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EXHIBIT 4.7
STOCKHOLDERS AGREEMENT
(ASTRA RESOURCES, INC.)
THIS STOCKHOLDERS AGREEMENT (this "Agreement") dated as of December 5,
1995, among Hanover Compressor Company, a Delaware corporation (the "Company")
and the other parties signatory hereto.
W I T N E S S E T H:
WHEREAS, the Company is authorized to issue (i) 500,000 shares of
common stock, $0.001 par value per share (the "Common Stock" or the "Stock")
and (ii) 200,000 shares of preferred stock, $0.01 par value per share;
WHEREAS, each of the signatories hereto (other than the Company) is a
holder of shares of Stock; and
WHEREAS, the parties hereto wish to provide for certain agreements and
understandings regarding, among others, the disposition of the Stock owned or
controlled by each of them.
NOW, THEREFORE, in consideration of the foregoing, of the mutual
covenants and agreements herein contained and of other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS; ETC.
1.1 Definitions. Except as otherwise herein expressly provided,
the following terms and phrases shall have the meanings set forth below:
"Affiliate" shall mean (i) in the case of an entity, any Person who or
which, directly or indirectly, through one or more intermediaries, controls or
is controlled by, or is under common control with, any specified Person or (ii)
in the case of an individual, such individual's spouse, children, grandchildren
or parents or a trust primarily for the benefit of any of the foregoing. With
respect to GKH, the term Affiliate shall expressly include the partners in GKH.
"Agreement" shall mean this Stockholders Agreement, as originally
executed and as amended, modified, supplemented or restated from time to time,
as the context requires.
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"Astra" shall mean Astra Resources, Inc., a Kansas corporation.
"Bankruptcy" shall mean with respect to any Person (i) the making of a
general assignment or composition for the benefit of creditors or (ii) any
commencement of bankruptcy, reorganization, debt arrangement or other case or
proceeding under any bankruptcy or insolvency law, or any liquidation
proceeding under any bankruptcy or insolvency law, or the commencement in
respect of such Person or a substantial portion of such Person's property or
assets of any liquidation proceeding and, if such case or proceeding is not
commenced by such Person, it is either (A) consented to or acquiesced in by
such Person or (B) remains undismissed after 60 days following the date of
commencement thereof.
"Board" shall mean the Board of Directors of the Company, as
constituted from time to time.
"Bona Fide Purchaser" shall mean any Person (other than a selling
Stockholder's Affiliate) who or which has delivered a good faith written offer
to purchase such Stockholder's Stock for cash or Marketable Securities
provided, however, that, such Person has the requisite financial resources
necessary, in the reasonable opinion of the Board, to purchase and acquire such
Stockholder's Stock.
"Charter Documents" shall mean, in relation to a Person, the
collective reference to the Certificate of Incorporation and Bylaws of such
Person.
"control" (including the terms "controlled by" and "under common
control with"), with respect to the relationship between or among two or more
Persons, means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the affairs or
management of a Person, whether through the ownership of voting securities, as
trustee or executor, by contract or otherwise, including, without limitation,
the ownership, directly or indirectly, of securities having the power to elect
a majority of the board of directors or similar body governing the affairs of
such Person.
"Dispose" or "Disposition" (and any derivatives thereof) shall mean
(i) a voluntary or involuntary sale, assignment, transfer, conveyance or other
disposition of a Stockholder's Stock, and (ii) any agreement, contract or
commitment to do any of the foregoing.
"Encumbrance" or "Encumber" shall mean or refer to any lien, claim,
charge, pledge, mortgage, encumbrance, security interest, preferential
arrangement, restriction on voting or alienation of any kind, adverse interest,
or the interest of a third party under any conditional sale agreement, capital
lease or other title retention agreement.
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"Exempt Issuance" shall mean issuances of the Company's Common Stock
of less than 1,000 shares in the aggregate of such Common Stock to the
employees, officers, directors or consultants of the Company under a bona fide
compensation program approved by the Board.
"GKH" shall mean the collective reference to (i) GKH Investments,
L.P., a Delaware limited partnership ("Investments"), (ii) GKH Partners, L.P.,
a Delaware limited partnership ("Partners") and (iii) the respective Affiliates
of Investments and Partners. Any and all decisions and determinations to be
made by GKH hereunder shall be made by Partners, for itself, Investments and
their respective Affiliates.
"Marketable Securities" shall mean securities of a Person which Person
files periodic reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, but only to the extent such securities are, at the
applicable time, being publicly traded in the over-the-counter market or on a
nationally recognized exchange.
"Non-GKH Holders" shall mean any Stockholder other than GKH.
"Person" shall mean any individual, partnership, corporation, limited
liability company, joint venture, trust, firm, association, unincorporated
organization or other entity.
"Production Equipment" shall mean, with respect to any Person other
than the Company or any of its Subsidiaries, oil and gas production equipment
which is similar to or is an enhancement of oil and gas production equipment
designed, manufactured, re-conditioned or sold by Hanover/Xxxxx, Inc. as of the
date hereof.
"Registration Rights Agreement" shall mean the Third Amended and
Restated Registration Rights Agreement, dated as of the date hereof among the
Company, GKH, Astra and the other Stockholders parties thereto.
"SEC" shall mean the United States Securities and Exchange Commission
or any similar agency then having authority to enforce the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar or successor statute, and the rules and regulations of the SEC
promulgated thereunder, all as the same shall be in effect from time to time.
"Stockholder" or "Stockholders" shall mean the parties hereto (other
than the Company), their appropriate successors and assigns and any Person who
is (i) a holder of Stock and (ii) is or is required to be a party to this
Agreement at the time of reference thereto.
"Subsidiary" shall mean with respect to any Person, (a) any
corporation (whether now existing or hereafter organized) of which
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at least a majority of the voting stock having ordinary voting power for the
election of directors is, at the time as of which any determination is being
made, directly or indirectly owned or controlled by such Person or as to which
such Person has the power to direct the management or operations thereof,
whether by contract or otherwise and (b) any partnership, joint venture,
association or other business entity (whether now existing or hereafter
organized) of which more than 50% of the equity interest is, at the time as of
which any determination is being made, directly or indirectly owned or
controlled by such Person or as to which such Person has the power to direct
the management or operations thereof, whether by contract or otherwise.
"Transfer Notice" shall mean the notice required to be delivered by
the Seller to the Non-Selling Stockholders pursuant to Section 2.2. To be
effective, the Transfer Notice must (i) state the identity and the address of
the Bona Fide Purchaser who has offered, in writing, to purchase the Seller's
Stock, and (ii) state all material terms of such Bona Fide Purchaser's offer.
1.2 Certain Other Defined Terms. The following terms are
defined in the Section of this Agreement set forth directly opposite such
terms:
Term Section
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Common Stock preamble
Company preamble
Exempt Disposition 2.1(a)
Notice of Election 3.2(b)
Participating Stockholder 2.4(b)
Preferred Stock preamble
Purchasing Stockholder 2.2(c)
Secondary Notice 2.2(b)
Securities Act 2.1(a)
Seller 2.2
Stock preamble
Stock Offering 3.2(a)
1.3 Article, Etc. References to an "Article" or a "Section"
are, unless otherwise specified, to one of the Articles or Sections of this
Agreement.
ARTICLE II
TRANSFER RESTRICTIONS
2.1 Transfer Restrictions.
(a) General Transfer Restriction. Each Stockholder
covenants and agrees that such Stockholder will not, and will not
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permit its Affiliates, directly or indirectly, to Dispose or cause the
Disposition of such Stockholder's Stock or any interest therein, except (i) in
accordance with the terms and conditions of this Article II, (ii) pursuant to
an effective registration statement under the Securities Act of 1933, as
amended (the "Securities Act") or (iii) pursuant to any public distribution of
Stock pursuant to Rule 144 of the Securities Act. The Dispositions described
in the immediately preceding clauses (ii) and (iii) are sometimes collectively
referred to herein as "Exempt Dispositions". Any attempted Disposition not in
accordance with the terms and conditions of this Agreement shall be null and
void and of no force or effect.
(b) Transfers to Affiliates. Notwithstanding the
restrictions on Disposition set forth in this Article II, any Stockholder may
Dispose of all or a portion of its Stock to an Affiliate; provided, however,
that any such transferee shall be an Affiliate of the original holder of such
Stock and if Astra is the transferor, the transferee shall be required to
assume Astra's obligations under the Agreement and Plan of Merger among Astra,
the Company, Astra Resources Compression, Inc. and Hanover Acquisition Corp.
dated October 13, 1995.
(c) Transfers to Persons other than Affiliates. Except
for transfers permitted by this Article II, no Stockholder may Dispose of its
Stock without the prior written consent of each of the other Stockholders
(which consent may be given or withheld, in the sole and absolute discretion of
such other Stockholders) and if Astra is the transferor, the transferee shall
be required to assume Astra's obligations under the Agreement and Plan of
Merger among Astra, the Company, Astra Resources Compression, Inc. and Hanover
Acquisition Corp. dated October 13, 1995. Any Stock Disposed of pursuant to
this Section 2.1(c) shall remain subject to all of the terms and conditions of
this Agreement in the hands of any Person to whom such Stock may be Disposed
and any such Person shall be required to first deliver to the Company and the
Stockholders a written agreement assuming and agreeing to be bound by all of
the terms and conditions of this Agreement and to be a Stockholder hereunder.
(d) Pledge. No Stockholder may Encumber its Stock for
any purpose other than to secure indebtedness to a third party commercial bank
or financial institution and the pledgee of such Stock agrees in writing to be
bound by the terms and conditions of this Agreement.
(e) Rules of Construction and General Application.
Other than Persons who are transferees of Stock pursuant to Section 2.3 or 2.4
hereof or pursuant to an Exempt Disposition, each transferee of Stock pursuant
to this Article II (including transferees pursuant to Section 2.1(b)) shall
execute and acknowledge such instruments (including, without limitation, a
counterpart of this Agreement), in form and substance reasonably satisfactory
to the Company and the other Stockholders, as the
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Company and such other Stockholders shall deem reasonably necessary or
desirable to effectuate such transfer and to confirm the agreement of the
transferee of such Stock to be bound by all the terms and provisions of this
Agreement with respect to the Stock acquired. All reasonable expenses,
including attorneys' fees, incurred by the Company in this connection shall be
borne by such transferee.
2.2 Dispositions by Stockholders.
(a) Offer from Bona Fide Purchaser. If a Non-GKH Holder
(for purposes of this Section 2.2, "Seller") desires to effect the Disposition
of its Stock to a Bona Fide Purchaser (other than pursuant to an Exempt
Disposition) at any time on or prior to the third anniversary date hereof, such
Seller shall deliver to the Company and to all of the other Stockholders a
Transfer Notice at least 30 days prior to the proposed Disposition of Seller's
Stock. Under no circumstances may any Seller sell less than all of its Stock
to any such Bona Fide Purchaser; provided, however, that so long as a Seller,
together with its Affiliates, owns at least 66.67% of the shares of Common
Stock which such Seller owns as of the date hereof, such Seller may, subject to
Section 2.2(b) in one or more transactions, sell a portion of its Common Stock
to one or more Bona Fide Purchasers, provided, further, that any such partial
sale does not reduce such Seller's (together with its Affiliates') aggregate
ownership of Common Stock or Preferred Stock, as the case may be, to less than
66.67% of the amount owned as of the date hereof. After the third anniversary
date hereof, Astra shall be free to dispose of its Stock without complying with
this Section 2.2 and free of the restrictions set forth in Section 2.1(c)
hereof; provided, however, that the restriction set forth in the last sentence
of Section 2.1(c) shall continue to be applicable for a period of five (5)
years after the date of this Agreement.
(b) Right of First Refusal. By delivery of the Transfer
Notice, Seller shall be deemed to have offered the Company, or its designee(s)
(such designee(s) to be subject to the approval of Astra, which approval shall
not be unreasonably withheld), the right and option to purchase on the terms
and conditions set forth in the Bona Fide Purchaser's written offer all, or any
portion of the Seller's Stock subject to the Transfer Notice. In order to
exercise such option, the Company shall deliver written notice to such effect
to Seller within 25 days of its receipt of the Transfer Notice. In the event
that the Company exercises its rights for less than 100% of the Seller's Stock
subject to the Transfer Notice pursuant to the first sentence of this Section
2.2(b), then the Company shall within 30 days of the date that the Transfer
Notice is deemed given hereunder provide the non-selling Stockholders with a
notice (the "Secondary Notice") setting forth the number of shares of Seller's
Stock that remain unpurchased following the initial 25 day exercise period.
The recipients of the Secondary Notice shall have 7 days from the date that the
Secondary Notice is deemed given to provide notice to Seller and the Company of
the amount of Seller's unpurchased Stock
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that each non-Selling Stockholder will purchase, which amounts shall be in such
proportions as such non-selling Stockholders shall agree among themselves, or
failing such agreement in proportion to their interest in the Company
(vis-a-vis each other). If the Company and/or the non-selling Stockholders, or
their respective designees, who wish to participate exercise their respective
options to purchase all of the Seller's Stock subject to the Transfer Notice,
the consummation of the purchase and sale of Seller's Stock shall occur in
accordance with Section 2.2(c) hereof. A failure by either the Company or any
non-selling Stockholder to timely deliver any notice of intent to purchase
required pursuant to this Section 2.2(b) shall constitute such Person's failure
to exercise its rights under this Section 2.2(b).
(c) Consummation of Purchase.
(i) The purchase price payable by either the
Company or a non-selling Stockholder or their respective designees
(collectively, the "Purchasing Stockholder") to Seller shall be paid
as set forth in the Bona Fide Purchaser's offer (except that no
payment need be made until at least 15 days subsequent to the
completion of the procedure described in Section 2.2(b), if
applicable) and Seller's Stock shall be transferred as provided in
such written offer.
(ii) At the closing of the purchase and sale
of Seller's Stock pursuant to Section 2.2(b), (A) each Purchasing
Stockholder shall deliver to Seller any and all consideration required
pursuant to the terms of the Bona Fide Purchaser's offer and (B)
Seller shall deliver to each such Purchasing Stockholder a stock
certificate or stock certificates evidencing such Seller's Stock
together with appropriate instruments of assignment duly executed in a
proper form to effect the transfer of such Stock from Seller to each
such Purchasing Stockholder on the books and records of the Company.
(d) Other Disposition Provisions.
(i) If Purchasing Stockholders do not agree
to purchase all of Seller's Stock subject to the Transfer Notice by
the expiration of the periods set forth in Section 2.2(b), then no
Purchasing Stockholder shall have the right to purchase any of
Seller's Stock which was the subject of such Transfer Notice and
Seller shall have 45 days thereafter in which to effect the
Disposition of its Stock to the Bona Fide Purchaser on terms not more
favorable than were set forth in the Bona-Fide Purchaser's written
offer.
(ii) During the term of the rights granted to
the Company and the non-selling Stockholders pursuant to Section 2.2,
Seller shall not negotiate or offer to sell its Stock on terms and
conditions more favorable to a purchaser than those
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offered to the Bona Fide Purchaser which offer was the subject of the
relevant Transfer Notice.
(iii) If Seller shall fail to consummate a
Disposition of its Stock within the time period set forth in Section
2.2(d)(i), then no Disposition of such Stock may be made by Seller
without first re-offering such Stock to the Company and the
non-selling Stockholders in accordance with the provisions of this
Section 2.2.
2.3 Rights to Compel Disposition.
(a) Rights of GKH. If GKH proposes to Dispose of all,
but not less than all, of its Common Stock to a Bona Fide Purchaser (other than
pursuant to an Exempt Disposition), then, notwithstanding anything in this
Agreement to the contrary, GKH may require the Non-GKH Holders to Dispose of
all of their Common Stock to such Bona Fide Purchaser for the same
consideration per share and otherwise on the same terms and conditions (other
than with respect to representations and warranties) upon which GKH effects the
Disposition of its Common Stock.
(b) Obligations of the Non-GKH Holders. In the event
that GKH desires to exercise its right pursuant to Section 2.3(a), GKH shall
deliver to the Company and the Non-GKH Holders notice setting forth the
consideration per share of Stock to be paid by such Bona Fide Purchaser and the
other terms and conditions of such Disposition. Within 25 days following the
date of such notice, each of the Non-GKH Holders shall deliver to GKH (i) a
stock certificate or stock certificates evidencing such Non-GKH Holder's Stock
together with an appropriate instrument of assignment duly executed in a proper
form to effect the Disposition of such Stock from such Non-GKH Holder to the
Bona Fide Purchaser on the books and records of the Company and (ii) a limited
power-of-attorney authorizing GKH to effect the Disposition of such Stock
pursuant to the terms of such Bona Fide Purchaser's offer as such terms may be
modified by GKH, provided, that all of such Non-GKH Holder's Stock is disposed
of for the same consideration per share of Stock and otherwise on the same
terms and conditions upon which GKH effects the Disposition of its Stock. In
the event that any Non-GKH Holder shall fail to deliver such documentation to
GKH, the Company shall (A) cause a notation to be made on its books and records
to reflect that the Stock of such Non-GKH Holder is bound by the provisions of
this Section 2.3 and that the Disposition of such Stock may be effected without
the such Non-GKH Holder's consent or surrender of its Stock and (B) hold back
the proceeds of the Disposition of any such Non-GKH Holder's Stock in a non-
interest bearing account pending compliance by such Non-GKH Holder with its
obligations under this Section 2.3(b).
In addition, in the event GKH exercises its rights under Section
2.3(a), the Non-GKH Holders shall be required to make to the relevant Bona Fide
Purchaser such unqualified representations
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and warranties with respect to their Stock as are set forth in Section 2.5(b)
hereof.
(c) Responsibility of GKH. Promptly after the
consummation of the Disposition of Stock pursuant to this Section 2.3, GKH
shall (i) deliver notice thereof to the Non-GKH Holders, (ii) subject to clause
(B) of Section 2.3(b) remit to each Non-GKH Holder the total consideration
received by GKH, if any, with respect to such Non-GKH Holder's Stock Disposed
of pursuant hereto, and (iii) furnish such other evidence of the completion and
time of completion of such Disposition and the terms thereof as may be
reasonably requested in writing by the Non-GKH Holders.
(d) Failure to Effect Transfer. If, within 90 days
after GKH's delivery of the notice required pursuant to Section 2.3(b), GKH
shall not have completed the Disposition of its Stock and that of the Non-GKH
Holders in accordance herewith, GKH shall return to the Non-GKH Holders the
documents and instruments which the Non-GKH Holders shall have delivered
pursuant to this Section 2.3. Upon the Non-GKH Holder's receipt of such
documents, all the restrictions on Disposition contained in this Agreement with
respect to the Stock owned by the Stockholders shall again be in effect.
2.4 Rights of Inclusion.
(a) Rights of the Non-GKH Holders. If GKH proposes to
Dispose Common Stock which will result in GKH owning less than 30% of the then
issued and outstanding Common Stock it owns as of the date hereof to a Bona
Fide Purchaser (other than pursuant to an Exempt Disposition), then any Non-GKH
Holder may require GKH to require the Bona Fide Purchaser to purchase all, but
not less than all, of the Common Stock then owned by such Non-GKH Holders to
such Bona Fide Purchaser in accordance with this Section 2.4(a) for the same
consideration per share and otherwise on the same terms and conditions (other
than with respect to representations and warranties) upon which GKH effects the
Disposition of its Common Stock. GKH shall be permitted to dispose of its
Common Stock without restriction if this Section 2.4(a) does not otherwise
apply.
(b) Obligations of Participating Stockholder. If GKH
desires to accept a Bona Fide Purchaser's offer to purchase GKH's Common Stock
in accordance with Section 2.4(a), GKH shall deliver a copy of the Bona Fide
Purchaser's offer to the Company and the Non-GKH Holders, and, within 25 days
of the receipt of such copy, in the event that any Non-GKH Holder desires to
exercise its rights pursuant to this Section 2.4 (each a "Participating
Stockholder"), such Participating Stockholder shall deliver to GKH and the
Company written notice to such effect and shall deliver to GKH (i) a stock
certificate or stock certificates evidencing such Participating Stockholder's
Stock, together with an appropriate instrument of assignment duly executed in a
proper form to effect the Disposition of such Stock to the Bona Fide Purchaser
on the books and records
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of the Company and (ii) a limited power-of-attorney authorizing GKH to effect
the Disposition of such Stock pursuant to the terms of such Bona Fide
Purchaser's offer as such terms may be modified by GKH, provided, that all of
the Participating Stockholder's Stock that is being transferred pursuant to
this Section 2.4 is Disposed of for the same consideration per share and
otherwise on the same terms and conditions upon which GKH effects the
Disposition of its Stock. The failure of a Participating Stockholder to
deliver notice of its desire to exercise its rights under, or to otherwise
comply with the provisions of, this Section 2.4(b) shall be deemed be a waiver
of the Participating Stockholder's rights hereunder.
The Participating Stockholders shall be required to make to a Bona
Fide Purchaser such unqualified representations and warranties with respect to
their Stock as are set forth in Section 2.5(b) hereof.
(c) Responsibility of GKH. In the event that any
Participating Stockholder timely exercises its rights of inclusion under this
Section 2.4, promptly after the consummation of the sale of Stock under this
Section 2.4, GKH shall (i) deliver notice thereof to each Participating
Stockholder, (ii) remit to each Participating Stockholder the total
consideration received by GKH, if any, with respect to such Participating
Stockholder's Stock sold pursuant hereto and (iii) furnish such other evidence
of the completion and time of completion of such Disposition and the terms
thereof as may be reasonably requested in writing by each Participating
Stockholder.
(d) Failure to Effect Transfer. In the event that any
Stockholder elects to exercise its rights of inclusion under this Section 2.4
as a Participating Stockholder, and if, within 90 days after GKH's delivery of
the copy of the Bona Fide Purchaser's offer pursuant to Section 2.4(b), GKH has
not completed the Disposition of its Stock and that of the Participating
Stockholders in accordance herewith, GKH shall return to each Participating
Stockholder the documents and instruments which such Participating Stockholder
delivered for Disposition pursuant to this Section 2.4. Upon the Participating
Stockholders' receipt of such documents and instruments, all the restrictions
on Disposition contained in this Agreement with respect to the Stock owned by
the Stockholders shall again be in effect.
2.5 Agreement of Selling Stockholders. All sales of Stock to be
made pursuant to Sections 2.2, 2.3 and 2.4 of this Agreement shall be subject
to the following terms:
(a) the Disposing Stockholder shall deliver to the
purchaser certificates evidencing the Stock being sold, free and clear of
Encumbrances (other than those set forth in Section 2.1(c)), together with duly
executed assignments or stock transfer powers in favor of the purchaser or its
nominees and such other documents, including evidence of ownership and
authority, as the purchaser may reasonably request;
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(b) the Disposing Stockholder shall not be required to
make any unqualified representations or warranties to any Person in connection
with such sale, except as to (i) good title to the Stock being sold, (ii) the
absence of Encumbrances with respect to the Stock being sold, (iii) its valid
existence and good standing of the Disposing Stockholder (if applicable), (iv)
the authority for, and validity and binding effect of (as against such
Disposing Stockholder), any agreement entered into by such Disposing
Stockholder in connection with such sale, (v) all required material consents to
such Disposing Stockholder's sale and material governmental approvals having
been obtained (excluding any securities laws) and (vi) the fact that no
broker's commission is payable by the such Disposing Stockholder as a result of
Disposing Stockholder's conduct in connection with the sale; and
(c) the Disposing Stockholder shall not be required to
provide any indemnities in connection with such sale except for breach of the
representations and warranties contained in Section 2.5(b).
ARTICLE III
ADDITIONAL AGREEMENTS
3.1 Board Rights. So long as (a) Astra and its Affiliates
continue to own (beneficially and of record) no less than 15% of the
outstanding Common Stock and (b) the Company continues to be the only business
entity which markets, leases, sells or finances (to third parties) natural gas
compression and to third parties as a material portion of its business (any
entity other than the Company and its subsidiaries which meets the foregoing
definition being hereinafter referred to as a "Competitor") in which Astra and
its Affiliates owns (beneficially and/or of record) an equity interest or an
interest which is convertible into or exchangeable for equity, Astra shall
have the right to nominate that number of directors which would constitute 20%
of the members of the Board. The foregoing notwithstanding, without causing
Astra to lose any of the rights granted under this Section 3.1, Astra and its
Affiliates may acquire ownership of Equity Interests of 5% or less of any
Competitor, which Competitor's stock is publicly traded in the over-the-counter
market or on a nationally recognized exchange.
Astra agrees that Astra and its designee(s) shall not disclose any
confidential information obtained in connection with this Section 3.1 to any
Person (other than Persons in a confidential relationship with Astra, including
Astra's employees, advisors, agents, partners, representatives and Affiliates)
unless such Person has agreed in writing to maintain such information
confidential; provided, however, that nothing herein shall be deemed to prevent
the disclosure of any confidential information if such disclosure is (1)
required to be made in a judicial, administrative or governmental proceeding,
(2) required by an
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applicable law or regulation, (3) made to any governmental agency or regulatory
body having or claiming authority over any aspect of Astra's or its Affiliates'
businesses in connection with the exercise of such authority or claimed
authority, (4) subject to subpoena, or (5) made on a confidential basis as
Astra deems reasonably necessary or appropriate to any of its investors, any
bank or financial institution and/or counsel to or the representatives of such
investors, bank or financial institution. Notwithstanding the foregoing, the
confidential information does not include any information which would be
excluded from the definition of "Evaluation Materials" under the terms of the
Confidentiality Agreement, dated May 23, 1995 between the Company and Astra.
3.2 Equity Rights Offerings.
(a) In the event that the Company issues additional
shares, other than in an Exempt Issuance (a "Stock Offering"), then Astra shall
have the right to subscribe for that number of shares (but not less than such
number) that would, together with the shares then owned by Astra, result in
Astra owning 20% of the outstanding Common Stock.
(b) Following delivery by the Company to Astra of
written notice of the Company's intent to pursue a Stock Offering, Astra shall
have 30 days to notify the Company in writing (the "Notice of Election") of its
election to exercise its rights under Section 3.2(a). Failure by Astra to
deliver the Notice of Election within such 30 day period shall constitute a
waiver by Astra of its rights under Section 3.2(a), and thereafter such rights
will be cancelled.
3.3 Agreement to Vote for Directors.
(a) During the term of this Agreement, each of Astra and
GKH agrees that at any regular or special meeting of the stockholders of the
Company at which director nominees are to be elected to the Board, or in any
written consent executed in lieu of such a meeting, it shall (a) vote its
Common Stock, (b) take all actions necessary and (c) cause the directors
nominated by it to the Board pursuant to this Agreement to take all actions
necessary, to ensure the election to the Board of the individuals nominated by
the other.
(b) Upon the request of Astra or GKH, as the case may
be, the non-requesting party will vote its Common Stock to (i) remove any
individual nominated by the requesting party and (ii) appoint another
individual nominated by the requesting party.
3.4 Registration Rights Agreement. Each of the parties hereto
shall concurrently with the execution and delivery of this agreement execute
and deliver a counterpart of the Third Amended and Restatement Registration
Rights Agreement dated as of
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December 5, 1995 among the Company, GKH, Astra and certain other stockholders
of the Company parties thereto.
3.5 Furnishing Information. The Company shall cause its annual
report to stockholders and any quarterly or other financial reports furnished
by it to its stockholders to be mailed to any party hereto which owns 5% or
more of the outstanding common stock of the Company within five days after the
date such documents are filed with the SEC.
At any time that the Company does not have a class of securities
registered pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 ("Exchange Act"), the Company will prepare, for the first three quarters
of each fiscal year quarterly reports, and for each fiscal year an annual
report, containing information (including, but not limited to, combined or
consolidated financial statements which in the case of annual reports shall be
audited) substantially equivalent to that required to be included in reports on
Form 10-Q and on Form 10-K, respectively, under the Exchange Act. All
financial statements will be prepared in accordance with generally accepted
accounting principles consistently applied, except for changes with which the
Company's independent public accountants concur and except that quarterly
statement may be subject to year-end adjustments and shall be certified by the
Chief Financial Officer of the Company, and in the case of the annual financial
statements, certified by the Company's independent public accountants. The
Company will cause at the Company's expense a copy of the respective reports to
be mailed to the any party hereto which owns 5% or more of the outstanding
common stock of the Company within 50 days after the close of each of the first
three quarters of each fiscal year and within 95 days after the close of each
fiscal year.
3.6 Visitation Rights. Astra may, during normal business hours,
at Astra's expense, and upon reasonable prior notice to a member of the senior
management of the Company, (i) visit and inspect the properties of the Company
and its subsidiaries, (ii) examine and copy their books of record and account,
and (iii) discuss their affairs, finances and accounts with its officers,
employees and independent public accountants, subject, in each case, to any
confidentiality agreements to which the Company is a party; provided that no
such visit, inspection, examination or discussion shall unreasonably disrupt
normal operations of the Company and the Astra representative shall be
accompanied by a member of the senior management of the Company. Astra shall
comply with the obligations of Astra under the Confidentiality Agreement
between the Company and Astra, dated May 23, 1995. The preceding sentence does
not apply to any information which (a) has become generally available to the
public through no fault of Astra, (b) is required or appropriate in any report,
statement or testimony submitted to any municipal, state or federal regulatory
body having or claiming to have jurisdiction over Astra, (c) may be required or
appropriate in response to any summons or subpoena or in connection with any
litigation, (d) is disclosed to Astra in good faith by a
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third party who had independent rights to such information, (e) is obsolete or
(f) is reasonably believed by Astra to be appropriate in order to comply with
any law, order, regulation or ruling applicable to Astra.
3.7 Amendment to Articles and By-Laws. GKH shall not vote to
amend the Articles of Incorporation of the Company, nor shall the Company amend
its by-laws in any manner which conflicts with the provisions of this
Agreement.
3.8 Committee Representation. The Company and GKH shall use
their reasonable best efforts to cause one of Astra's designees on the Board to
be elected to the Executive Committee and the Finance Committee of the Board.
3.9 Rule 144A. Subject to the execution by any prospective
transferee of any Stockholder of a confidentially agreement reasonably
satisfactory to the Company and its counsel, and provided that such prospective
transferee is not a Competitor, the Company will furnish any such prospective
transferee of any Stockholder (so long as such Stockholder owns any Stock),
upon the request of such Stockholder or such prospective transferee the
information required by Rule 144A of the Securities Act.
ARTICLE IV
MISCELLANEOUS PROVISIONS
4.1 Endorsement on Stock Certificates. Each and every
certificate evidencing Stock shall contain upon its face, or on the reverse
side thereof, the following legend:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER
SUCH ACT, OR UNLESS SUCH OFFER, SALE, TRANSFER, PLEDGE OR
HYPOTHECATION IS EXEMPT FROM REGISTRATION OR IS OTHERWISE IN
COMPLIANCE WITH SUCH ACT. THE TRANSFERABILITY OF THIS SECURITY IS
ALSO SUBJECT TO RESTRICTIONS CONTAINED IN A STOCKHOLDERS AGREEMENT AND
A REGISTRATION RIGHTS AGREEMENT, WHICH AGREEMENTS 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."
4.2 Termination. This Agreement shall terminate upon the
earliest to occur of the following events:
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(a) Bankruptcy of the Company;
(b) The consummation of a publicly registered offering
of 20% or more of the Common Stock; provided, that the provisions of Section
3.1, Section 3.3, 3.6, 3.8 and 3.9 (but only with respect to Astra to the
extent Astra continues to have Board rights under Section 3.1) and Section 3.5
shall survive any termination of this Agreement pursuant to this Section
4.2(b);
(c) 100% of the Stock being owned by a single
Stockholder;
(d) the voluntary agreement, in writing, of all of the
Stockholders; or
(e) August 1, 2005.
4.3 Stock Subject to this Agreement.
(a) This Agreement shall apply to all Stock currently or
hereinafter owned or acquired by the Stockholders (other than Stock Disposed of
pursuant to an Exempt Disposition), including, without limitation, (i) the
Stock held by the Stockholders on the date hereof, (ii) any Stock issued to any
Stockholder pursuant to Section 4.3(b) hereof, (iii) any Stock issued to any
Stockholder pursuant to such Stockholder's exercise of an option or warrant and
(iv) any Stock otherwise purchased, acquired or issued to any Stockholder.
(b) If, at any time, and from time to time, the Company
shall declare and make a distribution upon any of the Stock, or shall validly
issue Stock in lieu of, or in exchange for, or in addition to, any of the Stock
without the receipt of additional consideration therefor, then any such Stock
subsequently issued with respect to the Stock then subject to this Agreement
shall constitute additional Stock subject to this Agreement.
4.4 Notices. Any and all notices or other communications
provided for herein shall be in writing and shall be considered duly given upon
the earliest to occur of (a) personal delivery, (b) 2 days after being
delivered to a national recognized overnight delivery courier or service, (c) 3
days after being mailed by registered or certified mail, return receipt
requested, postage prepaid or (d) the delivering parties receipt of a written
confirmation of a facsimile transmission. Any notice to a Stockholder shall be
addressed to such Stockholder at its address listed on the signature pages of
this Agreement. Any party hereto may change its address by giving notice to
the other parties hereto as provided herein.
4.5 Severability. If any provision of this Agreement is held by
a court of competent jurisdiction to be invalid, illegal or unenforceable, such
provision shall be severed and the remaining provisions hereof shall be
enforced to the extent possible or
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modified in such a way as to make it enforceable, and the invalidity,
illegality or unenforceability thereof shall not affect the validity, legality
or enforceability of the remaining provisions of this Agreement.
4.6 Modification; Amendment. No modification or amendment of
this Agreement shall be valid unless the same shall be in writing executed by
all of the Stockholders.
4.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the conflict of laws provisions thereof.
4.8 Binding Effect; Complete Agreement. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns. This
Agreement (and all agreements and other documents referred to herein)
constitutes the entire agreement among the parties hereto and supersedes all
prior agreements and understandings, oral or written, among the parties hereto
with respect to the subject matter hereof.
4.9 Specific Performance. The parties acknowledge that given
the nature of the obligations of the parties hereto that any non-breaching
party will be irreparably damaged by a breach of this Agreement. The parties
hereto therefore acknowledge and agree that any non-breaching party hereto may
seek specific performance of the provisions hereof and that no party hereto may
assert adequacy of a remedy at law as a defense to an action for specific
performance hereunder.
4.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
4.11 Attorneys' Fees. If any legal action, including an action
for declaratory relief, is brought to enforce any provision of this Agreement,
the prevailing party or parties, as the case may be, shall be entitled to
recover his, its or their respective reasonable attorneys' fees from the
non-prevailing party or parties, as the case may be. These fees, which may be
set by the court in the same action or in a separate action brought for that
purpose, are in addition to any other relief to which any prevailing party may
be entitled.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties as of the date first above written.
THE COMPANY:
-----------
HANOVER COMPRESSOR COMPANY
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Title: Executive Vice President
THE STOCKHOLDERS:
----------------
ASTRA RESOURCES, INC.
By: /s/ C. Xxx Xxxxx
-----------------------------------
Title: President
Address:
-----------------------------------
-----------------------------------
-----------------------------------
GKH PARTNERS, L.P., a Delaware
limited partnership
By: JAKK HOLDING CORP., a general
partner
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Xxxxxx X. Xxxxx, President
Address:
000 Xxxx Xxxxxxx Xxxxxx,
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
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GKH INVESTMENTS, L.P., a Delaware
limited partnership.
By: GKH Partners, L.P., its
general partner
By: JAKK Holding Corp., a general
partner
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Xxxxxx X. Xxxxx, President
Address:
000 Xxxx Xxxxxxx Xxxxxx,
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
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