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EXHIBIT 4.1
REGISTRATION AGREEMENT
THIS REGISTRATION AGREEMENT (the "AGREEMENT") is made and entered into
as of September 15, 2000, by and among Universal Compression Holdings, Inc., a
Delaware corporation (the "COMPANY"), The Reuben James Helton Trust Dated
January 24, 2000 (the "TRUST INVESTOR"), and Michael Pahl (the "INDIVIDUAL
INVESTOR") (the Trust Investor and the Individual Investor collectively referred
to as the "INVESTORS" and individually as the "INVESTOR").
This Agreement is made in connection with the proposed merger (the
"MERGER") of Gas Compression Services, Inc., a Michigan corporation, with and
into Universal Compression, Inc., a Texas corporation and wholly owned
subsidiary of the Company. In connection with the Merger, the Company has agreed
to provide the Investor with the registration and sale 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,
$.01 par value per share.
"ELIGIBLE COMMON STOCK" shall mean the shares of Common Stock
acquired in the Merger and held by the Investors and any of such shares
thereafter held by any transferee or assignee of an Investor 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.
"PERMITTED TRANSFEREE" shall mean a Person (i) to whom the
Investor 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.
"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.
"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
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registration statement, including post-effective amendments, in each
case including the Prospectus contained therein, all material
incorporated by reference therein and all exhibits thereto.
"REQUISITE COMMON STOCK" shall mean shares of Eligible Common
Stock as to which registration is requested hereunder aggregating at
least $11 million in the case of a Underwritten Offering and $3 million
in the case of a non-Underwritten Offering.
"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, (iii) they have otherwise been transferred
(other than to a Permitted Transferee), or (iv) at all times after the first
anniversary hereof if the Investor ceases to be the beneficial holder of at
least 1% of the then issued and outstanding Common Stock.
SECTION 3. DEMAND REGISTRATION RIGHTS.
(a) The Investors hereby request that the Company file, and (x) subject
to Section 4 hereof, the Company agrees with the Investors to file within two
business days after the closing date of the Merger a Registration Statement with
respect to 450,000 shares of Eligible Common Stock held by the Trust Investor
and 50,000 shares of Eligible Common Stock held by the Individual Investor (the
"CLOSING DEMAND") and (y) the Company agrees with the Investors to file on
November 20, 2000 a Registration Statement (or, if available, at the Company's
option, a post-effective amendment to an existing Registration Statement) with
respect to the remaining Requisite Common Stock held by the Investors (the
"NOVEMBER DEMAND") (the Closing Demand and the November Demand collectively
referred to as the "DEMANDS" or individually a "DEMAND"), each such Registration
Statement to be filed on Form S-3 (or, if unavailable, Form S-2 or Form S-1) or
any other appropriate or successor form under the Securities Act; provided, that
the Company shall not be obligated to effect, or take any action to effect, any
such registration pursuant to this Section 3(a) in any particular 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
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such jurisdiction and except as may be required by the Securities Act or
applicable rules or regulations thereunder.
(b) With respect to each Demand, the Company will, at the request of
the Trust Investor, 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. The
Company shall be required to effect an additional registration pursuant to
Section 3(a) if the Company fails to effect either of the two registrations upon
the Demands referred to in Section 3(a) (unless such registration has not been
effected solely by reason of the fault of an Investor).
(c) If any offering or sale of Common Stock by the Investor pursuant to
a Registration Statement is not consummated due to any failure by the Company to
perform its obligations under this Agreement, the Demand with respect to which
such Registration Statement was filed shall not be included among the Demands
contemplated by Sections 3(a) and (b) above.
(d) Subject to compliance with rights and obligations under the
Company's existing registration rights agreements, the Company will not include
in any Registration Statement any securities other than the Requisite Common
Stock without the prior written consent of the applicable Investors, which
consent shall not be unreasonably withheld.
SECTION 4. COMPANY PURCHASE RIGHT.
(a) If the Trust Investor proposes to sell shares of Common Stock
pursuant to the Registration Statement relating to the Closing Demand prior to
November 20, 2000, it shall notify (a "SALE NOTICE") the Company as to the
shares proposed to be sold. The Company shall have the right (but not the
obligation) to purchase (and shall be deemed to have effected registration as to
the shares so purchased) from the Investor a number determined by the Company of
the shares referenced in the Sale Notice, but the number of shares subject to
such purchase right shall not exceed the lesser of 450,000 shares of Common
Stock or such number of shares as would not cause the Merger to fail to qualify
as a reorganization under Section 368 of the Internal Revenue Code, as amended.
If the Company elects to exercise its right pursuant to this Section 4(a), it
shall notify (the "PURCHASE NOTICE") the Investor of such election and shall
thereafter proceed to consummate the purchase within three business days of such
Purchase Notice.
(b) The purchase price to be paid to the Investor for such shares of
Eligible Common Stock shall be the weighted average sales price per share of
Common Stock as quoted on the New York Stock Exchange for the 20 business days
ended on the business day immediately prior to the date of the Purchase Notice.
SECTION 5. HOLDBACK AGREEMENTS.
(a) Each Investor agrees, if it is requested by the managing
underwriter or underwriters in an Underwritten Offering by the Company, not to
effect any public sale or distribution of securities of the Company of the same
class as the securities included in the
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Registration Statement, during the 15 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 on the first anniversary of the date hereof unless such Investor is a
5% or greater stockholder of the Company at the time of such primary offering by
the Company.
(b) The Company agrees, if requested by the Trust Investor, 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 15-day period prior to, and during the 90-day period beginning on, the
effective date of any underwritten Registration Statement filed pursuant to
Section 3(a) hereof unless the underwriters managing the requested public
offering otherwise agree; provided, however, that the provisions of this
paragraph (b) 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
Section 3(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, as soon as practicable, a
Registration Statement, which form 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;
(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 Investors); 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 Securities Act with respect to
the disposition of all securities covered by such Registration
Statement;
(c) notify the Investor 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
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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(m) 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) as promptly as practicable prior to the filing of any
document which is to be incorporated by reference into the Registration
Statement or the Prospectus (after initial filing of the Registration
Statement), provide copies of such document to the Investor and to the
managing underwriters, if any, make the Company's representatives
available for discussion of such document and make such changes in such
document prior to the filing thereof as the Investor or underwriters
may reasonably request;
(f) upon request, furnish to each managing underwriter, if
any, and the Investor, without charge, at least one signed 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);
(g) deliver to the Investor 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
Investor may reasonably request; the Company consents to the use of the
Prospectus or any amendment or supplement thereto by the Investor 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;
(h) prior to any public offering of Eligible Common Stock, use
its reasonable best efforts to register or qualify or cooperate with
the Investor, 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 Investor 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 Investor, 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
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(iii) take any action which would subject it to general service of
process in any such jurisdiction where it is not then so subject;
(i) cooperate with the Investor 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 Investor, as the case may be, may request at least
two business days prior to any sale of the Eligible Common Stock;
(j) 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;
(k) use its reasonable best efforts to 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 Investor or by the managing underwriters,
(l) provide a CUSIP number for all Eligible Common Stock, not
later than the effective date of the applicable Registration Statement;
(m) if requested by the Investor, 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;
(n) make available for inspection by the Investor and
representatives of the underwriters participating in any disposition
pursuant to the Registration Statement, and any attorney or accountant
retained by the Investor 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 Investor 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,
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if the Investor or such representative, counsel or accountant is
ordered to disclose any of such records, documents or information, the
Investor 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(n), 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
Investor and such representative, counsel and accountant agrees to
furnish only that portion of such records, documents or information
which the Investor or such representative, counsel or accountant is
legally required to disclose in the opinion of the special counsel or
counsel representing the Investor or such representative, underwriter
or accountant; and
(o) 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 Investor (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(m).
The Investor 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,
the Investor will forthwith discontinue the offering and disposition of Eligible
Common Stock until the Investor's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 6(j) 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, the Investor will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in the Investor'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 the Investor shall have received the copies of the supplemented or
amended Prospectus contemplated by Section 6(j) hereof or the Advice.
Notwithstanding the foregoing, (a) 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 (b) in the case of an effective Registration Statement,
upon the request of the Company each Investor shall refrain from selling any
shares pursuant to such Registration Statement, if the Company reasonably
determines in good faith that (i) such registration or sale would interfere with
or affect the
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negotiation or completion of any transaction that is being contemplated by the
Company (whether or not a final decision has been made to undertake such
transaction) at the time the right to delay is exercised, (ii) such registration
or sale would involve initial or continuing disclosure obligations with respect
to material non-public information not otherwise required by law or the rules
and regulations of the SEC which disclosure would not be in the best interest of
the Company's stockholders, or (iii), in the case of an Underwritten Offering,
the Investors would be unable to consummate such Underwritten Offering on
reasonable terms due to then currently prevailing market conditions as advised
by the Investor's underwriters; 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 180 days in the
aggregate.
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 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 Investors
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 Investors, and all relevant taxes, including
transfer taxes) will be borne by the Investors.
SECTION 8. INDEMNIFICATION; CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and
hold harmless the Investors, 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 which they were made, not misleading; (ii) against any and
all loss, liability, claim, damage and expense whatsoever, as
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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 Investors or the Underwriter, as the case may be,
thereafter fails to deliver such Prospectus as so amended or supplemented prior
to or concurrently with the sale by the Investors 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
Investors 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 Investors or the Underwriter,
as the case may be; and provided, further, that this indemnity agreement does
not apply to the Investors 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
Investors 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 INVESTORS. In connection with the applicable
Registration Statement, each Investor 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 Investor
expressly for use in such Registration Statement (or any amendment thereto) or
such Prospectus (or any amendment or supplement thereto).
(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
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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 Investors shall not be required to contribute in any amount
greater than the dollar amount of the proceeds received by the Investors 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:
(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;
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(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 either Investor owns any Eligible Common Stock, furnish
to such Investor 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, a copy of the most recent annual or quarterly report
of the Company, and such other reports and documents so filed as the Investor
may reasonably request in availing itself of any rule or regulation of the SEC
allowing the Investor to sell any such securities without registration.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.
Merrill Lynch & Co. will serve as the investment banker, manager and
underwriter that will administer the registration of the Eligible Common Stock
pursuant to a Demand unless it requires compensation in excess of prevailing
market rates or unless a different firm is otherwise selected by the Company;
provided, that such other investment banker, manager, or underwriter must be
reasonably satisfactory to the Investor and the Company. Investors acknowledge
to the Company that they will comply with their obligations in the letter to
Merrill Lynch dated the date hereof.
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.
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 the Investor.
(b) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or air courier guaranteeing overnight
delivery:
(i) if to the Trust Investor, initially at 24106 Bay Hill
Blvd., Katy, Texas 77494, Attention: Garlin R. Rhymes, and thereafter
at such other address, notice of which is given in accordance with this
Section 11(b).
(ii) If to the Individual Investor, initially at 5319 N.
Liberty Drive, Traverse City, MI 49684, and thereafter at such other
address, notice of which is given in accordance with this Section
11(b).
<PAGE> 12
12
(iii) if to the Company, initially at 4440 Brittmoore Road,
Houston, Texas 77041, Attention: President, Stephen A. Snider, and
thereafter at such other address, notice of which is given in
accordance with the provisions of this Section 11(b), with copies to
4440 Brittmoore Road, Houston, Texas 77041, Attention: Valerie L.
Banner, Esq., Senior Vice President and General Counsel, and King &
Spalding, 1100 Louisiana, Suite 3300, Houston, Texas 77002-5219,
Attention: Christine B. LaFollette, Esq.
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
answered back, if telexed; when receipt acknowledged, if telecopied; and on the
next business day, if timely delivered to any air courier guaranteeing overnight
delivery.
(c) ASSIGNMENT OF REGISTRATION RIGHTS. Except as otherwise provided
below, neither 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) the Individual Investor may assign this
Agreement and all of his rights and obligations hereunder to one Permitted
Transferee, (ii) the Trust Investor may assign this Agreement and (x) all of its
rights and obligations hereunder, other than pursuant to Section 4, to one
Permitted Transferee and (y) the rights and obligations hereunder, other than
pursuant to Section 4, to Permitted Transferees that are beneficiaries of the
Trust Investor as to shares of Eligible Common Stock owned by the Trust Investor
and (iii) 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. 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. In the event of any assignment
by the Trust Investor to a Permitted Transferee: (i) such Permitted Transferee
shall participate in all rights of the Trust Investor, and shall be bound by all
obligations of the Trust Investor, as provided in this Agreement, in each case
proportionately based on the relative number of shares of Eligible Common Stock
held by such Permitted Transferee; and (ii) all notices, decisions and elections
provided in this Agreement to be given to or made by the Trust Investor shall be
so given to or made by (and shall be for all purposes conclusively deemed to
have been adequately given or made if so given to or made by) the Trustee of The
Reuben James Helton Trust Dated January 24, 2000 for and on behalf of such
Permitted Transferee.
(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.
<PAGE> 13
13
(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.
(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 second
anniversary of the date hereof or, if earlier, when there is no Eligible Common
Stock.
<PAGE> 14
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
UNIVERSAL COMPRESSION HOLDINGS, INC.
By: /s/ ERNIE L. DANNER
-------------------
Name: Ernie L. Danner
Title: Executive Vice President
TRUST INVESTOR:
THE REUBEN JAMES HELTON TRUST
DATED JANUARY 24, 2000
By: /s/ GARLIN R. RHYMES
--------------------
Name: Garlin R. Rhymes
Title: Trustee
INDIVIDUAL INVESTOR:
/s/ MICHAEL PAHL
-----------------
Michael Pahl
<PAGE> 15
EXHIBIT A
ADDITIONAL PARTY COUNTERPART
The undersigned, after having received and reviewed to its satisfaction
a copy of the Registration Agreement, dated as of _________ __, 2000 (the
"Registration Agreement"), by and between Universal Compression Holdings, Inc.
(the "Company") and the Investor, 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 Agreement.
Dated:
[NAME]
[ADDRESS FOR NOTICES]
By:
-----------------------
Name:
Title:
Acknowledged and Accepted By:
UNIVERSAL COMPRESSION HOLDINGS, INC.
By:
---------------------------
Name:
Title:
