the Company will pay the then
        outstanding principal amount of this Note together with accrued interest
        thereon.

        Section 4.2. Required Prepayment upon Equity Issuance.

        Upon the issuance, sale or other disposition by the Company of any
shares of capital stock or other equity interests or any rights, warrants or
options to acquire any shares of capital stock or other equity interests of the
Company (other than to employees, officers or directors of the Company) pursuant
to a public offering or a private placement (a "Section 4.2 Prepayment Event"),
on the second Business Day following the occurrence of any such Section 4.2
Prepayment Event, the Company shall apply the net proceeds of such Section 4.2
Prepayment Event to prepay all or a portion of this Note, at 100% of the
principal amount so prepaid, together with accrued interest thereon but without
any premium (a "Section 4.2 Required Prepayment"). The Company will give the
Seller written notice of each Section 4.2 Required Prepayment not less than five
days and not more than 30 days prior to the date fixed for such prepayment. Each
such notice shall specify such date, the principal amount of this Note to be
prepaid, and the interest to be paid on the prepayment date with respect to such
principal amount being prepaid.

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        Section 4.3. Offset Prepayment. Upon receipt by the Company of written
notice from the Seller that the Seller has elected to have all or a portion of
the PIK Interest Portion of the principal of this Note prepaid by means of an
Offset Prepayment, the Company shall, on the date of such notice, be deemed to
have prepaid a portion of the principal amount of this Note together with
accrued interest thereon, in the amounts set forth in such notice. From and
after the date of such deemed prepayment, interest on the principal prepaid
shall cease to accrue.

        Section 4.4. Optional Prepayments. The Company may, at its option, upon
notice as provided below, prepay at any time all, or from time to time any part
of, this Note, at 100% of the principal amount so prepaid, together with accrued
interest thereon but without any premium. The Company will give the Seller
written notice of each optional prepayment under this Section 4.4 not less than
one day and not more than 60 days prior to the date fixed for such prepayment.
Each such notice shall specify such date, the principal amount of this Note to
be prepaid, and the interest to be paid on the prepayment date with respect to
such principal amount being prepaid.

        Section 4.5. Maturity; Surrender, Etc. In the case of each prepayment of
this Note pursuant to this Section 4.2 or Section 4.4, the principal amount of
this Note to be prepaid shall mature and become due and payable on the date
fixed for such prepayment, together with interest on such principal amount
accrued to such date but without any premium, subject to the subordination
provisions of Section 8. From and after such date, unless the Company shall fail
to pay such principal amount when so due and payable, together with the interest
as aforesaid, interest on such principal amount shall cease to accrue.

SECTION 5.      COVENANTS.

        The Company covenants that so long as this Note is outstanding:

        Section 5.1. Merger, Consolidation, Etc. The Company shall not
consolidate with or merge with any other corporation or convey, transfer or
lease substantially all of its assets in a single transaction or series of
transactions to any Person unless:

                (a)     the successor formed by such consolidation or the
        survivor of such merger or the Person that acquires by conveyance,
        transfer or lease substantially all of the assets of the Company as an
        entirety, as the case may be, shall be, immediately after giving effect
        to such consolidation or merger, a solvent Person organized and existing
        under the laws of the United States or any State thereof (including the
        District of Columbia), and, if the Company is not such corporation, such
        corporation shall have executed and delivered to the Seller its
        assumption of the due and punctual performance and observance of each
        covenant and condition of this Note; and

                (b)     immediately after giving effect to such transaction, no
        Default or Event of Default shall exist.

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No such conveyance, transfer or lease of substantially all of the assets of the
Company shall have the effect of releasing the Company or any successor
corporation that shall theretofore have become such in the manner prescribed in
this Section 5.1 from its liability under this Note.

        Section 5.2. Payment Limitations. The Company covenants that it will not
enter into or become subject to any restriction on the payment of any
Subordinated Obligations other than (a) the provisions of Section 8 and (b) any
such restriction prohibiting optional prepayments, optional redemptions or
optional purchases of the Subordinated Obligations (whether by way of offset
(other than Offset Interest Payments and Offset Prepayments) or otherwise).

        Section 5.3. Amendments to Credit Agreement. Without the prior written
consent of the Seller, the Company covenants that it will not enter into any
amendment or modification of, or waive, or consent to any waiver of, any of the
provisions of the negative covenant (including all related definitions)
contained in Section 8.1(d) of the Credit Agreement (as in effect on the date
hereof) restricting the ratio of Consolidated Indebtedness to Consolidated
EBITDA (as such terms are defined in the Credit Agreement as in effect on the
date hereof) of the Company if such amendment, modification or waiver would
permit such ratio for any period of four consecutive fully completed fiscal
quarters to be greater than 15% above the maximum ratio permitted under the
Credit Agreement as in effect on the date hereof.

SECTION 6.      EVENTS OF DEFAULT.

        An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:

                (a)     the Company defaults in the payment of any principal on
        this Note when the same becomes due and payable, whether at maturity or
        at a date fixed for prepayment or by declaration or otherwise; or

                (b)     the Company defaults in the payment of any interest on
        this Note for more than five days after the same becomes due and
        payable; or

                (c)     the Company defaults in the performance of or compliance
        with any term contained in Sections 5.1 through 5.3, inclusive; or

                (d)     any representation or warranty made in writing by or on
        behalf of the Company or by any officer of the Company in this Note
        proves to have been false or incorrect in any material respect on the
        date as of which made; or

                (e)     the Company is in default under one or more Senior Debt
        Agreements pursuant to which (1) Senior Debt in an aggregate principal
        amount of $100,000,000 or more is outstanding or (2) there are
        commitments thereunder to provide Senior Debt in an aggregate principal
        amount of $100,000,000 or more

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        and as a consequence of such default the Indebtedness under such Senior
        Debt Agreements has become, or has been declared, due and payable before
        its regularly scheduled dates of payment; or

                (f)     the Company (1) is generally not paying, or admits in
        writing its inability to pay, its debts as they become due, (2) files,
        or consents by answer or otherwise to the filing against it of, a
        petition for relief or reorganization or arrangement or any other
        petition in bankruptcy, seeking to adjudicate it as a bankrupt or
        insolvent, for liquidation or to take advantage of any bankruptcy,
        insolvency, reorganization, moratorium or other similar law of any
        jurisdiction, (3) makes a general assignment for the benefit of its
        creditors, (4) consents to the appointment of a custodian, receiver,
        trustee or other officer with similar powers with respect to it or with
        respect to any substantial part of its property or (5) takes corporate
        action for the purpose of any of the foregoing; or

                (g)     a court or Governmental Authority of competent
        jurisdiction enters an order appointing, without consent by the Company,
        a custodian, receiver, trustee or other officer with similar powers with
        respect to it or with respect to any substantial part of its property,
        or constituting an order for relief or approving a petition for relief
        or reorganization or any other petition in bankruptcy or for liquidation
        or to take advantage of any bankruptcy or insolvency law of any
        jurisdiction, or ordering the dissolution, winding-up or liquidation of
        the Company, or any such petition shall be filed against the Company and
        such petition shall not be dismissed within 60 days.

SECTION 7.      REMEDIES ON DEFAULT, ETC.

        Section 7.1. Acceleration. (a) If an Event of Default with respect to
the Company described in paragraph (f) or (g) of Section 6 (other than an Event
of Default described in clause (1) of paragraph (f) or described in clause (5)
of paragraph (f) by virtue of the fact that such clause encompasses clause (1)
of paragraph (f)) has occurred, concurrently with the Indebtedness under the
Credit Agreement becoming immediately due and payable, this Note then shall
automatically become immediately due and payable.

        (b)     If any other Event of Default has occurred and is continuing or
if any Event of Default described in clause (a) of Section 7.1 has occurred and
is continuing and the Indebtedness under the Credit Agreement has not become
immediately due and payable, the Seller may, at any time at its option, by
notice to the Company, declare this Note to be immediately due and payable.

        Upon this Note becoming due and payable under this Section 7.1, whether
automatically or by declaration, this Note will forthwith mature and the entire
unpaid principal amount of this Note, plus all accrued and unpaid interest,
shall all be immediately due and payable, in each and every case without
presentment, demand, protest or further notice, all of which are hereby waived.

                                       -12

<PAGE>

        Section 7.2. Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether this Note has become or
has been declared immediately due and payable under Section 7.1, the Seller may
proceed to protect and enforce its rights by an action at law, suit in equity or
other appropriate proceeding, whether for the specific performance of any
agreement contained herein, or for an injunction against a violation of any of
the terms hereof, or in aid of the exercise of any power granted hereby or by
law or otherwise.

        Section 7.3. Rescission. At any time after this Note has been declared
due and payable pursuant to clause (b) of Section 7.1, the Seller, by written
notice to the Company, may rescind and annul any such declaration and its
consequences if (a) the Company has paid all overdue interest on this Note, all
principal of this Note that is due and payable and is unpaid other than by
reason of such declaration, and all interest on such overdue principal and (to
the extent permitted by applicable law) any overdue interest in respect of the
Notes, at the Default Rate, (b) all Defaults and Events of Default, other than
non-payment of amounts that have become due solely by reason of such
declaration, have been cured or have been waived pursuant to Section 11, and
(c) no judgment or decree has been entered for the payment of any monies due
pursuant hereto. No rescission and annulment under this Section 7.3 will extend
to or affect any subsequent Default or Event of Default or impair any right
consequent thereon.

        Section 7.4. No Waivers or Election of Remedies, Expenses, Etc. No
course of dealing and no delay on the part of the Seller in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
the Seller's rights, powers or remedies. No right, power or remedy conferred by
this Note upon the Seller shall be exclusive of any other right, power or remedy
referred to herein or now or hereafter available at law, in equity, by statute
or otherwise. Without limiting the obligations of the Company under Section 9,
the Company will pay to the Seller on demand such further amount as shall be
sufficient to cover all costs and expenses of the Seller incurred in any
enforcement or collection under this Section 7, including, without limitation,
reasonable attorneys' fees, expenses and disbursements.

SECTION 8.      SUBORDINATION.

        Anything in this Note to the contrary notwithstanding, the Seller and
each subsequent holder of this Note by its acceptance hereof covenants and
agrees that the payment of the principal of and interest on this Note and all
other amounts payable by the Company under or in respect of this Note (all of
the foregoing, the "Subordinated Obligations") shall, to the extent set forth in
this Section 8, be subordinate and junior and subject in right of payment to the
prior payment in full in cash of all Senior Debt.

        Section 8.1. Payments. No payment or distribution (whether directly, by
purchase or redemption by right of set-off (other than Offset Interest Payments
and Offset Prepayments) or otherwise) in respect of this Note, whether as
principal, interest or otherwise, and whether in cash, securities or property
(collectively, "pay this Note"), shall be made by or on behalf of the Company or
received, accepted or demanded,

                                       -13

<PAGE>

directly or indirectly, by or on behalf of the Seller unless and until all
Senior Debt has been indefeasibly paid in full in cash to the holders of the
Senior Debt. Notwithstanding the immediately preceding sentence, the Company may
(a) make payments of interest in kind under this Note when due and payable
pursuant to the first paragraph of this Note, (b) make Offset Interest Payments
in accordance with the first paragraph of this Note, (c) make Offset Prepayments
in accordance with Section 4.3, (d) so long as no Senior Debt Default exists on
the date of a Section 4.2 Prepayment Event or would result from the then making
of a Section 4.2 Required Prepayment, prepay all or a portion of the outstanding
principal amount of this Note together with accrued interest thereon in
accordance with Section 4.2; provided, however, that, if a Senior Debt Default
exists on the date of such Section 4.2 Prepayment Event or would result from
the making of such Section 4.2 Required Prepayment, then (1) in the case of a
Senior Debt Default that is a Payment Default, the proceeds of such Section 4.2
Prepayment Event shall be applied first to cure such Payment Default and then to
make such Section 4.2 Required Prepayment and (2) in the case of a Senior Debt
Default that is a Non-Payment Default, upon such Non-Payment Default being cured
or waived, the proceeds of such Section 4.2 Prepayment Event, other than any
such proceeds used to cure or obtain a waiver in respect of such Non-Payment
Default, shall be applied to make such Section 4.2 Required Prepayment, (e) so
long as no Senior Debt Default exists on the Maturity Date or would result from
the payment of this Note on the Maturity Date, pay the outstanding principal
amount of this Note together with accrued interest thereon on the Maturity Date
in accordance with Section 4.1(b); provided, however, that if a Senior Debt
Default exists on the Maturity Date or would result from such payment of this
Note on the Maturity Date, then the Company shall not make such payment until
such Senior Debt Default is cured or waived and (f) pay this Note without regard
to the foregoing if the Company receives the written consent of the requisite
holders of the Senior Debt (or any duly authorized representative thereof) under
each of the Senior Debt Agreements.

        In the event that, notwithstanding the foregoing, the Company shall make
any payment or distribution to the Seller prohibited by the foregoing provisions
of this Section 8.1, then and in such event such payment or distribution shall
be segregated by the Seller and held in trust for the benefit of and immediately
shall be paid over to the holders of the Senior Debt for application against the
Senior Debt remaining unpaid until such Senior Debt is paid in full in cash.

        Section 8.2.    Insolvency; Bankruptcy; Etc.

        (a)     In the event of the institution of any Insolvency Proceeding
relative to the Company, then any payment or distribution of any kind or
character, whether in cash, property or securities, by setoff (other than Offset
Interest Payments and Offset Prepayments) or otherwise, which may be payable or
deliverable in such proceedings in respect of the Subordinated Obligations shall
(notwithstanding any other provision of this Note, including Section 8.1, but
excluding the proviso to this Section 8.2(a)) be paid or delivered by the Person
making such payment or distribution, whether a trustee in bankruptcy, a
receiver, a liquidating trustee, or otherwise, directly to the holders of the
Senior Debt to the extent necessary to make payment in full in cash of all
Senior Debt

                                       -14

<PAGE>

remaining unpaid; provided, however, that no such delivery of any Reorganization
Securities shall be made to holders of the Senior Debt.

        (b)     If the Seller does not file a proper claim or proof of debt or
other document or amendment thereof in the form required in any Insolvency
Proceeding relative to the Company under applicable law prior to 15 days before
the expiration of time to file such claim or other document or amendment
thereof, then the holders of the Senior Debt shall have the right (but not the
obligation) in such Insolvency Proceeding, and hereby irrevocably are appointed
lawful attorney of the Seller for the purpose of enabling the holders of the
Senior Debt, to demand, sue for, collect, receive and give receipt for the
payments and distributions in respect of this Note that are made in such
Insolvency Proceeding and that are required to be paid or delivered to the
holders of the Senior Debt as provided in Section 8.2(a), and to file and prove
all claims therefor and to execute and deliver all documents in such proceeding
in the name of the Seller or in the name of the holders of the Senior Debt or
otherwise in respect of such claims, as the holders of the Senior Debt
reasonably may determine to be necessary or appropriate to effectuate the
foregoing, provided, that the holders of the Senior Debt shall act in a
commercially reasonable manner and shall notify the Seller prior to commencing
the first of any such actions. The holders of the Senior Debt are authorized
(but shall not be required) to vote or otherwise act in any such Insolvency
Proceeding in the capacity of the holder of this Note (including, without
limitation, the right to vote to accept or reject any plan of reorganization,
composition, arrangement or liquidation), subject to the rights of the Seller
set forth in Section 8.3.

        (c)     In the event that, notwithstanding the foregoing provisions of
this Section 8.2, the Seller shall have received any payment or distribution of
any kind or character, whether in cash, property or securities (other than
Reorganization Securities), by setoff (other than Offset Interest Payments or
Offset Prepayments) or otherwise which was paid or delivered in respect of the
Subordinated Obligations pursuant to an Insolvency Proceeding, before all Senior
Debt is paid in full in cash, then and in such event such payment or
distribution shall be segregated and held in trust for the benefit of and
immediately shall be paid over to the holders of the Senior Debt for application
to the payment of all Senior Debt remaining unpaid until all such Senior Debt
shall have been paid in full in cash.

        Section 8.3. Standstill. Until the Senior Debt is paid in full in cash,
the Seller shall (notwithstanding the provisions of Section 7) be prohibited
from accelerating this Note and shall be prohibited from enforcing any of its
default remedies with respect thereto (including any right to sue the Company or
to file or participate in the filing of an involuntary bankruptcy petition
against the Company) except that (a) in the case of the failure by the Company
(1) to make a Section 4.2 Required Prepayment when due or (2) to pay the
outstanding principal amount of this Note together with accrued interest thereon
on the Maturity Date, so long as no Senior Debt Default exists or would result
from the making of any prepayment or payment described in clause (1) or (2) of
this Section 8.3 (other than a Senior Debt Default arising from the Company's
failure to make any prepayment or payment described in clause (1) or (2) of this
Section 8.3), the Seller

                                       -15

<PAGE>

may accelerate or take any other enforcement action with respect to this Note
(subject to the other subordination provisions of this Section 8); provided,
however, that if a Senior Debt Default then exists or would result from the
making of any prepayment or payment described in clause (1) or (2) of this
Section 8.3 (other than a Senior Debt Default arising from the Company's failure
to make any prepayment or payment described in clause (1) or (2) of this Section
8.3), the Seller may, upon the first to occur of (i) the 180th day after the due
date of such Section 4.2 Required Prepayment or the Maturity Date, as
applicable, (ii) the date on which there is commenced by or against the Company
any Insolvency Proceeding, (iii) the date upon which any Bank Agent or any
holder of Senior Debt commences a judicial proceeding to collect any Senior Debt
(in respect of $10,000,000 or more of Senior Debt) or commences to realize upon
any collateral for any such Senior Debt pursuant to the exercise of remedies or
gives notice of any non-judicial sale of any such collateral or (iv) the date
upon which the date for payment of any Senior Debt is accelerated under the
Credit Agreement or any Synthetic Lease Guaranty, the Seller may accelerate or
take any other enforcement action with respect to this Note (subject to the
other subordination provisions of this Section 8) and (b) this Note may be
declared immediately due and payable and the Seller may take any other
enforcement action with respect to this Note (subject to the other subordination
provisions of this Section 8) if the Indebtedness under one or more Senior Debt
Agreements pursuant to which (1) Senior Debt in an aggregate principal amount of
$100,000,000 or more is outstanding or (2) there are commitments thereunder to
provide Senior Debt in an aggregate principal amount of $100,000,000 or more, is
declared immediately due and payable. The provisions of this Section 8.3 shall
not, however, prohibit the Seller from seeking specific performance of, or an
injunction to enjoin violation of, any covenant by the Company (other than a
covenant to pay any Subordinated Obligation).

        Section 8.4. No Impairment. No right of any present or future holder of
Senior Debt to enforce subordination as herein provided shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of the
Company or by any non-compliance by the Company with the terms, provisions and
covenants of this Note, regardless of any knowledge thereof the Seller may have
or be otherwise charged with.

        Without in any way limiting the generality of the foregoing paragraph,
the holders of the Senior Debt may, at any time and from time to time, without
the consent of or notice to the Seller, without incurring responsibility and
without impairing or releasing the subordination provided in this Section 8, do
any one or more of the following (so long as such actions or omissions are not
prohibited by Section 5.3 hereof): (a) change the manner, place or terms of
payment or extend the time of payment of, or renew, amend, modify, or alter, any
Senior Debt or any Senior Debt Agreement evidencing the same or evidencing,
governing, creating, guaranteeing or securing any Senior Debt; (b) sell,
exchange, release, or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Debt; (c) release any Person liable in any manner for
the collection of Senior Debt; (d) fail or delay in the perfection of Liens
securing the Senior Debt, (e) exercise or refrain from exercising any rights
against the Company and any other Person (including, without limitation, actions
with respect to the foreclosure upon, sale, release or failure to realize upon,
any of its collateral, and actions with respect to the collection of

                                       -16

<PAGE>

any claim for all or any part of the Senior Debt from any account debtor or any
other Person, regardless of whether any such actions or omissions may affect the
rights of the holders of the Senior Debt to a deficiency) and (f) from time to
time enter into agreements and settlements with the Company as it may determine,
including, without limitation, any substitution of collateral, any release of
any Lien and any release of the Company.

        The provisions of this Section 8 are for the purpose of defining the
relative rights of the holders of Senior Debt on the one hand, and the Seller on
the other hand, and nothing herein shall impair, as between the Company and the
Seller, the obligation of the Company, which is unconditional and absolute, to
pay to the Seller the principal hereof and interest hereon in accordance with
the terms and provisions of this Note, nor shall anything herein prevent the
Seller from exercising all remedies otherwise permitted by applicable law or
hereunder upon Default hereunder (including the right to demand payment and sue
for performance hereof and to accelerate the maturity hereof as provided in
Section 7), subject to the rights, if any, of holders of Senior Debt under this
Section 8. Upon payment in full in cash of all Senior Debt, the Seller shall, to
the extent of any payments or distributions paid or delivered to the holders of
the Senior Debt or otherwise applied to the Senior Debt pursuant to the
provisions of this Section 8, be subrogated to the rights of the holders of the
Senior Debt to receive payments or distributions of assets of the Company made
on Senior Debt (and any security therefor) until the Subordinated Obligations
shall be paid in full in cash, and, for the purposes of such subrogation, no
payments to the holders of Senior Debt of any cash, assets, stock, or
obligations to which the Seller would be entitled except for the provisions of
this Section 8 shall, as between the Company, its creditors (other than the
holders of the Senior Debt), and the Seller, be deemed to be a payment by the
Company to or on account of Senior Debt. The fact that failure to make any
payment on account of the Subordinated Obligations is caused by reason of the
operation of any provision of this Section 8 shall not be construed as
preventing the occurrence of an Event of Default.

        Section 8.5. Recoveries. If a claim is made upon any holder or holders
of Senior Debt for repayment or recovery of any amount (a "Voidable Transfer")
on account of any Senior Debt under any state or Federal law, whether by reason
of preference, fraudulent conveyance, or otherwise and if such holder or holders
of Senior Debt repay all or a portion of such amounts by reason of (a) any
judgment, decree, or order of any court or administrative body having
jurisdiction over such holder or holders, or (b) any settlement or compromise of
any claim effected by such holder or holders based upon the reasonable advice of
counsel, then, as to the amount that has been repaid, the provisions of this
Section 8 automatically shall be reinstated and restored and the amount so
repaid shall constitute Senior Debt entitled to the benefits of this Section 8
as if such Voidable Transfer never had been made. The foregoing provisions of
this Section 8 shall constitute a continuing offer to all Persons who become
holders of Senior Debt, and such provisions are made for the benefit of, and may
be enforced directly by, holders of Senior Debt, who hereby are expressly stated
to be intended beneficiaries of this Section 8, whether or not they actually
relied thereon. The Seller covenants that it will not enter into any amendment
or modification of the provisions of this Section 8 (and the

                                       -17

<PAGE>

related definitions) without having obtained the prior written consent of the
holders of the Senior Debt under the Credit Agreement.

        Section 8.6. Payments to Bank Agent. Any payment or distribution to be
paid or delivered to the holders of the Senior Debt under the provisions of this
Section 8 may be paid or delivered to one or more Bank Agents for such holders.
The Seller shall be entitled to rely on the delivery to it of a written notice
purported to be signed on behalf of an officer or representative of any Bank
Agent believed by it in good faith to be genuine to establish the identity of
such Bank Agent, the amount of the outstanding Senior Debt and other matters
relevant to the provisions of this Section 8.

SECTION 9.      EXPENSES, ETC.

        Section 9.1. Expenses. The Company will pay all reasonable costs and
expenses (including reasonable attorneys' fees) incurred by the Seller in
connection with any amendment, waiver or consent requested by the Company under
or in respect of this Note (whether or not such amendment, waiver or consent
becomes effective), including, without limitation: (a) the costs and expenses
incurred in enforcing or defending (or determining whether or how to enforce or
defend) any rights under this Note or in responding to any subpoena or other
legal process or informal investigative demand issued in connection with this
Note, or by reason of being the holder of this Note and (b) the costs and
expenses, including financial advisors' fees, incurred in connection with the
insolvency or bankruptcy of the Company or in connection with any work-out or
restructuring of the transactions contemplated by this Note.

        Section 9.2. Survival. The obligations of the Company under this Section
9 will survive the payment or transfer of this Note and the enforcement,
amendment or waiver of any provision hereof.

SECTION 10.     SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

        All representations and warranties contained herein shall survive the
execution and delivery of this Note, the transfer by the Seller of this Note or
any portion hereof or interest herein and the payment of this Note, and may be
relied upon by any subsequent holder of this Note, regardless of any
investigation made at any time by or on behalf of the Seller or any subsequent
holder of this Note. This Note embodies the entire agreement and understanding
between the Company and the Seller and supersedes all prior agreements and
understandings relating to the subject matter hereof.

SECTION 11.     AMENDMENT AND WAIVER.

        Section 11.1. Requirements. This Note may be amended, and the observance
of any term hereof may be waived (either retroactively or prospectively), with
(and only with) the written consent of the Company and the Seller.

                                       -18

<PAGE>

        Section 11.2. Binding Effect, Etc. Any amendment or waiver consented to
as provided in this Section 11 is binding upon the Seller, each subsequent
holder of this Note and upon the Company without regard to whether this Note has
been marked to indicate such amendment or waiver. No such amendment or waiver
will extend to or affect any obligation, covenant, agreement, Default or Event
of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and the Seller nor any delay
in exercising any rights hereunder shall operate as a waiver of any rights of
the Seller. As used herein, the term "this Note" and references hereto shall
mean this Note as it may from time to time be amended or supplemented.

SECTION 12.     NOTICES.

        All notices and communications provided for hereunder shall be in
writing and sent (a) by telefacsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid); or (b) by registered or certified mail with return receipt
requested (postage prepaid) or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:

                (1)     if to the Seller, to it at 7030 Ardmore, Houston, Texas
        77054 to the attention of the General Counsel, or at such other address
        as the Seller shall have specified to the Company in writing,

                (2)     if to any subsequent holder of this Note, to such holder
        at such address as such other holder shall have specified to the Company
        in writing, or

                (3)     if to the Company, to the Company at its address set
        forth at the beginning hereof to the attention of William S. Goldberg,
        or at such other address as the Company shall have specified to the
        Seller in writing.

Notices under this Section 12 will be deemed given only when actually received.

SECTION 13.     MISCELLANEOUS.

        Section 13.1. Successors and Assigns. All covenants and other agreements
contained in this Note by or on behalf of any of the parties hereto bind and
inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of this Note) whether so expressed or
not.

        Section 13.2. Payments Due on Non-Business Days. Anything in this Note
to the contrary notwithstanding, any payment of principal of or interest on this
Note that is due on a date other than a Business Day shall be due and made on
the next succeeding Business Day without including the additional days elapsed
in the computation of the interest payable on such next succeeding Business Day.

                                       -19

<PAGE>

        Section 13.3. Severability. Any provision of this Note that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.

        Section 13.4. Construction. Each covenant contained in this Note shall
be construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision in this Note refers to
action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether such action is taken directly
or indirectly by such Person.

Section 13.5.   Limitation on Interest.

        (a)     It is the intent of the Company and the Seller to comply
strictly with applicable usury laws, and the Company and the Seller stipulate
and agree that none of the terms and provisions contained in this Note shall
ever be construed to create a contract to pay, for the use, forbearance or
detention of money, interest in excess of the maximum amount of interest
permitted to be charged by applicable law from time to time in effect. If any
excess of interest in such respect is hereby provided for or shall be
adjudicated to be so provided in this Note, the provisions of this Section 13.5
shall govern and prevail, and neither the Company nor any present or future
guarantors, endorsers, or other Persons hereafter becoming liable for payment of
this Note shall ever be obligated to pay the excess amount of such interest. The
provisions of this Section 13.5 shall control over all other provisions of this
Note that may be in conflict or apparent conflict herewith. The Seller expressly
disavows any intention to charge, collect or contract for excessive unearned
interest or finance charges in the event the maturity of this Note is
accelerated. If the maturity of this Note is accelerated for any reason, any
amounts held to constitute interest which are then unearned and have theretofore
been collected by the Seller shall be applied as of the date of receipt thereof
to reduce the principal balance hereof then outstanding and if the principal of
this Note has been paid in full, any remaining excess shall be forthwith paid to
the Company. If the Seller shall receive, collect or apply monies which are
deemed to constitute interest which would otherwise increase the interest on
this Note to an amount in excess of that permitted to be charged by applicable
law then in effect, all such sums deemed to constitute interest in excess of
such legal limit shall be applied to reduce the principal balance hereof then
outstanding or immediately returned to the Company or the other payor thereof
upon such determination. All sums paid or agreed to be paid to the Seller for
the use, forbearance or detention of sums due hereunder shall, to the extent
permitted by law applicable to the Seller, be amortized, prorated, allocated and
spread throughout the full term of the Indebtedness evidenced by this Note until
payment in full so that the rate or amount of interest on account of any
Indebtedness hereunder does not exceed the maximum amount allowed by such
applicable law. If at any time and from time to time

                                       -20

<PAGE>

(1) the amount of interest payable to the Seller on any date shall, pursuant to
this Section 13.5, be limited and (2) in respect of any subsequent interest
computation period, the amount of interest otherwise payable to the Seller would
be less than the amount of interest payable to the Seller computed at the
maximum lawful rate applicable to the Seller, then the amount of interest
payable to the Seller in respect to such subsequent interest computation period
shall continue to be computed at the maximum lawful rate applicable to the
Seller until the total amount of interest payable to the Seller shall equal the
total amount of interest which would have been payable to the Seller if the
total amount of interest had been computed without giving effect to this Section
13.5.

        (b)     As used in this section the term "applicable law" means the laws
of the State of Texas or the laws of the United States of America, whichever
laws allow the greater interest, as such laws now exist or may be changed or
amended or come into effect in the future.

        Section 13.6. Governing Law. This Note shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the law
of the State of Texas excluding choice-of-law principles of the law of such
State that would require the application of the laws of a jurisdiction other
than such State.

                                                  HANOVER COMPRESSOR COMPANY

                                                  By     /s/ [ILLEGIBLE]
                                                      --------------------------
                                                      Its PRESIDENT & CEO

                                      -21<PAGE>

                                                                   EXHIBIT 10.62

                                    AGREEMENT

                                  BY AND AMONG

                                   SJMB, L.P.,

                             CHARLES E. UNDERBRINK,

                                JOHN L. THOMPSON

                                       AND

                               BELLELI ENERGY SrL,

                                       AND

                           HANOVER COMPRESSOR COMPANY

                    HANOVER COMPRESSION GENERAL HOLDINGS, LLC

                   HANOVER COMPRESSOR HOLDING COMPANY NL B.V.

                        HANOVER COMPRESSOR NIGERIA, INC.,

                     HANOVER COMPRESSION LIMITED PARTNERSHIP

                               HCC MANTOVA S.r.L.

                               September 20, 2002

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                Page
                                                                                                                ----
<S>                                                                                                              <C>
ARTICLE I. DEFINITIONS............................................................................................1

         1.1.     Definitions.....................................................................................1
         1.2.     Interpretation..................................................................................5

ARTICLE II. PURCHASE AND SALE OF THE SUBJECT QUOTAS...............................................................5

         2.1.     Capital Structure...............................................................................5
         2.2.     Purchase and Sale of the Quotas.................................................................5
         2.3.     Purchase Price..................................................................................5

ARTICLE III. CLOSING..............................................................................................6

         3.1.     Closing.........................................................................................6
         3.2.     SJMB Deliveries at Closing......................................................................6
         3.3.     Hanover Entities Deliveries at Closing..........................................................6
         3.4.     Recordation.....................................................................................7

ARTICLE IV. CONDITIONS PRECEDENT TO THE CLOSING...................................................................7

         4.1.     Conditions Precedent to Obligations of SJMB, Underbrink and Thompson............................7
         4.2.     Conditions Precedent to Obligations of the Hanover Entities.....................................8

ARTICLE V. OPTIONS TO PURCHASE....................................................................................9

         5.1.     SJMB Purchase Option............................................................................9
         5.2.     HCHC Purchase Option...........................................................................11

ARTICLE VI. BONDS AND LETTERS OF CREDIT..........................................................................13

         6.1.     Existing Belleli Financing.....................................................................13
         6.2.     Additional Financing...........................................................................13
         6.3.     Replacement of Scheduled Bonds or Letters of Credit and Repayment of Scheduled Cash............14
         6.4.     Interest Payments on Scheduled Letters of Credit and Scheduled Cash............................14
         6.5.     Invoices and Payment...........................................................................14

ARTICLE VII. BELLELI FINANCING AND CAPITAL STRUCTURE.............................................................14

         7.1.     Additional Financing...........................................................................14
         7.2.     Capital Contributions..........................................................................14
         7.3.     Additional Actions.............................................................................15
         7.4.     Capital Structure..............................................................................15
         7.5.     Assets.........................................................................................15
</TABLE>

                                       ii

<PAGE>

<TABLE>
         <S>                                                                                                     <C>
         7.6.     Distributions..................................................................................16
         7.7.     Control........................................................................................16
         7.8.     Further Financing, Bonding, Letters of Credit, Guarantees, Etc.................................16

ARTICLE VIII. HCC MANTOVA FINANCING & CAPITAL STRUCTURE..........................................................16

         8.1.     Existing HCC Mantova Financing.................................................................16
         8.2.     Additional Financing...........................................................................16
         8.3.     Capital Contributions..........................................................................16
         8.4.     Capital Structure..............................................................................16
         8.5.     Assets.........................................................................................17
         8.6.     Distributions..................................................................................17
         8.7.     Control........................................................................................17

ARTICLE IX. ENTERPRISE VALUATION SALE............................................................................17

         9.1.     Enterprise Valuation Sale......................................................................17
         9.2.     Enterprise Valuation Sale to Unaffiliated Third Party..........................................18
         9.3.     Cooperation....................................................................................19
         9.4.     Representations and Warranties.................................................................19

ARTICLE X. REPRESENTATIONS AND WARRANTIES........................................................................19

         10.1.    Representations and Warranties of SJMB.........................................................19
         10.2.    Representations and Warranties of Non-Mantova Hanover Entities.................................21
         10.3.    Representations and Warranties of Belleli......................................................22
         10.4.    Representations and Warranties of HCC Mantova..................................................24
         10.5.    Representations and Warranties of HCHC.........................................................26
         10.6.    Representations and Warranties of HCLP.........................................................26

ARTICLE XI. INDEMNIFICATION AND GUARANTEE........................................................................27

         11.1.    Survival of Representations and Warranties.....................................................27
         11.2.    Indemnification................................................................................27

ARTICLE XII. TERMINATION OF OTHER AGREEMENTS AND RELEASES........................................................28

         12.1.    Termination of Other Agreements................................................................28

ARTICLE XIII. MISCELLANEOUS......................................................................................28

         13.1.    Notices........................................................................................28
         13.2.    Binding Effect; Benefits.......................................................................29
         13.3.    Waiver.........................................................................................29
         13.4.    Amendments.....................................................................................30
         13.5.    Assignability..................................................................................30
         13.6.    Governing Law..................................................................................30
         13.7.    Counterparts...................................................................................30
</TABLE>

                                       iii

<PAGE>

<TABLE>
         <S>                                                                                                     <C>
         13.8.    Entire Agreement...............................................................................30
         13.9.    Severability...................................................................................30
         13.10.   Disputes...................................................................................... 30
         13.11.   Fees and Expenses..............................................................................30
         13.12.   Remedy.........................................................................................30
         13.13.   Cooperation....................................................................................31
         13.14.   Restriction on Sale of Subject Quotas..........................................................31
</TABLE>

                                    SCHEDULES

Schedule 3.2(a)     SJMB Release
Schedule 3.2(d)     Lease Consent (to lease of assets of business from HCC
                    Mantova to Belleli)
Schedule 3.2(f)     Instrument of Transfer of the "Subject Quotas"
Schedule 3.3(a)     Hanover Release
Schedule 3.3(e)     Satisfaction, Release and Indemnification Agreement
Schedule 5.1(f)     Representations and Warranties at Option Closing
Schedule 6.1-1      Hanover Entities Scheduled Bonds or Letters of Credit
Schedule 6.1-2      SJMB Scheduled Bonds or Letters of Credit
Schedule 6.1(a)-1   Hanover Entities Scheduled Cash
Schedule 6.1(a)-2   SJMB Scheduled Cash
Schedule 6.1(b)     Hanover Capital Contribution
Schedule 10.3(c)    Litigation against Belleli
Schedule 10.3(f)    Belleli Unaudited Financial Statements as of June 30, 2002
Schedule 10.3(g)    Belleli Capital Calls
Schedule 10.3(h)    Belleli Distributions
Schedule 10.3(i)    Belleli Material Assets
Schedule 10.4(e)    Litigation against HCC Mantova
Schedule 10.4(i)    HCC Mantova Unaudited Financial Statements as of
                    June 30, 2002
Schedule 10.4(j)    HCC Mantova Capital Calls
Schedule 10.4(k)    HCC Mantova Distributions
Schedule 10.4(l)    HCC Mantova Material Assets
Schedule 12.1       Agreements Subject to Termination
Schedule 12.1-2     Agreements Not Subject to Termination

                                       iv

<PAGE>

               THIS AGREEMENT (the "Agreement") is made and entered into
effective as of September 20, 2002 (the "Effective Date"), among SJMB, L.P., a
Delaware limited partnership ("SJMB"), Charles E. Underbrink ("Underbrink"),
John L. Thompson ("Thompson"), Belleli Energy, SrL, an Italian company
("Belleli"), Hanover Compressor Company, a Delaware corporation ("Hanover"),
Hanover Compression General Holdings, LLC, a Delaware limited liability company
("HCGH"), Hanover Compressor Holding Company NL B.V. ("HCHC"), a Dutch
corporation, Hanover Compressor Nigeria, Inc. a Delaware corporation (formerly
known as Hanover Compressor Colombia, Inc., a Delaware corporation) ("HCNI"),
Hanover Compression Limited Partnership, a Delaware limited partnership
("HCLP"), and HCC Mantova S.r.L., an Italian company, ("HCC Mantova"). SJMB,
Underbrink, Thompson, Belleli, Hanover, HCGH, HCHC, HCLP, HCNI, and HCC Mantova
are sometimes hereinafter referred to individually as a "Party" and collectively
as the "Parties".

               WHEREAS, HCHC owns quotas of Belleli representing 40.31% of the
outstanding and issued quotas of Belleli;

               WHEREAS, HCHC desires to purchase quotas of Belleli representing
an 10.69% ownership interest of Belleli from SJMB, on the terms and conditions
set forth below.

               NOW, THEREFORE, in consideration of the mutual agreements and
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereto
hereby agree as follows.

                                   ARTICLE I.
                                   DEFINITIONS

               1.1.   Definitions. As used in this Agreement, the following
terms shall have the following meanings:

               "Affiliate" shall mean, with respect to any person, any person
that directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with such person. The term "control"
(including "controlled by" or "under common control with") shall mean the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies, of a person, whether through the ownership of
voting securities, by contract or otherwise. The term "person" as used in this
Agreement shall be broadly interpreted to include, without limitation, any
corporation, company, partnership, individual or other entity.

               "Additional Financing" shall have the meaning set forth in
Section 6.2 herein.

               "Agreement" shall have the meaning set forth in the introductory
paragraph.

               "Belleli" shall have the meaning set forth in the introductory
paragraph.

               "Belleli-Related Business" shall have the meaning set forth in
Section 8.5 herein.

               "Closing" shall have the meaning set forth in Section 3.1 herein.

                                        1

<PAGE>

               "Closing Date" shall have the meaning set forth in Section 3.1
herein.

               "EBITDA" shall mean earnings before interest, taxes, depreciation
and amortization.

               "Effective Date" shall have the meaning set forth in the
introductory paragraph.

               "Encumbrance" shall mean any encumbrance, charge, lien, pledge,
condemnation award, claim, restriction, security interest, mortgage, defect of
title, joint ownership, right of first offer, option, right of first refusal or
other encumbrance or charge of any kind.

               "Enterprise Valuation Purchase Price" shall have the meaning set
forth in Section 9.1 herein.

               "Governmental Authority" shall mean any governmental authority or
judicial, regulatory, or administrative body of any country or political
subdivision thereof exercising jurisdiction over SJMB, Belleli, Hanover, HCGH,
HCHC, HCNI, HCLP or HCC Mantova.

               "Hanover" shall have the meaning set forth in the introductory
paragraph.

               "Hanover Capital Contribution" shall have the meaning set forth
in Section 6.1 herein.

               "Hanover Entities" shall mean Hanover, HCGH, HCHC, HCNI, HCLP and
HCC Mantova.

               "HCNI" shall have the meaning set forth in the introductory
paragraph.

               "HCC Mantova" shall have the meaning set forth in the
introductory paragraph.

               "HCC Mantova Assets" shall have the meaning set forth in Section
10.4 herein.

               "HCC Mantova Assets, Taxes and Fees" shall have the meaning set
forth in Section 8.1 herein.

               "HCGH" shall have the meaning set forth in the introductory
paragraph.

               "HCHC" shall have the meaning set forth in the introductory
paragraph.

               "HCHC Initial Belleli Quotas" shall have the meaning set forth in
Section 2.1 herein.

               "HCHC Initial HCC Mantova Quotas" shall have the meaning set
forth in Section 10.4 herein.

               "HCLP Initial HCC Mantova Quotas" shall have the meaning set
forth in Section 10.4 herein.

                                        2

<PAGE>

               "HCHC Ownership Interest in Belleli" shall have the meaning set
forth in Section 2.2 herein.

               "HCHC Ownership Interest in HCC Mantova" shall have the meaning
set forth in Section 5.1 herein.

               "HCLP Ownership Interest in HCC Mantova" shall have the meaning
set forth in Section 5.1 herein.

               "HCHC Percentage Ownership" shall have the meaning set forth in
Section 2.2 herein.

               "HCHC Purchase Option" shall have the meaning set forth in
Section 5.2 herein.

               "HCHC Purchase Option Closing" shall have the meaning set forth
in Section 5.2 herein.

               "HCHC Purchase Option Closing Date" shall have the meaning set
forth in Section 5.2 herein.

               "HCHC Purchase Option Price" shall have the meaning set forth in
Section 5.2 herein.

               "HCLP" shall have the meaning set forth in the introductory
paragraph.

               "Losses" shall have the meaning set forth in Section 11.2 herein.

               "Management Employees" shall have the meaning set forth in
Section 4.2 herein.

               "Material Adverse Effect", with respect to any entity, shall mean
a material adverse change in, or effect on the business, financial position,
prospects or results of operations of such entity.

               "Non-Mantova Hanover Entities" shall have the meaning set forth
in Section 5.1 herein.

               "Other Party" shall have the meaning set forth in Section 9.1
herein.

               "Party" and "Parties" shall have the meaning set forth in the
introductory paragraph.

               "Proposing Party" shall have the meaning set forth in Section 9.1
herein.

               "Purchase Price" shall have the meaning set forth in Section 2.3
herein.

               "Quarterly EBITDA Notice" shall have the meaning set forth in
Section 9.1 herein.

                                        3

<PAGE>

               "Refund Distribution or Dividend" shall have the meaning set
forth in Section 8.6 herein.

               "Selling Party's Percentage Ownership Interest" shall have the
meaning set forth in Section 9.1 herein.

               "SJMB" shall have the meaning set forth in the introductory
paragraph.

               "SJMB Initial Quotas" shall have the meaning set forth in Section
2.1 herein.

               "SJMB Ownership Interest in Belleli" shall have the meaning set
forth in Section 2.2 herein.

               "SJMB Percentage Ownership" shall have the meaning set forth in
Section 2.2 herein.

               "SJMB Purchase Option" shall have the meaning set forth in
Section 5.1 herein.

               "SJMB Purchase Option Closing" shall have the meaning set forth
in Section 5.1 herein.

               "SJMB Purchase Option Closing Date" shall have the meaning set
forth in Section 5.1 herein.

               "SJMB Purchase Option Price" shall have the meaning set forth in
Section 5.1 herein.

               "Scheduled Advancer" shall have the meaning set forth in Section
6.3 herein.

               "Scheduled Bond" shall have the meaning set forth in Section 6.1
herein.

               "Scheduled Bonds or Letters of Credit" shall have the meaning set
forth in Section 6.1 herein.

               "Scheduled Cash" shall have the meaning set forth in Section 6.1
herein.

               "Scheduled Issuer" shall have the meaning set forth in Section
6.3 herein.

               "Scheduled Letter of Credit" shall have the meaning set forth in
Section 6.1 herein.

               "Subject Quotas" shall have the meaning set forth in Section 2.2
herein.

               "Thompson" shall have the meaning set forth in the introductory
paragraph.

               "Triggering Valuation" shall have the meaning set forth in
Section 9.1 herein.

               "Unaffiliated Third Parties" shall have the meaning set forth in
Section 6.2 herein.

                                        4

<PAGE>

               "Underbrink" shall have the meaning set forth in the introductory
paragraph.

               "U.S.$" or "Dollars" shall mean the legal currency and tender of
the United States of America.

               1.2.   Interpretation. Unless otherwise indicated:

               The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement or section, unless otherwise
specified. The words "include" and "including" and words of similar import when
used in this Agreement shall not be limiting but shall rather be deemed to be
followed by the words "without limitation." The singular includes the plural,
and the plural includes the singular. Words importing any gender include the
other gender. The word "or" shall mean "and/or."

                                   ARTICLE II.
                     PURCHASE AND SALE OF THE SUBJECT QUOTAS

               2.1.   Capital Structure. HCHC and SJMB acknowledge and agree
that, as of the Effective Date of this Agreement, (i) SJMB is the record holder
of 3,988,773 quotas, equal to a 59.58% interest in Belleli ("SJMB Initial
Quotas"), and (ii) HCHC is the record holder of 2,698,679 quotas, equal to a
40.31% interest in Belleli ("HCHC Initial Belleli Quotas").

               2.2.   Purchase and Sale of the Quotas. Pursuant to the terms of
this Agreement, subject to the satisfaction to the conditions precedent to
closing set forth in Article IV, SJMB hereby agrees to sell, transfer and
deliver, or cause to be sold, transferred and delivered to HCHC, and HCHC hereby
agrees to purchase 715,408 quotas of Belleli from SJMB ("Subject Quotas") such
that upon the transfer to HCHC by SJMB of the Subject Quotas as provided herein,
that (i) SJMB will be the record holder of 3,273,365 quotas (which quotas
together with any additional quotas in Belleli as SJMB may acquire after the
Effective Date and excluding any quotas which SJMB may dispose of after the
Effective Date shall collectively be referred to for purposes of this Agreement
as the "SJMB Ownership Interest in Belleli"), equal to a 48.898% interest in
Belleli ("SJMB Percentage Ownership") and (ii) HCHC will be the record holder of
3,414,087 quotas (which quotas together with any additional quotas in Belleli
that HCHC or its Affiliates may acquire after the Effective Date and excluding
any quotas which HCHC may dispose of after the Effective Date shall collectively
be referred to for purposes of this Agreement as the "HCHC Ownership Interest in
Belleli"), equal to a 51.000% interest in Belleli ("HCHC Percentage Ownership").

               2.3.   Purchase Price. The purchase consideration for the Subject
Quotas shall be the forgiveness of all indebtedness of any kind, including
principal and interest, owed any of the Hanover Entities or their Affiliates by
SJMB, Thompson and Underbrink and the release of all security interests,
guarantees, indemnifications, and liens previously granted by any of SJMB,
Thompson and Underbrink or their Affiliates to any of the Hanover Entities or
their Affiliates (including those security agreements included in prior
agreements between those parties) (the "Purchase Price").

                                        5

<PAGE>

                                  ARTICLE III.
                                     CLOSING

               3.1.   Closing. The closing of the transactions contemplated
hereby (the "Closing") will be held in the offices of Latham & Watkins on
September 30, 2002 at 10:00 a.m. Central time (the "Closing Date"), or, if the
conditions to the Closing set forth in Article IV shall not have been satisfied
by such date, as soon as practicable after such conditions shall have been
satisfied.

               3.2.   SJMB Deliveries at Closing. At the Closing, SJMB shall
deliver to the Hanover Entities the following:

               (a)    an executed release by SJMB, SJMB, L.L.C., Thompson and
Underbrink in the form attached hereto as Schedule 3.2(a);

               (b)    a certificate signed by an authorized officer of SJMB to
the effect that each of the conditions specified in clause (d) of Section 4.2 of
this Agreement is satisfied;

               (c)    evidence satisfactory to HCHC that each of the conditions
specified in clause (e) of Section 4.2 of this Agreement is satisfied;

               (d)    an executed lease consent in the form attached hereto as
Schedule 3.2(d);

               (e)    a copy of resolutions of the Managers of SJMB, L.L.C., the
general partner of SJMB, certified as of the Closing Date by the Secretary or an
Assistant Secretary of SJMB, L.L.C., which certified resolutions shall duly
authorize the execution, delivery and performance of this Agreement, together
with a certificate as to the incumbency of the persons executing such documents
on its behalf, such certificate to be in a form and substance reasonably
satisfactory to HCHC; and

               (f)    an executed and notarized instrument of transfer
(substantially in the form attached hereto as Schedule 3.2(f)) in respect of the
Subject Quotas, as provided by and in accordance with Article 2479 of the
Italian Civil Code, it being understood and agreed that such instrument of
transfer shall not constitute a novation of the terms and conditions herein
contained and that the language of such instrument of transfer is subject to
adjustment to reflect (1) the precise number of quotas owned by HCHC and SJMB
before the transfer (including any subscription by HCHC and/or SJMB of the
quotas pertaining to unexercised options held by Impianti) and (2) the
consideration for the transfer.

               3.3.   Hanover Entities Deliveries at Closing. At the Closing,
the Hanover Entities shall deliver to SJMB, Underbrink and Thompson the
following:

               (a)    an executed release by the Hanover Entities in the form
attached hereto as Schedule 3.3(a);

               (b)    a certificate signed by the president or chief executive
officer of each of the Hanover Entities to the effect that each of the
conditions specified in clause (d) of Section 4.1 of this Agreement is
satisfied;

                                        6

<PAGE>

               (c)    evidence satisfactory to SJMB that each of the conditions
specified in clause (e) of Section 4.1 of this Agreement is satisfied;

               (d)    a copy of resolutions of the Board of Directors or other
governing body of each of the Non-Mantova Hanover Entities, certified as of the
Closing Date by the Secretary or an Assistant Secretary of such Hanover Entity,
which certified resolutions shall duly authorize the execution, delivery and
performance of this Agreement, together with a certificate as to the incumbency
of the persons executing such documents on their behalf, such certificate to be
in a form and substance reasonably satisfactory to SJMB;

               (e)    an executed Satisfaction, Release and Indemnification
Agreement in the form attached hereto as Schedule 3.3(e);

               (f)    the original Unconditional Guaranty of Payment and
Performance by Underbrink dated February 4, 2000 marked "cancelled";

               (g)    the original Unconditional Guaranty of Payment and
Performance by Thompson dated February 4, 2000 marked "cancelled";

               (h)    the original $400,000 Promissory Note by SJMB to the order
of HCLP dated February 14, 2001 marked "paid in full";

               (i)    the original $1,500,000 Promissory Note by SJMB to the
order of HCLP dated July 31, 2001 marked "paid in full";

               (j)    executed UCC termination statements terminating all
security interests granted in the past by SJMB in favor of any of the Hanover
Entities in a form and substance reasonably satisfactory to St. James; and

               (k)    SJMB's Black Warrior Stock Certificate No. 0399
representing 5,017,481 common shares currently held in escrow by Stephenson &
Snokhous for the benefit of HCLP.

               3.4.   Recordation. The Parties shall each take such actions as
are necessary to cause the sale of the Subject Quotas to be recorded in the
quotaholders' ledger of Belleli promptly upon registration of the deed with
Belleli's registrar.

                                   ARTICLE IV.
                       CONDITIONS PRECEDENT TO THE CLOSING

               4.1.   Conditions Precedent to Obligations of SJMB, Underbrink
and Thompson. The obligations of SJMB, Underbrink and Thompson set forth in this
Agreement shall be subject to the satisfaction at or prior to the Closing of
each of the following conditions:

               (a)    the representations and warranties made by the Hanover
Entities, and each of them, herein, without taking into account any materiality
qualifications therein, shall have been true and correct in all material
respects when made, and shall be true and correct in all material respects at
and as of the Closing, with the same force and effect as though made at the
Closing except to the extent that such representations and warranties relate to
an earlier date;

                                        7

<PAGE>

               (b)    the Hanover Entities, and each of them, shall have
performed and complied in all material respects with all covenants, agreements
and obligations in this Agreement to be performed or complied with prior to or
at the Closing;

               (c)    no action, proceeding, suit or investigation shall have
been instituted nor shall governmental action before any court or other
Governmental Authority be threatened in writing, nor shall any order, judgment
or decree have been issued or proposed to be issued by any court or other
Governmental Authority which does, or is reasonably likely to: (1) set aside,
restrain, enjoin or prevent the consummation of transactions contemplated
hereby; or (2) otherwise have a Material Adverse Effect on Belleli or HCC
Mantova;

               (d)    all necessary authorizations, agreements, registrations,
orders, approvals and consents of any persons, entities or Governmental
Authorities to the consummation of the transactions contemplated by this
Agreement, or otherwise pertaining to the matters covered by it, shall have been
obtained and delivered to SJMB and shall be in full force and effect as of the
Closing Date, and no such authorizations, agreements, registrations, orders,
approvals or consents shall impose any burdensome or, in SJMB's reasonable
determination, unsatisfactory conditions or requirements on SJMB; and

               (e)    the Hanover Entities shall have released all existing
pledges and powers of attorney from SJMB to any of the Hanover Entities, HCHC
shall have returned full ownership of the SJMB Initial Quotas to SJMB and HCHC
shall have caused title to the SJMB Initial Quotas to be returned to SJMB,
without encumbrance of any kind, and shall have caused such clear title to be
reflected on the Register of Members of Belleli and in all appropriate public
records, other than Encumbrances created by the terms of this Agreement.

               4.2.   Conditions Precedent to Obligations of the Hanover
Entities. The obligations of the Hanover Entities set forth in this Agreement
shall be subject to the satisfaction at or prior to the Closing of each of the
following conditions:

               (a)    the representations and warranties made by SJMB herein,
without taking into account any materiality qualifications therein, shall have
been true and correct in all material respects when made, and shall be true and
correct in all material respects at and as of the Closing, with the same force
and effect as though made at the Closing except to the extent that such
representations and warranties relate to an earlier date;

               (b)    SJMB shall have performed and complied in all material
respects with all covenants, agreements and obligations in this Agreement to be
performed or complied with prior to or at the Closing;

               (c)    no action, proceeding, suit or investigation shall have
been instituted nor shall governmental action before any court or other
Governmental Authority be threatened in writing, nor shall any order, judgment
or decree have been issued or proposed to be issued by any court or other
Governmental Authority which does, or is reasonably likely to: (1) set aside,
restrain, enjoin or prevent the consummation of transactions contemplated
hereby; or (2) otherwise have a Material Adverse Effect on Belleli or HCC
Mantova;

                                        8

<PAGE>

               (d)    all necessary authorizations, agreements, registrations,
orders, approvals and consents of any persons, entities or Governmental
Authorities to the consummation of the transactions contemplated by this
Agreement, or otherwise pertaining to the matters covered by it shall have been
delivered to HCHC and shall be in full force and effect as of the Closing Date,
and no such authorizations, agreements, registrations, orders, approvals or
consents shall impose any burdensome, or in HCHC's reasonable determination,
unsatisfactory conditions or requirements on HCHC; and

               (e)    SJMB shall have obtained and delivered to HCHC a release
from each of Sergio Garrone, Aldo Patrini and Ettorre Prucco (the "Management
Employees") for any obligation of Belleli or HCLP or its Affiliates to sell or
issue any equity interests in Belleli to such Management Employee.

                                   ARTICLE V.
                               OPTIONS TO PURCHASE

               5.1.   SJMB Purchase Option. SJMB will have the option following
the Closing Date to purchase the HCHC Ownership Interest in Belleli, plus HCHC's
ownership interest in HCC Mantova, (which interest shall be equal to the HCHC
Initial HCC Mantova Quotas (as defined in Section 10.4 herein)) (the "HCHC
Ownership Interest in HCC Mantova"), plus the 0.01% ownership interest in HCC
Mantova owned by HCLP (which interest shall be equal to the HCLP Initial HCC
Mantova Quotas (as defined in Section 10.4 herein)) (the "HCLP Ownership
Interest in HCC Mantova"), as follows:

               (a)    Exercise Period. HCHC and HCLP grant to SJMB and its
assigns the right to acquire the HCHC Ownership Interest in Belleli, the HCHC
Ownership Interest in HCC Mantova, and the HCLP Ownership Interest in HCC
Mantova (the "SJMB Purchase Option"). Such purchase option is exercisable at any
time prior to June 30, 2003 by the delivery of irrevocable written notice to
HCHC at least 15 days prior to the closing of the purchase thereunder (the "SJMB
Purchase Option Closing"), which notice shall set forth the date of closing (the
"SJMB Purchase Option Closing Date").

               (b)    SJMB Purchase Option Price. The exercise price for the
SJMB Purchase Option (the "SJMB Purchase Option Price"), which shall be paid to
HCHC in full in cash at the SJMB Purchase Option Closing, shall be the sum of:

                           (i)     Thirty-eight Million Six Hundred Twenty-two
                      Thousand Four Hundred Twenty Seven and 00/100 Dollars
                      (U.S. $38,622,427); plus,

                           (ii)    the payment or satisfaction in full of all
                      obligations of SJMB to the Hanover Entities or their
                      Affiliates (not including HCC Mantova or Belleli) incurred
                      after the Effective Date (provided that such payment will
                      be made only with respect to such obligations as were
                      incurred in accordance with the terms of this Agreement);
                      plus,

                                        9

<PAGE>

                           (iii)   the repayment of any additional capital HCHC
                      has contributed after the Effective Date to Belleli or HCC
                      Mantova (provided that such capital contributions have
                      been made only in accordance with the terms of this
                      Agreement), excluding any capital contributions made by
                      the Hanover Entities or their Affiliates after the
                      Effective Date that are treated as debt for purposes of
                      Article IX hereof; plus,

                           (iv)    the repayment of any loans made to Belleli by
                      any of the Hanover Entities or their Affiliates (not
                      including HCC Mantova) ("Non-Mantova Hanover Entities")
                      (provided that such loans have been disclosed or made only
                      in accordance with the terms of this Agreement),
                      including, without limitation, any capital contributions
                      made by the Non-Mantova Hanover Entities or their
                      Affiliates after the Effective Date that are treated as
                      debt for purposes of Article IX hereof; plus

                           (v)     the greater of: (a) the product of (1) the
                      HCHC Percentage Ownership, and (2) Belleli's EBITDA, as
                      determined by Arthur Andersen, for the period commencing
                      January 1, 2002 and ending on the forty-fifth (45th) day
                      prior to the SJMB Purchase Option Closing Date; or (b)
                      $0.00; minus

                           (vi)    the amount of any payments to HCHC or any
                      other Non-Mantova Hanover Entity in repayment of any of
                      the loans referenced in Section 5.1(b)(iv) hereof.

               (c)    Releases Upon Exercise of SJMB Purchase Option. At the
SJMB Purchase Option Closing, SJMB shall provide for the release and return of
all letters of credit, bonds, guarantees and other sureties provided by the
Non-Mantova Hanover Entities for the benefit of Belleli (provided that such
letters of credit, bonds, guarantees and other sureties have been disclosed or
made only in accordance with the terms of this Agreement).

               (d)    Cooperation. HCHC and HCC Mantova and Belleli shall
cooperate with and use their reasonable best efforts to assist SJMB and its
agents in obtaining a new equity partner or financing for the purpose of
exercising the SJMB Purchase Option, including access to the financial
information, physical assets, customers, and holders of liabilities of Belleli
and HCC Mantova, subject to non-interference with the business of Belleli and
HCC Mantova and the execution of confidentiality agreements with any such
prospective partner or financing source and their representatives.

               (e)    Duties Upon Close of SJMB Purchase Option. HCHC, HCLP and
HCC Mantova will, at the SJMB Purchase Option Closing, and thereafter to the
extent reasonable upon SJMB's request, take the following actions:

                           (i)     HCHC will take all action as is required to
                      immediately cause good and marketable title to the HCHC
                      Ownership Interest in Belleli to be transferred to SJMB or
                      its assigns without counterclaims or setoffs, free of
                      Encumbrances;

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<PAGE>

                           (ii)    HCHC will further cause each person who is in
                      any way affiliated with HCHC or any Hanover Entity to
                      immediately resign any position as an officer or director
                      of Belleli;

                           (iii)   HCHC and HCLP will further immediately cause
                      good and marketable title to the HCHC Ownership Interest
                      in HCC Mantova and the HCLP Ownership Interest in HCC
                      Mantova, respectively, to be transferred to SJMB or its
                      assigns without counterclaims or setoffs, free of
                      Encumbrances; and

                           (iv)    HCHC and HCLP will further cause each person
                      who is in any way affiliated with HCHC, HCLP or any
                      Hanover Entity to immediately resign any position as an
                      officer or director of HCC Mantova.

               (f)    HCHC Representations and Warranties at SJMB Purchase
Option Closing. At the SJMB Purchase Option Closing, HCHC shall make such
representations and warranties as are customary in transactions of this sort
relating to the interests being sold and the assets and liabilities associated
therewith (including but not limited to the representations and warranties set
forth in Schedule 5.1(f)); provided, however, that HCHC shall not be required to
make any representation or warranty with respect to which (i) HCHC believes in
good faith is not true or will not be true when made or (ii) HCHC does not have
a good faith reasonable basis to believe is true and accurate when given or
made.

               5.2.   HCHC Purchase Option. HCHC will have the option following
the Closing Date to purchase the SJMB Ownership Interest in Belleli, as follows:

               (a)    Exercise Period. SJMB grants to HCHC and its assigns the
right to acquire the SJMB Ownership Interest in Belleli (the "HCHC Purchase
Option"). Such purchase option is exercisable at any time after June 30, 2003
and prior to September 30, 2003 by the delivery of irrevocable written notice to
SJMB at least 15 days prior to the closing of the purchase thereunder ("HCHC
Purchase Option Closing"), which notice shall set forth the date of closing
("HCHC Purchase Option Closing Date").

               (b)    HCHC Purchase Option Price. The exercise price for the
HCHC Purchase Option (the "HCHC Purchase Option Price") which shall be paid to
SJMB in full in cash at the HCHC Purchase Option Closing shall be the sum of:

                           (i)     Eleven Million and 00/100 Dollars (U.S.
                      $11,000,000); plus,

                           (ii)    the payment or satisfaction in full of all
                      obligations of the Hanover Entities to SJMB or its
                      Affiliates incurred after the Effective Date (provided
                      that such payment will be made only with respect to such
                      obligations as were incurred in accordance with the terms
                      of this Agreement); plus,

                                       11

<PAGE>

                           (iii)   the repayment of any additional capital SJMB
                      has contributed after the Effective Date to Belleli
                      (provided that such capital contributions have been made
                      only in accordance with the terms of this Agreement),
                      excluding any capital contributions made by SJMB after the
                      Effective Date that are treated as debt for purposes of
                      Article IX hereof; plus,

                           (iv)    the repayment of any loans made to Belleli by
                      SJMB (provided that such loans have been disclosed or made
                      only in accordance with the terms of this Agreement),
                      including, without limitation, any capital contributions
                      made by the SJMB after the Effective Date that are treated
                      as debt for purposes of Article IX hereof; plus,

                           (v)     the greater of: (a) the product of (1) the
                      SJMB Percentage Ownership Interest, and (2) Belleli's
                      EBITDA, as determined by Arthur Andersen, for the period
                      commencing January 1, 2002 and ending on the forty-fifth
                      (45th) day prior to the SJMB Purchase Option Closing Date;
                      or (b) $0.00; minus,

                           (vi)    the amount of any payments to SJMB in
                      repayment of any of the loans referenced in Section
                      5.2(b)(iv) hereof.

               (c)    Releases Upon Exercise of HCHC Purchase Option. At the
HCHC Purchase Option Closing, the Hanover Entities shall provide for the release
and return of all letters of credit, bonds, guarantees and other sureties
provided by SJMB or its Affiliates for the benefit of Belleli (provided that
such letters of credit, bonds, guarantees and other sureties have been disclosed
or made only in accordance with the terms of this Agreement).

               (d)    Duties Upon Close of HCHC Purchase Option. SJMB will, at
the HCHC Purchase Option Closing, and thereafter to the extent reasonable upon
HCHC's request, take the following actions:

                           (i)     SJMB will take all action as is required to
                      immediately cause good and marketable title of the SJMB
                      Ownership Interest in Belleli to be transferred to HCHC or
                      its assigns without counterclaims or setoffs, free of
                      Encumbrances; and

                           (ii)    SJMB will further cause each person who is in
                      any way affiliated with SJMB to immediately resign any
                      position as an officer or director of Belleli.

               (e)    SJMB Representations and Warranties at HCHC Purchase
Option Closing. At the HCHC Purchase Option Closing, SJMB shall make such
representations and warranties as are customary in transactions of this sort
relating to the interests being sold and the assets and liabilities associated
therewith (including but not limited to the representations and warranties set
forth in Schedule 5.1(f)); provided, however, that SJMB shall not be required to
make any representation or warranty with respect to which (i) SJMB believes in
good faith is not

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<PAGE>

true or will not be true when made or (ii) SJMB does not have a good faith
reasonable basis to believe is true and accurate when given or made.

                                   ARTICLE VI.
                           BONDS AND LETTERS OF CREDIT

               6.1.   Existing Belleli Financing. As of the Effective Date
hereof, the current outstanding face amounts of bonds and letters of credit
issued by one or more of the Hanover Entities and SJMB are set forth on Schedule
6.1-1 and Schedule 6.1-2 attached hereto, respectively (collectively, "Scheduled
Bonds and Letters of Credit" and, individually "Scheduled Bond" or "Scheduled
Letter of Credit").

               (a)    As of the Effective Date hereof, the current outstanding
amount of any cash or other consideration advanced by one or more of the Hanover
Entities or SJMB to or for the benefit of Belleli (whether characterized as
constituting a loan to Belleli, as creating a debt, a repayment, or a
reimbursement obligation by Belleli or otherwise) is set forth on Schedule
6.1(a)-1 or Schedule 6.1(a)-2 attached hereto, respectively ("Scheduled Cash").
Scheduled Cash for purposes of hereof shall include any costs incurred by SJMB
and the Hanover Entities to issue any Scheduled Bond or Scheduled Letter of
Credit.

               (b)    Prior to the Effective Date, the Hanover Entities
contributed the cash advances set forth on Schedule 6.1(b) to the capital of
Belleli (the "Hanover Capital Contribution"). The Parties acknowledge and agree
that the Hanover Capital Contribution shall be treated as debt for purposes of
Article IX hereof.

               (c)    The Scheduled Bonds and Letters of Credit and Scheduled
Cash shall not constitute capital contributions to Belleli for purposes of
Section 5.1(b) or Section 5.2(b) hereof.

               6.2.   Additional Financing. Neither the Non-Mantova Hanover
Entities nor SJMB shall be required to advance additional cash or provide
additional bonds, letters of credit, guaranties or sureties to or for the
benefit of Belleli or HCC Mantova.

               (a)    If either of Belleli or HCC Mantova (for purposes of
Belleli-Related Business only) needs or desires to obtain additional financing
(whether in the form of loans, bonds, letters of credit, or other alternative
financing) ("Additional Financing"), Belleli, HCC Mantova, HCHC, and SJMB shall
use their reasonable best efforts to cause Belleli or HCC Mantova to obtain such
Additional Financing from HCC Mantova or third parties unaffiliated with SJMB or
the Non-Mantova Hanover Entities ("Unaffiliated Third Parties").

               (b)    No Additional Financing may be provided to or for the
benefit of Belleli or HCC Mantova by SJMB or the Non-Mantova Hanover Entities,
without the prior joint written consent of SJMB and HCHC; provided, however,
that such consent shall not be unreasonably withheld or delayed if: (1) Belleli,
HCC Mantova, HCHC or SJMB have used their reasonable best efforts to cause
Belleli or HCC Mantova to obtain such Additional Financing from HCC Mantova or
Unaffiliated Third Parties; and (2) SJMB and HCHC have determined in good faith
that such Additional Financing is otherwise necessary or desirable.

                                       13

<PAGE>

               (c)    Any cash, bond, or letter of credit so advanced to or for
the benefit of Belleli or HCC Mantova by SJMB or any of the Non-Mantova Hanover
Entities in accordance with the terms of this Agreement shall be treated as
Scheduled Cash, a Scheduled Bond, or a Scheduled Letter of Credit, respectively,
for purposes of this Article VI, except that the effective date of such
Scheduled Cash, Scheduled Bond, or Scheduled Letter of Credit for purposes of
Section 6.4 shall be the date that such cash, bond, or letter of credit is
advanced.

               6.3.   Replacement of Scheduled Bonds or Letters of Credit and
Repayment of Scheduled Cash.

               (a)    Belleli, HCHC, and SJMB or the Non-Mantova Hanover
Entities that have issued such Scheduled Bonds or Letters of Credit, whichever
applies ("Scheduled Issuer"), shall use their reasonable best efforts to cause
Belleli to replace as soon as practicable such Scheduled Bonds or Letters of
Credit with bonds, letters of credit or other alternative financing issued or
provided by HCC Mantova or Unaffiliated Third Parties.

               (b)    Belleli, HCHC, and SJMB or the Non-Mantova Hanover
Entities that have advanced such Scheduled Cash, whichever applies ("Scheduled
Advancer"), shall use their reasonable best efforts to cause Belleli to repay as
soon as practicable such Scheduled Cash; provided, however, that such repayment
shall not require a capital call or cause a working capital shortfall for
Belleli.

               6.4.   Interest Payments on Scheduled Letters of Credit and
Scheduled Cash. Commencing on the Effective Date and continuing until such
obligations have been paid, satisfied, replaced, released or terminated, Belleli
will pay to each Scheduled Issuer or Scheduled Advancer an amount equal to (i)
four percent (4%) per annum on the outstanding face amount of the Scheduled
Letter of Credit issued by such Scheduled Issuer, and (ii) twelve percent (12%)
per annum on any Scheduled Cash or draw on Scheduled Bonds or Letters of Credit
provided by a Scheduled Advancer.

               6.5.   Invoices and Payment. Each Scheduled Issuer or Scheduled
Advancer will send Belleli quarterly invoices in arrears for amounts due to any
Scheduled Issuer or Scheduled Advancer by Belleli. Belleli will pay in cash to
any such Scheduled Issuer or Scheduled Advancer all amounts due to such
Scheduled Issuer or Scheduled Advancer based upon the payment terms in such
invoices; provided, however, that such Scheduled Issuers or Scheduled Advancers
will not provide for payment terms, the effect of which would require any
additional capital call or the payment of which would cause a working capital
shortfall for Belleli.

                                  ARTICLE VII.
                     BELLELI FINANCING AND CAPITAL STRUCTURE

               7.1.   Additional Financing. Additional Financing for Belleli
shall neither be required nor permitted except as set forth in Section 6.2
hereof.

               7.2.   Capital Contributions. Belleli shall not require and
neither HCHC nor SJMB shall be permitted or required to make any future capital
contributions to Belleli following

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<PAGE>

the Effective Date hereof without the prior joint written consent of HCHC and
SJMB, provided, however, that such consent shall not be unreasonably withheld or
delayed if: (i) such capital contributions are reasonably necessary in order to
maintain the solvency of Belleli and (ii) such capital contributions will not
result in the issuance of additional quotas to the contributing Party. Any
capital contributions in accordance with this Section 7.2 that do not result in
the issuance of additional quotas to the contributing Party shall be treated as
debt for purposes of Article IX hereof.

               7.3.   Additional Actions. HCHC and SJMB acknowledge and agree
that (i) no capital contribution pursuant to Section 7.2 hereof is intended to
result in a change in the number of quotas defined to equal the HCHC Ownership
Interest in Belleli or the SJMB Ownership Interest in Belleli or the percentage
of ownership defined to equal the HCHC Percentage Ownership or the SJMB
Percentage Ownership and (ii) capital contributions pursuant to Section 7.2
shall be treated as debt for purposes of Article IX hereof. If the Hanover
Capital Contribution or any capital contribution pursuant to Section 7.2 hereof
is deemed whether by operation of law or otherwise to result in a change in the
number of quotas defined to equal the HCHC Ownership Interest in Belleli or the
SJMB Ownership Interest in Belleli or the percentage of ownership defined to
equal the HCHC Percentage Ownership or the SJMB Percentage Ownership, any Party
shall, at the request of HCHC or SJMB, execute and deliver such additional
agreements, certificates, instruments or other documents and take such other
actions as the other Party may reasonably request to vest in HCHC and SJMB, as
applicable, valid title to the quotas defined to equal the HCHC Ownership
Interest in Belleli or the SJMB Ownership Interest in Belleli, respectively, or
to the percentage of ownership defined to equal the HCHC Percentage Ownership or
the SJMB Percentage Ownership, respectively. In addition, any Party shall, at
the request of SJMB or HCHC, execute and deliver such additional agreements,
certificates, instruments or other documents and take such other actions as the
other Party may reasonably request to confirm and effectuate the treatment of
any capital contributions pursuant to Section 7.2 as debt for purposes of
Article IX hereof.

               7.4.   Capital Structure. Neither HCHC nor SJMB shall sell,
transfer, assign or encumber all or a part of the HCHC Ownership Interest in
Belleli or the SJMB Ownership Interest in Belleli, respectively, following the
Effective Date hereof without the prior written joint consent of SJMB and HCHC,
or as provided for in Article V or Article IX of this Agreement. Belleli shall
not issue additional ownership interests or cause or approve a sale of existing
ownership interests following the Effective Date without the prior written joint
consent of HCHC and SJMB. Belleli shall not complete any capital transactions
(excluding debt financings in accordance with Article VI hereof) or enter into
any merger, joint venture or other similar transaction of any kind without the
prior written joint consent of HCHC and SJMB. The Parties shall take such action
as is necessary to include the foregoing restrictions in the By-Laws of Belleli.

               7.5.   Assets. Belleli shall not sell, transfer, assign or
encumber all or a part of its assets (other than partial sales of assets in the
ordinary course of business) following the Effective Date hereof without the
prior written joint consent of HCHC and SJMB. Belleli shall not make any
material purchase of assets outside the ordinary course of business without the
prior written joint consent of HCHC and SJMB.

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<PAGE>

               7.6.   Distributions. Belleli shall not make any distributions or
dividends following the Effective Date hereof without the prior written joint
consent of HCHC and SJMB.

               7.7.   Control. HCHC shall not use its control of Belleli to
cause Belleli to breach any covenant set forth in Article VII.

               7.8.   Further Financing, Bonding, Letters of Credit, Guarantees,
Etc. Following the Effective Date hereof, HCC Mantova will use its best efforts
to provide Additional Financing as feasible to the extent so requested by
Belleli.

                                  ARTICLE VIII.
                    HCC MANTOVA FINANCING & CAPITAL STRUCTURE

               8.1.   Existing HCC Mantova Financing. The Non-Mantova Hanover
Entities acknowledge and agree that neither they nor their Affiliates has as of
the Effective Date: (i) issued letters of credit, bonds, guarantees, or other
sureties for the benefit of HCC Mantova; (ii) advanced cash or other
consideration to HCC Mantova or for the benefit of HCC Mantova that must be
repaid or reimbursed by HCC Mantova to such Non-Mantova Hanover Entities or
their Affiliates, except for 4,135,786 EURO equal to the amount paid by or on
behalf of HCC Mantova for value added tax or other taxes or fees in connection
with the purchase of the HCC Mantova Assets ("HCC Mantova Assets Taxes and
Fees") which amount shall be satisfied as provided in Section 8.6 hereof. The
Non-Mantova Hanover Entities further acknowledge and agree that any debts or
obligations to any Non-Mantova Hanover Entities or their Affiliates in excess of
the HCC Mantova Assets Taxes and Fees as reflected in the unaudited financial
statement of HCC Mantova as of June 30, 2002 (attached hereto) as Schedule
10.4(i) have been or are forgiven as part of the consideration for this
Agreement as of the Effective Date hereof.

               8.2.   Additional Financing. Additional Financing for HCC Mantova
shall neither be required nor permitted except as set forth in Section 6.2
hereof.

               8.3.   Capital Contributions. HCC Mantova shall not require and
neither HCHC nor HCLP shall be permitted or required to make any capital
contributions to HCC Mantova following the Effective Date hereof without the
prior written consent of SJMB.

               8.4.   Capital Structure. HCHC and HCLP shall not sell, transfer,
assign or encumber all or a part of the HCHC Ownership Interest in HCC Mantova
or the HCLP Ownership Interest in HCC Mantova following the Effective Date
hereof without the prior written consent of SJMB or as provided for in Article V
or Article IX of this Agreement. HCC Mantova shall not issue additional
ownership interests or cause or approve a sale of existing ownership interests
of HCC Mantova following the Effective Date hereof without the prior written
consent of SJMB. HCC Mantova shall not complete any capital transactions
(excluding debt financings in accordance with Article VI hereof) or enter into
any merger, joint venture or other similar transaction of any kind without the
prior written consent of SJMB. The Parties shall take such action as is
necessary to include the foregoing restrictions in the By-Laws of HCC Mantova.

                                       16

<PAGE>

               8.5.   Assets. HCC Mantova shall not sell, transfer, assign or
encumber all or a part of its assets (other than partial sales of assets in the
ordinary course of business or to provide funding for the business of Belleli or
to fund cash needs in connection with the ownership, maintenance, preservation,
operation or lease of the assets leased to Belleli (the "Belleli-Related
Business")) following the Effective Date hereof without the prior written
consent of SJMB. HCC Mantova shall not make any material purchase of assets
outside the ordinary course of business without the prior written consent of
SJMB.

               8.6.   Distributions. HCC Mantova shall not make any
distributions or dividends following the Effective Date hereof without the prior
written consent of SJMB; provided, however, that HCC Mantova shall have the
right to distribute and/or dividend to any Hanover Entity or any Affiliate
thereof any amounts received by HCC Mantova as a refund of the HCC Mantova
Assets Taxes and Fees ("Refund Distribution or Dividend"). In the case of such a
Refund Distribution or Dividend, HCC Mantova shall provide SJMB with a written
notice of the proposed Refund Distribution or Dividend, and SJMB's consent to
such Refund Distribution or Dividend will be required immediately upon receipt
of documentation sufficient to verify that the proposed Refund Distribution or
Dividend is an amount equal to or less than the amount of any refund to HCC
Mantova of VAT or other taxes or fees paid by or on behalf of HCC Mantova in
connection with its purchase of the HCC Mantova Assets. In no event, however,
shall the total amount of such Refund Distributions or Dividends exceed the
amount of the HCC Mantova Assets Taxes and Fees.

               8.7.   Control. HCHC shall not use its control of HCC Mantova to
cause HCC Mantova to breach any covenant set forth herein.

                                   ARTICLE IX.
                            ENTERPRISE VALUATION SALE

               9.1.   Enterprise Valuation Sale.

               (a)    After November 1, 2002, either HCHC and HCLP or SJMB (the
"Proposing Party") may give notice to the other (the "Other Party") that the
Proposing Party is providing the Other Party with an enterprise valuation for
all of the equity interests in Belleli and HCC Mantova (the "Triggering
Valuation"). The notice shall be in writing and will include the amount of the
Triggering Valuation. The Triggering Valuation shall be used for the purpose of
determining the purchase price for the interest owned by either the Proposing
Party or the Other Party (the "Enterprise Valuation Purchase Price") which shall
be the Triggering Valuation multiplied by the HCHC Percentage Ownership, if HCHC
and HCLP are the sellers, or the SJMB Percentage Ownership, if SJMB is the
seller ("Selling Party's Percentage Ownership Interest"). At the closing of any
enterprise valuation sale pursuant to this Section 9.1, (i) the Enterprise
Valuation Purchase Price shall be paid in cash, (ii) all Scheduled Cash, all
loans made to Belleli in accordance with Article VI hereof, and all capital
contributions treated as debt for purposes of this Article IX provided by the
selling party shall be repaid in cash, and (iii) all Scheduled Bonds and Letters
of Credit provided by the selling party and its Affiliates shall be released.

                                       17

<PAGE>

               (b)    The Other Party shall have 30 days after receipt of the
notice from the Proposing Party to give the Proposing Party notice that it will
either sell its equity interest in Belleli and HCC Mantova to the Proposing
Party for the Enterprise Valuation Purchase Price or it will acquire the
Proposing Party's equity interest in Belleli and HCC Mantova for the Enterprise
Valuation Purchase Price. The purchasing party shall have 45 days from the date
of receipt of notice of the election by the Other Party to pay the Enterprise
Valuation Purchase Price and satisfy the other terms of sale set forth in this
paragraph. In the event that the purchasing party fails to pay the Enterprise
Valuation Purchase Price and satisfy the other terms of sale within the 45 day
period the purchasing party shall not be entitled to present another Triggering
Valuation as a Proposing Party under this Article IX for 18 months.

               (c)    Notwithstanding any other provision of this Section 9.1:

                           (i)     Belleli shall provide to SJMB and HCHC within
                      sixty (60) days following the end of each quarter in the
                      calendar year (beginning on November 29, 2002), Belleli's
                      EBITDA, as determined by Arthur Andersen, for the period
                      commencing on January 1, 2002 and ending as of the date of
                      the quarter just completed ("Quarterly EBITDA Notice").

                           (ii)    In no event shall HCHC and HCLP present a
                      Triggering Valuation which, together with the amounts
                      payable to SJMB pursuant to clause (ii) of the last
                      sentence of Section 9.1(a), would result in an aggregate
                      payment to SJMB under this Section 9.1 that is less than
                      the HCHC Purchase Option Price calculated in accordance
                      with Section 5.2(b), except that for purposes of
                      calculating the amount described in Section 5.2(b)(iv) the
                      amount of Belleli's EBITDA shall be equal to the EBITDA
                      reported in the Quarterly EBITDA Notice which most
                      recently preceded notice of such Triggering Valuation.

                           (iii)   In no event shall SJMB present a Triggering
                      Valuation which, together with the amounts payable to HCHC
                      and its Affiliates pursuant to clause (ii) of the last
                      sentence of Section 9.1(a), would result in an aggregate
                      payment to HCHC under this Section 9.1 that is less than
                      the SJMB Purchase Option Price calculated in accordance
                      with Section 5.1(b), except that for purposes of
                      calculating the amount described in Section 5.1(b)(iv) the
                      amount of Belleli's EBITDA shall be equal to the EBITDA
                      reported in the Quarterly EBITDA Notice which most
                      recently preceded notice of such Triggering Valuation.

               9.2.   Enterprise Valuation Sale to Unaffiliated Third Party. In
the event that the Proposing Party gives notice to the Other Party of a
Triggering Valuation with the intent to conduct a sale of all of the equity
interests in or substantially all of the assets of Belleli and HCC Mantova to an
Unaffiliated Third Party, the Proposing Party shall so state in the notice to
the Other Party. If the Proposing Party elects to give such notice and the Other
Party elects to sell its interest to the Proposing Party as described in the
preceding paragraph, the Proposing Party shall have 150 days to pay the Other
Party the Enterprise Valuation Purchase Price and satisfy the other terms of
sale set forth in Section 9.1, provided, however, that the Enterprise

                                       18

<PAGE>

Valuation Purchase Price shall be adjusted higher by an amount equal to the
Selling Party's Percentage Ownership Interest in Belleli multiplied by the
difference between the Triggering Valuation of the Proposing Party and the price
actually paid by the Unaffiliated Third Party purchaser. This Enterprise
Valuation Purchase Price adjustment shall only be made if it increases the
Enterprise Valuation Purchase Price to be paid to the selling party.

               9.3.   Cooperation. The Proposing Party and the Other Party agree
to use their respective reasonable efforts to cooperate and assist in the sale
process regardless of whether the Other Party elects to purchase or sell and
regardless of whether the Proposing Party elects to conduct a sale to an
Unaffiliated Third Party as set forth in Section 9.2 hereof.

               9.4.   Representations and Warranties. Either HCHC and HCLP or
SJMB, if the selling party pursuant to Section 9.1, or each of them in the event
of a sale to an Unaffiliated Third Party pursuant to Section 9.2, shall make the
representations and warranties described in Section 5.1(e) (in the case of HCHC
and HCLP) or Section 5.2(e) (in the case of SJMB).

                                   ARTICLE X.
                         REPRESENTATIONS AND WARRANTIES

               10.1.  Representations and Warranties of SJMB. SJMB hereby
represents and warrants to the Hanover Entities and Belleli as of the Effective
Date and the Closing Date as follows:

               (a)    Organization. SJMB is a limited partnership duly formed,
validly existing and in good standing under the laws of the jurisdiction of its
organization. SJMB has all requisite power and authority to: (i) own and operate
its properties and carry on its business as currently conducted; and (ii) to
execute this Agreement and perform its obligations hereunder.

               (b)    Qualification. SJMB is duly qualified to do business and
is in good standing in each jurisdiction in which the nature of its business as
now conducted or its assets make such qualification necessary, except where the
failure to be so qualified or in good standing would not have a Material Adverse
Effect on SJMB.

               (c)    Authorizations; Approvals. The execution and delivery by
SJMB of this Agreement and the performance of its obligations hereunder have
been duly and validly authorized by all requisite limited partnership action.
This Agreement has been duly executed and delivered by SJMB, and this Agreement
constitutes the legal, valid and binding obligation of SJMB enforceable against
SJMB in accordance with its terms (except as the enforceability thereof may be
limited by any applicable bankruptcy, reorganization, insolvency or other laws
affecting creditors' rights generally or by general principles of equity,
regardless of whether such enforceability is considered in equity or at law).
Upon the execution and delivery thereof, all agreements, contracts, documents
and instruments relating to this Agreement and the transactions contemplated
hereby that are to be executed and delivered by SJMB will be so executed and
delivered by a duly authorized officer of SJMB, will constitute the legal, valid
and binding obligations of SJMB, and will be enforceable against SJMB in
accordance with their terms (except as the enforceability thereof may be limited
by any applicable bankruptcy, reorganization, insolvency or other laws affecting
creditors' rights generally or by general

                                       19

<PAGE>

principles of equity, regardless of whether such enforceability is considered in
equity or at law). SJMB is not required to give any notice, make any filing or
register with, or obtain any consent, approval, authorization, waiver, permit,
certificate or order of any Governmental Authority or third party to consummate
the transactions contemplated by this Agreement to be consummated on the Closing
Date.

               (d)    Absence of Conflicts. Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby
to be consummated on the Closing Date will: (i) conflict with, result in a
breach under, or give rise to any consent or preferential purchase right under
(A) any statute, law or regulation applicable to SJMB, (B) the constituent
documents of SJMB, (C) any material contract, agreement, lease, license or other
arrangement to which SJMB is a party or by which it or any of its properties is
bound, or (D) any order, judgment, injunction, award or decree of any court or
regulatory or governmental body, or (ii) result in the creation or imposition of
any Encumbrance on any of the property of SJMB.

               (e)    Litigation. There are no actions, suits, proceedings or
investigations pending or, to the knowledge of SJMB, threatened against SJMB
before or by any Governmental Authority that would reasonably be expected to
have a Material Adverse Effect on the ability of SJMB to sell the Subject Quotas
pursuant to this Agreement.

               (f)    Brokers. There is no broker or finder or other person
entitled to a commission or brokerage fee or payment in connection with this
Agreement or the transactions contemplated hereby (including the sale of the
Subject Quotas) as a result of any agreement of, or action taken by, SJMB, any
Affiliate of SJMB, or any partner, member, officer, or director of SJMB.

               (g)    Subject Quotas. As of the Closing Date, SJMB will be the
sole legal owner and holder of record of the Subject Quotas and will have good,
valid and marketable title to the Subject Quotas, free and clear of all
restrictions on transfer, purchase rights, warrants, options, contracts,
commitments, taxes, and other Encumbrances. Upon delivery to HCHC at the Closing
of a notarized instrument of transfer in respect of the Subject Quotas as
provided by and in accordance with, the provisions of Article 2479 of the
Italian Civil Code, and upon SJMB's receipt of the Purchase Price, and upon HCHC
being entered in the Register of Members of Belleli as the holder of the Subject
Quotas, good and valid title to the Subject Quotas will pass to HCHC, free and
clear of any Encumbrances of any kind. Other than this Agreement and the Statuto
of Belleli, the Subject Quotas are not subject to any voting trust agreement or
other contract, agreement, arrangement, commitment or understanding, including
any contract, agreement, arrangement, commitment or understanding restricting or
otherwise relating to the voting, dividend rights or disposition of the Subject
Quotas. The Subject Quotas have not been sold, pledged, hypothecated, assigned
or otherwise transferred, and neither SJMB nor any of its Affiliates has agreed
to sell, pledge, hypothecate, assign or otherwise transfer the Subject Quotas,
except as set forth in the Statuto of Belleli and pursuant to this Agreement.
Each of SJMB's representations and warranties set forth in this Section 10.1(g)
is subject to and contingent upon the Hanover Entities' compliance with their
obligations under Section 4.1(e) and Section 7.3 hereof.

                                       20

<PAGE>

               (h)    Prior Obligations. As of the Effective Date of this
Agreement, SJMB has not failed to perform or observe any covenant, agreement or
provision to be performed or observed by SJMB in any of the agreements or
obligations referenced in Article VI herein. SJMB has taken no action and has
refrained from taking any action as of the Effective Date of this Agreement that
would affect the validity or enforceability of any of the agreements referenced
in Article VI.

               (i)    Continuing Obligations. Prior to the release or
termination thereof by mutual agreement of the parties thereto or in accordance
with their respective terms, SJMB will take no action or refrain from taking any
action that would result in a breach of or effect the validity or enforceability
of the agreements or obligations referenced in Article VI herein.

               10.2.  Representations and Warranties of Non-Mantova Hanover
Entities. Each of the Non-Mantova Hanover Entities, severally and not jointly,
represents and warrants to SJMB and Belleli as of the Effective Date and the
Closing Date as follows:

               (a)    Organization. Such Non-Mantova Hanover Entity has been
duly formed and is validly existing and in good standing under the laws of the
jurisdiction of its organization. Such Non-Mantova Hanover Entity has all
requisite power and authority to: (i) own and operate its properties and carry
on its business as currently conducted; and (ii) to execute this Agreement and
perform its obligations hereunder.

               (b)    Qualification. Such Non-Mantova Hanover Entity is duly
qualified to do business and is in good standing in each jurisdiction in which
the nature of its business as now conducted or its assets make such
qualification necessary, except where the failure to be so qualified or in good
standing would not have a Material Adverse Effect on such Non-Mantova Hanover
Entity.

               (c)    Authorizations; Approvals. The execution and delivery by
such Non-Mantova Hanover Entity of this Agreement and the performance of its
obligations hereunder have been duly and validly authorized by all requisite
action. This Agreement has been duly executed and delivered by such Non-Mantova
Hanover Entity, and this Agreement constitutes the legal, valid and binding
obligation of such Non-Mantova Hanover Entity enforceable against it in
accordance with its terms (except as the enforceability thereof may be limited
by any applicable bankruptcy, reorganization, insolvency or other laws affecting
creditors' rights generally or by general principles of equity, regardless of
whether such enforceability is considered in equity or at law). Upon the
execution and delivery thereof, all agreements, contracts, documents and
instruments relating to this Agreement and the transactions contemplated hereby
that are to be executed and delivered by such Non-Mantova Hanover Entity will be
so executed and delivered by a duly authorized officer of such Non-Mantova
Hanover Entity, will constitute the legal, valid and binding obligations of such
Non-Mantova Hanover Entity, and will be enforceable against such Non-Mantova
Hanover Entity in accordance with their terms (except as the enforceability
thereof may be limited by any applicable bankruptcy, reorganization, insolvency
or other laws affecting creditors' rights generally or by general principles of
equity, regardless of whether such enforceability is considered in equity or at
law). Such Non-Mantova Hanover Entity is not required to give any notice, make
any filing or register with, or obtain any consent, approval, authorization,
waiver, permit, certificate or order of any

                                       21

<PAGE>

Governmental Authority or third party to consummate the transactions
contemplated by this Agreement to be consummated on the Closing Date.

               (d)    Absence of Conflicts. Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby
to be consummated on the Closing Date will: (i) conflict with, result in a
breach under, or give rise to any consent or preferential purchase right under
(A) any statute, law or regulation applicable to such Non-Mantova Hanover
Entity, (B) the constituent documents of such Non-Mantova Hanover Entity, (C)
any material contract, agreement, lease, license or other arrangement to which
such Non-Mantova Hanover Entity is a party or by which such Non-Mantova Hanover
Entity or any of its properties is bound, or (D) any order, judgment,
injunction, award or decree of any court or regulatory or governmental body, or
(ii) result in the creation or imposition of any Encumbrance on any of the
property of such Non-Mantova Hanover Entity.

               (e)    Brokers. There is no broker or finder or other person
entitled to a commission or brokerage fee or payment in connection with this
Agreement or the transactions contemplated hereby (including the sale of the
Subject Quotas) as a result of any agreement of, or action taken by, such
Non-Mantova Hanover Entity, any of its Affiliates, or any partner, member,
officer, or director of such Non-Mantova Hanover Entity.

               (f)    Prior Obligations. As of the Effective Date of this
Agreement, such Non-Mantova Hanover Entity has not failed to perform or observe
any covenant, agreement or provision to be performed or observed by it in any of
the agreements or obligations referenced in Article VI. Such Non-Mantova Hanover
Entity has taken no action or has refrained from taking any action as of the
Effective Date of this Agreement that would affect the validity or
enforceability of any of the agreements referenced in Article VI.

               (g)    Continuing Obligations. Prior to the release or
termination thereof by mutual agreement of the parties thereto or in accordance
with their respective terms, such Non-Mantova Hanover Entity will take no action
or refrain from taking any action that would result in a breach of or effect the
validity or enforceability of the agreements or obligations referenced in
Article VI.

               10.3.  Representations and Warranties of Belleli. Belleli
represents and warrants to SJMB and the Hanover Entities as of the Effective
Date and the Closing Date as follows:

               (a)    Authorizations; Approvals. The execution and delivery by
Belleli of this Agreement and the performance of its obligations hereunder have
been duly and validly authorized by all requisite corporation action. This
Agreement has been duly executed and delivered by Belleli, and this Agreement
constitutes the legal, valid and binding obligation of Belleli enforceable
against Belleli in accordance with its terms (except as the enforceability
thereof may be limited by any applicable bankruptcy, reorganization, insolvency
or other laws affecting creditors' rights generally or by general principles of
equity, regardless of whether such enforceability is considered in equity or at
law). Upon the execution and delivery thereof, all agreements, contracts,
documents and instruments relating to this Agreement and the transactions
contemplated hereby that are to be executed and delivered by Belleli will be so

                                       22

<PAGE>

executed and delivered by a duly authorized officer of Belleli, will constitute
the legal, valid and binding obligations of Belleli, and will be enforceable
against Belleli in accordance with their terms (except as the enforceability
thereof may be limited by any applicable bankruptcy, reorganization, insolvency
or other laws affecting creditors' rights generally or by general principles of
equity, regardless of whether such enforceability is considered in equity or at
law). Belleli is not required to give any notice, make any filing or register
with, or obtain any consent, approval, authorization, waiver, permit,
certificate or order of any Governmental Authority or third party to consummate
the transactions contemplated by this Agreement on the Closing Date.

               (b)    Absence of Conflicts. Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby
will: (i) conflict with, result in a breach under, or give rise to any consent
or preferential purchase right under (A) any statute, law or regulation
applicable to Belleli, (B) the constituent documents of Belleli, (C) any
material contract, agreement, lease, license or other arrangement to which
Belleli is a party or by which Belleli or any of its properties is bound, or (D)
any order, judgment, injunction, award or decree of any court or regulatory or
governmental body, or (ii) result in the creation or imposition of any
Encumbrance on any of the property of Belleli.

               (c)    Litigation. Except as disclosed on Schedule 10.3(c), since
May 9, 2001, there are no actions, suits, proceedings or investigations pending
or, to the knowledge of Belleli, threatened against Belleli before or by any
Governmental Authority that would have a Material Adverse Effect on the ability
of Belleli to perform its obligations pursuant to this Agreement.

               (d)    Brokers. There is no broker or finder or other person
entitled to a commission or brokerage fee or payment in connection with this
Agreement or the transactions contemplated hereby as a result of any agreement
of, or action taken by, Belleli, any Affiliate of Belleli, or any member,
officer, or director of Belleli.

               (e)    Capitalization. As reflected in the quotaholders' ledger
of Belleli on file with Belleli's registrar, (i) the authorized quotas of
Belleli consist of 6,694,287 quotas, (ii) SJMB is the record holder of 3,988,773
quotas, equal to a 59.58% interest in Belleli, and (iii) HCHC is the record
holder of 2,698,679 quotas, equal to a 40.31% interest in Belleli.

               (f)    Financial Condition. The unaudited financial statement of
Belleli as of June 30, 2002, is attached as Schedule 10.3(f). Such financial
statement was prepared by Belleli in good faith and is based on reasonable
assumptions.

               (g)    Capital Calls. Since May 9, 2001, Belleli has not made and
is currently not obliged to make any capital call not reflected in Schedule
10.3(g).

               (h)    Distributions. Since May 9, 2001, Belleli has not made and
is currently not obliged to make any distribution not reflected in Schedule
10.3(h).

               (i)    Assets. A list of the material assets of Belleli as of the
Effective Date is attached as Schedule 10.3(i) ("Belleli Assets"). Belleli has
not sold, transferred, assigned or encumbered and is not as of the Effective
Date hereof obliged to sell, transfer, assign or

                                       23

<PAGE>

encumber all or a part of the Belleli Assets, except to the extent that such
sale would be permitted under Section 7.5 hereof.

               10.4.  Representations and Warranties of HCC Mantova. HCC Mantova
represents and warrants to SJMB as of the Effective Date and the Closing Date as
follows:

               (a)    Organization. HCC Mantova is a company duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation. HCC Mantova has all requisite power and authority to: (i) own and
operate its properties and carry on its business as currently conducted; and
(ii) to execute this Agreement and perform its obligations hereunder.

               (b)    Qualification. HCC Mantova is duly qualified to do
business and is in good standing in each jurisdiction in which the nature of its
business as now conducted or its assets make such qualification necessary,
except where the failure to be so qualified or in good standing would not have a
Material Adverse Effect on HCC Mantova.

               (c)    Authorizations; Approvals. The execution and delivery by
HCC Mantova of this Agreement and the performance of its obligations hereunder
have been duly and validly authorized by all requisite corporation action. This
Agreement has been duly executed and delivered by HCC Mantova, and this
Agreement constitutes the legal, valid and binding obligation of HCC Mantova
enforceable against HCC Mantova in accordance with its terms (except as the
enforceability thereof may be limited by any applicable bankruptcy,
reorganization, insolvency or other laws affecting creditors' rights generally
or by general principles of equity, regardless of whether such enforceability is
considered in equity or at law). Upon the execution and delivery thereof, all
agreements, contracts, documents and instruments relating to this Agreement and
the transactions contemplated hereby that are to be executed and delivered by
HCC Mantova will be so executed and delivered by a duly authorized officer of
HCC Mantova, will constitute the legal, valid and binding obligations of HCC
Mantova, and will be enforceable against HCC Mantova in accordance with their
terms (except as the enforceability thereof may be limited by any applicable
bankruptcy, reorganization, insolvency or other laws affecting creditors' rights
generally or by general principles of equity, regardless of whether such
enforceability is considered in equity or at law). HCC Mantova is not required
to give any notice, make any filing or register with, or obtain any consent,
approval, authorization, waiver, permit, certificate or order of any
Governmental Authority or third party to consummate the transactions
contemplated by this Agreement to be consummated on the Closing Date.

               (d)    Absence of Conflicts. Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby
to be consummated on the Closing Date will: (i) conflict with, result in a
breach under, or give rise to any consent or preferential purchase right under
(A) any statute, law or regulation applicable to HCC Mantova, (B) the
constituent documents of HCC Mantova, (C) any material contract, agreement,
lease, license or other arrangement to which HCC Mantova is a party or by which
HCC Mantova or any of its properties is bound, or (D) any order, judgment,
injunction, award or decree of any court or regulatory or governmental body, or
(ii) result in the creation or imposition of any Encumbrance on any of the
property HCC Mantova.

                                       24

<PAGE>

               (e)    Litigation. Except as disclosed on Schedule 10.4(e), there
are no actions, suits, proceedings or investigations pending or, to the
knowledge of HCC Mantova, threatened against HCC Mantova before or by any
Governmental Authority that would reasonably be expected to have a Material
Adverse Effect on the ability of HCC Mantova to perform its obligations pursuant
to this Agreement.

               (f)    Brokers. There is no broker or finder or other person
entitled to a commission or brokerage fee or payment in connection with this
Agreement or the transactions contemplated hereby as a result of any agreement
of, or action taken by, HCC Mantova, any Affiliate of HCC Mantova, or any
member, officer, or director of HCC Mantova.

               (g)    Capitalization. The authorized capital quotas of HCC
Mantova consist of 20,688,934 quotas, and are duly authorized, validly issued,
fully paid and nonassessable. As of the Effective Date of this Agreement, HCHC
is the record and beneficial owner of 20,688,834 quotas, equal to a ninety-nine
and 99/100 percent (99.99%) interest in HCC Mantova ("HCHC Initial HCC Mantova
Quotas"). The remaining 1/100 of a percent (0.01%) of the quotas of HCC Mantova
are owned by HCLP ("HCLP Initial HCC Mantova Quotas"). There are, and have been,
no preemptive rights with respect to the issuance of such quotas or any other
capital quotas of HCC Mantova. There are no outstanding subscriptions, warrants,
options, rights, "phantom" stock rights, agreements, calls, convertible or
exchangeable securities or other commitments (contingent or otherwise) pursuant
to which HCHC, HCLP, or HCC Mantova is or may become obligated to issue, sell,
purchase, return or redeem any such quotas or any other capital quotas of HCC
Mantova.

               (h)    Compliance with Laws. Since its formation, HCC Mantova has
complied in all material respects with all laws, rules, regulations and orders
of Governmental Authorities applicable to HCC Mantova and its assets and
business.

               (i)    Financial Condition. The unaudited financial statement of
HCC Mantova as of June 30, 2002, is attached as Schedule 10.4(i). Such financial
statement was prepared by HCC Mantova in good faith and is based on reasonable
assumptions.

               (j)    Capital Calls. HCC Mantova has not made and is not obliged
to make any capital call not reflected in Schedule 10.4(j).

               (k)    Distributions. HCC Mantova has not made and is not obliged
to make any distribution or dividend not reflected Schedule 10.4(k).

               (l)    Assets. HCC Mantova purchased the assets it now owns in
accordance with Schedule 10.4(l) ("HCC Mantova Assets"). HCC Mantova has not,
other than in the ordinary course of business, sold, transferred, assigned or
encumbered and is not as of the Effective Date hereof obliged to sell, transfer,
assign or encumber all or a part of the material HCC Mantova Assets other than
in connection with providing financing and/or guaranties or sureties on behalf
of Belleli.

                                       25

<PAGE>

               10.5.  Representations and Warranties of HCHC. In addition to the
representations and warranties set forth in Section 10.2 hereof, HCHC represents
and warrants to SJMB as of the Effective Date as follows:

               (a)    HCHC Initial Belleli Quotas. HCHC is the sole legal owner
and holder of record of the quotas representing the HCHC Initial Belleli Quotas
and has good, valid and marketable title to the HCHC Initial Belleli Quotas,
free and clear of all restrictions on transfer, purchase rights, warrants,
options, contracts, commitments, taxes, and other Encumbrances. Other than this
Agreement and the Statuto of Belleli, the HCHC Initial Belleli Quotas are not
subject to any voting trust agreement or other contract, agreement, arrangement,
commitment or understanding, including any contract, agreement, arrangement,
commitment or understanding restricting or otherwise relating to the voting,
dividend rights or disposition of the HCHC Initial Belleli Quotas. The HCHC
Initial Belleli Quotas have not been sold, pledged, hypothecated, assigned,
transferred or otherwise encumbered, and neither HCHC nor any of its Affiliates
has agreed or is obliged to sell, pledge, hypothecate, assign, transfer or
otherwise encumber all or a part of the HCHC Initial Belleli Quotas, except as
set forth in the Statuto of Belleli and pursuant to this Agreement.

               (b)    HCHC Initial HCC Mantova Quotas. HCHC is the sole legal
owner and holder of record of the quotas representing the HCHC Initial HCC
Mantova Quotas and has good, valid and marketable title to the HCHC Initial HCC
Mantova Quotas, free and clear of all restrictions on transfer, purchase rights,
warrants, options, contracts, commitments, taxes, and other Encumbrances. Other
than this Agreement and the Statuto of HCC Mantova, the HCHC Initial HCC Mantova
Quotas are not subject to any voting trust agreement or other contract,
agreement, arrangement, commitment or understanding, including any contract,
agreement, arrangement, commitment or understanding restricting or otherwise
relating to the voting, dividend rights or disposition of the HCHC Initial HCC
Mantova Quotas. The HCHC Initial HCC Mantova Quotas have not been sold, pledged,
hypothecated, assigned, transferred or otherwise encumbered, and neither HCHC
nor any of its Affiliates has agreed or is obliged to sell, pledge, hypothecate,
assign, transfer or otherwise encumber all or a part of the HCHC Initial HCC
Mantova Quotas, except as set forth in the Statuto of HCC Mantova and pursuant
to this Agreement.

               (c)    Litigation. There are no actions, suits, proceedings or
investigations pending, or to the knowledge of HCHC, threatened against HCHC
before or by any Governmental Authority that would reasonably be expected to
have a Material Adverse Effect on the ability of HCHC to perform its obligations
pursuant to this Agreement.

               10.6.  Representations and Warranties of HCLP. In addition to the
representations and warranties set forth in Section 10.2 hereof, HCLP represents
and warrants to SJMB as of the Effective Date as follows:

               (a)    HCLP Initial HCC Mantova Quotas. HCLP is the sole legal
owner and holder of record of the quotas representing the HCLP Initial HCC
Mantova Quotas and has good, valid and marketable title to the HCLP Initial HCC
Mantova Quotas, free and clear of all restrictions on transfer, purchase rights,
warrants, options, contracts, commitments, taxes, and other Encumbrances. Other
than this Agreement and the Statuto of HCC Mantova, the HCLP

                                       26

<PAGE>

Initial HCC Mantova Quotas are not subject to any voting trust agreement or
other contract, agreement, arrangement, commitment or understanding, including
any contract, agreement, arrangement, commitment or understanding restricting or
otherwise relating to the voting, dividend rights or disposition of the HCLP
Initial HCC Mantova Quotas. The HCLP Initial HCC Mantova Quotas have not been
sold, pledged, hypothecated, assigned, transferred or otherwise encumbered, and
neither HCLP nor any of its Affiliates has agreed or is obliged to sell, pledge,
hypothecate, assign, transfer or otherwise encumber all or a part of the HCLP
Initial HCC Mantova Quotas, except as set forth in the Statuto of HCC Mantova
and pursuant to this Agreement.

               (b)    Litigation. Except as referenced and disclosed in
Hanover's quarterly report on Form 10-Q for the quarter ended June 30, 2002,
there are no actions, suits, proceedings or investigations pending, or to the
knowledge of HCLP, threatened against HCLP before or by any Governmental
Authority that would reasonably be expected to have a Material Adverse Effect on
the ability of HCLP to perform its obligations pursuant to this Agreement.

                                   ARTICLE XI.
                          INDEMNIFICATION AND GUARANTEE

               11.1.  Survival of Representations and Warranties. The
representations and warranties of the Parties contained in this Agreement shall
lapse two (2) years following the Closing Date. Any representation or warranty
as to which a written claim shall have been asserted during the survival period
shall continue in effect with respect to such claims until such claim shall have
been finally resolved or settled.

               11.2.  Indemnification.

               (a)    SJMB covenants and agrees to defend, indemnify and hold
harmless the Hanover Entities and Belleli and their respective Affiliates from
and against any damages, claims, losses, liabilities, costs and expenses
(including, without limitation, settlement costs and any legal, accounting or
other expenses for defending any actions or threatened actions) (collectively,
"Losses"), arising out of or resulting from: (i) any inaccuracy in or breach of
any representation or warranty made by SJMB in this Agreement or in any writing
delivered pursuant to this Agreement or at the Closing; (ii) the failure of SJMB
to perform or observe fully any covenant, agreement or provision to be performed
or observed by SJMB pursuant to this Agreement or any other agreement between
the Parties still in effect following the Closing and (iii) any options,
subscriptions, warrants, rights, "phantom" stock rights, agreements, calls,
convertible or exchangeable securities or commitments (contingent or otherwise)
granted by or through SJMB or its Affiliates pursuant to which Belleli is or may
become obligated to issue, sell, purchase, return or redeem any quotas of
Belleli.

               (b)    Each Hanover Entity, severally and not jointly, covenants
and agrees to defend, indemnify and hold harmless SJMB, Underbrink, Thompson,
Belleli and their respective Affiliates from and against any Losses arising out
of or resulting from: (i) any inaccuracy in or breach of any representation or
warranty made by such Hanover Entity in this Agreement or in any writing
delivered pursuant to this Agreement or at the Closing; and (ii) the failure by
such Hanover Entity to perform or observe any covenant, agreement or provision
to be performed or

                                       27

<PAGE>

observed by it pursuant to this Agreement or any other agreement between the
Parties still in effect following the Closing.

               (c)    Belleli covenants and agrees to defend, indemnify and hold
harmless the Hanover Entities, SJMB, Underbrink, Thompson, and their respective
Affiliates from and against any Losses arising out of or resulting from: (i) any
inaccuracy in or breach of any representation or warranty made by Belleli in
this Agreement or in any writing delivered pursuant to this Agreement or at the
Closing; and (ii) the failure by Belleli to perform or observe any covenant,
agreement or provision to be performed or observed by it pursuant to this
Agreement or any other agreement between the Parties still in effect following
the Closing.

                                  ARTICLE XII.
                  TERMINATION OF OTHER AGREEMENTS AND RELEASES

               12.1.  Termination of Other Agreements. All agreements among
SJMB, the Hanover Entities and Belleli are hereby terminated (including without
limitation, those listed on Schedule 12.1-1 attached hereto) excluding (i) this
Agreement and any other documents, instruments and certificates delivered or
executed in connection herewith and (ii) those agreements listed in Schedule
12.1-2.

                                  ARTICLE XIII.
                                  MISCELLANEOUS

               13.1.  Notices. Notices and other communications given under this
Agreement, if any, shall be in writing and delivered personally or by facsimile,
receipt confirmed, or sent by certified mail, return receipt requested, postage
prepaid, or by overnight delivery or courier service to the Parties to this
Agreement at the following addresses or to such other address as the Party to
this Agreement whose address it is shall specify by notice to the other:

                      if to SJMB:              SJMB, L.P.
                                               d/b/a SJMB Merchant Bankers, L.P.
                                               4295 San Felipe, Suite 200
                                               Houston, Texas 77027
                                               Attn: John Thompson,
                                               Chief Executive Officer
                                               Facsimile: (713) 871-1028

                      with a copy to:          Gardere Wynne Sewell LLP
                                               1000 Louisiana, Suite 3400
                                               Houston, Texas 77002-5007
                                               Attn: John Nabors, Esquire
                                               Attn: Orin Lewis, Esquire
                                               Facsimile: (713) 276-5555

                      if to Mr. Thompson:      John L. Thompson
                                               4295 San Felipe, Suite 200
                                               Houston, Texas 77027
                                               Facsimile: (713) 871-1028

                                       28

<PAGE>

<TABLE>
                      <S>                      <C>
                      if to Mr. Underbrink:    Charles E. Underbrink
                                               4295 San Felipe, Suite 200
                                               Houston, Texas 77027
                                               Facsimile: (713) 871-1028

                      if to Hanover, HCHC      Hanover Compressor Nigeria, Inc.
                      HCNI, HCC Mantova,       Hanover Compression Limited Partnership
                      HCGH, or HCLP            Hanover Compression General Holdings, LLC
                                               HCC Mantova S.r.L.
                                               c/o Hanover Compressor Company
                                               12001 N. Houston Rosslyn
                                               Houston, Texas 77086
                                               Attn: Mark Berg, General Counsel
                                               Facsimile: (281) 447-0821

                      with a copy to:          Latham & Watkins
                                               Sears Tower, Suite 5800
                                               Chicago, Illinois 60606
                                               Attn: Richard S. Meller, Esquire
                                               Facsimile: (312) 993-9767

                      If to Belleli:           Belleli Energy SrL
                                               Via G. Taliercio, 3
                                               46111 Mantova
                                               ITALY
                                               Attn: Sergio Garrone
                                               Facsimile: 011+39 0376 333813
</TABLE>

A notice shall be deemed to have been given to a party to whom it is directed
(i) upon actual receipt by courier, (ii) upon dispatch by facsimile (with
transmission confirmed), or (iii) one business day after sent by overnight
delivery service.

               13.2.  Binding Effect; Benefits. Subject to Section 13.5 below,
this Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successors and permitted assigns. Nothing in this Agreement,
express or implied, is intended or shall be construed to give any person other
than the Parties and their respective successors or permitted assigns any legal
or equitable right, remedy or claim under or in respect of any agreement or any
provision contained herein.

               13.3.  Waiver. Any waiver of a provision hereof must be in
writing and signed by the waiving Party. No action taken pursuant to this
Agreement, including, without limitation, any investigation by or on behalf of
any Party, shall be deemed to constitute a waiver, by the Party taking such
action, of compliance by any other Party with any representations, warranties,
covenants or agreements contained herein. The waiver by any Party hereto of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any preceding or

                                       29

<PAGE>

succeeding breach and no failure by any Party to exercise any right or privilege
hereunder shall be deemed a waiver of such Party's rights or privileges
hereunder or shall be deemed a waiver of such Party's rights to exercise the
same at any subsequent time or times hereunder.

               13.4.  Amendments. This Agreement may only be amended, modified,
or supplemented by a written instrument executed by each of the Parties.

               13.5.  Assignability. None of the Parties may assign any rights
under this Agreement without the prior consent of the other Parties.

               13.6.  Governing Law. THIS AGREEMENT AND ANY CLAIMS RELATED TO
THIS AGREEMENT WHETHER CONTRACTUAL, TORT BASED OR OTHERWISE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, UNITED STATES
OF AMERICA, WITHOUT REFERENCE TO ITS CHOICE OF LAW PRINCIPLES. NOTWITHSTANDING
THE FOREGOING, THE APPLICABLE LAW GOVERNING THE PURCHASE AND DELIVERY OF THE
SUBJECT QUOTAS SHALL BE THE LAWS OF ITALY WITHOUT REFERENCE TO ITS CHOICE OF LAW
PRINCIPLES. EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE TO RECEIVE
PUNITIVE DAMAGES IN CONNECTION WITH ANY JUDICIAL ACTION BROUGHT IN CONNECTION
WITH THIS AGREEMENT.

               13.7.  Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original and all of
which together shall be deemed to be one and the same instrument.

               13.8.  Entire Agreement. With the exception of the documents
required to be provided in satisfaction of conditions hereunder, this Agreement
shall constitute the entire agreement of the Parties hereto with respect to the
subject matter contained herein.

               13.9.  Severability. In case any provision of this Agreement
shall be invalid or unenforceable in any jurisdiction, the validity and
enforceability of the remaining provisions shall not in any way be affected
thereby.

               13.10. Disputes. All Parties hereto shall submit to the
jurisdiction of and consent to have any disputes arising out of or related to
this Agreement adjudicated in the federal or state courts located in Houston,
Harris County, Texas.

               13.11. Fees and Expenses. Each Party hereto shall pay its own
legal, accounting or other professional fees and disbursements of any kind
incurred by such Party arising out of the negotiation, preparation or execution
of this Agreement and the consummation of the transactions contemplated hereby.
In the event that a dispute between the Parties is litigated, the prevailing
Party shall be entitled to a reimbursement of professional fees, disbursements
and direct expenses from the other Party.

               13.12. Remedy. The Parties hereto recognize that irrevocable
injury may result to one or more of such Parties in the event of a breach of
this Agreement and that the acceptance of this Agreement by all of the Parties
hereto was a material factor in each Party's decision to

                                       30

<PAGE>

enter into this Agreement and to consummate the transactions contemplated
herein. Each Party hereto agrees that if it engages in any acts in violation of
this Agreement, any other Party to this Agreement shall be entitled, in addition
to such other remedies and damages as may be available to such Party, in law or
equity, or otherwise, to a mandatory injunction compelling specific performance
of the offending Party's obligations hereunder.

               13.13. Cooperation. After the execution hereof, the Parties
hereto agree to execute and deliver such other instruments and take such other
actions as are reasonably necessary to carry out such transactions as intended
by the Parties hereto.

               13.14. Restriction on Sale of Subject Quotas. THE SUBJECT QUOTAS
SOLD AND PURCHASED PURSUANT TO THIS AGREEMENT WILL BE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER APPLICABLE SECURITIES LAWS. THE SUBJECT QUOTAS ALSO WILL BE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY CONTAINED IN THE ARTICLES OF
ASSOCIATION OF BELLELI.

                [Intentionally Left Blank-Signature Pages Follow]

                                       31

<PAGE>

               IN WITNESS WHEREOF, the Parties have executed this Agreement
effective as of the date first written above.

                                       SJMB, L.P.
                                       By: SJMB, L.L.C., its General Partner

                                       By: /s/ JOHN L. THOMPSON
                                          ------------------------------------
                                       Name: John L. Thompson
                                            ----------------------------------
                                       Title: CEO
                                             ---------------------------------

                                       John L. Thompson

                                        /s/ JOHN L. THOMPSON
                                       ---------------------------------------

                                       Charles E. Underbrink

                                        /s/ CHARLES E. UNDERBRINK
                                       ---------------------------------------

                                       HANOVER COMPRESSOR COMPANY

Signed September 20, 2002 /s/ CCD      By: /s/ CHAD C. DEATON
                                          ------------------------------------
                                       Name: Chad C. Deaton
                                            ----------------------------------
                                       Title: President and Chief Executive
                                              Officer
                                             ---------------------------------

                                       HANOVER COMPRESSION GENERAL
                                       HOLDINGS, LLC

                                       By: Hanover Compressor Company, its
                                       sole member

Signed September 20, 2002 /s/ CCD      By: /s/ CHAD C. DEATON
                                          ------------------------------------
                                       Name: Chad C. Deaton
                                            ----------------------------------
                                       Title: President
                                             ---------------------------------

                                       S-1

<PAGE>

                                       HANOVER COMPRESSION LIMITED
                                       PARTNERSHIP

                                       By: Hanover Compression General
                                       Holdings, LLC, its General Partner

                                       By: Hanover Compressor Company,
                                       its sole member

Signed September 20, 2002 /s/ CCD      By: /s/ CHAD C. DEATON
                                          ------------------------------------
                                       Name: Chad C. Deaton
                                            ----------------------------------
                                       Title: President and Chief Executive
                                              Officer
                                             ---------------------------------

                                       HANOVER COMPRESSOR HOLDING
                                       COMPANY NL B.V.

                                       By: /s/ W.P. RUOFF
                                          ------------------------------------
                                       Name: Equity Trust Co. N.V.
                                            ----------------------------------
                                       Title: Managing Director
                                             ---------------------------------

                                       S-2

<PAGE>

                                       HANOVER COMPRESSOR NIGERIA, INC.:

Signed September 20, 2002 /s/ JEJ      By: /s/ JOHN E. JACKSON
                                          ------------------------------------
                                       Name: John E. Jackson
                                            ----------------------------------
                                       Title: Vice President & Treasurer
                                             ---------------------------------

                                       HCC MANTOVA S.r.L.

Signed September 20, 2002 /s/ PGS   By: /s/ PETER G. SCHRECK
                                          ------------------------------------
                                       Name: Peter G. Schreck
                                            ----------------------------------
                                       Title: President and Sole Director
                                             ---------------------------------

                                       BELLELI ENERGY SrL

Signed September 20, 2002 /s/ ROP   By: /s/ ROBERT O. PIERCE
                                          -----------------------------------
                                       Name: Robert O. Pierce
                                            ----------------------------------
                                       Title: Chairman
                                             ---------------------------------

                                       S-3

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