Document:

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                                                                     EXHIBIT 4.2

                           HANOVER COMPRESSOR COMPANY

                          1996 EMPLOYEE STOCK OFFERING

                             SUBSCRIPTION AGREEMENT

     SUBSCRIPTION AGREEMENT (this "Agreement") dated as of March 21, 1996,
between Hanover Compressor Company, a Delaware corporation (the "Company"), and
the individual named on the signature page hereof under the heading "PURCHASER"
("Purchaser").

                              W I T N E S S E T H

     WHEREAS, Purchaser desires to subscribe for and purchase from the Company,
and the Company desires to issue and to sell to Purchaser (i) for cash out of
Purchaser's own funds, the number of shares (the "Cash Shares") of common stock,
$.001 par value ("Common Stock"), of the Company set forth next to the heading
"Cash Shares" on Schedule A attached hereto, and (ii) out of the proceeds of a
four year loan (a "Four Year Loan") to be made to Purchaser by the Company in
accordance with the terms of a loan agreement (the "Loan Agreement") and a
secured promissory note (the "Four Year Note"), each substantially in the form
attached as Exhibits C and D to the Confidential Offering Memorandum dated
March 21, 1996 (the "Memorandum"), previously delivered to Purchaser, the number
of shares (the "Four Year Loan Shares") forth next to the heading "Four Year
Loan Shares" on Schedule A each case upon the terms and conditions hereinafter
set in set forth. The Four Year Loan Shares and the Cash Shares are sometimes
collectively referred to herein as the "Shares"; and

     WHEREAS, this Agreement is one of several agreements, including, without
limitation those agreements and instruments attached as Exhibits to the
Memorandum ("Other Purchaser Agreements") being entered into concurrently
herewith by the Company and certain members of the management of the Company in
connection with the offering (the "Offering") made pursuant to the Memorandum.

     NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby acknowledge, agree and understand the
following:

1.  Subscription. Subject only to the provisions of Section 8 hereof, Purchaser
hereby irrevocably subscribes for the Shares under terms and conditions set
forth herein. The purchase price (the "Purchase Price") for each Share shall be
$1,800. The parties agree that notwithstanding anything herein to the contrary,
the Company reserves the absolute right (i) to reject any subscription for any
reason and (ii) to terminate or modify the Offering at any time for any reason.
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2.  The Closing. The closing of the purchase and sale of the Shares (the
"Closing") shall take place at the principal offices of the Company, 12001 North
Houston Rosslyn, Houston, Texas 77086 at 10:00 a.m., Houston time on Thursday,
April 25, 1996, or (i) at such later date or time as the Company in its sole
discretion may determine without the consent of or notice to Purchaser, but in
no event later than May 31, 1996 (the "Termination Date"), and (ii) at such
other place as shall be agreed upon by the parties hereto. The date of the
Closing is sometimes hereinafter referred to as the "Closing Date."

3.  Deliveries by Purchaser.

        (a) Stockholders' Agreement. Concurrently with Purchaser's execution and
delivery of this Agreement, Purchaser shall deliver to the Company two executed
counterparts to that certain Amended and Restated Stockholders' Agreement, dated
as of August 7, 1995, among the Company, GKH Partners, L.P., GKH Investments,
L.P. and the other stockholders of the Company parties thereto (the
"Stockholders' Agreement"), attached to the Memorandum as Exhibit B.

        (b) Additional Deliveries. At or prior to the Closing, upon the terms
and subject to the conditions of this Agreement, Purchaser shall execute where
appropriate and deliver to the Company:

             (i) a certified or bank cashier's check in the amount of the
          aggregate Purchase Price for the Cash Shares;

             (ii) to the extent any of the Shares subscribed for pursuant to
          this Agreement are Four Year Loan Shares:

                    (A)  a duly executed Loan Agreement;

                    (B) a duly executed Four Year Note in an original principal
          amount equal to the aggregate Purchase Price for all such Four Year
          Loan Shares to be funded by the proceeds of the Four Year Note and
          subscribed for by Purchaser pursuant to this Agreement;

                    (C) two executed counterparts of that certain pledge
          agreement (the "Pledge Agreement") between the Purchaser and the
          Company effecting a pledge of all of the shares of Common Stock of the
          Company owned or thereafter acquired by the Purchaser, substantially
          in the form attached to the Memorandum as Exhibit E; and

                    (D) a stock power with respect to the Shares (the "Stock
          Power") duly executed in blank;

             (iii) two executed counterparts of that certain stock option
          agreement (the "Option Agreement") between the Purchaser and the
          Company, substantially in the form attached to the Memorandum as
          Exhibit G, which Stock Option Agreement shall be

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          governed in accordance with the terms of the Hanover Compressor
          Company 1996 Employee Stock option Plan (substantially in the form
          attached to the Memorandum as Exhibit G) as such plan may be amended
          from time to time;

             (iv) a fully completed and executed  IRS Form W-9;

             (v) two executed counterparts of this Agreement (including a fully
          completed Schedule A, notary page and Spousal Consent (if
          applicable)); and

             (vi) two fully executed counterparts of the letter agreement
          attached to the Memorandum as Exhibit H.

        (c) Document Delivery; Escrow. All documents and funds (the "Funds")
delivered to the Company prior to the Closing Date shall be delivered by
Purchaser to Hanover Compressor Company, 12001 North Houston Rosslyn, Houston,
Texas 77086, Attention: Curtis Bedrich. All such documents and Funds will be
deemed to be held in escrow until the Closing. The Funds shall be promptly
deposited in an interest bearing, segregated account and such Funds may be
invested in treasury bills or other cash equivalents, as determined in the sole
and absolute discretion of the Company. If, prior to the Termination Date,
acceptable subscriptions for a minimum aggregate of one share of Common Stock is
received and the other conditions set forth herein and in the Memorandum
(collectively, the "Offering Conditions") are satisfied, all Funds will be
transferred from the segregated bank account to the Company, together with all
interest, if any, accrued or paid thereon. In the event the Offering Conditions
have not been satisfied in full prior to the Termination Date, the Offering will
be terminated and all Funds will be returned to the Purchaser together with a
pro rata share of interest earned thereon. Interest on Funds shall be calculated
on the basis of the amount of Funds invested by the Purchaser and the length of
time interest on such Funds was earned.

        4. Deliveries by the Company. At the Closing, upon the terms and subject
to the conditions of this Agreement, the Company shall deliver to Purchaser a
certificate or certificates representing the Shares duly executed and
authenticated by the Company; provided, however, that if any portion of the
Shares are being purchased with the proceeds of a Four Year Loan, the Company
shall retain possession of all of the Shares in accordance with the terms of the
Pledge Agreement. Following the Closing, the Company shall deliver to the
Purchaser a copy of the fully executed Adoption Agreement (the original of which
will be retained at the offices of the Company) and fully executed counterparts
of the Other Purchaser Agreements executed by the Company.

        5. Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to the Company as follows:

        (a) Investment Intention; No Resales. Purchaser is acquiring the Shares
for investment solely for his own account and not with a view to, or for resale
in connection with, the distribution or other disposition thereof. Purchaser
agrees and acknowledges that all dispositions of the Shares by Purchaser (other
than involuntary transfers) will comply with the

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provisions of this Agreement, the provisions of the Stockholders' Agreement and
the Pledge Agreement and applicable provisions of state and federal securities
laws.

        (b) Certain information Not Material. Purchaser has not received
individualized information relative to the compensation of the management of the
Company, which information is acknowledged by Purchaser as not being material to
Purchaser in forming a basis for making an investment in the Shares or for any
other purpose in connection herewith.

        (c) Shares Unregistered. Purchaser acknowledges and represents that he
has been advised by the Company that:

             (i) the offer and sale of the Shares have not been registered under
          the Securities Act of 1933, as amended (the "Securities Act"), or any
          state securities laws;

             (ii) the Shares must be held indefinitely and Purchaser must
          continue to bear the economic risk of the investment in the Shares
          unless the offer and sale of such Shares is subsequently registered
          under the Securities Act and all applicable state securities laws or
          an exemption from such registration is available to the Purchaser with
          respect to the Shares;

             (iii) there is no established market for the Shares and it is not
          anticipated that there will be any public market for the Shares in the
          foreseeable future;

             (iv) the Company is under no obligation to register the Shares
          under the Securities Act on behalf 6f Purchaser, to assist Purchaser
          in complying with any exemption from registration or to consent to the
          transfer of the Shares;

             (v) Rule 144 promulgated under the Securities Act may not be
          presently available with respect to the sale of any securities of the
          Company, and the Company has made no covenant to make such Rule
          available;

             (vi) when and if the Shares may be disposed of without registration
          under the Securities Act in reliance on Rule 144, such disposition may
          be made only in limited amounts in accordance with the terms and
          conditions of such Rule;

             (vii) a restrictive legend in the form set forth in Section 6(f)
          hereof shall be placed on the certificates representing the Shares;
          and

             (viii) a notation shall be made in the appropriate records of the
          Company indicating that the Shares are subject to restrictions on
          transfer and appropriate stop-transfer instructions will be issued
          with respect to the Shares.

        (d)  Additional Investment Representations.

             (i) Purchaser has carefully reviewed, is familiar with and
          understands the Memorandum, the Other Purchaser Agreements and the
          other documents, records and

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          information, if any, requested by Purchaser or otherwise supplied by
          the Company in connection with the Offering;

             (ii) All documents, records and information pertaining to an
          investment in the Company which have been requested by Purchaser have
          been made available or delivered to Purchaser, except to the extent
          otherwise addressed in the Memorandum;

             (iii) Purchaser is fully familiar with the business and operations
          of the Company and has had an opportunity to ask questions of and
          receive answers from the Company concerning the terms and conditions
          of Purchaser's investment and the financial condition, operations and
          prospects of the Company;

             (iv) No oral or written statement, printed material or inducement
          given or made by the Company or any of the Company's affiliates is
          contrary to the information contained in this Agreement, the
          Memorandum or the Other Purchase Agreements, and Purchaser
          acknowledges and agrees that in making his decision to purchase the
          Shares he has relied solely on such documents and the independent
          investigations made by him and, to the extent believed by Purchaser to
          be appropriate, Purchaser's representatives, including Purchaser's own
          professional, financial, legal, tax and other advisors;

             (v) Purchaser acknowledges that the Company, in reliance upon
          certain federal and state securities law exemptions, has provided
          Purchaser with less or different information than Purchaser would have
          received if an information memorandum complying with Rule 502(b)(2) of
          Regulation D promulgated pursuant to the Securities Act had been
          prepared and made available to Purchaser or if the Shares had been
          registered pursuant to the Securities Act. The foregoing
          notwithstanding, the information provided to Purchaser is sufficient
          to allow Purchaser to make a knowledgeable and informed decision
          regarding his investment in the Shares;

             (vi) Purchaser (A) has adequate means of providing for Purchaser's
          current financial needs and possible personal contingencies and has no
          need for liquidity in Purchaser's investment in the Shares, (B) can
          bear the economic risk of losing Purchaser's entire investment in the
          Shares, (C) has such knowledge and experience in financial matters
          that Purchaser is capable of evaluating the relative risks and merits
          of Purchaser's purchase of the Shares, (D) is familiar with the nature
          of, and risks attendant to, Purchaser's purchase of the Shares, and
          (E) has determined that the purchase of the Shares is consistent with
          Purchaser's financial objectives;

             (vii) Purchaser realizes that Purchaser may not be able to sell or
          dispose of the Shares even in the event of a personal emergency.
          Purchaser's overall commitment to investments which are not readily
          marketable (including Purchaser's investment in the Shares) is not
          disproportionate to Purchaser's net worth;

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             (viii) The address set forth on the signature page hereof is
          Purchaser's true and correct residence, and Purchaser has no present
          intention of becoming a domiciliary of any other state or
          jurisdiction;

             (ix) Purchaser has no reason to anticipate any change in
          Purchaser's circumstances, financial or otherwise, which may cause or
          require any sale or disposition by Purchaser of any of the Shares;

             (x) Each of this Agreement and the Other Purchaser Agreements has
          been duly and validly executed and delivered by Purchaser and each
          constitutes the valid and binding obligation of Purchaser enforceable
          against Purchaser, Purchaser's successors and assigns, including, but
          not limited to, Purchaser's estate and Purchaser's spouse, in
          accordance with its terms;

             (xi) Assuming the due execution and delivery of each of this
          Agreement and the Other Purchaser Agreements (to which the Company is
          a party) by the Company, each of this Agreement and the Other
          Purchaser Agreements is a valid and binding obligation of the
          Purchaser, enforceable against the Purchaser in accordance with its
          terms, except as such enforcement may be subject to (A) bankruptcy,
          insolvency, reorganization, moratorium or other similar laws now or
          hereafter in effect relating to creditors rights generally and (B)
          general principles of equity (regardless of whether such enforcement
          is considered in a proceeding in equity or at law); and

             (xii) The Company has not guaranteed, represented or warranted to
          Purchaser either that (A) the Company will be profitable or that
          Purchaser will realize profits as a result of his investment in the
          Shares or (B) the past performance or experience on the part of any
          officer, director, stockholder, employee, agent, representative or
          affiliate thereof, or any employee, agent, representative or affiliate
          of the Company will in any way indicate the predict able results of
          ownership of the Shares.

        (e)  Residence-Specific Representations.

             (i) If Purchaser is a resident of the State of Texas, the aggregate
          Purchase Price for the Shares subscribed for by Purchaser hereunder
          does not exceed 20% of Purchaser's net worth (or joint net worth with
          Purchaser's spouse, if applicable) as of the date hereof; and

             (ii) If Purchaser is a resident of the State of Louisiana, the
          aggregate Purchase Price for the Shares subscribed for by Purchaser
          hereunder does not exceed 25% of Purchaser's net worth (or joint net
          worth with Purchaser's spouse, if applicable) as of the date hereof.

6.  Representations and Warranties of the Company. The Company represents and
warrants to Purchaser as follows:

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        (a) Organization; Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Company is duly qualified and in good standing as a foreign
corporation and is licensed, admitted or approved to do business as a foreign
corporation in each jurisdiction wherein the character of the properties owned
or held by it under lease, or the nature of the business conducted by it, makes
such qualification necessary, except where the failure to so qualify would not
have a material adverse effect on the Company, and would not have any adverse
effect on the enforceability of this Agreement.

        (b) Authority. The Company has the requisite corporate power and
authority and full legal right to enter into this Agreement and the other
Purchaser Agreements to which it is a party, to perform, observe and comply with
all of its agreements and obligations hereunder and thereunder and to issue the
Shares to Purchaser.

        (c) Due Authorization. The execution and delivery by the Company of this
Agreement and the Other Purchaser Agreements to which it is a party, the
performance by it of all of its agreements and obligations under this Agreement
and the Other Purchaser Agreements to which it is a party, and the issuance of
the Shares, have been duly authorized by all necessary corporate action on the
part of the Company.

        (d) Binding Obligation. Each of this Agreement and the Other Purchaser
Agreements to which the Company is a party has been duly and validly executed
and delivered by the Company and, assuming the due execution and delivery of
each such document by Purchaser, is a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
such enforcement may be subject to (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors, rights generally and (ii) general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law).

        (e) Capitalization. At the Closing Date, the authorized capital stock of
the Company will consist of 500,000 shares of Common Stock and 200,000 shares of
preferred stock. No other class or series of capital stock of the Company is
authorized. All of the outstanding shares of Common Stock, including the Shares,
will, at the time of issuance, have been duly authorized and issued and, upon
receipt by the Company of the Purchase Price for the Shares subscribed for
hereunder, the Shares will be fully paid and nonassessable. There are no pre-
emptive rights relating to the capital stock of the Company other than those
granted pursuant to (i) the Stockholders, Agreement, (ii) that certain
Stockholders, Agreement, dated as of March 8, 1995, among the Company and
certain of its stockholders, (iii) that certain Stockholders' Agreement, dated
as of August 7, 1995, among the Company, Joint Energy Development Investments
Limited Partnership and certain other stockholders of the Company and (iv) that
certain Stockholders, Agreement, dated as of December 6, 1995, among the Company
and certain of its stockholders.

        (f) Legend. Each certificate representing the Shares shall bear a legend
substantially to the following effect:

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          THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
          1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
          TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER
          SUCH ACT, OR UNLESS SUCH OFFER, SALE, TRANSFER, PLEDGE OR
          HYPOTHECATION IS EXEMPT FROM REGISTRATION OR IS OTHERWISE IN
          COMPLIANCE WITH SUCH ACT. THE TRANSFERABILITY OF THIS SECURITY IS ALSO
          SUBJECT TO RESTRICTIONS CONTAINED IN A STOCKHOLDERS AGREEMENT WHICH
          AGREEMENT THE COMPANY WILL FURNISH TO THE HOLDER OF THIS SECURITY UPON
          REQUEST.

          A STATEMENT SUMMARIZING THE VOTING POWERS, DESIGNATIONS, PREFERENCES,
          LIMITATIONS, RESTRICTIONS AND RELATIVE RIGHTS OF THE VARIOUS CLASSES
          OF STOCK OR SERIES THEREOF MAY BE OBTAINED BY THE STOCKHOLDERS OF THE
          COMPANY, WITHOUT CHARGE, FROM THE PRINCIPAL OFFICES OF THE COMPANY.

7.  Conditions to Obligations of Purchaser. The obligation of Purchaser to
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction (or waiver by the Purchaser) on or prior to the Closing Date of
the following conditions:

        (a) Performance of Obligations. The Company shall have performed and
complied in all material respects with all obligations and agreements required
to be performed and complied with by it hereunder on or prior to the Closing
Date;

        (b) Representations and Warranties. The representations and warranties
of the Company contained in this Agreement shall be true and correct in all
material respects as of the Closing Date as if made as of such date;

        (c) Loans. The Company shall have made available to Purchaser at the
Closing, as a loan (or loans), that portion of the Purchase Price attributable
to the Four Year Loan Shares subscribed for hereunder as agreed to by Purchaser
and the Company; and

        (d) Section 4 Obligations. The Company shall have fully complied with
all of its obligations under the first sentence of Section 4 hereof.

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8.  Conditions to Obligations of the Company. The obligation of the Company to
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction (or waiver by the Company) on or prior to the Closing Date of
the following conditions:

        (a) Performance of Obligations. Purchaser shall have performed and
complied in all material respects with all obligations and agreements required
to be performed and complied with by Purchaser hereunder on or prior to the
Closing Date;

        (b) Representations and Warranties. The representations and warranties
of Purchaser contained in this Agreement shall be true and correct in all
material respects as of the Closing Date as if made as of such date;

        (c) Offering. The Offering shall not have been terminated by the
Company; and

        (d) Section 3 (b) Obligations. Purchaser shall have fully complied with
all of its obligations under Section 3 (b) hereof.

9.  Indemnification.

        (a) Indemnification of the Company and the Company Affiliates. From and
after the date hereof, Purchaser shall indemnify and hold harmless the Company
and its predecessors, successors, officers, directors, employees,
representatives, agents and affiliates (collectively, the "Indemnitees") from
and against any loss, damage or expense, including, without limitation,
reasonable attorneys' and consultants' fees, disbursements and expenses,
suffered by any one or more of the Indemnitees arising out of or resulting from
any inaccuracy in or breach of any of the representations, warranties, covenants
or agreements made by Purchaser herein.

        (b) Indemnification of Purchaser. From and after the date hereof, the
Company shall indemnify and hold harmless Purchaser from and against any loss,
damage or expense, including, without limitation, reasonable attorneys, and
consultants' fees, disbursements and expenses suffered by Purchaser arising out
of or resulting from any inaccuracy in or breach of any of the representations,
warranties, covenants or agreements made by the Company herein. The foregoing
notwithstanding, the Company's obligation to indemnify Purchaser under this
Section 10(b) shall not exceed the Purchase Price.

        (c) Procedure for Claims. Within thirty days after obtaining written
notice of any claim or demand which has given rise to, or could reasonably give
rise to, a claim for indemnification hereunder, the party seeking
indemnification shall give written notice of such claim ("Notice of Claim") to
the other party. Failure to give such notice by the party seeking
indemnification within said thirty-day period shall not relieve the indemnifying
party of its obligations hereunder, unless and only to the extent that the
failure to so notify the indemnifying party actually results in damage or
prejudice to such indemnifying party. The Notice of Claim shall set forth a
brief description of the facts giving rise to such claim and the amount (or a

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reasonable estimate) of the loss, damage or expense suffered, or which may be
suffered, by the party seeking indemnification.

     Upon receiving the Notice of Claim, the indemnifying party shall resist,
settle or otherwise dispose of such claim in such manner as it shall deem
appropriate, including the employment of counsel, and shall be responsible for
the payment of all expenses, including the reasonable fees and expenses of such
counsel. The indemnified party shall have the right to employ separate counsel
in any such action and to participate in or assume the defense thereof, but the
fees and expenses of such counsel shall be at the indemnified party's expense
unless (i) the employment has been specifically authorized by the indemnifying
party in writing, (ii) the indemnifying party has failed to assume the defense
and employ counsel in a timely manner or (iii) the named parties to any. action
(including any impleaded parties) include both Purchaser and the Company, and
the indemnified party has been advised by such counsel that representation of
the Company and the Purchaser by the same counsel would be inappropriate under
applicable standards of professional conduct due to actual or potential
differing interests between them (in which case, if the indemnified party
notifies the indemnifying party in writing that the indemnified party elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall have neither the right nor the obligation to assume the
defense of such action on behalf of the indemnified party).

        (d) Third Party Beneficiaries. Nothing contained in this Section 10
shall confer any rights upon, or inure to the benefit of, any third party other
than those parties specified in Sections 10(a) and 10(b) above, it being
understood that such specified parties, to the extent not actually parties
hereto, shall be third party beneficiaries.

10.  Miscellaneous.

        (a) Notices. All notices, offers or other communications required or
permitted to be given pursuant to this Agreement shall be in writing and shall
be considered as properly given or made on the earliest to occur of (i) personal
delivery, (ii) two days after being delivered to a nationally recognized
overnight mail delivery or courier service, (iii) five days after being mailed
by certified mail, return receipt requested, postage prepaid, or (iv) delivery
by prepaid telegram or facsimile transmission (with written confirmation of
receipt). All notices given or made pursuant hereto shall be addressed to the
Company at its principal office and to Purchaser at his address appearing on
the signature page hereof under the heading "PURCHASER". The address of any
party hereto may be changed by a notice in writing given in accordance with the
provisions hereof.

        (b) Effect and Interpretation. This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware without regard
to the conflicts of laws provisions thereof.

        (c) Entire Agreement. This Agreement, the Memorandum and the Other
Purchase Agreements and any Exhibits or Schedules attached hereto or thereto,
which documents are incorporated herein by this reference, constitute the entire
agreement between the parties hereto with respect to the subject matter hereof
and may be amended only by a writing executed

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by all parties hereto. This Agreement and the other documents and instruments
specified in this Section 10(c) and the information contained herein and therein
expressly supersede all understandings and agreements of the parties, whether
written or oral, between the parties with respect to the subject matter hereof.

        (d) Successors. This Agreement and all the terms and provisions hereof
shall be binding upon and shall inure to the benefit of the parties hereto, and
their respective heirs, legal representatives, permitted successors and
permitted assigns.

        (e) Pronouns and Headings. As used herein, all pronouns shall include
the masculine, feminine, neuter, singular and plural wherever the context and
facts require such construction. The descriptive headings in the sections of
this Agreement are inserted for convenience of reference only and shall not
control or affect the meaning or construction of any of the provisions hereof.

        (f) Severability. If any provision of this Agreement is held by a court
of competent jurisdiction to be invalid, illegal or unenforceable, such
provision shall be severed and enforced to the extent possible or modified in
such a way as to make it enforceable, and the invalidity, illegality or
unenforceability thereof shall not affect the validity, legality or
enforceability of the remaining provisions of this Agreement.

        (g) Certain Tax Matters. Under section 1445(e) of the Internal Revenue
Code of 1986, as amended, a corporation, partnership, trust or estate must
withhold tax with respect to certain transfers of property if a holder of the
interest in the entity is a foreign person. To inform the Company that no
withholding is required with respect to any of the Shares, Purchaser hereby
certifies as follows: (1) he is not a nonresident alien for purposes of U.S.
income taxation; (2) his social security number is as set forth on the signature
page hereto; and (3) his home address is as set forth an the signature page
hereto. Purchaser understands under penalties of perjury that this certification
may be disclosed to the Internal Revenue Service and that any false statement he
has made herein could be punished by fine, imprisonment or both. The Purchaser
has completed and submitted herewith a Form W-9 relative to his taxpayer
identification number and other matters and does hereby represent and warrant
that such form is complete, true and correct.

        (h) Counterparts. This Agreement may be executed simultaneously in one
or more counterparts each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

        (i) Assignment. This Agreement and the rights and obligations of the
parties hereunder may be assigned or otherwise delegated by the Company, but may
not be assigned by Purchaser without the Company's prior written consent, which
consent may be withheld in the Company's sole discretion.

        (j) Consent of Spouse; Insertion in Will. Purchaser if married, or, if
currently unmarried, each Purchaser upon his marriage, agrees to obtain the
consent and approval of his spouse to all of the terms and provisions of this
Agreement by the execution hereof by such spouse. Purchaser agrees to insert in
his last will and testament, or other similar instrument, or to

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execute a codicil thereto, directing and authorizing his personal
representatives to fulfill and comply with the provisions hereof.

        (k) Effectiveness; Termination. In the event this Agreement is
terminated for any reason, the parties hereto shall have no further obligations
to each other, except that in the event of a complete or partial performance of
the terms hereof which occurs prior to any termination hereof, (i) Purchaser
shall promptly return to the Company all certificates in his possession
representing the Shares, if any, and (ii) the Company shall promptly refund the
Purchase Price to Purchaser, if and to the extent paid.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                              THE COMPANY:

                              HANOVER COMPRESSOR COMPANY, a
                              Delaware corporation

                              By:
                                 --------------------------------
                                    William S. Goldberg
                                    Executive Vice President

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                          1996 EMPLOYEE STOCK OFFERING
                             SUBSCRIPTION AGREEMENT
                            PURCHASER SIGNATURE PAGE

                         PURCHASER:

                         ------------------------------------
                         Print Name:
                                    -------------------------
                         Social Security No.
                                            -----------------
                         Home Address:

                         ------------------------------------
                         ------------------------------------
                         ------------------------------------

                                SPOUSAL CONSENT

     The undersigned, being the spouse of Purchaser who is a party to the
foregoing Subscription Agreement, hereby consents to the execution of the
foregoing Subscription Agreement pursuant to the Offering and the consummation
of the transactions contemplated thereby by his or her spouse, and to the extent
the undersigned has acquired or hereafter acquires an interest in and to the
property and subject matter of the Subscription Agreement, hereby agrees to be
bound by the terms of such Subscription Agreement.

Date:
      -----------------------               -----------------------------------
                                            Print Name

                                       13
<PAGE>

                                  NOTARY PAGE

STATE OF _______________)
                        )
COUNTY OF ______________)

     I,         , a Notary Public in and for said County, in the State
aforesaid, do hereby certify that          appeared before me this day in
person, and acknowledged and swore that he signed, sealed, and delivered the
said instrument as his respective free and voluntary act and deed for the uses
and purposes therein set forth, and that the statements contained therein are
true.

     Given under my hand and notarial seal as of the day of      day of
                 , 1996.

My Commission expires:

-------------------------------      -------------------------------------
                                      Notary Public

                                       14
<PAGE>

                                   SCHEDULE A

                             Shares Subscribed For

<TABLE>
<CAPTION>
==================================================================================================
        Type of Share                   Number of Shares                    Consideration
--------------------------------------------------------------------------------------------------
<S>                                     <C>                                 <C>
Cash Shares(a)
--------------------------------------------------------------------------------------------------
Four-Year Loan Shares(b)
--------------------------------------------------------------------------------------------------
Total
==================================================================================================
</TABLE>
(a) Purchaser must subscribe for a minimum of one Share hereunder. There is no
    maximum subscription.

(b) Purchaser may subscribe for Four Year Loan Shares purchased with the
    proceeds of a Four Year Note in any amount up to twice the number of Cash
    Shares subscribed for pursuant to the Offering. Additional information with
    respect to the maximum number of Four Year Loan Shares may be obtained from
    Curtis Bedrich at the Company's principal office.

                                       15<PAGE>

                                                                     EXHIBIT 4.3

DATED: NOVEMBER 5, 1996

                        CONFIDENTIAL OFFERING MEMORANDUM

                           HANOVER COMPRESSOR COMPANY

             Up to 10,870 shares. of Common Stock, $.001 par value
                                $2,300 PER SHARE
                       MINIMUM INVESTMENT OF FOUR SHARES
================================================================================

     Hanover Compressor Company, a Delaware corporation (the "Company"), is
offering to sell up to 10,870 shares (the "Shares") of its common stock, $.001
par value (the "Common Stock"). The Shares are being offered only to certain
existing stockholders of the Company who meet certain suitability standards. See
"The Offering."

     To date, there has been no public market for the Common Stock, and no such
public market is anticipated to exist in the foreseeable future. See
"Determination of Offering Price" for a discussion of the factors considered in
determining the offering price of the Shares.

             THESE SECURITIES INVOLVE A SIGNIFICANT DEGREE OF RISK.

     See "Risk Factors" herein and in the accompanying draft Registration
Statement for a discussion of certain factors that should be considered. in
evaluating an investment in the Shares.

   THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
     AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
        THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
           COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
                OFFERING MEMORANDUM. ANY REPRESENTATION TO THE
                        CONTRARY IS A CRIMINAL OFFENSE.

     The offering price per share of $2,300 (the "Offering Price") is payable in
cash upon subscription. The minimum purchase by an investor is four (4) shares
(for a total of $9,200) and the maximum aggregate purchase by all investors is
10,870 shares (for a total of $25,001,000). See "The Offering."

THIS OFFERING MEMORANDUM CONSTITUTES AN OFFER ONLY IF A NAME APPEARS IN THE
SPACE BELOW MARKED "NAME OF OFFEREE" AND CONSTITUTES AN OFFER ONLY TO SUCH NAMED
OFFEREE.

===============================================================================

Name of Offeree: ______________________ Memorandum Number: ____________________

                             --------------------

<PAGE>

     THIS MEMORANDUM IS SUBMITTED IN CONNECTION WITH THE OFFERING OF THE SHARES
PURSUANT TO SECTION 4(2) OF THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") AND/OR REGULATION D PROMULGATED PURSUANT THERETO AND PURSUANT
TO AVAILABLE EXEMPTIONS UNDER STATE SECURITIES LAWS, AND MAY NOT BE REPRODUCED
OR USED FOR ANY OTHER PURPOSE. ANY ACTION CONTRARY TO THESE RESTRICTIONS MAY
INVOLVE A VIOLATION OF CERTAIN FEDERAL OR STATE SECURITIES LAWS.

                              ------------------

     THE COMPANY HAS AGREED TO MAKE AVAILABLE, PRIOR TO THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREIN, TO EACH OFFEREE OF SHARES OR HIS
REPRESENTATIVE(S) OR BOTH, THE OPPORTUNITY TO ASK QUESTIONS OF, AND RECEIVE
ANSWERS FROM IT OR ANY PERSON ACTING ON ITS BEHALF CONCERNING THE TERMS AND
CONDITIONS OF THIS OFFERING, AND TO OBTAIN ANY ADDITIONAL INFORMATION, TO THE
EXTENT IT POSSESSES SUCH INFORMATION OR CAN ACQUIRE IT WITHOUT UNREASONABLE
EFFORT OR EXPENSE, NECESSARY TO VERIFY THE ACCURACY OF THE INFORMATION SET FORTH
HEREIN.

                              ------------------

     PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS MEMORANDUM
OR ANY PRIOR OR SUBSEQUENT COMMUNICATION FROM THE COMPANY, ITS AFFILIATES,
DIRECTORS, OFFICERS, EMPLOYEES OR ANY PROFESSIONAL ASSOCIATED WITH THIS OFFERING
AS LEGAL OR TAX ADVICE. EACH INVESTOR SHOULD CONSULT HIS OWN PERSONAL COUNSEL,
ACCOUNTANT AND OTHER ADVISERS AS TO LEGAL, TAX, ECONOMIC AND RELATED MATTERS
CONCERNING THE INVESTMENT DESCRIBED HEREIN AND ITS SUITABILITY FOR HIM.

                              ------------------

     NO DISTRIBUTION OF THIS MEMORANDUM IN WHOLE OR IN PART, OR THE DISCLOSURE
OF ANY OF ITS CONTENTS, IS PERMITTED UNLESS AUTHORIZED. EXCEPT FOR INFORMATION
CONTAINED HEREIN OR AUTHORIZED BY THE COMPANY, NO OFFERING LITERATURE OR
ADVERTISING IN WHATEVER FORM SHALL BE EMPLOYED IN THE OFFERING OF THE SHARES. NO
PERSON HAS BEEN AUTHORIZED TO MAKE REPRESENTATIONS, OR GIVE ANY INFORMATION,
WITH RESPECT TO THE SHARES, EXCEPT THE INFORMATION CONTAINED HEREIN.

                              ------------------

                                      ii
<PAGE>

     INVESTMENT IN THE SHARES IS SUITABLE ONLY FOR INVESTORS WHO MEET THE
SUITABILITY STANDARDS DESCRIBED UNDER "THE OFFERING - SUITABILITY."

     THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER OR SOLICITATION TO ANYONE IN
ANY STATE OR IN ANY OTHER JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS
NOT AUTHORIZED.

                              ------------------

     THE COMPANY WILL NOT BE REQUIRED TO DELIVER AN ANNUAL REPORT TO
STOCKHOLDERS PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
HOWEVER, THE COMPANY INTENDS TO FURNISH ITS STOCKHOLDERS WITH A COPY OF THE
COMPANY'S AUDITED FINANCIAL STATEMENTS ON AN ANNUAL BASIS.

                              ------------------

     THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE
INCLUDING, WITHOUT LIMITATION, THE PROVISIONS OF ONE OR MORE STOCKHOLDER
AGREEMENTS BETWEEN THE PURCHASER AND THE COMPANY, AND MAY NOT BE TRANSFERRED OR
RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM AND IN
ACCORDANCE WITH SUCH AGREEMENTS. INVESTORS SHOULD BE AWARE THAT THEY MAY BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME.

FOR TEXAS RESIDENTS ONLY:

     THE SHARES HAVE NOT BEEN REGISTERED UNDER THE TEXAS SECURITIES ACT, AS
AMENDED (TM "TEXAS ACT"), AND ARE OFFERED AND SOLD PURSUANT TO AN EXEMPTION
THEREFROM. THE SHARES CANNOT BE SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION
WHICH IS EXEMPT UNDER THE TEXAS ACT, OR PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE TEXAS ACT OR IN A TRANSACTION WHICH IS OTHERWISE IN
COMPLIANCE WITH THE TEXAS ACT.

                                      iii
<PAGE>

                        CONFIDENTIAL OFFERING MEMORANDUM
                           HANOVER COMPRESSOR COMPANY

                               TABLE OF CONTENTS
                               -----------------
<TABLE>
<CAPTION>
                                                                PAGE
                                                                ----
<S>                                                              <C>
BACKGROUND OF THE OFFERING.....................................   1
THE OFFERING...................................................   2
RISK FACTORS...................................................   4
DETERMINATION OF OFFERING PRICE................................   5
PLAN OF OFFERING...............................................   5
DILUTION.......................................................   6
CAPITALIZATION.................................................   7
RECENT DEVELOPMENTS............................................   9
ADDITIONAL INFORMATION.........................................  10
</TABLE>

Exhibit A - Draft dated August 5, 1996 of the Company's Registration Statement
            on Form S-1

Exhibit B - Letter Dated August 13, 1996 from Goldman, Sachs & Co. to the
            Company Together With a Subsequent Analysis Subscription Agreement

Exhibit C - Subscription Agreement

                                      iv
<PAGE>

                           BACKGROUND OF THE OFFERING

     The Company contemplated offering shares of its Common Stock in an initial
public offering (the "IPO") this past summer. In connection with the IPO, which
was ultimately postponed for the reasons described below, the Company prepared a
draft registration statement on Form S-I dated August 5, 1996 (the
"Registration Statement"), which was prepared but not filed with the Securities
and Exchange Commission (the "SEC") under the Securities Act. A copy of the most
recent draft of the Registration Statement is attached hereto as Exhibit A and
you are urged to review the following specific sections thereof. "The Company",
"Summary Historical and Pro Forma Financial and Operating Information", "Risk
Factors", "Dividend Policy", "Selected Financial Information", "Management's
Discussion and Analysis of Financial Condition and Results of Operations",
"Business", "Management", "Certain Transactions", "Principal and Selling
Stockholders", "Description of Capital Stock", and the "Company's Consolidated
Financial Statements for the three years ended December 31, 1995", To the extent
information in this Offering Memorandum conflicts with information set forth in
the Registration Statement, the information in this Offering Memorandum shall
govern.

     In anticipation of the IPO, the Company interviewed several underwriting
firms and ultimately selected Goldman, Sachs & Co., CS First Boston and Salomon
Brothers Inc as the underwriters for the IPO (collectively, the "Underwriters").
In presenting their initial indications of value to the Company in June 1996,
each of the Underwriters estimated that the fully distributed net common equity
value was in the range of $425 million to $450 million and that the price to the
public in the IPO for the Company's Common Stock would be in the range of
$2,753-$3,096 per share without regard to a 10% IPO discount.

     The Company, the Underwriters and their advisers began drafting the
Registration Statement and anticipated filing the Registration Statement with
the SEC by the end of July or early August. During this period, conditions in
the stock market in general and in the IPO market in particular became unstable.
The Underwriters, having conducted further due diligence, focused on the market
conditions, the Company's capital structure and projected net income (calculated
in accordance with generally accepted accounting principles ("GAAP")), and
comparisons to comparable companies, did not believe that the market would
support a value consistent with their original estimates. Thus, they
significantly reduced their estimate of the fully distributed net common equity
value to be in the range of $322 million to $361 million or $2,212-$2,473 per
share without regard to a 15% IPO discount.

     By letter dated August 13, 1996 (the "August Letter"), Robert B. Tudor,
III, of Goldman, Sachs & Co., the lead Underwriter, set forth various reasons
which the Underwriters' believed justified delaying the IPO. A copy of the
August Letter is attached hereto as Exhibit B together with an analysis provided
subsequently by Goldman, Sachs & Co. As a result of the Underwriters' reduced
estimation of the fully distributed net common equity value and increased IPO
discount to levels which were unsatisfactory to the Company, the Company decided
to abandon the IPO and to pursue instead the offering described herein to
existing stockholders of the Company who meet certain suitability standards (the
"Offering"). The Offering is being made by the Company in reliance on exemptions
from the registration requirements found in Section 4(2) of the Securities Act
and/or Regulation D promulgated pursuant thereto. The Company

                                       1
<PAGE>

currently intends to use the proceeds of the Offering either to repay
indebtedness and/or for general corporate purposes, including working capital.

     In spite of the reduction in the Underwriters' estimation of the fully
distributed net common equity value of the Company's Common Stock, the Company
believes that each Share being offered in this Offering has a value of at least
$2,300 per Share, which value is within the range originally presented by the
Underwriters. See "Determination of the Offering Price." Accordingly, the
Company now desires to offer an aggregate of 10,870 Shares at an Offering Price
of $2,300 to existing stockholders of the Company who meet certain suitability
standards.

     Hanover Compressor Company is a corporation organized under the laws of the
State of Delaware. The principal executive office of the Company is located at
12001 North Houston Rosslyn, Houston, Texas 77086, and the Company's telephone
number is 713/447-8787.

                                  THE OFFERING

     Prospective purchasers of Shares should carefully consider the factors set
forth under "Risk Factors" herein and in the accompanying Registration
Statement.

THE OFFERING

<TABLE>
<CAPTION>
<S>                                             <C>
Shares of Common Stock offered:                 Up to 10,870

Shares of Common Stock to be outstanding        141,032.93 (maximum), including 198.40 shares
 after the Offering:                            held by the Company as treasury shares

Use of Proceeds:                                Repayment of indebtedness and/or general
                                                corporate purposes, including working capital
</TABLE>

GENERAL

     Subject to adjustment for over-subscription, each offeree may subscribe to
purchase for cash as many of the Shares as such offeree may desire, subject to a
minimum subscription for four (4) Shares. The maximum aggregate number of Shares
which may be subscribed for pursuant to this Offering is 10,870. If the offerees
subscribe for more than such number of Shares, each offeree's subscription will
be reduced proportionately based on the relationship between the number of
Shares subscribed for by such offeree and the aggregate number of Shares
subscribed for by all offerees. For information regarding the method of
subscribing for Shares, see "Plan of Offering" and the Subscription Agreement
attached hereto as Exhibit C (the "Subscription Agreement").

     This Offering is being made only to existing stockholders of the Company
who meet certain suitability standards described below. To the extent the Shares
being offered in this Offering are purchased by a stockholder of the Company who
is currently a party to one or more stockholders' agreements with the Company,
such Shares will be subject to the terms of such agreements including, without
limitation, the restrictions on transferability set forth therein.

                                       2
<PAGE>

     The Company reserves the right to withdraw this Offering and return all
subscriptions or modify this Offering at any time on or before the Termination
Date. Subscriptions for Shares may be accepted or rejected by the Company in its
sole discretion. All cash received by the Company in respect of subscriptions
for the Shares (the "Funds") shall be promptly deposited in an interest bearing,
segregated account and such Funds may be invested in treasury bills or other
short-term investment grade securities, as determined in the sole and absolute
discretion of the Company. Funds deposited in the segregated account may not be
withdrawn by subscribers. The deposit of Funds in such account does not
constitute acceptance by the Company of all or any portion of any offeree's
subscription.  If acceptable subscriptions for a minimum aggregate of at least
8,153 Shares are not received by the Company on or before November 25, 1996 or
such later date as the Company in its sole discretion may determine without
consent of or notice to the offerees, but in no event later than January 31,
1997 (the "Termination Date"), or in the event all conditions have not been
satisfied in full prior to the Termination Date or the Company in its sole
discretion and without the consent of or notice to the offerees, terminates this
Offering, this Offering will be terminated and all Funds will be returned to
subscribing offerees with a "r = share of interest earned thereon, if any,
calculated on the basis of the amount of Funds invested by each subscribing
offeree and the length of time such Funds were on deposit. See "Plan of
Offering."

SUITABILITY

     Investment in the Shares offered hereby involves a significant degree of
risk. See "Risk Factors" herein and in the Registration Statement. This Offering
is a private offering made only by delivery of a copy of this Offering
Memorandum (together with all Exhibits hereto) to the existing stockholder of
the Company whose name appears hereon. The Shares have not been registered under
the Securities Act, or any applicable state securities laws. The Shares are
being offered pursuant to one or more exemptions from the registration
requirements of the Securities Act, including the exemption afforded by Section
4(2) thereof and/or Regulation D promulgated thereunder, and pursuant to
available exemptions under state securities laws, only to certain existing
stockholders of the Company for investment purposes only. Each person who
subscribes for Shares and whose subscription is accepted by the Company (each an
"Investor," collectively, the "Investors") will be required to represent that he
is an "accredited investor" as such term is defined in Rule 501 promulgated
pursuant to the Securities Act and that he is acquiring the Shares for his own
account, for investment, and without any intention of making a distribution or
resale thereof, either in whole or in part. The Shares may not be resold or
transferred except in accordance with the provisions of the Securities Act, the
rules and regulations thereunder, and any applicable state securities laws. As a
result of the foregoing, investment in the Shares is suitable only for persons
who have adequate financial means separate and apart from their investment in
the Shares, who have no need for liquidity with respect to such investment, and
who can withstand the loss of their entire investment in the Shares.

     Offerees who desire to subscribe for Shares should read and discuss with
their advisors this Offering Memorandum (together with all Exhibits hereto), the
Subscription Agreement, and the other documents relative to the foregoing
regarding the appropriateness of an investment in the Shares. The desirability
of an investment in the Common Stock depends upon a number of factors including,
among others, (i) the factors set forth under the caption "Risk Factors" herein

                                       3
<PAGE>

and in the Registration Statement, (H) the nature of the Company's business,
(iii) the possibility of a decline in value of the Common Stock, (iv) the
various restrictions on transferability of the Common Stock and the possible
continued illiquidity of the investment, (v) the desirability to the offeree of
a long-term investment, (vi) the likelihood that the Company will not pay
dividends on the Common Stock in the foreseeable future and the likelihood of
restrictions imposed on the Company's ability to pay dividends under the terms
of the agreements governing the Company's senior secured indebtedness and the
Series A and Series B Preferred Stock (as defined in the Registration
Statement), (vii) the control of the Company by its principal stockholders,
(viii) the relationship between such offeree's investment and such offeree's net
worth, and (ix) other relevant personal circumstances of each offeree.

                                  RISK FACTORS

     Investors should consider the specific risk factors set forth below and in
the accompanying Registration Statement as well as the other information set
forth in this Offering Memorandum and the accompanying Registration Statement.
Neither the following risk factors nor those set forth in the accompanying
Registration Statement is an exhaustive list of all of the potential risks
associated with an investment in the Shares.

RESTRICTIONS IMPOSED BY THE TERMS OF THE COMPANY'S INDEBTEDNESS; EFFECT OF
DEFAULT

     The terms of the Company's existing credit agreement dated December 19,
1995 (the "Bank Credit Agreement") among the Company, Chemical Bank, as agent,
and the other banks party thereto and the loan agreement dated as of December
19, 1995 (the "JEDI Loan Agreement") among the Company, Joint Energy Development
Investments Limited Partnership ("JEW) as agent and the financial institutions
named therein impose a variety of restrictions on the Company's operations,
including, without limitation, limiting the Company's ability to incur
additional indebtedness, grant or suffer liens or other encumbrances on its
property, make investments, loans or advances except under certain enumerated
circumstances, make capital expenditures above specified levels, enter into
sale/leaseback arrangements as a seller/lessee, dispose of its assets or extend
guarantees. Such restrictions may limit the Company's ability to exploit fully
certain business opportunities. In addition, under the terms of the Bank Credit
Agreement and the JEDI Loan Agreement, the Company may not declare or pay any
dividend on or make any payment for the purchase, redemption or acquisition of
any shares of Common Stock other than repurchases of Common Stock from employees
of the Company which do not exceed a cumulative aggregate of $2,500,000. In
addition, the failure of the Company to maintain certain financial ratios may
cause the Company to be in default under the agreements governing its
indebtedness and such default, if uncured, may ultimately entitle its creditors
to foreclose on all of the assets of the Company.

LIMITED PREEMPTIVE RIGHTS

     Although Delaware law does not generally provide for preemptive rights,
Astra Resources has a preemptive right to subscribe for shares of Common Stock
sufficient for it to maintain ownership of at least 20% of the outstanding
Common Stock subject to a specified threshold, which right will apply to this
Offering. See "Certain Transactions - Stockholders'

                                       4
<PAGE>

Agreements - JEDI Stockholders' Agreement" and "- Astra Stockholders' Agreement"
in the Registration Statement. Furthermore, in connection with the Offering, the
Basic Stockholders' Agreement (as defined in the Registration Statement) has
been amended to provide that the pre-emptive rights set forth therein are not
available where the Company, in its sole discretion, determines that they would
prevent it from relying upon any exemption from the registration requirements of
the Securities Act in connection with an offering of securities. Not all parties
to the Basic Stockholders' Agreement meet the suitability standards of the
exemption(s) upon which the Company intends to rely in connection with this
Offering. Accordingly, the pre-emptive rights set forth in the Basic
Stockholders' Agreement do not apply to this Offering.

NO PUBLIC MARKET FOR COMMON STOCK; RESTRICTION ON TRANSFERABILITY

     Each subscribing offeree will be required to represent that he is
purchasing the Shares for investment purposes for his own account and not with a
view towards resale or distribution. Additionally, each potential investor in
this Offering is currently a stockholder of the Company and, as such, is a party
to one or more stockholders' agreements with the Company, which agreements
contain certain transferability restrictions which will apply to Shares
purchased in this Offering. Furthermore, there is currently no public market for
the Shares. Thus, any potential investor must be able and willing to bear the
risk of his investment for an indefinite period.

DILUTION

     Assuming all of the Shares are issued, the value of the Shares purchased
pursuant to this Offering will be subject to immediate dilution in the net
tangible book value of $961 per Share from the adjusted net tangible book value
as of August 31, 1996.

                        DETERMINATION OF OFFERING PRICE

     The Offering Price of $2,300 per Share was determined solely by the
Company's Board of Directors based on a number of factors, including the
Underwriters' original estimation of the fully distributed net common equity
value of the Company in connection with the abandoned IPO and a comparison of
the Company's 1994 and 1995 financial performance to the financial performance
and corresponding per share market multiples of a select group of public
companies involved in the natural gas compressor leasing and fabrication and
energy services industries. By virtue of the nature of this Offering, the
Offering Price was not determined pursuant to arm's length negotiations with a
third party, and there can be no assurance that such price is indicative of the
fair market value of the Shares.

                                PLAN OF OFFERING

     The minimum purchase per subscribing offeree is four (4) Shares for a
minimum aggregate purchase price of $9,200. The minimum aggregate purchase for
all Investors is 8,153 Shares for a minimum aggregate purchase price of
$18,751,900. The Company reserves the right (i) to reject any subscription for
any reason and (ii) to make non-material modifications to or terminate this
Offering at any time for any reason.

                                       5
<PAGE>

     Each offeree who desires to subscribe for Shares must on or before
November 25, 1996, execute and return* to the Company, % Curtis Bedrich, one
copy and one extra signature page of the Subscription Agreement included
herewith (including Schedule A attached thereto), together with a certified or
cashier's check in an amount equal to the product of (i) the number of Shares
subscribed for and (ii) $2,300.

     All Funds received by the Company shall be promptly deposited in an
interest bearing, segregated account and such Funds may be invested in treasury
bills or other short-term investment grade securities, as determined in the sole
and absolute discretion of the Company. If acceptable subscriptions for a
minimum of 8,153 Shares are not received by the Company on or before November
25, 1996 or such later date as the Company in its sole discretion may determine
without consent of or notice to the offerees, but in no event later than the
Termination Date, or in the event all conditions have not been satisfied in full
prior to the Termination Date or the Company in its sole discretion and without
the consent of or notice to the offerees, terminates this Offering, this
Offering will be terminated and all Funds will be returned to subscribing
offerees with a pro rata share of interest earned thereon, if any, calculated on
the basis of the amount of Funds invested by each subscribing offeree and the
length of time such Funds were on deposit.

                                    DILUTION

     As of August 31, 1996, the Company had adjusted net tangible book value
(defined as total stockholders' equity less goodwill) of $163,577,772, or $1,259
per share of Common Stock,. Adjusted net tangible book value per share of Common
Stock is determined by dividing the actual net tangible book value by the number
of shares of its Common Stock and treating all such Common Stock as having been
issued for cash which would have been outstanding as of December 31, 1995. After
giving effect to the sale of the Shares and the application by the Company of
the estimated net proceeds therefrom as described in "Use of Proceeds" in the
Registration Statement, the pro forma net tangible book value of the Company as
of August 31, 1996 would have been $188,578,772, or $1,339 per share of Common
Stock. This value represents an immediate increase in the adjusted net tangible
book value of $80 per share of Common Stock to the current stockholders and an
immediate dilution in net tangible book value of $961 per Share to purchasers of
the Shares. Dilution per share is determined by subtracting the pro forma
adjusted net tangible book value per share of Common Stock after the completion
of this Offering from the per share price paid by purchasers of the Shares. The
following table illustrates this per share dilution:

<TABLE>
<S>                                                                                <C>
Price per share pursuant to this Offering.......................................           $2,300
   Adjusted net tangible book value per share of August 31, 1996................           $1,259
   Increase in adjusted net tangible book value per share attributable to the
    Offering....................................................................           $   80

Pro forma adjusted net tangible book value per share after this Offering........           $1,339
Dilution per share to purchasers of the Shares..................................           $  961
</TABLE>

                                       6
<PAGE>

------------
(1)  Assumes that all of the Sham are subscribed for and excludes shares of
     Common Stock reserved for issuance pursuant to options which have
     previously been granted to certain members of management. To the extent
     such options are exercised, the value of Shams purchased by Investors will
     be subject to further dilution. See "Capitalization" herein.

     The following table sets forth as of August 31, 1996 (calculated on the
same basis as the preceding paragraph and rounded for purposes of this
presentation) the number of shares of Common Stock purchased from the Company,
the value of the total consideration received, the average price per share paid
by the existing stockholders of the Company and the price per Share to be paid
by purchasers:

<TABLE>
<CAPTION>
                                   Shares Purchased         Total Consideration
                                  -------------------   ----------------------------   Avg. Price
                                   Number        %            Amount            $      Per Share
                                  ---------   -------   ------------------   -------   ----------
<S>                               <C>         <C>       <C>                  <C>       <C>
Existing stockholders..........    129,964     92.28    $144,232,693.80(1)     84.80    $1,072.99
Investors......................     10.870      7.72    $ 25,001,000.00        15.20     2,300.00
                                  (maximum)
Total..........................    140,834    100.00    $169,233,693.80(1)    100.00    $1,167.69
</TABLE>
------------
(1)  Unaudited information based on records readily available to the Company and
     certain stockholders.

                                 CAPITALIZATION

     The following table sets forth the total capitalization of the Company as
of August 31, 1996 and as adjusted to reflect the consummation of this Offering
(assuming all 10,870 Shares are subscribed for) after the anticipated
application of the estimated net proceeds therefrom.

                                       7
<PAGE>

<TABLE>
<CAPTION>
                                                                                                As Adjusted for the
                                                                          Actual                     Offering
                                                                 ------------------------       --------------------
<S>                                                              <C>                        <C>
Current installments of long-term debt........................               $    314,974                      $314.974
Long-term debt, less current positions........................                 88,017,622                    63,016,622
Stockholders' Equity:.........................................
     Undesignated Preferred Stock, $.01 par value, 135,000
      shares authorized, 0 shares issued and outstanding......                          -                             -
     Series A Preferred Stock $.01 par value, 50,000 shares
      authorized, 23,002 issued and outstanding...............                        230                           230
     Series B Preferred Stock, $.01 par value, 15,000 shares
      authorized, 10,637 issued and outstanding...............                        106                           106
     Common Stock, $.001 par value, 200,000 shares
      authorized, 130,162.93 issued and outstanding,
      141,032.93 issued and outstanding after the Offering....                        130                           130

Additional paid-in capital....................................                166,305,108                   191,306,097
Retained earnings.............................................                 13,265,812                    13,265,812
Less:
     Notes receivable from officers and employees for
      purchase of Common Stock................................                  6,789,234                     6,789,234
     198.40 Treasury shares, at cost..........................                    218,240                       218,240
     Net stockholders' equity.................................                172,563,912                   197,564,912
     Total capitalization.....................................                260,896,508                   260,896,508
</TABLE>
--------
(1)  Includes 198.40 treasury shares, but excludes an aggregate of 15,190.97
     shares of Common Stock subject to options previously granted to executive
     officers and other members of management of the Company pursuant to the
     1992 Stock Plan, the 1993 Option Plan, the Senior Executive Plan, the 1995
     Management Option Plan, the 1995 Employee Option Plan, the Incentive Option
     Plan and the 1996 Employee Stock Option Plan.

                                       8
<PAGE>

                              RECENT DEVELOPMENTS

Redemption of Series B Preferred Stock

     The Company is currently in the process of negotiating with representatives
of JEDI the terms upon which all of the shares of Series B Preferred Stock held
by JEDI will be converted earlier than currently permitted and in accordance
with the terms of the conversion formula set forth in the applicable Certificate
of Designations. In addition, the Company has agreed to pay JEDI approximately
$1.4 million as an early conversion payment. The early conversion is anticipated
to close simultaneously with the consummation of this Offering.

AMENDMENT OF FOREIGN INVESTMENT COVENANTS

     Both the Bank Credit Agreement and the JEDI Loan Agreement currently
restrict the amount of the Company's investments in foreign countries to an
aggregate of 30% of the Company's consolidated net worth and further prohibit
the Company from investing more than 15% in any one country. Absent amendment of
these covenants, after December 31, 1996, the individual country limit will be
reduced to 10% of the Company's consolidated net worth. At the present time, the
Company currently has approximately $20 million of its consolidated net worth
invested in Argentina and $30 million invested in other countries. In
anticipation of the increasing demand for the Company's compression services in
foreign countries, the Company plans to seek to amend and anticipates receiving
approval from each of Chemical Bank and JEDI to amend the foreign investment
covenants of each of the Bank Credit Agreement and the JEDI Loan Agreement. In
the event the Company is not able to amend such agreements, its ability to
pursue further investment opportunities in foreign countries will be severely
restrained absent the availability of non-recourse financing for its foreign
investments. In the event the Company sells the maximum number of Shares being
offered hereunder in this Offering, it anticipates having approximately 27% of
its consolidated net worth available for investment in foreign countries.

ELIMINATION OF VOTING TRUST

     In anticipation of an initial public offering of the Company's Common Stock
at some future time, the Company's Board of Directors has agreed to terminate
the voting trust agreement dated October 13, 1995. This termination is currently
expected to be effective concurrently with the closing of this Offering.

AMENDMENT OF STOCKHOLDERS' AGREEMENTS

     In anticipation of an initial public offering of the Company's Common Stock
at some future time, the Company's Board of Directors and the parties to the
stockholders' agreements have orally agreed to terminate the director voting
provisions set forth in each of the stockholders' agreements among stockholders
of the Company. Such termination will be effective concurrently with the closing
of this Offering.

                                       9
<PAGE>

OTHER TRANSACTIONS

     The Company is engaged in ongoing evaluations of and discussions with third
parties regarding possible transactions and plans to continue to do so.
Transactions currently being contemplated include sale/leasebacks, acquisitions
of other compressor companies for cash and Company stock and joint ventures in
Europe and Central and South America. The Company currently has no definitive
agreements with respect to any such transactions.

                             ADDITIONAL INFORMATION

     The Company intends annually to supply its stockholders with a copy of its
audited financial statements.

     The Company will answer all inquiries from prospective investors or their
representatives relating to the Offering and will afford prospective investors
and their representatives the opportunity to obtain any additional information
(to the extent that the Company possesses such information or can acquire it
without unreasonable effort or expense) necessary to verify the accuracy of the
information set forth in this Offering Memorandum.

                                      10

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