REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
February 2, 1998 by and between ASHLAND INC., a Kentucky corporation (the
"Company"), and each of the persons whose names appear on the signature
page attached hereto (each, a "Holder" and collectively, the "Holders").
WHEREAS, pursuant to an Agreement of Merger and Plan of Reorganization
dated as of January 21, 1998 (the "Merger Agreement"), by and among the
Company, the Holders, and EGL-1, Inc., a California corporation, the
Holders have acquired shares of common stock, $1.00 par value (the "Common
Stock"), of the Company (collectively, and together with any shares of
Common Stock of the Company issued to a Holder as (or issuable upon the
conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in exchange
for or in replacement of, any shares of Common Stock held by the Holders,
the "Registrable Securities");
WHEREAS, in order to induce the Holders to acquire the Registrable
Securities, the Company and the Holders have agreed to enter into this
Agreement; and
WHEREAS, it is intended by the Company and the Holders that this
Agreement shall become effective immediately upon the acquisition by the
Holders of the Registrable Securities;
NOW, THEREFORE, in consideration of the premises, promises and the
mutual covenants contained herein and in the Merger Agreement, the Company
hereby agrees as follows:
1. Registration Rights.
(a) Grant of Required Registration Right. The
Company agrees (i) to prepare and file a registration statement
(the "Registration Statement") on Form S-3 (or other applicable
form) with the Securities and Exchange Commission (the "SEC")
under the Securities Act of 1933, as amended (the "Securities
Act"), no later than sixty (60) days following the Closing (as
defined in the Merger Agreement) covering the registration for
resale of the Registrable Securities, and (ii) use its best
efforts to cause the Registration Statement to become effective
under the Securities Act no later than May 1, 1998 (the
"Registration Date"). The Company shall use its best efforts to
cause the Registration Statement to be effective continuously for
a period of sixty (60) days beginning with the Registration Date
(the "Registration Period"); provided, however, that in the event
the Registration Statement does not become effective on such date,
the Registration Period shall commence on such later date as the
Registration Statement becomes effective (and provided further,
that such deferral of the Registration Period shall not excuse any
breach by the Company of its obligations hereunder).
(b) Exception as to Timing. Notwithstanding any
other provision of this Agreement, the Company may postpone or
suspend the filing or effectiveness of the Registration Statement
if the Company shall furnish to the Holders a certificate signed
by the Chief Financial Officer of the Company (the "Certificate")
stating that, in the good faith judgment of the Chief Financial
Officer of the Company, it would be detrimental to the Company and
its shareholders for the Registration Statement to be filed or the
effectiveness thereof continued and it is therefore necessary to
defer or suspend, as applicable, the filing or effectiveness of
the Registration Statement. Upon receipt of the Certificate, each
Holder shall cease sales of the Registrable Securities until
notified by the Company that the Registration Statement is or has
remained effective. The Company shall have the right to defer or
suspend such filing or effectiveness for a maximum of two periods
as follows: (i) a period of not more than seven (7) consecutive
days and a period of not more than thirty (30) consecutive days;
provided, however, that, with respect to the thirty-day period
described above, the Company shall use its commercially reasonable
efforts to terminate as soon as practicable the deferral or
suspension of the effectiveness of the Registration Statement
prior to the expiration of such period; and provided, further,
that notwithstanding anything to the contrary set forth herein,
the Company shall not exercise any right of deferral or suspension
of the effectiveness of the Registration Statement for the ten
consecutive trading days commencing on the Registration Date (or,
if later, the date the Registration Period actually commenced).
The length of the Registration Period (as defined above) shall be
increased by the length of any deferral or postponement taken by
the Company hereunder.
2. Registration Procedures. Pursuant to its obligations hereunder,
the Company shall:
(a) prepare and file with the SEC the
Registration Statement and use its best efforts to cause the
Registration Statement to become effective and remain effective as
provided above;
(b) prepare and file with the SEC such
amendments and supplements to the Registration Statement and the
prospectus used in connection therewith as may be necessary to
keep the Registration Statement effective as provided above and to
comply with the provisions of the Securities Act with respect to
the sale or other disposition of all securities covered by the
Registration Statement (including prospectus supplements with
respect to the sales of securities from time to time in connection
with a registration statement pursuant to Rule 415 of the
Commission);
(c) supply copies of the Registration Statement
and any amendments thereto (it being understood that for purposes
of this Agreement, reports filed under the Exchange Act shall not
constitute part of, or an amendment to, the Registration
Statement) to each Holder prior to filing such document with the
SEC, and reasonably consult with such persons and their counsel
with respect to the form and content of such filing. The Company
will immediately amend such Registration Statement to include such
reasonable changes as the Holders reasonably agree should be
included therein;
(d) furnish to the Holders such numbers of
copies of a summary prospectus or other prospectus, including a
preliminary prospectus or any amendment or supplement to any
prospectus, in conformity with the requirements of the Securities
Act, and such other documents as the Holders may reasonably
request in order to facilitate the public sale or other
disposition of the securities owned by the Holders;
(e) use its best efforts to register and qualify
the securities covered by the Registration Statement under such
other securities or blue sky laws of such jurisdictions as the
Holders shall reasonably request, and do any and all other acts
and things which may be necessary or advisable to enable such
Holders to consummate the public sale or other disposition in such
jurisdictions of the securities owned by such Holders, except that
the Company shall not for any such purpose be required to qualify
to do business as a foreign corporation in any jurisdiction
wherein it is not so qualified, to file therein any general
consent to service of process or to be subject to any escrow or
other similar conditions;
(f) use its best efforts to list the Registrable
Securities on any securities exchange on which any securities of
the Company are then listed, if the listing of such securities is
then permitted under the rules of such exchange;
(g) enter into and perform its obligations under
an underwriting agreement, if the offering is an underwritten
offering, in usual and customary form, with the managing
underwriter or underwriters of such underwritten offering;
(h) notify the Holders at any time when a
prospectus relating thereto covered by the Registration Statement
is required to be delivered under the Securities Act, of the
happening of any event of which it has knowledge 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 a material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of the circumstances then existing;
(i) immediately notify each Holder (a) of the
issuance by the SEC of any stop order or order suspending the
effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose, or (b) of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any
jurisdiction, or the initiation of any proceedings for such
purpose. The Company, with the reasonable cooperation of the
Holders, shall make every reasonable effort to contest any such
proceedings and to obtain the withdrawal of any such order at the
earliest possible time;
(j) make earning statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158
thereunder generally available to its security holders as soon as
reasonably practicable, but in no event later than 45 days after
the end of any 12-month period commencing at the end of any fiscal
quarter in which Registrable Securities are sold;
(k) take such other actions as shall be
reasonably requested by any Holders to facilitate the registration
and sale of the Registrable Securities.
3. Exclusion of Certain Securities in Registration Statement; No
Other Registration Statements. The Company hereby represents, warrants and
agrees that other than the Registrable Securities it shall not allow or
permit any other securities of the Company to be included in the
Registration Statement; provided, however, that other securities may be
included in the Registration Statement at the request of the Company and
with the prior written consent of all the Holders, which consent shall not
be unreasonably withheld.
4. Expenses. All expenses incurred in any registration of the
Holder's Registrable Securities under this Agreement shall be paid by the
Company, including, without limitation, printing expenses, fees and
disbursements of counsel for the Company, the reasonable fees and
disbursements of one counsel for the Holders (which counsel the Company may
request be the Company's counsel if such counsel is reasonably acceptable
to the Holders and, if not, such counsel shall be selected by the Holders;
provided, however, that in the event the Holders retain separate counsel,
the reasonable fees and expenses to be reimbursed shall not exceed $1,000,
expenses of any audits to which the Company shall agree or which shall be
necessary to comply with governmental requirements in connection with any
such registration and expenses of complying with the securities or blue sky
laws of any jurisdictions pursuant to Section 2(d); provided, however, the
Company shall not be liable for any discounts or commissions to any
broker-dealer or underwriter selected by any Holder. At such time as the
Holders are permitted to resell the Registrable Securities pursuant to Rule
144 under the Securities Act, the Company shall bear the expense relating
to any legal opinion requested by the transfer agent of the Company in
order to effect such resale.
5. Indemnification,
(a) Company Indemnity. The Company shall
indemnify and hold harmless each Holder, the affiliates, officers,
directors and partners of each Holder, and each person, if any,
who controls such Holder (within the meaning of the Securities Act
or the Securities Exchange Act of 1934 (the "Exchange Act")),
against any losses, claims, damages or liabilities (joint or
several) to which they may become subject under the Securities
Act, the Exchange Act or other federal or state law, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation") :
(i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement including any
preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, or any state
securities law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any state securities law, and
in each case, the Company shall reimburse the Holder, affiliate,
officer or director or partner or controlling person for any legal
or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability
or action; provided, however, that the Company shall not be liable
to any Holder in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is
based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in
connection with such registration by the Holder or any other
officer, director or controlling person thereof. The Company will
also indemnify selling brokers, dealer managers and similar
securities industry professionals participating in the
distribution, their officers and directors and each Person who
controls such Persons (within the meaning of the Securities Act or
the Exchange Act) to the same extent as provided above with
respect to the indemnification of the Holders of Registrable
Securities.
(b) Holder Indemnity. The Holder shall indemnify
and hold harmless the Company, its affiliates, its counsel,
officers, directors, shareholders and representatives, any
underwriter (as defined in the Securities Act) and each person, if
any, who controls the Company or the underwriter (within the
meaning of the Securities Act or the Exchange Act) , against any
losses, claims, damages, or liabilities (joint or several) to
which they may become subject under the Securities Act, the
Exchange Act or any state securities law, and in each case the
Holder shall reimburse the Company, affiliate, officer or director
or shareholder, underwriter or controlling person for any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability
or action; insofar as such losses, claims, damages or liabilities
(or actions and respect thereof) arise out of or are based upon a
violation which occurs in reliance upon and in conformity with
written information furnished expressly by such Holder or any
other officer, director or controlling person thereof to the
Company in connection with the registration of Registrable
Securities. Notwithstanding the above, the Holder's
indemnification shall be limited to the dollar value of the
securities being registered for the account of the Holder.
(c) Notice; Right to Defend. Promptly after
receipt by an indemnified party under this Section 5 of notice of
the commencement of any action (including any governmental action)
, such indemnified party shall, if a claim in respect thereof is
to be made against any indemnifying party under this Section 5,
deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the
right to participate in and if the indemnifying party agrees in
writing that it will be responsible for any costs, expenses,
judgments, damages and losses incurred by the indemnified party
with respect to such claim, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however,
that an indemnified party shall have the right to retain its own
counsel in combination with other parties who have entered into
substantially identical agreements, with the fees and expenses to
be paid by the indemnifying party, if the indemnified party based
upon advice of counsel reasonably believes that representation of
such indemnified party by the counsel retained by the indemnifying
party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to
deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall
relieve such indemnifying party of any liability to the
indemnified party under this Agreement only if and to the extent
that such failure is prejudicial to its ability to defend such
action, and the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this
Agreement. There can be no settlement without the indemnifying
party's prior consent.
(d) Contribution. If the indemnification
provided for in this Agreement is held by a court of competent
jurisdiction to be unavailable to an indemnified party with
respect to any loss, liability, claim, damage or expense referred
to therein, then the indemnifying party, in lieu of indemnifying
such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such
loss, liability, claim, damage or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other
hand in connection with the statements or omissions which resulted
in such loss, liability, claim, damage or expense as well as any
other relevant equitable considerations. The relevant fault of the
indemnifying party and the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying
party or by the indemnified party and the parties' relative
intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. Notwithstanding the
foregoing, the amount the Holder shall be obligated to contribute
pursuant to the Agreement shall be limited to an amount equal to
the proceeds to the Holder of the Registrable Securities sold
pursuant to the Registration Statement which gives rise to such
obligation to contribute (less the aggregate amount of any damages
which the Holder has otherwise been required to pay in respect of
such loss, claim, damage, liability or action, or any
substantially similar loss, claim, damage, liability or action
arising from the sale of such Registrable Securities).
(e) Survival of Indemnity. The indemnification
provided by this Agreement shall be a continuing right to
indemnification and shall survive the registration and sale of any
Registrable Securities by any person entitled to indemnification
hereunder and the expiration or termination of this Agreement.
6. Reports Under Exchange Act. With a view to making available to
the Holders the benefits of Rule 144 promulgated under the Securities Act
and any other rule or regulation of the SEC that may at any time permit a
Holder to sell securities of the Company to the public without registration
generally or pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep adequate public information
available, as those terms are understood and defined in SEC Rule
144, at all times;
(b) use all reasonable commercial efforts to
qualify, and maintain qualification, for registration on Form S-3;
(c) file with the SEC in a timely manner all
reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(d) furnish to any Holder, so long as the Holder
owns any Registrable Securities, promptly upon request (i) a
written statement by the Company as to whether or not it has
complied with the reporting requirements of SEC Rule 144, the
Securities Act and the Exchange Act, or that it qualifies as a
registrant whose securities may be resold pursuant to Form S-3,
(ii) a copy of the most recent annual and/or quarterly report of
the Company and such other reports and documents so filed by the
Company as may be reasonably requested, and (iii) such other
information as may be reasonably requested in availing any Holder
of any rule or regulation of the SEC which permits the selling of
any such securities without registration or pursuant to such form.
7. Remedies.
(a) Time is of the Essence. The parties agree
that time is of the essence of each of the covenants contained
herein and that, in the event of a dispute hereunder, this
Agreement is to be interpreted and construed in a manner that will
enable the Holders to sell their Registrable Securities as quickly
as possible. Any delay on the part of any party not expressly
permitted under this Agreement shall be deemed a material breach
of this Agreement.
(b) Remedies Upon Default or Delay. The Company
acknowledges the breach of any part of this Agreement may cause
irreparable harm to the Holder and that monetary damages alone may
be inadequate. The Company therefore agrees that the Holder shall
be entitled to injunctive relief or such other applicable remedy
as a court of competent jurisdiction may provide. Nothing
contained herein will be construed to limit a Holder's right to
any remedies at law, including recovery of damages for breach of
any part of this Agreement.
8. No Inconsistent Agreements. The Company will not, on or after
the date of this Agreement, enter into any agreement with respect to its
securities that materially adversely affects the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions
hereof. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the
holders of the Company's securities under any agreement in effect on the
date hereof.
9. Notices. Any notice, request, instruction or other document to
be given hereunder by any party hereto to another party hereto shall be in
writing, shall be deemed to have been duly given or delivered when
delivered personally or telecopied (receipt confirmed, with a copy sent by
reputable overnight courier), or one business day after delivery to a
reputable overnight courier, postage prepaid, to the address of the party
set forth below such person's signature on this Agreement or to such
address as the party to whom notice is to be given may provide in a written
notice to each of the other parties to this Agreement, a copy of which
written notice shall be on file with the Secretary of the Company.
10. Successors and Assigns. Except as otherwise expressly provided
herein, this Agreement shall inure to the benefit of and be binding upon
the successors and permitted assigns of the Company and the Holder.
11. Amendment; Waiver and Termination. This Agreement may be
amended, and the observance of any term of this Agreement may be waived,
but only with the written consent of the company and the Holder. No delay
on the part of any party in the exercise of any right, power or remedy
shall operate as a waiver thereof, nor shall any single or partial exercise
by any party of any right, power or remedy preclude any other or further
exercise thereof , or the exercise of any other right, power or remedy.
12. Counterparts; Facsimile Delivery. One or more counterparts of
this Agreement may be signed by the Parties, each of which shall be an
original but all of which together shall constitute one and the same
instrument. Delivery of an executed counterpart of the signature page to
this Agreement by facsimile shall be effective as delivery of a manually
executed counterpart of this Agreement; provided, that any party so
delivering an executed counterpart by facsimile shall thereafter promptly
deliver a manually executed counterpart of this Agreement to the other
party, but failure to deliver such manually executed counterpart shall not
affect the validity, enforceability and binding effect of this Agreement.
13. Governing Law. This Agreement shall be construed in accordance
with and governed by the internal laws of the State of California, without
giving effect to conflicts of law principles.
14. Invalidity or Provisions. If any provision of this Agreement
is or becomes invalid, illegal or unenforceable. in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not be affected thereby.
15. Headings. The headings in this Agreement are for convenience
of reference only and shall not be deemed to alter or affect the meaning or
interpretation of any provisions hereof.
IN WITNESS WHEREOF, the undersigned have executed this Agreement
as of the date first set forth above.
ASHLAND INC. THE LI FAMILY TRUST
By: /s/ Xxxxx X. X'Xxxxx /s/ Xxxxxxx X. Xx
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Name: Xxxxx X. X'Xxxxx Xxxxxxx X. Xx, Trustee
Position: Senior Vice President Address: X.X. Xxx 0000
Address: 0000 Xxxxxx Xxxxxxx Xxxxxx Xxxxx Xx, XX 00000
Xxxxxxxxx, Xxxxxxxx 00000
/s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
Address: 0000 Xxxxx Xxxxxxx Xxxx
Xxxxx, XX 00000
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Address: 00000 Xxxxxx Xxx
Xxxxxxxx, XX 00000
