STOCK DISTRIBUTION AGREEMENT
This Stock Distribution Agreement (the "Agreement") is made between and
among the person whose name is set forth as the "Holder" on the signature page
hereto (the "Holder") and U S LIQUIDS INC., a Delaware corporation ("Liquids"),
effective as of June 16, 1997 (the "Effective Date").
R E C I T A L S:
Liquids, American WasteWater Inc. ("AWW") and certain other persons have
entered into that certain Agreement and Plan of Merger (the "Merger Agreement"),
dated as of the date hereof, pursuant to which a wholly-owned subsidiary of
Liquids will be merged (the "AWW Merger") into AWW. Pursuant to the Merger
Agreement, AWW will become a wholly-owned subsidiary of Liquids, and the Holder,
as a shareholder of AWW, will receive shares of Liquids common stock, par value
$.01 per share (the "Liquids Stock"). The form of this Agreement is an exhibit
to the Merger Agreement and is being entered into as a requirement of the Merger
Agreement. For purposes of this Agreement, the shares of Liquids Stock issued
to the Holder in connection with the AWW Merger is referred to as the "Holder's
Stock." The portion of the Holder's Stock with respect to which the Holder has
registration rights hereunder and with respect to which Liquids has a
registration obligation hereunder is referred to as the "Registrable Stock."
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. REGISTRATION OF LIQUIDS STOCK. Within nine (9) months after the
execution of this Agreement, Liquids will file with the SEC a registration
statement (the "Registration Statement") on an appropriate form under the
Securities Act of 1933, as amended (the "Securities Act"), registering for
resale up to thirty percent (30%) of each Holder's Stock (subject to and in
compliance with the applicable securities laws and other laws regarding such
resale), and will use its commercially reasonable efforts to cause the
Registration Statement to become effective as soon as practicable, and
thereafter, until the termination of this Agreement, to keep the Registration
Statement effective and, if necessary, to amend and supplement the same. Any
shares of Registrable Stock not resold by the Holder during the period in which
those shares are registered for resale will continue to be registered for
resale, provided however, that Liquids will have no obligation to register or to
continue the registration of any such shares for resale following the expiration
of two (2) years from the effective date of the Registration Statement. The
registration rights granted under this Agreement shall be nontransferable. The
Holder shall
cooperate fully with Liquids by furnishing all information concerning the
Holder required or appropriate for preparation and inclusion in the
Registration Statement. If permitted by applicable law (and unless
prohibited by the terms of any agreement entered into by Liquids prior to the
date hereof), Liquids shall include the Registrable Stock in any shelf
registration statement, filed by Liquids registering shares for issuance in
connection with future acquisition by Liquids.
2. REGISTRATION PROCEDURES.
(a) In performing its obligations under Section 1, Liquids will,
subject to the limitations provided herein, use its commercially reasonable
efforts to:
(i) prepare and file with the U.S. Securities and Exchange
Commission (the "SEC") such amendments and supplements to the
Registration Statement and the prospectus used in connection therewith
(the "Prospectus") as may be necessary to keep the Registration
Statement effective and to comply with the provisions of the
Securities Act with respect to the disposition of all Registrable
Stock covered by the Registration Statement until such time as all
such Registrable Stock have been disposed of in accordance with the
intended method of disposition by the Holder;
(ii) furnish to the Holder one signed and such number of
conformed copies of the Registration Statement and of each such
amendment and supplement thereto (in each case including all
exhibits), such number of copies of the Prospectus (including each
preliminary prospectus and any summary prospectus) and any other
Prospectus filed under Rule 424 under the Securities Act, and such
other documents, as the Holder may reasonably request;
(iii) (a) register or qualify the Registrable Stock under
such other securities or Blue Sky laws of such jurisdictions as the
Holder shall reasonably request, (b) keep such registration or
qualification in effect for so long as the Registration Statement
remains in effect, and (c) take any other action which may be
reasonably necessary or advisable to enable the Holder to consummate
the disposition of the Registrable Stock in such jurisdictions, except
that Liquids shall not for any such purpose be required to qualify
generally to do business as a foreign corporation in any jurisdiction
wherein it would not but for the requirements of this subdivision
(iii) be obligated to be so qualified, to consent to general service
of process in any such jurisdiction, or
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to take any such action which would impose unreasonable expense on
Liquids;
(iv) cause the Registrable Stock to be registered with or
approved by such other United States federal or state governmental
agencies or authorities as may be necessary to enable the Holder to
consummate the disposition of the Registrable Stock;
(v) notify the Holder at any time when a Prospectus is required
to be delivered under the Securities Act, upon discovery that or upon
the happening of any event as a result of which, the Prospectus
included in the Registration Statement, as then in effect, includes an
untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which
they were made, and prepare and furnish to the Holder a reasonable
number of copies of a supplement to or an amendment of such Prospectus
as may be necessary so that, as thereafter delivered to the purchasers
of such securities, such Prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were
made;
(vi) list or qualify the Registrable Stock on any securities
exchange or quotation system of any national securities association on
which any of the Liquids Stock is then listed or qualified;
(vii) if requested by the Holder, promptly incorporate in a
supplement or post-effective amendment such information as the Holder
reasonably requests to be included therein with respect to the number
of shares of the Registrable Stock being sold by the Holder and the
Holder's plan of distribution and promptly make all required filings
of such prospectus supplement or post-effective amendment;
(viii) cooperate with the Holder to facilitate the timely
preparation and delivery of certificates (not bearing any restrictive
legends) representing shares of Registrable Stock to be sold under the
Registration Statement, in such denominations and registered in such
names as the Holder may reasonably request;
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(ix) if the offering is underwritten, furnish at the request of
the Holder on the date that the Holder's Stock is delivered to any
underwriters for sale pursuant to such registration and after the
Registration Statement has become effective: (A) an opinion dated such
date of counsel representing Liquids, addressed to the underwriters
and to the Holder, stating that such Registration Statement has become
effective under the Securities Act and that (1) to the actual
knowledge of such counsel (as that term is defined in the opinion), no
stop order suspending the effectiveness thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
have been threatened under the Securities Act, (2) the Registration
Statement, the Prospectus, and each amendment or supplement thereof
comply as to form in all material respects with the requirements of
the Securities Act and the applicable rules and regulations of the SEC
thereunder (except that such counsel need express no opinion as to
financial statements contained therein) and (3) to such other ordinary
and customary matters as may reasonably be requested by counsel for
such underwriters or by the Holder or its counsel, and (B) a letter
dated such date from the independent public accountants retained by
Liquids, addressed to such underwriters and to the Holder, stating
that they are independent public accountants within the meaning of the
Securities Act and that, in the opinion of such accountants, the
financial statements of Liquids included in the Registration Statement
or the Prospectus, or any amendment or supplement thereof, comply as
to form in all material respects with the applicable accounting
requirements of the Securities Act, and such letter shall additionally
cover such other ordinary and customary financial matters (including
information as to the period ending no more than five business days
prior to the date of such letter) with respect to the registration of
which such letter is being given as such underwriters or the Holder
may reasonably request; provided however, the parties hereto
understand and agree that Liquids cannot as a matter of right or law
require its counsel or independent public accountants to render and
deliver any opinion as to any matter which they are unwilling to
render and deliver; and
(x) make available for inspection by the Holder, any
underwriting participating in any distribution pursuant to such
Registration Statement on behalf of the Holder, and by any attorney,
accountant or other professional retained by the Holder or any such
underwriter, all relevant and non-confidential financial and other
pertinent corporate records and information
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reasonably requested by the Holder, or any such underwriter,
attorney, accountant or professional in connection with such
Registration Statement.
(b) All expenses incident to Liquids' performance of its obligations
under this Agreement, including all registration and filing fees, fees and
expenses of compliance with securities and Blue Sky laws, printing
expenses, fees and disbursements of Liquids' counsel, independent certified
public accountants, and other persons retained by Liquids (all such
expenses being herein called "Registration Expenses") will be borne by
Liquids. The Holder shall be responsible for all selling fees, expenses,
discounts and commissions relating to Holder's Stock (including the
Registrable Stock) and for the fees and expenses of counsel and other
persons engaged by the Holder.
3. OBLIGATIONS OF HOLDER.
(a) The Holder agrees that he will offer and sell the Holder's Stock
in compliance with all applicable state and federal securities laws, except
those laws compliance with which are within the control of Liquids and
which are not within the control of the Holder. Specifically, without
limitation, the Holder agrees as follows:
(i) The Holder agrees not to use any prospectus (as that term is
defined under the Securities Act) for the purpose of offering or
selling the Registrable Stock to the public except for the Prospectus,
as the same may be supplemented and amended from time to time.
(ii) Neither the Holder nor any affiliate of the Holder shall
engage in any practice which would violate Rule 10b-6 promulgated
under the Securities Exchange Act of 1934 ("Exchange Act").
(iii) Neither the Holder nor any affiliate of the Holder
shall solicit purchases of Holder's Stock to facilitate the
distribution of the Registrable Stock in violation of Rule 10b-2
promulgated under the Exchange Act.
(iv) Neither the Holder nor any affiliate of the Holder shall
effect any stabilizing transactions to facilitate the offer and sale
of the Registrable Stock to the public in violation of Rule 10b-7
promulgated under the Exchange Act.
As used above, the term "affiliate" shall not include Liquids.
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(b) The Holder agrees to promptly notify Liquids as and when any of
the Registrable Stock is sold and when the Holder elects to terminate all
further offers and sales of Shares pursuant to the Registration Statement.
The Holder acknowledges that any of the Registrable Stock which has not
been sold within two (2) years after the effective date of the Registration
Statement or any earlier termination of the distribution of the Registrable
Stock will be removed from registration by means of a post-effective
amendment to the Registration Statement.
(c) It shall be a condition precedent to the obligations of Liquids
to take any action with respect to registering the Registrable Stock that
the Holder furnish Liquids in writing such information regarding the
Holder, the Holder's Stock and other securities of Liquids held by the
Holder, and the distribution of such Holder's Stock as Liquids may from
time to time reasonably request in writing. If the Holder refuses to
provide Liquids with any of such information on the grounds that it is not
necessary to include such information in the Registration Statement,
Liquids may exclude the Registrable Stock from the Registration Statement.
The Holder agrees that upon receipt of any notice from Liquids of the
happening of any event of the kind described in Section 2(a)(v), the Holder
will forthwith discontinue the Holder's disposition of shares pursuant to
the Registration Statement until the Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 2(a)(vii) and,
if so directed by Liquids, will deliver to Liquids (at Liquids' expense)
all copies, other than permanent file copies then in such Holder's
possession, of the Prospectus current at the time of receipt of such
notice.
(d) In the event the Holder intends to sell any Registrable Stock
under the Registration Statement, the Holder agrees to provide written
notice to Liquids at least two (2) business days prior to making any offers
or sales of the Registrable Stock, which written notice shall specify the
number of Registrable Stock which the Holder proposes to offer and sell and
which shall describe any changes to the information set forth in the
Registration Statement and the prospectus (the "Prospectus") included as a
part thereof, as the same may have been amended and supplemented from time
to time, concerning the Holder or the plan of distribution of the
Registrable Stock. The Holder represents and warrants that such
information as so updated will be true and correct and will not omit
information necessary to make the statements contained therein not
misleading. Within two (2) business days after its receipt of such written
notice, Liquids shall (i) notify the Holder that no supplement or amendment
is then required with respect to the Prospectus, or (ii) notify the
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Holder that such a supplement or amendment is required, in which event
Liquids shall prepare and file with the SEC such supplement or amendment
as soon as reasonably practicable and shall endeavor to cause any such
amendment to become effective. Immediately after filing a supplement with
the SEC or immediately after an amendment is declared effective by the SEC,
whichever is appropriate, Liquids will provide copies thereof to the Holder,
as provided in Section 2, and the Holder may then commence offers and sales
of Registrable Stock under the Registration Statement.
(e) The Holder agrees that for the period ending on the second
anniversary of the issuance of the Holder's Stock he will not sell,
exchange, pledge or otherwise transfer any of the Holder's Stock except in
transactions (i) made pursuant to the Registration Statement, or (ii) which
are exempt from the registration requirements of the Securities Act and all
applicable state securities laws, and Liquids is provided with an opinion
of counsel to the Holder and other evidence as may be reasonably
satisfactory to Liquids to the effect that such transfer will not be in
violation of the Securities Act and all applicable state securities laws.
4. PUBLIC OFFERING BY LIQUIDS. Notwithstanding the registration rights
granted to the Holder under this Agreement, in the event Liquids files a
registration statement for an underwritten public offering of Liquids Stock (a
"Public Offering") within two (2) years of the effective date of the
Registration Statement, then upon the request of Liquids' underwriter in such
Public Offering, the Holder agrees to enter into an agreement pursuant to which
the Holder will be prohibited from transferring the Registrable Stock for such
period of time, not to exceed six (6) months after completion of the Public
Offering, as Liquids' underwriter may request. In the event Liquids makes a
Public Offering and Liquids' underwriter imposes transfer restrictions on the
sale of Registrable Stock, the period during which the Registration Statement
will be kept current shall not be extended beyond the maximum two-year period
from the effective date of the Registration Statement as provided in Section 1.
5. POOLING RESTRICTIONS. It is a material factor to Liquids in entering
into this Agreement that the transactions contemplated by this Agreement be
treated as a "pooling-of-interests" for accounting purposes. Therefore,
notwithstanding any other provision of this Agreement, prior to notice by
Liquids of the publication and dissemination by Liquids of consolidated
financial results which include results of combined operations of each of the
Mesa Companies and AWW (as that term is defined in the Merger Agreement) for at
least a thirty-day period on a consolidated basis following the closing date of
the Merger Agreement, the Holder
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shall not sell or otherwise transfer or dispose of, or in any other way
reduce his risk relative to, any shares of the Holder's Stock (including, by
way of example and not limitation, engaging in put, call, short-sale,
straddle or similar market transactions). The Holder, therefore, covenants
and agrees that he will fulfill any requests reasonably made of him by
Liquids in writing if made by Liquids for the purpose of satisfying the
requirements of the Securities Release Nos. 130 and 135 relating to "pooling
of interests" accounting. Additionally, the certificates evidencing the
Holder's Stock will bear a legend substantially in the form set forth below
and containing such other information as Liquids may deem necessary or
appropriate:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED, AND U S LIQUIDS INC. SHALL NOT BE REQUIRED TO
GIVE EFFECT TO ANY ATTEMPTED SALE, TRANSFER OR ASSIGNMENT PRIOR TO THE
PUBLICATION AND DISSEMINATION OF FINANCIAL STATEMENTS BY U S LIQUIDS
INC. WHICH INCLUDE THE RESULTS OF AT LEAST THIRTY (30) DAYS OF
COMBINED OPERATIONS OF U S LIQUIDS INC. AND THE MESA COMPANIES FOR
WHICH THESE SHARES ARE ISSUED. UPON THE WRITTEN REQUEST OF THE RECORD
HOLDER OF THIS CERTIFICATE DIRECTED TO U S LIQUIDS INC., THE ISSUER
AGREES TO REMOVE THIS RESTRICTIVE LEGEND (AND ANY STOP ORDER PLACED
WITH THE TRANSFER AGENTS) WHEN THE REQUIREMENTS HAVE BEEN MET.
Liquids agrees to make publication and dissemination of its consolidated
financial results which includes results of combined operations of Liquids, the
Mesa Companies (as defined in the Merger Agreement), and AWW for at least a
thirty (30) day period on a consolidated basis following the closing date of the
Merger Agreement as soon as practicable following the end of the first full
calendar month ending after such thirty (30) day period.
6. INDEMNIFICATION.
(a) INDEMNIFICATION BY LIQUIDS. To the extent permitted by law,
Liquids will, and hereby does, indemnify and hold harmless the Holder
against any losses, claims, damages or liabilities to which the Holder may
become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such securities were
registered under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not
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misleading, and Liquids will reimburse the Holder for any legal or any
other expenses reasonably incurred by him in connection with
investigating or defending any such loss, claim, liability, action or
proceeding; PROVIDED that Liquids shall not be liable in any such case
to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information
pertaining to the Holder, or, as to periods prior to the date hereof, to
AWW or its business or activities, or to any other business or activity
in which the Holder has been involved in any way, in each case furnished
to Liquids by or for the Holder, and PROVIDED FURTHER that Liquids shall
not be liable to the Holder or any other person to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense arises out of or is based upon any violation by him
of the Securities Act or the Exchange Act. Nothing contained herein
shall limit the rights of the Holder to receive indemnification from
Liquids to which the Holder may be entitled other than as set forth
herein.
(b) INDEMNIFICATION BY THE HOLDER. To the extent permitted by law,
the Holder will, and hereby does, indemnify and hold harmless (in the same
manner and to the same extent as set forth in subdivision (a) of this
Section) each underwriter, each person (including an individual or a legal
entity) who controls such underwriter within the meaning of the Securities
Act, Liquids, each director of Liquids, each officer of Liquids and each
other person, if any, who controls Liquids within the meaning of the
Securities Act, with respect to any statement or alleged statement in or
omission or alleged omission from such Registration Statement, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in reliance upon
and in strict conformity with written information pertaining to the Holder,
or, as to periods prior to the date hereof, to AWW or its business or
activities, or to any other business or activity in which the Holder has
been involved in any way, furnished to Liquids by the Holder expressly for
use in the preparation of such Registration Statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement,
and with respect to any violation by the Holder of the Securities Act or
the Exchange Act; provided however, that the liability of the Holder
hereunder shall be limited to the proportion of any loss, claim, damage, or
liability which is equal to the proportion that the public offering price
of shares sold by
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the Holder under such Registration Statement bears to the total public
offering price of shares sold thereunder, but not to exceed the
proceeds received by the Holder from the sale of the Holder's Stock
covered by such Registration Statement.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding subdivisions of this Section, such
indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party, give written notice to the latter of the
commencement of such action, provided that the failure of any indemnified
party to give notice as provided herein shall not relieve the indemnifying
party of its obligations under the preceding subdivisions of this Section,
except to the extent that the indemnifying party is actually prejudiced by
such failure to give notice. In case any such action is brought against an
indemnified party, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties
actually exists in respect of such claim or if the defendants in any such
action include both the indemnified party and the indemnifying party, and
the indemnified party shall have reasonably concluded that there may be
defenses available to it which are different from or additional to those
available to the indemnifying party (in either of which cases the
indemnified party shall have the right to select a separate counsel and to
assume such legal defenses and otherwise to participate in the defense of
such action, with the expenses and fees of such separate counsel and other
expenses relating to such participation to be reimbursed by the
indemnifying party as incurred), the indemnifying party shall be entitled
to participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its election so as
to assume the defense thereof, the indemnifying party shall not be liable
to such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without
the consent of the indemnified party, consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect to such claim or litigation.
(d) OTHER INDEMNIFICATION. Indemnification similar to that specified
in the preceding subdivisions of this Section (with appropriate
modifications) shall be given by Liquids and the Holder with respect to any
required registration or other
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qualification of securities under any Federal or state law or regulation
of any governmental authority other than the Securities Act.
(e) INDEMNIFICATION PAYMENTS. The indemnification required by this
Section shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
(f) CONTRIBUTION. If the indemnification provided for in this
Section from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such loss, claims,
damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and indemnified
parties in connection with the actions which resulted in such losses,
claims, damage, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to, among other
things, whether any action in question, including any untrue statement of
material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying
party or indemnified parties, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such action.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth above, any legal or other
fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section were determined by pro rata
allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. 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. If indemnification is available under this Section, the
indemnifying parties shall indemnify each indemnified party to the full
extent provided herein without regard to the relative fault of said
indemnifying party or indemnified party or any other equitable
consideration provided for in this Section.
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7. NOTICES. All notices required or permitted herein must be in writing
and shall be deemed to have been duly given the first business day following the
date of service if served personally, on the first business day following the
date of actual receipt if delivered by telecopier, telex or other similar
communication to the party or parties to whom notice is to be given, or on the
third business day after mailing if mailed to the party or parties to whom
notice is to be given by registered or certified mail, return receipt requested,
postage prepaid, to the Holder at the address reflected on Liquids' records, and
to Liquids at the address set forth below, or to such other addresses as either
party hereto may designate to the other by notice from time to time for this
purpose.
HOLDER:
--------------------------------
--------------------------------
--------------------------------
LIQUIDS: U S Liquids Inc.
000 X. Xxx Xxxxxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
ATTN: Chief Executive Officer
WITH A COPY TO:
Xxx Xxxxx
Xxxxxxx Xxxxxx & Xxxxx
1600 Bank of Xxxxxxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
8. INTEGRATED AGREEMENT. This Agreement contains and constitutes the
entire agreement between and among the parties with respect to the matters set
forth herein and supersedes all prior agreements and understandings between the
parties hereto relating to the subject matter hereof. There are no agreements,
understandings, restrictions, warranties or representations among the parties
relating to the subject matter hereof other than those set forth or referred to
herein. This instrument is not intended to have any legal effect whatsoever, or
to be a legally binding agreement or any evidence thereof, until it has been
signed by all parties hereto.
9. BINDING EFFECT. This Agreement shall be binding on and enforceable by
the Holder and by Liquids and its successors. No transferee of any of the
Holder's Stock shall acquire any rights under this Agreement except with the
written consent of Liquids, which may be withheld for any reason.
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10. CONSTRUCTION. This Agreement shall be construed, enforced and
governed in accordance with the laws of the State of Texas. All pronouns and
any variations thereof shall be deemed to refer to the masculine, feminine or
neuter gender thereof or to the plurals of each, as the identity of the person
or persons or the context may require. The descriptive headings contained in
this Agreement are for reference purposes only and are not intended to describe,
interpret, define or limit the scope, extent or intent of this Agreement or any
provision contained herein.
11. INVALIDITY. If any provision contained in this Agreement shall for
any reason be held to be invalid, illegal, void or unenforceable in any respect,
such provisions shall be deemed modified so as to constitute a provision
conforming as nearly as possible to such invalid, illegal, void or unenforceable
provisions while still remaining valid and enforceable, and the remaining terms
or provisions contained herein shall not be affected thereby.
12. TERMINATION. If the Merger Agreement is terminated for any reason or
the AWW Merger is not consummated in accordance with the terms thereof, this
Agreement shall immediately terminate and be of no further force or effect.
13. RULE 144 REPORTING. For so long as the Holder is otherwise eligible
to sell any of the Holder's Stock in accordance with Rule 144 under the
Securities Act, Liquids agrees with the Holder as follows:
(a) Liquids shall make and keep public information available, as
those terms are understood and defined in Rule 144, at all times from and
after ninety (90) days following the effective date of the first
registration of Liquids under the Securities Act of an offering of its
securities to the general public.
(b) Liquids shall file with the SEC in a timely manner all reports
and other documents as the SEC may prescribe under Section 13(a) or 15(d)
of the Exchange Act at any time after Liquids has become subject to such
reporting requirements of the Exchange Act.
(c) Liquids shall furnish to the Holder upon request (i) a written
statement by Liquids as to its compliance with the reporting requirements
of Rule 144 (at any time from and after ninety (90) days following the
effective date of the first registration statement of Liquids for an
offering of its securities to the general public), and of the Securities
Act and the Exchange Act (at any time after it has become subject to such
reporting requirements),(ii) a copy of the most
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recent annual or quarterly report of Liquids, and (iii) such other
reports and documents so filed as the Holder may reasonably request to
avail himself of any rule or regulation of the SEC allowing the Holder
to sell any of the Holder's Stock without registration.
14. MISCELLANEOUS. The parties acknowledge that a form of this Stock
Distribution Agreement is being entered into concurrently by W. Xxxxxxx Xxx,
Xxxx X. Xxxxxxxxx, Xxxxxx X. Xxxxxxx, Xxxxxxx X. XxXxxxx, and Xxxxxxx Xxxxxx,
Jr. It is the intent of the parties to all of these Stock Distribution
Agreements that their registration rights with respect to the Holder's Stock
owned by them as of the date of these Stock Distribution Agreements shall
continue to be the same except as they may otherwise agree. Therefore, it is
agreed that, without the written consent of all of the parties to these Stock
Distribution Agreements, Liquids will not, within two years after the date
hereof, enter into any agreement with any of the parties to these Stock
Distribution Agreements with respect to registration rights pertaining to any of
the Holder's Stock owned by each of them as of the date hereof which has any
material terms more favorable than the terms contained in these Stock
Distribution Agreements unless the same is offered to all of the aforesaid
parties on a reasonably equivalent basis.
[Intentionally left blank]
-14-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
dates shown below.
HOLDER:
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Date:
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LIQUIDS: U S LIQUIDS INC.
By: /s/ W. Xxxxxxx Xxx, Chief Executive Officer
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Date: June 16, 1997
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