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EXHIBIT 4.10
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (this "Agreement") is dated as of August 7,
1995 by and between Hanover Compressor Company, a Delaware corporation (the
"Company"), and [__________________], ("Warrant Holder").
W I T N E S S E T H:
WHEREAS, the Company's authorized capital stock consists of 500,000
shares of common stock, par value $0.001 per share (the "Common Stock"), and
200,000 of preferred stock, par value $0.01 per share;
WHEREAS, the Warrant Holder is a party to that certain Subscription
Agreement, dated as of the date hereof (the "Subscription Agreement"), which
Subscription Agreement provides for the issuance by the Company to the Warrant
Holder of certain detachable warrants in connection with its subscription for
shares of the Company's 6.5% Cumulative Redeemable Series A Preferred Stock;
and
WHEREAS, subject to the terms and provisions hereof, each Common Stock
purchase warrant, $0.001 par value Common Stock (individually, a "Warrant",
and, collectively, the "Warrants") issued under this Agreement entitles the
Warrant Holder thereof to purchase one-sixth (0.1667) of a share of Common
Stock at the price designated as the "Exercise Price" herein (subject to
adjustment hereunder).
NOW, THEREFORE, in consideration of the mutual agreements contained
herein and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
FORM OF WARRANT
The Warrants shall be evidenced by a certificate (the "Warrant
Certificate"). The text of the Warrant Certificate (and the related forms of
exercise and assignment) shall be substantially in the form attached hereto as
Exhibit A and may have such identification, designation and information thereon
as the Company may deem appropriate and as is not inconsistent with the
provisions of this Agreement, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto.
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ARTICLE II
EXERCISE PRICE, VESTING, TERM, AND METHOD OF EXERCISE
Section 2.01. Exercise Price. Unless adjusted as otherwise provided
herein, the exercise price ("Exercise Price") for each share of Common Stock
purchased upon exercise of a Warrant issued hereunder shall be $1.00. The
Exercise Price shall be adjusted upon the occurrence of certain events as set
forth in Article III hereof.
Section 2.02. Vesting. Other than upon the occurrence of a Capital
Event (as defined in Section 3.05 hereof), the warrants evidenced by the
Warrant Certificate shall be exercisable only to the extent vested in
accordance with the following vesting schedule (the "Vesting Schedule"):
% of Warrants
Date of Vesting Under Vest on Such Date
--------------- -----------------------
The Closing Date 20%
Each month during the first
twelve (12) month period
following the Closing Date 1.667%
Each month during the twenty
four (24) month period
following the first anniversary
of the Closing Date 2.5%
Section 2.03. Warrant Rights and Term. Each Warrant shall entitle the
Warrant Holder, upon exercise thereof and subject to the provisions thereof and
of this Agreement, including provisions relating to adjustments upon the
occurrence of certain events as set forth in Article III hereof, to purchase
from the Company one-sixth (0.1667) of a fully paid and nonassessable share of
Common Stock at the then Exercise Price, upon the earlier to occur of (a) a
Capital Event and (b) the date on which such Warrant becomes vested in
accordance with the Vesting Schedule. All of the Warrants issued hereunder and
evidenced by the Warrant Certificate shall expire and no longer be exercisable
at 5:00 p.m. (Houston time) on the earlier to occur of (a) August 31, 2005, or
if August 31, 2005 is not a business day in Houston, Texas, then on the next
succeeding business day and (b) the 30th day following delivery to the Warrant
Holder of the notice described in Section 30.7(d) hereof (the "Expiration
Date").
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Section 2.04. Expiration. Each Warrant not exercised by 5:00 p.m.
(Houston time), time, on the Expiration Date shall become void, and all rights
thereunder and all rights in respect thereof under this Agreement shall
thereupon cease.
Section 2.05. Method of Exercise. To the extent vested in
accordance with the Vesting Schedule the Warrant Holder may exercise its rights
with respect to all or any whole number of Warrants evidenced by the Warrant
Certificate. Exercise shall be effected by surrender of the Warrant
Certificate, with the exercise form thereon duly executed, to the Company at
its offices as designated in Section 5.04 hereof, together with the Exercise
Price for each Warrant that is exercised. Payment of the Exercise Price shall
be made by (a) certified check payable in lawful money of the United States of
America to the order of the Company, or (b) by wire transfer of immediately
available funds to an account designated by the Company.
Upon receipt of the Warrant Certificate with the exercise form duly
executed and accompanied by full and proper payment of the Exercise Price for
the shares of Common Stock purchased thereby, the Company shall deliver to, or
in accordance with the instructions of, the Warrant Holder certificates for the
total number of shares of Common Stock for which the Warrants evidenced by such
Warrant Certificate are being exercised.
In the event that the Warrant Holder shall exercise rights with
respect to less than all of the Warrants evidenced by the Warrant Certificate
surrendered upon the exercise of Warrants, a new Warrant Certificate for the
balance of such Warrants shall be delivered to, or in accordance with the
instructions of, the Warrant Holder.
Section 2.06. Cancellation of Warrants. In the event the Company
shall purchase or otherwise acquire Warrants, the same shall thereupon be
delivered to the Company and be cancelled by it and retired. The Company shall
cancel any Warrant surrendered for exchange, substitution, transfer or exercise
in whole or in part.
ARTICLE III
ADJUSTMENTS TO WARRANTS UPON CERTAIN EVENTS
Section 3.01. Mechanical Adjustments. The number of shares of
Common Stock purchasable upon the exercise of each Warrant (such shares being
referred to in this Article III as the "Warrant Shares") and the Exercise Price
shall be subject to adjustment as follows if any of the events listed in (a) -
(c) below occur prior to exercise of each Warrant:
(a) In case the Company shall (i) pay a dividend in
shares of Common Stock or make a distribution in shares of Common
Stock, (ii) subdivide or reclassify its outstanding shares of Common
Stock into a greater number of shares, (iii) combine or
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reclassify its outstanding shares of Common Stock into a smaller
number of shares, the number of Warrant Shares purchasable upon the
exercise of each Warrant immediately prior thereto shall be adjusted
so that the number of Warrant Shares purchasable upon exercise of each
Warrant shall be determined by multiplying the number of Warrant
Shares theretofore purchasable upon the exercise of each Warrant by a
fraction, of which the numerator shall be the number of shares of
Common Stock outstanding immediately following such action and of
which the denominator shall be the number of shares of Common Stock
outstanding immediately prior thereto. If the Company declares a
dividend in money or its Common Stock and at substantially the same
time offers its stockholders a right to purchase new shares of Common
Stock from the proceeds of such dividend, or for an amount
substantially equal to such dividend, all shares of Common Stock so
issued shall for purposes hereof be deemed issued as a stock dividend.
(b) In case the Company shall (i) sell or issue shares of
its Common Stock, (ii) issue rights, options or warrants to subscribe
for or purchase shares of Common Stock or (iii) issue or sell other
rights or securities convertible into or for the purchase of shares of
Common Stock, in each case to holders of its Common Stock, at a price
per share which is lower at the record date mentioned below than the
then Current Market Price (as hereinafter defined) per share of Common
Stock, then in each case unless the Warrant Holder shall be permitted
to subscribe for or purchase shares of Common Stock on the same basis
as through such Warrant Holder's Warrants had been converted into
shares of Common Stock immediately prior to such record date, the
number of Warrant Shares thereafter purchasable upon the exercise of
each Warrant shall be determined by multiplying the number of Warrant
Shares theretofore purchasable upon exercise of each Warrant by a
fraction, of which the numerator shall be the number of shares of
Common Stock outstanding on such record date plus the number of
additional shares of Common Stock offered for subscription or
purchase, and of which the denominator shall be the number of shares
of Common Stock outstanding on such record date plus the number of
shares which the aggregate offering price of the total number of
shares of Common Stock so offered would purchase at the then Current
Market Price per share of Common Stock. Such adjustment shall be made
whenever such shares, rights, options or warrants are issued, and
shall become effective immediately after the record date for the
determination of shareholders entitled to receive such rights, options
or warrants. In determining whether any rights or warrants entitle the
holders of the Common Stock to subscribe for or purchase shares of
Common Stock at less than the Current Market Price, and in determining
the aggregate offering price of the shares of Common Stock so offered,
there shall be taken into account any consideration received by the
Company for such rights or warrants, the value of such consideration,
if other than cash, to be determined by the Board (whose
determination, if made in good faith, shall be conclusive). To the
extent that rights, options or warrants expire unexercised, the number
of Warrant Shares purchasable upon the exercise of each Warrant shall
be readjusted to the number which would then be in effect had the
adjustments made upon the issuance of such rights, warrants or options
been made upon the basis of only the number of shares of Common Stock
delivered pursuant to rights, options or warrants actually exercised.
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(c) In case the Company shall distribute to all holders
of its shares of Common Stock shares of stock (other than Common
Stock) or evidences of its indebtedness or cash or other assets
(excluding regular cash dividends or distributions payable out of
consolidated earnings or retained earnings and dividends or
distributions referred to in paragraph (a) above) or rights, options or
warrants or convertible or exchangeable securities containing the
right to subscribe for or purchase shares of Common Stock (excluding
those referred to in paragraph (b) above), then in each case the
number of Warrant Shares thereafter purchasable upon the exercise of
each Warrant shall be determined by multiplying the number of Warrant
Shares theretofore purchasable upon the exercise of each Warrant, by a
fraction of which the numerator shall be the Current Market Price per
share of Common Stock on the record date mentioned below in this
paragraph (c), and of which the denominator shall be the Current
Market Price per share of Common Stock on such record date, less the
then fair value (as reasonably determined by the Board of Directors of
the Company, whose determination, if made in good faith, shall be
conclusive) of the portion of the shares of stock other than Common
Stock or cash, assets or evidences of indebtedness so distributed or
of such subscription rights, options or warrants, or of such
convertible or exchangeable securities applicable to one share of
Common Stock. Such adjustment shall be made whenever any such
distribution is made, and shall become effective retroactive to the
record date for the determination of shareholders entitled to receive
such distribution.
(d) Notwithstanding the foregoing, the provisions of this
Section 3.01 shall not apply to (i) any offering of Capital Stock of
the Company in an underwritten public offering pursuant to a firm
commitment (as opposed to best efforts) from the underwriter and (ii)
any issuance of shares of Capital Stock of the Company under any bona
fide compensation program for the benefit of the employees, officers,
directors or consultants of the Company or its subsidiaries. For the
purposes of this Agreement, "Capital Stock" means any and all shares,
interests, rights to purchase, warrants, options, participations or
other equivalents of or interests in (however designated) corporate
stock, including, without limitation, any preferred stock of a
corporation.
(e) For the purposes of this Agreement, "Current Market
Price of the Common Stock" at any date shall be (i) in the event that
the Common Stock is not then being publicly traded in the
over-the-counter market or on a nationally recognized exchange, the
fair market value (which shall not be less than book value) on the
date for which such determination is to be made as determined in good
faith by the Board of Directors of the Company after consultation with
the Company's investment bankers or (ii) in the event that the Common
Stock is then being publicly traded in the over-the-counter market or
on a nationally recognized exchange, the average of the last reported
sale prices per share for the ten consecutive Trading Days (as defined
below) preceding the date of such
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computation. The last reported sale price for each day shall be (A)
the last sale price, or the closing bid price if no sale occurred, of
the Common Stock on the principal securities exchange on which the
Common Stock is listed, (B) if not listed as described in clause (A),
the last reported sale price of the Common Stock on the Automated
Quotation System of the National Association of Securities Dealers,
Inc. (the "NASDAQ System"), or any similar system of automated
dissemination of quotations of securities prices then in common use,
if so quoted, or (C) if not quoted as described in clauses (i) or
(ii), the mean of the high and low bid quotations for the Common Stock
as reported by the National Quotation Bureau Incorporated if at least
two securities dealers have inserted bid quotations for the Common
Stock on at least five of the ten preceding days. If the Common Stock
is quoted on a national securities or central market system, in lieu
of a market or quotation system described above, the last reported
sale price shall be determined in the manner set forth in clause (C)
of the preceding sentence if bid and asked quotations are reported but
actual transactions are not, and in the manner set forth in clause (A)
of the preceding sentence if actual transactions are reported. If none
of the conditions set forth above is met, the last reported sale price
of the Common Stock on any day or the average of such last reported
sale prices for any period shall be the fair market value of such
class of stock as determined by a member firm of the New York Stock
Exchange, Inc. selected by the Company. As used herein the term
"Trading Days" means (x) if the Common Stock is quoted on the NASDAQ
System or any similar system of automated dissemination of quotations
of securities prices, days on which trades may be made on such system,
or (y) if not quoted as described in clause (x), days on which
quotations are reported by the National Quotation Bureau Incorporated,
or (z) if the Common Stock is listed or admitted for trading on any
national securities exchange, days on which such national securities
exchange is open for business.
(f) In the event that the provisions of this Article III
fail as a result of an unintentional oversight to provide expressly
for the adjustment of the Exercise Price or the number of Warrant
Shares purchasable upon exercise of each Warrant under circumstances
that, based upon the purposes and intentions expressed herein, would
otherwise have been addressed, the Board of Directors of the Company
shall, in good faith, cause an equitable adjustment to be made to the
Exercise Price or the number of Warrant Shares purchasable upon
exercise of each Warrant to correct such an oversight.
Section 3.02. Adjustment for De Minimis Change. No adjustment in
the number of Warrant Shares purchasable hereunder shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
number of Warrant Shares purchasable upon the exercise of each Warrant;
provided, however, that any adjustments which by reason of this Section 3.02
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations shall be made to the nearest whole
share, as the case may be, and no fractional shares shall be issued.
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Section 3.03. Adjustment of Exercise Price. Whenever the number of
Warrant Shares purchasable upon the exercise of each Warrant is adjusted, as
herein provided, the Exercise Price payable upon exercise of each Warrant shall
be adjusted by multiplying such Exercise Price immediately prior to such
adjustment by a fraction, of which the numerator shall be the number of Warrant
Shares purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant Shares
so purchasable immediately thereafter.
Section 3.04. Notice of Adjustment. Whenever the number of Warrant
Shares purchasable upon the exercise of each Warrant or the Exercise Price of
such Warrant Shares is adjusted, as herein provided, the Company shall promptly
mail to the Warrant Holder, in accordance with Section 5.04, a notice of such
adjustment or adjustments which sets forth the number of Warrant Shares
purchasable upon the exercise of each Warrant and the Exercise Price of such
Warrant Shares after such adjustment, a brief statement of the facts requiring
such adjustment and the computation by which such adjustment was made.
Section 3.05. Effect of Sale, Merger or Consolidation. In the event
of (a) any reclassification (other than a change in par value) of the Common
Stock, (b) any conversion of the Common Stock into securities of another
corporation, (c) the consolidation of the Company with, or the merger of the
Company with or into, any other corporation where the Common Stock is converted
into other securities or property (including cash) or (d) in the event of the
sale of all or substantially all of the properties and assets of the Company to
any person as a consequence of which, with respect to any of the matters
described in clauses (a) through (d) of this Section 3.05, those persons who
held all of the voting shares of the Company immediately prior to such
transaction hold less than a majority of the voting shares or less than a
majority of the beneficial interest in the resulting or surviving corporation
(each such event hereinafter being referred to as a "Capital Event"), each
Warrant vested as of the date of a Capital Event shall be exercisable within
forty-five days after such Capital Event, upon the terms and conditions
specified in this Agreement, only for the number of shares of stock or other
securities or property (including cash) of the Company or of the person into
which shares of Common Stock are converted or resulting from such consolidation
or surviving such merger or to which such sale shall be made, as the case may
be, to which the shares of Common Stock issuable (immediately prior to such
Capital Event) upon exercise of such Warrant would have been entitled upon such
Capital Event. In any such case, if necessary, the provisions set forth in this
Article III with respect to the rights and interests thereafter of the Warrant
Holder shall be appropriately adjusted so as to be reasonably applicable to any
shares of stock or other securities or property thereafter deliverable on the
exercise of the Warrants. Any Warrants vested as of the date of a Capital Event
and not exercised within forty-five days after the date of a Capital Event
shall expire and thereafter shall be of no further force and effect and all
unvested Warrants as of the date of a Capital Event shall, immediately
following the closing of the Capital Event transaction, expire and thereafter
shall be of no further force and effect.
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The subdivision or combination of shares of Common Stock at any time
outstanding into a greater or lesser number of shares of Common Stock shall not
be deemed to be a reclassification of the Common Stock of the Company for the
purpose of this Section. The Company shall not effect any consolidation, merger
or sale resulting in a Capital Event, unless prior to or simultaneously with
the consummation thereof, any successor person or person purchasing such assets
shall assume, by written instrument executed and delivered to the Company, the
obligation to deliver to the holder of each Warrant such shares of stock,
securities or property (including cash) as the Warrant Holder may be entitled
to receive upon exercise of the Warrants in accordance with the foregoing
provisions, and the other obligations of the Company under this Warrant
Agreement.
Section 3.06. Election to Increase Warrants Instead of Shares of
Common Stock Per Warrant. The Company may elect, on or after the date of any
adjustment of the Exercise Price, to adjust the number of Warrants in
substitution for any adjustment in the number of Warrant Shares pursuant to
Section 3.01. Each Warrant held of record immediately prior to such adjustment
of the number of Warrants shall become that number of Warrants (calculated to
the nearest whole warrant) obtained by (a) multiplying the number of Warrants
held of record prior to adjustment of the number of Warrants by the Exercise
Price in effect prior to adjustment of the Exercise Price and (b) dividing the
product so obtained by the Exercise Price in effect after adjustment of the
Exercise Price. The Company shall notify the Warrant Holder of the Company's
election to adjust the number of Warrants (in substitution for its obligation
to adjust the number of Warrant Shares issuable upon the exercise of a Warrant
pursuant to Section 3.01), indicating the record date for the adjustment, and,
if known at the time, the amount of the adjustment to be made. Such record date
may be the date on which the Exercise Price is adjusted or any date thereafter,
but shall be at least 10 days later than the date of the notification of the
Company's election. Upon each adjustment of the number of Warrants pursuant to
this Section, the Company shall, as promptly as practicable, distribute to the
Warrant Holder a Warrant Certificate evidencing the additional Warrants to
which the Warrant Holder shall be entitled as a result of such adjustment, or,
at the option of the Company, shall distribute to the Warrant Holder in
substitution and replacement for the Warrant Certificates held by the Warrant
Holder prior to the date of the adjustment, and upon surrender thereof, if
required by the Company, a new Warrant Certificate evidencing all the Warrants
to which the Warrant Holder shall be entitled after such adjustment.
Section 3.07. Notice of Certain Events. In the event that at any
time prior to the expiration of the Warrants and prior to their exercise in
full:
(a) the Company shall declare any distribution (other
than a cash dividend or a dividend payable in securities of the
Company with respect to the Common Stock);
(b) the Company shall offer for subscription to the
holders of the Common Stock any additional shares of stock of any
class or any other securities convertible into Common Stock or any
rights to subscribe thereto:
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(c) the Company shall declare any stock split, stock
dividend, subdivision, combination or similar distribution with
respect to the Common Stock, regardless of the effect of any such
event on the outstanding number of shares of Common Stock;
(d) there shall be any Capital Event in the Company or
any merger of the Company with another corporation (other than a
merger with a subsidiary in which merger the Company is the continuing
corporation and which does not result in any reclassification or
change of the shares of Common Stock issuable upon exercise of the
Warrants); or
(e) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company (other than in connection
with a consolidation, merger or sale of all or substantially all of
its property, assets and business as an entity);
(each such event hereinafter referred to as a "Notification Event"), the
Company shall mail to the Warrant Holder, not less than 15 days prior to the
record date, if any, in connection with such Notification Event (provided,
however, that, if there is no record date, or, if 15 days' prior notice is
impracticable, as soon as practicable) written notice specifying the nature of
such event and the effective date of, or the date on which the books of the
Company shall close or a record shall be taken with respect to, such event.
Such notice shall also set forth facts indicating the effect of such action (to
the extent such effect may be known at the date of such notice) on the Exercise
Price and the kind and amount of the shares of stock or other securities or
property deliverable upon exercise of the Warrants.
Section 3.08. Effect of Adjustment on Warrant Certificates. Except
as provided in Section 3.06, the form of Warrant Certificate need not be
changed because of any change in the Exercise Price, the number of Warrant
Shares issuable upon the exercise of a Warrant or the number of Warrants
outstanding pursuant to this Article III, and Warrant Certificates issued
before or after such change may state the same Exercise Price, the same number
of Warrants and the same number of Warrant Shares issuable upon exercise of
Warrants as are stated in the Warrant Certificates theretofore issued pursuant
to this Agreement. The Company may, however, at any time, in its sole
discretion, make any change in the form of Warrant Certificate that it may deem
appropriate and that does not affect the substance thereof, and any Warrant
Certificates thereafter issued, whether in exchange or substitution for an
outstanding Warrant Certificate or otherwise, may be in the form as so changed.
ARTICLE IV
RIGHTS OF WARRANT HOLDER
Section 4.01. No Rights as Stockholders. The Warrant Holder, as
such, shall not be entitled to vote or to receive dividends or otherwise be
deemed to be the holder of shares of Common Stock for any
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purpose, nor shall anything contained herein or in any Warrant Certificate be
construed to confer upon any Warrant Holder, as such, any of the rights of a
stockholder of the Company or any right to vote upon or give or withhold
consent to any action of the Company (whether upon any reorganization, issuance
of securities, reclassification or conversion of Common Stock, consolidation,
merger, sale, lease, conveyance or otherwise), receive notice of meetings or
other action affecting stockholders (except for notices expressly provided for
in this Agreement) or receive dividends or subscription rights, until such
Warrant Certificates shall have been surrendered for exercise accompanied by
full and proper payment of the Exercise Price as provided in this Agreement and
shares of Common Stock thereunder shall have become issuable and until such
person shall have been deemed to have become a holder of record of such shares.
If, at the date of surrender of such Warrant Certificate and payment of such
Exercise Price, the transfer books for the Common Stock shall be closed,
certificates for the shares of Common Stock shall be issuable on the date on
which such books shall next be open (whether before, on or after the Expiration
Date) and, until such date, the Company shall be under no duty to deliver any
certificate for such shares of Common Stock. The Warrant Holder shall, upon the
exercise of Warrants, not be entitled to any dividends if the record date with
respect to payment of such dividends shall be a date prior to the date such
shares of Common Stock became issuable upon the exercise of such Warrants.
Section 4.02. Replacement Warrants. If any Warrant Certificate is
lost, stolen, mutilated or destroyed, the Company may, upon receipt of evidence
satisfactory to the Company of such loss, theft, mutilation or destruction and
on such terms as to indemnity or otherwise as the Company may in its discretion
require (which shall, in the case of a mutilated Warrant Certificate, include
the surrender thereof), issue a new Warrant Certificate of like denomination
and tenor as the lost, stolen, mutilated or destroyed Certificate. Applicants
for such substitute Warrant Certificates shall also comply with such other
reasonable regulations and pay any such reasonable charges as the Company may
prescribe. In the event any Warrant Certificate is lost, stolen, mutilated or
destroyed, and the owner thereof desires to exercise the Warrants evidenced
thereby, the Company may, in lieu of issuing a substitute Warrant Certificate,
authorize the exercise thereof upon receipt of the above evidence and on such
terms of indemnity as it may require; provided, however, that the original
Warrant Holder shall not be required to provide such an indemnity.
Section 4.03. Maintenance of Sufficient and Proper Shares of Common
Stock.
(a) The Company shall at all times reserve and keep
available a number of authorized shares of Common Stock sufficient to
permit the exercise in full of all outstanding Warrants.
(b) If at any time the taking of any action would cause
an adjustment in the Exercise Price so that the exercise of a Warrant
while such Exercise Price is in effect would cause a share of Common
Stock to be issued at a price below its then par value, the Company
shall take such action as may, in the opinion of its counsel, be
necessary in order that it may validly and legally issue fully paid
and nonassessable shares of Common Stock upon the exercise of the
Warrants at such Exercise Price.
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Section 4.04. Fractional Warrants. Anything herein to the contrary
notwithstanding, the Company shall not be required to issue fractions of
Warrants on any distribution of Warrants to warrant Holders or to distribute
Warrant Certificates that evidence fractional Warrants.
Section 4.05. Nontransferability. Except for transfers expressly
permitted pursuant to the Amended and Restated Stockholders Agreement, dated as
of August 7, 1995 (the "Stockholders Agreement") among the Company, GKH
Partners, L.P., GKH Investments, L.P., the Warrant Holder and certain other
stockholders of the Company, the Warrants may not be sold, transferred or
otherwise disposed of without the prior consent of the Company. Any approval of
sale, transfer or other disposition shall be subject to such restrictions as
the Company may require.
Section 4.06 Legend. The certificates evidencing Warrants shall
bear the legend set forth in Exhibit A hereto and the shares of Common Stock
issuable upon the exercise of the Warrants shall bear 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."
Section 4.07 Stockholders Agreement. The Warrant Holder, by its
acceptance of the Warrants, agrees that, upon exercise of any of the Warrants,
the Warrant Holder shall become subject to the duties and obligations, and
entitled to the rights and benefits, of the Stockholders Agreement, dated as of
the date hereof, between the Company and its stockholders signatories thereto
and that the Warrant Shares issued upon exercise of the Warrants shall be
subject to the transfer restrictions contained in the aforesaid Stockholders
Agreement.
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Section 4.08. No Dilution or Impairment. The Company will not, by
amendment of its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of
all such action as any be necessary or appropriate in order to protect the
rights of the holder of this Warrant against dilution or other impairment.
Without limiting the generality of the foregoing, the Company (a) will not
increase the par value of any shares of stock receivable on the exercise of the
Warrants above the amount payable therefor on such exercise and (b) will not
effect a subdivision or split-up of shares or similar transaction with respect
to any class of the Common Stock without effecting an equivalent transaction
with respect to all other classes of Common Stock.
ARTICLE V
GENERAL
Section 5.01. Taxes on Issuance of Shares of Common Stock. All
shares of Common Stock issued upon the exercise of a Warrant shall be validly
issued, fully paid and nonassessable, and the Company shall pay all taxes and
other governmental charges that may be imposed in respect to the issue or
delivery thereof other than taxes imposed on net income of the Warrant Holder
as a result of the exercise of the Warrants and receipt of shares of Common
Stock. The Company shall not be required, however, to pay any tax or other
charge imposed in connection with any transfer involved in the issue of any
certificate for shares of Common Stock in any name other than that of the
registered holder of the Warrant surrendered in connection with the purchase of
such shares, and in such case the Company shall not be required to issue or
deliver any stock certificate until such tax or other charge has been paid or
it has been established to the Company's satisfaction that no tax or other
charge is due.
Section 5.02. Dates and Times. If any date set forth in this
Warrant Agreement shall fall on a day other than a full business day in
Houston, Texas said date shall be deemed to be the next full business day
succeeding that date. All times shall be the legal time then in effect in
Houston, Texas.
Section 5.03. Binding Agreement. All of the covenants and
provisions of this Agreement by or for the benefit of the Company shall bind
and inure to the benefit of its respective successors and assigns hereunder.
Nothing expressed in this Agreement and nothing that may be implied from any of
the provisions hereof is intended, or shall be construed, to confer upon or
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give to any person or corporation, other than the Company and the Warrant
Holder, any legal or equitable right, remedy or claim under or by reason of
this Agreement or of any covenant, condition, stipulation, promise or agreement
herein, and all covenants, conditions, stipulations, promises and agreements
contained in this Agreement shall be for the sole and exclusive benefit of the
Company, the Warrant Holder and their respective successors and assigns.
Section 5.04. Notices. Any communication, notice or deemed to be
given hereunder shall be duly given if in writing and delivered, or sent by
first class mail, certified or registered, postage prepaid and addressed as
follows:
(a) If to the Company:
Hanover Compressor Company
00000 Xxxxx Xxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attention: President
with a copy to:
Xxxx Xxxxxx & Xxxxxxxxx
Two North LaSalle Street
Suite 2200
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
(b) If to the Warrant Holder, at the address set forth on
the signature page hereto.
Any party may change the address to which any communication, notice
or demand shall be given by giving notice of such change in conformity with the
provisions of this Section.
Section 5.05. Governing Law. This Agreement and each Warrant issued
hereunder shall be governed by and construed in accordance with the laws of the
State of Delaware, without giving effect to conflict of laws provisions thereof.
Section 5.06. Headings. The Article and Section headings herein are
for convenience only and are not part of this Agreement and shall not affect the
interpretation thereof.
Section 5.07. Counterparts. This Agreement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the day and year first above written.
COMPANY:
HANOVER COMPRESSOR COMPANY
By:
-------------------------------
Title:
WARRANT HOLDER:
-------------------------------
Address:
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EXHIBIT A
(Form of Warrant Certificate)
THE SECURITIES REPRESENTED BY THIS CERTIFICATE (i) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND NEITHER
THE SECURITIES NOR ANY INTEREST THEREON MAY BE PLEDGED, HYPOTHECATED,
TRANSFERRED, OFFERED FOR SALE OR SOLD EXCEPT PURSUANT TO A
REGISTRATION UNDER SAID ACT OR AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO COUNSEL FOR THE COMPANY, THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR AS CONTEMPLATED BY SECTION 4.05 OF THE
WARRANT AGREEMENT DATED AS OF THE DATE HEREOF BETWEEN THE COMPANY AND
THE ORIGINAL WARRANT HOLDER AND (ii) ARE SUBJECT TO THE PROVISIONS A
STOCKHOLDERS AGREEMENT AMONG THE COMPANY AND EACH OF THE STOCKHOLDERS
SPECIFIED THEREIN. COPIES OF THE WARRANT AGREEMENT AND THE
STOCKHOLDERS AGREEMENT ARE AVAILABLE AT THE PRINCIPAL OFFICES OF THE
COMPANY.
No. ________ [DATE]
[NUMBER OF WARRANTS]
VOID AFTER 5:00 P.M., HOUSTON, TEXAS
ON [DATE] (UNLESS EXTENDED),
HANOVER COMPRESSOR COMPANY
WARRANT TO PURCHASE COMMON STOCK
This Warrant Certificate certifies that [WARRANT HOLDER], or
registered assigns, is the registered holder of [___________] Warrants, par
value $.001 per share (the "Warrants") to purchase shares of the Common Stock,
par value $.001 per share ("Common Stock"), of Hanover Compressor Company, a
Delaware corporation (the "Company"). Each Warrant entitles the holder thereof,
upon proper exercise and subject to the provisions of the Warrant Agreement,
dated as of August 7, 1995 (the "Warrant Agreement") between the Company
one-sixth (0.1667) of a fully paid and non-assessable share of Common Stock
upon the earlier to occur of (a) a Capital Event (as defined in the Warrant
Agreement) and (b) the date on which such Warrant becomes vested in accordance
with the Vesting Schedule (as defined in the Warrant Agreement). In order to
exercise a Warrant evidenced by this Warrant evidenced by this Warrant
Certificate
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(together with the Form of Election to Purchase duly executed) at the corporate
office of the Company, together with proper payment of the Exercise Price (as
defined below). The Warrants evidenced by this Warrant Certificate which have
vested in accordance with the Vesting Schedule may be exercised in whole or in
part to purchase shares of Common Stock. Subject to adjustment as provided in
the Warrant Agreement, the exercise price ("Exercise Price") for each Warrant
evidenced hereby shall be $1.00 per one-sixth (0.1667) of a share of Common
Stock. This Warrant will expire on the Expiration Date (as defined in the
Warrant Agreement). Payment of the Exercise Price shall be made in accordance
with the terms of the Warrant Agreement. As provided in the Warrant Agreement,
the Exercise Price and the number of shares of Common Stock purchasable upon
the exercise of the Warrants are, upon the happening of certain events, subject
to modification or adjustment.
This Warrant Certificate is subject to all of the terms, provisions
and conditions of the Warrant Agreement, including the provisions of such
Agreement relating to the amendment thereof, which Warrant Agreement is hereby
incorporated herein by reference and made a part hereof. Reference is hereby
made to the Warrant Agreement for a full description of the rights, limitations
of rights, obligations, duties and immunities of the Company and the holder of
this Warrant Certificate.
If this Warrant Certificate shall be exercised in part, the holder
hereof shall be entitled to receive upon surrender hereof another Warrant
Certificate evidencing the number of warrants not exercised.
No holder of this Warrant Certificate shall be deemed to be the holder
of Common Stock or any other securities of the Company that may at any time be
issuable on the exercise hereof for any purpose, nor shall anything contained
in the Warrant Agreement or herein be construed to confer upon the holder of
this Warrant Certificate as such any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action (whether upon any reorganization, issuance of
stock, reclassification or conversion of stock, change of par value, or
exchange of stock to no par value, consolidation, merger, conveyance or
otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise, until this Warrant Certificate shall have
been exercised and the Common Stock purchasable upon the exercise hereof shall
have become issuable as provided in the Warrant Agreement.
Every holder of this Warrant Certificate, by accepting the same,
consents and agrees with the Company that, upon exercise of any of the
Warrants, the Warrant Holder shall become subject to the duties and
obligations, and entitled to the rights and benefits, of the Stockholders
Agreement, dated as of August 7, 1995 between the Company and certain of its
stockholders signatories thereto and that the Warrant Shares issued upon
exercise of the Warrants shall be subject to the transfer restrictions
contained in the aforesaid Stockholders Agreement.
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Except as specifically set forth in the Warrant Agreement, this
Warrant may not be transferred or otherwise disposed of without the prior
consent of the Company.
WITNESS the signatures of the proper officers of the Company.
Dated: [____________, 1995] HANOVER COMPRESSOR COMPANY
By:
----------------------------
Title:
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FORM OF
ELECTION TO PURCHASE
To: HANOVER COMPRESSOR COMPANY
The undersigned hereby irrevocably elects to exercise ____________
Warrants represented by this Warrant Certificate, and to purchase the Common
Stock issuable upon the exercise of such Warrants, and requests that
certificates for such shares shall be issued in the name of
------------------------------------
(Name)
------------------------------------
(Address)
------------------------------------
(Social Security or other Identifying Number)
and be delivered to
------------------------------------
(Name)
at
---------------------------------
(Address)
and, if said number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be delivered to the undersigned at the address stated above.
Dated:
------------------------------
Name of Warrant Holder:
------------------------------------
(Please Print)
Signature:
--------------------------
Address:
----------------------------
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FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns and
transfers unto ____________ ________ the right represented by the within
Warrant to purchase shares of Common Stock of Hanover Compressor Company to
which the within Warrant relates, and appoints _______________ attorney-in-fact
to transfer such right on the books of Hanover Compressor Company with full
power of substitution in the premises.
Dated:
------------------- ---------------------------------------
(Signature must conform in all respects
to name of holder as specified on
the face of the Warrant)
---------------------------------------
(Address)
Signed in the presence of:
-----------------------------
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