Exhibit 10.5
STANDSTILL AGREEMENT
Standstill Agreement dated as of May 8, 2003 (this "Agreement") between
American Access Technologies, Inc., a Florida corporation (the "Company") and
Chatsworth Products, Inc., a Delaware corporation ("CPI").
W I T N E S S E T H:
WHEREAS, pursuant to a Stock Purchase and Sale Agreement dated as of May 8,
2003 (the "Stock Purchase and Sale Agreement") between the Company and CPI, CPI
has agreed to purchase from the Company, and the Company has agreed to sell to
CPI, certain shares of newly issued shares of the Company's Common Stock, par
value $.001 per share ("Common Stock").
WHEREAS, the Company and CPI are entering into this Agreement to establish
certain arrangements with respect to the relationships between them.
WHEREAS, the Company believes that these arrangements will be in the best
interests of the Company and all of its stockholders.
NOW, THEREFORE, intending to be legally bound, the parties hereto agree as
follows:
Section 1. Certain Definitions. As used in this Agreement, the following
terms shall have the following meanings:
1.1 "Company Voting Securities" shall mean, collectively, Common Stock, any
preferred stock of the Company that is entitled to vote generally for the
election of directors, any other class or series of Company securities that is
entitled to vote generally for the election of directors and any other
securities, warrants, options or rights of any nature (whether or not issued by
the Company) that are convertible into, exchangeable for, or exercisable for the
purchase of, or otherwise give the holder thereof any rights in respect of,
Common Stock, Company preferred stock that is entitled to vote generally for the
election of directors, or any other class or series of Company securities that
is entitled to vote generally for the election of directors.
1.2 "Effective Date" means the date hereof.
1.3 The "Combined Voting Power" at any measurement date shall mean the
total number of votes which could have been cast in an election of directors of
the Company had a meeting of the stockholders of the Company been duly held
based upon a record date as of the measurement date if all Company Voting
Securities then outstanding and entitled to vote at such meeting were present
and voted to the fullest extent possible at such meeting.
1.4 The terms "beneficial ownership," "person" and "group" shall have the
respective meanings ascribed to such terms pursuant to Regulation 13D-G adopted
by the Securities and Exchange Commission (the "SEC") under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as in effect on the date
hereof. The term "affiliate" shall have the meaning
ascribed to such term pursuant to Rule 12b-2 under the Exchange Act, as in
effect on the date hereof.
1.5 "Chatsworth Group" means CPI and any persons or entities controlled by
or controlling CPI, collectively.
1.6 "Termination Date" means the earlier to occur of: (i) the date of
termination of that certain Manufacturing and Marketing Agreement of even date
hereof between the Company and CPI (the "Manufacturing and Marketing
Agreement"); or (ii) May 8, 2008.
Section 2. Representations and Warranties.
2.1 CPI represents and warrants to the Company as follows:
(a) CPI is a corporation duly organized, validly existing and in good
standing under the laws of Delaware. CPI has the power and authority to enter
into this Agreement and perform its obligations hereunder.
(b) This Agreement has been duly authorized, executed and delivered by CPI
and constitutes the legal, valid and binding agreement of CPI, enforceable
against it in accordance with the terms hereof.
(c) Neither the execution and delivery of this Agreement nor the
performance of its obligations hereunder will conflict with, or result in a
breach of, or constitute a default under, any law, rule, regulation, judgment,
order or decree of any court, arbitrator or governmental agency or
instrumentality, or of any agreement or instrument to which CPI is bound or by
which it is affected or of any charter documents of CPI .
(d) As of the Effective Date, no shares of Common Stock are currently
beneficially owned by any member of the Chatsworth Group, except for those
shares of Common Stock acquired pursuant to the Stock Purchase and Sale
Agreement.
2.2 The Company represents and warrants to CPI as follows:
(a) The Company is a validly existing corporation under the laws of the
Florida and has the corporate power and authority to enter into this Agreement
and perform its obligations hereunder.
(b) This Agreement has been duly authorized, executed and delivered by the
Company and constitutes the legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with the terms hereof.
(c) Neither the execution and delivery of this Agreement nor the
performance of its obligations hereunder will conflict with, or result in a
breach of, or constitute a default under, any law, rule, regulation, judgment,
order or decree of any court, arbitrator or governmental
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agency or instrumentality, or of any agreement or instrument to which the
Company is bound or by which it is affected or of any charter documents of the
Company.
Section 3. Covenants with Respect to the Company Voting Securities and
Other Matters.
3.1 Acquisition of Company Voting Securities. Except as the same may be
approved by the Board of Directors of the Company in a specific resolution to
that effect adopted prior to the taking of such action, prior to five years from
the date hereof, no member of the Chatsworth Group shall, directly or
indirectly, acquire, offer to acquire, agree to acquire, become the beneficial
owner of or obtain any rights in respect of any Company Voting Securities, by
purchase or otherwise, or take any action in furtherance thereof, if the effect
of such acquisition, agreement or other action would be (either immediately or
upon consummation of any such acquisition agreement or other action, or
expiration of any period of time provided in any such acquisition, agreement or
other action) to increase the aggregate beneficial ownership of Company Voting
Securities by the Chatsworth Group to such number of Company Voting Securities
that represents or possesses greater than 9.9% of the Combined Voting Power of
Company Voting Securities.
Notwithstanding the foregoing maximum percentage limitations, (A) no member
of the Chatsworth Group shall be obligated to dispose of any Company Voting
Securities beneficially owned in violation of such maximum percentage
limitations if, and solely to the extent that, its beneficial ownership is or
will be increased solely as a result of a repurchase of any Company Voting
Securities by the Company or any of its subsidiaries if such repurchase was
approved by the Board of Directors of the Company and (B) the foregoing shall
not prohibit any purchase of Company Voting Securities directly from the Company
(including pursuant to the exercise of rights, oversubscription rights or
standby purchase obligations in connection with rights offerings by the
Company). For purposes of calculating the maximum percentage limitations, all
Company Voting Securities that are the subject of an agreement, arrangement or
understanding pursuant to which the Chatsworth Group or any member thereof has
the right to obtain beneficial ownership of such securities in the future
(including, without limitation, the shares of Common Stock being sold after the
date hereof under the Stock Purchase and Sale Agreement as long as the Stock
Purchase and Sale Agreement constitutes a binding commitment to purchase and
sell those shares) shall also be deemed to be outstanding and beneficially owned
by the Chatsworth Group or the applicable member thereof. If the Manufacturing
and Distribution Agreement between the parties of even date herewith shall be
terminated, then the number "9.9%" set forth in this paragraph shall be adjusted
automatically to the percentage of Company Voting Securities owned by CPI as of
the date of such termination, but in no event shall such number be less than
9.9%.
3.2 Distribution of the Company Voting Securities.
(a) Except as the same may be approved by the Board of Directors of the
Company in a specific resolution to that effect adopted prior to the taking of
such action, no member of the Chatsworth Group shall, directly or indirectly,
sell, transfer any beneficial interest in, pledge, hypothecate or otherwise
dispose of any Company Voting Security prior to the Termination Date, in a
transaction that would result in a transfer to any person or group that, to the
knowledge
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of the Chatsworth Group, upon consummation of such sale, transfer or
disposition, would, directly or indirectly, have beneficial ownership of or the
right to acquire beneficial ownership of such number of Company Voting
Securities as represent greater than 9.9% of the Combined Voting Power, except
in response to certain tender or exchange offers as permitted by Section 3.2(b).
(b) Notwithstanding Section 3.2(a), on and after the eleventh business day
after commencement of a tender or exchange offer made by a person who is not a
member of the Chatsworth Group for outstanding Company Voting Securities (a
"Qualifying Offer"), any member of the Chatsworth Group may tender or exchange
any Company Voting Securities beneficially owned by it pursuant to such
Qualifying Offer if the Qualifying Offer shall have been approved by the Board
of Directors of the Company.
3.3 Proxy Solicitations, etc. Prior to the Termination Date, no member of
the Chatsworth Group shall solicit proxies, assist any other person in any way,
directly or indirectly, in the solicitation of proxies, become a "participant"
in a "solicitation" or assist any "participant" in a "solicitation" (as such
terms are defined in Rule 14a-1 of Regulation 14A under the Exchange Act) in
opposition to the recommendation of the Board of Directors of the Company,
submit any proposal for the vote of stockholders of the Company, recommend or
request or induce or attempt to induce any other person to take any such
actions, or seek to advise, encourage or influence any other person with respect
to the voting of Company Voting Securities, in each case without the prior
approval of the Board of Directors of the Company.
3.4 No Voting Trusts, Pooling Agreements, or Formation of "Groups". Except
as the same may be approved by the Board of Directors of the Company in a
specific resolution to that effect adopted prior to the taking of such action,
prior to the Termination Date, neither CPI nor any other member of the
Chatsworth Group shall form, join or in any other way participate in a
partnership, pooling agreement, syndicate, voting trust or other "group" other
than the Chatsworth Group with respect to Company Voting Securities, or enter
into any agreement or arrangement or otherwise act in concert with any other
person, for the purpose of acquiring, holding, voting or disposing of Company
Voting Securities.
3.5 No Solicitation of Bidders. Except as the same may be approved by the
Board of Directors of the Company in a specific resolution to that effect
adopted prior to the taking of such action, prior to the Termination Date no
member of the Chatsworth Group shall directly or indirectly assist, encourage or
induce any person to bid for or acquire outstanding Company Voting Securities
which would result in such other person, directly or indirectly, beneficially
owning in excess of 5.0% of the Combined Voting Power of Company Voting
Securities, provided, however, that the mere sale of Company Voting Securities
by any member of the Chatsworth Group shall not constitute assisting,
encouraging or inducing within the meaning of this Section 3.5.
3.6 Material Transactions. Prior to the Termination Date, no member of the
Chatsworth Group shall engage in any material transaction with the Company
without the prior approval of the Board of Directors of the Company.
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3.7 Non-Circumvention. Except as the same may be approved by the Board of
Directors of the Company in a specific resolution to that effect adopted prior
to the taking of such action, prior to the Termination Date no member of the
Chatsworth Group shall take any action, alone or in concert with any other
person, to seek control of the Company or otherwise seek to circumvent the
limitations of the provisions of Section 3 of this Agreement. Without limiting
the generality of the foregoing, without such approval no member of the
Chatsworth Group shall (i) present to the Company or to any third party any
proposal that can reasonably be expected to result in a change of control of the
Company or in any increase beyond the percentage specified in Section 3.1 in the
Combined Voting Power of Company Voting Securities beneficially owned in the
aggregate by the Chatsworth Group, (ii) publicly suggest or announce its
willingness or desire to engage in a transaction or group of transactions that
would result in a change of control of the Company or in any increase beyond the
percentage specified in Section 3.1 in the Combined Voting Power of Company
Voting Securities beneficially owned in the aggregate by the Chatsworth Group,
or (iii) initiate, request, induce or attempt to induce or give encouragement to
any other person to initiate any proposal that can reasonably be expected to
result in a change of control of the Company or in any increase beyond the
percentage specified in Section 3.1 in the Combined Voting Power of Company
Voting Securities beneficially owned in the aggregate by the Chatsworth Group.
3.8 Confidential Material.
(a) Definitions. For purposes of this Section:
(i) The term "Confidential Material" means all information, whether
oral, written or otherwise (including any information furnished prior to the
execution of this Agreement) , furnished by the Company to any member of the
Chatsworth Group or any of the Representatives (as defined below) , and all
notes, reports, analyses, compilations, studies and other materials prepared by
the Chatsworth Group or any of the Representatives (in whatever form maintained,
whether documentary, computer storage or otherwise) containing or based upon, in
whole or in part, any such information, and the fact that such information has
been delivered to the Chatsworth Group or any of its Representatives. The term
"Confidential Material" does not include information which is or becomes
generally available to the public other than as a result of a disclosure by any
member of the Chatsworth Group or any of the Representatives in violation of
this section or becomes available to any member of the Chatsworth Group or any
of the Representatives on a non-confidential basis from any source that is not
known by such member of the Chatsworth Group or such Representative to be bound
by an obligation of confidentiality to the Company.
(ii) The term "Representatives" shall mean any and all employees,
agents, financial advisors, partners, affiliates or other representatives of any
member of the Chatsworth Group.
(b) Each member of the Chatsworth Group and each of the Representatives
will preserve the confidentiality of the Confidential Material and will not
disclose any of the Confidential Material in any manner whatsoever; provided,
however, that (i) the Chatsworth Group may make any disclosure of such
information to which the Company gives its prior
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consent, and (ii) any of such information may be disclosed to the
Representatives who need to know such information, and who are informed of the
confidential nature of the Confidential Material and of the terms this Section
3.8 and who agree to keep such information confidential. In any event, the
Chatsworth Group will be responsible for any actions by the Representatives,
which are not in accordance with the provisions hereof.
(c) If any member of the Chatsworth Group or any of the Representatives are
requested or required (by oral questions, interrogatories, requests for
information or documents, subpoena, civil investigative demand, any informal or
formal investigation by any government or governmental agency or authority or
otherwise) to disclose any Confidential Material or such person's opinion,
judgment, view or recommendation concerning the Company as developed from the
Confidential Material, the Chatsworth Group agrees (i) to promptly notify the
Company of the existence, terms and circumstances surrounding such a request,
(ii) to the extent possible, to consult with the Company on the advisability of
taking legally available steps to resist or narrow such request and (iii) if
disclosure of such information is required, to furnish only that portion of the
Confidential Material which, in the opinion of counsel to the Chatsworth Group,
the Chatsworth Group is legally compelled to disclose, and to cooperate with any
action by the Company to obtain an appropriate protective order or other
reliable assurance that confidential treatment will be accorded the Confidential
Material.
(d) CPI hereby acknowledges on behalf of itself and all members of the
Chatsworth Group (and agrees to advise the Representatives and members of the
Chatsworth Group who are informed in accordance with the terms or this Section
3.8 as to the matters which are the subject of this Section 3.8), that the
United States securities laws prohibit, in certain circumstances, any person who
has received from an issuer material, non-public information, including certain
information that may be part of the Confidential Material, while such
information is non-public, from purchasing or selling securities of such issuer
or from communicating such information to any other person under circumstances
in which it is reasonably foreseeable that such person is likely to purchase or
sell such securities.
(e) This Section 3.8 shall survive until the earlier of the Termination
Date or two years following the date of termination of this Agreement.
3.9 Right of First Refusal. Until the Termination Date, any member of the
Chatsworth Group, unless the proposed sale is to take place on the NASDAQ Stock
Market or any other market or stock exchange where the Common Stock trades, the
following restrictions on sale shall apply and prior to the Chatsworth Group
making any such offer to sell, sale or transfer of Company Voting Securities,
shall give the Company the opportunity to purchase such Company Voting
Securities in the following manner:
(a) Any member of the Chatsworth Group intending to make such an offer,
sale or transfer shall give notice (the "Transfer Notice") to the Company in
writing of such intention specifying the number of Company Voting Securities
proposed to be disposed of and the proposed price therefor, and any specific
offer to purchase such Company Voting Securities theretofore received and then
remaining open, identifying the offeror and setting forth all the terms of such
offer (including price). For purposes hereof a bona fide third-party tender or
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exchange offer to purchase Company Voting Securities shall be deemed to be an
offer at the price specified therein, without regard to any provisions thereof
with respect to proration or conditions to the offeror's obligation to purchase.
(b) The Company shall have the right, exercisable by written notice given
by the Company to the party which gave the Transfer Notice within 10 business
days after receipt of such Notice (or in the case of a tender or exchange offer,
no later than 24 hours prior to the latest time by which Company Voting
Securities must be tendered in order to be accepted pursuant to such offer or to
quality for any proration applicable to such offer), to purchase all, but not a
part of, the Company Voting Securities specified in such Notice for cash at the
total purchase price set forth therein. If the purchase price specified in the
Transfer Notice includes property other than cash, such purchase price shall be
deemed to be the amount of any cash included in the purchase price plus the
value (as jointly determined by a nationally recognized investment banking firm
selected by each party or, in the event such firms are unable to agree, a third
nationally recognized investment banking firm to be selected by them) of such
other property included in such price. For this purpose:
(i) The parties shall use their best efforts to cause any determination of
the value of any securities included in the purchase price to be made within
three business days after the date of delivery of the Transfer Notice. If the
firms selected by CPI and the Company are unable to agree upon the value of any
such securities within such three-day period, the parties shall promptly select
a third firm whose determination shall be conclusive.
(ii) The parties shall use their best efforts to cause any determination of
the value of property other than securities to be made within seven business
days after the date of delivery of the Transfer Notice. If the firms selected by
CPI and the Company are unable to agree upon a value within such seven-day
period, the parties shall promptly select a third firm whose determination shall
be conclusive.
(iii) The date on which the Company must exercise its right of first
refusal shall be extended until three business days after the determination of
the value of property included in the purchase price if such property consists
solely of securities or ten business days after the determination of such value
if other property is included.
(c) If the Company exercises its right of first refusal hereunder, the
closing of the purchase of the Company Voting Securities with respect to which
such right has been exercised shall take place within 15 calendar days (or if
approval of such purchase by the Company's shareholders is required by law or
pursuant to any stock exchange rule or policy, within 60 calendar days) after
the Company gives notice of such exercise. Upon exercise of its right of first
refusal, the Company shall be legally obligated to consummate the purchase
contemplated thereby, shall use its best effort to secure all approvals required
in connection therewith.
(d) If the Company does not exercise its right of first refusal hereunder
within the time specified for such exercise, the party giving the Transfer
Notice shall be free during the period of 90 calendar days following the
expiration of such time for exercise to sell the Company Voting Securities
specified in such Notice to the offeror identified therein at the price
specified therein
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or at any price in excess thereof, provided, however, if the proposed sale is to
take place on the NASDAQ Stock Market or any other market or stock exchange
where the Common Stock trades, the following restrictions on such sale shall
apply to each such sale transaction:
(i) each such sale shall take place between 10:00 a.m. and 3:30 p.m.
Eastern time, and
(ii) each order to sell shall not be in excess of the amount of shares in
the highest bid price offered and for a price less than that contained in the
highest bid price, and
(iii) sales in any day will not exceed the number of shares reported as
sold in the prior trading day.
Section 4. Voting of Company Securities and Other Matters.
4.1. (a) Each member of the Chatsworth Group that is a holder of record of
Company Voting Securities shall be present, and each member of the Chatsworth
Group that is a beneficial owner of Company Voting Securities shall cause the
holder of record to be present, in person or by proxy, at all meetings of
stockholders of the Company so that all Company Voting Securities owned of
record or beneficially by the Chatsworth Group may be counted for the purpose of
determining the presence of a quorum at such meetings.
(b) Each member of the Chatsworth Group shall vote all Company Voting
Securities owned of record by such member of the Chatsworth Group and shall
cause all Company Voting Securities owned beneficially by such member of the
Chatsworth Group to be voted with respect to the election or removal of
directors of Company, and any other matter that may be presented to the
stockholders of the Company, other than matters that would result in a change of
control of the Company, in accordance with the recommendations of the Board of
Directors of the Company, provided, however, that notwithstanding the foregoing
any member of the Chatsworth Group may vote its Company Voting Securities with
respect to any matter presented to the stockholders of the Company that would
result in a change of control of the Company either (i) in favor of such matter
if such matter was recommended by a majority of the Company's Board of Directors
or (ii) against such matter.
4.2 Reports Under the Exchange Act. With a view to making available to the
Chatsworth Group the benefits of Rule 144 and any other rule or regulation of
the SEC that may at any time permit the Chatsworth Group to sell securities of
the Company to the public without registration or pursuant to a registration on
Form S-3, the Company agrees to:
(a) use its best efforts to make and keep public information available, as
those terms are understood and defined in Rule 144;
(b) use its best efforts to file with the SEC in a timely manner all
reports and other documents required under the Act and the Exchange Act; and
(c) furnish to any Holder forthwith upon request (i) a written statement by
the Company as to its compliance with the reporting requirements of Rule 144, or
as to whether it
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qualifies as a registrant whose securities may be resold pursuant to Form S-3,
(ii) a copy of the most recent annual or quarterly report of the Company and
such other reports and documents so filed by the Company, 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.
The parties agree that upon the date that Holder provides reasonable assurances
that the Company Voting Securities held by each member of the Chatsworth Group
can be sold pursuant to Rule 144, the Company shall permit the transfer and
within 48 hours of receipt of such assurances (the "Delivery Date"): (i)
instruct its transfer agent to issue one or more certificates, free from
restrictive legend, in such name and in such denominations as specified by the
Chatsworth Group; and (ii) deliver all required opinions and other documents and
otherwise cooperate with the Chatsworth Group in effecting such transfer (the
"Transfer Documents"). If the Company fails to timely deliver the Transfer
Documents, the Company agrees to instruct its transfer agent to accept Transfer
Documents prepared by CPI's counsel of choice in lieu of the Transfer Documents
to be prepared by the Company or its agents. The Company acknowledges that a
breach by it of its obligations hereunder will cause irreparable harm to the
Chatsworth Group, by vitiating the intent and purpose of the transactions
contemplated hereby. Accordingly, the Company acknowledges that the remedy at
law for a breach of its obligations under this Section 4.2 will be inadequate
and agrees, in the event of a breach or threatened breach by the Company of the
provisions of this Section, that the Chatsworth Group shall be entitled, in
addition to all other available remedies, to: (i) an injunction restraining any
breach and requiring immediate transfer, without the necessity of showing
economic loss and without any bond or other security being required; and (ii)
cash payments (the "Late Payments") as partial compensation for such delay or
reduction of the ability of the Chatsworth Group to sell Company Voting
Securities held by the Chatsworth Group (which remedy shall not be exclusive of
any other remedies available at law or in equity). The Late Payments will be
equal to the product of: (i) 2% of the purchase price paid for the Company
Voting Securities purchased by such the Chatsworth Group; (ii) multiplied by a
ratio the numerator of which is the number of Company Voting Securities
requested by the Chatsworth Group to be sold under Rule 144 and the denominator
of which is the aggregate number of the Company Voting Securities held by the
Chatsworth Group. The Late Payments will: (i) accrue each day after the Delivery
Date that the Company fails to perform under this section; (ii) be recalculated
on a daily basis; and (iii) be paid to the Chatsworth Group in cash by wire
transfer of immediately available funds within two business days after the
applicable due date.
Section 5. Registration Rights. The Company covenants and agrees as
follows:
5.1 Definitions. For purposes of this Section 5:
(a) The term "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act of 1933, as amended (the "Act").
(b) The term "Registrable Securities" means the shares of Common Stock
purchased from the Company pursuant to the Stock Purchase and Sale Agreement.
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(c) The term "Holder" means any member of the CPI Group who owns of record
Registrable Securities.
5.2 Request for Registration.
(a) If the Company shall at any time receive a written request from the
Holders of at least 500,000 shares of Common Stock that the Company file a
registration statement under the Act covering the registration of at least
500,000 shares of Common Stock, then the Company shall, within 10 days after the
receipt thereof, give written notice of such request to all Holders, and shall,
subject to the limitations of Section 5.2(b), effect as soon as practicable
after the receipt of such request the registration under the Act of all
Registrable Securities which the Holders request to be registered within 15 days
after the mailing of such notice by the Company in accordance with Section 9.3.
(b) If the Holders initiating the registration request hereunder
("Initiating Holders") intend to distribute the Registrable Securities covered
by their request by means of an underwriting, they shall so advise the Company
as a part of their request made pursuant to this Section 5.2 and the Company
shall include such information in the written notice referred to in Section
5.2(a). In such event, the right of any Holder to include Registrable Securities
in such registration shall be conditioned upon such Holder's participation in
such underwriting and the inclusion of such Holder's Registrable Securities in
the underwriting to the extent provided herein. All Holders proposing to
distribute Registrable Securities through such underwriting shall (together with
the Company as provided in Section 5.4(e)) enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting by the Initiating Holders and reasonably acceptable to the Company.
The Company at its sole discretion may offer a right to participate in any
registration statement filed pursuant to this Section 5.2 to other holders of
Common Stock, and may itself participate in any registration statement filed
pursuant to this Section 5.2. However, notwithstanding any other provision of
this Section 5.2, if the offering is an underwritten offering and the lead
managing underwriter advises the Initiating Holders in writing that marketing
factors require a limitation of the number of shares of Common Stock to be
underwritten, then (subject to any contrary provisions in registration rights
agreements executed by the Company prior to the date hereof) the total number of
shares of Common Stock to be underwritten shall be reduced, with such reduction
coming first from selling stockholders who are not Holders, and then from the
Company. If further reduction is required, the Company shall so advise all
Holders of Registrable Securities that would have otherwise been underwritten
pursuant hereto, and the number of shares of Registrable Securities that may be
included in the underwriting shall be allocated among all Holders thereof,
including the Initiating Holders, in proportion (as nearly as practicable) to
the amount of Registrable Securities sought to be registered by each Holder.
(c) The Company is obligated to effect only two such registrations pursuant
to this Section 5.2.
(d) Notwithstanding the foregoing, if the Company shall furnish to Holders
requesting a registration statement pursuant to this Section 5.2 a certificate
signed by the Chief
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Executive, Chief Operating, or Chief Financial Officer of the Company stating
that, in the good faith judgment of the Board of Directors of the Company, it
would be materially detrimental to the Company for such registration statement
to be filed, the Company shall have the right to defer such filing for a period
of not more than 120 days after receipt of the request of the Initiating
Holders; provided, however, that the Company may not utilize this right more
than twice in any 12-month period.
5.3 Piggyback Registration. If (but without any obligation to do so) the
Company proposes to register any of its Common Stock under the Act in connection
with the public offering of such Common Stock by the Company solely for cash
(other than a registration relating solely to the sale of securities to
participants in a dividend reinvestment plan, stock plan or employee benefit
plan; a registration relating solely to the issuance of securities to the
security holders of an acquired company in connection with an acquisition; or a
registration on any form which does not permit inclusion of selling
stockholders) , or the Company proposes to register any of its securities on
behalf of a holder exercising demand registration rights similar to those set
forth in Section 5.2, the Company shall, at such time, promptly give each Holder
written notice of such registration. Upon the written request of each Holder
given within 15 days after mailing of such notice by the Company in accordance
with Section 9.3, the Company shall, subject to the provisions of Section 5.8,
cause to be registered under the Act all of the Registrable Securities that each
such Holder has requested to be registered.
5.4 Obligations of the Company. Whenever required under this Section 5 to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with respect to
such Registrable Securities and use its reasonable efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder, keep such
registration statement effective for up to 120 days, or such other period as may
be required pursuant to Section 5.4(f) hereof.
(b) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities covered by
such registration statement under such other securities or Blue Sky laws of up
to two (2) states as shall be reasonably requested by the Holders, provided that
the Company shall not be required to qualify to do business or to file a general
consent to service of process in any such states.
11
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the underwriters of such offering. Each Holder participating in such
underwriting shall also enter into and perform its obligations under such an
agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such 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, and then
use its best efforts to promptly correct such statement or omission.
Notwithstanding the foregoing and anything to the contrary set forth in this
Section 5.4, each Holder acknowledges that there may occasionally be times when
the Company must suspend the use of the prospectus forming a part of the
registration statement until such time as an amendment to the registration
statement has been filed by the Company and declared effective by the SEC, or
until such time as the Company has filed an appropriate report with the SEC
pursuant to the Exchange Act. Each Holder hereby covenants that it will (a) keep
any such notice strictly confidential, and (b) not sell any shares of Common
Stock pursuant to such prospectus during the period commencing at the time at
which the Company gives the Holder notice of the suspension of the use of such
prospectus and ending at the time the Company gives the Holder notice that it
may thereafter effect sales pursuant to such prospectus. The Company shall only
be able to suspend the use of such prospectus for periods aggregating no more
than 60 days in respect of any registration and, in any event, the 120-day
period of effectiveness referred to in Section 5.4(a) shall be extended one day
for each day that sales are suspended under this Section 5.4(f).
5.5 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 5 with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities and as may be required from time to time to keep such registration
current.
5.6 Expenses of Demand Registration. All expenses incurred by or on behalf
of the Company in connection with registrations, filings or qualifications
pursuant to Section 5.2, including, without limitation, all registration, filing
and qualification fees, printers' and accounting fees, and fees and
disbursements of counsel for the Company, shall be borne by the Company;
provided, however, that the Company shall not be required to pay for any
expenses of any registration begun pursuant to Section 5.2 if the registration
request is subsequently withdrawn at the request of the Holders of a majority of
the Registrable Securities to be registered (in which case all participating
Holders shall reimburse the Company promptly for all such reasonable expenses).
In no event shall the Company be obligated to bear any underwriting discounts or
commissions relating to registrable Securities or the fees and expenses of
counsel to the selling Holders.
12
5.7 Expenses of Piggyback Registration. The Company shall bear and pay all
expenses incurred by or on behalf of the Company in connection with any
registration, filing or qualification of Registrable Securities with respect to
the registrations pursuant to Section 5.3 for each Holder, including, without
limitation, all registration, filing, and qualification fees, printing and
accounting fees and fees and disbursements of counsel for the Company relating
or allocable thereto, but excluding any underwriting discounts or commissions
relating to Registrable Securities and the fees and disbursements of counsel to
the selling Holders.
5.8 Underwriting Requirements. In connection with any offering involving an
underwriting of shares being issued by the Company, the Company shall not be
required under Section 5.3 to include any of the Holders' Registrable Securities
in such underwriting or the registration statement relating thereto unless they
accept the terms of the underwriting as agreed upon between the Company and the
underwriters selected by the Company. If the total amount of securities,
including Registrable Securities, requested by Holders and other stockholders to
be included in such offering exceeds the amount of securities offered other than
by the Company that the underwriters reasonably believe can be offered without
jeopardizing the success of the offering, then the Company shall be required to
include in the offering only that number of such securities, including
Registrable Securities, which the underwriters believe will not jeopardize the
success of the offering. To achieve any necessary reduction in the securities to
be sold, the securities to be excluded from the offering shall first be selected
(in each case, pro rata among such class of holders according to the total
amount of securities proposed to be included in the registration statement or in
such other proportions as shall mutually be agreed to by such class of holders)
in the following order (subject to any contrary provisions in registration
rights agreements executed by the Company prior to the date hereof): (i) first,
securities being included on behalf of holders other than members of the
Chatsworth Group shall be excluded, except for securities of holders referred to
in clause (iii) below; (ii) next, if additional securities must be excluded,
Registrable Securities included pursuant to Section 5.3 shall be excluded; (iii)
thereafter, if additional securities must be excluded, securities included on
behalf of a holder exercising demand registration rights similar to those set
forth in Section 5.2 shall be excluded; and (iv) finally, if additional
securities must be excluded, securities offered by the Company shall be
excluded.
5.9 Delay of Registration. No Holder shall have any right to obtain or seek
an injunction restraining or otherwise delaying any registration as the result
of any controversy that might arise with respect to the interpretation or
implementation of this Section 5.
5.10 Indemnification. In the event any Registrable Securities are included
in a registration statement under this Section 5:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless each Holder and the affiliates of such Holder, and their respective
directors, officers, general and limited partners, agents and representatives
(and the directors, officers, affiliates and controlling persons thereof) , and
each other person, if any, who controls such Holder within the meaning of the
Act, against any losses, claims, damages, or liabilities (joint or several) to
which they may become subject under the 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
13
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 such registration statement, including any
preliminary prospectus (but only if such statement is not corrected in the final
prospectus) contained therein or any amendments or supplements thereto and all
material incorporated therein, (ii) 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 (but only if such omission is not corrected in
the final prospectus) , or (iii) any violation or alleged violation by the
Company under the Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Act, the Exchange Act or any state securities
law relating to the offer or sale of securities; and the Company will pay to
each such Holder, affiliate or controlling person, as incurred, 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 indemnity agreement contained in this Section 5.10(a) shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company be liable 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 any such Holder or controlling
person. Each indemnified party shall furnish such information regarding itself
or the claim in question as an indemnifying party may reasonably request in
writing and as shall be reasonably required in connection with defense of such
claim and litigation resulting therefrom.
(b) To the extent permitted by law, each selling Holder will indemnify and
hold harmless the Company, each of its directors, each of its officers who has
signed the registration statement, each person, if any, who controls the Company
within the meaning of the Act, any underwriter, any other Holder selling
securities in such registration statement and any controlling person of any such
underwriter or other Holder, against any losses, claims, damages or liabilities
(joint or several) to which any of the foregoing persons may become subject,
under the Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereto) arise out
of or are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection
with such registration; and each such Holder will pay, as incurred, any legal or
other expenses reasonably incurred by any person intended to be indemnified
pursuant to this Section 5.10(b) in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section 5.10(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of such Holder, which consent shall
not be unreasonably withheld; provided, that, in no event shall any indemnity
under this section 5.10(b) exceed the gross cash proceeds actually received by
such Holder pursuant to any public offering of the Registrable Securities in
connection with such registration statement.
(c) Promptly after receipt by an indemnified party under this Section 5.10
of notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section
14
5.10, deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties. The failure to deliver written notice to
the indemnifying party within a reasonable time after the commencement of any
such action, if materially prejudicial to its ability to defend such action,
shall relieve such indemnifying party of any liability to the indemnified party
under this Section 5.10 to the extent of such prejudice, but 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
Section 5.10. The indemnified party shall have the right, but not the
obligation, to participate in the defense of any action referred to above
through counsel of its own choosing and shall have the right, but not the
obligation, to assert any and all separate defenses, cross claims or
counterclaims which it may have, and the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the employment of such
counsel has been specifically authorized in advance by the indemnifying party,
(ii) there is a conflict of interest that prevents counsel for the indemnifying
party from adequately representing the interests of the indemnified party or
there are defenses available to the indemnified party that are different from,
or additional to, the defenses that are available to the indemnifying party,
(iii) the indemnifying party does not employ counsel that is reasonably
satisfactory to the indemnified party, or (iv) the indemnifying party fails to
assume the defense or does not reasonably contest such action in good faith, in
which case, if the indemnified party notifies the indemnifying party that it
elects to employ separate counsel, the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party
and the reasonable fees and expenses of such separate counsel shall be borne by
the indemnifying party; provided, however, that, the indemnifying party shall
not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm (in addition to one firm acting as local counsel) for all
indemnified parties. Whether or not such defense is assumed by the indemnifying
party, such indemnified party shall not be subject to any liability for any
settlement made without its consent. The indemnifying party shall not consent to
entry of any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release, in form and substance reasonably satisfactory to
the indemnified party, from all liability in respect of such claim or litigation
for which such indemnified party would be entitled to indemnification hereunder.
(d) If the indemnification provided for in this Section 5.10 is unavailable
to an indemnified party in respect of any Violation (other than in accordance
with its terms), then each applicable 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 Violations, in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party, on the one hand, and such indemnified party, on the other hand, in
connection with the actions, statements or omissions that resulted in such
Violations as well as any other relevant equitable considerations. The relative
fault of such indemnifying party, on the one hand, and indemnified party, on the
other hand, shall be determined by reference to, among other things, whether any
action in question, including any untrue statement of a material fact or
omission or alleged omission to state a material fact, has been taken by, or
relates to information supplied by, such indemnifying party or indemnified
party, and the parties' relative intent, knowledge, access to
15
information and opportunity to correct or prevent any such action, statement or
omission. The amount paid or payable by a party as a result of any Violations
shall be deemed to include any legal or other fees or expenses 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 5.10(d) were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in the immediately preceding paragraph. Notwithstanding the provisions of
this Section 5.10(d), an indemnifying party that is a Holder shall not be
required to contribute any amount which is in excess of the amount by which the
total proceeds received by such Holder from the sale of the Registrable Shares
sold by such Holder (net of all underwriting discounts and commissions) exceeds
the amount of any damages that such indemnifying party has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. 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.
(e) The obligations of the Company and the holders under this Section 5.10
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 5.
(f) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement (if
any) entered into in connection with any underwritten public offering of the
Registrable Securities are in conflict with the foregoing provisions, the
provisions in such underwriting agreement shall control.
5.11 No Assignment of Registration Rights. The rights to cause the Company
to register Registrable Securities pursuant to this Section 5 may only be
assigned by a Holder to a transferee or assignee of any Registrable Securities
if (i) such transferee or assignee is a member of the Chatsworth Group and (ii)
immediately following such transfer the further disposition of such securities
by the transferee or assignee is restricted under the Act.
5.12 Waiver Procedures. The observance by the Company of any provision of
this Section 5 may be waived (either generally or in a particular instance and
either retroactively or prospectively) with the written consent of the Holders
of a majority of the Registrable Securities, and any waiver effected in
accordance with this paragraph shall be binding upon each Holder of Registrable
Securities.
5.13 "Market Stand-off" Agreement. Any Holder of Registrable Securities, if
requested by an underwriter of any registered public offering of Company
securities being sold in a firm commitment underwriting, agrees not to sell or
otherwise transfer or dispose of any Common Stock (or other Company Voting
Securities) held by such Holder other than shares of Registrable Securities
included in the registration during the seven days prior to, and during a period
of up to 120 days following, the effective date of the registration statement.
Such agreement shall be in writing in a form reasonably satisfactory to the
Company and such underwriter. The Company may impose stop- transfer instructions
with respect to the securities subject to the foregoing restriction until the
end of the required stand-off period.
16
Section 6. Term of Agreement; Certain Provisions Regarding Termination.
Unless this Agreement specifically provides for earlier or later termination
with respect to any particular right or obligation, this Agreement shall
terminate if the Chatsworth Group shall, at any time (in compliance with this
Agreement), sell or otherwise dispose of or otherwise cease to own Company
Voting Securities such that the Chatsworth Group beneficially owns in the
aggregate Company Voting Securities representing less than 2% of the Combined
Voting Power of all Company Voting Securities (calculated in accordance with
Section 3.1 and including the shares of Common Stock which may be acquired from
the Company pursuant to the Stock Purchase and Sale Agreement as long as such
agreement is in effect). Notwithstanding the foregoing, the obligations of the
Company and the Holder under Sections 5 through and including 9 shall terminate
on the first date on which no Registrable Securities remain outstanding.
Section 7. Legend and Stop Transfer Order. To assist in effectuating the
provisions of this Agreement, CPI hereby consents (i) to the placement, in
connection with the transactions contemplated by the Stock Purchase and Sale
Agreement or otherwise within 10 business days after any Company Voting
Securities become subject to the provisions of this Agreement, of the legend
specified in Section 4.10(b) of the Stock Purchase and Sale Agreement on all
certificates representing ownership of Company Voting Securities owned of record
or beneficially by any member of the Chatsworth Group, until such shares are
sold, transferred or disposed in a manner permitted hereby to a person who is
not then a member of the Chatsworth Group, and (ii) to the entry of stop
transfer orders with the transfer agent or agents of Company Voting Securities
against the transfer of Company Voting Securities except in compliance with the
requirements of this Agreement.
Section 8. Remedies.
(a) CPI and the Company acknowledge and agree that (i) the provisions of
this Agreement are reasonable and necessary to protect the proper and legitimate
interests of the parties hereto, and (ii) the parties would be irreparably
damaged in the event any of the provisions of this Agreement were not performed
in accordance with their specific terms or were otherwise breached. It is
accordingly agreed that, except as otherwise provided in Section 5.9 hereof,
each party shall be entitled to preliminary and permanent injunctive relief to
prevent breaches of the provisions of this Agreement by the other party (or its
affiliates) without the necessity of proving actual damages or of posting any
bond, and to enforce specifically the terms and provisions hereof and thereof in
any court of the United States or any state thereof having jurisdiction, which
rights shall be cumulative and in addition to any other remedy to which the
parties may be entitled hereunder or at law or equity.
(b) In addition to any other remedy the Company may have under this
Agreement or in law or equity, if any member of the Chatsworth Group shall
acquire or transfer any Company Voting Securities in violation of this
Agreement, such Company Voting Securities which are in excess of the number
permitted to be owned or controlled by the Chatsworth Group or which have been
transferred by a member of the Chatsworth Group in violation of the provisions
of this Agreement may not be voted by the owner thereof or any proxy therefor.
17
Section 9. General Provisions.
9.1 Consent to Jurisdiction; Service of Process. This agreement shall be
governed by and interpreted and enforced in accordance with the laws of the
State of Florida without giving effect to any conflicts of law provisions. Each
of the parties hereto irrevocably and unconditionally (a) agrees that any suit,
action or other legal proceeding (collectively, "suit") arising out of this
agreement shall be brought and adjudicated in the United States District Court
for the Middle District of Florida or, if such court will not accept
jurisdiction, in any court of competent civil jurisdiction sitting in the State
of Florida, (b) submits to the jurisdiction of any such court for the purposes
of any such suit and (c) waives and agrees not to assert by way of motion, as a
defense or otherwise in any such suit, any claim that it is not subject to the
jurisdiction of the above courts, that such suit is brought in an inconvenient
forum or that the venue of such suit is improper. Each of the parties also
irrevocably and unconditionally consents to the service of any process,
pleadings, notices or other papers in a manner permitted by the notice
provisions of Section 9.3.
9.2 Additional Chatsworth Group Parties; Joint and Several Obligations. All
of the obligations of the Chatsworth Group and its members hereunder shall be
joint and several. Each member of the Chatsworth Group that shall become or have
the right to become the beneficial owner, within the meaning and scope of
Section 3.1 hereof, of Company Voting Securities shall, promptly upon becoming
such owner or holder, execute and deliver to the Company a joinder agreement,
agreeing to be legally bound by this Agreement to the same extent as if it had
signed this Agreement as an original signatory as a member of the Chatsworth
Group; provided that failure to execute such an agreement shall not excuse such
member's noncompliance with any provision of this Agreement. No member of the
Chatsworth Group shall transfer securities to another member of the Chatsworth
Group unless the transferee shall agree to be bound by this Agreement in the
manner specified above in this Section 9.2.
9.3 Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been given or made when
delivered personally or by facsimile (with written confirmation of receipt) or
three business days after having been sent by registered or certified mail,
postage prepaid, return receipt requested, or one business day after having been
sent by Federal Express or other comparable nationally recognized overnight
courier service (receipt requested), as follows:
If to the Company: American Access Technologies, Inc.
0000 Xxxxxx Xx.
Xxxxxxxx, XX 00000
Attention: President
Fax: (___)
----------------
With a copy to: Xxxx Xxxxxxxxx, Esq.
00000 Xxxxxxxx Xxxx.
Xxxxx 000
Xxxxx, XX 00000
Fax: (___)
----------------
18
If to CPI or any member of the Chatsworth Group:
Chatsworth Products, Inc.
00000 Xxxxxx Xxxx
Xxxxxxxx Xxxxxxx, XX 00000-0000
Attn: Chief Executive Officer
Fax: 000-000-0000
With a copy to: Xxxxxxx X. Xxxx, Esq.
Xxxx, Forward, Xxxxxxxx & Scripps LLP
00000 Xxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Fax: 000-000-0000
or to such other address as may be specified in a notice given pursuant to this
Section 9.3.
9.4 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. The parties hereto agree that they will use
their best efforts at all times to support and defend this Agreement.
9.5 Amendments. This Agreement may be amended only by an agreement in
writing signed by each of the parties hereto; provided, however, that any
amendment executed by the Company must prior thereto be approved by the Board of
Directors of the Company then in office.
9.6 Descriptive Headings. Descriptive headings are for convenience only and
shall not control or affect the meaning or construction of any provision of this
Agreement.
9.7 Counterparts; Facsimile Signatures. This Agreement shall become binding
when one or more counterparts hereof, individually or taken together, bears the
signatures of each of the parties hereto. This Agreement may be executed in any
number of counterparts, each of which shall be an original as against the party
whose signature appears thereon, or on whose behalf such counterpart is
executed, but all of which taken together shall be one and the same agreement. A
facsimile copy of a signature of a party to this Agreement or any such
counterpart shall be fully effective as if an original signature.
9.8 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the successors and assigns of the
parties hereto.
9.9 Adjustments Affecting Registrable Shares. The Company shall not take
any action, or permit any change to occur, with respect to the Registrable
Shares, which would adversely affect the ability of the Holders of Registrable
Shares to include such Registrable Shares in a registration undertaken pursuant
to this Agreement.
19
9.10 No Inconsistent Agreements. The Company shall not on or after the date
of this Agreement enter into any agreement with respect to its securities, which
is inconsistent with or limits or impairs the rights granted to the Holder in
this Agreement or otherwise conflicts with the provisions hereof.
9.11 Attorneys' Fees. If attorneys' fees or other costs are incurred to
secure performance of any obligations hereunder, or to establish damages for the
breach thereof or to obtain any other appropriate relief, whether by way of
prosecution or defense, the prevailing party will be entitled to recover
reasonable attorneys' fees and costs incurred in connection therewith, including
on appeal therefrom.
IN WITNESS WHEREOF, the parties hereto intending to be legally bound have
duly executed this Agreement, all as of the day and year first above written.
Company:
CHATSWORTH PRODUCTS, INC.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
AMERICAN ACCESS TECHNOLOGIES, INC.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
20
