EXHIBIT 4
REGISTRATION RIGHTS AGREEMENT
-----------------------------
REGISTRATION RIGHTS AGREEMENT, dated as of January 8, 1998, by and
between ASHA Corporation, a Delaware corporation (the "Company"), and
Greenmotors LLC, a Delaware limited liability company ("Stockholder").
WHEREAS, the authorized capital stock of the Company consists of
20,000,000 shares of Common Stock, par value $.00001 per share (the "Common
Stock"), of which 8,663,158 shares of Common Stock are currently issued and
outstanding and 10,000,000 shares of Preferred Stock, par value $.001 per share,
of which no shares are issued and outstanding;
WHEREAS, contemporaneously herewith, the Stockholder is acquiring
1,118,652 shares of the Common Stock (the "Shares") pursuant to the terms and
conditions of a certain Stock Purchase Agreement dated as of January 5, 1998,
among the Company, Alain X-X Xxxxxx and the Stockholder; and
WHEREAS, as a condition precedent to such purchase, the Company
desires to grant to Stockholder certain registration rights with respect to the
Shares, all in accordance with the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing premises and the
agreements and mutual covenants hereinafter set forth, the parties hereto,
intending to be legally bound, agree as follows:
1. "Piggyback" Registration Rights. Subject to applicable stock
exchange rules and securities regulations, the Company shall, at least thirty
(30) days prior to a public offering by the Company prior to December 31, 2002,
pursuant to an effective registration statement (other than a registration
statement on Form S-4 or S-8 or any successor form) under the Securities Act (a
"Registration Statement") of any class of its equity securities, or securities
convertible into or exercisable for any class of its equity securities, give
written notice of such proposed filing and of the proposed date thereof to the
Stockholder and if, on or before the twentieth (20th) day following the date on
which such notice is given, the Company shall receive a written request from the
Stockholder requesting that the Company include among the securities covered by
such
NYFS11...:\92\56392\0003\1915\AGRD167M.04B
Registration Statement any Shares owned by such Stockholder for offering for
sale in a manner and on terms set forth in such request, the Company shall
include such Shares in such Registration Statement, if filed, so as to permit
such Shares to be sold or disposed of in the manner and on the terms of the
offering thereof set forth in such request.
2. Shelf-Registration; Demand Registration Rights. (i) From and
after May 1, 1999, so long as the Company shall be eligible to use a
registration statement on Form S-3 relating to the resale of Shares (a
"ShelfRegistration Statement"), if the Company shall receive written notice from
the Stockholder, specifying in good faith the intended methods of disposition
thereof pursuant to a Shelf-Registration Statement, the Company agrees to use
its best efforts to prepare said Shelf-Registration Statement and to cause said
Shelf-Registration to be filed with and to be declared effective by the
Securities and Exchange Commission as soon as reasonably practical thereafter.
It is understood and agreed that such ShelfRegistration may have included
therein shares of common stock or other equity securities of the Company other
than the Shares.
(ii) The Company agrees to use its best efforts to keep the
Shelf-Registration Statement continuously effective until the first to occur of
the third anniversary of the date on which such Shelf-Registration Statement was
first declared effective by the Securities and Exchange Commission (subject to
Suspension Periods (defined below) and extensions coincident with the length of
such Suspension Periods) or the date on which all Shares covered by the
Shelf-Registration Statement have been sold thereunder in accordance with the
plan and method of distribution intended by the Stockholder and as disclosed in
the prospectus forming part of the Shelf-Registration Statement (the "Effective
Period"). For purposes hereof, "Suspension Period" shall mean a period of time
commencing on the date on which the Company provides notice that the
ShelfRegistration Statement is no longer effective, that the prospectus included
in the Shelf-Registration Statement no longer complies with the requirements
therefor prescribed by Section 10(a) of the Securities Act, or that the Company
in its reasonable, good faith judgment, for valid business purposes (including,
without limitation, in connection with a proposed or pending issuance or sale of
the Company's debt or equity securities by the Company or any other Person or a
proposed or pending merger, reorganization, consolidation, recapitalization,
public offering, sale of assets or other extraordinary corporate transaction,
whether or not publicly
2
announced, involving the Company or any of its subsidiaries) has elected to
require the suspension of the sale by the Stockholder of Shares pursuant to the
Shelf-Registration Statement, and shall end on the date when the Stockholder
either receives copies of the supplemented or amended prospectus plus an
additional five (5) business days or otherwise is advised in writing by the
Company that use of the prospectus may be resumed. The Stockholder agrees that
it will not sell any Shares pursuant to the ShelfRegistration Statement during
any Suspension Period and the Company agrees to cause each Suspension Period to
end as soon as reasonably practicable. The Company agrees that no other
similarly situated holder of the Company's Common Stock will be permitted to
sell shares of the Company's Common Stock pursuant to a shelf registration
statement during a Suspension Period. If one or more Suspension Periods occur,
the Effective Period shall be extended by such number of days coincident with
the aggregate number of days included in all Suspension Periods.
(iii) From and after May 1, 1999, so long as a Shelf-Registration is
not in effect with respect to the Shares, the Stockholder may make a written
request of the Company (a "Demand Request") for registration with the Securities
and Exchange Commission, under and in accordance with the provisions of the
Securities Act, of all or part of the Shares (a "Demand Registration").
Thereupon the Company shall, as expeditiously as is possible and in any event
within 60 days after receiving the Demand Request (such 60th day being referred
to herein as the "Required Filing Date"), use its commercially reasonable
efforts to file a Registration Statement for all Shares which the Company has
been so requested to register by Stockholder for sale, all to the extent
required to permit the disposition of the Shares so registered; provided,
however, that (i) the Company shall not be required to effect (a) more than
three (3) Demand Registrations of the Shares pursuant to this Agreement and (ii)
in no event shall the Company be required to effect more than one Demand
Registration in any six-month period.
3. Terms and Conditions of Registration or Qualification. In
connection with any Registration Statement filed pursuant to Sections 1 and 2
hereof, the following provisions shall apply:
(i) If a Registration Statement shall be filed pursuant to Section 1
hereof, the Stockholder shall, if requested by the managing underwriter,
agree not to sell publicly any Shares (other than the Shares so
3
registered) for a period of up to 90 days following the effective date of
the Registration Statement relating to such offering, or such longer time
up to one hundred eighty (180) days as the managing underwriter may
require.
(ii) If a Registration Statement shall be filed pursuant to Section 1
hereof, and if the Company's managing underwriter advises that the
inclusion in such registration or qualification of some or all of the
Shares of the Stockholder sought to be registered creates a substantial
risk that the proceeds or price per share the Company will derive from
such registration or qualification will be reduced or that the number of
shares to be registered or qualified at the instance of the Company plus
the number of Shares sought to be registered or qualified by the
Stockholder is too large a number to be reasonably sold, the number of
Shares sought to be registered or qualified for the Stockholder shall be
reduced to the extent necessary to reduce the number of Shares to be
registered or qualified to the number recommended by the managing
underwriter.
(iii) The Stockholder will promptly provide the Company with such
information as it shall reasonably request in order to prepare such
Registration Statement or Shelf-Registration Statement, as the case may
be.
(iv) All expenses in connection with the preparation of any
Registration Statement or ShelfRegistration Statement, as the case may be,
filed pursuant to Section 1 or 2 hereof shall be borne solely by the
Company, except for any underwriters' discount, resulting solely from the
inclusion of the Stockholder's Shares in such Registration Statement,
which discount shall be paid by the Stockholder, but in no event shall the
Stockholder be required to bear any printing expenses, audit expenses or
legal expenses other than expenses of counsel to the Stockholder;
provided, however, that expenses incurred in connection with the
registration or qualification of Shares for sale in jurisdictions selected
by the Stockholder as provided in paragraph (viii) of this Section 3 and
in which the Company would not otherwise sell shares (other than expenses
attributable to services of regularly employed personnel of the Company or
counsel, accountants or other professional advisors of the Company which
are not directly and specifically related
4
to and resulting from such registration or qualification) shall be borne
by the Stockholder.
(v) Following the effective date of such Registration Statement or
Shelf-Registration Statement, as the case may be, the Company shall, upon
the request of the Stockholder, forthwith supply such number of
prospectuses (including preliminary prospectuses and amendments and
supplements thereto) meeting the requirements of the Securities Act or
such other securities laws where the Registration Statement or
Shelf-Registration Statement, as the case may be, has been filed and such
other documents as are referred to in the Registration Statement or
Shelf-Registration Statement, as the case may be, as shall be requested by
the Stockholder to permit the Stockholder to make a public distribution of
the Shares, provided that the Stockholder furnish the Company with such
appropriate information relating to the Stockholder's intentions in
connection therewith as the Company shall reasonably request in writing.
(vi) If a Registration Statement shall be filed pursuant to Section 1
hereof, the Company shall prepare and file such amendments and supplements
to such Registration Statement as may be necessary to keep such
Registration Statement effective and to comply with the provisions of the
Securities Act or such other securities laws where the Registration
Statement has been filed with the respect to the offer and sale or other
disposition of the shares covered by such Registration Statement during
the period required for distribution of the shares, which period shall not
be in excess of nine (9) months from the effective date of such
Registration Statement.
(vii) The Company shall select the underwriter or underwriters, if any,
who are to undertake any offering of securities with respect to which the
Stockholder has rights pursuant to Section 1 hereof.
(viii) The Company shall use its best efforts to register or qualify the
Shares of the Stockholder covered by any such Registration Statement or
ShelfRegistration Statement, as the case may be, under such securities or
Blue Sky laws in such jurisdictions as the Stockholder may request;
provided, however, that the Stockholder shall reimburse the Company, as
and to the extent provided in Section 3(iv) hereof, for expenses incurred
by the Company in complying with such
5
request and, provided further, that the Company shall not be required to
execute a general consent to service of process or to qualify to do
business as a foreign corporation in any jurisdiction where it is not so
qualified in order to comply with such request.
4. Indemnification.
(i) In the event of the registration or qualification of any Shares
of the Stockholder under the Securities Act or any other applicable
securities laws pursuant to the provisions of this Agreement, the Company
agrees to indemnify and hold harmless the Stockholder, each underwriter,
broker or dealer, if any, of such Shares, and each other person, if any,
who controls said Stockholder and any such underwriter, broker or dealer
within the meaning of the Securities Act or any other applicable
securities, from and against any and all losses, claims, damages or
liabilities (or actions in respect thereof), joint or several, to which
said Stockholder and such underwriter, broker or dealer or controlling
person may become subject under the Securities Act or any other applicable
securities laws or otherwise, insofar as such losses, claims, damages or
liabilities (or actions 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 or Shelf-Registration Statement
under which such Shares were registered or qualified under the Securities
Act or any other applicable securities laws, any preliminary prospectus or
final prospectus relating to such Shares, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation
by the Company of any rule or regulation under the Securities Act or any
other applicable securities laws applicable to the Company or relating to
any action or inaction required by the Company in connection with any such
registration or qualification and will reimburse said Stockholder and each
such underwriter, broker or dealer and controlling person for any legal or
other expenses reasonably incurred by such said Stockholder and each such
underwriter, broker or dealer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company will not be liable in any such
case to the extent that any such loss,
6
claim, damage or liability arises out of or is based upon an untrue
statement or omission made in such Registration Statement or
Shelf-Registration Statement, such preliminary prospectus, such final
prospectus or such amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by said
Stockholder and any such underwriter, broker, dealer or controlling person
specifically and expressly for use in the preparation thereof.
(ii) In the event of the registration or qualification of any Shares
of the Stockholder under the Securities Act or any other applicable
securities laws for sale pursuant to the provisions hereof, said
Stockholder and each underwriter, broker and dealer, if any, of such
Shares, and each other person, if any, who controls any such Stockholder,
agrees to indemnify and hold harmless the Company, each person who
controls the Company within the meaning of the Securities Act, and each
officer and director of the Company from and against any losses, claims,
damages or liabilities, joint or several, to which the Company, such
controlling person or any such officer or director may become subject
under the Securities Act or any other applicable securities laws or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement of any material fact contained in any Registration Statement or
Shelf-Registration Statement under which such Shares were registered or
qualified under the Securities Act or any other applicable securities
laws, any preliminary prospectus or final prospectus relating to such
Shares, or any amendment or supplement thereto, or arise out of or are
based upon an untrue statement or the omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, which untrue statement or omission was made
therein in reliance upon and in conformity with written information
furnished to the Company by said Stockholder specifically for use in
connection with the preparation thereof, and will reimburse the Company,
such controlling person and each such officer or director for any legal or
any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability, or
action.
(iii) Promptly after receipt by a person entitled to indemnification
under this Section 4 (an
7
"indemnified party") of notice of the commencement of any action or claim
relating to any Registration Statement or Shelf-Registration Statement
filed under Section 1 or Section 2, as the case may be, or as to which
indemnity may be sought hereunder, such indemnified party will, if a claim
for indemnification hereunder in respect thereof is to be made against any
other party hereto (an "indemnifying party"), give written notice to such
indemnifying party of the commencement of such action or claim, but the
omission to so notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than
pursuant to the provisions of this Section 4 and shall also not relieve
the indemnifying party of its obligations under this Section 4 except to
the extent that the indemnifying party is actually prejudiced thereby. In
case any such action is brought against an indemnified party, and it
notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled (at its own expense) to participate in
and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense, with counsel reasonably
satisfactory to such indemnified party, of such action and/or to settle
such action and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof, other than the reasonable cost of
investigation; provided, however, that no indemnifying party shall enter
into any settlement agreement without the prior written consent of the
indemnified party unless such indemnified party is fully released and
discharged from any such liability. Notwithstanding the foregoing, the
indemnified party shall have the right to employ its own counsel in any
such case, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (a) the employment of such
counsel shall have been authorized in writing by the indemnifying party in
connection with the defense of such suit, action, claim or proceeding, (b)
the indemnifying party shall not have employed counsel (reasonably
satisfactory to the indemnified party) to take charge of the defense of
such action, suit, claim or proceeding, or (c) such indemnified party
shall have reasonably concluded, based upon the advice of counsel, that
there may be defenses available to it which are
8
different from or additional to those available to the indemnifying party
which, if the indemnifying party and the indemnified party were to be
represented by the same counsel, could result in a conflict of interest
for such counsel or materially prejudice the prosecution of the defenses
available to such indemnified party. If any of the events specified in
clauses (a), (b) or (c) of the preceding sentence shall have occurred or
shall otherwise be applicable, then the fees and expenses of one counsel
or firm of counsel selected by a majority in interest of the indemnified
parties (and reasonably acceptable to the indemnifying party) shall be
borne by the indemnifying party. If, in any such case, the indemnified
party employs separate counsel, the indemnifying party shall not have the
right to direct the defense of such action, suit, claim or proceeding on
behalf of the indemnified party and the indemnified party shall assume
such defense and/or settle such action; provided, however, that, an
indemnifying party shall not be liable for the settlement of any action,
suit, claim or proceeding effected without its prior written consent,
which consent shall not be unreasonably withheld.
5. Miscellaneous.
(a) Certain Definitions. For purposes hereof, (i) the term
"Affiliate" as used herein shall mean any Person directly or indirectly
controlling, controlled by, or under common control with, another Person, (ii)
the term "Person" shall mean any natural person, corporation, trust,
partnership, limited liability company, association or other entity of any
nature whatsoever, and (iii) the term "Securities Act" shall mean the Securities
Act of 1933, as amended.
(b) Notices. Any and all notices or any other communication provided
for herein shall be made by handdelivery, first-class mail (registered or
certified, return receipt requested), telex, telecopier, or overnight air
courier guaranteeing next day delivery: (i) in the case of the Company, to: ASHA
Corporation, 000 X Xxxx Xxxxx, Xxxxx Xxxxxxx, Xxxxxxxxxx 00000, Attention:
President, telecopy number (000) 000-0000, with a copy to: Xxx Xxxxxx, Esq.,
Xxxx Xxxxx Xxxxxxxx & Xxxxxx, P.C., Attorneys at Law, Xxxxxxxx Xxxxx, Xxxxx
0000, Xxxxx Xxxxx 000, Xxxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000-0000, telecopy
number: 303- 893-2882, and (ii) in the case of the Stockholder, to: Greenway
Motors LLC, c/o Greenway Partners, L.P., 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention:
9
President and Chief Executive Officer, telecopy number: 000- 000-0000, with a
copy to: Xxxxx X. Xxxxxxx, Esq., Weil, Gotshal & Xxxxxx, LLP, 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, telecopy number: 000-000-0000 (or to such other
address as may be designated by such party). Except as otherwise provided in
this Agreement, each such notice shall be deemed given at the time delivered by
hand, if personally delivered; five business days after being deposited in the
mail, postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next business day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery. A
party hereto may designate a new address or telecopy number for purposes of
notices hereunder by giving a notice of such change as hereinabove provided.
(c) Amendment. No change or modification of this Agreement shall be
valid, binding or enforceable unless the same shall be in writing and signed by
the Company and the Stockholder.
(d) Waiver. No failure or delay on the part of the Stockholder in
exercising any right, power or privilege hereunder, and no course of dealing
between the Company and the Stockholder shall operate as a waiver thereof nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude the simultaneous or later exercise of any other right, power or
privilege. The rights and remedies herein expressly provided are cumulative and
not exclusive of any rights and remedies which the Stockholder would otherwise
have. No notice to or demand on the Company in any case shall entitle the
Company to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Stockholder to take
any other or further action in any circumstances without notice or demand.
(e) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
(f) Governing Law. This Agreement shall be governed and construed in
accordance with the law of the State of Delaware without giving effect to the
provisions, policies or principles thereof with respect to conflict or choice of
law.
(g) Jurisdiction. The Company and the Stockholder hereby consents to
the non-exclusive
10
jurisdiction of the courts in the State of New York and all courts competent to
hear appeals therefrom, over any actions which may be commenced against any of
them under or in connection with this Agreement.
(h) Benefit and Binding Effect. This Agreement shall be binding upon
and shall inure to the benefit of the Company and the Stockholder and their
respective successors and assigns. In the event that any part of this Agreement
shall be held to be invalid or unenforceable, the remaining parts hereof shall
nevertheless continue to be valid and enforceable as though the invalid portions
were not a part hereof.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as
of the day and year first above written.
COMPANY:
ASHA CORPORATION
By: /s/Xxxx X. XxXxxxxxx
----------------------------------
Name: Xxxx X. XxXxxxxxx
Title: President
STOCKHOLDER:
GREENMOTORS LLC
By: /s/Xxxx X. Xxxxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President
11
