EXHIBIT 10.1
HANOVER COMPRESSOR CAPITAL TRUST
7 1/4% CONVERTIBLE PREFERRED SECURITIES
Term Income Deferrable Equity Securities (TIDES)_
(liquidation amount $50 per
each of the TIDES)
guaranteed to the extent set forth
in the Guarantee Agreement by, and
convertible into Common Stock of,
Hanover Compressor Company
REGISTRATION RIGHTS AGREEMENT
-----------------------------
December 15, 1999
Credit Suisse First Boston Corporation
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx Xxxxxx Inc.
Dain, Xxxxxxxx Incorporated
c/o Credit Suisse First Boston Corporation
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Dear Sirs:
Hanover Compressor Capital Trust, a business trust formed under the laws of
the State of Delaware (the "Trust") by Hanover Compressor Company, a Delaware
corporation (the "Company"), proposes to issue and sell to you, as initial
purchasers (the "Purchasers"), upon the terms set forth in a purchase agreement
dated December 9, 1999 (the "Purchase Agreement"), among the Purchasers, the
Company and the Trust up to 1,725,000 7 1/4% Convertible Preferred Securities
Term Income Deferrable Equity Securities ("TIDES") (liquidation amount $50 per
each of the TIDES) (the "Initial Placement"). The proceeds of the sale by the
Trust of the TIDES and the Common Securities, liquidation amount $50 per Common
Security (the "Common Securities"), are to be invested in the Convertible Junior
Subordinated Debentures Due 2029 of the Company (the "Convertible Junior
Subordinated Debentures") having an aggregate principal amount equal to the
aggregate liquidation amount of the TIDES and the Common Securities. The TIDES
are guaranteed by the Company to the extent set forth in the Guarantee Agreement
dated as of December 15, 1999 (the "Guarantee"), between the Company and
Wilmington Trust Company, as trustee, and are convertible into Common Stock, par
value $.001 per share (the "Common Stock") of the Company. As an inducement to
you to enter into the Purchase Agreement and in satisfaction of a condition to
your obligations thereunder, the Trust and the Company agree with you, (i) for
your benefit and (ii) for the benefit of the registered holders from time to
time of the TIDES and the Convertible Junior Subordinated Debentures and the
record holders of the Common Stock of the Company issuable upon conversion of
the TIDES or the Convertible Junior Subordinated Debentures (collectively,
together with the Guarantee by the Company of the TIDES, the "Securities"),
including the Purchasers (each of the foregoing a "Holder" and together the
"Holders"), as follows:
1. Definitions. Capitalized terms used herein without definition shall
have their respective meanings set forth in or pursuant to the Purchase
Agreement or, if not defined therein, in the Confidential Offering Circular
dated December 9, 1999, in respect of the TIDES or, if not defined therein, in
the Amended and Restated Declaration of Trust dated as of December 15, 1999 (the
"Declaration") relating to the Trust. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"Act" or "Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Affiliate" of any specified person means any other person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such specified person. For purposes of this definition, control of a
person means the power, direct or indirect, to direct or cause the direction of
the management and policies of such person whether by contract or otherwise; the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Business Day" means any day other than (i) a Saturday or Sunday, (ii) a
day on which banking institutions in The City of New York or Wilmington,
Delaware are authorized or required by law or executive order to remain closed
or (iii) a day on which the corporate trust office of the Debenture Trustee or
the Property Trustee is closed for business.
"Commission" means the Securities and Exchange Commission.
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"Common Stock" has the meaning set forth in the first paragraph to this
Agreement.
"Company" has the meaning set forth in the first paragraph to this
Agreement.
"Convertible Junior Subordinated Debentures" has the meaning set forth in
the first paragraph to this Agreement.
"Debenture Trustee", "Guarantee Trustee" and "Property Trustee" each means
Wilmington Trust Company, a Delaware banking corporation.
"Electing Holder" has the meaning assigned thereto in Section 2(c)(iii)
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"First Closing Date" has the meaning given such term in the Purchase
Agreement.
"Guarantee" means the guarantee by the Company of the TIDES pursuant to a
Guarantee Agreement dated as of December 15, 1999 between the Company and the
Guarantee Trustee.
"Holder" and "Holders" each has the meaning set forth in the first
paragraph to this Agreement.
"Initial Placement" has the meaning set forth in the first paragraph to
this Agreement.
"Managing Underwriters" means the investment banker or investment bankers
and manager or managers that shall administer an underwritten offering, if any,
as set forth in Section 6 hereof.
"Prospectus" means the prospectus included in any Shelf Registration
Statement filed pursuant to Rule 415 under the Act, with respect to the terms of
the offering of all or any portion of the Securities covered by such Shelf
Registration Statement, as amended or supplemented by all amendments (including
post-effective amendments) and supplements to the Prospectus.
"Purchase Agreement" has the meaning set forth in the first paragraph to
this Agreement.
"Purchasers" has the meaning set forth in the first paragraph to this
Agreement.
"Registration Default" has the meaning given to such term in Section 7(a)
hereof.
"Securities" means the TIDES, the Convertible Junior Subordinated
Debentures, the Common Stock and the Guarantee, individually and collectively.
"Shelf Registration" means a registration effected pursuant to Section 2
hereof.
"Shelf Registration Period" has the meaning set forth in Section 2(b)
hereof.
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"Shelf Registration Statement" means a "shelf" registration statement of
the Trust and the Company pursuant to the provisions of Section 2 hereof filed
with the Commission which covers some or all of the Securities, as applicable,
on an appropriate form under Rule 415 under the Act, or any similar rule that
may be adopted by the Commission, amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Special Distributions" has the meaning given such term in Section 7(a)
hereof.
"Special Interest" has the meaning given such term in Section 7(a) hereof.
"TIDES" has the meaning set forth in the first paragraph to this Agreement.
"Trust" has the meaning set forth in the first paragraph to this Agreement.
"Trustee" means the Guarantee Trustee, the Indenture Trustee or the
Property Trustee, as applicable.
"Underwriter" means any underwriter of Securities in connection with an
offering thereof under a Shelf Registration Statement.
2. Shelf Registration. (a)ab The Trust and the Company shall (i) file as
soon as practicable, but in no event more than 60 days after the First Closing
Date, a Shelf Registration covering resales of the TIDES, the Guarantee, the
Convertible Junior Subordinated Debentures and the related Company Common Stock
issuable upon conversion thereof and (ii) use their best efforts to cause the
Shelf Registration Statement to be declared effective under the Securities Act
within 150 days after the First Closing Date, provided, however, that no Holder
shall be entitled to be named as a selling securityholder in the Shelf
Registration Statement or to use the Prospectus forming a part thereof for
resales of Registrable Securities unless such holder is an Electing Holder.
(1) The Trust and the Company shall each use their best efforts (i)
to keep the Shelf Registration Statement continuously effective, subject to
Section 7(b) hereof, in order to permit the Prospectus forming part thereof to
be usable by Holders until resale of the Securities are permitted pursuant to
Rule 144(k) under the Securities Act or any successor rule or regulation thereto
after the date the Shelf Registration Statement is declared effective or such
shorter period that will terminate upon the earliest of the following: (A) two
years from the date of the effectiveness of the Shelf Registration Statement,
(B) when all the TIDES covered by the Shelf Registration Statement have been
sold pursuant to the Shelf Registration Statement, (C) when all Convertible
Junior Subordinated Debentures issued to Holders in respect of TIDES that had
not been sold pursuant to the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement or (D) when all shares of Common
Stock issued upon conversion of any such TIDES or any such Convertible Junior
Subordinated Debentures that had not been sold pursuant to the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement (in any such case, such period being called the "Shelf Registration
Period") and (ii) after the effectiveness of the
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Shelf Registration Statement, promptly upon the request of any Holder that is
not then an Electing Holder to take any action reasonably necessary to register
the sale of any Securities of such Holder and to identify such Holder as a
selling securityholder, provided, however, that nothing in this subparagraph
shall relieve such Holder of the obligation to provide the Company and the Trust
with the information required pursuant to Section 2(c) hereof.
(2) (i) No Holder shall be entitled to be named as a selling
securityholder in the Shelf Registration Statement as of the date on which the
Commission declares the Shelf Registration Statement effective or on which the
Shelf Registration Statement otherwise becomes effective, and no Holder shall be
entitled to use the Prospectus forming a part thereof for resales of Registrable
Securities at any time, unless such holder has provided the Company and the
Trust with such information as they shall reasonably request in order to enable
the Company and the Trust to comply with the applicable requirements of the
Securities Act in connection with offers and sales by such Holder as a selling
securityholder in the Shelf Registration Statement within 30 calendar days from
the date on which any such request is first mailed to such Holder. Each Holder
as to which any Shelf Registration is being effected agrees to furnish promptly
to the Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not materially
misleading.
(ii) After the date on which the Commission declares the Shelf
Registration Statement effective or on which the Shelf Registration Statement
otherwise becomes effective, the Company and the Trust may, upon the request of
any Holder of Registrable Securities that is not then an Electing Holder, take
such action as is necessary to name such Holder as a selling security holder in
the Shelf Registration Statement or to enable such Holder to use the Prospectus
forming a part thereof for resales of Registrable Securities if such Holder
promptly provides the Company and the Trust with such information as they shall
reasonably request in order to enable the Company and the Trust to comply with
the applicable requirements of the Securities Act in connection with offers and
sales by such Holder so as to permit such Holder to be so named. Each Holder as
to which any Shelf Registration is being effected agrees to furnish promptly to
the Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not materially
misleading.
(iii) The term "Electing Holder" shall mean any holder of
Registrable Securities that has complied with the requests of the Company and
the Trust in accordance with Section 2(c)(i) or 2(c)(ii) hereof.
3. Registration Procedures. In connection with any Shelf Registration
Statement, the following provisions shall apply:
(1) The Trust and the Company shall furnish to each Purchaser,
prior to the filing thereof with the Commission, a copy of any Shelf
Registration Statement, and each amendment thereof and each amendment or
supplement, if any, to the Prospectus included therein and shall each use its
best efforts to reflect in each such document, when so filed with the
Commission, such comments as such Purchaser reasonably may propose.
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(2) The Trust and the Company shall take such action as may be
necessary, subject to Section 7(b) hereof, so that (i) any Shelf Registration
Statement and any amendment thereto and any Prospectus forming part thereof and
any amendment or supplement thereto (and each report or other document
incorporated therein by reference in each case) complies in all material
respects with the Securities Act and the Exchange Act and the respective rules
and regulations thereunder, (ii) any Shelf Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any Prospectus forming part of any Shelf Registration Statement, and any
amendment or supplement to such Prospectus, does not, during the Shelf
Registration Period, include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements, in the light of
the circumstances under which they were made, not misleading.
(3) The Company shall advise each Purchaser and each Electing
Holder and, if requested by such Purchaser or any such Electing Holder in
writing, confirm such advice in writing:
(1) when a Shelf Registration Statement and any amendment
thereto has been filed with the Commission and when the Shelf Registration
Statement or any post-effective amendment thereto has become effective; and
(2) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the Prospectus included
therein or for additional information.
(2) The Trust and the Company shall advise each Purchaser and each
Electing Holder and, if requested by such Purchaser or any such Electing
Holder in writing, confirm such advice in writing:
(3) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement or the
initiation of any proceedings for that purpose;
(4) of the receipt by the Trust or the Company of any
notification with respect to the suspension of the qualification of the
securities included therein for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose; and
(5) of the happening, during the Shelf Registration Period,
of any event (provided that such notice need not specify the nature of such
event) that requires the making of any changes in the Shelf Registration
Statement or the Prospectus so that, as of such date, the Registration Statement
and the Prospectus do not contain an untrue statement of a material fact and do
not omit to state a material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading (which advice shall be
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accompanied by an instruction to suspend the use of the Prospectus until the
requisite changes have been made).
(3) Written notice pursuant to Section 3(c)(1)(ii) and Section
3(c)(2)(i)-(iii) shall be accompanied by an instruction to suspend the use of
the prospectus until the requisite changes have been made.
(4) The Trust and the Company shall use their reasonable best
efforts to prevent the issuance, and if issued to obtain the withdrawal, of any
order suspending the effectiveness of any Shelf Registration Statement at the
earliest possible time.
(5) The Trust and the Company shall furnish to each Electing Holder
of Securities, without charge, at least one copy of such Shelf Registration
Statement and any post-effective amendment thereto (including any reports or
other documents incorporated therein by reference), including financial
statements and schedules, and, if the Electing Holder so requests in writing,
all exhibits thereto (including those incorporated by reference).
(6) The Trust and the Company shall, during the Shelf Registration
Period, deliver to each Electing Holder, without charge, as many copies of the
Prospectus (including each preliminary Prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto as such Electing
Holder may reasonably request and shall deliver such materials to the New York
Stock Exchange pursuant to Rule 153 under the Act; and each of the Trust and the
Company consents to the use of the Prospectus or any amendment or supplement
thereto by each of the Electing Holders in connection with the offering and sale
of the Securities covered by the Prospectus or any amendment or supplement
thereto during the Shelf Registration Period.
(7) Prior to any offering of Securities pursuant to any Shelf
Registration Statement, the Trust and the Company shall register or qualify or
cooperate with the Electing Holders and their respective counsel in connection
with the registration or qualification of such Securities for offer and sale
under the securities or blue sky laws of such jurisdictions as any such Electing
Holders reasonably request in writing and do any and all other acts or things
necessary or advisable to enable the offer and sale in such jurisdictions of the
Securities covered by such Shelf Registration Statement; provided, however, that
neither the Trust nor the Company will be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to take any
action which would subject it to general service of process or to taxation in
any such jurisdiction where it is not then so subject.
(8) Unless the applicable Securities shall be in book-entry only
form, the Trust and the Company shall cooperate with the Electing Holders to
facilitate the timely preparation and delivery of certificates representing
Securities to be sold pursuant to any Shelf Registration Statement free of any
restrictive legends and in such permitted denominations and registered in such
names as Electing Holders may request in connection the sale of Securities
pursuant to such Shelf Registration Statement.
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(9) Upon the occurrence of any event contemplated by Section
3(c)(1)(ii) or 3(c)(2)(i) above, the Trust and the Company shall promptly
prepare, subject to Section 7(b) hereof, as soon as possible a post-effective
amendment to any Shelf Registration Statement or an amendment or supplement to
the related Prospectus or file any other required document so that, as
thereafter delivered to purchasers of the Securities included therein, the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading. If the Trust or
the Company notifies the Electing Holders in accordance with Section 3(c)(3)
above to suspend use of the prospectus until the requisite changes to the
Prospectus have been made, then the Electing Holders shall suspend the use of
the Prospectus until the requisite changes to the Prospectus have been made, and
the period of effectiveness of the Shelf Registration Statement provided for in
Section 2(b) above shall each be extended by the number of days from and
including the date of the giving of such notice to and including the date when
the Purchaser and the Electing Holders of the Securities shall have received
such amended or supplemented prospectus pursuant to this Section 3(i).
(10) Not later than the effective date of any Shelf Registration
Statement hereunder, the Trust and the Company shall provide a CUSIP number for
the TIDES and, in the event of and at the time of any distribution thereof to
Holders, the Convertible Junior Subordinated Debentures, registered under such
Shelf Registration Statement, and provide the applicable Trustee with
certificates for such Securities, in a form eligible for deposit with The
Depository Trust Company.
(11) The Trust and the Company shall comply with all applicable
rules and regulations of the Commission and shall make generally available to
their securityholders (or otherwise provide in accordance with Section 11(a) of
the Securities Act) an earnings statement satisfying the provisions of Section
11(a) of the Securities Act, no later than 45 days after the end of a 12-month
period (or 90 days, if such period is a fiscal year) beginning with the first
month of the Company's first quarter commencing after the effective date of the
Registration Statement, which statement shall cover such 12-month period.
(l2) The Trust and the Company shall cause the Indenture, the
Declaration and the Guarantee to be qualified under the Trust Indenture Act in a
timely manner and containing such changes, if any, as shall be necessary for
such qualification. In the event that such qualification would require the
appointment of a new trustee under the Indenture, the Company shall appoint a
new trustee thereunder pursuant to the applicable provisions of the Indenture.
(13) The Trust and the Company may require each Electing Holder to
furnish to the Trust and the Company such information regarding the Electing
Holder and the distribution of such Securities as the Trust and the Company may
from time to time reasonably require for inclusion in such Shelf Registration
Statement, and the Trust and the Company may exclude from such registration the
Securities of any Electing Holder that
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unreasonably fails to furnish such information within a reasonable time after
receiving such request.
(14) The Trust and the Company shall, if requested, promptly
incorporate in a Prospectus supplement or post-effective amendment to a Shelf
Registration Statement, such information as the Managing Underwriters reasonably
agree should be included therein and to which the Trust and the Company do not
reasonably object and shall make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after they are
notified of the matters to be incorporated in such Prospectus supplement or
post-effective amendment; provided, however, that the Company shall not be
obligated to arrange for more than one underwritten offering during the Shelf
Registration Period as set forth in Section 6 hereof .
(15) The Trust and the Company shall enter into such customary
agreements (including underwriting agreements in customary form) to take all
other appropriate actions in order to expedite or facilitate the registration or
the disposition of the Securities, and in connection therewith, if an
underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures substantially identical to those set
forth in Section 5 (or such other provisions and procedures acceptable to the
Managing Underwriters, if any) with respect to all parties to be indemnified
pursuant to Section 5.
(16) The Trust and the Company shall (i) make reasonably available for
inspection by the Electing Holders, any underwriter participating in any
disposition pursuant to such Shelf Registration Statement, and any attorney,
accountant or other agent retained by such Electing Holders or any such
underwriter all relevant financial and other records, pertinent corporate
documents and properties of the Trust and the Company and its subsidiaries as
shall be requested in connection with the discharge of their due diligence
obligations; (ii) cause the Company's officers, directors and employees and any
relevant Trustees to supply at the Company's expense all relevant information
reasonably requested by such Electing Holders or any such underwriter, attorney,
accountant or agent in connection with any such Shelf Registration Statement, in
each case, as shall be reasonably necessary to enable such persons to conduct a
reasonable investigation within the meaning of Section 11 of the Securities Act;
provided, however, that the foregoing inspection and information gathering
shall, to the greatest extent possible, be coordinated on behalf of the Electing
Holders and the other parties entitled thereto by one counsel designated by and
on behalf of such Electing Holders and other parties; (iii) in connection with
an underwritten offering conducted pursuant to Section 6 hereof, make such
representations and warranties to the Electing Holders participating in such
underwritten offering and the underwriters in form, substance and scope as are
customarily made by the issuers to underwriters in primary underwritten
offerings and covering matters as are customarily covered in representations and
warranties requested in primary underwritten offerings including, but not
limited to, those set forth in the Purchase Agreement; (iv) in connection with
an underwritten offering conducted pursuant to Section 6 hereof, obtain opinions
of counsel to the Trust and the
9
Company and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the Managing Underwriters)
addressed to each Electing Holder participating in such offering and the
underwriters, if any, covering such matters and with such exceptions as are
customarily covered or taken in opinions requested in underwritten offerings and
such other matters as may be reasonably requested by such Electing Holders and
underwriters (it being agreed that the matters to be covered by such opinion
shall include, without limitation, as of the date of the opinion and as of the
effective date of the Shelf Registration Statement or most recent post-effective
amendment thereto, as the case may be, a statement by such counsel regarding the
absence from such Shelf Registration Statement and the prospectus included
therein, as then amended or supplemented, including the documents incorporated
by reference therein, of an untrue statement of a material fact or the omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading); (v) in connection with an
underwritten offering conducted pursuant to Section 6 hereof, obtain "cold
comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data are, or are
required to be, included in the Shelf Registration Statement), addressed to each
Electing Holder participating in such underwritten offering and the
underwriters, if any, in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with primary
underwritten offerings in accordance with Statement of Auditing Standards No.
72; and (vi) in connection with an underwritten offering conducted pursuant to
Section 6 hereof, deliver such documents and certificates as may be reasonably
requested by the Managing Underwriters, if any, including those to evidence
compliance with Section 3(i) and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Trust and the
Company. The foregoing actions set forth in clauses (iii), (iv), (v) and (vi) of
this Section 3(p) shall be performed at (A) with respect to clauses (ii) and (v)
only, the execution of an underwriting agreement and (B) each closing under any
underwritten offering to the extent required under any related underwriting or
similar agreement.
(17) The Trust and the Company will use their best efforts to cause
the Common Stock relating to such Shelf Registration Statement to be listed on
each securities exchange, over-the-counter market, or respective counterpart if
any, on which any shares of Common Stock are then listed.
(18) The Trust and the Company shall, in the event that any broker-
dealer registered under the Exchange Act shall underwrite any Securities or
participate as a member of an underwriting syndicate or selling group or "assist
in the distribution" (within the meaning of the Rules of Fair Practice (the
"Rules") and the By-Laws of the National Association of Securities Dealers, Inc.
("NASD")) thereof, whether as a Holder of such Securities or as an underwriter,
a placement or sales agent or a broker or dealer in respect thereof, or
otherwise, assist such broker-dealer in complying with the requirements of such
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Rules and By-Laws, including, without limitation, by (A) if such Rules or By-
Laws, including Schedule E thereto, shall so require, engaging a "qualified
independent underwriter" (as defined in such Schedule) to participate in the
preparation of the Shelf Registration Statement relating to such Securities, to
exercise usual standards of due diligence in respect thereto, (B) indemnifying
any such qualified independent underwriter to the extent of the indemnification
of underwriters provided in Section 5 hereof and (C) providing such information
to such broker-dealer as may be required in order for such broker-dealer to
comply with the requirements of the Rules of Fair Practice of the NASD.
(19) The Company will use its best efforts to (a) if the Securities
have been rated prior to the initial sale of such Securities, confirm such
ratings will apply to the Securities covered by the Shelf Registration
Statement, or (b) if the Securities were not previously rated, cause the
Securities covered by the Shelf Registration Statement to be rated with the
appropriate rating agencies, if so requested by Electing Holders of a majority
in aggregate principal amount of Securities covered by such Shelf Registration
Statement, or by the managing underwriters, if any.
(20) The Trust and the Company shall use their best efforts to take
all other steps necessary to effect the registration, offering and sale of the
Securities covered by the Shelf Registration Statement contemplated hereby.
4. Registration Expenses. Except as otherwise provided in Section 6, the
Company shall bear all fees and expenses incurred in connection with the
performance of the obligations of the Company and the Trust under Sections 2 and
3 hereof and shall bear or reimburse the Purchasers for the reasonable fees and
disbursements of not more than one counsel for the Purchasers, which shall be
Xxxxxx & Xxxxxx, L.L.P. unless another firm shall be chosen by the Holders of a
majority in principal amount of Securities in connection with the filing of the
Shelf Registration Statement.
5. Indemnification and Contribution. (a) In connection with any Shelf
Registration Statement, the Trust and the Company, jointly and severally, agree
to indemnify and hold harmless each Electing Holder and each person who
controls any such Electing Holder within the meaning of either the Securities
Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or other Federal or state statutory
law or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Shelf Registration Statement as originally filed or in any
amendment thereof, or in any preliminary prospectus or Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agree to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability
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or action; provided, however, that (i) the Company and the Trust will not be
liable in any case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf any
such Electing Holder specifically for inclusion therein and, provided, further,
that with respect to any untrue statement or alleged untrue statement in or
omission or alleged omission from any preliminary prospectus, the indemnity
agreement contained in this subsection (a) shall not inure to the benefit of any
Electing Holder or person who controls any such Electing Holder from whom the
person asserting any such losses, claims, damages or liabilities purchased the
Securities concerned, to the extent that a prospectus relating to such
Securities was required to be delivered by such Electing Holder under the Act in
connection with such purchase and any such loss, claim, damage or liability of
such Electing Holder results from the fact that there was not sent or given to
such person, at or prior to the written confirmation of the sale of such
Securities to such person, a copy of the Prospectus if the Company has
previously furnished such quantity of copies thereof to such Electing Holder.
This indemnity agreement will be in addition to any liability which the Company
or the Trust may otherwise have. The Trust and the Company, jointly and
severally, also agree to indemnify or contribute to Losses (as defined below)
of, as provided in Section 5(d), any underwriters of Securities registered under
the Shelf Registration Statement, their officers, directors, employees and
agents and each person who controls such underwriters on substantially the same
basis as that of the indemnification of the Electing Holders provided in this
Section 5(a) and shall, if requested by any Electing Holder, enter into an
underwriting agreement reflecting such agreement, as provided in Section 3(o)
and Section 6 hereof.
(b) Each Electing Holder, severally and not jointly, agrees as a
consequence of the inclusion of any of such Xxxxxx's Registrable Securities in
such Shelf Registration Statement, and each underwriter executing an
underwriting agreement, if any, which facilitates the disposition of Registrable
Securities shall agree, as a consequence of facilitating such disposition of
Registrable Securities, severally and not jointly, to indemnify and hold
harmless (i) the Trust and the Company, (ii) each of the directors of the
Company, (iii) each of its officers and any Administrative Trustee who signs
such Shelf Registration Statement and (iv) each person who controls the Trust or
the Company within the meaning of either the Securities Act or the Exchange Act
to the same extent as the foregoing indemnity from the Trust and the Company,
but only with reference to written information relating to such Electing Holder
or underwriter executing an underwriting agreement furnished to the Company by
or on behalf of such Electing Holder or underwriter executing an underwriting
agreement specifically for inclusion in the documents referred to in the
foregoing indemnity; and shall reimburse, as incurred, the Company and the Trust
for any legal or other expenses reasonably incurred by the Company or the Trust
or any such controlling person in connection with investigating or defending any
loss, claim, damage, liability or action in respect thereof. This indemnity
agreement will be in addition to any
12
liability which any such Electing Holder or underwriter executing an
underwriting agreement may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
5 of notice of the commencement of any action or proceeding (including a
governmental investigation), such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 5,
notify the indemnifying party of the commencement thereof; but the omission so
to notify the indemnifying party will not relieve the indemnifying party from
any liability it may have to any indemnified party otherwise than under
paragraph (a) or (b) above, except to the extent such failure prejudices the
indemnified person. In case any such action is brought against any indemnified
party and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of such indemnified party, be
counsel to the indemnifying party), and after notice from the indemnifying party
to such indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 5 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action, and does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 5 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall have a joint and several
obligation to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which such
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by such indemnifying party, on the one hand, and
such indemnified party, on the other hand, from the Initial Placement and the
Shelf Registration Statement which resulted in such Losses; provided, however,
that in no case shall the Purchasers or any subsequent Holder of any Securities
be responsible, in the aggregate, for any amount in excess of the amount by
which the net proceeds received by such Holders from the sale of the Securities
pursuant to the Registration Statement exceeds the amount of damages which such
Holders have otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. If the allocation provided by
the immediately
13
preceding sentence is unavailable for any reason, the indemnifying party and the
indemnified party shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of such
indemnifying party, on the one hand, and such indemnified party, on the other
hand, in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Relative fault
shall be determined by reference to whether any alleged untrue statement or
omission relates to information provided by the indemnifying party, on the one
hand, or by the indemnified party, on the other hand. The parties agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim which is the subject of this subsection (d). For purposes of
this Section 5, each person who controls a Holder within the meaning of either
the Securities Act or the Exchange Act shall have the same rights to
contribution as such Holder, and each person who controls the Company or the
Trust within the meaning of either the Securities Act or the Exchange Act, each
officer of the Company who shall have signed the Shelf Registration Statement
and each director of the Company shall have the same rights to contribution as
the Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
(e) The provisions of this Section 5 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder or
the Company or the Trust or any of the officers, directors, employees, agents or
controlling persons referred to in Section 5 hereof, and will survive the sale
by a Holder of Securities covered by the Shelf Registration Statement. The
obligations of the Trust and the Company under this Section shall be in addition
to any liability which the Trust and the Company may otherwise have.
6. Underwritten Offering. The Holders of Securities covered by the Shelf
Registration Statement who desire to do so may sell such Securities in an
underwritten offering. In any such underwritten offering, the investment banker
or bankers and manager or managers that will administer the offering will be
selected by, and the underwriting arrangements with respect thereto will be
approved by, the Holders of a majority of the Securities to be included in such
offering; provided, however, that (i) such investment bankers and managers and
underwriting arrangements must be reasonably satisfactory to the Company and the
Trust and (ii) the Company shall not be obligated to arrange for more than one
underwritten offering during the Shelf Registration Period. No Holder may
participate in any underwritten offering contemplated hereby unless such Xxxxxx
(a) agrees to sell such
14
Holder's Securities in accordance with any approved underwriting arrangements,
(b) completes and executes all reasonable questionnaires, powers of attorney,
indemnities, underwriting agreements, lock-up letters and other documents
required under the terms of such approved underwriting arrangements, (c) at
least 30% of the outstanding Securities are included in such underwritten
offering, and (d) if such Holder is not then an Electing Holder, such Holder
provides the Company and the Trust with such information as they shall
reasonably request in order to enable the Company and the Trust to comply with
the applicable requirements of the Securities Act in connection with offers and
sales by such Holder as a selling securityholder in the underwritten offering
within a reasonable amount of time before such underwritten offering. The
Holders participating in any underwritten offering shall be responsible for any
expenses customarily borne by selling securityholders, including underwriting
discounts and commissions and fees and expenses of counsel to the selling
securityholders.
7. Special Interest and Special Distributions Under Certain Circumstances.
If (i) within 150 days of the First Closing Date the Shelf Registration
Statement has not been declared effective by the Commission, or (ii) in the
event that a Shelf Registration Statement is declared effective by the
Commission, the Company or the Trust fails to keep such Shelf Registration
Statement continuously effective and usable (except as permitted in paragraph
(b) of this Section 7) prior to the end of the Shelf Registration Period (each
such event referred to in clauses (i) and (ii) a "Registration Default"), then
additional interest ("Special Interest") will accrue on the Convertible Junior
Subordinated Debentures (including in respect of amounts accruing during any
Deferral Period), and corresponding additional distributions (the "Special
Distributions") will accrue on the TIDES and the Common Securities, in each case
from and including the day following such Registration Default to but excluding
the day on which such Registration Default has been cured or has been deemed to
have been cured. Subject to the deferral of interest provisions of the
Convertible Junior Subordinated Debentures and the deferral of distributions
provisions of the TIDES, Special Interest and Special Distributions will be paid
in cash quarterly in arrears on March 15, June 15, September 15 and December 15
commencing with the first such date following the applicable Registration
Default and will accrue at a rate such that the interest rate or distribution
rate, as the case may be, will be increased 0.50% per annum of the principal
amount or liquidation amount, as applicable. Following the cure of a
Registration Default, Special Interest and Special Distributions will cease to
accrue with respect to such Registration Default.
(3) A Registration Default referred to in Section 7(a)(ii) shall be
deemed not to have occurred and be continuing in relation to the Shelf
Registration Statement or the related Prospectus if such Registration Default
has occurred solely as a result of (x) the filing of a post-effective amendment
to such Shelf Registration Statement to incorporate annual audited financial
information with respect to the Company where such post-effective amendment is
not yet effective and needs to be declared effective to permit Holders to use
the related Prospectus or (y) the occurrence of other material events or
developments with
15
respect to the Trust or the Company that would need to be described in such
Registration Statement or the related Prospectus and either (i) the Company
shall have determined in good faith that such disclosure is not in the best
interests of the Company and its stockholders or (ii) the Trust and the Company
are proceeding promptly and in good faith to amend or supplement such
Registration Statement and related Prospectus to describe such events; provided,
however, that in any case, if such Registration Default occurs for a continuous
period in excess of 45 days, Special Interest and Special Distributions shall be
payable in accordance with the above paragraph from the first day of such 45-day
period until the date on which such Registration Default is cured.
8. Rules 144 and 144A. The Company shall use its best efforts to file the
reports required to be filed by it under the Securities Act and the Exchange Act
in a timely manner and, if at any time the Company is not required to file such
reports, it will, within a reasonable period of time, upon written request of
any Holder of Securities, make publicly available other information so long as
necessary to permit sales of their securities pursuant to Rules 144 and 144A.
The Company covenants that it will take such further action as any Holder of
Securities may reasonably request, all to the extent required from time to time
to enable such Holder to sell Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rules 144 and
144A (including the requirements of Rule 144A(d)(4)). The Company will provide
a copy of this Agreement to prospective purchasers of Securities identified to
the Company by any Purchaser upon request. Upon the request of any Holder of
Securities, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements. Notwithstanding the foregoing,
nothing in this Section 8 shall be deemed to require the Company to register any
of its securities pursuant to the Exchange Act.
9. Miscellaneous.
(3) No Inconsistent Agreements. The Trust and the Company have not, as
of the date hereof, entered into, nor shall they on or after the date hereof,
enter into, any agreement with respect to their securities or otherwise that is
inconsistent with the rights granted to the Holders herein or otherwise
conflicts with the provisions hereof.
(4) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Trust and the Company have
obtained the written consent of the Credit Suisse First Boston Corporation.
16
(5) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by such Holder
to the Company in accordance with the provisions of this Section 7(c), which
address initially is, with respect to each Holder, the address of such Holder
maintained by the Registrar under the Indenture;
(2) if to the Purchasers, initially at the address set forth in the
Purchase Agreement; and
(3) if to the Trust or the Company, initially at its address set
forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged by recipient's facsimile machine operator, if sent by facsimile
transmission; and on the day delivered, if sent by overnight air courier
guaranteeing next day delivery.
The Purchaser or the Trust and the Company by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
(6) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties and the
Holders, including, without the need for an express assignment or any consent by
the Trust or the Company thereto, subsequent Holders of Securities. The Trust
and the Company hereby agree to extend the benefits of this Agreement to any
Holder of Securities and any such Holder may specifically enforce the provisions
of this Agreement as if an original party hereto.
(7) Counterparts. This agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(8) Headings. The headings in this agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(9) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS.
17
(10) Severability. In the event that any one of more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
shall be enforceable to the fullest extent permitted by law.
(11) Third Party Beneficiaries. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Trust, on the one hand, and the Purchasers, on the other hand, and the Holders
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect their rights or the
rights of Holders hereunder.
(12) Securities Held by the Company. Whenever the consent or approval
of Holders of a specified percentage of principal amount of Securities is
required hereunder, Securities held by the Company or its affiliates (other than
subsequent Holders of Securities if such subsequent Holders are deemed to be
affiliates solely by reason of their holdings of such Securities) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.
[Remainder of this Page Intentionally Left Blank]
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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Purchasers, the Trust and the Company in accordance with its terms.
Very truly yours,
HANOVER COMPRESSOR CAPITAL
TRUST
By: _______________________________________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Administrative Trustee
HANOVER COMPRESSOR COMPANY
By:________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer and
Treasurer
The foregoing Registration Rights
Agreement is hereby confirmed
and accepted as of the date first above
written.
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXX, XXXXX & CO.
XXXXXXX XXXXX XXXXXX INC.
XXXX XXXXXXXX INCORPORATED
By: CREDIT SUISSE FIRST BOSTON CORPORATION
Acting on behalf of itself and as
the representative of the several
Purchasers
By:___________________________________________________________________
Name: Xxxxx Xxxx
Title: Managing Director
19
