Document:

exv10w1

 

Exhibit 10.1

PROMISSORY NOTE AND INDENTURE

			
	 	 	 
	$6,650,000
	 	April 21, 2004
	
	 	Houston, Texas

     For value received, the undersigned, Hanover Compressor Company, a
Delaware corporation (the “Company”), promises to pay to the order of the law
firm of Milberg Weiss Bershad Hynes & Lerach LLP, or its successor(s), as and
solely in the capacity of escrow agent (the “Escrow Agent”) with respect to the
Settlement Fund as defined in that certain Stipulation and Agreement of
Settlement, dated as of October 23, 2003, entered into in connection with Civil
Action No. H-02-0410 (Consolidated) of the United States District Court for the
Southern District of Texas, Houston Division (the “Stipulation”), at its
offices at 401 B Street, Suite 1700, San Diego, California, or at such other
place as may be designated in writing by the Escrow Agent, in lawful money of
the United States of America and in immediately available funds, the principal
sum of Six Million Six Hundred Fifty Thousand Dollars ($6,650,000.00), together
with interest thereon at an effective annual yield of five percent (5%) from
February 6, 2004 (the date of final approval of the Stipulation by the Federal
Court), on March 31, 2007 (the “Maturity Date”), on the terms and subject to
the conditions contained herein. Interest under this Note shall be calculated
on the basis of a 365-day year for the actual number of days elapsed.

     This is the Note referred to in the Stipulation. The Escrow Agent agrees
to apply the proceeds of this Note, if any, as provided in Section 9.3 of the
Stipulation. Initially capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to them in the Stipulation. If there is any
inconsistency between the Stipulation and this Note, the terms of this Note
shall govern.

     This Note is a general, unsecured obligation of the Company.

     Each of the Company and the Escrow Agent represents and warrants that this
Note is intended to constitute an “indenture” as defined in, and for purposes
of, the Trust Indenture Act of 1939, as amended (the “TIA”). This Note is not
qualified, or subject to qualification, under the TIA, and the Escrow Agent is
not required to be eligible as a trustee for purposes of the TIA. The
provisions of Sections 315(a), (c) and (d) of the TIA are incorporated by
reference herein and the Escrow Agent agrees to be bound by such provisions as
if it were a “trustee” as such term is used therein

     This Note is not negotiable and is not otherwise transferable, divisible
or assignable. Any purported negotiation of this Note and any purported
transfer, division or assignment of this Note shall be null and void ab initio.

     If a Change of Control occurs prior to the Maturity Date and the Change of
Control Price (as defined below) is (x) $12.25 or more, this Note shall be
immediately extinguished and cancelled, and shall no longer evidence an
obligation of the Company, or (y) less than $12.25, the entire outstanding
principal amount of this Note and all accrued but unpaid interest hereunder
shall be due and payable thirty (30) days following the Change of Control.

 

 

     “Change of Control Price” means the Closing Price Per Share on the last
Business Day (as defined below) immediately prior to a Change of Control, with
all appropriate adjustments made, by and in the good faith judgment of the
Company’s Board of Directors, to reflect stock splits, reverse stock splits,
stock dividends, reclassifications, mergers and reorganizations occurring after
May 12, 2003 (but prior to the date of the Change of Control).

     “Closing Price Per Share” means, with respect to the Hanover Common Stock,
for any Business Day, (i) the last reported sale price regular way (or if no
closing sale price is reported, the average of the bid and ask prices or, if
more than one in either case, the average of the average bid and average ask
prices) on such date as reported in the composite transactions for the
principal United States securities exchange on which the Hanover Common Stock
is traded or, (ii) if the Hanover Common Stock is not listed or admitted to
trading on any United States securities exchange or quoted on the Nasdaq
National Market, the average of the closing bid prices in the over-the-counter
market as furnished by any Nasdaq National Market member firm selected from
time to time by the Company for that purpose.

     If, before the Maturity Date, the stockholders of the Company approve a
transaction the consummation of which would be a Change of Control, but such
consummation does not occur prior to the Maturity Date, the Company’s
obligation to make payment hereunder shall be suspended for a period not to
exceed sixty (60) days, during which period interest shall continue to accrue
at the annual rate of five percent (5%). If a Change of Control occurs prior
to the expiration of such sixty-day period and the Change of Control Price is
$12.25 or more, this Note shall be extinguished and cancelled and shall no
longer evidence an obligation of the Company; otherwise, the entire outstanding
principal amount of this Note and all accrued but unpaid interest hereunder
shall be immediately due and payable upon expiration of such sixty-day period.

     If at any time prior to the Maturity Date and after the earlier of (x)
March 31, 2004 and (y) the first distribution to the Settling Securities
Plaintiffs from the Settlement Fund, the average Closing Price Per Share equals
or exceeds $12.25, with all appropriate adjustments made by and in the good
faith judgment of the Company’s Board of Directors to reflect stock splits,
reverse stock splits, stock dividends, reclassifications, mergers and
reorganizations occurring after May 12, 2003, for any 15 consecutive trading
days, this Note shall be extinguished and cancelled and shall no longer
evidence an obligation of the Company.

     The Company shall give prompt written notice to the Escrow Agent, in form
and substance reasonable to allow the Escrow Agent to carry out its duties
hereunder, following any Change of Control, stockholder approval of a
transaction that would be a Change of Control, adjustment made pursuant to the
immediately preceding paragraph and the Company’s calculation, certified by its
chief financial officer, of the applicable Change of Control Price or average
Closing Price Per Share. Any failure by the Company to comply with the
obligations imposed on it by this paragraph shall be a default, entitling the
Escrow Agent to such remedies as the Federal Court may deem just and equitable
under the circumstances.

2

 

     If payment on this Note becomes due and payable on a day other than a
Business Day,
the maturity hereof shall be extended to the immediately following Business Day
and interest shall continue to accrue during such extension. “Business Day”
means any day other than a Saturday or Sunday or any other day on which banks
in Houston, Texas are authorized or required by law, order or proclamation to
be closed for business.

     The Company and the Escrow Agent each irrevocably agree that all claims in
respect of any action or proceeding arising out of or relating to this Note are
related to the Actions referred to in the Stipulation, which are pending before
the Federal Court and, therefore, irrevocably submit to the jurisdiction of
such court in any such action or proceeding arising out of or relating to this
Note, and the Company and the Escrow Agent hereby each irrevocably agree that
the sole and exclusive venue for the resolution of any such claims in any such
action or proceeding shall be in such court.

     All rights and obligations hereunder shall be governed by the laws of the
State of Texas, without giving effect to principles of conflict of laws that
would result in the application of the laws of any other jurisdiction.

	 	 	 	 	 
	 	HANOVER COMPRESSOR COMPANY

 	 
	 	By:  	/s/ JOHN JACKSON	 
	 	 	Name:  	John E. Jackson	 
	 	 	Title:  	Sr. V.P. & CFO	 
	 
	 	MILBERG WEISS BERSHAD HYNES & LERACH LLP,

as Escrow Agent

 	 
	 	By:  	/s/ KEITH PARK	 
	 	 	Name:  	Keith Park	 
	 	 	Title:  	Partner	 
	 

3<PAGE>
                                                                     Exhibit 4.1

NUMBER                             [Vignette]
SSP_____________                                                  ______________
                                                                         SHARES

                                     APACHE
                                   CORPORATION

THIS CERTIFICATE IS TRANSFERABLE                     INCORPORATED UNDER THE LAWS
IN MINNEAPOLIS, MINNESOTA OR                            OF THE STATE OF DELAWARE
NEW YORK, NEW YORK

   COMMON STOCK                                                COMMON STOCK

   This Certifies that ___________________                     CUSIP 037411 10 5
                                             SEE REVERSE FOR CERTAIN DEFINITIONS

PAR VALUE
$0.625 EACH

   is the owner of _______________________

                              CERTIFICATE OF STOCK

         FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF Apache
Corporation, transferable on the books of the Corporation by the holder hereof
in person or by duly authorized attorney upon surrender of this certificate
properly endorsed. This certificate is not valid until countersigned by the
Transfer Agent and registered by the Registrar.

         Witness the signatures of its duly authorized officers.

                                                   Countersigned and Registered:
                                                WELLS FARGO BANK MINNESOTA, N.A.
                                                                  TRANSFER AGENT
                                                                   AND REGISTRAR

/s/ Raymond Plank
CHAIRMAN

/s/ C. L. Peper
SECRETARY                                        By
                                                    ----------------------------
                                                        AUTHORIZED SIGNATURE

                             DATED:
                                   ------------------

<PAGE>
                               APACHE CORPORATION

         The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

<Table>
<S>                                             <C>
TEN COM - as tenants in common                  UNIF TRF MIN ACT - _____________ Custodian _______________
                                                                    (Cust)                     (Minor)
TEN ENT - as tenants by the entireties                              under Uniform Transfers to Minors
JT TEN -  as joint tenants with right of                            Act _______________________
          survivorship and not as tenants                                       (State)
          in common
</Table>

         Additional abbreviations may also be used though not in the above list.

This certificate also evidences and entitles the holder hereof to certain rights
(the "Rights") as set forth in a Rights Agreement between Apache Corporation and
Wells Fargo Bank Minnesota, N.A. (formerly known as Norwest Bank Minnesota,
N.A.), as Rights Agent, dated as of January 31, 1996, as the same may be amended
from time to time (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the principal
executive offices of Apache Corporation. Under certain circumstances, as set
forth in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. Apache
Corporation will mail to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor. Under
certain circumstances, as set forth in the Rights Agreement, Rights owned by or
transferred to any Person who is or becomes an Acquiring Person (as defined in
the Rights Agreement) and certain transferees thereof will be come null and void
and will no longer be transferable.

         For value received, ____________ hereby sell, assign and transfer unto

         PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
________________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIPE CODE OF
ASSIGNEE _______________________________________________________________________
_________________________________________________________________________ Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint _____________________________________________
Attorney to transfer the said stock on the books of the within-named Corporation
with full power of substitution in the premises.

Dated,  __________________

NOTICE:  THE SIGNATURE(S) TO                      ______________________________
THIS ASSIGNMENT MUST CORRESPOND
WITH THE NAME(S) AS WRITTEN UPON
THE FACE OF THE CERTIFICATE IN
EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATEVER             ______________________________

THE SIGNATURE(S) SHOULD BE GUARANTEED BY ELIGIBLE GUARANTOR INSTITUTION, (Banks,
Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP
IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM PURSUANT TO SEC RULE
17Ad-15.

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