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EXHIBIT 4.12
SECOND AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
OF HANOVER COMPRESSOR COMPANY
SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this "Agreement")
dated as of June ___, 1997, among Hanover Compressor Company, a Delaware
corporation (the "Company") and the Amending Stockholders (all capitalized
terms used but not defined prior to Article I shall have the meaning ascribed
to them in Article I), which Agreement shall be effective upon the occurrence
of the Effective Date.
W I T N E S S E T H:
WHEREAS, as of the date hereof, the Company and the Amending
Stockholders are parties to that certain Amended and Restated Stockholders
Agreement dated as of August 7, 1995, amended as of October 31, 1996 (the
"Stockholders Agreement");
WHEREAS, no amendment of the Stockholders Agreement shall be valid
unless the same shall be in writing executed by (a) the Company, (b) GKH and
(c) Minority Stockholders holding a majority of the shares of Common Stock (on
a Fully Diluted Basis) then held by all Minority Stockholders;
WHEREAS, the Company, GKH and Minority Stockholders holding a majority
of the shares of Common Stock (on a Fully Diluted Basis) held by all Minority
Stockholders as of the date hereof (such Minority Stockholders, along with GKH,
are hereinafter called the "Amending Stockholders") agree that it is in their
mutual best interests to amend and restate the Stockholders Agreement in its
entirety.
NOW, THEREFORE, in consideration of the foregoing, of the mutual
covenants and agreements herein contained and of other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto, intending legally to be bound, hereby agree
as follows:
ARTICLE I
DEFINITIONS; ETC.
1.1 Definitions. Except as otherwise herein expressly provided,
the following terms and phrases shall have the meanings set forth below:
"Affiliate" shall mean (i) in the case of an entity, any Person who or
which, directly or indirectly, through one or more intermediaries, controls or
is controlled by, or is under common control with, any specified Person and
(ii) in the case of an individual, such individual's spouse, children,
grandchildren or parents, or a trust primarily for the benefit of any of the
foregoing. With respect to GKH, the term Affiliate shall expressly include,
without limitation, the partners in GKH.
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"Agreement" shall mean this Second Amended and Restated Stockholders
Agreement, as originally executed and as amended, modified, supplemented or
restated from time to time, as the context requires.
"Applicable Date" shall mean the last business day of the month
immediately preceding the date on which a Terminated Stockholder's employment
is terminated.
"Bankruptcy" shall mean with respect to any Person (i) the making of a
general assignment or composition for the benefit of creditors or (ii) any
commencement of bankruptcy, reorganization, debt arrangement or other case or
proceeding under any bankruptcy or insolvency law, or any liquidation
proceeding under any bankruptcy or insolvency law, or the commencement in
respect of such Person or a substantial portion of such Person's property or
assets of any liquidation proceeding and, if such case or proceeding is not
commenced by such Person, it is either (A) consented to or acquiesced in by
such Person or (B) remains undismissed after 60 days following the date of
commencement thereof.
"Board" shall mean the Board of Directors of the Company as
constituted from time to time.
"Bona Fide Purchaser" shall mean any Person (other than a selling
Stockholder's Affiliates) who or which has delivered a good faith written offer
to purchase all or a portion of such Stockholder's Stock for cash or Marketable
Securities; provided, however, that, such Person has the requisite financial
resources necessary, in the reasonable opinion of the Board, to purchase and
acquire such Stockholder's Stock.
"Cause" when used in connection with the termination of employment of
an Employee Minority Stockholder, shall mean a termination of such Employee
Minority Stockholder's employment by the Company due to (i) the commission by
such Employee Minority Stockholder of an act of fraud, embezzlement or willful
breach of a fiduciary duty to the Company (including the unauthorized
disclosure of confidential or proprietary material information of the Company),
(ii) a conviction of such Employee Minority Stockholder (or a plea of nolo
contendere in lieu thereof) for a felony or a crime involving fraud, dishonesty
or moral turpitude, (iii) willful misconduct as an employee of the Company,
(iv) the willful failure of such Employee Minority Stockholder to render
services to the Company in accordance with his employment, which failure
amounts to a material neglect of his duties to the Company or (v) substantial
dependence, as determined by the Board, on alcohol or any Controlled Substance.
"Common Stock" shall mean the Company's common stock, par value $.001
per share.
"Control" (including the terms "controlled by" and "under common
control with"), with respect to the relationship between or among two or more
Persons, means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the affairs or
management of a Person, whether through the ownership of voting securities, as
trustee or executor, by contract or otherwise, including, without limitation,
the ownership,
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directly or indirectly, of securities having the power to elect a majority of
the board of directors or similar body governing the affairs of such Person.
"Controlled Substance" shall mean a drug, immediate precursor or other
substance listed in Schedule I-V of the Federal Comprehensive Drug Abuse
Prevention and Control Act of 1970, as amended.
"Cost," with respect to a Terminated Stockholder, shall mean the
purchase price paid by the Terminated Stockholder for each share of his Stock
at the time of such Terminated Stockholder's acquisition thereof. In
accordance with the foregoing, each share of Stock owned by a Stockholder may
have a different Cost.
"Director" shall mean a person appointed or elected as a member of the
Board.
"Dispose" or "Disposition" (and any derivatives thereof) shall mean
(i) a voluntary or involuntary sale, assignment, transfer, conveyance or other
disposition of a Stockholder's Stock, and (ii) any agreement, contract or
commitment to do any of the foregoing.
"Effective Date" shall mean the date of consummation of an initial
public offering of Common Stock.
"Employee Minority Stockholder" shall mean each Minority Stockholder
who is an employee of the Company on the date hereof or on such other date that
such person shall become a party hereto.
"Encumbrance" or "Encumber" shall mean or refer to any lien, claim,
charge, pledge, mortgage, encumbrance, security interest, restriction on voting
or alienation of any kind, adverse interest or preferential arrangement of any
kind, or the interest of a third party under any conditional sale agreement,
capital lease or other title retention agreement.
"Exempt Disposition" shall mean a Disposition (i) pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the "Securities Act") or (ii) pursuant to any public distribution of Stock
pursuant to Rule 144 of the Securities Act.
"Fair Market Value" shall mean the per share value of a share of
Common Stock (determined on a Fully Diluted Basis) as determined within 6
months prior to the date of a Terminated Stockholder's termination of
employment with the Company; provided, however, that if no such determination
has been made within 6 months thereof, then as of the Applicable Date as
determined by the Board; provided, further, that if the Terminated Stockholder
notifies the Board in writing within 10 days of such Terminated Stockholder's
receipt of written notice of the determination of the Fair Market Value of his
Common Stock that he disagrees with such determination, the Board shall retain
an independent nationally-recognized investment banking firm (such firm to be
subject to such Terminated Stockholder's approval, which approval shall not be
unreasonably withheld or delayed) to determine the per share value of the
Common
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Stock; provided, further, that the Board shall not be required to retain any
such firm more than once in any six month period for all Terminated
Stockholders. Any fees and expenses incurred with respect to such investment
banking firm shall be shared equally by the Terminated Stockholder and the
Company if the Board's determination of Fair Market Value is equal to, higher
than or no more than 15% less than that of such investment banking firm;
otherwise the Company shall pay all the fees and expenses of such investment
banking firm. The determination of Fair Market Value by such investment
banking firm shall be final and binding. The calculation of Fair Market Value
shall include a Minority Discount, shall be determined on the basis of the
Common Stock being fully distributed and shall give effect to restrictions on
transferability. For the purposes of this definition of "Fair Market Value"
the calculation of the value of the Common Stock on a Fully Diluted Basis shall
take into account an increase in the capitalization of the Company in the
amount of the consideration which would have been paid to the Company had the
options, warrants or convertible securities referred to in the definition of
"Fully Diluted Basis" below, actually been exercised.
"Fully Diluted Basis" shall mean with respect to the shares of Common
Stock, the aggregate of (i) the number of shares of Common Stock issued and
outstanding at the time of calculation (other than shares of Common Stock held
in the treasury of the Company or held by any Affiliate of the Company that is
controlled by the Company) and (ii) the number of shares of Common Stock
issuable, at the time of calculation, upon (A) the exercise of any then
exercisable outstanding options, warrants or similar instrument (other than
such instruments held by the Company or any Affiliate of the Company that is
controlled by the Company) and (B) the exercise of any then exercisable
conversion or exchange rights with respect to any outstanding securities or
instruments (other than such securities or instruments held by the Company or
any Affiliate of the Company that is controlled by the Company).
"GKH" shall mean the collective reference to (i) GKH Investments,
L.P., a Delaware limited partnership ("GKH Investments"), (ii) GKH Partners,
L.P., a Delaware limited partnership ("GKH Partners"), and (iii) their
respective Affiliates. Any and all decisions and determinations required to be
made by GKH hereunder shall be made by GKH Partners, for itself, GKH and their
respective Affiliates.
"Letter Agreement Date" shall mean the third anniversary of the date
referenced within an Employee Minority Stockholder's letter agreement
pertaining to either Section 3.3(b) of this Agreement or to section 3.5(d) of
the Stockholders Agreement being amended and restated hereby.
"Marketable Securities" shall mean securities of a Person which Person
files periodic reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, but only to the extent such securities being
offered by a Bona Fide Purchaser to a Stockholder are, at the time of the
offer, being publicly traded in the over-the- counter market or on a nationally
recognized exchange.
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"Minority Discount" shall mean any impact that the lack of a
controlling interest possessed by a particular block of Common Stock may have
on the valuation of such Common Stock.
"Minority Stockholders" shall mean all of the Stockholders other than
GKH, together with such Stockholders' respective Affiliates. Any and all
decisions and determinations required to be made by a Minority Stockholder
hereunder shall be made by such Minority Stockholder, for itself or himself and
on behalf of its Affiliates.
"Person" shall mean any individual, partnership, corporation, limited
liability company, joint venture, trust, firm, association, unincorporated
organization or other entity.
"Seller" shall mean a Minority Stockholder Disposing of its or his
Stock.
"Stock" shall mean (i) shares of Common Stock, (ii) shares of
preferred stock, and (iii) options and warrants exercisable with respect to, or
other securities convertible into or exchangeable for shares of, Common Stock.
"Stockholder" or "Stockholders" shall mean parties hereto (other than
the Company), their appropriate successors and assigns and any Person who is a
holder of Stock and is or is required to be a party hereto at the time of
reference thereto.
1.2 Certain Other Defined Terms The following terms are defined
in the Section of this Agreement directly opposite such terms:
Term Section
---- -------
Amending Stockholders preamble
Company preamble
Debt Instrument 3.3(b)
Participating Minority Stockholder 3.2(b)
Terminated Stockholder 3.3
1.3 Article, Etc. References to an "Article" or a "Section" are,
unless otherwise specified, to one of the Articles or Sections of this
Agreement.
ARTICLE II
ORGANIZATIONAL DOCUMENTS; DIRECTORS
2.1 Articles of Incorporation; By-Laws. From and after the date
hereof, each Stockholder shall vote the Common Stock owned by him or it at any
meeting of the stockholders of the Company or in any written consent executed
in lieu of such a meeting of stockholders and shall take all actions necessary
to insure that the Certificate of Incorporation and By-Laws of the Company do
not, at any time, conflict with the provisions of this Agreement and take all
necessary and required action to cause the Company to amend, or amend and
restate, the
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Certificate of Incorporation and By-Laws of the Company as necessary to
effectuate the purposes of this Agreement.
ARTICLE III
TRANSFER RESTRICTIONS
3.1 Rights to Compel Disposition.
(a) Rights of GKH. If GKH proposes to Dispose of all
(but not less than all) of the Common Stock owned by it to a Bona Fide
Purchaser, other than pursuant to an Exempt Disposition, then, notwithstanding
anything in this Agreement to the contrary, GKH may require the Minority
Stockholders to Dispose of their Common Stock to such Bona Fide Purchaser for
the same consideration per share and otherwise on the same terms and conditions
(other than with respect to representations and warranties) upon which GKH
effects the Disposition of its Common Stock.
(b) Obligations of Minority Stockholders. In the event
that GKH desires to exercise its rights pursuant to Section 3.1(a), GKH shall
deliver to the Company and the Minority Stockholders written notice setting
forth the consideration per share to be paid by such Bona Fide Purchaser and
the other terms and conditions of such Disposition. Within 15 days following
the date of such notice, each Minority Stockholder shall deliver to GKH (i) a
stock certificate or certificates evidencing such Minority Stockholder's Common
Stock, together with an appropriate assignment separate from certificate duly
executed in a proper form to effect the Disposition of such Common Stock from
such Minority Stockholder to the Bona Fide Purchaser on the books and records
of the Company and (ii) a limited power- of-attorney authorizing GKH to effect
the Disposition of such Common Stock pursuant to the terms of such Bona Fide
Purchaser's offer as such terms may be modified by GKH, provided, that all of
the Minority Stockholders' Common Stock is disposed of for the same
consideration per share and otherwise on the same terms and conditions upon
which GKH effects the Disposition of its Common Stock. In the event that any
Minority Stockholder shall fail to deliver such stock certificate(s),
assignment separate from certificate and limited power-of-attorney to GKH, the
Company shall (A) cause a notation to be made on its books and records to
reflect that the Common Stock of such Minority Stockholder is bound by the
provisions of this Section 3.1 and that the Disposition of such Common Stock
may be effected without such Minority Stockholder's consent or surrender of its
Common Stock and (B) hold back the proceeds of the Disposition of any such
Minority Stockholder's Common Stock in an interest bearing account pending
compliance by such Minority Stockholder with its obligations under this Section
3.1(b).
In addition, in the event GKH exercises its rights under Section
3.1(a), each Minority Stockholder shall be required to make to a Bona Fide
Purchaser such unqualified representations and warranties with respect to its
Common Stock as are set forth in Section 3.4(b) hereof and representations and
warranties qualified to knowledge with respect to all other matters as are
reasonably requested by the Bona Fide Purchaser.
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(c) Responsibility of GKH. Promptly after the
consummation of the Disposition of Common Stock pursuant to this Section 3.1,
GKH shall (i) deliver notice thereof to the Minority Stockholders, (ii) remit
to the Minority Stockholders the total consideration received by GKH, if any,
with respect to the Minority Stockholders' Common Stock Disposed of pursuant
hereto, and (iii) furnish such other evidence of the completion and time of
completion of such Disposition and the terms thereof as may be reasonably
requested in writing by such Minority Stockholders.
(d) Failure to Effect Transfer. If, within 120 days
after GKH's delivery of the notice required pursuant to Section 3.1(b), GKH has
not completed the Disposition of its Common Stock and that of the Minority
Stockholders in accordance herewith, GKH shall return to each of the Minority
Stockholders (i) the stock certificates and assignments of certificates with
respect to such Minority Stockholder's Common Stock which such Minority
Stockholder delivered pursuant to this Section 3.1 and (ii) the related limited
power-of-attorney. Upon the Minority Stockholders' receipt of such materials,
all of the restrictions on Disposition contained in this Agreement with respect
to the Common Stock owned by the Stockholders shall again be in effect.
3.2 Rights of Inclusion.
(a) Rights of Minority Stockholders. If (i) GKH proposes
to Dispose of Common Stock owned by it to a Bona Fide Purchaser, (ii) such
Common Stock represents greater than 50% of the outstanding Common Stock (on an
undiluted basis) then owned by GKH and (iii) GKH elects not to exercise its
rights under Section 3.1, then each Minority Stockholder, at its sole right and
option, may require GKH to require the Bona Fide Purchaser to purchase that
percentage of its Common Stock which is equal to the percentage of all Common
Stock then owned by GKH that is being so Disposed of by GKH for the same
consideration per share and otherwise on the same terms and conditions upon
which GKH effects the Disposition of its Common Stock.
(b) Obligations of Participating Minority Stockholders.
If GKH desires to accept a Bona Fide Purchaser's offer to purchase all of the
Common Stock which GKH proposes to sell in accordance with Section 3.2(a), GKH
shall deliver a copy of the Bona Fide Purchaser's offer to the Company and each
of the Minority Stockholders, and, within 15 days of the receipt of such copy,
each Minority Stockholder desiring to exercise its rights pursuant to this
Section 3.2 (each a "Participating Minority Stockholder," collectively, the
"Participating Minority Stockholders") shall deliver to the Company and GKH
written notice to such effect and shall deliver to GKH (i) a stock certificate
or certificates evidencing its Common Stock, together with an appropriate
assignment separate from certificate duly executed in a proper form to effect
the Disposition of the Participating Common Stock to the Bona Fide Purchaser on
the books and records of the Company and (ii) a limited power-of-attorney
authorizing GKH to effect the Disposition of such Common Stock pursuant to the
terms of such Bona Fide Purchaser's offer as such terms may be modified by GKH,
provided, that all of the Participating Minority Stockholders' Common Stock
that is being transferred pursuant to this Section 3.2 is Disposed
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of for the same consideration per share and otherwise on the same terms and
conditions upon which GKH effects the Disposition of its Common Stock. The
failure of a Minority Stockholder to deliver notice of its desire to exercise
its rights under or to otherwise comply with the provisions of this Section
3.2(b) shall be deemed to be a waiver of such Minority Stockholder's rights
hereunder and such Minority Stockholder shall not be deemed to be a
Participating Minority Stockholder.
(c) Responsibility of GKH. Promptly after the
consummation of the sale of Common Stock under this Section 3.2, GKH shall (i)
deliver notice thereof to the Participating Minority Stockholders of the sale,
(ii) remit to the Participating Minority Stockholders the total consideration
received by GKH, if any, with respect to the Minority Stockholders' Common
Stock sold pursuant hereto and (iii) furnish such other evidence of the
completion and time of completion of such Disposition and the terms thereof as
may be reasonably requested in writing by a Participating Minority Stockholder.
(d) Failure to Effect Transfer. If, within 120 days
after GKH's delivery of the copy of the Bona Fide Purchaser's offer pursuant to
Section 3.2(b), GKH has not completed the Disposition of its Common Stock and
that of the Participating Minority Stockholders in accordance herewith, GKH
shall return to each of the Participating Minority Stockholders (i) the stock
certificates and assignments of certificates with respect to such Participating
Minority Stockholder's Common Stock which such Participating Minority
Stockholder delivered for Disposition pursuant to this Section 3.2 and (ii) the
related limited power-of-attorney. Upon the Participating Minority
Stockholders' receipt of such materials, all the restrictions on Disposition
contained in this Agreement with respect to the Common Stock owned by the
Stockholders shall again be in effect.
3.3 Certain Sales Upon Termination of Employment.
(a) Termination for Cause. In the event the employment
of an Employee Minority Stockholder is terminated for Cause (the "Terminated
Stockholder"), the Company shall have the right, but not the obligation, for a
period of 90 days thereafter to purchase all, but not less than all, of the
Common Stock of the Terminated Stockholder by delivering written notice to such
effect. The purchase price for the Common Stock purchased pursuant to this
Section 3.3 shall be equal to the lesser of (i) Cost and (ii) 80% of the Fair
Market Value thereof, payable by delivery of a promissory note of the Company
having a term of seven years and otherwise complying with Section 3.3(c)
hereof.
(b) Exceptions for Payment in Cash. Notwithstanding
anything herein to the contrary, if the payment of all or a portion of the
purchase price in cash under any subsection of Section 3.3 would cause a
default under any agreement or instrument respecting the incurrence of
indebtedness, including, without limitation, any credit agreement, note,
mortgage, bond, indenture, or deed of trust to which the Company or any of its
subsidiaries is a party or by which any of its or their properties or assets
are bound (each, a "Debt Instrument") then such portion of the purchase price
shall be payable in cash to the extent such default would not be
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caused and the remainder of such portion of the purchase price shall be payable
pursuant to the Company's delivery of a promissory note in accordance with
Section 3.3(c) and having the shortest term permissible without causing such a
default. To the extent that any or all of the portion of the purchase price is
payable to the Terminated Stockholder in cash, the amount of such payment shall
offset by the cancellation of any indebtedness owed by the Terminated
Stockholder to the Company or its Affiliates (including, without limitation,
any indebtedness owed by such Terminated Stockholder to the Company in
connection with such Terminated Stockholder's purchase of the Common Stock).
(c) Payment Pursuant to Promissory Note. Any promissory
note of the Company required to be delivered pursuant to this Section 3.3 shall
be in a form reasonably acceptable to the parties and shall have the following
terms: (i) the principal amount of the note shall be equal to the purchase
price for the Terminated Stockholder's Common Stock offset by the cancellation
of any indebtedness owed by the Terminated Stockholder to the Company or its
Affiliates (including, without limitation, any indebtedness owed by such
Terminated Stockholder to the Company in connection with such Terminated
Stockholder's purchase of the Common Stock) after giving effect to any such
offset made pursuant to Section 3.3(b), (ii) the Company's obligations under
such promissory note shall be subordinated and subject in right of payment to
the prior payment of all indebtedness of the Company and its subsidiaries the
terms of which require such subordination, (iii) the principal amount of such
promissory note shall be payable, to the extent permitted by all Debt
Instruments, in equal annual installments commencing on the first anniversary
of the issuance thereof and continuing as required by subsection (a) or (b), as
appropriate, of this Section 3.3 and (iv) the principal amount of such
promissory note shall be bear interest payable annually at the prime rate
announced from time to time by The Chase Manhattan Bank in New York, New York.
(d) Tender of Common Stock. Any payment of the purchase
price pursuant to Section 3.3, whether by delivery of a note, in cash or by a
combination thereof, shall be made against delivery of the certificates
representing the Common Stock so purchased, duly endorsed, or, at the
purchaser's option, accompanied by a stock power executed in blank.
3.4 Agreement of Selling Stockholder. All sales of Common Stock
to be made pursuant to Sections 3.1, 3.2, and 3.3 of this Agreement shall be
subject to the following terms:
(a) Deliveries. The Seller shall deliver to the
purchaser certificates evidencing the Common Stock being sold, free and clear
of any Encumbrance, together with duly executed transfers thereof in favor of
the purchaser or its nominees and such other documents, including evidence of
ownership and authority, as the purchaser may reasonably request;
(b) Representations and Warranties. The Seller shall not
be required to make any representations or warranties to any Person in
connection with such sale, except as to (i) good title to the Common Stock
being sold, (ii) the absence of Encumbrances with respect to the Common Stock
being sold, (iii) the due organization and valid existence of the Seller if the
Seller is not an individual, (iv) the authority for, and validity and binding
effect of (as against
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such Seller), any agreement entered into by such Seller in connection with such
sale, (v) all required material consents to Seller's sale and governmental
approvals having been obtained (excluding any approvals required by applicable
state or federal securities laws) and (vi) the fact that no broker's commission
is payable by the Seller as a result of Seller's conduct in connection with the
sale; and
(c) Indemnification. The Seller shall not be required to
provide any indemnities in connection with such sale except for breach of the
representations and warranties contained in Section 3.4(b).
3.5 General Transfer Restriction. Unless otherwise agreed by GKH
and the Minority Stockholders holding a majority of shares of Common Stock (on
a Fully Diluted Basis) then held by all Minority Stockholders, any Stock
Disposed by a Minority Stockholder, other than pursuant to an Exempt
Disposition shall remain subject to all of the terms and conditions of this
Agreement in the hands of any Person to whom such Stock may be Disposed and any
such Person shall be required to first deliver to the Company and the
Stockholders a written agreement assuming and agreeing to be bound by all of
the terms and conditions of this Agreement and to be a Stockholder hereunder.
ARTICLE IV
MISCELLANEOUS PROVISIONS
4.1 Endorsement on Common Stock Certificates. Each and every
certificate of stock evidencing Common Stock and Preferred Stock shall contain
upon its face, or on the reverse side thereof, the following legend:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER
SUCH ACT, OR UNLESS SUCH OFFER, SALE, TRANSFER, PLEDGE OR
HYPOTHECATION IS EXEMPT FROM REGISTRATION OR IS OTHERWISE IN
COMPLIANCE WITH SUCH ACT. THE TRANSFERABILITY OF THIS SECURITY IS
ALSO SUBJECT TO RESTRICTIONS CONTAINED IN A STOCKHOLDERS AGREEMENT
WHICH AGREEMENT THE COMPANY WILL FURNISH TO THE HOLDER OF THIS
SECURITY UPON REQUEST.
A STATEMENT SUMMARIZING THE VOTING POWERS, DESIGNATIONS,
PREFERENCES, LIMITATIONS, RESTRICTIONS AND RELATIVE RIGHTS OF THE
VARIOUS CLASSES OF STOCK OR SERIES THEREOF MAY BE OBTAINED BY THE
STOCKHOLDERS OF THE COMPANY, WITHOUT CHARGE, FROM THE PRINCIPAL
OFFICES OF THE COMPANY."
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4.2 Termination.
(a) Agreement. This Agreement shall terminate upon the
earliest to occur of the following events:
(i) Bankruptcy of the Company;
(ii) the Common Stock being owned by a single
Stockholder;
(iii) the passage of six months (or such longer
time period required by the Company's underwriters) from the effective
date of a publicly registered offering of 25% or more of the Common
Stock;
(iv) GKH ceases to own 35% or more of the then
issued and outstanding Common Stock (on an undiluted basis);
(v) the Effective Date failing to occur by
September 15, 1997; or
(vi) the voluntary agreement, in writing, of (A)
the Company, (B) GKH and (C) Minority Stockholders holding a majority
of the Common Stock then held by all Minority Stockholders.
4.3 Effectiveness. Until occurrence of the Effective Date, the
Stockholders Agreement shall remain in full force and effect and in the event
of the termination of this Agreement pursuant to Section 4.2(v) hereof, the
Stockholders Agreement shall continue in full force and effect.
4.4 Common Stock subject to this Agreement.
(a) This Agreement shall apply to all Stock currently or
hereinafter owned or acquired by the Stockholders, including, without
limitation, (i) the Stock held by the Stockholders on the Effective Date, (ii)
any Stock issued to any Stockholder pursuant to Section 4.4(b) hereof, (iii)
any Stock issued to any Stockholder pursuant to such Stockholder's exercise of
an option or warrant and (iv) any Stock otherwise purchased by, acquired by or
issued to any Stockholder. All stock certificates evidencing Stock subject to
this Agreement shall, on the reverse thereof, contain the restrictive legend
set forth in Section 4.1.
(b) If at any time, and from time to time, the Company
shall declare and pay a dividend upon any of the Stock in the form of
additional shares of Stock, or shall validly issue shares in lieu of, or in
exchange for, or in addition to, any of the Stock without the receipt of
additional consideration therefor, then any such shares subsequently issued
with respect to the Stock then subject to this Agreement shall constitute
additional Stock subject to this Agreement.
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4.5 Notices. Any and all notices or other communications provided
for herein shall be in writing and shall be considered duly given upon the
earliest to occur of (a) personal delivery, (b) 2 days after being delivered to
a nationally recognized overnight mail delivery or courier service, (c) 5 days
after being mailed by certified or registered mail, return receipt requested,
postage prepaid or (d) delivery by prepaid telegram or facsimile transmission
(with written confirmation of receipt). All notices shall be addressed to the
Company at its principal office and to the Stockholders at their addresses last
appearing on the stock records of the Company. Any party hereto may change its
address by giving notice to the other parties hereto as provided herein.
4.6 Pronouns and Headings. As used herein, all pronouns shall
include the masculine, feminine, neuter, singular and plural wherever the
context and facts require such construction. The descriptive headings in the
Articles or Sections of this Agreement are inserted for convenience of
reference only and shall not control or affect the meaning or construction of
any of the provisions hereof.
4.7 Severability. If any provision of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal or unenforceable, such
provision shall be severed and enforced to the extent possible or modified in
such a way as to make it enforceable, and the invalidity, illegality or
unenforceability thereof shall not affect the validity, legality or
enforceability of the remaining provisions of this Agreement.
4.8 Modification; Amendment. No modification or amendment of this
Agreement shall be valid unless the same shall be in writing executed by (a)
the Company, (b) GKH and (c) Minority Stockholders holding a majority of the
shares of Common Stock (on a Fully Diluted Basis) then held by all Minority
Stockholders.
4.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard
to the conflict of laws provisions thereof.
4.10 Binding Effect; Complete Agreement. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns. This
Agreement and the agreements and related documentation, if any, pursuant to
which the Stockholders acquired their respective shares of Stock from the
Company, constitute the entire agreement among the parties hereto and supersede
all prior agreements and understandings, oral or written, among the parties
hereto with respect to the subject matter hereof and thereof including, without
limitation, the Stockholders Agreement, except as provided in Section 4.3
hereof.
4.11 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
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13
4.12 Attorneys' Fees. If any legal action, including an action
for declaratory relief, is brought to enforce any provision of this Agreement,
the prevailing party or parties, as the case may be, shall be entitled to
recover his, its or their respective reasonable attorneys' fees from the
non-prevailing party or parties, as the case may be. These fees, which may be
set by the court in the same action or in a separate action brought for that
purpose, are in addition to any other relief to which any prevailing party may
be entitled.
4.13 Consent of Spouse; Insertion in Will. Each married Minority
Stockholder, or, if currently unmarried, each Minority Stockholder upon his
marriage, agrees to obtain the consent and approval of his spouse to all of the
terms and provisions of this Agreement by the execution hereof by such spouse.
Each Minority Stockholder, if an individual, agrees to insert in his last will
and testament, or other similar instrument, or to execute a codicil thereto,
directing and authorizing his personal representatives to fulfill and comply
with the provisions hereof and to sell and transfer his Common Stock in
accordance with the terms and provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
THE COMPANY:
-----------
HANOVER COMPRESSOR COMPANY,
a Delaware corporation
By:
------------------------------------------
Xxxxxx Xxxxxxx
Chief Financial Officer and Treasurer
-13-
14
THE STOCKHOLDERS:
GKH INVESTMENTS, L.P., a Delaware limited
partnership
By: GKH PARTNERS, L.P., a Delaware limited
partnership, its general partner
By: JAKK HOLDING CORP., a Nevada
corporation, a general partner
By:
--------------------------------------
Name: Xxxxxx X. Xxxxx,
President
GKH PARTNERS, L.P., a Delaware limited
partnership
By: JAKK HOLDING CORP., a Nevada
corporation, a general partner
By:
--------------------------------------
Name: Xxxxxx X. Xxxxx,
President
[signatures of Minority Stockholders
holding a majority of the shares of
Common Stock (on a Fully Diluted Basis)
held by all Minority Stockholders as of
the date hereof continued on next pages]
-14-
15
XXXXXXX X'XXXXXX, representing % of the shares
-----
of the Minority Stockholders
-----------------------------------------
Xxxxxxx X'Xxxxxx
XXXXXXX XXXXXX, representing % of the shares
-----
of the Minority Stockholders
-----------------------------------------
Xxxxxxx XxXxxx
XXXXXXX X. XXXXXXXX, representing % of the
------
shares of the Minority Stockholders
-----------------------------------------
Xxxxxxx X. XxXxxxxx
XXXXXX XXXXXXX, representing % of the shares
-----
of the Minority Stockholders
-----------------------------------------
Xxxxxx Xxxxxxx
-15-
16
XXXXXXX X. XXXXXX, representing % of the shares
----
of the Minority Stockholders
-----------------------------------------
Xxxxxxx X. Xxxxxx
XXXXXXX X. XXXXX, representing % of the
-------
shares of the Minority Stockholders
-----------------------------------------
Xxxxxxx X. Xxxxx
-16-
17
OTHER MINORITY STOCKHOLDERS:
----------------------------
XXXXX INVESTMENT GROUP II
------------------------------------
By: Xxx X. Xxxxx
Its: Managing Partner
NEW PROSPECT DRILLING COMPANY
------------------------------------
By:
Its:
XXXX CANDIES, INC.
------------------------------------
By: Xxxx X. Candies
Its: President
------------------------------------
Xxxxx X. Xxxxx
------------------------------------
Xxxxxx X. Xxxxxxx
------------------------------------
Xxxxx Xxxxxx
-17-
18
------------------------------------
Xxxxx X. Xxxxxxxxxxx
------------------------------------
Xxxxxxx Xxxxxxxx
------------------------------------
Xxxx X. Xxxxx
------------------------------------
Xxxxxx X. Xxxxxxxxx
------------------------------------
Xxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxx
------------------------------------
Xxxx X. Xxxxx
------------------------------------
Xxxxxx Xxxxxx Xxxxx
------------------------------------
Xxxxx Xxxxx Xxxxxx
-18-
19
------------------------------------
Xxxxx X. Xxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxxxx
------------------------------------
Xxx Xxxxxxx, Jr.
------------------------------------
Xxxx Xxxxxxxxx
------------------------------------
Xxxx X. Xxxxxx
------------------------------------
Xxxxx X. Xxxxx
------------------------------------
Xxxx Xxxxxx
------------------------------------
Xxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxx
-19-
20
------------------------------------
Xxxxxx X. Xxxxxxxxx
------------------------------------
Xxxx X. Xxxxx
------------------------------------
Xxxxxxx X. Xxxxxx
------------------------------------
Xxxxx X. Xxxxx, Xx.
------------------------------------
Xxxx Xxxxxx Xxxxxx
------------------------------------
Xxxxx X. Xxxx
------------------------------------
Xxxx Xxxxxxx Good
------------------------------------
Xxxx Xxxxxx Xxxxxxx
------------------------------------
Teddy Head
-20-
21
------------------------------------
Xxxx Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxx Xxxxxx
------------------------------------
Xxxxxxx Xxxx Xxxxxx
------------------------------------
Xxxx Xxxx
------------------------------------
Xxxxxx X. Xxxxxx
------------------------------------
Xxx X. Xxxxx
------------------------------------
Xxxxx X. Xxxxx
-21-
22
------------------------------------
Xxxxxxx X. Xxxxx
------------------------------------
Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxxx X. Xxxxxx
------------------------------------
Xxxx X'Xxxxxx Xxxxxxx
------------------------------------
Xxxxxxx X. Light
------------------------------------
Xxxxx Xxxx Xxxx
------------------------------------
Xxxx X. Xxxxx
------------------------------------
Xxxx X. Xxxxxxx
------------------------------------
Xxxxxx Xxxxx
-22-
23
------------------------------------
Xxxx X. Xxxxxxx
------------------------------------
W. Xxxxx Xxxxxx
------------------------------------
Xxxxx X. Xxxx
------------------------------------
Xxxxxx X. Xxxxx
------------------------------------
Xxxxx X. XxXxxxxx
------------------------------------
Xxxxxxx Xxx XxXxxxxxx
------------------------------------
Xxxxx Xx XxXxxxxxxx
------------------------------------
Xxxxxx XxXxxx
------------------------------------
Xxxxxxx Xxxxxxx
-23-
24
------------------------------------
Xxxxx Xxx Xxxxxx
------------------------------------
Xxxxxxx X. X'Xxxxx, Xx.
------------------------------------
Xxxx X. Xxxxx
------------------------------------
Xxxxxxx X. Paris
------------------------------------
Xxx X. Xxxxxxx, Xx.
------------------------------------
Xxxxxx Xxxxxxx
------------------------------------
Xxxxxx Xxxxxx
------------------------------------
Xxxxxx Xxxxxxxxxx
------------------------------------
Xxxxxx Xxx Xxx
-24-
25
------------------------------------
Xxxxxx X. Xxxx
------------------------------------
Xxxxxxx X. Xxxxxx
------------------------------------
Xxxxx Xxxxxxxx
------------------------------------
Xxxxxx Xxxx
------------------------------------
Xxxx Xxxxxxxxxx
------------------------------------
J. Xxxx Xxxxxxx
------------------------------------
Xxxxx Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx
-25-
26
------------------------------------
Xxxx X. Xxxxxxxx
------------------------------------
Xxxx Xxxx Xxxxx
------------------------------------
Xxxxxx X. Xxxxxxxxx
------------------------------------
Xxxxxx X. Xxxxx
------------------------------------
Xxxxxx X. Xxxxxxxxxx
------------------------------------
Xxxxx Xxxxxx
------------------------------------
Xxxxx Xxxxxxx
------------------------------------
Xxxxxxxxx Xxxxxxxx, Xx.
------------------------------------
Xxxxxxx Xxxxxxxxx
-26-
27
------------------------------------
Xxxxxxx X. Xxxxx
------------------------------------
Xxxxxx X. Xxxxxxx
------------------------------------
Xxxx Xxxxxxx
------------------------------------
Xxxxx Xxxxxxx Xxxxxxx
------------------------------------
L. O. Xxxx
------------------------------------
Xxxxx Xxxx
------------------------------------
Xxx Xxxxxxx, Xx.
------------------------------------
Xxxxxxx X. Xxxxxxxx
------------------------------------
Xxx Xxxxxx
-27-
28
------------------------------------
Xxxx Wind
------------------------------------
Xxxx Wind
------------------------------------
Xxxxxxx Xxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxx
-28-
