Document:

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                                                                    Exhibit 10.6

             AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT

                                     made by

                           HANOVER COMPRESSOR COMPANY

                     HANOVER COMPRESSION LIMITED PARTNERSHIP

                        and certain of their Subsidiaries

                                   in favor of

                              JPMORGAN CHASE BANK,
                               as Collateral Agent

                          Dated as of January 31, 2003,
                 as amended and restated as of February 14, 2003

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                                Table of Contents
<TABLE>
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                                                                                               Page
                                                                                               ----
<S>                                                                                           <C>
SECTION 1.        DEFINED TERMS                                                                   2
  1.1      Definitions                                                                            2
  1.2      Other Definitional Provisions                                                          6

SECTION 2.        GUARANTEE                                                                       6
  2.1      Guarantee                                                                              6
  2.2      Right of Contribution                                                                  7
  2.3      No Subrogation                                                                         7
  2.4      Amendments, etc. with respect to HCC Obligations                                       7
  2.5      Guarantee Absolute and Unconditional                                                   8
  2.6      Reinstatement                                                                          9
  2.7      Payments                                                                               9

SECTION 3.        GRANT OF SECURITY INTEREST                                                      9

SECTION 4.        REPRESENTATIONS AND WARRANTIES                                                 10
  4.1      Title; No Other Liens                                                                 10
  4.2      Perfected First Priority Liens                                                        10
  4.3      Jurisdiction of Organization; Chief Executive Office                                  10
  4.4      [Intentionally Reserved]                                                              10
  4.5      Farm Products                                                                         11
  4.6      Investment Property                                                                   11
  4.7      Receivables                                                                           11
  4.8      Intellectual Property                                                                 11

SECTION 5.        COVENANTS                                                                      11
  5.1      Delivery of Instruments, Certificated Securities and Chattel Paper                    11
  5.2      Maintenance of Insurance                                                              12
  5.3      [Intentionally Reserved]                                                              12
  5.4      Maintenance of Perfected Security Interest; Further Documentation                     12
  5.5      Changes in Locations, Name, etc                                                       12
  5.6      Notices                                                                               13
  5.7      Investment Property                                                                   13
  5.8      Receivables                                                                           14
  5.9      Intellectual Property                                                                 14
  5.10     Vehicles                                                                              15

SECTION 6.        REMEDIAL PROVISIONS                                                            15
  6.1      Certain Matters Relating to Receivables                                               15
  6.2      Communications with Obligors; Grantors Remain Liable                                  15
  6.3      Pledged Stock                                                                         16
  6.4      Proceeds to be Turned Over To Collateral Agent                                        17
  6.5      Application of Proceeds                                                               17
  6.6      Code and Other Remedies                                                               17
  6.7      Private Sales                                                                         18
  6.8      Deficiency                                                                            18
</TABLE>

                                       i

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SECTION 7.        THE COLLATERAL AGENT                                     18
  7.1      Collateral Agent's Appointment as Attorney-in-Fact, etc         18
  7.2      Duty of Collateral Agent                                        20
  7.3      Execution of Financing Statements                               20
  7.4      Authority of Collateral Agent                                   20
  7.5      Appointment of Collateral Agent                                 20

SECTION 8.        MISCELLANEOUS                                            22
  8.1      Amendments in Writing                                           22
  8.2      Notices                                                         22
  8.3      No Waiver by Course of Conduct; Cumulative Remedies             23
  8.4      Enforcement Expenses; Indemnification                           23
  8.5      Successors and Assigns                                          23
  8.6      Set-Off                                                         23
  8.7      Counterparts                                                    24
  8.8      Severability                                                    24
  8.9      Section Headings                                                24
  8.10     Integration                                                     24
  8.11     GOVERNING LAW                                                   24
  8.12     Submission To Jurisdiction; Waivers                             24
  8.13     Acknowledgements                                                25
  8.14     Additional Grantors                                             25
  8.15     Releases                                                        25
  8.16     WAIVER OF JURY TRIAL                                            25

SCHEDULES

Schedule 1        Notice Addresses
Schedule 2        Perfection Matters
Schedule 3        Jurisdictions of Organization and Chief Executive Offices

                                       ii

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                       GUARANTEE AND COLLATERAL AGREEMENT

     GUARANTEE AND COLLATERAL AGREEMENT, dated as of January 31, 2003, as
amended and restated as of February 14, 2003, made by each of the signatories
hereto (together with any other entity that may become a party hereto as
provided herein, the "Grantors"), in favor of JPMorgan Chase Bank, as Collateral
Agent (in such capacity, the "Collateral Agent") for the Secured Parties (as
hereinafter defined)

                              W I T N E S S E T H:

     WHEREAS, certain of the Grantors and JPMorgan Chase Bank, as administrative
agent, are parties to the Guarantee and Collateral Agreement dated as of January
31, 2003 (the "Original Guarantee and Collateral Agreement");

     WHEREAS, the parties to the Original Guarantee and Collateral Agreement
desire to amend and restate the Original Guarantee and Collateral Agreement
pursuant to this Agreement in order to, among other things (i) include the
Synthetic Guarantee Obligations (as hereinafter defined) as obligations which
are secured and guaranteed hereunder and (ii) cause JPMorgan Chase Bank to agree
to act as collateral agent for the benefit of the Secured Parties (as
hereinafter defined);

     WHEREAS, pursuant to the Amendment dated as of January 31, 2003 the
Guarantors are required to enter into this Agreement on or before February 14,
2003;

     WHEREAS, Hanover Compressor Company ("Holdings") and Hanover Compression
Limited Partnership (formerly known as Hanover Compression Inc.) ("HCC") are
parties to the Transaction Documents (as hereinafter defined), pursuant to which
the Secured Parties have made extensions of credit to HCC upon the terms and
subject to the conditions set forth therein;

     WHEREAS, the Grantors have requested that the Secured Parties continue
making loans and other financial accommodations available to HCC;

     WHEREAS, Holdings is a member of an affiliated group of companies that
includes each other Grantor;

     WHEREAS, the proceeds of the extensions of credit under the Transaction
Documents have been and will continue to be used in part to enable HCC to make
valuable transfers to one or more of the other Grantors in connection with the
operation of their respective businesses;

     WHEREAS, HCC and the other Grantors are engaged in related businesses, and
each Grantor will derive substantial direct and indirect benefit from the
continued making of the extensions of credit under the Transaction Documents;
and

     NOW, THEREFORE, in consideration of the premises and to induce the
Collateral Agent and the Lenders to continue to make their respective extensions
of credit to HCC under the Transaction Documents and to satisfy the requirements
of the Amendment, the Original Guarantee and Collateral Agreement is hereby
amended and restated, as follows:

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                            SECTION 1. DEFINED TERMS

     1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the
Senior Credit Agreement are used herein as therein defined, and the following
terms are used herein as defined in the New York UCC: Accounts, Certificated
Security, Chattel Paper, Commercial Tort Claims, Documents, Equipment, Farm
Products, General Intangibles, Instruments, Inventory, Letter-of-Credit Rights
and Supporting Obligations.

     (b) The following terms shall have the following meanings:

          "Agreement": the Original Guarantee and Collateral Agreement, as
     amended and restated by this Guarantee and Collateral Agreement, as the
     same may be further amended, supplemented or otherwise modified from time
     to time.

          "Collateral": as defined in Section 3.

          "Collateral Account": any collateral account established by the
     Collateral Agent as provided in Section 6.1 or 6.4.

          "Copyrights": (i) all copyrights arising under the laws of the United
     States, any other country or any political subdivision thereof, whether
     registered or unregistered and whether published or unpublished, all
     registrations and recordings thereof, and all applications in connection
     therewith, including, without limitation, all registrations, recordings and
     applications in the United States Copyright Office, and (ii) the right to
     obtain all renewals thereof.

          "Copyright Licenses": any written agreement naming any Grantor as
     licensor or licensee, granting any right under any Copyright, including,
     without limitation, the grant of rights to manufacture, distribute, exploit
     and sell materials derived from any Copyright.

          "Event of Default": as defined n the Senior Credit Agreement.

          "Excluded Equipment Lease Property": any property or assets of any
     Grantor that is subject to a Lien that secures any Equipment Lease
     Transaction. Notwithstanding anything to the contrary contained herein, it
     is intended that the Excluded Equipment Lease Property shall in no event be
     pledged hereunder or required to be pledged hereunder as long as such
     Property secures an Equipment Lease Transaction.

          "Excluded Foreign Subsidiary Stock": any shares of Capital Stock of
     Foreign Subsidiaries exceeding 66% of the outstanding voting Capital Stock
     of each Foreign Subsidiary. Notwithstanding anything to the contrary
     contained herein, it is intended that such Excluded Foreign Subsidiary
     Stock shall in no event be pledged hereunder or required to be pledged
     hereunder.

          "Default": any default or event of default under any Transaction
     Document.

          "Deposit Account": as defined in the Uniform Commercial Code of any
     applicable jurisdiction and, in any event, including, without limitation,
     any demand, time, savings, passbook or like account maintained with a
     depositary institution.

          "Derivatives Agreements": any agreement entered into by Holdings or
     any of its Subsidiaries pursuant to Subsection 8.9 of the Senior Credit
     Agreement or pursuant to Subsection 11.9 of any Synthetic Guarantee.

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          "Event of Default": as defined in the Senior Credit Agreement.

          "Foreign Subsidiary": any Subsidiary organized under the laws of any
     jurisdiction outside the United States of America.

          "Foreign Subsidiary Voting Stock": the voting Capital Stock of any
     Foreign Subsidiary.

          "Guarantor Obligations": with respect to any Guarantor, all
     obligations and liabilities of such Guarantor which may arise under or in
     connection with this Agreement (including, without limitation, Section 2)
     or any other Loan Document (as defined in the Senior Credit Agreement) to
     which such Guarantor is a party, in each case whether on account of
     guarantee obligations, reimbursement obligations, fees, indemnities, costs,
     expenses or otherwise (including, without limitation, all fees and
     disbursements of counsel to the Collateral Agent or to the Secured Parties
     that are required to be paid by such Guarantor pursuant to the terms of
     this Agreement or any such Loan Document).

          "Guarantors": the collective reference to each Grantor other than HCC
     and Non-Guarantor Subsidiaries.

          "HCC Obligations": the collective reference to the unpaid principal of
     and interest on the Loans and Reimbursement Obligations under the Senior
     Credit Agreement and all other obligations and liabilities of HCC
     (including, without limitation, interest accruing at the then applicable
     rate provided in the Senior Credit Agreement after the maturity of the
     Loans and Reimbursement Obligations and interest accruing at the then
     applicable rate provided in the Senior Credit Agreement after the filing of
     any petition in bankruptcy, or the commencement of any insolvency,
     reorganization or like proceeding, relating to HCC, whether or not a claim
     for post-filing or post-petition interest is allowed in such proceeding) to
     the Administrative Agent or any Lender under the Senior Credit Agreement
     (or, in the case of any Derivatives Agreements, any Affiliate of any such
     Lender) whether direct or indirect, absolute or contingent, due or to
     become due, or now existing or hereafter incurred, which may arise under,
     out of, or in connection with, the Senior Credit Agreement, this Agreement,
     the other Loan Documents (as defined in the Senior Credit Agreement), any
     Letter of Credit, any Derivatives Agreements or any other document made,
     delivered or given in connection with any of the foregoing, in each case
     whether on account of principal, interest, reimbursement obligations, fees,
     indemnities, costs, expenses or otherwise (including, without limitation,
     all fees and disbursements of counsel to the Administrative Agent or to the
     Lenders that are required to be paid by HCC pursuant to the terms of any of
     the foregoing agreements).

          "Intellectual Property": the collective reference to all rights,
     priorities and privileges relating to intellectual property, whether
     arising under United States, multinational or foreign laws or otherwise,
     including, without limitation, the Copyrights, the Copyright Licenses, the
     Patents, the Patent Licenses, the Trademarks and the Trademark Licenses,
     and all rights to sue at law or in equity for any infringement or other
     impairment thereof, including the right to receive all proceeds and damages
     therefrom.

          "Intercompany Note": any promissory note evidencing loans made by any
     Grantor to Holdings or any of its Subsidiaries.

          "Investment Property": the collective reference to (i) all "investment
     property" as such term is defined in Section 9-102(a)(49) of the New York
     UCC (other than Excluded Foreign Subsidiary Stocks) and (ii) whether or not
     constituting "investment property" as so defined, all Pledged Notes and all
     Pledged Stock.

          "Issuers": the collective reference to each issuer of any Investment
     Property.

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          "New York UCC": the Uniform Commercial Code as from time to time in
     effect in the State of New York.

          "Obligations": (i) in the case of HCC and each Non-Guarantor
     Subsidiary, Secured Obligations, and (ii) in the case of each Guarantor,
     its Guarantor Obligations.

          "Non-Guarantor Subsidiary": each Subsidiary identified only as a
     Grantor on the signature pages hereto together with each Subsidiary which
     is required to execute this Agreement pursuant to subsection 7.10 of the
     Senior Credit Agreement or subsection 10.10 of each of the Synthetic
     Guarantees unless, in each case, (i) such Subsidiary has guaranteed payment
     of all or any portion of the Guarantee Obligations (as defined in the 2001A
     Participation Agreement and 2001B Participation Agreement) or (ii) such
     Subsidiary is requested to become a Guarantor by the Collateral Agent or
     the Required Secured Parties.

          "Participation Agreements": the 1999A Participation Agreement, the
     2000A Participation Agreement and the 2000B Participation Agreement (each a
     "Participation Agreement", and collectively, the "Participation
     Agreements")

          "Patents": (i) all letters patent of the United States, any other
     country or any political subdivision thereof, all reissues and extensions
     thereof and all goodwill associated therewith, (ii) all applications for
     letters patent of the United States or any other country and all divisions,
     continuations and continuations-in-part thereof, and (iii) all rights to
     obtain any reissues or extensions of the foregoing.

          "Patent License": all agreements, whether written or oral, providing
     for the grant by or to any Grantor of any right to manufacture, use or sell
     any invention covered in whole or in part by a Patent.

          "Pledged Notes": all Intercompany Notes at any time issued to any
     Grantor and all other promissory notes issued to or held by any Grantor
     (other than promissory notes issued in connection with extensions of trade
     credit by any Grantor in the ordinary course of business).

          "Pledged Stock": any shares, stock certificates, options, interests or
     rights of any nature whatsoever in respect of the Capital Stock of any
     Person that may be issued or granted to, or held by, any Grantor while this
     Agreement is in effect, but excluding the Excluded Foreign Subsidiary
     Stock.

          "Proceeds": all "proceeds" as such term is defined in Section
     9-102(a)(64) of the New York UCC and, in any event, shall include, without
     limitation, all dividends or other income from the Investment Property,
     collections thereon or distributions or payments with respect thereto.

          "Receivable": any right to payment for goods sold or leased or for
     services rendered, whether or not such right is evidenced by an Instrument
     or Chattel Paper and whether or not it has been earned by performance
     (including, without limitation, any Account).

          "Required Secured Parties": collectively, the Required Lenders (as
     defined in the Senior Credit Agreement) and the Required Lenders (as
     defined in Annex A to each of the Participation Agreements).

          "Secured Obligations": the collective reference to the HCC Obligations
     and the Synthetic Guarantee Obligations.

          "Secured Parties": the Senior Credit Agreement Lenders, the Synthetic
     Lease Lenders , the Investors (as defined in Annex A to each of the
     Participation Agreements), their respective affiliates

                                       4

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     and each other Person to whom HCC owes or may in the future owe a payment
     or performance obligation under the Synthetic Guarantees.

          "Securities Act": the Securities Act of 1933, as amended.

          "Senior Credit Agreement": the Credit Agreement, dated as of December
     15, 1997, as amended and restated on December 3, 2001 (as may be further
     amended, supplemented or otherwise modified from time to time), among
     Holdings, HCC, the banks and other financial institutions parties thereto
     from time to time (the "Senior Credit Agreement Lenders") and JPMorgan
     Chase Bank as administrative agent, and any credit agreement refinancing,
     refunding, replacing, or increasing the same, whether or not with the same
     parties.

          "Subsidary Guarantor": each Guarantor which is a Subsidiary of
     Holdings.

          "Synthetic Credit Agreements": the Credit Agreement dated as of June
     15, 1999 (as amended, supplemented or otherwise modified from time to
     time), among Hanover Equipment Trust 1999A, as borrower, the several
     lenders from time to time parties thereto (the "1999A Lenders"), the
     managing agents thereto and The Chase Manhattan Bank, as agent, (ii) the
     Credit Agreement dated as of March 13, 2000 (as amended, supplemented or
     otherwise modified from time to time), among Hanover Equipment Trust 2000A,
     as borrower, the several lenders from time to time parties thereto (the
     "2000A Lenders"), Industrial Bank of Japan, LTD., as syndication agent, The
     Bank of Nova Scotia, as documentation agent and The Chase Manhattan Bank,
     as agent and (iii) the Credit Agreement dated as of October 27, 2000 (as
     amended, supplemented or otherwise modified from time to time), among
     Hanover Equipment Trust 2000B, as borrower, the several lenders from time
     to time parties thereto (the "2000B Lenders, and together with the 1999A
     Lenders and the 2000A Lenders, the "Synthetic Lease Lenders"), National
     Westminster Bank PLC, as managing agent, Citibank, N.A., Credit Suisse
     First Boston and The Industrial Bank of Japan, Ltd., as co-agents and The
     Chase Manhattan Bank, as agent (each a "Synthetic Credit Agreement" and,
     collectively, the "Synthetic Credit Agreements").

          "Synthetic Guarantee Obligations": all obligations and liabilities of
     HCC (including, without limitation, interest accruing and the then
     applicable rate provided in the applicable Transaction Document after the
     maturity of any obligation guaranteed by a Synthetic Lease and interest
     accruing at the then applicable rate provided in the applicable Transaction
     Document after the filing of any petition in bankruptcy, or the
     commencement of any insolvency, reorganization or like proceeding, relating
     to HCC, whether or not a claim for post-filing or post-petition interest is
     allowed in such proceeding) to the Collateral Agent or any Secured Party
     under the Synthetic Guarantees, whether direct or indirect, absolute or
     contingent, due or to become due, or now existing or hereafter incurred,
     which may arise under, out of or in connection with the Synthetic
     Guarantees.

          "Synthetic Guarantees": (i) the Guarantee dated as of June 15, 1999
     (as amended and restated through March 13, 2000 and as further amended,
     supplemented or otherwise modified from time to time), made by Holdings,
     HCC, and certain of their subsidiaries listed on the signature pages, in
     favor of Hanover Equipment Trust 1999A, The Chase Manhattan Bank, as agent,
     and certain lenders and investors, (ii) the Guarantee dated as of March 13,
     2000 (as amended, supplemented or otherwise modified from time to time),
     made by Holdings, HCC and certain of their subsidiaries listed on the
     signature pages thereto, in favor of Hanover Equipment Trust 2000A, The
     Chase Manhattan Bank, as agent, and certain lenders and investors and (iii)
     the Guarantee dated as of October 27, 2000 (as amended, supplemented or
     otherwise modified from time to time), made by Holdings, HCC and certain of
     their subsidiaries listed on the signature pages thereto, in favor of
     Hanover Equipment Trust 2000B, The Chase Manhattan Bank, as agent, and
     certain lenders and investors (each a "Synthetic Guarantee" and,
     collectively, the "Synthetic Guarantees").

                                       5

<PAGE>

          "Trademarks": (i) all trademarks, trade names, corporate names,
     company names, business names, fictitious business names, trade styles,
     service marks, logos and other source or business identifiers, and all
     goodwill associated therewith, now existing or hereafter adopted or
     acquired, all registrations and recordings thereof, and all applications in
     connection therewith, whether in the United States Patent and Trademark
     Office or in any similar office or agency of the United States, any State
     thereof or any other country or any political subdivision thereof, or
     otherwise, and all common-law rights related thereto, and (ii) the right to
     obtain all renewals thereof.

          "Trademark License": any agreement, whether written or oral, providing
     for the grant by or to any Grantor of any right to use any Trademark.

          "Transaction Documents": the Senior Credit Agreement (and the Loan
     Documents as described and defined therein), the Synthetic Credit
     Agreements, the Synthetic Guarantees, each Lease (as defined in each
     Synthetic Guarantee), the Participation Agreements and the Derivatives
     Agreements, as the same may be amended from time to time.

          "Vehicles": all cars, trucks, trailers, construction and earth moving
     equipment and other vehicles covered by a certificate of title law of any
     state and all tires and other appurtenances to any of the foregoing.

     1.2 Other Definitional Provisions. (a) The words "hereof," "herein",
"hereto" 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, and Section and Schedule references are to this Agreement unless
otherwise specified.

     (b) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.

     (c) Where the context requires, terms relating to the Collateral or any
part thereof, when used in relation to a Grantor, shall refer to such Grantor's
Collateral or the relevant part thereof.

                              SECTION 2. GUARANTEE

     2.1 Guarantee. (a) This guarantee supplements the existing Holdings
Guarantee and the existing Subsidiaries Guarantee (each as defined in the Senior
Credit Agreement) and each of the Guarantees (as defined in Annex A to each of
the Participation Agreements). Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the Collateral Agent,
for the ratable benefit of the Secured Parties and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by HCC when due (whether at the stated maturity, by acceleration or
otherwise) of the Secured Obligations.

     (b) Anything herein or in any Transaction Document, Loan Document (as
defined in the Senior Credit Agreement) or Credit Document (as defined in Annex
A to each of the Participation Agreements) to the contrary notwithstanding, the
maximum liability of each Guarantor hereunder and under the other Transaction
Documents shall in no event exceed the amount which can be guaranteed by such
Guarantor under applicable federal and state laws relating to the insolvency of
debtors (after giving effect to the right of contribution established in Section
2.2).

     (c) Each Guarantor agrees that the Secured Obligations may at any time and
from time to time exceed the amount of the liability of such Guarantor hereunder
without impairing the guarantee

                                       6

<PAGE>

contained in this Section 2 or affecting the rights and remedies of the
Collateral Agent or any Secured Party hereunder.

     (d) The guarantee contained in this Section 2 shall remain in full force
and effect until all Secured Obligations and the obligations of each Guarantor
under the guarantee contained in this Section 2 shall have been satisfied by
payment in full, no Letter of Credit shall be outstanding and the Commitments
shall be terminated, notwithstanding that from time to time during the term of
the Transaction Documents HCC may be free from any Secured Obligations.

     (e) No payment made by HCC, any of the Guarantors, any other guarantor or
any other Person or received or collected by the Collateral Agent or any Secured
Party from HCC, any of the Guarantors, any other guarantor or any other Person
by virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
Secured Obligations shall be deemed to modify, reduce, release or otherwise
affect the liability of any Guarantor hereunder (other than any payment made by
such Person in respect of Secured Obligations or any payment received or
collected from such Person in respect of Secured Obligations). Each Guarantor
shall remain liable for the Secured Obligations up to the maximum liability of
such Guarantor hereunder until Secured Obligations are paid in full, no Letter
of Credit shall be outstanding and the Commitments are terminated

     2.2 Right of Contribution. Each Subsidiary Guarantor hereby agrees that to
the extent that a Subsidiary Guarantor shall have paid more than its
proportionate share of any payment made hereunder, such Subsidiary Guarantor
shall be entitled to seek and receive contribution from and against any other
Subsidiary Guarantor hereunder which has not paid its proportionate share of
such payment. Each Subsidiary Guarantor's right of contribution shall be subject
to the terms and conditions of Section 2.3. The provisions of this Section 2.2
shall in no respect limit the obligations and liabilities of any Subsidiary
Guarantor to the Collateral Agent and the Secured Parties, and each Subsidiary
Guarantor shall remain liable to the Collateral Agent and the Secured Parties
for the full amount guaranteed by such Subsidiary Guarantor hereunder.

     2.3 No Subrogation. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the
Collateral Agent or any Secured Party, no Guarantor shall be entitled to be
subrogated to any of the rights of the Collateral Agent or any Secured Party
against HCC or any other Guarantor or any collateral security or guarantee or
right of offset held by the Collateral Agent or any Secured Party for the
payment of Secured Obligations, nor shall any Guarantor seek or be entitled to
seek any contribution or reimbursement from HCC or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing to
the Collateral Agent and the Secured Parties by HCC on account of Secured
Obligations are paid in full, no Letter of Credit shall be outstanding and the
Commitments are terminated. If any amount shall be paid to any Guarantor on
account of such subrogation rights at any time when all of the Secured
Obligations shall not have been paid in full, such amount shall be held by such
Guarantor in trust for the Collateral Agent and the Secured Parties, segregated
from other funds of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Collateral Agent in the exact form received by
such Guarantor (duly indorsed by such Guarantor to the Collateral Agent, if
required), to be applied against Secured Obligations, whether matured or
unmatured, in such order as the Collateral Agent may determine.

     2.4 Amendments, etc. with respect to Secured Obligations. Each Guarantor
shall remain obligated hereunder notwithstanding that, without any reservation
of rights against any Guarantor and without notice to or further assent by any
Guarantor, any demand for payment of any of Secured Obligations made by the
Collateral Agent or any Secured Party may be rescinded by the Collateral Agent
or such Secured Party and any of the Secured Obligations continued, and Secured
Obligations, or the

                                       7

<PAGE>

liability of any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Collateral
Agent or any Secured Party, and the Transaction Documents, the other Loan
Documents (as defined in the Senior Credit Agreement) and the other Credit
Documents (as defined in Annex A to each of the Participation Agreements) and
any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the
Collateral Agent (or the Required Secured Parties or all Secured Parties, as the
case may be) may deem advisable from time to time, and any collateral security,
guarantee or right of offset at any time held by the Collateral Agent or any
Secured Party for the payment of the Secured Obligations may be sold, exchanged,
waived, surrendered or released. Neither the Collateral Agent nor any Secured
Party shall have any obligation to protect, secure, perfect or insure any Lien
at any time held by it as security for the Secured Obligations or for the
guarantee contained in this Section 2 or any property subject thereto.

     2.5 Guarantee Absolute and Unconditional. Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Secured
Obligations and notice of or proof of reliance by the Collateral Agent or any
Secured Party upon the guarantee contained in this Section 2 or acceptance of
the guarantee contained in this Section 2; the Secured Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 2; and all dealings between HCC and any of the
Guarantors, on the one hand, and the Collateral Agent and the Secured Parties,
on the other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon the guarantee contained in this Section 2. Each
Guarantor waives diligence, presentment, protest, demand for payment and notice
of default or nonpayment to or upon HCC or any of the Guarantors with respect to
the Secured Obligations. Each Guarantor understands and agrees that, to the
fullest extent permitted under applicable law, the guarantee contained in this
Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or enforceability of the
Transaction Documents or any other Loan Document (as defined in the Senior
Credit Agreement) or any other Credit Document (as defined in Annex A to each of
the Participation Agreements), any of the Secured Obligations or any other
collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Collateral Agent or any
Secured Party, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted by
HCC or any other Person against the Collateral Agent or any Secured Party, or
(c) any other circumstance whatsoever (with or without notice to or knowledge of
HCC or such Guarantor) which constitutes, or might be construed to constitute,
an equitable or legal discharge of HCC for the Secured Obligations, or of such
Guarantor under the guarantee contained in this Section 2, in bankruptcy or in
any other instance. When making any demand hereunder or otherwise pursuing its
rights and remedies hereunder against any Guarantor, the Collateral Agent or any
Secured Party may, but shall be under no obligation to, make a similar demand on
or otherwise pursue such rights and remedies as it may have against HCC, any
other Guarantor or any other Person or against any collateral security or
guarantee for the Secured Obligations or any right of offset with respect
thereto, and any failure by the Collateral Agent or any Secured Party to make
any such demand, to pursue such other rights or remedies or to collect any
payments from HCC, any other Guarantor or any other Person or to realize upon
any such collateral security or guarantee or to exercise any such right of
offset, or any release of HCC, any other Guarantor or any other Person or any
such collateral security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Collateral Agent or any Secured Party against any
Guarantor. For the purposes hereof "demand" shall include the commencement and
continuance of any legal proceedings.

                                       8

<PAGE>

     2.6 Reinstatement. The guarantee contained in this Section 2 shall continue
to be effective, or be reinstated, as the case may be, if at any time payment,
or any part thereof, of any of the Secured Obligations is rescinded or must
otherwise be restored or returned by the Collateral Agent or any Secured Party
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
HCC or any Guarantor, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, HCC or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payments had not been made.

     2.7 Payments. Each Guarantor hereby guarantees that payments hereunder will
be paid to the Collateral Agent without set-off or counterclaim in Dollars at
the Funding Office.

                     SECTION 3. GRANT OF SECURITY INTEREST

     Each Grantor hereby assigns and transfers to the Collateral Agent, and
hereby grants to the Collateral Agent, for the ratable benefit of the Secured
Parties, a security interest in, all of the following property now owned or at
any time hereafter acquired by such Grantor or in which such Grantor now has or
at any time in the future may acquire any right, title or interest
(collectively, the "Collateral"), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of such Grantor's Obligations,:

     (a) all Accounts;

     (b) all Chattel Paper;

     (c) all Deposit Accounts;

     (d) all Documents;

     (e) all Equipment;

     (f) all General Intangibles;

     (g) all Instruments;

     (h) all Intellectual Property;

     (i) all Inventory;

     (j) all Investment Property;

     (k) all Letter-of-Credit Rights;

     (l) all Vehicles and title documents with respect to Vehicles;

     (m) all other property not otherwise described above;

     (n) all books and records pertaining to the Collateral; and

     (o) to the extent not otherwise included, all Proceeds, Supporting
Obligations and products of any and all of the foregoing and all collateral
security and guarantees given by any Person with respect to any of the
foregoing;

                                       9

<PAGE>

     provided, however, that notwithstanding any of the other provisions set
forth in this Section 3, (i) this Agreement shall not constitute a grant of a
security interest in any property to the extent that such grant of a security
interest is prohibited by any Requirements of Law of a Governmental Authority,
requires a consent not obtained of any Governmental Authority pursuant to such
Requirement of Law or is prohibited by, or constitutes a breach or default under
or results in the termination of or requires any consent not obtained under, any
contract, license, agreement, instrument or other document evidencing or giving
rise to such property or, in the case of any Investment Property, Pledged Stock
or Pledged Note, any applicable shareholder or similar agreement, except to the
extent that such Requirement of Law or the term in such contract, license,
agreement, instrument or other document or shareholder or similar agreement
providing for such prohibition, breach, default or termination or requiring such
consent is ineffective under applicable law and (ii) the Collateral shall in no
event include the Excluded Foreign Subsidiary Stock or the Excluded Equipment
Lease Property.

                   SECTION 4. REPRESENTATIONS AND WARRANTIES

     To induce the Collateral Agent and the Secured Parties to continue to make
their respective extensions of credit to HCC under the Transaction Documents,
each Grantor hereby represents and warrants to the Collateral Agent and each
Secured Party that:

     4.1 Title; No Other Liens. Except for the security interest granted to the
Collateral Agent for the ratable benefit of the Secured Parties pursuant to this
Agreement and the other Liens permitted to exist on the Collateral by the Senior
Credit Agreement, (or, if the Senior Credit Agreement shall have been paid in
full or terminated, by the last version of the Senior Credit Agreement as in
effect immediately prior to such payment in full or termination) such Grantor
owns each item of the Collateral free and clear of any and all Liens or claims
of others. No financing statement or other public notice with respect to all or
any part of the Collateral is on file or of record in any public office, except
such as have been filed in favor of the Collateral Agent, for the ratable
benefit of the Secured Parties, pursuant to this Agreement or as are permitted
by the Senior Credit Agreement (or, if the Senior Credit Agreement shall have
been paid in full or terminated, by the last version of the Senior Credit
Agreement as in effect immediately prior to such payment in full or
termination).

     4.2 Perfected First Priority Liens. The security interests granted pursuant
to this Agreement (a) constitute valid perfected security interests (to the
extent that such perfection may be achieved through the filing of a Uniform
Commercial Code financing statement in the appropriate filing office) in all of
the Collateral in favor of the Collateral Agent, for the ratable benefit of the
Secured Parties, as collateral security for such Grantor's Obligations,
enforceable in accordance with the terms hereof against all creditors of such
Grantor and any Persons purporting to purchase any Collateral from such Grantor
and (b) are prior to all other Liens on the Collateral in existence on the date
hereof except for Liens permitted by the Senior Credit Agreement (or, if the
Senior Credit Agreement shall have been paid in full or terminated, by the last
version of the Senior Credit Agreement as in effect immediately prior to such
payment in full or termination) which have priority over the Liens on the
Collateral.

     4.3 Jurisdiction of Organization; Chief Executive Office. On the date
hereof, such Grantor's jurisdiction of organization, identification number from
the jurisdiction of organization (if any), and the location of such Grantor's
chief executive office or sole place of business or principal residence, as the
case may be, are specified on Schedule 3. Such Grantor has furnished to the
Collateral Agent a certified charter, certificate of incorporation or other
organization document and long-form good standing certificate as of a date which
is recent to the date hereof.

     4.4 [Intentionally Reserved]

                                       10

<PAGE>

     4.5 Farm Products. None of the Collateral constitutes, or is the Proceeds
of, Farm Products.

     4.6 Investment Property. (a) The shares of Pledged Stock pledged by such
Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor or, in the
case of Foreign Subsidiary Voting Stock, if less, 66% of the outstanding Foreign
Subsidiary Voting Stock of each relevant Issuer.

     (b) All the shares of the Pledged Stock have been duly and validly issued
and are fully paid and nonassessable.

     (c) Each of the Pledged Notes constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.

     (d) Such Grantor is the record and beneficial owner of, and has good and
marketable title to, the Investment Property pledged by it hereunder, free of
any and all Liens or options in favor of, or claims of, any other Person, except
(i) the security interest created by this Agreement, (ii) Liens permitted by
subsection 8.3(a) of the Senior Credit Agreement (or, if the Senior Credit
Agreement shall have been paid in full or terminated, by the last version of the
Senior Credit Agreement as in effect immediately prior to such payment in full
or termination), and (iii) encumbrances and minor irregularities of title that,
in the aggregate, are not substantial in amount and that in any case do not
materially detract from the value of such Investment Property.

     4.7 Receivables. The amounts represented by such Grantor to the Secured
Parties from time to time as owing to such Grantor in respect of the Receivables
will at such times be accurate in all material respects.

     4.8 Intellectual Property. (a) On the date hereof, all material
Intellectual Property is valid, subsisting, unexpired and enforceable, has not
been abandoned and does not infringe the intellectual property rights of any
other Person.

     (b) No holding, decision or judgment has been rendered by any Governmental
Authority which would limit, cancel or question the validity of, or such
Grantor's rights in, any Intellectual Property in any respect that could
reasonably be expected to have a Material Adverse Effect.

     (c) No action or proceeding is pending, or, to the knowledge of such
Grantor, threatened, on the date hereof (i) seeking to limit, cancel or question
the validity of any Intellectual Property or such Grantor's ownership interest
therein, or (ii) which, if adversely determined, would have a material adverse
effect on the value of any Intellectual Property.

                              SECTION 5. COVENANTS

     Each Grantor covenants and agrees with the Collateral Agent and the Secured
Parties that, from and after the date of this Agreement until the Obligations
shall have been paid in full, no Letter of Credit shall be outstanding and the
Commitments shall have terminated:

     5.1 Delivery of Instruments, Certificated Securities and Chattel Paper. If
any amount payable under or in connection with any of the Collateral shall be or
become evidenced by any Instrument, Certificated Security or Chattel Paper,
such Instrument, Certificated Security or Chattel Paper

                                       11

<PAGE>

shall, if requested by the Collateral Agent or the Required Secured Parties, be
promptly delivered to the Collateral Agent, duly indorsed in a manner
satisfactory to the Collateral Agent, to be held as Collateral pursuant to this
Agreement.

     5.2 Maintenance of Insurance. (a) Such Grantor will maintain, with
financially sound and reputable companies, insurance policies insuring such
Grantor, the Collateral Agent and the Secured Parties against liability for
personal injury and property damage relating to such Inventory, Equipment and
Vehicles, such policies to be in such form and amounts and having such coverage
as may be reasonably satisfactory to the Collateral Agent and the Secured
Parties.

     (b) All such insurance shall (i) provide that no cancellation, material
reduction in amount or material change in coverage thereof shall be effective
until at least 30 days after receipt by the Collateral Agent of written notice
thereof, (ii) name the Collateral Agent as insured party or loss payee, and
(iii) be reasonably satisfactory in all other respects to the Collateral Agent.

     5.3 [Intentionally Reserved]

     5.4 Maintenance of Perfected Security Interest; Further Documentation. (a)
Such Grantor shall maintain the security interest created by this Agreement as a
perfected security interest (it being agreed that, unless other means of
perfection have been requested by the Collateral Agent or the Required Secured
Parties, such perfected security interest is only to the extent that perfection
may be achieved through the filing of a Uniform Commercial Code financing
statement in the appropriate filing office) having at least the priority
described in Section 4.2 and shall defend such security interest against the
claims and demands of all Persons whomsoever, subject to the rights of such
Grantor under the Transaction Documents to dispose of the Collateral.

     (b) Such Grantor will furnish to the Collateral Agent and the Secured
Parties from time to time statements and schedules further identifying and
describing the assets and property of such Grantor and such other reports in
connection therewith as the Collateral Agent may reasonably request, all in
reasonable detail.

     (c) At any time and from time to time, upon the written request of the
Collateral Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Collateral Agent
may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, (i) filing any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby and
(ii) in the case of Investment Property, Deposit Accounts, Letter-of-Credit
Rights and any other relevant Collateral, taking any actions necessary to enable
the Collateral Agent to obtain "control" (within the meaning of the applicable
Uniform Commercial Code) with respect thereto.

     (d) Notwithstanding any other provision of the Transaction Documents to the
contrary, the Grantors shall not be required to take any action to perfect the
security interests created hereunder except for filing of properly completed
Uniform Commercial Code financing statements in appropriate filing offices
unless otherwise requested by the Collateral Agent or the Required Secured
Parties.

     5.5 Changes in Locations, Name, etc. Such Grantor will not, except upon 15
days' prior written notice to the Collateral Agent and delivery to the
Collateral Agent of all additional executed

                                       12

<PAGE>

financing statements and other documents reasonably requested by the Collateral
Agent to maintain the validity, perfection and priority of the security
interests provided for herein:

          (i) change its jurisdiction of organization or the location of its
     chief executive office or sole place of business or principal residence
     from that referred to in Section 4.3; or

          (ii) change its name.

     5.6 Notices. Such Grantor will advise the Collateral Agent and the Secured
Parties promptly, in reasonable detail, of any Lien (other than security
interests created hereby or Liens permitted under the Senior Credit Agreement
(or, if the Senior Credit Agreement shall have been paid in full or terminated,
by the last version of the Senior Credit Agreement as in effect immediately
prior to such payment in full or termination)) on any of the Collateral which
would adversely affect the ability of the Collateral Agent to exercise any of
its remedies hereunder.

     5.7 Investment Property. (a) If such Grantor shall become entitled to
receive or shall receive any certificate (including, without limitation, any
certificate representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the Capital
Stock of any Issuer, whether in addition to, in substitution of, as a conversion
of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect
thereof, such Grantor shall, if requested by the Collateral Agent or the
Required Secured Parties, accept the same as the agent of the Collateral Agent
and the Secured Parties, hold the same in trust for the Collateral Agent and the
Secured Parties and deliver the same forthwith to the Collateral Agent in the
exact form received, duly indorsed by such Grantor to the Collateral Agent, if
required, together with an undated stock power covering such certificate duly
executed in blank by such Grantor and with, if the Collateral Agent so requests,
signature guaranteed, to be held by the Collateral Agent, subject to the terms
hereof, as additional collateral security for the Obligations. Any sums paid
upon or in respect of the Investment Property upon the liquidation or
dissolution of any Issuer shall be paid over to the Collateral Agent to be held
by it hereunder as additional collateral security for the Obligations, and in
case any distribution of capital shall be made on or in respect of the
Investment Property or any property shall be distributed upon or with respect to
the Investment Property pursuant to the recapitalization or reclassification of
the capital of any Issuer or pursuant to the reorganization thereof, the
property so distributed shall, unless otherwise subject to a perfected security
interest in favor of the Collateral Agent, if requested by the Collateral Agent
or the Required Secured Parties, be delivered to the Collateral Agent to be held
by it hereunder as additional collateral security for the Obligations. If any
sums of money or property so paid or distributed in respect of the Investment
Property shall be received by such Grantor, such Grantor shall, until such money
or property is paid or delivered to the Collateral Agent, if requested by the
Collateral Agent or the Required Secured Parties, hold such money or property in
trust for the Collateral Agent and the Secured Parties, segregated from other
funds of such Grantor, as additional collateral security for the Obligations.

     (b) Without the prior written consent of the Collateral Agent, such Grantor
will not (i) sell, assign, transfer, exchange, or otherwise dispose of, or grant
any option with respect to, the Investment Property or Proceeds thereof (except
pursuant to a transaction expressly permitted by the Transaction Documents),
(ii) create, incur or permit to exist any Lien or option in favor of, or any
claim of any Person with respect to, any of the Investment Property or Proceeds
thereof, or any interest therein, except for the security interests created by
this Agreement or (iii) enter into any agreement or undertaking restricting the
right or ability of such Grantor or the Collateral Agent to sell, assign or
transfer any of the Investment Property or Proceeds thereof.

                                       13

<PAGE>

     (c) In the case of each Grantor which is an Issuer, such Issuer agrees that
(i) it will be bound by the terms of this Agreement relating to the Investment
Property issued by it and will comply with such terms insofar as such terms are
applicable to it and (ii) the terms of Sections 6.3(c) and 6.7(b) shall apply to
it, mutatis mutandis, with respect to all actions that may be required of it
pursuant to Section 6.3(c) or 6.7(b) with respect to the Investment Property
issued by it.

     5.8 Receivables. Other than in the ordinary course of business, such
Grantor will not (i) grant any extension of the time of payment of any
Receivable, (ii) compromise or settle any Receivable for less than the full
amount thereof, (iii) release, wholly or partially, any Person liable for the
payment of any Receivable, (iv) allow any credit or discount whatsoever on any
Receivable or (v) amend, supplement or modify any Receivable in any manner that
could adversely affect the value thereof.

     5.9 Intellectual Property. (a) Such Grantor (either itself or through
licensees) will not (and not permit any licensee or sublicensee thereof to) do
any act or knowingly omit to do any act whereby any material Trademark may
become invalidated or impaired in any material way.

     (b) Such Grantor (either itself or through licensees) will not do any act,
or omit to do any act, whereby any material Patent may become forfeited,
abandoned or dedicated to the public.

     (c) Such Grantor (either itself or through licensees) will not (and will
not permit any licensee or sublicensee thereof to) do any act or knowingly omit
to do any act whereby any material portion of the Copyrights may become
invalidated or otherwise materially impaired. Such Grantor will not (either
itself or through licensees) do any act whereby any material portion of the
Copyrights may fall into the public domain.

     (d) Such Grantor (either itself or through licensees) will not do any act
that knowingly uses any material Intellectual Property to infringe, in any
material way, the intellectual property rights of any other Person.

     (e) Such Grantor will notify the Collateral Agent and the Secured Parties
promptly if it knows, or has reason to know, that any application or
registration relating to any material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any material and adverse
determination or development (including, without limitation, the institution of,
or any such determination or development in, any proceeding in the United States
Patent and Trademark Office, the United States Copyright Office or any court or
tribunal in any country) regarding such Grantor's ownership of, or the validity
of, any material Intellectual Property or such Grantor's right to register the
same or to own and maintain the same.

     (f) Whenever such Grantor, either by itself or through any agent, employee,
licensee or designee, shall file an application for the registration of any
Intellectual Property with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, such Grantor shall, if so
requested by the Collateral Agent, report such filing to the Collateral Agent
within five Business Days after the last day of the fiscal quarter in which such
filing occurs. Upon request of the Collateral Agent, such Grantor shall execute
and deliver, and have recorded, any and all agreements, instruments, documents,
and papers as the Collateral Agent may request to evidence the Collateral
Agent's and the Secured Parties' security interest in any Copyright, Patent or
Trademark and the goodwill and general intangibles of such Grantor relating
thereto or represented thereby.

     (g) Such Grantor will take all reasonable and necessary steps, including,
without limitation, in any proceeding before the United States Patent and
Trademark Office, the United States Copyright

                                       14

<PAGE>

Office or any similar office or agency in any other country or any political
subdivision thereof, to maintain and pursue each application (and to obtain the
relevant registration) and to maintain each registration of the material
Intellectual Property, including, without limitation, filing of applications for
renewal, affidavits of use and affidavits of incontestability.

     (h) In the event that any material Intellectual Property is infringed,
misappropriated or diluted by a third party, such Grantor shall (i) take such
actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Collateral Agent after a Responsible Officer of such Grantor learns thereof and
sue for infringement, misappropriation or dilution, to seek injunctive relief
where appropriate and to recover any and all damages for such infringement,
misappropriation or dilution.

     5.10 Vehicles. No Grantor shall be required to take any action to perfect
any security interest in Vehicles created pursuant to this Agreement.

                         SECTION 6. REMEDIAL PROVISIONS

     6.1 Certain Matters Relating to Receivables. (a) The Collateral Agent
hereby authorizes each Grantor to collect such Grantor's Receivables, and the
Collateral Agent may curtail or terminate said authority at any time after the
occurrence and during the continuance of an Event of Default. If required by the
Collateral Agent at any time after the occurrence and during the continuance of
an Event of Default, any payments of Receivables, when collected by any Grantor,
(i) shall be forthwith (and, in any event, within two Business Days) deposited
by such Grantor in the exact form received, duly indorsed by such Grantor to the
Collateral Agent if required, in a Collateral Account maintained under the sole
dominion and control of the Collateral Agent, subject to withdrawal by the
Collateral Agent for the account of the Secured Parties only as provided in
Section 6.5, and (ii) until so turned over, shall be held by such Grantor in
trust for the Collateral Agent and the Secured Parties, segregated from other
funds of such Grantor. Each such deposit of Proceeds of Receivables shall be
accompanied by a report identifying in reasonable detail the nature and source
of the payments included in the deposit.

     (b) At the Collateral Agent's request after the occurrence and during the
continuance of an Event of Default, each Grantor shall deliver to the Collateral
Agent all original and other documents evidencing, and relating to, the
agreements and transactions which gave rise to the Receivables, including,
without limitation, all original orders, invoices and shipping receipts.

     6.2 Communications with Obligors; Grantors Remain Liable. (a) The
Collateral Agent in its own name or in the name of others may at any time after
the occurrence and during the continuance of an Event of Default communicate
with obligors under the Receivables to verify with them to the Collateral
Agent's satisfaction the existence, amount and terms of any Receivables.

     (b) Upon the request of the Collateral Agent at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
notify obligors on the Receivables that the Receivables have been assigned to
the Collateral Agent for the ratable benefit of the Secured Parties and that
payments in respect thereof shall be made directly to the Collateral Agent.

     (c) Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under each of the Receivables to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto. Neither the
Collateral Agent nor any Secured Party shall have any obligation or liability
under any Receivable (or any agreement giving rise thereto) by reason of or
arising out of this Agreement or the receipt by the

                                       15

<PAGE>

Collateral Agent or any Secured Party of any payment relating thereto, nor shall
the Collateral Agent or any Secured Party be obligated in any manner to perform
any of the obligations of any Grantor under or pursuant to any Receivable (or
any agreement giving rise thereto), to make any payment, to make any inquiry as
to the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party thereunder, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.

     6.3 Pledged Stock. (a) Unless an Event of Default shall have occurred and
be continuing and the Collateral Agent shall have given notice to the relevant
Grantor of the Collateral Agent's intent to exercise its corresponding rights
pursuant to Section 6.3(b), each Grantor shall be permitted to receive all cash
dividends paid in respect of the Pledged Stock and all payments made in respect
of the Pledged Notes, in each case paid in the normal course of business of the
relevant Issuer, to the extent permitted in the Senior Credit Agreement (or, if
the Senior Credit Agreement shall have been paid in full or terminated, by the
last version of the Senior Credit Agreement as in effect immediately prior to
such payment in full or termination), and to exercise all voting and corporate
or other organizational rights with respect to the Investment Property;
provided, however, that no vote shall be cast or corporate or other
organizational right exercised or other action taken which would be inconsistent
with or result in any violation of any provision of the Transaction Documents,
this Agreement or any other Loan Document (as defined in the Senior Credit
Agreement) or any other Credit Documents (as defined in Annex A to each of the
Participation Agreements).

     (b) If an Event of Default shall occur and be continuing and the Collateral
Agent shall give notice of its intent to exercise such rights to the relevant
Grantor or Grantors, (i) the Collateral Agent shall have the right to receive
any and all cash dividends, payments or other Proceeds paid in respect of the
Investment Property and make application thereof to the Obligations in such
order as the Collateral Agent may determine, and (ii) any or all of the
Investment Property shall be registered in the name of the Collateral Agent or
its nominee, and the Collateral Agent or its nominee may thereafter exercise (x)
all voting, corporate and other rights pertaining to such Investment Property at
any meeting of shareholders of the relevant Issuer or Issuers or otherwise and
(y) any and all rights of conversion, exchange and subscription and any other
rights, privileges or options pertaining to such Investment Property as if it
were the absolute owner thereof (including, without limitation, the right to
exchange at its discretion any and all of the Investment Property upon the
merger, consolidation, reorganization, recapitalization or other fundamental
change in the corporate or other organizational structure of any Issuer, or upon
the exercise by any Grantor or the Collateral Agent of any right, privilege or
option pertaining to such Investment Property, and in connection therewith, the
right to deposit and deliver any and all of the Investment Property with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Collateral Agent may determine), all without
liability except to account for property actually received by it, but the
Collateral Agent shall have no duty to any Grantor to exercise any such right,
privilege or option and shall not be responsible for any failure to do so or
delay in so doing.

     (c) Each Grantor hereby authorizes and instructs each Issuer of any
Investment Property pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the Collateral Agent in writing that (x) states
that an Event of Default has occurred and is continuing and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Investment Property directly to the Collateral Agent.

                                       16

<PAGE>

     6.4 Proceeds to be Turned Over To Collateral Agent. In addition to the
rights of the Collateral Agent and the Secured Parties specified in Section 6.1
with respect to payments of Receivables, if an Event of Default shall occur and
be continuing, all Proceeds received by any Grantor consisting of cash, checks
and other near-cash items shall be held by such Grantor in trust for the
Collateral Agent and the Secured Parties, segregated from other funds of such
Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to
the Collateral Agent in the exact form received by such Grantor (duly indorsed
by such Grantor to the Collateral Agent, if required). All Proceeds received by
the Collateral Agent hereunder shall be held by the Collateral Agent in a
Collateral Account maintained under its sole dominion and control. All Proceeds
while held by the Collateral Agent in a Collateral Account (or by such Grantor
in trust for the Collateral Agent and the Secured Parties) shall continue to be
held as collateral security for all the Obligations and shall not constitute
payment thereof until applied as provided in Section 6.5.

     6.5 Application of Proceeds. At such intervals as may be agreed upon by HCC
and the Collateral Agent, or, if an Event of Default shall have occurred and be
continuing, at any time at the Collateral Agent's election, the Collateral Agent
may apply all or any part of Proceeds constituting Collateral, whether or not
held in any Collateral Account, in payment of the Obligations in such order as
the Collateral Agent may elect, and any part of such funds which the Collateral
Agent elects not so to apply and deems not required as collateral security for
the Obligations shall be paid over from time to time by the Collateral Agent to
HCC or to whomsoever may be lawfully entitled to receive the same. Any balance
of such Proceeds remaining after the Obligations shall have been paid in full,
no Letters of Credit shall be outstanding and the Commitments shall have
terminated shall be paid over to HCC or to whomsoever may be lawfully entitled
to receive the same.

     6.6 Code and Other Remedies. If an Event of Default shall occur and be
continuing, the Collateral Agent, on behalf of the Secured Parties, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the New York UCC or any other applicable law. Without limiting the generality of
the foregoing, the Collateral Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to do any
of the foregoing), in one or more parcels at public or private sale or sales, at
any exchange, broker's board or office of the Collateral Agent or any Secured
Party or elsewhere upon such terms and conditions as it may deem advisable and
at such prices as it may deem best, for cash or on credit or for future delivery
without assumption of any credit risk. The Collateral Agent or any Secured Party
shall have the right upon any such public sale or sales, and, to the extent
permitted by law, upon any such private sale or sales, to purchase the whole or
any part of the Collateral so sold, free of any right or equity of redemption in
any Grantor, which right or equity is hereby waived and released. Each Grantor
further agrees, at the Collateral Agent's request, to assemble the Collateral
and make it available to the Collateral Agent at places which the Collateral
Agent shall reasonably select, whether at such Grantor's premises or elsewhere.
The Collateral Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 6.6, after deducting all reasonable costs and expenses
of every kind incurred in connection therewith or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or
the rights of the Collateral Agent and the Secured Parties hereunder, including,
without limitation, reasonable attorneys' fees and disbursements, to the payment
in whole or in part of the Obligations, in such order as the Collateral Agent
may elect, and only after such application and after the payment by the
Collateral Agent of any other amount required by any provision of law,
including, without limitation, Section 9-615(a)(3) of the New York UCC, need

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<PAGE>

the Collateral Agent account for the surplus, if any, to any Grantor. To the
extent permitted by applicable law, each Grantor waives all claims, damages and
demands it may acquire against the Collateral Agent or any Secured Party arising
out of the exercise by them of any rights hereunder. If any notice of a proposed
sale or other disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least 10 days before such sale
or other disposition.

     6.7 Private Sales. (a) Each Grantor recognizes that the Collateral Agent
may be unable to effect a public sale of any or all the Pledged Stock, by reason
of certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Collateral
Agent shall be under no obligation to delay a sale of any of the Pledged Stock
for the period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.

     (b) Each Grantor agrees to use its best efforts to do or cause to be done
all such other acts as may be necessary to make such sale or sales of all or any
portion of the Pledged Stock pursuant to this Section 6.7 valid and binding and
in compliance with any and all other applicable Requirements of Law. Each
Grantor further agrees that a breach of any of the covenants contained in this
Section 6.7 will cause irreparable injury to the Collateral Agent and the
Secured Parties, that the Collateral Agent and the Secured Parties have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 6.7 shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under the
Senior Credit Agreement.

     6.8 Deficiency. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Obligations and the fees and disbursements of any attorneys employed by
the Collateral Agent or any Secured Party to collect such deficiency.

                        SECTION 7. THE COLLATERAL AGENT

     7.1 Collateral Agent's Appointment as Attorney-in-Fact, etc. (a) Each
Grantor hereby irrevocably constitutes and appoints the Collateral Agent and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Grantor and in the name of such Grantor or in its own name,
for the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Grantor hereby gives the
Collateral Agent the power and right, on behalf of such Grantor, without notice
to or assent by such Grantor, to do any or all of the following:

          (i) in the name of such Grantor or its own name, or otherwise, take
     possession of and indorse and collect any checks, drafts, notes,
     acceptances or other instruments for the payment of moneys due under any
     Receivable or with respect to any other Collateral and file any claim or
     take any other action or proceeding in any court of law or equity or
     otherwise deemed appropriate by the Collateral

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<PAGE>

     Agent for the purpose of collecting any and all such moneys due under any
     Receivable or with respect to any other Collateral whenever payable;

          (ii) in the case of any Intellectual Property, execute and deliver,
     and have recorded, any and all agreements, instruments, documents and
     papers as the Collateral Agent may request to evidence the Collateral
     Agent's and the Secured Partys' security interest in such Intellectual
     Property and the goodwill and general intangibles of such Grantor relating
     thereto or represented thereby;

          (iii) pay or discharge taxes and Liens levied or placed on or
     threatened against the Collateral, effect any repairs or any insurance
     called for by the terms of this Agreement and pay all or any part of the
     premiums therefor and the costs thereof;

          (iv) execute, in connection with any sale provided for in Section 6.6
     or 6.7, any indorsements, assignments or other instruments of conveyance or
     transfer with respect to the Collateral; and

          (v) (1) direct any party liable for any payment under any of the
     Collateral to make payment of any and all moneys due or to become due
     thereunder directly to the Collateral Agent or as the Collateral Agent
     shall direct; (2) ask or demand for, collect, and receive payment of and
     receipt for, any and all moneys, claims and other amounts due or to become
     due at any time in respect of or arising out of any Collateral; (3) sign
     and indorse any invoices, freight or express bills, bills of lading,
     storage or warehouse receipts, drafts against debtors, assignments,
     verifications, notices and other documents in connection with any of the
     Collateral; (4) commence and prosecute any suits, actions or proceedings at
     law or in equity in any court of competent jurisdiction to collect the
     Collateral or any portion thereof and to enforce any other right in respect
     of any Collateral; (5) defend any suit, action or proceeding brought
     against such Grantor with respect to any Collateral; (6) settle, compromise
     or adjust any such suit, action or proceeding and, in connection therewith,
     give such discharges or releases as the Collateral Agent may deem
     appropriate; (7) assign any Copyright, Patent or Trademark (along with the
     goodwill of the business to which any such Copyright, Patent or Trademark
     pertains), throughout the world for such term or terms, on such conditions,
     and in such manner, as the Collateral Agent shall in its sole discretion
     determine; and (8) generally, sell, transfer, pledge and make any agreement
     with respect to or otherwise deal with any of the Collateral as fully and
     completely as though the Collateral Agent were the absolute owner thereof
     for all purposes, and do, at the Collateral Agent's option and such
     Grantor's expense, at any time, or from time to time, all acts and things
     which the Collateral Agent deems necessary to protect, preserve or realize
     upon the Collateral and the Collateral Agent's and the Secured Partys'
     security interests therein and to effect the intent of this Agreement, all
     as fully and effectively as such Grantor might do.

     Anything in this Section 7.1(a) to the contrary notwithstanding, the
Collateral Agent agrees that it will not exercise any rights under the power of
attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.

     (b) If any Grantor fails to perform or comply with any of its agreements
contained herein, the Collateral Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.

     (c) The expenses of the Collateral Agent incurred in connection with
actions undertaken as provided in this Section 7.1, together with interest
thereon at a rate per annum equal to the highest rate per annum at which
interest would then be payable on any category of past due ABR Loans under the
Senior Credit Agreement (or, if the Senior Credit Agreement shall have been paid
in full or terminated, by the last version of the Senior Credit Agreement as in
effect immediately prior to such payment in full or

                                       19

<PAGE>

termination), from the date of payment by the Collateral Agent to the date
reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Collateral Agent on demand.

     (d) Each Grantor hereby ratifies all that said attorneys shall lawfully do
or cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.

     7.2 Duty of Collateral Agent. The Collateral Agent's sole duty with respect
to the custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the New York UCC or otherwise, shall be to
deal with it in the same manner as the Collateral Agent deals with similar
property for its own account. Neither the Collateral Agent, any Secured Party
nor any of their respective officers, directors, employees or agents shall be
liable for failure to demand, collect or realize upon any of the Collateral or
for any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of any Grantor or any other Person or
to take any other action whatsoever with regard to the Collateral or any part
thereof. The powers conferred on the Collateral Agent and the Secured Parties
hereunder are solely to protect the Collateral Agent's and the Secured Partys'
interests in the Collateral and shall not impose any duty upon the Collateral
Agent or any Secured Party to exercise any such powers. The Collateral Agent and
the Secured Parties shall be accountable only for amounts that they actually
receive as a result of the exercise of such powers, and neither they nor any of
their officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.

     7.3 Execution of Financing Statements. Pursuant to any applicable law, each
Grantor authorizes the Collateral Agent to file or record financing statements
and other filing or recording documents or instruments with respect to the
Collateral without the signature of such Grantor in such form and in such
offices as the Collateral Agent determines appropriate to perfect the security
interests of the Collateral Agent under this Agreement. Each Grantor authorizes
the Collateral Agent to use the collateral description "all personal property"
in any such financing statements. Each Grantor hereby ratifies and authorizes
the filing by the Collateral Agent of any financing statement with respect to
the Collateral made prior to the date hereof.

     7.4 Authority of Collateral Agent. Each Grantor acknowledges that the
rights and responsibilities of the Collateral Agent under this Agreement with
respect to any action taken by the Collateral Agent or the exercise or
non-exercise by the Collateral Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Collateral Agent and the Secured
Parties, be governed by the Transaction Documents and by such other agreements
with respect thereto as may exist from time to time among them, but, as between
the Collateral Agent and the Grantors, the Collateral Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.

     7.5 Appointment of Collateral Agent. (a) Each Secured Party hereby
irrevocably appoints the Collateral Agent as its agent and authorizes the
Collateral Agent to take such actions on its behalf and to exercise such powers
as are delegated to the Collateral Agent by the terms hereof, together with such
actions and powers as are reasonably incidental thereto.

     (b) The bank serving as the Collateral Agent hereunder shall have the same
rights and powers in its capacity as a Secured Party as any other Secured Party
and may exercise the same as though it were not the Collateral Agent, and such
bank and its Affiliates may accept deposits from, lend money to

                                       20

<PAGE>

and generally engage in any kind of business with Holdings or any of its
Subsidiaries as if it were not the Collateral Agent hereunder.

     (c) The Collateral Agent shall not have any duties or obligations except
those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Collateral Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Collateral Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Collateral Agent is
required to exercise in writing as directed by the Required Secured Parties (or
such other number or percentage of the Secured Parties as shall be necessary
under the circumstances as provided in Section 8.1), and (c) except as expressly
set forth herein, the Collateral Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to
Holdings or any of its Subsidiaries that is communicated to or obtained by the
bank serving as Collateral Agent or any of its Affiliates in any capacity. The
Collateral Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Secured Parties (or such
other number or percentage of the Secured Parties as shall be necessary under
the circumstances as provided in Section 8.1) or in the absence of its own gross
negligence or willful misconduct. The Collateral Agent shall be deemed not to
have knowledge of any Default unless and until written notice thereof is given
to the Collateral Agent by HCC or a Secured Party, and the Collateral Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with this
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or (iv) the validity, enforceability, effectiveness or genuineness
of this Agreement or any other agreement, instrument or document.

     (d) The Collateral Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Collateral Agent also
may rely upon any statement made to it orally or by telephone and believed by it
to be made by the proper Person, and shall not incur any liability for relying
thereon. The Collateral Agent may consult with legal counsel (who may be counsel
for HCC), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

     (e) The Collateral Agent may perform any and all its duties and exercise
its rights and powers by or through any one or more sub-agents appointed by the
Collateral Agent. The Collateral Agent and any such sub-agent may perform any
and all its duties and exercise its rights and powers through their respective
Affiliates. The exculpatory provisions of the preceding paragraphs shall apply
to any such sub-agent and to the Affiliates of the Collateral Agent and any such
sub-agent in connection with its activities as Collateral Agent.

     (f) Subject to the appointment and acceptance of a successor Collateral
Agent as provided in this paragraph, the Collateral Agent may resign at any time
by notifying the Secured Parties and HCC. Upon any such resignation, the
Required Secured Parties shall have the right, to appoint a successor, which
successor shall be subject to the approval of HCC (such approval not to be
unreasonably withheld or delayed). If no successor shall have been so appointed
by the Required Secured Parties and shall have accepted such appointment within
30 days after the retiring Collateral Agent gives notice of its resignation,
then the retiring Collateral Agent may, on behalf of the Secured Parties,
appoint a successor Collateral Agent which shall be a bank with an office in New
York, New York, or an Affiliate of any such bank, which successor shall be
subject to the approval of HCC (such approval not to be unreasonably withheld or
delayed). Upon the acceptance of its appointment as Collateral Agent hereunder
by a

                                       21

<PAGE>

successor and the approval of HCC as required above, such successor shall
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Collateral Agent, and the retiring Collateral Agent shall be
discharged from its duties and obligations hereunder. After the Collateral
Agent's resignation hereunder, the provisions of this Article and Section 7.5
hereof shall continue in effect for the benefit of such retiring Collateral
Agent, its sub-agents and their respective Affiliates in respect of any actions
taken or omitted to be taken by any of them while it was acting as Collateral
Agent.

     (g) Each Secured Party acknowledges that it has, independently and without
reliance upon the Collateral Agent or any other Secured Party and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Secured Party also
acknowledges that it will, independently and without reliance upon the
Collateral Agent or any other Secured Party and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any related agreement or any document furnished hereunder or thereunder.

     (h) Each Secured Party, by accepting the benefits of this Agreement, agrees
to indemnify the Collateral Agent in its capacity as such (to the extent not
reimbursed by HCC, or the other Grantors and without limiting the obligation of
HCC and each other Grantor to do so), ratably according to the respective
amounts of the Secured Obligations owed to such Secured Party, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time (including, without limitation, at any time following the
payment of the Secured Obligations) be imposed on, incurred by or asserted
against the Collateral Agent in any way relating to or arising out of this
Agreement, any of the other Transaction Documents or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Collateral Agent under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Collateral Agent's gross negligence or willful
misconduct. The agreements in this paragraph shall survive the payment of the
Secured Obligations and all other amounts payable hereunder. No Secured Party
shall be entitled to the benefits of this Agreement if it has failed to confirm
in writing (in form and substance satisfactory to the Collateral Agent) that it
is bound by and subject to the provisions of this Section 7.5 following a
request to do so by the Collateral Agent. Any Secured Party which fails to
provide such a confirmation shall not be entitled to vote with respect to
matters relating to this Agreement or the Collateral or to share in any
distribution of, or payments or distributions in respect of, the Collateral.

     (i) The Collateral Agent shall be entitled to and succeed to all rights of
the Administrative Agent under the Original Guarantee and Collateral Agreement
and all liens created under the Original Guarantee and Collateral Agreement
shall continue in full force and effect hereunder without interruption in
perfection or priority.

                            SECTION 8. MISCELLANEOUS

     8.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 11.1 of the Senior Credit Agreement (or the comparable
provision of any bank credit agreement which refinances the Senior Credit
Agreement), notwithstanding any provisions of the Transaction Documents to the
contrary.

     8.2 Notices. All notices, requests and demands to or upon the Collateral
Agent or any Grantor hereunder shall be effected in the manner provided for in
Section 11.2 of the Senior Credit Agreement and Section 12.1 of each of the
Synthetic Guarantees; provided that any such notice, request

                                       22

<PAGE>

or demand to or upon any Guarantor shall be addressed to such Guarantor at its
notice address set forth on Schedule 1.

     8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Collateral Agent nor any Secured Party shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Collateral Agent or any Secured Party, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Collateral Agent or any Secured Party of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Collateral Agent or such Secured Party would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.

     8.4 Enforcement Expenses; Indemnification. (a) Each Grantor agrees to pay
or reimburse the Collateral Agent and each Secured Party for all its reasonable
costs and expenses incurred in connection with the enforcement or preservation
of any rights under this Agreement and the other Transaction Documents to which
such Grantor is a party, including, without limitation, reasonable fees and
disbursements of counsel to the Collateral Agent and the several Secured
Parties.

     (b) Each Grantor agrees to pay, and to save the Collateral Agent and the
Secured Parties harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by
this Agreement.

     (c) Each Grantor agrees to pay, and to save the Collateral Agent and the
Secured Parties harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement to the extent that
HCC would be required to do so pursuant to Section 11.5 of the Senior Credit
Agreement, mutatis mutandis.

     (d) The agreements in this Section 8.4 shall survive repayment of the
Obligations and all other amounts payable under the Transaction Documents.

     8.5 Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Collateral Agent and the Secured Parties and their successors and assigns;
provided that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Collateral Agent.

     8.6 Set-Off. Each Grantor hereby irrevocably authorizes the Collateral
Agent and each Secured Party at any time and from time to time while an Event of
Default shall have occurred and be continuing, without notice to such Grantor or
any other Grantor, any such notice being expressly waived by each Grantor, to
set-off and appropriate and apply any and all deposits (general or special, time
or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Collateral Agent or such Secured Party to or for the credit or the
account of such Grantor, or any part thereof in such amounts as the Collateral
Agent or such Secured Party may elect, against and on account of the obligations
and liabilities of such Grantor to the Collateral Agent or such Secured Party
hereunder and claims of every nature and description of the Collateral Agent or
such Secured Party against such Grantor, in any currency, whether arising
hereunder, under any Transaction

                                       23

<PAGE>

Document or otherwise, as the Collateral Agent or such Secured Party may elect,
whether or not the Collateral Agent or any Secured Party has made any demand for
payment and although such obligations, liabilities and claims may be contingent
or unmatured. The Collateral Agent and each Secured Party shall notify such
Grantor promptly of any such set-off and the application made by the Collateral
Agent or such Secured Party of the proceeds thereof, provided that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of the Collateral Agent and each Secured Party under
this Section 9.6 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which the Collateral Agent or such
Secured Party may have.

     8.7 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.

     8.8 Severability. Any provision of this Agreement which 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 not invalidate or render unenforceable such provision in any
other jurisdiction.

     8.9 Section Headings. The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.

     8.10 Integration. This Agreement and the other Transaction Documents
represent the agreement of the Grantors, the Collateral Agent and the Secured
Parties with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Collateral Agent or
any Secured Party relative to subject matter hereof and thereof not expressly
set forth or referred to herein or in the other Transaction Documents.

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

     8.12 Submission To Jurisdiction; Waivers. Each Grantor hereby irrevocably
and unconditionally:

     (a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Transaction Documents to which it is a
party, or for recognition and enforcement of any judgment in respect thereof, to
the non-exclusive general jurisdiction of the courts of the State of New York,
the courts of the United States of America for the Southern District of New
York, and appellate courts from any thereof;

     (b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;

     (c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Grantor at its
address referred to in Section 8.2 or at such other address of which the
Collateral Agent shall have been notified pursuant thereto;

                                       24

<PAGE>

     (d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and

     (e) waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.

     8.13 Acknowledgements. Each Grantor hereby acknowledges that:

     (a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Transaction Documents to which it is a
party;

     (b) neither the Collateral Agent nor any Secured Party has any fiduciary
relationship with or duty to any Grantor arising out of or in connection with
this Agreement or any of the other Transaction Documents, and the relationship
between the Grantors, on the one hand, and the Collateral Agent and Secured
Parties, on the other hand, in connection herewith or therewith is solely that
of debtor and creditor; and

     (c) no joint venture is created hereby or by the other Transaction
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Secured Parties or among the Grantors and the Secured Parties.

     8.14 Additional Grantors. Each Subsidiary of Holdings that is required to
become a party to this Agreement pursuant to Section 7.10 of the Senior Credit
Agreement or Section 10.10 of each of the Synthetic Guarantees shall become a
Grantor for all purposes of this Agreement upon execution and delivery by such
Subsidiary of an Assumption Agreement in the form of Annex 1 hereto.

     8.15 Releases. (a) At such time as the Secured Debt and the other
Obligations (other than Obligations in respect of Derivatives Agreements) shall
have been paid in full, the Commitments have been terminated and no Letters of
Credit shall be outstanding, the Collateral shall be released from the Liens
created hereby, and this Agreement and all obligations (other than those
expressly stated to survive such termination) of the Collateral Agent and each
Grantor hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party, and all rights to the Collateral shall
revert to the Grantors. At the request and sole expense of any Grantor following
any such termination, the Collateral Agent shall deliver to such Grantor any
Collateral held by the Collateral Agent hereunder, and execute and deliver to
such Grantor such documents as such Grantor shall reasonably request to evidence
such termination.

     (b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Transaction
Documents, then the Collateral Agent, at the request and sole expense of such
Grantor, shall execute and deliver to such Grantor all releases or other
documents reasonably necessary or desirable for the release of the Liens created
hereby on such Collateral. At the request and sole expense of HCC, a Subsidiary
Guarantor shall be released from its obligations hereunder in the event that all
the Capital Stock of such Subsidiary Guarantor shall be sold, transferred or
otherwise disposed of in a transaction permitted by the Transaction Documents.

     8.16 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT (AS DEFINED IN THE SENIOR CREDIT
AGREEMENT) OR ANY OTHER CREDIT

                                       25

<PAGE>

DOCUMENT (AS DEFINED IN ANNEX A TO EACH OF THE PARTICIPATION AGREEMENTS) AND FOR
ANY COUNTERCLAIM THEREIN.

     8.17 Amendment and Restatement. (a) As of the date hereof, the terms,
conditions, agreements, covenants, representations and warranties set forth in
the Original Guarantee and Collateral Agreement are hereby amended and restated
in their entirety by the terms, conditions, agreements, covenants,
representations and warranties set forth in this Agreement, except that nothing
herein or in the other Transaction Documents shall impair or adversely affect
the continuation of the liability of the Grantors for the Obligations heretofore
incurred and the security interests, liens and other interests in the Collateral
heretofore granted, pledged and/or assigned by the Grantors to the Collateral
Agent and the Administrative Agent under the Original Guarantee and Collateral
Agreement, for itself and for the benefit of the Secured Parties.

     (b) The amendment and restatement contained herein shall not, in any
manner, be construed to constitute payment of, or impair, limit, cancel or
extinguish, or constitute a novation in respect of any of the obligations,
liabilities and indebtedness of the Company evidenced by or arising under the
Original Guarantee and Collateral Agreement or the Transaction Documents, and
the liens and security interests securing such other obligations, liabilities
and indebtedness, which shall not in any manner be impaired, limited,
terminated, waived or released.

     (c) The Grantors hereby acknowledge, confirm and agree that (a) the
Collateral Agent, for itself and for the benefit of the Secured Parties, has and
shall continue to have a security interest in and lien upon the Collateral
heretofore granted to the Collateral Agent (or Administrative Agent) under the
Original Guarantee and Collateral Agent, and (b) the liens and security
interests of the Collateral Agent in the Collateral shall be deemed to be
continuously granted and perfected from the earliest date of the granting and
perfection of such liens and security interest under the Original Guarantee and
Collateral Agreement.

                                       26

<PAGE>

     IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and
Collateral Agreement to be duly executed and delivered as of the date first
above written.

                           HANOVER COMPRESSOR COMPANY

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

                           HANOVER COMPRESSION LIMITED PARTNERSHIP

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

<PAGE>

                               ENERGY TRANSFER - HANOVER VENTURE L.P.
                               GULF COAST DISMANTLING, INC.
                               HANOVER ASIA, INC.
                               HANOVER AUSTRALIA, L.L.C.
                               HANOVER COMPRESSED NATURAL GAS SERVICES, LLC
                               HANOVER COMPRESSOR NIGERIA, INC.
                               HANOVER COMPRESSION GENERAL HOLDINGS LLC
                               HANOVER COMPRESSOR CAPITAL TRUST
                               [HANOVER ECUADOR L.L.C.]
                               HANOVER GENERAL ENERGY TRANSFER, LLC
                               HANOVER HL HOLDINGS, LLC
                               HANOVER HL, LLC
                               HANOVER IDR, INC.
                               HANOVER LIMITED ENERGY TRANSFER, LLC
                               HANOVER MEASUREMENT, LLC
                               HANOVER PARTNERS NIGERIA LLC
                               HANOVER POWER (GATES), LLC
                               HANOVER POWER, LLC
                               HANOVER/TRINIDAD, L.L.C.
                               HC CAYMAN LLC
                               HC LEASING, INC.
                               HCC HOLDINGS, INC.
                               HCL COLOMBIA, INC.
                               KOG, INC.
                               SOUTHWEST INDUSTRIES, INC.

                               By: /s/ John E. Jackson
                                   Name:  John E. Jackson
                                   Title: V.P. Treasure

                               HANOVER SPE, LLC

                               By: Hanover Compressor Company, the managing
                                   member

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

<PAGE>

                                                                     Schedule 1

                         NOTICE ADDRESSES OF GUARANTORS

<PAGE>
                                                                     Schedule 2

                            FILINGS AND OTHER ACTIONS

                     REQUIRED TO PERFECT SECURITY INTERESTS

                         Uniform Commercial Code Filings

          [List each office where a financing statement is to be filed]

                          Patent and Trademark Filings

                               [List all filings]

                      Actions with respect to Pledged Stock

                                  Other Actions

                      [Describe other actions to be taken]

<PAGE>

                                                                    Schedule 3

       LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE

         Grantor                   Jurisdiction of            Location of Chief
                                     Organization              Executive Office
         -------                   ---------------            -----------------

<PAGE>

                           ACKNOWLEDGEMENT AND CONSENT

     The undersigned hereby acknowledges receipt of a copy of the Guarantee and
Collateral Agreement dated as of January 31, 2003 as amended and restated as of
February 14, 2003 (the "Agreement"), made by the Grantors parties thereto for
the benefit of JPMorgan Chase Bank, as Collateral Agent. The undersigned agrees
for the benefit of the Collateral Agent and the Secured Parties as follows:

     1. The undersigned will be bound by the terms of the Agreement and will
comply with such terms insofar as such terms are applicable to the undersigned.

     2. The terms of Sections 6.3(c) and 6.7(b) of the Agreement shall apply to
it, mutatis mutandis, with respect to all actions that may be required of it
pursuant to Section 6.3(c) or 6.7(b) of the Agreement.

                                     [NAME OF ISSUER]

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

                                     Address for Notices:

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

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

                                     -----------------------------------------
                                     Fax:

<PAGE>

                                                                     Annex 1 to
                                             Guarantee and Collateral Agreement

     ASSUMPTION AGREEMENT, dated as of ________________, 200_, made by
______________________________ (the "Additional Grantor"), in favor of JPMorgan
Chase Bank, as collateral agent (in such capacity, the "Collateral Agent") for
the banks and other financial institutions or entities (the "Secured Parties")
parties to the Transaction Documents referred to below. All capitalized terms
not defined herein shall have the meaning ascribed to them in such Senior Credit
Agreement.

                              W I T N E S S E T H :

     WHEREAS, Hanover Compressor Company ("Holdings"), Hanover Compression
Limited Partnership ("HCC") and the Secured Parties have entered into the
Transaction Documents (as defined in the Guarantee and Collateral Agreement
referred to below);

     WHEREAS, in connection with the Transaction Documents, HCC and certain of
its Affiliates (other than the Additional Grantor) have entered into the
Guarantee and Collateral Agreement, dated as of January 31, 2003, as amended and
restated as of February 14, 2003 (and as may be further amended, supplemented or
otherwise modified from time to time, the "Guarantee and Collateral Agreement")
in favor of the Collateral Agent for the benefit of the Secured Parties;

     WHEREAS, the Senior Credit Agreement and the Synthetic Guarantees require
the Additional Grantor to become a party to the Guarantee and Collateral
Agreement; and

     WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee and Collateral
Agreement;

     NOW, THEREFORE, IT IS AGREED:

     1. Guarantee and Collateral Agreement. By executing and delivering this
Assumption Agreement, the Additional Grantor, as provided in Section 8.14 of the
Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee and
Collateral Agreement as a Grantor thereunder with the same force and effect as
if originally named therein as a Grantor and, without limiting the generality of
the foregoing, hereby expressly assumes all obligations and liabilities of a
Grantor thereunder. The information set forth in Annex 1-A hereto is hereby
added to the information set forth in the Schedules to the Guarantee and
Collateral Agreement. The Additional Grantor hereby represents and warrants that
each of the representations and warranties contained in Section 4 of the
Guarantee and Collateral Agreement is true and correct on and as the date hereof
(after giving effect to this Assumption Agreement) as if made on and as of such
date.

     2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

<PAGE>

     IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to
be duly executed and delivered as of the date first above written.

                                       [ADDITIONAL GRANTOR]

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

<PAGE>

                                                                    Annex 1-A to
                                                            Assumption Agreement

                            Supplement to Schedule 1

                            Supplement to Schedule 2

                            Supplement to Schedule 3<PAGE>

                                                                    EXHIBIT 10.9

                                                                  EXECUTION COPY

================================================================================

                         AMENDED AND RESTATED GUARANTEE

                                     made by

                           HANOVER COMPRESSOR COMPANY

                            HANOVER COMPRESSION INC.

                        and certain of their Subsidiaries

                           Dated as of March 13, 2000

================================================================================

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<S>     <C>                                                                                 <C>
1.      Defined Terms ...................................................................... 1

2.      Guaranty .............................................................. ............ 2

3.      Right of Set-off.................................................................... 3

4.      No Subrogation ..................................................................... 3

5.      Amendments, etc. with respect to the Guaranteed Obligations; Waiver of Rights ...... 4

6.      Guarantee Absolute and Unconditional ............................................... 4

7.      Reinstatement ...................................................................... 5

8.      Payments ........................................................................... 5

9.      Representations, Warranties ........................................................ 5
        9.1     Financial Condition ........................................................ 5
        9.2     No Change .................................................................. 6
        9.3     Corporate Existence; Compliance with Law ................................... 6
        9.4     Corporate Power; Authorization; Enforceable Obligations .................... 7
        9.5     No Legal Bar ............................................................... 7
        9.6     No Material Litigation ..................................................... 7
        9.7     No Default ................................................................. 7
        9.8     Ownership of Property; Liens; Leases of Equipment .......................... 7
        9.9     Intellectual Property ...................................................... 8
        9.10    Taxes ...................................................................... 8
        9.11    Federal Regulations ........................................................ 8
        9.12    ERISA ...................................................................... 8
        9.13    Investment Company Act; Other Regulations .................................. 9
        9.14    Subsidiaries ............................................................... 9
        9.15    Environmental Matters ...................................................... 9
        9.16    Accuracy and Completeness of Information ...................................10
        9.17    Year 2000 ..................................................................10
        9.18    Senior Indebtedness ........................................................10
        9.19    Representations and Warranties in Existing Guarantee .......................11

10.     Affirmative Covenants of the Guarantor .............................................11
        10.1    Financial Statements .......................................................11
        10.2    Certificates; Other Information ............................................12
        10.3    Payment of Obligations .....................................................13
        10.4    Conduct of Business and Maintenance of Existence ...........................13
</TABLE>

                                        i

<PAGE>

<TABLE>
<CAPTION>
                                                                                          Page
                                                                                          ----
<S>     <C>                                                                                 <C>
        10.5    Maintenance of Property; Insurance .........................................13
        10.6    Inspection of Property; Books and Records; Discussions .....................13
        10.7    Notices ....................................................................13
        10.8    Environmental Laws .........................................................14
        10.9    Subsequent Guarantees ......................................................15

11.     Negative Covenants .................................................................15
        11.1    Financial Condition Covenants ..............................................15
        11.2    Limitation on Indebtedness .................................................16
        11.3    Limitation on Liens ........................................................17
        11.4    Limitation on Guarantee Obligations ........................................19
        11.5    Limitations on Fundamental Changes .........................................19
        11.6    Limitation on Sale or Lease of Assets ......................................20
        11.7    Limitation on Leases .......................................................21
        11.8    Limitation on Dividends ....................................................21
        11.9    Limitation on Derivatives ..................................................22
        11.10   Limitation on Investments, Loans and Advances ..............................22
        11.11   Limitation on Optional Payments and Modifications of Debt Instruments ......23
        11.12   Transactions with Affiliates ...............................................24
        11.13   Sale and Leaseback .........................................................24
        11.14   Corporate Documents ........................................................24
        11.15   Fiscal Year ................................................................24
        11.16   Nature of Business .........................................................24
        11.17   Unqualified Subsidiaries ...................................................24

12.     Notices ............................................................................24

13.     Severability .......................................................................25

14.     Integration ........................................................................25

15.     Amendments in Writing; No Waiver; Cumulative Remedies ..............................25

16.     Section Headings ...................................................................25

17.     Successors and Assigns .............................................................26

18.     SUBMISSION TO JURISDICTION; WAIVERS ................................................26

19.     GOVERNING LAW ......................................................................26

20.     Survival of Representations, Warranties, etc .......................................26
</TABLE>

                                       ii

<PAGE>

<TABLE>
<CAPTION>
                                                                                          Page
                                                                                          ----
<S>     <C>                                                                                 <C>
21.     Authority of Agent..................................................................27

22.     Third Party Beneficiaries...........................................................27

23.     Right of Contribution...............................................................27

24.     WAIVER OF JURY TRIAL................................................................27
</TABLE>

Schedules

Schedule 9.2            Material Changes
Schedule 9.4            Required Consents
Schedule 9.14           Subsidiaries
Schedule 9.15           Environmental
Schedule 11.2(c)        Existing Indebtedness
Schedule 11.3(1)        Existing Liens
Schedule 11.3(n)        Additional Existing Liens
Schedule 11.3(t)        Additional Liens
Schedule 11.6(i)        Lease of Assets
Schedule 11.12          Affiliate Transactions
Schedule 11.13          Sale and Leaseback Transactions

                                       iii

<PAGE>

                         AMENDED AND RESTATED GUARANTEE

                  AMENDED AND RESTATED GUARANTEE, dated as of March 13, 2000
(the "Agreement",) made by HANOVER COMPRESSOR COMPANY, a Delaware corporation,
HANOVER COMPRESSION INC., a Delaware corporation, and certain of their
Subsidiaries that are signatories hereto (individually, a "Guarantor",
collectively, the "Guarantors"), in favor of the Beneficiaries (as hereinafter
defined).

                              W I T N E S S E T H:

                  WHEREAS, on the Initial Closing Date, Holdings, HCC and
certain Subsidiaries of Holdings entered into a Guarantee, dated as of June 15,
1999 (the "Existing Guarantee"), to induce (i) Hanover Equipment Trust 1999A
(the "Lessor") to enter into the Lease and the other Operative Agreements to
which it is a party; (ii) the Lenders to enter into the Credit Agreement and the
other Operative Agreements to which they are party; and (iii) Societe Generale
Financial Corporation and FBTC Leasing Corp. (the "Investors") to enter into the
Participation Agreement (as hereinafter defined) and the other Operative
Agreements to which they are a party;

                  WHEREAS, (i) the Lenders have agreed to make, and have made,
loans and (ii) the Investors have agreed to make, and have made, investments to
the Lessor in order for the Lessor to acquire the Equipment and to pay other
Equipment Acquisition Costs;

                  WHEREAS, HCC has requested that the Investors, Agent and the
Required Lenders (i) amend certain definitions and covenants in the
Participation Agreement and Credit Agreement and (ii) amend and restate the
Existing Guarantee so as to permit HCC to enter into a new equipment lease
transaction; and

                  NOW, THEREFORE, in consideration of the premises contained
herein and to induce the Investors, Agent and the Required Lenders to enter into
the requested amendments, the Guarantors hereby agree for the benefit of the
Lessor, the Agent, for the ratable benefit of the Lenders and the Investors and
their respective successors and assigns (individually a "Beneficiary",
collectively, the "Beneficiaries"), as follows:

                  1.    Defined Terms. (a) Capitalized terms not otherwise
defined herein (including in the Preliminary Statement) shall have the meanings
ascribed to them in Annex A to the Participation Agreement dated as of June
15, 1999 among Hanover Compression Inc. ("HCC"), the Lessor, the Investors, The
Chase Manhattan Bank, as agent (the "Agent") and the several banks and financial
institutions from time to time party thereto (the "Lenders"), as the same may
from time to time be amended, supplemented or otherwise modified (the
"Participation Agreement").

                  (b)   As used herein, the following terms shall have
the following meanings:

<PAGE>

                                                                               2

                        "Agreement" means this Amended and Restated Guarantee,
as the same may be amended, supplemented or otherwise modified from time to
time.

                        "Contribution Obligations" means the collective
reference to the outstanding amount of the Investor Contributions and the
Investor Yield with respect thereto and all rights of the Investors to receive
distributions under the Trust Agreement and any of the other Operative
Agreements.

                        "Guaranteed Obligations" means the collective reference
to (i) the Note Obligations, (ii) the Contribution Obligations and (iii) the
Lease Obligations and, with respect to each such obligation, interest accruing
thereon at the applicable rate provided in the Operative Agreements after
maturity and interest accruing at the then applicable rate provided in the
Operative Agreements after the filing of any petition in bankruptcy, or the
commencement of an insolvency, reorganization or like proceeding, whether or not
a claim for post-filing or post-petition interest is allowed in such proceeding
and whether such obligations are direct or indirect, absolute or contingent, due
or to become due, or now existing or hereinafter incurred, which may arise,
under, out of or in connection with any of the Operative Agreements, any other
document made, delivered or given in connection therewith, in each case whether
on account of principal, interest, Investor Contributions or Investor Yield,
reimbursement obligations, fees, indemnities, costs, expenses, or payment
obligations (including, without limitation, all fees and disbursements of
counsel to any of the Beneficiaries that are required to be paid by HCC pursuant
to the terms of the Operative Agreements).

                        "Lease Obligations" means the collective reference to
the payment obligations and undertakings applicable to HCC contained in or
arising under the Lease or any of the other Operative Agreements to which HCC is
a party, including, but not limited to, the full and punctual payment by HCC,
when due, of any and all Rent, the payments required pursuant to Section 17.2
and 17.3 of the Lease, the Purchase Option Price and the Maximum Residual
Guarantee Amount.

                        "Note Obligations" means the collective reference to the
unpaid principal of and interest on the Notes and all other payment obligations
and liabilities of the Lessor to the Agent and the Lenders under the Notes, the
Credit Agreement and any of the other Operative Agreements.

                  2.    Guaranty. (a) Subject to the provisions of paragraph
2(b) and (c), the Guarantors hereby, jointly and severally, unconditionally and
irrevocably guaranty to the Beneficiaries and their respective successors,
endorsees, transferees and assigns the prompt and complete payment when due
(whether at the stated maturity, by acceleration or otherwise) of the Guaranteed
Obligations.

                  (b)   Anything to the contrary notwithstanding, the Guarantors
shall not at anytime be required to make any payment with regard to the Tranche
B Loans or with respect to the Contribution Obligations unless at such time a
Lease Event of Default has occurred and is continuing.

<PAGE>

                                                                               3

                  (c)   Anything herein or in any other Operative Agreement to
the contrary notwithstanding, the maximum liability of each Guarantor (other
than HCC) hereunder and under the other Operative Agreement shall in no event
exceed the amount which can be guaranteed by such Guarantor under applicable
federal and state laws relating to the insolvency of debtors.

                  (d)   The Guarantors further agree, jointly and severally, to
pay any and all costs, expenses (including all fees and disbursements of
counsel) and damages which may be paid or incurred in enforcing, or obtaining
advice of counsel in respect of, any rights with respect to, or collecting from
the Guarantors, any or all of the Guaranteed Obligations and/or enforcing any
rights with respect to, or collecting against, the Guarantors under this
Guarantee.

                  3.    Right of Set-off. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
an Event of Default, each of the Investors, Agent and each Lender is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Borrower, the Guarantors or to any
other Person, any such notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by such Investor, Agent or such Lender
(including, without limitation, by branches and agencies of such Investor, Agent
or such Lender wherever located) to or for the credit or the account of the
Guarantors against and on account of the obligations and liabilities of the
Guarantors hereunder or under any of the other Operative Agreements, and all
other claims of any nature or description arising out of or connected with this
Guarantee or any other Operative Agreement, irrespective of whether such
Investor, Agent or such Lender shall have made any demand hereunder and although
said obligations, liabilities or claims, or any of them, shall be contingent or
unmatured. Each of the Investors, Agent and each Lender shall notify such
Guarantor promptly of any such set-off and the application made by such
Investor, Agent or such Lender; provided, that the failure to give such notice
shall not affect the validity of such set-off and application.

                  4.    No Subrogation. Notwithstanding any payment or payments
made by the Guarantors hereunder or any set-off or application of funds of the
Guarantors by any Lender, the Guarantors shall not be entitled to exercise or
enforce any subrogation rights of the Investors, Agent or any Lender against the
Borrower or any other Person or any collateral security or guarantee or right of
offset held by the Investors, Agent or any Lender for the payment of the
Guaranteed Obligations, nor shall the Guarantors seek or be entitled to seek any
contribution or reimbursement from the Borrower or any other Person in respect
of payments made by the Guarantors hereunder, until all amounts owing to the
Investors, Agent and the Lenders by the Borrower on account of the Guaranteed
Obligations and all amounts owing hereunder are paid in full and the Commitments
are terminated. If any amount shall be paid to the Guarantors on account of such
subrogation rights at any time when all of the Guaranteed Obligations and all
amounts owing hereunder shall not have been paid in full or the Commitments
shall not have been terminated, such amount shall be held by the Guarantors in
trust for the Investors, Agent and the Lenders, segregated from other funds of
the Guarantors, and shall, forthwith upon receipt by the Guarantors, be turned
over to the Agent in the exact form received by the Guarantors (duly

<PAGE>

                                                                               4

indorsed by the Guarantors to the Agent, if required), to be applied against the
Guaranteed Obligations, whether matured or unmatured, in such order as the Agent
may determine.

                  5.    Amendments, etc. with respect to the Guaranteed
Obligations; Waiver of Rights. The Guarantors shall remain obligated hereunder
notwithstanding that, without any reservation of rights against the Guarantors
and without notice to or further assent by the Guarantors, any demand for
payment of any of the Guaranteed Obligations made by the Investors, Agent or any
Lender may be rescinded by such party and any of the Guaranteed Obligations
continued, and the Guaranteed Obligations, or the liability of any other party
upon or for any part thereof, or any collateral security or guarantee therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Investors, Agent or any Lender, and the Credit
Agreement, the Participation Agreement and the other Operative Agreements may be
amended, modified, supplemented or terminated, in whole or in part, as the Agent
(or the Required Lenders, as the case may be) may deem advisable from time to
time in accordance with the terms thereof, and any collateral security,
guarantee or right of offset at any time held by the Investors, Agent or any
Lender for the payment of the Guaranteed Obligations may be sold, exchanged,
waived, surrendered or released. Neither the Investors, Agent nor any Lender
shall have any obligation to protect, secure, perfect or insure any Lien at any
time held by it as security for the Guaranteed Obligations or for this Guarantee
or any property subject thereto. When making any demand hereunder against the
Guarantors, the Investors, Agent or any Lender may, but shall be under no
obligation to, make a similar demand on the Borrower or any other guarantor, and
any failure by the Investors, Agent or any Lender to make any such demand or to
collect any payments from the Borrower or any other guarantor or any release of
the Borrower or such other guarantor shall not relieve the Guarantors from their
obligations under this Guarantee, and shall not impair or affect the rights and
remedies, express or implied, or as a matter of law, of the Investors, Agent or
any Lender against the Guarantors. For the purposes hereof "demand" shall
include the commencement and continuance of any legal proceedings.

                  6.    Guarantee Absolute and Unconditional. Each Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Guaranteed Obligations and notice of or proof of reliance by the
Investors, Agent or any Lender upon this Guarantee or acceptance of this
Guarantee, the Guaranteed Obligations, and any of them, shall conclusively be
deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon this Guarantee; and all dealings between the
Borrower and such Guarantor, on the one hand, and the Agent and the Lenders, on
the other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon this Guarantee. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or such Guarantor with respect to the Guaranteed
Obligations. Each Guarantor understands and agrees that this Guarantee shall be
construed as a continuing, absolute and unconditional guarantee and surety of
payment without regard to (a) the validity, regularity or enforceability of the
Credit Agreement or any other Operative Agreement, any of the Guaranteed
Obligations or any other collateral security therefor or guarantee or right of
offset with respect thereto at any time or from time to time held by the
Investors, Agent or any Lender, (b) any defense, set-off or counterclaim (other
than a defense of payment or performance) which may at any time be available to
or be asserted by the Borrower or such Guarantor against the

<PAGE>

                                                                               5

Investors, Agent or any Lender, or (c) any other circumstance whatsoever (with
or without notice to or knowledge of the Borrower or such Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrower for the Guaranteed Obligations, or of such Guarantor
under this Guarantee, in bankruptcy or in any other instance. When pursuing its
rights and remedies hereunder against any Guarantor, the Investors, the Agent
and any Lender may, but shall be under no obligation to, pursue such rights and
remedies as it may have against the Borrower or any other Person or against any
collateral security or guarantee for the Guaranteed Obligations or any right of
offset with respect thereto, and any failure by the Investors, Agent or any
Lender to pursue such other rights or remedies or to collect any payments from
the Borrower or any such other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release of
the Borrower or any such other Person or any such collateral security, guarantee
or right of offset, shall not relieve such Guarantor of any liability hereunder,
and shall not impair or affect the rights and remedies, whether express, implied
or available as a matter of law, of the Investors, the Agent and the Lenders
against such Guarantor. This Guarantee shall remain in full force and effect and
be binding in accordance with and to the extent of its terms upon such Guarantor
and the successors and assigns thereof, and shall inure to the benefit of the
Investors, the Lessor, the Agent and the Lenders, and their respective
successors, indorsees, transferees and assigns, until all the Guaranteed
Obligations and the obligations of such Guarantor under this Guarantee shall
have been satisfied by payment in full and the Commitments shall be terminated,
notwithstanding that from time to time during the term of the Credit Agreement
the Borrower may be free from any Guaranteed Obligations.

                  7.    Reinstatement. This Guarantee shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned by the Investors, Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or the Guarantors, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or the Guarantors or any substantial part of its property, or
otherwise, all as though such payments had not been made.

                  8.    Payments. The Guarantors hereby guarantee that payments
hereunder will be paid to the Agent without set-off or counterclaim in Dollars
at the office of the Agent located at 270 Park Avenue, New York, New York 10017.

                  9.    Representations, Warranties. In order to induce the
Lenders to enter into the Credit Agreement and to make the Loans, the Investors
to enter into the Participation Agreement and make the Investor Contribution and
the Lessor to enter into the Lease, Holdings and HCC hereby jointly and
severally represent and warrant to the Beneficiaries as follows, all of which
shall survive the execution and delivery of this Guarantee and the Credit
Agreement and the making of the Loans:

                  9.1   Financial Condition. (a) The unaudited pro forma
consolidated balance sheet of HCC and its consolidated Subsidiaries as at
September 30, 1999 (including the notes thereto) (the "Pro Forma Balance
Sheet"), copies of which have heretofore been furnished to each Lender, has been
prepared giving effect (as if such events had occurred on such date) to the

<PAGE>

                                                                               6

consummation of the TIDES issuance. The Pro Forma Balance Sheet has been
prepared based on the best information available to Holdings and HCC as of the
date of delivery thereof, and presents fairly in all material respects on a
pro forma basis the estimated financial position of HCC and its consolidated
Subsidiaries as at September 30, 1999, assuming that the events specified in the
preceding sentence had actually occurred at such date.

                  (b)   The audited consolidated balance sheets of HCC as at
December 31, 1997 and December 31, 1998, and the related consolidated statements
of income and of cash flows for the fiscal years ended on such dates, reported
on by and accompanied by an unqualified report from PricewaterhouseCoopers LLP,
present fairly in all material respects the consolidated financial condition of
HCC as at such date, and the consolidated results of its operations and its
consolidated cash flows for the respective fiscal years then ended. The
unaudited consolidated balance sheet of HCC as at March 31, 1999 and June 30,
1999, and the related unaudited consolidated statements of income and cash flows
for the three and six-month periods ended on such date, present fairly in all
material respects the consolidated financial condition of HCC as at such date,
and the consolidated results of its operations and its consolidated cash flows
for the three and six-month periods then ended (subject to normal year-end audit
adjustments). All such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by the aforementioned firm
of accountants and disclosed therein). Holdings, HCC and its Subsidiaries do not
have any material Guarantee Obligations, contingent liabilities and liabilities
for taxes, or any long-term leases or unusual forward or long-term commitments,
including any interest rate or foreign currency swap or exchange transaction or
other obligation in respect of derivatives, that are not reflected in the most
recent financial statements referred to in this paragraph. During the period
from September 30, 1999 to and including the date hereof there has been no
Disposition by Holdings or any of its Subsidiairies, as applicable, of any
material part of their business or property (other than to Holdings or any of
its Subsidiaries).

                  9.2   No Change. Since September 30, 1999 (a) there has been
no development or event nor any prospective development or event, which has had
or would reasonably be expected to have a Material Adverse Effect and (b) except
as disclosed on Schedule 9.2 to this Agreement, as of the date of this
Agreement, no dividends or other distributions have been declared, paid or made
upon the Capital Stock of Holdings or HCC nor has any of the Capital Stock of
Holdings or HCC (other than in connection with the Restructuring) been redeemed,
retired, purchased or otherwise acquired for value by Holdings or any of its
respective Subsidiaries.

                  9.3   Corporate Existence; Compliance with Law. Each Guarantor
(a) is duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, (b) has the corporate power and authority,
and the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged,
(c) is duly qualified as a foreign corporation and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification, except where the
failure to be so qualified would not reasonably be expected to have a Material
Adverse Effect, and (d) is in compliance with all Requirements of Law except to
the extent that the failure to comply therewith would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.

<PAGE>

                                                                               7

                  9.4   Corporate Power; Authorization; Enforceable Obligations.
Each Guarantor has the corporate power and authority, and the legal right, to
make, deliver and perform the Operative Agreements to which it is a party. HCC
has the corporate power and authority, and the legal right, to perform the
Operative Agreements and has taken all necessary corporate action to authorize
the performing under the Operative Agreements on the terms and conditions of the
Operative Agreements. Each Guarantor has taken all necessary corporate action to
authorize the execution, delivery and performance of this Guarantee. No consent
or authorization of, filing with or other act by or in respect of, any
Governmental Authority or any other Person (other than consents that have been
obtained and consents or authorizations the failure to obtain would not, in the
aggregate, reasonably be expected to have a Material Adverse Effect) is required
in connection with the Loans or with the execution, delivery, performance,
validity or enforceability of this Guarantee or any of the other Operative
Agreements, except consents, authorizations, filings and notices described in
Schedule 9.4, which consents, authorizations, filings and notices have been
obtained or made and are in full force and effect. This Guarantee has been duly
executed and delivered on behalf of the Guarantors party hereto. This Guarantee
constitutes, each Operative Agreement when executed and delivered will
constitute, a legal, valid and binding obligation of the Guarantors party
thereto enforceable against such Guarantors in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

                  9.5   No Legal Bar. The execution, delivery and performance of
this Guarantee and the other Operative Agreements, the Loans and the use of the
proceeds thereof will not violate any Requirement of Law or Contractual
Obligation of any Guarantor party thereto and will not result in, or require,
the creation or imposition of any Lien on any of their respective properties or
revenues pursuant to any such Requirement of Law or Contractual Obligation,
except as contemplated hereby or thereby and except to the extent any such
violation or creation or imposition of a Lien would not reasonably be expected
to have a Material Adverse Effect.

                  9.6   No Material Litigation. Except as set forth in HCC's
Form 10-Q, filed with respect to the period ending September 30, 1999, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of HCC, threatened by or
against any Guarantor or against any of their respective properties or revenues
(a) with respect to this Guarantee or the other Operative Agreements or any of
the transactions contemplated hereby, or (b) which would reasonably be expected
to have a Material Adverse Effect.

                  9.7   No Default. None of the Guarantors nor any of their
respective Subsidiaries is in default under or with respect to any of their
respective Contractual Obligations in any respect which if not cured would
reasonably be expected to have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.

                  9.8   Ownership of Property; Liens; Leases of Equipment. Each
of the Guarantors has good record and marketable title in fee simple (except for
exceptions to title as will not in the aggregate materially interfere with the
present or contemplated use of the property

<PAGE>

                                                                               8

affected thereby) to, or a valid leasehold interest in, all its real property,
and good title to all its other property, and none of such property is subject
to any Lien except as permitted by Section 11.3. None of the Equipment or
Inventory (as defined in the Uniform Commercial Code) owned by any Guarantor has
been leased by such Guarantor as lessor, except pursuant to operating leases
(which do not constitute Financing Leases). As used herein, Equipment or
Inventory leased by a Guarantor under a Financing Lease shall be deemed "owned"
by such Guarantor.

                  9.9   Intellectual Property. Each Guarantor owns, or is
licensed to use, all trademarks, tradenames, trade secrets, copyrights,
technology, know-how and processes necessary for the conduct of its business as
currently conducted except for those the failure to own or license which would
not reasonably be expected to have a Material Adverse Effect (the "Intellectual
Property"). To the knowledge of each Guarantor, no claim has been asserted and
is pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does each Guarantor know of any valid basis for any such claim,
which would reasonably be expected to have a Material Adverse Effect. The use of
such Intellectual Property by the Guarantors does not infringe on the rights of
any Person, except for such claims and infringements that, in the aggregate,
would not reasonably be expected to have a Material Adverse Effect.

                  9.10  Taxes. Each of the Guarantors has filed or caused to be
filed all tax returns which, to the knowledge of each Guarantor, are required to
be filed and has paid all taxes shown to be due and payable on said returns or
on any assessments made against it or any of its property and all other taxes,
fees or other charges imposed on it or any of its property by any Governmental
Authority (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of any of the
Guarantors, as the case may be); no tax Lien has been filed against the
property of any Guarantor, and, to the knowledge of each Guarantor, no claim is
being asserted, with respect to any such tax, fee or other charge.

                  9.11  Federal Regulations. No part of the proceeds of any
Loans will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U of the Board
of Governors of the Federal Reserve System as now and from time to time
hereafter in effect or for any purpose which violates the provisions of the
Regulations of such Board of Governors. If requested by any Lender or the Agent,
HCC will furnish to the Agent and each Lender a statement to the foregoing
effect in conformity with the requirements of FR Form U-1 referred to in said
Regulation U.

                  9.12  ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred and
no lien in favor of the PBGC or a Plan has arisen during the five-year period
prior to the date as of which this representation is deemed made. The present
value of all accrued benefits under each Single Employer Plan maintained by HCC,
or any Commonly Controlled Entity (based on those assumptions used to fund the
Plans) did not, as of the last annual valuation

<PAGE>

                                                                               9

date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued benefits.
Neither HCC nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan, and neither HCC nor any Commonly
Controlled Entity would become subject to any liability under ERISA if HCC or
any such Commonly Controlled Entity were to withdraw completely from all
Multiemployer Plans as of the valuation date most closely preceding the date on
which this representation is made or deemed made. No such Multiemployer Plan is
in Reorganization or Insolvent. The present value (determined using actuarial
and other assumptions which are reasonable in respect of the benefits provided
and the employees participating) of the liability of HCC and each Commonly
Controlled Entity for post retirement benefits to be provided to their current
and former employees under Plans which are welfare benefit plans (as defined in
Section 3(1) of ERISA) does not, in the aggregate, exceed the assets under all
such Plans allocable to such benefits.

                  9.13  Investment Company Act; Other Regulations. None of the
Guarantors is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended. None of the Guarantors is subject to regulation under any Federal or
State statute or regulation which limits its ability to incur Indebtedness or
change rates or change tariffs. None of the Guarantors are "holding companies"
or "subsidiary companies" of a "holding company" or a "subsidiary company" of a
"holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended.

                  9.14  Subsidiaries. As of the Initial Closing Date, Holdings
has no Subsidiaries other than as set forth on Schedule 9.14. Except if a
Guarantor, other than cash or Cash Equivalents located in bank accounts at the
Agent, none of the assets owned by any Unqualified Subsidiary as of the date
hereof are located within the United States of America or any territory thereof.

                  9.15  Environmental Matters. Each of the representations and
warranties set forth in paragraphs (a) through (e) of this subsection is true
and correct with respect to each parcel of real property owned or operated by
any of the Guarantors (the "Properties"), except to the extent that the facts
and circumstances giving rise to any such failure to be so true and correct
would not reasonably be expected to have a Material Adverse Effect:

                  (a)   Except as set forth on Schedule 9.15, the Properties do
        not contain, and have not previously contained, in, on, or under,
        including, without limitation, the soil and groundwater thereunder, any
        Hazardous Substances in concentrations which violate Environmental Laws.

                  (b)   Except as set forth on Schedule 9.15, the Properties and
        all operations and facilities at the Properties are in compliance with
        all Environmental Laws, and there is no Hazardous Substances
        contamination or violation of any Environmental Law which would
        reasonably be expected to interfere with the continued operation of any
        of the Properties or impair the fair saleable value of any thereof.

<PAGE>

                                                                              10

                  (c)   Except as set forth on Schedule 9.15, none of the
        Guarantors has received any complaint, notice of violation, alleged
        violation, investigation or advisory action or of potential liability or
        of potential responsibility regarding environmental protection matters
        or environmental permit compliance with regard to the Properties which
        has not been resolved, nor is HCC aware that any Governmental Authority
        is contemplating delivering to any Guarantor any such notice.

                  (d)   Hazardous Substances have not been generated, treated,
        stored, disposed of, at, on or under any of the Properties in
        concentrations that violate Environmental Laws, nor have any Hazardous
        Substances been transferred to any other location, in violation of any
        Environmental Laws from the Properties or as a result of the sale or
        lease of any equipment or inventory of any Guarantor.

                  (e)   There are no governmental, administrative actions or
        judicial proceedings pending or contemplated under any Environmental
        Laws to which any Guarantor is or to HCC's knowledge will be named as a
        party with respect to the Properties, nor to HCC's knowledge are there
        any consent decrees or other decrees, consent orders, administrative
        orders or other orders, or other administrative or judicial requirements
        outstanding under any Environmental Law with respect to any of the
        Properties.

                  9.16  Accuracy and Completeness of Information. The factual
statements contained in the Operative Agreements and each other agreement,
instrument, certificate and document related thereto and any other certificates
or documents furnished or to be furnished to the Investors, the Agent or the
Lenders by any Guarantor from time to time in connection with this Guarantee (in
any case excluding any of the financial statements referred to in Section 9.l(a)
and 10.1 hereof), taken as a whole, and taking into consideration all
corrections or substituted documents, do not and will not, as of the date when
made, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained therein not
misleading in light of the circumstances in which the same were made, all except
as otherwise qualified herein or therein.

                  9.17  Year 2000. The Year 2000 date change has not resulted in
disruption of Holdings' and its Subsidiaries' computer hardware, software,
databases, systems and other equipment containing embedded microchips (including
systems and equipment supplied by others or with which Holdings' or its
Subsidiaries' systems interface), or to Holdings' or its Subsidiaries'
operations or business systems, or to the best of Holdings' and its
Subsidiaries' knowledge, to the operations or business systems of Holdings'
major vendors, customers, suppliers and counterparties. Holdings has no reason
to believe that liabilities and expenditures related to the Year 2000
date-change (including, without limitation, costs caused by reprogramming
errors, the failure of others' systems or equipment, and the potential
liability, if any, of Holdings or its Subsidiaries for Year 2000 related costs
incurred or disruption experienced by others) will result in a Default or a
Material Adverse Effect.

                  9.18  Senior Indebtedness. The Guaranteed Obligations
constitute "Senior Indebtedness" of HCC under and as defined in the Shareholder
Subordinated Loan Agreement.

<PAGE>

                                                                              11

The obligations of the Guarantors under the Agreement constitute "Senior
Indebtedness" of such applicable Guarantors under and as defined in the
Shareholder Subordinated Loan Agreement.

                  9.19  Representations and Warranties in Existing Guarantee.
The representations and warranties contained in Section 9 of the Existing
Guarantee and in any amendment, consent or waiver thereto were true and correct
in all material respects on and as of the dates when made pursuant to the
Existing Guarantee.

                  10.   Affirmative Covenants of the Guarantor. Each Guarantor
hereby covenants and agrees that so long as this Guarantee is in effect and
until the Commitments have terminated and the Guaranteed Obligations and all
amounts owing hereunder are paid in full such Guarantor will:

                  10.1  Financial Statements. Furnish to each Lender and each of
the Investors:

                  (a)   as soon as available for distribution to shareholders
        and creditors generally, but in any event within 120 days after the end
        of each fiscal year of Holdings, a copy of the consolidated balance
        sheet of Holdings and its consolidated Subsidiaries, as at the end of
        such year and the related consolidated statements of income and retained
        earnings and of cash flows for such year, setting forth in each case in
        comparative form the figures for the previous year, reported on without
        a "going concern" or like qualification or exception, or qualification
        arising out of the scope of the audit, by PricewaterhouseCoopers LLP or
        other independent certified public accountants of nationally recognized
        standing not unacceptable to the Required Lenders;

                  (b)   as soon as available for distribution to shareholders
        and creditors generally, but in any event within 90 days after the end
        of each fiscal year of Holdings, a copy of the unaudited consolidated
        balance sheet of Holdings and its consolidated Subsidiaries, as at the
        end of such year, and the related unaudited consolidated statements of
        income and retained earnings and of cash flows for such year, in each
        case setting forth in comparative form the figures for the corresponding
        period of the previous year and the figures for such period as shown on
        the budgets of Holdings for such year; and

                  (c)   as soon as available, but in any event not later than 45
        days after the end of each of the first three quarterly periods of each
        fiscal year of Holdings, the unaudited consolidated balance sheet of
        Holdings and its consolidated Subsidiaries, as at the end of such
        quarter, and the related unaudited consolidated statements of income and
        retained earnings and of cash flows of Holdings and its consolidated
        Subsidiaries, for such quarter and the portion of the fiscal year
        through the end of such quarter, setting forth in each case in
        comparative form the figures for the corresponding period of the
        previous year, certified by a Responsible Officer as being fairly stated
        in all material respects when considered in relation to the consolidated
        financial statements of Holdings and its consolidated Subsidiaries,
        (subject to normal year-end audit adjustments), and in each case setting
        forth in comparative form the figures for such periods as shown on the
        budgets of such Person for such year;

<PAGE>

                                                                              12

all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).

                  10.2  Certificates; Other Information. Furnish to each Lender
and each of the Investors:

                  (a)   concurrently with the delivery of the financial
        statements referred to in subsection 10.1(a), a certificate of the
        independent certified public accountants reporting on such financial
        statements stating that in making the examination necessary therefor no
        knowledge was obtained of any Default or Event of Default, except as
        specified in such certificate;

                  (b)   concurrently with the delivery of the financial
        statements referred to in subsections 10.1(a) and 10.1(c), a certificate
        of a Responsible Officer stating that, to the best of such Responsible
        Officer's knowledge, Holdings during such period has observed or
        performed all of its covenants and other agreements, and satisfied every
        material condition, contained in this Guarantee and the other Operative
        Agreements to which it is a party to be observed, performed or satisfied
        by it, and that such Responsible Officer has obtained no knowledge of
        any Default or Event of Default except as specified in such certificate;

                  (c)   not later than 45 days following the end of each fiscal
        year of Holdings, a copy of the projections by Holdings of the operating
        budget and cash flow budget of Holdings and its Subsidiaries for the
        succeeding fiscal year, such projections to be accompanied by a
        certificate of a Responsible Officer to the effect that such projections
        have been prepared on the basis of reasonable assumptions and that such
        Officer has no reason to believe they are incorrect or misleading in any
        material respect;

                  (d)(i) within five days after the same are sent, copies of all
        financial statements and reports which Holdings, if at such time any
        class of Holding's securities are held by the public, sends to its
        stockholders generally, or, if otherwise, such financial statements and
        reports as are made generally available to the public, and (ii) within
        five days after the same are filed, copies of all financial statements
        and reports which Holdings may make to, or file with, the Securities and
        Exchange Commission or any successor or analogous Governmental
        Authority;

                  (e)   concurrently with the delivery of the financial
        statements referred to in subsections 10.1(b) and (c), a management
        summary describing and analyzing the performance of Holdings and its
        Subsidiaries during the periods covered by such financial statements;

<PAGE>

                                                                              13

                  (f)   within 45 days after the end of each quarter in each
        fiscal year of Holdings, a certificate of the principal financial
        officer of Holdings showing both the Applicable Margin for the next
        quarter and the detailed computations necessary to calculate the
        Applicable Margin (an "Applicable Margin Certificate"); and

                  (g)   promptly, such additional financial and other
        information as any Lender or either of the Investors may from time to
        time reasonably request.

                  10.3  Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of Holdings or any Subsidiary of Holdings, as the case may be.

                  10.4  Conduct of Business and Maintenance of Existence.
Continue to engage in business of the same general type as now conducted by it
and preserve, renew and keep in full force and effect its corporate existence
and take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business except as otherwise
permitted pursuant to Section 11.5; comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith would
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

                  10.5  Maintenance of Property; Insurance. (a) Keep and
maintain all property material to the conduct of its business in good working
order and condition, ordinary wear and tear excepted, and (b) maintain, with
financially sound and reputable insurance companies, insurance in such amounts
and against such risks as are customarily maintained by companies engaged in the
same or similar businesses operating in the same or similar locations.

                  10.6  Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities; and permit
representatives of either of the Investors or any Lender to visit and inspect
any of its properties and examine and make abstracts from any of its books and
records at any reasonable time and as often as may reasonably be desired and to
discuss the business, operations, properties and financial and other condition
of Holdings and Subsidiaries of Holdings with officers and employees of Holdings
and Subsidiaries of Holdings and with its independent certified public
accountants; provided, however, that no such visit, inspection or examination or
discussion shall unreasonably disrupt or interfere with normal operations of
Holdings or any of its Subsidiaries and any such representatives of such
Investor, Agent and the Lenders shall be accompanied by a Responsible Officer of
Holdings. No failure to comply with any request for the exercise of rights
hereunder shall be cause for any Event of Default unless such request is
submitted in writing to Holdings with reference to this Section 10.6.

                  10.7  Notices. Promptly give notice to the Investors, Agent
and each Lender of:

<PAGE>

                                                                              14

                  (a)   the occurrence of any Default or Event of Default of
        which any Guarantor has actual knowledge;

                  (b)   any (i) default or event of default by any Guarantor or
        any of its Subsidiaries under or with respect to any of their respective
        Contractual Obligations in any respect which, if not cured, would
        reasonably be expected to have a Material Adverse Effect, or to
        Guarantor's knowledge any default or event of default by any third party
        under or with respect to any Contractual Obligation of said third party
        with any Guarantor or any of its Subsidiaries in a respect which, if not
        cured, would reasonably be expected to have a Material Adverse Effect or
        (ii) litigation, investigation or proceeding of which any Guarantor has
        actual knowledge which may exist at any time between any Guarantor or
        any Subsidiary of such Guarantor and any Governmental Authority, which
        in either case, if not cured or if adversely determined, as the case may
        be, would reasonably be expected to have a Material Adverse Effect;

                  (c)   any litigation or proceeding affecting any Guarantor or
        any Subsidiary of such Guarantor of which such Guarantor has actual
        knowledge in which the amount involved is $5,000,000 or more and not
        covered by insurance or in which injunctive or similar relief is sought
        and which if adversely determined would reasonably be expected to have a
        Material Adverse Effect;

                  (d)   the following events, as soon as possible and in any
        event within 30 days after any Guarantor has actual knowledge thereof:
        (i) the occurrence or expected occurrence of any Reportable Event with
        respect to any Plan, or any withdrawal from, or the termination,
        Reorganization or Insolvency of any Multiemployer Plan or (ii) the
        institution of proceedings or the taking of any other action by the PBGC
        or such Guarantor, any Commonly Controlled Entity with respect to the
        termination of any Single Employer Plan; and

                  (e)   a development or event which has had or would reasonably
        be expected to have a Material Adverse Effect.

Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the applicable Guarantor proposes to take with respect
thereto.

                  10.8  Environmental Laws.

                  (a)   Comply in all material respects with, and undertake all
        reasonable efforts to ensure compliance by all tenants and subtenants,
        if any, with, all Environmental Laws and obtain and comply in all
        material respects with and maintain, and undertake all reasonable
        efforts to ensure that all tenants and subtenants obtain and comply with
        and maintain, any and all licenses, approvals, registrations or permits
        required by Environmental Laws, and upon discovery of any non-compliance
        or suspected non-compliance, undertake all reasonable efforts to attain
        full compliance;

<PAGE>

                                                                              15

                  (b)   Conduct and complete all investigations, studies,
        sampling and testing, and all remedial, removal and other actions
        required under Environmental Laws and promptly comply in all material
        respects with all lawful orders and directives of all Governmental
        Authorities respecting Environmental Laws, except to the extent that the
        failure to so conduct, complete or take such actions, or to comply with
        such orders and directives, would not in the aggregate reasonably be
        expected to have a Material Adverse Effect; and

                  (c)   Defend, indemnify and hold harmless the Investors, the
        Lessor, the Agent and the Lenders, and their respective employees,
        agents, officers and directors, from and against any claims, demands,
        penalties, fines, liabilities, settlements, damages, costs and expenses
        of whatever kind or nature known or unknown, contingent or otherwise,
        arising out of, or in any way relating to the violation of or
        noncompliance with any Environmental Laws applicable to the real
        property owned or operated by any Guarantor or any Subsidiary of such
        Guarantor, or any orders, requirements or demands of Governmental
        Authorities related thereto, including, without limitation, reasonable
        attorney's and consultant's fees, investigation and laboratory fees,
        court costs and litigation expenses, except to the extent that any of
        the foregoing arise out of the gross negligence or willful misconduct of
        the party seeking indemnification therefor.

                  (d)   Maintain a program to identify and promote substantial
        compliance with and to minimize prudently any liabilities or potential
        liabilities under any Environmental Law that may affect any Guarantor or
        any of its Qualified Subsidiaries.

                  10.9  Subsequent Guarantees. Each Guarantor shall cause each
Qualified Subsidiary (other than the TIDES Trust, HMS, MAC and Collicut) of such
Guarantor for which the aggregate value of all assets owned by such Qualified
Subsidiary is or becomes greater than $20,000,000, to execute an amendment to
this Guarantee, substantially in the form of Exhibit A hereto within one-year
after the later of (i) the date on which such Qualified Subsidiary becomes a
Subsidiary of such Guarantor and (ii) the date on which such Qualified
Subsidiary's assets attain an aggregate value in excess of $20,000,000;
provided, however, that if during such one-year period the aggregate value of
such Qualified Subsidiary's assets is or becomes $20,000,000 or less, such
Qualified Subsidiary shall not be required to become a party to this Guarantee.

                  11.   Negative Covenants. Each Guarantor hereby agrees that so
long as this Guarantee is in effect and until the Commitments have terminated
and the Guaranteed Obligations and all amounts owing hereunder are paid in full,
the Guarantor shall not, directly or indirectly:

                  11.1  Financial Condition Covenants. (a) Maintenance of
Consolidated Indebtedness to Consolidated Capitalization. Permit the ratio
(expressed as a percentage) of Consolidated Indebtedness to Consolidated
Capitalization of Holdings as at the end of any of Holdings' fiscal quarters to
be greater than .65 to 1.0; provided that for purposes of calculating the
numerator of the foregoing ratio, Consolidated Indebtedness shall exclude
seventy percent (70%) of the Indebtedness in respect of the TIDES Debentures.

<PAGE>

                                                                              16

                  (b)   Current Ratio. Permit the Current Ratio of Holdings at
the end of any of Holdings' fiscal quarters to be less than 1.0 to 1.0.

                  (c)   Consolidated Indebtedness to Consolidated Adjusted
EBITDA. Permit the ratio of Consolidated Indebtedness of Holdings to
Consolidated Adjusted EBITDA for the four consecutive fiscal quarters of
Holdings most recently ended to be greater than 5.25 to 1.0; provided that for
purposes of calculating the numerator of the foregoing ratio, Consolidated
Indebtedness of Holdings shall exclude seventy percent (70%) of the Indebtedness
in respect of the TIDES Debentures.

                  (d)   Consolidated Indebtedness to Consolidated EBITDA. Permit
the ratio of Consolidated Indebtedness to Consolidated EBITDA of Holdings for
the four consecutive fiscal quarters of Holdings most recently ended
("Consolidated Indebtedness Ratio") to be greater than 4.0 to 1.0; provided that
for purposes of calculating the numerator of the foregoing ratio, Consolidated
Indebtedness of Holdings shall exclude seventy percent (70%) of the Indebtedness
in respect of the TIDES Debentures.

                  (e)   Interest Coverage Ratio. Permit the ratio of
Consolidated EBITDA to Consolidated Interest Expense of Holdings for the period
of four consecutive fiscal quarters of Holdings most recently ended to be less
than 2.5 to 1.0.; provided that for purposes of calculating the foregoing ratio,
Consolidated Interest Expense of Holdings shall exclude any accrued but unpaid
interest to the TIDES or TIDES Debentures.

                  11.2  Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:

                  (a)   Indebtedness in respect of the loans, and other
        obligations of the Guarantors under the Corporate Credit Agreement and
        the other Loan Document as defined in the Corporate Credit Agreement;

                  (b)   Indebtedness of HCC to any of its Subsidiaries and of
        any such Subsidiary which is a Guarantor to HCC or any other Subsidiary
        of HCC;

                  (c)   Indebtedness outstanding on the Initial Closing Date and
        listed on, Schedule 11.2 and all extensions, renewals, replacements,
        refinancings and modifications thereof permitted hereunder;

                  (d)   Indebtedness of Holdings and any of its Subsidiaries in
        an aggregate amount not to exceed $10,000,000 at any time outstanding
        which is recourse only to the assets of HCC or any Subsidiaries acquired
        or financed with the proceeds of such Indebtedness;

                  (e)   Indebtedness in respect of Financing Leases provided
        that, after giving effect thereto, subsection 11.7 is not contravened;

                  (f)   Indebtedness in respect of Subordinated Debt, the terms
        and conditions of which have been approved in writing by the Required
        Lenders and Investors and all

<PAGE>

                                                                              17

        extensions, renewals, replacements, refinancings and modifications
        thereof permitted hereunder;

                  (g)   Indebtedness of Unqualified Subsidiaries of Holdings;
        provided that any such Indebtedness is Non-Recourse Indebtedness;

                  (h)   Indebtedness of a Person which becomes a Subsidiary
        after the date hereof in an aggregate principal amount not exceeding as
        to Holdings and its Subsidiaries $10,000,000 at any time outstanding,
        provided that (i) such indebtedness existed at the time such Person
        became a Subsidiary and was not created in anticipation thereof and (ii)
        immediately after giving effect to the acquisition of such Person by
        Holdings or any of its Subsidiaries no Default or Event of Default shall
        have occurred and be continuing;

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

                  (j)   Indebtedness not contemplated by clauses (a)-(i) above
        not exceeding $5,000,000 in the aggregate at any time outstanding.

                  11.3  Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except for:

                  (a)   Liens for taxes not yet due or which are being contested
        in good faith by appropriate proceedings, provided that adequate
        reserves with respect thereto are maintained on the books of Holdings or
        any Subsidiary of Holdings, as the case may be, in conformity with GAAP;

                  (b)   carriers', warehousemen's, mechanics', materialmen's,
        repairmen's or other like Liens arising in the ordinary course of
        business which are not overdue for a period of more than 60 days or
        which are being contested in good faith by appropriate proceedings;

                  (c)   pledges or deposits in connection with workers'
        compensation, unemployment insurance and other social security
        legislation and deposits securing liability to insurance carriers under
        insurance or self insurance arrangements;

                  (d)   deposits to secure the performance of bids, trade
        contracts (other than for borrowed money), leases, statutory
        obligations, surety and appeal bonds, performance bonds and other
        obligations of a like nature incurred in the ordinary course of
        business;

                  (e)   easements, rights-of-way, restrictions and other similar
        encumbrances incurred in the ordinary course of business which, in the
        aggregate, are not substantial in amount and which do not in any case
        materially detract from the value of the property subject thereto or
        materially interfere with the ordinary conduct of the business of
        Holdings or any of its Subsidiaries;

                  (f)   leases or subleases granted to third Persons not
        interfering in any material respect with the business of Holdings or any
        of its Subsidiaries;

<PAGE>

                                                                              18

                  (g)   Liens arising from UCC financing statements regarding
        leases permitted by this Agreement or the Equipment Leases;

                  (h)   any interest or title of a lessor or sublessor under any
        lease permitted by the Corporate Credit Agreement or the Equipment
        Leases;

                  (i)   Liens in favor of customs and revenue authorities
        arising as a matter of law to secure payment of custom duties in
        connection with the importation of goods so long as such Liens attach
        only to the imported goods;

                  (j)   Liens arising out of consignment or similar arrangements
        for the sale of goods entered into by Holdings or any of its
        Subsidiaries in the ordinary course of business;

                  (k)   Liens created pursuant to Financing Leases permitted
        pursuant to Section 11.2(e);

                  (l)   Liens in existence on the Initial Closing Date listed
        on, Schedule 11.3(l), securing Indebtedness permitted by subsection
        11.2(c), provided that no such Lien is spread to cover any additional
        property after the Initial Closing Date and that the amount of
        Indebtedness secured thereby is not increased;

                  (m)   Liens on (i) natural gas compressors and related
        equipment, and usual accessories and improvements and proceeds thereof
        (other than the Equipment), and (ii) oil and gas production equipment,
        in each case, the acquisition of which were financed with the proceeds
        of the Indebtedness permitted by subsection 11.2(e) and which secures
        only such Indebtedness, provided that any such Lien is placed upon such
        natural gas compressor or related equipment or such oil and gas
        production equipment at the time of the acquisition of such natural gas
        compressors or related equipment or such oil and gas production
        equipment by Holdings or any of its Subsidiaries and the Lien extends to
        no other property, and provided, further, that no such Lien is spread to
        cover any additional property after the date such Lien attaches and that
        the amount of Indebtedness secured thereby is not increased;

                  (n)   Liens on assets of the Guarantors listed on Schedule
        11.3(n), provided that no such Lien is spread to cover any additional
        property after the Initial Closing Date and that the amount of
        Indebtedness secured thereby is not increased;

                  (o)   Liens on the assets of Unqualified Subsidiaries of
        Holdings securing Indebtedness of such Unqualified Subsidiaries
        permitted under Section 11.2(g);

                  (p)   Liens securing Derivatives entered into by Holdings and
        its Subsidiaries which are permitted hereunder;

                  (q)   Liens securing Indebtedness of Holdings or any
        Subsidiary permitted under subsection 11.2(d) so long as such Liens
        attach only to the assets acquired or financed pursuant to such
        subsection;

<PAGE>

                                                                              19

                  (r)   Liens on the property or assets of a Person which
        becomes a Subsidiary after the date hereof securing Indebtedness
        permitted by subsection 11.2(h), provided that (i) such Liens existed at
        the time such Person became a Subsidiary and were not created in
        anticipation thereof, (ii) any such Lien is not spread to cover any
        property or assets of such Person after the time such Person becomes a
        Subsidiary, and (iii) the amount of Indebtedness secured thereby is not
        increased;

                  (s)   Liens that arise in connection with the Equipment Lease
        Transactions;

                  (t)   Liens listed on Schedule 11.3(t); and

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

                  11.4  Limitation on Guarantee Obligations. Create, incur,
assume or suffer to exist any Guarantee Obligation except:

                  (a)   the Corporate Guarantees and the Equipment Lease
        Guarantees;

                  (b)   up to $5,000,000 in the aggregate of Guarantee
        Obligations of HCC or any of its Subsidiaries in connection with
        indebtedness incurred by customers of HCC or any of its Subsidiaries;
        provided, that the proceeds of any such indebtedness shall be used by
        such customers to purchase natural gas compressors or oil and gas
        production equipment from HCC or any of its Subsidiaries;

                  (c)   Guarantee Obligations (in respect of obligations not
        constituting Indebtedness) arising under agreements entered into by HCC
        or any of its Subsidiaries in the ordinary course of business;

                  (d)   guarantees in respect of Indebtedness (other than
        Subordinated Debt) permitted under the Corporate Credit Agreement;

                  (f)   Guarantee Obligations of Holdings and any of its
        Subsidiaries arising pursuant to the Equipment Lease Transactions;

                  (g)   the Guarantee Obligations of HCC in the nature of a
        guarantee or indemnification for, in each case, performance obligations
        (and not Indebtedness) as contemplated by the HMS Transactions; and

                  (h)   the Subordinated Guarantee Obligations of Holdings
        arising under the TIDES Guarantees.

                  11.5  Limitations on Fundamental Changes. Enter into any
merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of its

<PAGE>

                                                                              20

property, business or assets, or make any material change in its present method
of conducting business, except:

                  (a)   any Qualified Subsidiary may be merged or consolidated
        with or into any other Qualified Subsidiary; provided, that a Qualified
        Subsidiary shall be the continuing or surviving corporation;

                  (b)   Holdings or any Qualified Subsidiary may be merged or
        consolidated with any other Person organized under a jurisdiction of the
        United States with assets held primarily in the United States; provided,
        that Holdings or such Qualified Subsidiary shall be the continuing or
        surviving corporation; the Agent is provided with written notice, and
        after giving effect thereto no Default or Event of Default would exist
        or reasonably be expected to be caused thereby;

                  (c)   any Qualified Subsidiary may sell, lease, assign,
        transfer or otherwise dispose of any or all of its assets to Holdings or
        any Qualified Subsidiary;

                  (d)   any Unqualified Subsidiary may be merged or consolidated
        with or into any other Person and/or may sell, lease, assign, transfer
        or otherwise dispose of any of its assets (upon voluntary liquidation or
        otherwise) to any other Person provided that, if merged or consolidated
        with or into a Qualified Subsidiary, the Qualified Subsidiary will
        remain as a "Qualified Subsidiary" after the merger;

                  (e)   pursuant to the Equipment Lease Transactions;

                  (f)   the TIDES Trust may wind up or dissolve itself (or
        suffer a liquidation or dissolution), or convey, assign, transfer or
        otherwise dispose of, all or substantially all of its property, business
        or assets, as contemplated by the TIDES Declaration of Trust;

                  (g)   any of the HMS Entities may wind up, dissolve (or suffer
        a liquidation or dissolution), or convey, assign, transfer or otherwise
        dispose of, all or substantially all of its property, business or
        assets; and

                  (h)   HCC may merge with another Subsidiary of Holdings in
        connection with the Restructuring.

                  11.6  Limitation on Sale or Lease of Assets. Convey, sell,
lease, assign, transfer or otherwise dispose of any of its property, business or
assets (including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, except:

                  (a)   obsolete or worn out property disposed of in the
        ordinary course of business, provided that the aggregate value of
        obsolete or worn out natural gas compressors and oil and gas production
        equipment disposed of in the ordinary course of business does not exceed
        $5,000,000 during any fiscal year of Holdings;

<PAGE>

                                                                              21

                  (b)   the sale of inventory in the ordinary course of
        business, provided that if such inventory is comprised of natural gas
        compressors or oil and gas production equipment, such natural gas
        compressors or oil and gas production equipment were never part of the
        natural gas compressors or oil and gas production equipment leased or
        held for lease by HCC or any of its Subsidiaries;

                  (c)   the lease or sublease by HCC or any of its Subsidiaries
        as lessor of natural gas compressors and oil and gas production
        equipment in the ordinary course of business under operating leases
        (which do not constitute Financing Leases);

                  (d)   the sale or discount without recourse of defaulted
        accounts receivable arising in the ordinary course of business in
        connection with the compromise or collection thereof;

                  (e)   as permitted by subsection 11.5;

                  (f)   the sale of natural gas compressors and oil and gas
        production equipment, other than disposals and sales covered by clauses
        (a) and (b) above, provided that the fair market value of natural gas
        compressors and oil and gas production equipment sold during the term of
        this Agreement does not exceed ten percent of the aggregate fair market
        value of all natural gas compressors and oil and gas production
        equipment owned by HCC and its Qualified Subsidiaries; provided further
        that if the proceeds are reinvested in natural gas compressors or oil
        and gas production equipment to be owned by HCC or its Qualified
        Subsidiaries within nine months after the sale of the assets which
        produced such proceeds, such proceeds shall not be included for purposes
        of this covenant;

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

                  (h)   the sale of natural gas compressors to the Lessor in
        connection with the Equipment Lease Transactions; and

                  (i)   the lease of assets as listed on Schedule 11.6(i).

                  11.7  Limitation on Leases. Permit Consolidated Lease Expense
for any fiscal year of Holdings to exceed $10,000,000.

                  11.8  Limitation on Dividends. Declare or pay any dividend
(other than dividends payable solely in common stock of such Person) on, or make
any payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other acquisition
of, any shares of any class of Capital Stock of such Person or any warrants or
options to purchase any such Stock, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of Holdings or any Subsidiary of
Holdings, except that if no Default or Event of

<PAGE>

                                                                              22

Default exists or would reasonably be expected to be caused thereby (i)
Subsidiaries of Holdings may declare and pay dividends to Holdings (to the
extent necessary to pay interest on, or redeem, the TIDES Debentures or to cover
operating expenses of Holdings) and other shareholders of such Subsidiaries and
the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of
Trust, (ii) Holdings may repurchase or redeem shares of Holdings common stock
from its employees and former employees so long as the aggregate amount of all
such repurchases since the Closing Date does not exceed $7,500,000, (iii)
Holdings may make open market repurchases of shares of Holdings common stock so
long as the aggregate amount of all such repurchases since the Closing Date does
not exceed $25,000,000, (iv) Holdings may declare or pay dividends on and make
mandatory stock repurchases (pursuant to the terms of the applicable certificate
of designation) of its preferred stock, if any, and (v) Holdings may declare or
pay dividends on shares of Holdings common stock, provided that the aggregate
amount of such declarations or payments pursuant to this clause (v) above does
not exceed 25% of the Consolidated Net Income of Holdings for the period (taken
as one accounting period) from the beginning of the first fiscal quarter
commencing after the Closing Date to the end of Holdings' most recently ended
fiscal quarter for which financial statements have been delivered to the Agent
and the Lenders pursuant to subsection 10.1 at or prior to the time of such
declaration or payment.

                  11.9  Limitation on Derivatives. Enter into or assume any
obligations with respect to any Derivatives except for Derivatives used by
Holdings or any of its Subsidiaries in reducing the interest rate risk exposure
or foreign currency risk exposure of Holdings and its Subsidiaries which have
been provided by a lender under the Corporate Credit Agreement or the Equipment
Lease Transactions; provided, that the aggregate notional amounts of such
Derivatives shall not exceed the aggregate amount of loans outstanding under the
Corporate Credit Agreement and the Equipment Lease Transactions.

                  11.10 Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in (all of the
foregoing being herein collectively referred to as "Investments"), any Person,
except:

                  (a)   extensions of trade credit in the ordinary course of
        business;

                  (b)   Investments in Cash Equivalents;

                  (c)   loans and advances to employees of such Person or its
        Subsidiaries for travel, entertainment and relocation expenses in the
        ordinary course of business in an aggregate amount for Holdings and its
        Subsidiaries not to exceed $250,000 at any one time outstanding;

                  (d)   Investments by Holdings in its Subsidiaries which are or
        become Guarantors and investments by such Subsidiaries which are or
        become Guarantors in Holdings and in other Subsidiaries of Holdings
        which are or become Guarantors;

<PAGE>

                                                                              23

                  (e)   Investments by Holdings in the Real Estate Subsidiary in
        an aggregate amount not to exceed $5,000,000 plus amounts necessary to
        maintain and operate the real property and improvements thereon owned by
        the Real Estate Subsidiary;

                  (f)   Investments in Unqualified Subsidiaries of Holdings not
        to exceed $20,000,000 in the aggregate;

                  (g)   Investments constituting Permitted Business Acquisitions
        so long as, after giving effect to the consummation of the transactions
        contemplated by each Permitted Business Acquisition and the Loans, and
        the loans to be made and the Letters of Credit to be issued in
        connection with the Corporate Credit Agreement, the sum of (i) the cash
        and Cash Equivalents then held by Holdings and (ii) an amount equal to
        the difference between (A) the aggregate Commitments under the Corporate
        Credit Agreement, the aggregate Commitments and the aggregate Investor
        Commitments under the Equipment Lease Participation Agreements in effect
        at such time and (B) the Aggregate Outstanding Extensions of Credit
        under the Corporate Credit Agreement, the Available Commitments and the
        Available Investor Commitments under the Equipment Lease Participation
        Agreements at such time, equals at least $20,000,000;

                  (h)   Investments or acquisitions by Holdings or its
        Subsidiaries in (i) up to 50% of the shares of capital stock,
        partnership interests, joint venture interests, limited liability
        company interests or other similar equity interests in, a Person (other
        than a Subsidiary), or (ii) loans or advances to a Person (other than a
        Subsidiary), provided that the aggregate amount of all such loans,
        advances, investments or acquisitions does not exceed $25,000,000 in any
        fiscal year;

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

                  (j)   the purchase by the TIDES Trust of the TIDES Debentures,
        as contemplated under the TIDES Declaration of Trust.

                  11.11 Limitation on Optional Payments and Modifications of
Debt Instruments. (i) Make any optional payment or prepayment on or redemption,
purchase or defeasance of any portion of the Shareholder Subordinated Debt, (ii)
make any optional payment or prepayment in excess of $10,000,000 during any
calendar year on or redemption of any Indebtedness other than (a) redemptions of
any portion of the TIDES Debentures pursuant to the TIDES Indenture or
redemptions of any portion of the TIDES pursuant to the TIDES Declaration of
Trust or (b) any optional payment, prepayment or redemption of any Indebtedness
pursuant to the Corporate Credit Agreement, the Equipment Lease Credit
Agreements or (iii) amend, modify or change, or consent or agree to any
amendment, modification or change to any of the terms of any Indebtedness other
than (a) any Indebtedness pursuant to the Corporate Credit Agreement, the
Equipment Lease Credit Agreements or (b) any amendment, modification or change
which would extend the maturity or reduce the amount of any payment of principal
thereof or which would reduce the rate or extend the date for payment of
interest thereon, or any amendment or waiver which would render the terms of
such Indebtedness less restrictive.

<PAGE>

                                                                              24

                  11.12 Transactions with Affiliates. Except for transactions of
a type set forth on Schedule 11.12, enter into any transaction, including,
without limitation, any purchase, sale, lease or exchange of property or the
rendering of any service, with any Affiliate unless such transaction is
otherwise permitted under this Agreement, is in the ordinary course of Holdings'
or such Subsidiary's business and is upon fair and reasonable terms no less
favorable to Holdings or such Subsidiary, as the case may be, than it would
obtain in a comparable arm's length transaction with a Person not an Affiliate.

                  11.13 Sale and Leaseback. Except for the transactions of a
type set forth on Schedule 11.13, enter into any arrangement with any Person
where Holdings or any of the Subsidiaries of Holdings is the lessee of real or
personal property which has been or is to be sold or transferred by Holdings or
such Subsidiary to such Person or to any other Person to whom funds have been or
are to be advanced by such Person on the security of such property or rental
obligations of Holdings or such Subsidiary (any of such arrangements, a "Sale
and Leaseback Transaction"), except that (i) HCC and its Subsidiaries may enter
into Financing Leases as lessee for natural gas compressors and oil and gas
production equipment if after giving effect thereto subsection 11.2 is not
contravened and (ii) HCC may enter into Sale and Leaseback Transactions as
lessee for natural gas compressors in connection with the Equipment Lease
Transactions.

                  11.14 Corporate Documents. Amend its Certificate of
Incorporation in any way adverse to the interests of the Agent and the Lenders.

                  11.15 Fiscal Year. Permit the fiscal year of Holdings to end
on a day other than December 31.

                  11.16 Nature of Business. Engage in any business other than
(a) the leasing, maintenance, purchase, sale and operation of natural gas
compressor units and oil and gas production equipment, (b) the design,
engineering and fabrication of natural gas compressor units, (c) the design,
engineering and fabrication of oil and gas production equipment, (d) the
provision of contract compression and related services, (e) the provision of gas
metering services as contemplated under the HMS Transactions, and (f) any
activities related thereto which are consistent with past practice and conducted
in the ordinary course of business.

                  11.17 Unqualified Subsidiaries. Permit any Unqualified
Subsidiary to directly or indirectly own any assets (other than cash or Cash
Equivalents located in bank accounts at Chase) which are located in the United
States of America or any territory thereof.

                  12.   Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
facsimile transmission), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) when delivered by hand, (b) one
Business Day after delivery to a nationally recognized courier service
specifying overnight delivery, (c) three Business Days after being deposited in
the mail, certified or registered, postage prepaid, or (d) in the case of
facsimile notice, when sent and receipt has been confirmed, addressed as
follows:

<PAGE>

                                                                              25

                  (a)   if to the Agent or any Lender, at its address or
        transmission number for notices provided in Section 9.2 of the Credit
        Agreement; and

                  (b)   if to any Guarantor, at its address or transmission
        number for notices set forth on the signature page below.

                  (c)   if to the Investors, at their address or transmission
        number for notices provided in Section 13.3 of the Participation
        Agreement.

                  The Investors, Agent, each Lender and each Guarantor may
change its address and transmission numbers for notices by notice in the manner
provided in this Section 12.

                  13.   Severability. Any provision of this Guarantee which 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 not invalidate or render
unenforceable such provision in any other jurisdiction.

                  14.   Integration. This Guarantee and the other Operative
Agreements represents the agreement of the Guarantors with respect to the
subject matter hereof and there are no promises or representations by the
Investors, Agent, any Lender or any Guarantor relative to the subject matter
hereof not reflected herein or in the other Operative Agreements.

                  15.   Amendments in Writing: No Waiver: Cumulative Remedies
(a) None of the terms or provisions of this Guarantee may be waived, amended,
supplemented or otherwise modified except as provided in Section 9.1 of the
Credit Agreement.

                  (b)   Neither the Investors, Agent nor any Lender shall not by
any act (except by a written instrument pursuant to Section 15(a) hereof),
delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default or in
any breach of any of the terms and conditions hereof. No failure to exercise,
nor any delay in exercising, on the part of the Investors, Agent or any Lender,
any right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by both Investors, Agent or any Lender of
any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Investors, Agent or such Lender would
otherwise have on any future occasion.

                  (c)   The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any other
rights or remedies provided by law.

                  16.   Section Headings. The section headings used in this
Guarantee are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.

<PAGE>

                                                                              26

                  17.   Successors and Assigns. This Guarantee shall be binding
upon the successors and assigns of the Guarantors and shall inure to the benefit
of the Investors, Agent and the Lenders and their successors and assigns.

                  18.   SUBMISSION TO JURISDICTION; WAIVERS. (a) EACH GUARANTOR
HEREBY IRREVOCABLY AND UNCONDITIONALLY:

                        (i)     SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL
        ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND THE OTHER OPERATIVE
        AGREEMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF
        ANY JUDGEMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL
        JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE
        UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND
        APPELLATE COURTS FROM ANY THEREOF;

                        (ii)    CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY
        BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR
        HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH
        COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
        COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;

                        (iii)   AGREES THAT SERVICE OF PROCESS IN ANY SUCH
        ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY
        REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF
        MAIL), POSTAGE PREPAID, TO SUCH PERSON AT ITS ADDRESS SET FORTH IN
        SECTION 12 OR AT SUCH OTHER ADDRESS OF WHICH THE AGENT SHALL HAVE BEEN
        NOTIFIED PURSUANT THERETO;

                        (iv)    AGREES THAT NOTHING HEREIN SHALL AFFECT THE
        RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
        OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND

                        (v)     WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY
        LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR
        PROCEEDING REFERRED TO IN THIS SUBSECTION ANY SPECIAL, EXEMPLARY,
        PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES.

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

                  20.   Survival of Representations, Warranties, etc. All
representations, warranties, covenants and agreements made herein and in
statements or certificates delivered

<PAGE>

                                                                              27

pursuant hereto shall survive any investigation or inspection made by or on
behalf of the Lessor and shall continue in full force and effect until all of
the obligations of the Guarantors under this Guaranty shall be fully performed
in accordance with the terms hereof, and until the payment in full of all the
Guaranteed Obligations, and until performance in full of all obligations of HCC
in accordance with the terms and provisions of such agreements.

                  21.   Authority of Agent. Each Guarantor acknowledges that the
rights and responsibilities of the Agent under this Guarantee with respect to
any action taken by the Agent or the exercise or non-exercise by the Agent of
any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Guarantee shall, as between the
Investors, Agent and the Lenders, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Agent and each Guarantor, the Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and no Guarantor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.

                  22.   Third Party Beneficiaries. Each Guarantor expressly
acknowledges and agrees that each Indemnified Person shall be a third party
beneficiary of this Guaranty.

                  23.   Right of Contribution. Each Guarantor hereby agrees that
to the extent that a Guarantor shall have paid more than its proportionate share
of any payment made hereunder, such Guarantor shall be entitled to seek and
receive contribution from and against any other Guarantor hereunder who has not
paid its proportionate share of such payment. Each Guarantor's right of
contribution shall be subject to the terms and conditions of Section 4 hereof.
The provisions of this Section shall in no respect limit the obligations and
liabilities of any Guarantor to Beneficiaries and each Guarantor shall remain
liable to the Beneficiaries for the full amount guaranteed by such Guarantor
hereunder.

                  24.   WAIVER OF JURY TRIAL. THE GUARANTORS EACH HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS GUARANTY AND FOR ANY COUNTERCLAIM THEREIN.

<PAGE>

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

                                              HANOVER COMPRESSOR COMPANY

                                              By:   /s/ [ILLEGIBLE]
                                                    ----------------------------
                                                    Name:  [ILLEGIBLE]
                                                    Title: Treasurer

                                              HANOVER COMPRESSION INC.

                                              By:   /s/ [ILLEGIBLE]
                                                    ----------------------------
                                                    Name:  [ILLEGIBLE]
                                                    Title: Treasurer

<PAGE>

                                              HANOVER COMPRESSOR LIMITED
                                              HOLDINGS, LLC

                                              by Hanover General Holdings, Inc.,
                                              as sole member

                                              By:   /s/ [ILLEGIBLE]
                                                    ----------------------------
                                                    Name:  [ILLEGIBLE]
                                                    Title: Treasurer

<PAGE>

                                              HANOVER MAINTECH LIMITED
                                              PARTNERSHIP

                                              by Hanover General Holdings, Inc.,
                                              as general partner

                                              By:   /s/ [ILLEGIBLE]
                                                    ----------------------------
                                                    Name:  [ILLEGIBLE]
                                                    Title: Treasurer

<PAGE>

                                              HANOVER/SMITH LIMITED
                                              PARTNERSHIP

                                              by Hanover General Holdings, Inc.,
                                              as general partner

                                              By:   /s/ [ILLEGIBLE]
                                                    ----------------------------
                                                    Name:  [ILLEGIBLE]
                                                    Title: Treasurer

<PAGE>
                                              HANOVER LAND LIMITED
                                              PARTNERSHIP

                                              by Hanover General Holdings, Inc.,
                                              general partner

                                              By:   /s/ [ILLEGIBLE]
                                                    ----------------------------
                                                    Name:  [ILLEGIBLE]
                                                    Title: Treasurer

Address for Notices for all Guarantors:

12001 North Houston Rosslyn
Houston, Texas 77806
Attention: Chief Financial Officer
Telecopy: 281-477-0821

with a copy to:

Latham & Watkins
Sears Tower, Suite 5800
233 South Wacker Drive
Chicago, Illinois 60602
Attention: Richard S. Meller and Michael A. Pucker
Telecopy: 312-993-9767

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