NO SALE, TRANSFER, PLEDGE, OR OTHER DISPOSITION OF THIS
WARRANT OR THE SHARES PURCHASABLE HEREUNDER MAY BE MADE
EXCEPT PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR PURSUANT TO AN EXEMPTION THEREFROM.
U S LIQUIDS INC.
WARRANT TO PURCHASE 20,000
SHARES OF COMMON STOCK
This Warrant is being issued in connection with that certain letter
agreement, dated June 23, 1997 (the "Service Agreement"), between U S Liquids
Inc., a Delaware corporation ("Company"), and Xxxx Liebovit ("Liebovit").
During the Exercise Period (as defined in Section 3), and subject to the terms
and conditions set forth below, for value received, Liebovit is entitled to
purchase from Company, twenty thousand (20,000) fully paid and nonassessable
shares of Company's common stock, par value $0.01 per share ("Common Stock"), at
the Exercise Price per share set forth in Section 1 (subject to adjustment as
provided below). Holder shall be entitled to receive such shares of Common
Stock upon (i) surrender to Company at Company's principal office at 000 X. Xxx
Xxxxxxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, XX 00000-0000 (or at such other
location as Company may notify Holder) of this Warrant, properly endorsed with
the attached Notice of Exercise Form filled in and signed, and (ii) payment of
the aggregate Exercise Price (as defined in Section 1) for the number of shares
for which this Warrant is being exercised.
This Warrant is subject to the following further terms and conditions:
1. EXERCISE PRICE; NUMBER OF SHARES.
1.1. INITIAL EXERCISE PRICE. The initial per share exercise price
pursuant to this Warrant shall be the price at which shares of Common Stock are
offered to the public in the Company's initial public offering of Common Stock
pursuant to an effective registration statement filed with the Securities and
Exchange Commission. Such exercise price shall be subject to adjustment
pursuant to Section 1.2. Such exercise price, as adjusted from time to time in
accordance with Section 1.2, is referred to as the "Exercise Price."
1.2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER/KIND OF SHARES. The
Exercise Price and the number of and kind of securities purchasable upon
exercise of this Warrant shall be subject to adjustment from time to time as
follows:
(i) SUBDIVISIONS; COMBINATIONS; OTHER ISSUANCES. If the outstanding
shares of Common Stock shall be subdivided (by stock split, stock dividend, or
otherwise) into a greater number of shares of Common Stock, then concurrently
with the effectiveness of such subdivision the number of shares of Common Stock
purchasable hereunder shall be proportionately increased and the Exercise Price
shall be proportionately decreased. If the outstanding shares of Common Stock
shall be combined or consolidated (by reclassification or otherwise) into a
lesser number of shares of Common Stock, then concurrently with the
effectiveness of such combination or consolidation the number of shares of
Common Stock purchasable hereunder shall be proportionately decreased and the
Exercise Price shall be proportionately increased.
(ii) RECAPITALIZATION. If a distribution (other than a cash dividend
or a dividend payable in property other than Common Stock) shall be paid in
respect of the Common Stock, or if there shall occur any reclassification,
capital reorganization, or recapitalization of Company affecting the Common
Stock (other than a change in par value or a subdivision or combination
described in Section 1.2(i)), or if there shall occur any consolidation or
merger of Company with or into another entity, then (as part of any such
distribution, reclassification, reorganization, recapitalization, consolidation,
or merger) provision shall be made so that the holder of this Warrant shall have
the right thereafter to receive upon exercise of this Warrant the kind and
number of shares of stock, other securities, or property which such holder would
have been entitled to receive if immediately prior to such distribution,
reclassification, reorganization, recapitalization, consolidation, or merger
such holder had held the shares of Common Stock which were then purchasable upon
exercise of this Warrant. In any such case, appropriate adjustment shall be
made (as determined by Company's Board of Directors in its sole discretion) in
the application of the provisions of this Warrant with respect to the rights and
interests of the holder so that the provisions of this Warrant (including
provisions with respect to adjustment of the Exercise Price) shall thereafter be
applicable, as nearly as practicable, to any shares of stock, other securities,
or property thereafter purchasable upon exercise of this Warrant.
1.3. REQUIRED NOTIFICATIONS. (i) If at any time Company shall
declare a cash dividend or stock dividend upon its Common Stock, or shall make
any special dividend or other distribution to the holders of its Common Stock,
then Company shall give notice to the holder of this Warrant at least seven (7)
days prior to the date on which a record shall be taken for such dividend or
distribution, which notice shall specify the date (if any) on which the holders
of Common Stock shall be entitled to any such dividend or distribution.
(ii) If at any time there shall be any reorganization or
reclassification of Company's capital stock, or any consolidation or merger of
Company with, or sale of all or substantially all of Company's assets to,
another entity, or a voluntary or involuntary dissolution, liquidation, or
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winding-up of Company, then Company shall give notice to the holder of this
Warrant at least seven (7) days prior to the date on which Company's books shall
close or the date on which a record shall be taken for determining rights to
vote in respect of any such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, or winding-up. Such notice shall also
specify the date on which the holders of Common Stock shall be entitled to
exchange their Common Stock for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, or winding-up.
2. PAYMENT OF EXERCISE PRICE. Payment for shares of Common Stock
purchasable upon exercise of this Warrant may be made in the form of (i) cash,
certified check or other immediately available funds for the aggregate Exercise
Price for such shares of Common Stock, (ii) the exchange of a number of shares
of Common Stock owned by the holder, free and clear of all liens or
encumbrances, the Fair Market Value (defined below) of which at the time of
exercise is equal to the aggregate Exercise Price of such shares, accompanied by
executed stock powers and any other documents of transfer requested by the
Company, (iii) the relinquishment of Warrant Shares (defined below), which
Warrant Shares shall be deemed to have a value equal to the aggregate Fair
Market Value of such Warrant Shares less the aggregate Exercise Price of such
Warrant Shares, or (iv) a combination of (i), (ii) or (iii). For purposes of
this Section 2, the term "Fair Market Value", as of a particular day, means (a)
if the shares of Common Stock are then listed or admitted for trading on a
national securities exchange or quoted on the National Association of Securities
Dealers Automated Quotation System, the last reported sales price or the average
of the closing bid and ask prices, as applicable, of the Common Stock on the
last trading day before such date, or (b) if the shares of Common Stock are not
then listed or admitted for trading on a national securities exchange or quoted
on the National Association of Securities Dealers Automated Quotation System,
such value as the entire Board of Directors of the Company, in its absolute
discretion, may determine in good faith. For purposes of this Section 2, the
term "Warrant Shares" means shares of Common Stock issuable upon exercise of
this Warrant.
3. CONDITIONS TO EXERCISE; EXERCISE PERIOD. This Warrant shall be
exercisable only if Liebovit shall not have breached its obligations under the
Service Agreement. This Warrant shall be exercisable only during the period
("Exercise Period") beginning on the first business day after December 23, 1997
and ending at the close of business on the fifth anniversary of the execution
date of this Warrant, at which time any unexercised portion of this Warrant
shall expire and become null and void. Notwithstanding anything to the contrary
herein, the Company may, at its sole discretion, terminate the Service Agreement
and rescind this Warrant if an initial public offering of the Common Stock has
not been completed by December 31, 1998 by giving written notice thereof to
Liebovit. Immediately upon the giving of such notice, this Warrant shall become
null and void.
4. RECORD DATE; CERTIFICATES; ETC. Any shares of Common Stock
purchased upon exercise of this Warrant shall be deemed to have been issued to
the holder thereof as of the close of business on the date of exercise. Subject
to Section 5, certificates for the shares of Common Stock so purchased shall be
delivered to the holder thereof promptly after exercise. The stock certificates
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so delivered shall be in denominations requested by the holder of this Warrant
and shall be registered in such holder's name. Upon partial exercise of this
Warrant, a new warrant shall promptly be issued to the holder of this Warrant,
representing the right to purchase the number of shares of Common Stock with
respect to which this Warrant shall not have been exercised.
5. RESTRICTIONS ON TRANSFER. This Warrant and the rights hereunder
are not transferable unless and until Liebovit shall have fully and completely
performed all of his obligations under the Service Agreement. Further, holder
shall not offer, sell, pledge, hypothecate, or otherwise dispose of this Warrant
unless such offer, sale, pledge, hypothecation, or other disposition (i) is
registered under the Securities Act of 1933, as amended (the "Securities Act"),
(ii) is in compliance with an opinion of counsel, addressed to Company or upon
which Company is authorized to rely ("Opinion of Counsel"), to the effect that
such offer, sale, pledge, hypothecation, or other disposition does not violate
the Securities Act, or (iii) is in compliance with an Opinion of Counsel that
the transaction complies with Rule 144 promulgated by the Securities and
Exchange Commission ("Rule 144"). Subject to the foregoing, transfer of this
Warrant shall be made by holder at Company's principal office (or at such other
location as Company may notify holder) by holder in person or by his duly
authorized attorney, upon surrender of this Warrant properly endorsed, with the
attached Registration of Assignment completed. Unless the securities
transferred are no longer "restricted securities" as defined under Rule 144, the
permissibility of transfers pursuant to this Section 5 shall be conditioned upon
such transferee making in writing to Company the covenant set forth in the
second sentence of this Section 5. All expenses of transfer including, without
limitation, transfer taxes and attorneys' fees, whether incurred by the Company
or the transferor, shall be borne by the transferor.
6. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. All shares of
Common Stock issued upon exercise of this Warrant, in accordance with the terms
of this Warrant, shall be duly authorized, validly issued, fully paid,
nonassessable, and free from preemptive rights. During the Exercise Period,
Company will have authorized and reserved for issuance or transfer upon exercise
of this Warrant, a sufficient number of shares of authorized but unissued Common
Stock, free from preemptive rights, when and as required to provide for exercise
of this Warrant.
7. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing
contained in this Warrant shall be construed as conferring upon holder the right
to vote as a stockholder or to consent or to receive notice as a stockholder in
respect of meetings of Company's stockholders for election of directors or for
other matters. Nothing contained in this Warrant shall be construed as
conferring upon holder any other right as a stockholder of Company. No dividend
or interest shall be payable or accrued in respect of this Warrant or the stock
reserved for issuance in connection herewith until, and only to the extent that,
this Warrant shall have been exercised. In the absence of affirmative action by
holder to purchase shares of Common Stock, no provision of this Warrant and no
enumeration in this Warrant of holder's rights or privileges, shall give rise to
any liability of holder for the Exercise Price.
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8. AMENDMENT; WAIVER. This Warrant may not be amended or otherwise
modified without the prior written consent of the Company and the then
registered holder of this Warrant.
9. NOTICES. All notices, approvals, consents, requests, demands,
and other communications in connection with this Warrant shall be in writing and
shall be deemed to have been duly given (i) when delivered personally,
(ii) three days after deposit in the U.S. mail (registered or certified mail),
postage prepaid, or (iii) when sent by facsimile machine with machine or other
confirmation of delivery, as follows:
(a) If to Company, to:
000 X. Xxx Xxxxxxx Xxxxxxx Xxxx,
Xxxxx 000
Xxxxxxx, XX 00000-0000
Fax No.: (000) 000-0000
Attention: President
(b) If to Xxxx Liebovit
X.X. Xxx 0000
Xxxxxx Xxxxxxx 00000
Fax No.: (000) 000-0000
If to any subsequent holder of this Warrant, to it at such address or fax number
as may have been furnished to Company in writing by such subsequent holder. If
no address has been furnished to Company by such subsequent holder, Company
shall deliver any notice to the subsequent holder in care of the previous holder
at the address provided to Company in accordance with this Warrant. Company and
any holder of this Warrant may change their respective addresses for purposes of
notice hereunder by notice to the other party in accordance with this Section.
10. BENEFITS OF AGREEMENT. Nothing in this Warrant shall be
construed to give to any person or entity other than Company and the registered
holder of this Warrant any legal or equitable right, remedy or claim under this
Warrant. This Warrant shall be for the sole and exclusive benefit of Company
and the registered holder of the Warrant.
11. SECTION HEADINGS; APPLICABLE LAW. The section headings in this
Warrant are for reference purposes only and are not intended to affect the
meaning or construction of this Warrant. THIS WARRANT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF TEXAS.
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12. LOST WARRANT. Upon receipt of evidence reasonably satisfactory
to Company of the loss, theft, destruction, or mutilation of this Warrant,
Company will make and deliver a new warrant, of like tenor, in lieu of the lost,
stolen, destroyed, or mutilated Warrant; provided that (i) upon any such loss,
theft, or destruction, holder shall provide Company with an indemnity and/or
bond reasonably satisfactory to Company, and (ii) upon any such mutilation,
holder shall surrender this Warrant for cancellation. Holder shall indemnify
Company for any liability arising from replacement of this Warrant.
13. FRACTIONAL SHARES. No fractional shares shall be issued or
accepted by the Company upon exercise of this Warrant. In lieu of issuing a
fractional share, Company shall pay holder in cash a sum equal to the applicable
fraction multiplied by the per share Exercise Price.
IN WITNESS WHEREOF, Company has caused this Warrant to be duly
executed as of June 23, 1997.
U S Liquids Inc.
By: /s/ W. Xxxxxxx Xxx
------------------------------
W. Xxxxxxx Xxx, President
ATTEST:
By: /s/ Xxxx X. Xxxxxxxxx
--------------------------------
Xxxx X. Xxxxxxxxx, Secretary
(Corporate Seal)
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NOTICE OF EXERCISE FORM
(To be signed only upon exercise of Warrant)
To U S Liquids Inc.:
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, ________________________________________________________
(_________) (*) shares of Common Stock of U S Liquids Inc. The undersigned
hereby elects to pay for such shares pursuant to clause ___(**) of Section 2
of the Warrant and requests that certificates for such shares be issued in
the name of (and delivered to) the undersigned at the undersigned's address
as follows:
____________________________
____________________________
The undersigned represents that it is acquiring such Common Stock for
its own account for investment and not with a view to or for sale in
connection with any distribution thereof. Further, the undersigned makes and
reiterates the representations and covenants to Company contained in Section
5 of the Warrant as of the date of execution hereof.
Dated: ___________________ _________________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant or a duly executed and delivered
Form of Assignment)
(Print Name and address)
________________________________________
________________________________________
________________________________________
(*) Insert the number of shares of Common Stock called for on the face of
the Warrant (or, in the case of partial exercise, the portion thereof
as to which the Warrant is being exercised), without making any
adjustment for additional Common Stock or any other stock or other
securities or property or cash which, pursuant to the adjustment
provisions of the Warrant, may be deliverable upon exercise.
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(**) Insert the number of the particular clause of Section 2 describing the
payment method elected by the holder (i.e., clause (i), (ii) or (iii))
or describe the combination of such payment methods elected by the
holder.
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REGISTRATION OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned, the holder of the within Warrant,
hereby sells, assigns, and transfers all of its rights under the within
Warrant, in compliance with and subject to Section 5 of the Warrant, with
respect to the number of shares of Common Stock covered thereby and set forth
below, to:
NAME OF ASSIGNEE ADDRESS NO. OF SHARES
---------------- ------- -------------
Dated: __________________ _________________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant)
(Print name and address)
________________________________________
________________________________________
________________________________________
