Exhibit 2
EXECUTION COPY
LOCK-UP, STANDSTILL AND REGISTRATION RIGHTS AGREEMENT
THIS LOCK-UP, STANDSTILL AND REGISTRATION RIGHTS AGREEMENT (this
"AGREEMENT"), dated as of August 31, 2001 is by and among Schlumberger
Technology Corporation, a Texas corporation ("STC"), Camco International, Inc.,
a Delaware corporation ("CAMCO"), Schlumberger Oilfield Holdings Ltd., a British
Virgin Islands company ("XXXX"), Schlumberger Surenco S.A., a Panama company
("SURENCO"), Operational Services, Inc., a Texas corporation ("OSI"), and
Hanover Compressor Company, a Delaware corporation ("HANOVER").
RECITALS
WHEREAS, pursuant to the Purchase Agreement, dated as of June 28, 2001
(the "PURCHASE AGREEMENT"), among STC, XXXX, Surenco, Camco, Hanover and Hanover
Compression Limited Partnership, a Delaware limited liability partnership
("HCLP"), Camco is acquiring Six Million Seven Hundred Sixty Two Four Hundred
Seventy Nine (6,762,479) shares of Hanover's common stock, par value $0.001 per
share (the "COMMON STOCK"), XXXX is acquiring Two Hundred Fifty One Thousand
Seven Hundred Thirty Four (251,734) shares of the Common Stock and Surenco is
acquiring One Million Four Hundred Thirty Thousand Three Hundred Four
(1,430,304) shares of the Common Stock (collectively, the "SPA SHARES");
WHEREAS, pursuant to the Alliance Agreement, dated as of August 31,
2001 (the "ALLIANCE AGREEMENT"), among STC, XXXX and Hanover, STC is acquiring
Fifty One Thousand Four Hundred Ninety One (51,491) shares of the Common Stock
and XXXX is acquiring One Hundred Fourteen Thousand Four Hundred Twenty Four
(114,424) shares of the Common Stock (collectively the "ALLIANCE SHARES");
WHEREAS, pursuant to the Asset Purchase Agreement, dated as of Xxxxxx
00, 0000 (xxx XXX XXXXX PURCHASE AGREEMENT"), by and between OSI, STC, HCLP and
Hanover, OSI is acquiring Ninety Seven Thousand Two Hundred Sixty One (97,261)
shares of the Common Stock (the "OSI SHARES");
WHEREAS, the parties are entering into this Agreement as a condition to
closing the Purchase Agreement, the Alliance Agreement and the OSI Asset
Purchase Agreement;
AGREEMENTS
NOW, THEREFORE, in consideration of the premises, and of the mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. DEFINITIONS. In addition to capitalized terms defined elsewhere in
this Agreement, the following capitalized terms shall have the following meaning
when used in this Agreement. Defined terms used, but not defined, herein shall
have the meanings ascribed to them as set forth in the Purchase Agreement.
"ALLIANCE REGISTRABLE SECURITY" means at any time (i) the Alliance
Shares; (ii) any shares of Common Stock issued or issuable as dividends on, or
other distributions with respect to, the Alliance Shares; and (iii) any other
security issued or issuable in exchange for, or in replacement of, any of the
Alliance Shares, PROVIDED that any such security ceases to be an Alliance
Registrable Security when (a) a registration statement covering the sale of such
Alliance Registrable Security has been declared effective under the Securities
Act and such Alliance Registrable Security has been sold in accordance
therewith, or (b) such Alliance Registrable Security is distributed to the
public pursuant to Rule 144, or any similar provision then in force, under the
Securities Act.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
together with all rules and regulations promulgated thereunder.
"MATERIAL BREACH" means a breach of any obligation to make a payment to
any Seller Party as and when due and payable under the Alliance Agreement, the
Purchase Agreement, the Note or the OSI Asset Purchase Agreement.
"NOTE" means the Subordinated Promissory Note, dated as of August 31,
2001, in the amount of $150,000,000, by HCLP payable to the order of Camco.
"OSI REGISTRABLE SECURITY" means at any time (i) the OSI Shares; (ii)
any shares of Common Stock issued or issuable as dividends on, or other
distributions with respect to, the OSI Shares; and (iii) any other security
issued or issuable in exchange for, or in replacement of, any of the OSI Shares,
PROVIDED that any such security ceases to be an OSI Registrable Security when
(a) a registration statement covering the sale of such OSI Registrable Security
has been declared effective under the Securities Act and such OSI Registrable
Security has been sold in accordance therewith, or (b) such OSI Registrable
Security is distributed to the public pursuant to Rule 144, or any similar
provision then in force, under the Securities Act.
"OTHER REGISTRATION RIGHTS AGREEMENT" means the Third Amended and
Restated Registration Rights Agreement among Hanover and the stockholders party
thereto, as amended from time to time.
"PERSON" means any person or entity, whether an individual, whether in
his capacity as a trustee, executor, administrator or other legal
representative, sole proprietorship, corporation, limited liability company,
general partnership, limited partnership, trust, unincorporated organization,
syndicate, business association, firm, joint venture, governmental agency or
authority or any similar entity.
"PUBLIC OFFERING" means any offering by Hanover of its Common Stock to
the public pursuant to an effective registration statement under the Securities
Act or any comparable
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statement under any comparable federal statute then in effect (other than any
offerings registered under Form S-4 or Form S-8 or a comparable or successor
form).
"REGISTRATION RIGHTS DATE" shall mean the date that is three (3) years
from the date hereof.
"REGISTRABLE SECURITY" means the Alliance Registrable Securities, the
OSI Registrable Securities and/or the SPA Registrable Securities, as the case
may be.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, together
with all rules and regulations promulgated thereunder.
"SELLER PARTIES" means STC, XXXX, Surenco, Camco, OSI and any Person
who becomes a Seller Party after the date of this Agreement pursuant to Section
7.1 hereof.
"SELLING EXPENSES" means all fees and expenses of underwriters
including discounts, commissions or fees of underwriters, selling brokers,
dealer managers or similar securities industries professionals relating to the
distribution of the Registrable Securities.
"SHARES" means the Alliance Shares, the OSI Shares and/or the SPA
Shares, as the case may be.
"SPA REGISTRABLE SECURITY" means at any time (i) the SPA Shares; (ii)
any shares of Common Stock issued or issuable as dividends on, or other
distributions with respect to, the SPA Shares; and (iii) any other security
issued or issuable in exchange for, or in replacement of, any of the SPA Shares,
PROVIDED that any such security ceases to be an SPA Registrable Security when
(a) a registration statement covering the sale of such SPA Registrable Security
has been declared effective under the Securities Act and such SPA Registrable
Security has been sold in accordance therewith, or (b) such SPA Registrable
Security is distributed to the public pursuant to Rule 144, or any similar
provision then in force, under the Securities Act.
2. PIGGYBACK REGISTRATION.
2.1 RIGHT TO PIGGYBACK. During the period beginning on the
Registration Rights Date and ending on the date ten (10) years thereafter (the
"REGISTRATION PERIOD"), whenever Hanover proposes to register any of its
securities under the Securities Act for sale in a Public Offering and the
registration form to be used may be used for the registration of any Registrable
Securities (a "PIGGYBACK REGISTRATION"), Hanover will give STC and XXXX, as
representatives of the Seller Parties, written notice of its intention to effect
such a registration at least thirty (30) days prior to the proposed filing of a
registration statement with respect thereto and will offer to include in such
registration such Registrable Securities. Upon the written request of STC and
XXXX, acting together as representatives of the Seller Parties, which shall have
been received by Hanover within ten (10) days after STC and XXXX received the
notice described in the immediately preceding sentence, and in accordance with
the priorities set forth
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in Sections 2.2 and 2.3 below, Hanover will use its reasonable best efforts
to cause such Registrable Securities specified in such notice to be included
in such registration statement.
2.2 PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback
Registration is an underwritten primary registration on behalf of Hanover and
the managing underwriters advise Hanover in writing that in their opinion the
number of securities requested to be included in the registration would
materially interfere with the underwriter's ability to effect the registration
and sale of Hanover's securities, Hanover will include in such registration the
permissible quantity of securities to be sold as determined by the managing
underwriter(s) (a) first, the securities that Hanover proposes to sell, (b)
second, the securities requested to be included therein by other holders
requesting registration under the Other Registration Rights Agreement and the
Registrable Securities requested to be included in such registration, pro rata
among the holders of such securities.
2.3 PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
Hanover's securities and the managing underwriters advise Hanover in writing
that in their opinion the number of securities requested to be included in the
registration would materially interfere with the underwriters' ability to effect
the registration and sale of such securities, Hanover will include in such
registration the permissible quantity of securities to be sold as determined by
the managing underwriter(s) (a) first, the securities requested to be included
therein by the holders requesting such registration, and (b) second, the
Registrable Securities requested to be included in such registration and other
securities requested to be included therein under the Other Registration Rights
Agreement, pro rata among the holders of such securities.
2.4 SELECTION OF UNDERWRITERS. Hanover shall have the right to
select the managing underwriter(s) to administer any offering of Hanover's
securities in which any Seller Party participates pursuant to a Piggyback
Registration.
2.5 LIMITATION WITH RESPECT TO SHELF REGISTRATIONS.
Notwithstanding anything herein to the contrary, the number of Registrable
Securities that Hanover shall be obligated to register pursuant to a Piggyback
Registration with respect to a shelf registration statement on an appropriate
form pursuant to Section 415 of the Securities Act, or any similar rule then in
effect (a "SHELF REGISTRATION"), shall not exceed (A) two million (2,000,000)
Registrable Securities, less (B) the number of Registrable Securities that have
been registered hereunder and not yet sold pursuant to any Shelf Registrations
then outstanding.
3. DEMAND REGISTRATION.
3.1 REGISTRATION. During the Registration Period, STC and XXXX,
acting together as representatives of the Seller Parties, will be entitled to
request five (5) registrations under the Securities Act of all, but in any event
no less than fifteen percent (15%), of the aggregate number of Registrable
Securities (the "DEMAND REGISTRATION"); provided, that STC and XXXX shall not be
entitled to request a Shelf Registration hereunder. Notwithstanding anything
herein to the contrary, Hanover is obligated to effect only five (5)
registrations under this Section 3.1 (regardless of whether such registrations
are only of Alliance Shares, the OSI Shares or the SPA Shares), PROVIDED, that
if Hanover fails (A) to effect such registration of all
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Registrable Securities for which registration is requested or (B) to have
such registration declared or ordered effective, then one (1) additional
registration request may be made hereunder each time such limit is imposed.
Thereafter, Hanover shall have no obligation to include any Registrable
Securities in any registration hereunder.
3.2 PAYMENT OF EXPENSES FOR THE DEMAND REGISTRATION. Hanover
will pay all Registration Expenses (as defined in Section 6 below) for the
Demand Registration, provided that the Seller Parties will pay all Selling
Expenses.
3.3 PRIORITY. If a Demand Registration is an underwritten
Public Offering and the managing underwriters advise Hanover in writing that in
their opinion the inclusion of the number of Registrable Securities and other
securities requested to be included would materially interfere with the
underwriters' ability to effect the registration and sale of such securities,
Hanover will include in such registration the permissible quantity of securities
to be sold as determined by the managing underwriter(s) (a) first, the
Registrable Securities requested to be included in such registration as limited
as set forth in Section 3.1, and (b) second, the securities requested to be
included therein by the other holders under the Other Registration Rights
Agreement, pro rata among the holders of such securities.
3.4 RESTRICTIONS. Hanover may postpone for up to ninety (90)
days the filing or the effectiveness of a registration statement for the Demand
Registration if the Board of Directors of Hanover reasonably and in good faith
determines that such filing would be materially detrimental to Hanover or
require a disclosure of a material fact that might reasonably be expected to
have a material adverse effect on Hanover or any plan or proposal by Hanover or
any of its Affiliates to engage in any acquisition of stock or assets (other
than in the ordinary course of business) or any merger, consolidation, tender
offer or other significant transaction.
3.5 SELECTION OF UNDERWRITERS. Hanover shall have the right to
select the managing underwriter(s) to administer any offering of Hanover
securities pursuant to a Demand Registration.
4. HOLDBACK AGREEMENTS. In addition to the restrictions set forth in
Section 7.1 hereto, each Seller Party agrees not to effect any public sale or
distribution of equity securities of Hanover, or any securities convertible into
or exchangeable or exercisable for such securities, during the seven (7) days
prior to, and during the ninety (90) days following, the effective date of any
underwritten Piggyback Registration or the underwritten Demand Registration in
which Registrable Shares are included (except as part of such underwritten
registration), unless the underwriters managing the Public Offering otherwise
agree.
5. REGISTRATION PROCEDURES. Whenever the Seller Parties have requested
that any Registrable Securities be registered pursuant to this Agreement,
Hanover will use its reasonable best efforts to effect the registration and sale
of such Registrable Securities in accordance with the intended method of
disposition thereof and, pursuant thereto, Hanover will as expeditiously as
possible:
(a) prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its reasonable best efforts
to cause such registration statement to
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become effective (provided that before filing a registration statement or
prospectus, or any amendments or supplements thereto, Hanover will furnish
copies of all such documents proposed to be filed to the counsel or counsels
for the Seller Parties covered by such registration statement);
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus(es) used in
connection therewith as may be necessary to keep such registration statement
effective for a period of not less than six (6) months or such shorter period
until such Registrable Securities are no longer Registrable Securities and
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement;
(c) furnish to the Seller Parties such number of copies of
such registration statement, each amendment and supplement thereto, the
prospectus(es) included in such registration statement (including each
preliminary prospectus) and such other documents as the Seller Parties may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by each such seller;
(d) use its reasonable best efforts to register or qualify
such Registrable Securities under such other securities or blue sky laws of such
jurisdictions as the Seller Parties reasonably request and do any and all other
acts and things which may be reasonably necessary or advisable to enable the
Seller Parties to consummate the disposition in such jurisdictions of the
Registrable Securities (provided that Hanover will not be required to (i)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph or (ii) consent to
general service of process in any such jurisdiction);
(e) notify each Seller Party, at any time when a prospectus
relating to such Seller Party is required to be delivered under the Securities
Act, of the happening of any event as a result of which the prospectus included
in such registration statement contains an untrue statement of a material fact
or omits any fact necessary to make the statements therein not misleading, and,
at the request of such Seller Party, Hanover will prepare a supplement or
amendment to such prospectus so that, as thereafter delivered to the purchasers
of such Registrable Securities, such prospectus will not contain any untrue
statement of a material fact or omit to state any fact necessary to make the
statements therein not misleading;
(f) cause all such Registrable Securities to be listed
on each securities exchange on which similar securities issued by Hanover are
then listed;
(g) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other customary
actions the Seller Parties or the underwriters, if any, reasonably request in
order to expedite or facilitate the disposition of such Registrable Securities;
(h) make available for inspection by each Seller Party, any
underwriter participating in any disposition pursuant to such registration
statement, and any attorney, accountant or other agent retained by such Seller
Party or any such underwriter, all financial and
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other records, pertinent corporate documents and properties of Hanover, and
cause Hanover's officers, directors, employees and independent accountants to
supply all information reasonably requested by such Seller Party, any such
underwriter, attorney, accountant or agent in connection with such
registration statement; and
(i) advise each Seller Party, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by the SEC
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceeding for such purpose and promptly use all reasonable
efforts to prevent the issuance of any stop order or to obtain its withdrawal if
such stop order should be issued.
6. REGISTRATION EXPENSES. Except as provided in Section 3.2, all
expenses incident to Hanover's performance of or compliance with this Agreement,
including, but not limited to, all registration and filing fees, fees and
expenses of compliance with securities or blue sky laws, printing expenses,
messenger and delivery expenses, and fees and disbursements of counsel for
Hanover and all independent certified public accountants, underwriters
(excluding Selling Expenses which shall be payable by the Seller Parties) and
other Persons retained by Hanover (all such expenses being herein called
"REGISTRATION EXPENSES"), will be borne by Hanover, provided that Hanover shall
not be required to pay sales commissions, discounts or transfer taxes. In
addition, Hanover will pay its internal expenses (including, but not limited to,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit or quarterly review, the
expense of any liability insurance obtained by Hanover and the expenses and fees
for listing the securities to be registered on each securities exchange.
7. LOCK-UP PERIOD; STANDSTILL.
7.1 LOCK-UP PERIOD. In order to induce Hanover to enter into
this Agreement, together with the Purchase Agreement, the Alliance Agreement and
the OSI Asset Purchase Agreement, during the period beginning on the date hereof
through the Registration Rights Date, except as permitted below, none of the
Seller Parties or any of their Affiliates will, directly or indirectly, offer,
sell, contract to sell, pledge, grant any option to purchase, make any short
sale or otherwise dispose of any of the SPA Shares, the OSI Shares or the
Alliance Shares, as the case may be, or any options or warrants to purchase any
such Shares, or any securities convertible into, exchangeable for or that
represent the right to receive such Shares. The foregoing restriction is
expressly agreed to preclude the Seller Parties and their Affiliates from
engaging in any hedging or other transaction which is designed to or which could
lead to or result in a sale or disposition of the SPA Shares, the OSI Shares or
the Alliance Shares, as the case may be, even if such Shares would be disposed
of by someone other than the Seller Parties or their Affiliates. Such prohibited
hedging or other transactions would include without limitation any short sale or
any purchase, sale or grant of any right (including without limitation any put
or call option) with respect to any of the SPA Shares, the OSI Shares or the
Alliance Shares, as the case may be, or with respect to any security that
includes, relates to, or derives any significant part of its value from such
Shares. Notwithstanding anything herein to the contrary, the Seller Parties
shall be permitted to transfer any of the Shares (provided that such transfer is
exempt from registration under the Securities Act), together with the rights
granted to such Seller Party under this Agreement, only to a Permitted
Transferee who delivers to Hanover, within a reasonable time after such
transfer, a written
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instrument by which such transferee agrees to be bound by the applicable
terms of this Agreement. A "PERMITTED TRANSFEREE" shall mean any wholly-owned
Affiliate of a Seller Party or any entity that merges or consolidates with or
owns or acquires all of the equity securities or all or substantially all of
the assets of such Seller Party.
7.2 STANDSTILL. In order to induce Hanover to enter into this
Agreement, together with the Purchase Agreement, the OSI Asset Purchase
Agreement and the Alliance Agreement, during the period beginning on the date
hereof through the Registration Rights Date, each Seller Party agrees that
neither it nor any of its Affiliates or any officers, directors, employees,
advisors, agents or other representatives acting on its behalf will, in any
manner, directly or indirectly, without the prior written consent of Hanover:
(a) effect or seek, offer or propose (whether publicly or
otherwise) to effect, agree to effect or cause or participate in, directly or
indirectly, or in any way assist any other person to effect, offer or propose
(whether publicly or otherwise) to effect or participate in (i) any acquisition,
directly or indirectly, by purchase or otherwise, of any securities (or
beneficial ownership thereof), or rights to acquire any securities, of Hanover
or any successor to or person in control of Hanover, pursuant to which, after
giving effect to such acquisition, the Seller Parties and their Affiliates would
own, directly or indirectly, beneficially or otherwise, greater than twenty-five
percent (25%) of the shares of Common Stock then outstanding; and (ii) any
tender or exchange offer, merger, consolidation or other business combination
involving Hanover's securities, pursuant to which, after giving effect to such
transaction, the Seller Parties and their Affiliates would own, directly or
indirectly, beneficially or otherwise, greater than twenty-five percent (25%) of
the shares of Common Stock then outstanding (or, if applicable, greater than
twenty-five percent (25%) of the outstanding voting stock with respect to any
successor entity to Hanover);
(b) make any public announcement with respect to, or submit a
proposal for, or offer of (with or without conditions), any extraordinary
transaction involving Hanover or any of its securities or relating to any of the
matters set forth in clause (a) above;
(c) form, join or in any way participate in a "group"
(as defined in the Exchange Act) with respect to any of the matters set forth in
clause (a) above; or
(d) enter into any discussions or arrangements with any third
party with respect to any of the matters set forth in clause (a) above or
advise, assist, encourage, finance or seek to persuade others to take any action
with respect to the foregoing.
8. CROSS-DEFAULT.
8.1 SPA DEFAULT. In the event that Hanover commits a Material
Breach of the Purchase Agreement or the OSI Asset Purchase Agreement, which
Material Breach continues uncured for a period of thirty (30) business days
after receipt of written notice of such Material Breach, or Hanover commits a
Material Breach of the Note, which Material Breach continues uncured for a
period of ten (10) business days after receipt of written notice of such
Material Breach (in either case, the "SPA DEFAULT DATE"), then:
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(a) with respect to all Registrable Securities then
outstanding (including all SPA Registrable Securities, OSI Registrable
Securities and Alliance Registrable Securities), the lock-up provisions set
forth in Section 7.1 hereof shall expire and be of no further force and effect;
and
(b) with respect to all Registrable Securities then
outstanding (including all SPA Registrable Securities, OSI Registrable
Securities and Alliance Registrable Securities), the "Registration Period"
referred to in Sections 2.1 and Section 3.1 hereof shall be deemed to be the
period beginning on the earlier of (1) the Registration Rights Date and (2) the
SPA Default Date, and ending on the date ten (10) years thereafter.
8.2 ALLIANCE DEFAULT. In the event that Hanover commits a
Material Breach of the Alliance Agreement, which Material Breach has continued
uncured for a period of thirty (30) business days after receipt of written
notice of such Material Breach, or the parties to the strategic alliance have
failed to meet the Performance Goals (as defined in the Alliance Agreement)
solely as a result of Hanover's refusal or unwillingness to commit the necessary
resources to the strategic alliance, as determined by STC and XXXX, acting
together as representatives of the Seller Parties, in their reasonable
discretion, which refusal or unwillingness to commit such resources has
continued uncured for a period of thirty (30) business days after receipt of
written notice thereof (in either case, the "ALLIANCE DEFAULT DATE"), then:
(a) with respect to the Alliance Registrable Securities then
outstanding (and expressly NOT with respect to the SPA Registrable Securities or
the OSI Registrable Securities), the lock-up provisions set forth in Section 7.1
hereof shall expire and be of no further force and effect; and
(b) with respect to the Alliance Registrable Securities then
outstanding (and expressly NOT with respect to the SPA Registrable Securities or
the OSI Registrable Securities), the "Registration Period" referred to in
Sections 2.1 and Section 3.1 hereof shall be deemed to be the period beginning
on the earlier of (1) the Registration Rights Date and (2) the Alliance Default
Date, and ending on the date ten (10) years thereafter.
8.3 RIGHT OF FIRST REFUSAL. Hanover or its designee shall have
a right of first refusal with respect to any or all the Registrable Securities
proposed to be sold by the Seller Parties prior to the Registration Rights Date
pursuant to Sections 8.1 or 8.2 hereof. After Hanover's receipt of a written
request for a Piggyback Registration or a Demand Registration, which notice has
been received prior to the Registration Rights Date pursuant to Section 8.1 or
8.2 hereof, Hanover shall have five (5) business days to notify STC and XXXX, as
representatives of the Seller Parties, in writing (the "EXERCISE NOTICE") that
Hanover or its designee shall exercise its right of first refusal hereunder.
Such Exercise Notice shall specify the number of such Registrable Securities to
be purchased by Hanover or its designee (the "PURCHASED SHARES"). On the date
that is ten (10) business days after the date of the Exercise Notice, Hanover or
its designee will purchase the Purchased Shares from the applicable Seller Party
at the Agreed Market Price. The "Agreed Market Price" shall be a price equal to
the average of the closing prices of one share of Common Stock on the New York
Stock Exchange as reported in the Wall Street Journal for the ten (10) business
days immediately after the date of the Exercise Notice on which the New York
Stock Exchange is open and available for at least
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five (5) hours for the trading of securities. For these purposes, during such
ten (10) business day period, neither Hanover nor its Affiliates will sell or
cause to be sold any outstanding Common Stock and neither the Seller Parties
nor their Affiliates will purchase or cause to be purchased any outstanding
Common Stock.
9. INDEMNIFICATION.
9.1 BY HANOVER. Hanover agrees to indemnify, to the extent
permitted by law, the Seller Parties, their officers, employees and directors
and each Person who controls such Seller Party (within the meaning of the
Securities Act) and such Person's officers, employees and directors against all
losses, claims, damages, liabilities and expenses (including, but not limited
to, reasonable attorneys' fees and expenses) caused by any untrue or alleged
untrue statement of material fact contained in any registration statement,
prospectus or preliminary prospectus, or any amendment thereof or supplement
thereto, or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as the same are caused by or contained in any information
furnished, or caused to be furnished, in writing to Hanover by any Seller Party
or its Affiliates expressly for use therein or by any Seller Party's failure to
deliver a copy of the prospectus or any amendments or supplements thereto after
Hanover has furnished such Seller Party with a sufficient number of copies of
the same. The payments required by this Section 9.1 will be made periodically
during the course of the investigation or defense, as and when bills are
received or expenses incurred.
9.2 BY SELLER PARTIES. In connection with any registration
statement in which a Seller Party is participating, such Seller Party will
furnish to Hanover in writing such information as Hanover reasonably requests
for use in connection with any such registration statement or prospectus and, to
the extent permitted by law, will indemnify Hanover, its directors, employees
and officers and each Person who controls Hanover (within the meaning of the
Securities Act) against any losses, claims, damages, liabilities and expenses
(including, but not limited to, reasonable attorneys' fees and expenses)
resulting from any untrue or alleged untrue statement of material fact contained
in the registration statement, prospectus or preliminary prospectus, or any
amendment thereof or supplement thereto, or any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only to the extent that such untrue
statement or omission is contained in or omitted from any information so
furnished in writing by such Seller Party or its Affiliates for the acknowledged
purpose of inclusion in such registration statement, prospectus or preliminary
prospectus; provided that the liability of each Seller Party will be limited in
all events to the net amount received by such Seller Party from the sale of
Registrable Securities pursuant to such registration statement.
9.3 PROCEDURE. Any Person entitled to indemnification hereunder
will (a) give prompt written notice to the indemnifying Person of any claim with
respect to which it seeks indemnification and (b) permit such indemnifying
Person to assume the defense of such claim with counsel reasonably satisfactory
to the indemnified Person. If such defense is assumed, the indemnifying Person
will not be subject to any liability for any settlement made by the indemnified
Person without its consent (but such consent will not be unreasonably withheld).
An indemnifying Person who is not entitled to, or elects not to, assume the
defense of a claim
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will not be obligated to pay the fees and expenses of more than one counsel
for all parties indemnified by such indemnifying Person with respect to such
claim. No indemnifying Person, in the defense of any claim, shall, except
with the prior written consent of the indemnified Person, consent to entry of
any judgment or enter into any settlement (1) that does not include as an
unconditional term thereof the giving by the claimant to such indemnified
Person a release from all liability in respect to such claim in form and
substance reasonable satisfactory to such indemnified Person, and (2) that
imposes any equitable remedies, conduct restrictions or affirmative
obligations whatsoever on such indemnified Person other than financial
obligations for which such indemnified Person will be indemnified hereunder.
9.4 SURVIVAL. The indemnification provided for under this
Agreement will remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified Person or any officer, director or
controlling Person of such indemnified Person and will survive the transfer of
securities. Hanover also agrees to make such provisions as are reasonably
requested by any indemnified Person for contribution to such Person in the event
Hanover's indemnification is unavailable for any reason.
10. COMPLIANCE WITH RULE 144 AND RULE 144A. Subject to the lock-up
provisions of Section 2.1 hereof, so long as Hanover files reports under Section
13 or 15(d) of the Exchange Act, then at the request of any Seller Party,
Hanover will (a) forthwith furnish to such Seller Party a written statement of
compliance with the filing requirements of the SEC as set forth in Rule 144, as
such rule may be amended from time to time and (b) make available to the public
and such Seller Party such information as will enable such Seller Party to make
sales pursuant to Rule 144. At any time that Hanover is not subject to Section
13 or 15(d) of the Exchange Act, Hanover will provide to such Seller Party and
to any prospective purchaser of Registrable Securities under Rule 144A of the
SEC, the information described in Rule 144A(d)(4) of the SEC.
11. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Person may
participate in any registration hereunder which is underwritten unless such
Person (a) agrees to sell its securities on the basis provided in any
underwriting arrangements approved by such Person or Persons entitled hereunder
to approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, custody agreements, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements.
12. MISCELLANEOUS.
12.1 NO INCONSISTENT AGREEMENTS. Hanover will not hereafter
enter into any agreement with respect to its securities which is inconsistent
with or which otherwise materially limits, restricts or interferes with the
rights granted to the holders of Registrable Securities in this Agreement.
12.2 AMENDMENTS AND WAIVERS. Except as otherwise expressly
provided herein, the provisions of this Agreement may be amended or waived at
any time only by the written agreement of Hanover and each Seller Party. Any
waiver, permit, consent or approval of any kind or character on the part of any
such holders of any provision or condition of this
11
Agreement must be made in writing and shall be effective only to the extent
specifically set forth in writing.
12.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto. Except as set forth in
Section 7.1, this Agreement may not be assigned (and any purported assignment
shall be null and void) without the prior written consent of the non-assigning
Person.
12.4 DESCRIPTIVE HEADINGS. The descriptive headings of
this Agreement are inserted for convenience of reference only and do not
constitute a part of and shall not be utilized in interpreting this Agreement.
12.5 NOTICES. Any notices required or permitted to be sent
hereunder shall be delivered personally or mailed, certified mail, return
receipt requested, or delivered by overnight courier service to the following
addresses, or such other address as any party hereto designates by written
notice to Hanover, and shall be deemed to have been given upon delivery, if
delivered personally, three (3) days after mailing, if mailed, or one (1)
business day after delivery to the courier, if delivered by overnight courier
service:
If to Hanover, to:
Hanover Compressor Company
00000 Xxxxx Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
with a copy to
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
If to STC, to:
Schlumberger Technology Corporation
000 Xxxxxxxxxxxx Xxxxx MD:23
Xxxxx Xxxx, Xxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
If to Camco, to:
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Camco International Inc.
0000 Xxxxxxx Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
If to Surenco, to:
Schlumberger Surenco S.A.
Piso 13, Avenida Rio Caura Parque Humboldt
Caracas 1080, Venezuela
Attention: General Counsel
Fax: (000) 00 000 000-0000
If to XXXX, to:
Schlumberger Oilfield Holdings Ltd.
Xxxxxxxxx Xxxxxxxx X.X. Xxx 00
Xxxxxxxx, Xxxxxxx, XXX
Xxxxxxxxx: General Counsel
Fax: (000) 00 00 000-0000
If to OSI, to:
Operational Services, Inc.
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxx 00000
Attention: Legal
Fax: (000) 000-0000
in each case with a copy to:
Xxxx Xxxx Xxxx & Freidenrich
0000 Xxxxx XxXxx, Xxxxx 000
Xxxxxx, Xxxxx 00000-0000
Attn: Xxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
12.6 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which when so executed and delivered
shall be deemed an original, and such counterparts together shall constitute one
instrument.
12.7 GOVERNING LAW. This Agreement and the transactions
contemplated hereby shall be construed in accordance with, and governed by, the
laws of the State of Texas.
12.8 CONSENT TO JURISDICTION. Each of the parties hereto (i)
consents to submit itself to the personal jurisdiction of any federal court
located in the Xxxxxx County, Texas or any Texas state court in the event any
dispute arises out of this Agreement or any of the transactions
13
contemplated hereby, (ii) agrees that it will not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from any such
court, and (iii) agrees that it will not bring any action relating to this
Agreement in any court other than a federal court sitting in the Xxxxxx
County, Texas or a Texas state court.
12.9 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
WAIVES ITS RESPECTIVE RIGHT TO A JURY TRIAL OF ANY PERMITTED CLAIM OR CAUSE OF
ACTION ARISING OUT OF THIS AGREEMENT, ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY, OR ANY DEALINGS BETWEEN ANY OF THE PARTIES HERETO RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL
DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF
THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING,
WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR OTHER MODIFICATIONS TO THIS AGREEMENT, ANY
OF THE TRANSACTIONS CONTEMPLATED HEREBY OR TO ANY OTHER DOCUMENT OR AGREEMENT
RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY.
12.10 SERVICE OF PROCESS. Each of the parties hereto
irrevocably consents to the service of any process, pleading, notices or other
papers by the mailing of copies thereof by registered, certified or first class
mail, postage prepaid, to such party at such party's address set forth herein,
or by any other method provided or permitted under Texas law.
12.11 REPRODUCTION OF DOCUMENTS. This Agreement and all
documents relating hereto, including, but not limited to, (a) consents, waivers,
amendments and modifications which may hereafter be executed and (b)
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, optical disk,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
12.12 REMEDIES. Each of the parties to this Agreement will be
entitled to enforce its rights under this Agreement specifically, to recover
damages by reason of any breach of any provision of this Agreement and to
exercise all other rights existing in its favor. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party shall be entitled to
immediate injunctive relief or specific performance without bond or the
necessity of showing actual monetary damages in order to enforce or prevent any
violations of the provisions of this Agreement.
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12.13 SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
12.14 FINAL AGREEMENT. This Agreement constitutes the
complete and final agreement of the parties concerning the matters referred
to herein, and supersedes all prior agreements and understandings.
12.15 NO STRICT CONSTRUCTION. The language used in this
Agreement will be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction will be used
against any Person.
[SIGNATURE PAGE FOLLOWS]
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SIGNATURE PAGE FOR
LOCK-UP, STANDSTILL AND REGISTRATION RIGHTS AGREEMENT
The parties hereto have executed this Agreement as of the date first set forth
above.
HANOVER COMPRESSOR COMPANY
By:
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Name: Xxxxxxx X. XxXxxx
Title: President and Chief Executive Officer
SCHLUMBERGER TECHNOLOGY CORPORATION
By:
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Name:
-------------------------------------
Its:
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SCHLUMBERGER SURENCO, S.A.
By:
--------------------------------------
Name:
-------------------------------------
Its:
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SCHLUMBERGER OILFIELD HOLDINGS LTD.
By:
--------------------------------------
Name:
-------------------------------------
Its:
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CAMCO INTERNATIONAL INC.
By:
--------------------------------------
Name:
-------------------------------------
Its:
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OPERATIONAL SERVICES, INC.
By:
--------------------------------------
Name:
-------------------------------------
Its:
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