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EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and
entered into as of July 11, 2001, by and among Universal Compression Holdings,
Inc., a Delaware corporation (the "COMPANY"), and MCNIC Compression GP, Inc., a
Michigan corporation ("MCNIC GP"), and MCNIC Compression LP, Inc., a Michigan
corporation ("MCNIC LP" and, collectively with MCNIC GP, the "HOLDERS" and each
individually, a "HOLDER").
This Agreement is made in connection with the acquisition by the
Company of KCI Compression Company, L.P., a Delaware limited partnership (the
"PARTNERSHIP"), by way of a purchase by the Company of all of the interests in
the Partnership owned by MCNIC GP and MCNIC LP (the "PURCHASE OF INTERESTS") and
certain related transactions. In connection with the Purchase of Interests, the
Company has agreed to provide the Holders with the registration rights set forth
in this Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
SECTION 1. CERTAIN DEFINITIONS:
"COMMON STOCK" shall mean the common stock of the Company, par
value $.01 per share.
"ELIGIBLE COMMON STOCK" shall mean the shares of Common Stock
acquired in the Purchase of Interests and held by the Holders and any
of such shares thereafter held by any transferee or assignee of a
Holder pursuant to Section 11(c) hereof on the date of determination.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder.
"KCI REGISTRATION RIGHTS AGREEMENT" shall mean that certain
Registration Rights Agreement dated as of the date hereof by and among
the Company and the former shareholders of KCI, Inc., an Oklahoma
corporation, as listed on the signature pages to such agreement.
"MAJORITY HOLDERS" shall mean Holders or Permitted Transferees
holding at least a majority of the Eligible Common Stock on the date of
determination.
"PARTICIPATING HOLDERS" shall mean the Holders electing to
participate in the Demand Registration or any Piggyback Registration
pursuant to the terms of this Agreement.
"PERMITTED TRANSFEREE" shall mean a Person (i) to whom the
Holder has transferred Eligible Common Stock pursuant to Section 11(c)
hereof and (ii) who has executed and delivered to the Company an
Additional Party Counterpart in the form set forth in Exhibit A.
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"PERSON" shall mean any individual, partnership, corporation,
trust or unincorporated organization, or a government or agency or
political subdivision thereof.
"PROSPECTUS" shall mean the prospectus included in a
Registration Statement, including any preliminary prospectus, and any
such prospectus as amended or supplemented by any prospectus supplement
with respect to the terms of the offering of the Common Stock covered
by the Registration Statement, and by all other amendments and
supplements to such Prospectus, including post-effective amendments,
and in each case including all materials incorporated by reference
therein.
"REGISTRABLE SECURITIES" shall mean shares of Eligible Common
Stock as to which registration is requested hereunder aggregating at
least $5 million.
"REGISTRATION STATEMENT" shall mean any registration statement
of the Company on an appropriate form under the Securities Act (other
than any registration statement with respect to equity securities filed
on a Form S-4 or S-8 or any other forms prescribed for the same or
similar purposes) and all amendments and supplements to such
registration statement, including post-effective amendments, in each
case including the Prospectus contained therein, all material
incorporated by reference therein and all exhibits thereto.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, and the rules and regulations thereunder.
"UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING" shall
mean an offering of the Common Stock pursuant to a Registration
Statement in which the Common Stock of the Company is sold to an
underwriter in a firm commitment underwriting for reoffering to the
public or sold through an investment banker or manager on a best
efforts basis.
SECTION 2. COMMON STOCK SUBJECT TO REGISTRATION RIGHTS.
Shares of Eligible Common Stock will cease to be Eligible Common Stock
when (i) a Registration Statement covering such Eligible Common Stock has been
declared effective by the SEC and such Eligible Common Stock has been disposed
of pursuant to such effective Registration Statement, (ii) they may be
distributed without a holding period or volume amount limitations or are
distributed to the public pursuant to Rule 144 (or any similar provision then in
force) under the Securities Act, or (iii) they have otherwise been transferred
(other than to a Permitted Transferee).
SECTION 3. DEMAND REGISTRATION RIGHTS.
(a) The Holders hereby request that the Company file, and the Company
agrees with the Holders to file within 30 days after the closing date of the
Merger (the "PERMITTED FILING PERIOD") a Registration Statement with respect to
all of the shares of Eligible Common Stock held by the Holders, such
Registration Statement to be filed on Form S-3 or any similar short-
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form registration. The Company further agrees with the Holders to use its
reasonable best efforts to cause such Registration Statement to be declared
effective within 90 days after the closing date of the Purchase of Interests.
The registration requested pursuant to this Section 3 is referred to herein as
the "DEMAND REGISTRATION."
(b) Notwithstanding Section 3(a) above, if the Company fails to file
the Registration Statement within the Permitted Filing Period or to cause the
Registration Statement to be declared effective within 90 days after the closing
of the Purchase of Interests, the 90-day period set forth in Section 5(b),
starting 91 days from the date hereof and ending 180 days from the date hereof,
shall be reduced by one day for each day that such Registration Statement
remains unfiled or not effective, as applicable.
(c) With respect to the Demand Registration, the Company will, at the
request of the Majority Holders, file either a post-effective amendment to the
effective Registration Statement or a Form 8-K incorporated by reference into
the Registration Statement in order to permit a firm commitment underwriting of
at least 500,000 shares. The Company shall be required to effect an additional
registration pursuant to Section 3(a) if the Company fails to effect the Demand
Registration referred to in Section 3(a) (unless such registration has not been
effected solely by reason of the fault of the Holders).
(d) A registration shall not count as the Demand Registration until it
has become effective (unless such Demand Registration has not become effective
due to the fault of the Holders), and unless 100% of the Registrable Securities
requested to be included in such Demand Registration are registered.
(e) Subject to compliance with rights and obligations under the
Company's existing registration rights agreements, if the Demand Registration is
an underwritten offering, the Company shall not include in the Demand
Registration any securities other than the Registrable Securities .
SECTION 4. PIGGYBACK REGISTRATIONS.
(a) Whenever the Company proposes to register any of its securities
under the Securities Act (whether or not such registration relates to a primary
offering of securities by the Company or a secondary sale of securities by a
selling securityholder) and the registration form to be used may be used for the
registration of Registrable Securities (a "PIGGYBACK REGISTRATION"), the Company
shall give prompt written notice to the Holders of its intention to effect such
a registration and, subject to Section 5 hereof, shall include in such
registration all Registrable Securities with respect to which the Company has
received a written request for inclusion therein within ten (10) days after the
Company's notice, provided that the foregoing shall not apply to a registration
on Form S-4 or S-8 or similar transaction or an effective registration statement
as of the date of this Agreement.
(b) If a Piggyback Registration is an underwritten primary registration
on behalf of the Company, and the managing underwriters advise the Company that
in their judgment, the number of securities requested to be included in such
registration exceeds the number that can be sold in such offering without
adversely affecting the marketability of the offering, the Company
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shall include in such registration (i) first, the securities the Company
proposes to sell, (ii) second, any securities requested to be included in such
registration under the Registration Rights Agreement, dated as of February 20,
1998, by and among the Company, Xxxxxx Xxxxxx Partners III, L.P. and the other
persons or entities signatory thereto (the "XXXXXX XXXXXX AGREEMENT") or the
Registration Rights Agreement, dated as of February 9, 2001, by and between the
Company and WEUS Holding, Inc. (the "WEATHERFORD AGREEMENT") and (iii) third,
the Registrable Securities and other securities requested to be included in such
registration, on a pro rata basis among the holders of such securities.
(c) If a Piggyback Registration is an underwritten secondary
registration on behalf of holders of the Company's securities other than the
Holders, and the managing underwriters advise the Company that in their judgment
the number of securities requested to be included in such registration exceeds
the number which can be sold in such offering without adversely affecting the
marketability of the offering, the Company shall include in such registration
(i) first, the securities requested to be included therein by the holders
requesting such registration, (ii) second, the securities the Company proposes
to sell, (iii) third, any securities to be included in such registration under
the Xxxxxx Xxxxxx Agreement or the Weatherford Agreement and (iv) fourth, the
Registrable Securities under this Agreement and the KCI Registration Rights
Agreement and any other securities requested to be included in such
registration, on a pro rata basis among the holders of such securities.
(d) The Company or its designee shall select the investment banker(s)
and manager(s) to administer each Piggyback Registration.
SECTION 5. HOLDBACK AGREEMENTS.
(a) Notwithstanding Sections 3 and 4 above, for a period of 90 days
from the date hereof, the Holders shall not be entitled to sell any Registrable
Securities (whether by way of Demand Registration, Piggyback Registration or
otherwise).
(b) Notwithstanding Sections 3 and 4 above, but subject to Section 3(b)
above, for a period starting 91 days from the date hereof and ending 180 days
from the date hereof, the Holders shall not be entitled to sell any Registrable
Securities (whether by way of Demand Registration, Piggyback Registration or
otherwise) that, when combined with all securities registered (or as to which
registration has been requested) under this Agreement exceed 50% of the Eligible
Common Stock; provided, however, the restrictions contained in this sentence
shall terminate as to each Holder 180 days from the date hereof.
(c) The Holders agree, if requested by the managing underwriter or
underwriters in an Underwritten Offering by the Company (whether a primary
offering of securities by the Company or a secondary sale of securities by a
selling securityholder), not to effect any public sale or distribution of
securities of the Company of the same class as the securities included in the
Registration Statement, during the 25-day period prior to, and during the 90-day
period (or such longer period requested for all similar holders by the
underwriters) beginning on, the effective date of such Registration Statement,
including a sale pursuant to Rule 144 under the Securities Act, to the extent
timely notified in writing by the Company or the managing underwriters;
provided, however, that the restrictions contained in this sentence shall
terminate as
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to each Holder on the first anniversary of the date hereof unless such Holder is
a 5% or greater stockholder of the Company at the time of such primary offering
by the Company; provided, further, that the restrictions contained in this
sentence shall terminate as to each Holder upon the approval of the managing
underwriter or underwriters in the Underwritten Offering; provided, further,
that the restrictions contained in this sentence shall terminate as to each
Holder upon the termination of similar restrictions for all securities that may
be included in the Underwritten Offering pursuant to the Xxxxxx Xxxxxx Agreement
or the Weatherford Agreement; provided, further, that the provisions of this
paragraph (c) shall not prevent the sale of Eligible Common Stock by a Holder
pursuant to a Piggyback Registration.
(d) The Company agrees, if requested by the Participating Holders, not
to effect a public or private sale or distribution of its Common Stock, or any
securities convertible into or exchangeable for such securities (other than any
such sale or distribution of such securities in connection with any merger or
consolidation by the Company or a subsidiary thereof or the acquisition by the
Company or a subsidiary thereof of the capital stock or assets of any other
Person or registration on Form S-4 or Form S-8 or any successor forms) during
the 25-day period prior to, and during the 90-day period beginning on, the
effective date of any firm underwritten Registration Statement filed pursuant to
Sections 3(a) or 4(a) hereof unless the underwriters managing the requested
public offering otherwise agree; provided, however, that the provisions of this
paragraph (d) shall not prevent the sale, distribution, conversion or exchange
of any securities and grants of options during such periods pursuant to stock
option or benefit plans of the Company.
SECTION 6. REGISTRATION PROCEDURES.
In connection with the Company's registration obligations pursuant to
Sections 3(a) and 4(a) hereof, the Company will make reasonable efforts to
effect the registration of the Eligible Common Stock in accordance with the
intended method or methods of distribution thereof, and pursuant thereto the
Company shall:
(a) prepare and file with the SEC, a Registration Statement, which
shall include all financial statements and other information required by the SEC
to be filed therewith, and use its reasonable best efforts to cause such
Registration Statement to become effective; provided, however, that the Company
shall not be obligated to effect, or take any action to effect, any such
registration in any jurisdiction in which the Company would be required to
execute a general consent to service of process in effecting such registration,
qualification or compliance, unless the Company is already subject to service in
such jurisdiction and except as may be required by the Securities Act or
applicable rules or regulations thereunder;
(b) prepare and file with the SEC such amendments to the Registration
Statement as may be necessary to keep the Registration Statement effective until
the distribution of the Eligible Common Stock under the Registration Statement
is complete (which period shall not extend beyond the earlier to occur of (i)
the first anniversary of the date hereof or (ii) the date on which all of the
Eligible Common Stock has been disposed of by the Holders); cause the Prospectus
to be supplemented by any required prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 under the Securities Act; and comply with the
provisions of the
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Securities Act with respect to the disposition of all securities covered by such
Registration Statement;
(c) notify the Participating Holders and the managing underwriters
promptly (and if requested by any such Person, confirm such advice in writing),
(i) when the Registration Statement has become effective and when any
post-effective amendment or supplements thereto become effective, (ii) of the
issuance by the SEC of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for the purpose,
(iii) if between the effective date of the Registration Statement and the
closing of the sale of the securities covered thereby, the representations and
warranties of the Company contained in any underwriting agreement entered into
pursuant to Section 6(k) below cease to be true and correct, (iv) of the receipt
by the Company of any notification with respect to the suspension of the
qualification of the Eligible Common Stock for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose and (v) of the
happening of any event which makes any material statement made in the
Registration Statement or the Prospectus or any document incorporated therein by
reference untrue or which requires the making of any changes in the Registration
Statement or the Prospectus or any document incorporated therein by reference to
make the statements therein not misleading;
(d) use its reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of the Registration Statement at the earliest
possible time;
(e) upon request, furnish to each managing underwriter, if any, and the
Participating Holders, without charge, at least one copy of the Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules, all documents incorporated therein by reference and
all exhibits (including those incorporated by reference);
(f) deliver to the Participating Holders and each underwriter, if any,
without charge, as many copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement thereto as the Participating Holders
may reasonably request; the Company consents to the use of the Prospectus or any
amendment or supplement thereto by the Participating Holders and the
underwriters, if any, in connection with the offering and sale of the Eligible
Common Stock covered by the Prospectus or any amendment or supplement thereto;
(g) prior to any public offering of Eligible Common Stock, use its
reasonable best efforts to register or qualify or cooperate with the
Participating Holders, the underwriters, if any, and their respective counsel in
connection with the registration or qualification of such Eligible Common Stock
for offer and sale under the securities or blue sky laws of such jurisdictions
as the Participating Holders or any underwriter reasonably requests in writing
and do any and all other acts or things necessary or advisable to enable the
underwriters or the Participating Holders, as the case may be, to consummate the
disposition in such jurisdictions of the Eligible Common Stock covered by the
Registration Statement; provided that the Company will not be required to (i)
qualify generally to do business in any jurisdiction where it is not then so
qualified; (ii) subject itself to taxation in any such jurisdiction; or (iii)
take any action which would subject it to general service of process in any such
jurisdiction where it is not then so subject;
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(h) cooperate with the Participating Holders and the managing
underwriters to facilitate the timely preparation and delivery of certificates
representing the Eligible Common Stock to be sold and not bearing any
restrictive legends; and enable such Eligible Common Stock to be in such
denominations and registered in such names as the managing underwriters or the
Participating Holders, as the case may be, may request at least two business
days prior to any sale of the Eligible Common Stock;
(i) as promptly as practicable following the occurrence of any event
contemplated by Section 6(c)(v) above, use its reasonable best efforts to
prepare a supplement or post-effective amendment to the Registration Statement
or the related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of the Eligible Common Stock, the Prospectus will not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
(j) cause all the Eligible Common Stock covered by the Registration
Statement to be listed on each securities exchange or automated quotation
system, if any, on which similar securities issued by the Company are then
listed if requested by the Participating Holders or by the managing
underwriters;
(k) if requested by the Participating Holders, enter into an
underwriting agreement with an underwriter or underwriters providing for the
sale of such Eligible Common Stock in an Underwritten Offering which shall be
customary in form, substance and scope and shall contain customary requirements
for representations, warranties, covenants and opinions of counsel; and make
reasonable efforts to obtain any customary opinions of counsel or customary
accountants' "cold comfort" letters referred to in such underwriting agreement,
and enter into such other customary agreements and take all such other
reasonable actions in connection therewith to expedite or facilitate the
disposition of Eligible Common Stock as contemplated by such agreements;
(l) make available for inspection by the Participating Holders and
representatives of the underwriters participating in any disposition pursuant to
the Registration Statement, and any attorney or accountant retained by the
Holder or an underwriter, all relevant financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors and employees to supply all information reasonably requested
by the Participating Holders or any such representative, attorney or accountant
in connection with such Registration Statement; provided, however, that any
records, information or documents that are designated by the Company in writing
as confidential shall be kept confidential by such Persons unless disclosure of
such records, information or documents is required by court or administrative
order; provided, further, if the Participating Holders or such representative,
counsel or accountant is ordered to disclose any of such records, documents or
information, the Participating Holders or such representative, counsel or
accountant will provide the Company with prompt written notice of such
requirement so that the Company at its expense may seek a protective order or
other appropriate remedy and/or waive compliance with this Section 6(l), and, in
the event that such protective order or other remedy is not obtained, or that
the Company waives compliance with the provisions hereof, the Participating
Holders and such representative,
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counsel and accountant agree to furnish only that portion of such records,
documents or information which such Participating Holder or such representative,
counsel or accountant is legally required to disclose in the opinion of the
special counsel or counsel representing the Participating Holders or such
representative, underwriter or accountant; and
(m) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC, and make generally available to its
security holders, earnings statements no later than 45 days after the end of any
12-month period (or 90 days, if such period is a fiscal year) commencing at the
end of any fiscal quarter in which Eligible Common Stock is sold to underwriters
in an Underwritten Offering, which statements shall cover said 12-month period.
The Company may require the Participating Holders (i) to furnish to the
Company such information regarding the distribution of the Eligible Common Stock
as the Company may from time to time reasonably request in writing and (ii) to
enter into an underwriting agreement in the form contemplated by Section 6(k).
Each Participating Holder agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
6(c)(v) hereof, such Participating Holder will forthwith discontinue the
offering and disposition of Eligible Common Stock until such Participating
Holder receives copies of the supplemented or amended Prospectus contemplated by
Section 6(i) hereof, or until it is advised in writing (the "ADVICE") by the
Company that the use of the Prospectus may be resumed, and has received copies
of any additional or supplemental filings which are incorporated by reference in
the Prospectus, and, if so directed by the Company, each Participating Holder
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Participating Holder's possession, of the
Prospectus covering such Eligible Common Stock current at the time of receipt of
such notice. In the event the Company shall give any such notice to suspend the
offering and disposition of the Eligible Common Stock, the time periods
regarding the maintenance of the applicable Registration Statement shall be
extended by the number of days during the period from and including the date of
the giving of such notice pursuant to Section 6(c)(v) hereof to and including
the date when such Participating Holder shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(i) hereof or the
Advice.
Notwithstanding the foregoing and except for the demand rights set
forth in Section 3(a) hereof, (x) the Company may delay the filing of any
Registration Statement, any amendment thereof or any supplement to the related
Prospectus, and may withhold efforts to cause any Registration Statement to
become effective, and (y) the Company may prohibit offers and sales of
Registrable Securities pursuant to a Registration Statement at any time if
(i)(A) the Company is in possession of material non-public information, (B) an
executive officer of the Company (the "EXECUTIVE OFFICER"), after consultation
with the Board of Directors of the Company (the "BOARD") or the Executive
Committee of the Board (the "EXECUTIVE COMMITTEE"), determines in good faith
that such prohibition is necessary in order to avoid an obligation to disclose
such information and (C) the Executive Officer, after consultation with the
Board or the Executive Committee, determines in good faith that disclosure of
such information would not be in the best interest of the Company or its
stockholders or (ii) the Company has made a public announcement relating to an
acquisition or business combination transaction including the Company and/or one
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or more of its subsidiaries for which the Executive Officer, after consultation
with the Board or the Executive Committee, determines in good faith that offers
and sales of Registrable Securities pursuant to a Registration Statement prior
to the consummation of such transaction (or such earlier date as the Executive
Officer, after consultation with the Board or the Executive Committee shall
determine) would not be in the best interest of the Company or its stockholders;
provided, however, that the duration of all such delays or periods in which
shares of Eligible Common Stock may not be sold pursuant to an effective
Registration Statement shall not exceed 90 days in the aggregate; provided
further, that the Company shall be required to keep such Registration Statement
effective for an additional period of time beyond the first anniversary of the
date hereof equal to the number of days the effectiveness thereof is suspended
pursuant to this proviso.
SECTION 7. REGISTRATION EXPENSES.
All expenses incident to the Company's performance of or compliance
with this Agreement, including without limitation SEC registration and filing
fees, fees with respect to filings required to be made with the National
Association of Securities Dealers, Inc., fees and expenses in compliance with
state securities, or blue sky, laws (including fees and disbursements of counsel
for the underwriters in connection with blue sky qualifications of the Eligible
Common Stock), printing expenses, and fees and disbursements of counsel for the
Company and of all independent certified public accountants of the Company
(including the expenses of any special audit and "cold comfort" letters required
by or incident to such performance) and the fees and expenses incurred in
connection with the listing of the securities to be registered on each
securities exchange on which similar securities issued by the Company are then
listed in connection with the Demand Registration or any Piggyback Registration
(collectively, "REGISTRATION EXPENSES") will be borne by the Company; provided,
that all underwriting discounts and selling commissions applicable to the sale
of the Eligible Common Stock and all other expenses of the Holders incurred in
connection with the distribution of Eligible Common Stock (including all fees
and expenses of the consultants, advisors, attorneys, special experts and other
Persons engaged by the Holders, and all relevant taxes, including transfer
taxes) will be borne by the Holders.
SECTION 8. INDEMNIFICATION; CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and
hold harmless the Participating Holders, each Person who participates as an
underwriter (any such Person being an "UNDERWRITER"), and each Person, if any,
who controls any Underwriter within the meaning of the Securities Act as
follows: (i) against any and all loss, claim, damage and expense whatsoever, as
incurred, arising out of any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement (or any amendment thereto)
pursuant to which Eligible Common Stock was registered under the Securities Act,
including all documents incorporated therein by reference, or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact contained in any
Prospectus (or any amendment or supplement thereto), including all documents
incorporated therein by reference, or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the
light of the circumstances under
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which they were made, not misleading; (ii) against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or investigation or
proceeding by any governmental agency or body, commenced or threatened, or of
any claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and (iii) against any and all expense
whatsoever, as incurred (including, subject to the provisions of subsection (c),
fees and disbursements of counsel), reasonably incurred in investigating,
preparing or defending against any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, in each case whether
or not a party, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under (i) or (ii) above; provided, however, that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or expense arises out of or is based upon an
untrue statement or omission, or alleged untrue statement or omission, in a
Prospectus, if such untrue statement or omission, or alleged untrue statement or
omission, is corrected in an amendment or supplement to such Prospectus and if
the Holders or the Underwriter, as the case may be, thereafter fail to deliver
such Prospectus as so amended or supplemented prior to or concurrently with the
sale by the Holders or the Underwriter, as the case may be, of the Eligible
Common Stock to the Person asserting such loss, claim, damage, liability or
expense and if the Company has furnished the Holders or the Underwriter, as the
case may be, within a reasonable period of time prior to such sale with the
number of copies of such amended or supplemented Prospectus reasonably required
by the Holders or the Underwriter, as the case may be; and provided, further,
that this indemnity agreement does not apply to the Holders or any Underwriter
with respect to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or omission, or alleged untrue statement or
omission, made in reliance upon and in conformity with information furnished to
the Company by the Holders or any Underwriter expressly for use in a
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto).
(b) INDEMNIFICATION BY THE HOLDERS. In connection with the applicable
Registration Statement, each Holder will furnish promptly to the Company in
writing such information and affidavits as the Company reasonably requests for
use in connection with the Registration Statement or Prospectus and agrees to
indemnify and hold harmless the Company and each Underwriter, if any, and each
of their respective directors and officers (including each officer of the
Company who signed the Registration Statement), and each Person, if any, who
controls the Company or any Underwriter within the meaning of the Securities
Act, against any and all loss, liability, claim, damage and expense described in
the indemnity contained in Section 8(a) hereof, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in a Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Holder
expressly for use in such Registration Statement (or any amendment thereto) or
such Prospectus (or any amendment or supplement thereto); provided, however, the
obligation to indemnify will be individual, not joint and several, for each
Holder and shall be limited to the dollar amount of proceeds received by such
Holder with respect to the sale of any Eligible Common Stock.
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(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Each indemnified party
shall give reasonably prompt notice to each indemnifying party of any action or
proceeding commenced against it in respect of which indemnity may be sought
hereunder, provided, that failure to so notify an indemnifying party shall not
relieve it from any liability which it may have under this indemnity agreement.
If the indemnifying party so elects within a reasonable time after receipt of
such notice, the indemnifying party may assume the defense of such action or
proceeding at such indemnifying party's own expense with counsel chosen by the
indemnifying party and approved by the indemnified parties defendant in such
action or proceeding, which approval shall not be unreasonably withheld;
provided, however, that, if such indemnified party or parties reasonably
determine that a conflict of interest exists where it is advisable for such
indemnified party or parties to be represented by separate counsel or that, upon
advice of counsel, there may be legal defenses available to them which are
different from or in addition to those available to the indemnifying party, then
the indemnifying party shall not be entitled to assume the defense and the
indemnified party or parties shall be entitled to one separate counsel at the
indemnifying party's expense. If an indemnifying party is not entitled to assume
the defense of such action or proceeding as a result of the proviso to the
preceding sentence, such indemnifying party's counsel shall be entitled to
conduct such indemnifying party's defense and counsel for the indemnified party
or parties shall be entitled to conduct the defense of such indemnified party or
parties, it being understood that both such counsel will cooperate with each
other to conduct the defense of such action or proceeding as efficiently as
possible. If an indemnifying party is not so entitled to assume the defense of
such action or does not assume such defense, after having received the notice
referred to in the first sentence of this Section 8(c), the indemnifying party
or parties will pay the reasonable fees and expenses of counsel for the
indemnified party or parties. In such event, however, no indemnifying party will
be liable for any settlement effected without the written consent of such
indemnifying party. If an indemnifying party is entitled to assume, and assumes,
the defense of such action or proceeding in accordance with this Section 8(c),
such indemnifying party shall not be liable for any fees and expenses of counsel
for the indemnified parties incurred thereafter in connection with such action
or proceeding.
(d) CONTRIBUTION. If for any reason the indemnification provided for in
the preceding subsections (a) and (b) of this Section 8 is unavailable to an
indemnified party or insufficient to hold it harmless as contemplated by such
preceding subsections, then the indemnifying party shall contribute to the
amount paid or payable by the indemnified party as a result of such
unavailability or insufficiency in proportion as is appropriate to reflect not
only the relative benefits received by the indemnified party and the
indemnifying party, but also the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable considerations,
provided, that the Holders shall not be required to contribute in any amount
greater than the dollar amount of the proceeds received by the Holders with
respect to the sale of any Eligible Common Stock. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
SECTION 9. RULE 144.
With a view to making available the benefits of certain rules
and regulations of the SEC which may permit the sale of restricted securities to
the public without registration, the Company agrees to:
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(a) make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act, or any successor
rule ("RULE 144"), at all times;
(b) use its reasonable best efforts to file with the SEC in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act at all times; and
(c) so long as any Holder owns any Eligible Common Stock, furnish to
any such Holder upon request, a written statement by the Company as to its
compliance with the reporting requirements of Rule 144, and of the Securities
Act and the Exchange Act, and such other reports and documents as the Holder may
reasonably request in availing itself of any rule or regulation of the SEC
allowing the Holder to sell any such securities without registration.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.
The Majority Holders shall have the right to select the investment
banker, manager and underwriter that will administer the registration of the
Eligible Common Stock pursuant to the Demand Registration subject to the prior
written approval of the Company, which approval shall not be unreasonably
withheld.
No person may participate in any Underwritten Registration hereunder
unless such Person (a) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements or
this Agreement. Nothing in this Section 10 shall be construed to create any
additional rights regarding the registration of Eligible Common Stock in any
Person otherwise than as set forth herein.
SECTION 11. MISCELLANEOUS.
(a) AMENDMENTS AND WAIVERS. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company has obtained the written consent of Holders holding at
least a majority of the Eligible Common Stock.
(b) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier, or courier guaranteeing overnight delivery:
(i) if to the Holders, initially at the address set forth
opposite such Holder's name on the signature pages hereto, and
thereafter at such other address, notice of which is given in
accordance with this Section 11(b).
(ii) if to the Company, initially at 0000 Xxxxxxxxxx Xxxx,
Xxxxxxx, Xxxxx 00000, Attention: President, Xxxxxxx X. Xxxxxx, and
thereafter at such other address,
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notice of which is given in accordance with the provisions of this
Section 11(b), with copies to 0000 Xxxxxxxxxx Xxxx, Xxxxxxx, Xxxxx
00000, Attention: Xxxx X. Xxxxxxx, Senior Vice President and General
Counsel, and King & Spalding, 0000 Xxxxxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxx 00000-0000, Attention: Xxxxxxxxx X. XxXxxxxxxx.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to any courier guaranteeing overnight delivery.
(c) ASSIGNMENT OF REGISTRATION RIGHTS. Except as otherwise provided
below, no party may assign this Agreement or any of the rights and obligations
of the parties hereunder without the prior written consent of the other party;
provided, that (i) each Holder may assign this Agreement and all of its, his or
her rights and obligations hereunder to one Permitted Transferee and (ii) the
Company may assign this Agreement and all of its rights and obligations
hereunder to any entity that succeeds to all or substantially all of the assets
of the Company, whether by merger, sale or otherwise. Notwithstanding the
foregoing, a Holder may assign this Agreement or any of the rights and
obligations of the parties hereunder without the prior written consent of the
Company to (a) any partner, active or retired, of a Holder, where such Holder is
a partnership, (b) any affiliate (as that term is defined in Rule 405
promulgated by the SEC under the Securities Act) of a Holder, (c) any officer,
director, shareholder or member thereof, where such Holder is a corporation or
limited liability company or (d) the spouse, children, grandchildren or spouse
of such children or grandchildren of any Holder or to trusts for the benefit of
any Holder or such persons where the Holder is a natural person, provided that
written notice thereof is promptly given to the Company and that the transferee
executes and delivers to the Company an Additional Party Counterpart in the form
set forth in Exhibit A. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties. If the
Company shall so request, any such successor or assign shall agree in writing to
acquire and hold the Eligible Common Stock subject to all of the terms hereof.
(d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(e) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(f) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without giving effect to such
jurisdiction's conflicts of law provisions.
(g) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
such provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
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(h) ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
(i) CONFIDENTIALITY. The parties hereto agree, and will cause all
Persons under their control to agree, to maintain the confidentiality of any
material, non-public information with respect to the Company that they may
obtain pursuant to the terms of this Agreement, and not to use, or permit the
use of, such information for any improper purpose or in any manner that might be
detrimental to the Company.
(j) TERMINATION. This Agreement shall terminate on the first
anniversary of the date hereof or, if earlier, when there is no Eligible Common
Stock.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
UNIVERSAL COMPRESSION HOLDINGS,
INC.
By: /s/ XXXXX X. XXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President
MCNIC COMPRESSION GP, INC.
Address: By: /s/ XXXXXX X. XXXXXXXX
000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 0000 ------------------------------------
Xxxxxxx, XX 00000 Name: Xxxxxx X. Xxxxxxxx
Title: Vice President and Secretary
MCNIC COMPRESSION LP, INC.
Address: By: /s/ XXXXXX X. XXXXXXXX
000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 0000 ------------------------------------
Xxxxxxx, XX 00000 Name: Xxxxxx X. Xxxxxxxx
Title: Vice President and Secretary
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EXHIBIT A
ADDITIONAL PARTY COUNTERPART
The undersigned, after having received and reviewed to its
satisfaction a copy of the Registration Rights Agreement, dated as of _________
__, 2001 (the "Registration Agreement"), by and among Universal Compression
Holdings, Inc. (the "Company") and the Holders, does hereby agree to become
party to the Registration Agreement thereby accepting all the rights, benefits
and obligations of a holder of Eligible Common Stock thereunder. The Company may
attach this page as a counterpart to the Registration Agreement and the
undersigned agrees that such attachment shall be deemed conclusive evidence of
its acknowledgment and acceptance of the terms thereof.
Defined terms used herein and not otherwise defined herein
shall have the meaning given such terms in the Registration Rights Agreement.
Dated:
------------------------------
[NAME]
[ADDRESS FOR NOTICES]
By:
-------------------------------
Name:
Title:
Acknowledged and Accepted By:
UNIVERSAL COMPRESSION HOLDINGS, INC.
By:
---------------------------------
Name:
Title:
