EXHIBIT 4.11
COMMON SECURITIES GUARANTEE AGREEMENT
DELIVERED BY
HANOVER COMPRESSOR COMPANY
FOR THE BENEFIT OF THE HOLDERS OF COMMON SECURITIES OF
HANOVER COMPRESSOR CAPITAL TRUST
This COMMON SECURITIES GUARANTEE AGREEMENT (the "Common Securities
Guarantee"), dated as of December 15, 1999, is executed and delivered by Hanover
Compressor Company, a Delaware corporation (the "Guarantor"), for the benefit of
the Holders (as defined herein) from time to time of the Common Securities (as
defined in the Declaration (as defined herein)) of Hanover Compressor Capital
Trust, a Delaware business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of December 15, 1999, among the trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer may issue
up to 1,725,000 Preferred Securities (as defined in the Declaration), having an
aggregate liquidation amount of up to $86,250,000; and
WHEREAS, pursuant to the Declaration, the Issuer may issue up to 53,351
Common Securities, having an aggregate stated liquidation amount of up to
$2,667,550 designated the 7.25% Convertible Common Securities (liquidation
amount $50 per each of the Convertible Common Securities) (the "Common
Securities");
WHEREAS as incentive for the Holders to purchase the Common Securities, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth in this Common Securities Guarantee, to pay on a subordinated basis to the
Holders of the Common Securities the Guarantee Payments (as defined herein) and
to make certain other payments on the terms and conditions set forth herein; and
WHEREAS the Guarantor is also executing and delivering a guarantee
agreement in substantially identical terms to this Common Securities Guarantee
for the benefit of the holders of the Preferred Securities (the "Guarantee")
except that if a Debenture Event of Default or a Declaration Event of Default
(each as defined herein) (or an event that, with passage of time, would become a
Debenture Event of Default) shall have occurred and be continuing, the rights of
Holders of the Common Securities to receive Guarantee Payments under this Common
Securities Guarantee are subordinated to the rights of holders of Preferred
Securities to receive Guarantee Payments under the Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of Common
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Common Securities Guarantee
for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.01 Definitions and Interpretation.
In this Common Securities Guarantee, unless the context otherwise requires,
the terms set forth below shall have the following meanings.
2
(a) capitalized terms used in this Common Securities Guarantee but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.01 or the Guarantee;
(b) terms defined in the Declaration as at the date of execution of this
Common Securities Guarantee have the same meaning when used in this Common
Securities Guarantee unless otherwise defined in this Common Securities
Guarantee or in the Guarantee;
(c) a term defined anywhere in this Common Securities Guarantee has the
same meaning throughout;
(d) all references to "the Common Securities Guarantee" or "this Common
Securities Guarantee" are to this Common Securities Guarantee as modified,
supplemented or amended from time to time;
(e) all references in this Common Securities Guarantee to Articles and
Sections are to Articles and Sections of this Common Securities Guarantee unless
otherwise specified; and
(f) a reference to the singular includes the plural and vice versa.
"Common Stock" means common stock, par value $.001 per share, of the
Guarantor.
"Debenture Event of Default" means an Event of Default under the Indenture.
"Declaration Event of Default" means an Event of Default under the
Declaration.
"Guarantee Event of Default" means a default by the Guarantor on any of its
payment or other obligations under the Common Securities Guarantee.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Common Securities, to the extent not paid or
made by or on behalf of the Issuer: (i) any accrued and unpaid Distributions
which are required to be paid on such Common Securities, to the extent that the
Issuer shall have funds on hand available therefor at such time, (ii) the
applicable Redemption Price (as defined in the Indenture) with respect to any
Common Securities called for redemption by the Issuer, to the extent that the
Issuer has funds on hand available therefor at such time, and (iii) upon a
voluntary or involuntary dissolution, winding up or liquidation of the Issuer
(other than in connection with the distribution of Debentures to the Holders or
the redemption of all the Common Securities), the lesser of (a) the aggregate
liquidation amount thereof plus accrued and unpaid Distributions thereon to the
date of payment (such amount being the "Liquidation Distribution") to the extent
the Issuer has funds available therefor and (b) the amount of assets of the
Issuer remaining available for distribution to Holders upon liquidation of the
Issuer after satisfaction of liabilities to creditors of the Issuer as required
by applicable law.
"Holder" means any holder, as registered on the books and records of the
Issuer, of any outstanding Common Securities.
"Senior Debt" shall have the meaning set forth in the Indenture.
3
ARTICLE II
GUARANTEE
SECTION 2.01 Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full on a
subordinated basis to the Holders the Guarantee Payments (without duplication of
amounts theretofore paid by or on behalf of the Issuer), as and when due, in
coin or currency of the United States of America which at the time of payment is
legal tender for payment of public and private debt regardless of any defense,
right of set-off or counterclaim which the Issuer may have or assert other than
the defense of payment. The Guarantor's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by the Guarantor to
the Holders or by causing the Issuer to pay such amounts to the Holders.
SECTION 2.02 Subordination.
If a Debenture Event of Default or a Declaration Event of Default (or an
event that, with passage of time, would become a Debenture Event of Default)
shall have occurred and be continuing, the rights of Holders of the Common
Securities to receive Guarantee Payments under this Common Securities Guarantee
are subordinated to the rights of holders of Preferred Securities to receive
Guarantee Payments under the Guarantee.
SECTION 2.03 Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this Common Securities
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 2.04 OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the Guarantor under
this Common Securities Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Common Securities to be performed or
observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, the amount payable upon redemption, or the amount
payable upon liquidation of the Issuer or any other sums payable under the terms
of the Common Securities or the extension of time for the performance of any
other obligation under, arising out of, or in connection with, the Common
4
Securities (other than an extension of time for payment of Distributions, that
results from the extension of any interest payment period on the Debentures
permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Common Securities, or any
action on the part of the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in the Common Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred;
or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 2.04 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders or any other Person to give
notice to, or obtain consent of, the Guarantor with respect to the happening of
any of the foregoing.
SECTION 2.05 Rights of Holders.
The Guarantor expressly acknowledges that any Holder may institute a legal
proceeding directly against the Guarantor to enforce its rights under this
Common Securities Guarantee, without first instituting a legal proceeding
against the Issuer or any other Person.
SECTION 2.06 Guarantee of Payment.
This Common Securities Guarantee creates a guarantee of payment and not of
collection. This Common Securities Guarantee will not be discharged except by
payment of the Guarantee Payments in full (without duplication of amounts
theretofore paid by the Issuer) or upon distribution of Debentures to Holders as
provided in the Declaration.
SECTION 2.07 Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Common Securities Guarantee and shall have right to waive
payment by the Issuer pursuant to Section 2.01; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any
5
indemnity, reimbursement or other agreement, in all cases as a result of payment
under this Common Securities Guarantee, if, at the time of any such payment, any
amounts are due and unpaid under this Common Securities Guarantee. If any amount
shall be paid to the Guarantor in violation of the preceding sentence, the
Guarantor agrees to hold such amount in trust for the Holders and to pay over
such amount to the Holders.
SECTION 2.08 Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Common Securities and that
the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Common Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 2.04 hereof.
SECTION 2.09 Conversion.
The Guarantor acknowledges its obligation to issue and deliver common stock
upon the conversion of the Common Securities.
SECTION 2.10 Events of Default; Waiver.
The Holders of a majority in liquidation amount of Common Securities may by
vote, on behalf of the Holders of all of the Common securities, waive any past
Guarantee Event of Default and its consequences. Upon such waiver, any such
Guarantee Event of Default shall cease to exist, and any Guarantee Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Common Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Guarantee Event of Default or impair any right
consequent thereon.
ARTICLE III
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 3.01 Limitation of Transactions.
So long as any Common Securities remain outstanding, if (i) there shall
have occurred and be continuing a Debenture Event of Default, a Declaration
Event of Default or an event that, with the giving of notice or the lapse of
time or both, would constitute a Debenture Event of Default or a Declaration
Event of Default or (ii) a selection by the Guarantor of a Deferral Period as
provided in the Indenture and such period, or any extension thereof, shall be
continuing, then (a) the Guarantor shall not declare or pay any dividend on, or
make any distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock (other than stock
dividends paid by the Guarantor which consist of the stock of the same class as
that on which the dividend is being paid), (b) the Guarantor shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by the Guarantor which rank pari passu with or
junior in interest to the Debentures and (c) shall not make any guarantee
payments with respect to any guarantee by the Guarantor of the debt securities
of any
6
subsidiary of the Guarantor if such guarantee ranks pari passu with or junior in
interest to the Debentures (in each case, other than (A) dividends or
distributions in Common Stock, (B) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (C) payments under the Guarantee and the Common
Securities Guarantee, (D) purchases or acquisitions of shares of Common Stock in
connection with the satisfaction by the Guarantor of its obligations under any
employee benefit plan or any other contractual obligation of the Guarantor
(other than a contractual obligation raking pari passu with or junior in
interest to the Debentures), (E) as a result of a reclassification of the
Guarantor=s capital stock or the exchange or conversion of one class or series
of the Guarantor=s capital stock for another class or series of the Guarantor=s
capital stock or (F) the purchase of fractional interests in shares of the
Guarantor=s capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged).
SECTION 3.02 Ranking.
This Common Securities Guarantee will constitute an unsecured obligation of
the Guarantor and will rank subordinate to all Senior Debt of the Guarantor to
the same extent that the Debentures (as defined in the Indenture) are
subordinated pursuant to the Indenture.
ARTICLE IV
TERMINATION
SECTION 4.01 Termination.
This Common Securities Guarantee shall terminate upon (i) full payment of
the amount payable upon redemption of the Common Securities, (ii) the
distribution of the Guarantor's common stock to the Holders in respect of the
conversion of the Common Securities into the Guarantor's common stock, (iii) the
distribution of the Debentures to the Holders in exchange for all of the Common
Securities or (iv) full payment of the amounts payable in accordance with the
Declaration upon liquidation of the Issuer. Notwithstanding the foregoing, this
Common Securities Guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any Holder of Common Securities must restore
payment of any sums paid under the Common Securities or under this Common
Securities Guarantee.
ARTICLE V
MISCELLANEOUS
SECTION 5.01 Successors and Assigns.
All guarantees and agreements contained in this Common Securities Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders.
7
SECTION 5.02 Amendments.
Except with respect to any changes which do not adversely affect the rights
of Holders (in which case no consent of Holders will be required), this Common
Securities Guarantee may only be amended with the prior approval of the Holders
of a majority in liquidation amount of the outstanding Common Securities. The
provisions of Section 12.02 of the Declaration with respect to meetings of
Holders of the Securities apply to the giving of such approval.
SECTION 5.03 Notices.
All notices provided for in this Common Securities Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Issuer, in care of the Administrative Trustees at the
Issuer's mailing address set forth below (or such other address as the Issuer
may give notice of to the Holders of the Common Securities):
Xxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxx
Hanover Compressor Capital Trust
c/o Hanover Compressor Company
00000 Xxxxx Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Treasurer
(b) if given to the Guarantor, at the Guarantor's mailing address set forth
be low (or such other address as the Guarantor may give notice of to the Holders
of the Common Securities):
Hanover Compressor Company
00000 Xxxxx Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Treasurer
(c) if given to any Holder of Common Securities, at the address set forth
on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
8
SECTION 5.04 Benefit.
This Common Securities Guarantee is solely for the benefit of the Holders
and is not separately transferable from the Common Securities.
SECTION 5.05 Governing Law.
THIS COMMON SECURITIES GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
[Remainder of this Page Intentionally Left Blank]
9
This COMMON SECURITIES GUARANTEE is executed as of the day and year first
above written.
HANOVER COMPRESSOR COMPANY, as
Guarantor
By:_____________________________
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer and Treasurer
10
