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EXHIBIT 4.6
STOCKHOLDERS AGREEMENT
(JOINT ENERGY DEVELOPMENT INVESTMENTS LIMITED PARTNERSHIP)
THIS STOCKHOLDERS AGREEMENT (this "Agreement") dated as of August 7,
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") and (ii) 200,000
shares of preferred stock, $0.01 par value per share (the "Preferred Stock";
and together with the Common Stock, the "Stock");
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
and with respect to JEDI, the term Affiliate shall expressly include the
partners in JEDI.
"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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"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 all, but not less than all, of such Stockholder's Stock for cash or
Marketable Securities provided, however, that, such Person has the requisite
financial resources necessary, in the reasonable opinion of the Board, to
purchase and acquire such Stockholder's Stock.
"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.
"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.
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"JEDI" shall mean Joint Energy Development Investments Limited
Partnership, a Delaware limited partnership.
"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 being offered by a
Bona Fide Purchaser to a Stockholder are, at the time of the offer, being
publicly traded in the over-the-counter market or on a nationally recognized
exchange.
"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 Second Amended and
Restated Registration Rights Agreement, dated as of the date hereof among the
Company, GKH, JEDI and the other stockholders of the Company parties thereto.
"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 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.
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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
---- -------
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)
Rights Offering 3.2(a)
Secondary Notice 2.2(b)
Securities Act 2.1(a)
Seller 2.2
Stock preamble
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 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 must be an Affiliate of the original holder of such
Stock.
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(c) Transfers to Persons other than Affiliates. Except
as otherwise provided in 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). 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, and
causes any transferee of such pledged stock to agree 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 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), 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 50% of each of
the shares of Common Stock and Preferred Stock which such Seller owns as of the
date hereof, such Seller may, in one or more transactions, sell a portion of
its Common Stock and/or its Preferred 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 50% of the amount owned as of
the date hereof.
(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 JEDI, 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
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any portion of the Seller's Stock. In order to exercise such option, the
Company shall deliver written notice to such effect to Seller within 20 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 pursuant to the first
sentence of this Section 2.2(b), then the Company shall within 22 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 20 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 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, 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 its designees as permitted by Section 2.2(b) or a
non-selling Stockholder or their respective Affiliates (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 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.
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(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 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 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 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 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 and warranties with respect to their
Stock as are set forth in Section 2.5(b) hereof.
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(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 (i) GKH proposes
to Dispose of its Stock to a Bona Fide Purchaser (other than pursuant to an
Exempt Disposition), (ii) such Stock represents greater than 50% of either the
Preferred Stock or Common Stock then owned by GKH and (iii) GKH elects not to
exercise its rights pursuant to Section 2.3 hereof, then any Non-GKH Holder may
require GKH to require the Bona Fide Purchaser to purchase that percentage of
such Non-GKH Holder's Preferred Stock or Common Stock, as the case may be,
equal to the percentage of GKH's Stock that is being disposed of by GKH 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 Stock.
(b) Obligations of Participating Stockholder. If GKH
desires to accept a Bona Fide Purchaser's offer to purchase all of GKH's 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 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,
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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;
(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
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commission is payable by the Disposing Stockholder as a result of such
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 Observation Rights; Access to Information. So long as
(a) JEDI and its Affiliates continue to own (beneficially and of record) no
less than 7.5% of the Common Stock (on a fully diluted basis) and (b) the
Company continues to be the only business entity which markets, leases, sells
or finances (to third parties) natural gas compression and Production Equipment
(any entity other than the Company and its Subsidiaries which meets the
foregoing description being hereinafter referred to as a "Competitor") in which
JEDI and, to the actual knowledge of the executive officers of the general
partner of JEDI, Affiliates of the general partner of JEDI own (beneficially
and/or of record) an equity interest or an interest which is convertible into
or exchangeable for equity (an "Equity Interest"), JEDI shall have either (i)
the right to nominate one member of the Board, or (ii) the right to (A) receive
prior notice of any action proposed to be taken by the Board, (B) receive such
notices as are required to be given to directors of the Company of any meeting
of the Board, (C) designate two persons to attend any meeting of the Board as
observers, (D) receive, promptly upon completion, all written management
reports and written management accounts relating to the Company, to the extent
such reports and accounts are provided to the Board and (E) have reasonable
access to the statutory books and minute books of the Company upon reasonable
prior written notice to an executive officer of the Company, but only to the
extent such statutory books and minute books would be available to all members
of the Board. The foregoing notwithstanding, without causing JEDI to lose any
of the rights granted under this Section 3.1, (x) JEDI and each of 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 and (y) any Affiliate of the
general partner of JEDI (other than Enron Corp.) that is (i) publicly traded in
the over-the-counter market or on a nationally recognized exchange and (ii)
managed independently from JEDI may acquire any amount of Equity Interests in
any Competitor.
JEDI agrees that JEDI and its designee 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 JEDI, including
JEDI'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 any applicable law or regulation, (3) made to any
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governmental agency or regulatory body having or claiming authority over any
aspect of JEDI'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 JEDI deems reasonably necessary or appropriate to any
of its investors, any bank or financial institution and/or counsel to or other
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 24, 1995
between the Company and Enron Capital & Trade Resources Corp.
3.2 Equity Rights Offerings.
(a) In the event that the Company elects to raise
additional equity pursuant to a rights offering made to 80% or more of the
Company's then existing stockholders (the "Rights Offering") the proceeds of
which will be used to satisfy certain conditions precedent to the Company's
draw down of funds under the terms of the Credit Facility (as defined below),
then the Company shall notify JEDI of the Company's intent to pursue a Rights
Offering and JEDI, solely in its capacity as a holder of the Company's capital
stock, shall have the right to do any or all of the following: (i) subscribe
for the initial 15% of such Rights Offering on an exclusive basis, (ii)
subscribe for its pro rata share (on an undiluted basis) (without taking into
account any rights acquired pursuant to the immediately preceding clause (i))
of the remaining rights offered in such Rights Offering and (iii) cause its
duly licensed Affiliate to underwrite all, but not less than all, of such
Rights Offering in the event that the Company and JEDI can mutually agree on
the terms of such underwriting, including, without limitation, an underwriting
agreement and other customary documentation between the Company, JEDI and such
Affiliate.
(b) Following delivery by the Company to JEDI of written
notice of the Company's intent to pursue a Rights Offering, JEDI shall have 30
days to notify the Company in writing (the "Notice of Election") of its
election to exercise any of the rights described in clauses (i), (ii) and (iii)
of Section 3.2(a). Failure by JEDI to deliver the Notice of Election within
such 30 day period shall constitute a waiver by JEDI of its rights under
Section 3.2(a), and thereafter such rights will be cancelled with respect to
the relevant Rights Offering only.
(c) JEDI's rights pursuant to this Section 3.2 shall
terminate and be of no further force and effect until the later of (i) the date
that the Stand-by Credit Facility (the "Credit Facility") described in Section
3.1 of the Letter of Intent dated June 26, 1995 between the Company and Enron
Capital & Trade Resources Corp. (if such credit facility is entered into) is
terminated and the Company has no obligations thereunder and (ii) the Company
consummates a publicly registered offering of any of its Common Stock.
3.3 Agreement to Vote for Directors.
(a) During the term of this Agreement, each of JEDI 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
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(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 JEDI 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 Second Amended and Restatement Registration
Rights Agreement dated as of August ___, 1995 among the Company, GKH, JEDI and
certain other stockholders of the Company parties thereto.
3.5 Rule 144A. Subject to the execution by any prospective
transferee of any Stockholder of a confidentiality 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.
3.6 Additional Stockholders. The Company agrees to use its
reasonable best efforts to negotiate with any Person which (i) becomes a
stockholder of the Company following the date hereof and (ii) owns in excess of
3% of the outstanding Common Stock for the purpose of entering into a
stockholders agreement with JEDI, GKH and the Company providing for
restrictions and rights on transfers of Stock, preemptive rights and election
of directors.
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
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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:
(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 (but only with respect to JEDI to the extent JEDI 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
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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 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
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THE STOCKHOLDERS:
----------------
JOINT ENERGY DEVELOPMENT INVESTMENTS
LIMITED PARTNERSHIP, Delaware
limited partnership
By: Enron Capital Corp., its general partner
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxx X. Xxxxxx, Vice President
Address:
c/o Enron Corp.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxx/Xxxxxx XxXxx,
Specialists 28th Floor
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
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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