AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
This Amended and Restated Registration Rights Agreement (this
"Agreement"), dated as of May 25, 2006, by and among World Waste Technologies,
Inc., a California corporation (the "Company") and the individuals and entities
set forth on Exhibit A hereto (the "Preferred Holders").
RECITALS
A. The Company has previously entered into that certain Registration
Rights Agreement (the "Prior Registration Rights Agreement") dated April 28,
2005 with certain of the Preferred Holders (the "Series A Holders"), pursuant to
a Securities Purchase Agreement dated April 28, 2005 entered into between the
Company and the Series A Holders (the "Original Purchase Agreement").
B. Concurrently with the execution of this Agreement, the Company is
entering into Securities Purchase Agreements (collectively, the "Purchase
Agreement") with certain investors (the "Series B Holders") pursuant to which
the Series B Holders have agreed to purchase an aggregate of up to 161,000
shares of the Company's 8% Series B Cumulative Redeemable Convertible Preferred
Stock (the "Series B Preferred Stock"), together with warrants to purchase
shares of Common Stock (the "Warrants").
C. The Prior Registration Rights Agreement provides that it may be amended
by the written agreement of the Company and the holders of at least a majority
of the Registrable Shares then outstanding.
D. The parties to this Agreement include the holders of at least a
majority of the outstanding Registrable Shares.
E. To satisfy a condition to the closing of the transactions contemplated
by the Securities Purchase Agreement, the Series A Holders party hereto and the
Company desire to amend and restate the Prior Registration Rights Agreement as
provided for herein, and in so doing, to supersede the Prior Registration Rights
Agreement in its entirety.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
obligations hereinafter set forth, the Company and the Holders hereby agree as
follows:
Section 1. Definitions.
As used in this Agreement, the following terms shall have the following
meanings:
(a) "Closing Deadline" means May 25, 2006.
(b) "Commission" means the Securities and Exchange Commission or any
other Federal agency at the time administering the Securities Act.
(c) "Common Stock" means the common stock of the Company.
(d) "Effectiveness Date" means the one hundred eightieth (180th) day
after the Closing Deadline.
(e) "Exchange Act" means the Securities Exchange Act of 1934 or any
successor Federal statute, and the rules and regulations of the Commission
promulgated thereunder, all as the same shall be in effect from time to time.
(f) "Filing Date" means the sixtieth (60) day after the Closing
Deadline.
(g) "Holders" means the Series A Holders, the Series B Holders and
the Insiders, collectively.
(h) "Insiders" means the individuals and entities set forth on
Exhibit B hereto.
(i) "Insider Shares" means the Registrable Shares held by the
Insiders.
(j) "Other Shares" means at any time those shares of Common Stock
which do not constitute Primary Shares or Restricted Shares.
(k) "Person" shall be construed broadly and shall include an
individual, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
(l) "Preferred Stock" means the Series A Preferred Stock and the
Series B Preferred Stock, collectively.
(m) "Primary Shares" means at any time the authorized but unissued
shares of Common Stock and shares of Common Stock held by the Company in its
treasury.
(n) "Qualified Public Offering" means the sale of the Company's
Common Stock in a public offering underwritten by an investment bank reasonably
acceptable to the holders of a majority of the then-outstanding shares of
Preferred Stock, registered under the Securities Act with a per share price to
the public of at least $5.00 per share (as adjusted for any stock dividends,
combination or splits with respect to such shares) and for a total gross
offering amount of at least $20 million, other than a registration relating
solely to a transaction under Rule 145 under the Securities Act (or any
successor thereto) or to an employee benefit plan of the Company.
(o) "Registrable Shares" means at any time, with respect to the
Holders, the shares of Common Stock (including the shares of Common Stock
issuable upon conversion of the Preferred Stock and exercise of the Warrants)
held by or issuable to the Preferred Holders which constitute Restricted Shares
and the shares of Common Stock held by the Insiders which constitute Restricted
Shares.
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(p) "Restricted Shares" means (i) shares of Common Stock held by or
issuable to the Preferred Holders, including shares issuable upon the conversion
of shares of Preferred Stock and exercise of the Warrants or issued to a
Preferred Holder pursuant to the terms thereof and any other securities which by
their terms are exercisable or exchangeable for or convertible into Common Stock
or other securities which are so exercisable or convertible and any securities
received in respect thereof, which are held by the Preferred Holders; and (ii)
Insiders Shares and any other securities which by their terms are exercisable or
exchangeable for or convertible into Common Stock or other securities which are
so exercisable or convertible and any securities received in respect thereof,
which are held by the Insiders. As to any particular Restricted Shares, once
issued, such Restricted Shares shall cease to be Restricted Shares when (i) they
have been registered under the Securities Act, the registration statement in
connection therewith has been declared effective and they have been disposed of
pursuant to such effective registration statement, (ii) they are eligible to be
sold or distributed pursuant to Rule 144(k) of the Securities Act without
notice, manner of sale or volume limitations, or (iii) they shall have ceased to
be outstanding.
(q) "Securities Act" means the Securities Act of 1933, as amended or
any successor Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
Section 2. Registration.
The Company shall prepare and file, on or prior to the Filing Date, a
registration statement with the Commission under the Securities Act covering the
resale of the Registrable Shares, and shall cause such registration statement to
be declared effective under the Securities Act as promptly as possible
thereafter, but in no event later than the Effectiveness Date, and shall,
subject to clause (b) below, keep such registration statement effective until
such time as all Restricted Shares beneficially owned by the Preferred Holders
shall have been sold pursuant thereto or such shares no longer constitute
Restricted Shares and all restrictive legends and any stop transfer instructions
relating thereto have been removed therefrom, from this Agreement, the Original
Purchase Agreement, the Purchase Agreement and the Warrants.
Notwithstanding the foregoing:
(a) the Company shall not be obligated to file and cause to become
effective (i) more than one registration statement, or (ii) any registration
statement during any period in which any other registration statement (other
than on Form S-8 promulgated under the Securities Act or any successor forms
thereto) pursuant to which Primary Shares are to be or were sold has been filed
and not withdrawn or has been declared effective within the prior ninety (90)
days provided, however, that notwithstanding the forgoing, once the registration
statement referred to in the first paragraph of this Section 2 shall have become
effective the Company shall, subject to clause (b) below, amend and supplement
such registration statement as may be necessary to maintain the effectiveness
thereof;
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(b) the Company may delay the filing or effectiveness of any
registration statement or suspend the sale of Restricted Shares under a
registration statement pursuant to this Section 2 if (i) the Company is engaged,
or has fixed plans to engage within ninety (90) days of the time of such
request, in a Qualified Public Offering of Primary Shares, or (ii) there is
material non-public information regarding the Company which the Company's Board
of Directors (the "Board") reasonably determines not to be in the Company's best
interest to disclose and which the Company is not otherwise required to
disclose, or (iii) there is a significant business opportunity (including, but
not limited to, the acquisition or disposition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender offer or other
similar transaction) available to the Company which the Board reasonably
determines not to be in the Company's best interest to disclose which the
Company is not otherwise required to disclose and which the Company would be
required to disclose under the registration statement, or (iv) the Company
reasonably determines that such registration and offering would interfere with
any material transaction involving the Company, as approved by the Board or
would impair in any manner the registration rights granted to holders of Other
Shares prior to the date of this Agreement; provided, however, that no such
delay or suspension shall exceed 30 days and all delays and suspensions pursuant
to this paragraph (b) shall not exceed 90 days in any 360 day period;
(c) with respect to the registration pursuant to this Section 2, the
Company shall give notice of such registration to the Insiders and the holders
of all Other Shares which are entitled to registration rights under a written
agreement with the Company that would permit such holders to be included in such
registration, and the Company may include in such registration any shares held
by such holders, as well as Primary Shares, provided that, notwithstanding
anything to the contrary in this Agreement, as between the Company and the
Preferred Holders, any additional cost of including any such shares shall be the
responsibility of the Company; and provided, further, however, that if the
method of disposition selected by the Preferred Holders is an underwritten
public offering and the managing underwriter of such offering advises the
Company that the inclusion of all shares proposed to be included in such
registration would interfere with the successful marketing (including pricing)
of the Restricted Shares proposed to be included in such registration, then the
number of shares proposed to be included in such registration shall be included
in the following order:
(i) first, the Registrable Shares held by (x) the Preferred
Holders, (y) any other holders of Series B Preferred Stock which are entitled to
registration rights under a written agreement with the Company that would permit
such holders to be included in such registration and (z) the holders of any
Other Shares which are, as of the date hereof, entitled to registration rights
under a written agreement with the Company that would permit such holders to be
included in such registration (or, if necessary, such Registrable Shares pro
rata among the holders thereof);
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(ii) second, the remaining Other Shares which are entitled to
registration rights; and
(iii) third, the Insider Shares.
(d) Without the consent of a majority in interest of the Holders of
Registrable Shares participating in a registration referred to in this Section
2, no securities other than Registrable Shares held by Preferred Holders shall
be covered by such registration if the inclusion of such other securities would
result in a reduction of the number of Registrable Shares covered by such
registration or included in any underwriting or if, in the opinion of the
managing underwriter, the inclusion of such other securities would adversely
impact the marketing of such offering;
(e) if the method of disposition requested by the Preferred Holders
is an underwritten public offering, the Company shall have the right approve the
underwriters of such offering as designated by the Preferred Holders, such
approval not to be unreasonably withheld (it being agreed that a regional or
nationally recognized investment bank shall be acceptable to the Company); and
(f) at any time before the registration statement covering
Restricted Shares becomes effective, the Preferred Holders may request the
Company to withdraw or not to file the registration statement. In order to count
as the registration to be effected pursuant to this Section 2, the registration
statement in respect thereof must have not been withdrawn and all Registrable
Shares held by Preferred Holders must have been so included on an effective
registration statement. Notwithstanding the foregoing, if such withdrawal or
failure to include such shares shall not have been caused by, or made in
response to, a Material Adverse Effect, the Preferred Holders shall be deemed to
have used their registration rights under this Agreement and the Company shall
no longer be obligated to register such Restricted Shares.
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Section 3. Failure to File Registration Statement and Other Events. The
Company and the Preferred Holders agree that the Preferred Holders will suffer
damages if the registration statement is not filed on or prior to the Filing
Date or is not declared effective by the Commission on or prior to the
Effectiveness Date and maintained in the manner contemplated herein during the
Effectiveness Period. The Company and the Preferred Holders further agree that
it would not be feasible to ascertain the extent of such damages with precision.
Accordingly, if (i) the registration statement is not filed on or prior to the
Filing Date, (ii) is not declared effective by the Commission on or prior to the
Effectiveness Date, or (iii) the registration statement is filed with and
declared effective by the Commission but thereafter ceases to be effective at
any time that it is required to be so effective other than as contemplated by,
and then only to the extent in excess of the period permitted by, clause (b) of
Section 2, without being succeeded within a reasonable period by a subsequent
registration statement filed with and declared effective by the Commission (any
such failure or breach being referred to as an "Event"), the Company shall pay
as liquidated damages for such failure or breach and not as a penalty (the
"Liquidated Damages") to each Preferred Holder an amount equal to one percent
(1%) of the purchase price of the shares of Preferred Stock then held by such
Preferred Holder for each thirty (30) day period during which any Event
described in subsections (i), (ii) or (iii) above occurs and is continuing, pro
rated for any period less than thirty (30) days, following the Event until the
applicable Event has been cured; provided, however, the Preferred Holders shall
conclusively be deemed to have waived any Liquidated Damages resulting from the
registration statement ceasing to remain effective after being declared
effective by the Commission if the Company cures such breach prior to the end of
the first thirty (30) day period thereafter. Notwithstanding the foregoing, in
no event shall the Company be required to pay Liquidated Damages to any
Preferred Holder in excess of six percent (6%) of the purchase price of the
shares of Preferred Stock held by such Preferred Holder. Payments to be made
pursuant to this Section 3 shall be due and payable immediately upon demand and
all Liquidated Damages shall be paid by the issuance by the Company of a number
of additional fully paid non-assessable shares of Series B Preferred Stock, in
the case of Series B Holders, and Series A Preferred Stock, in the case of
Series A Holders, in the name of the registered Holder equal to the amount of
Liquidated Damages due divided by the purchase price per share of Preferred
Stock (as adjusted for any stock split, reverse stock split, reclassification,
or similar event). The parties agree that the Liquidated Damages represent a
reasonable estimate on the part of the parties, as of the date of this
Agreement, of the amount of damages that may be incurred as a result of an
Event. The remedies provided in this Agreement and the Purchase Agreement are
cumulative and not exclusive of any remedies provided by law. In the event of a
breach by the Company or by the Holders of any of their obligations under this
Agreement, the Holders or the Company, as the case may be, in addition to being
entitled to exercise all rights granted by law and under this Agreement,
including recovery of damages, will be entitled to specific performance of their
rights under this Agreement. The Company and the Holders agree that monetary
damages would not provide adequate compensation for any losses incurred by
reason of a breach by it of any of the provisions of this Agreement and hereby
further agrees that, in the event of any action for specific performance in
respect of such breach, it shall waive the defense that a remedy at law would be
adequate.
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Section 4. Preparation and Filing.
If and whenever the Company is under an obligation pursuant to the
provisions of this Agreement to effect the registration of any Restricted
Shares, the Company shall:
(a) subject to the provisions of Section 2, cause a registration
statement that registers such Restricted Shares to become and remain effective
until all of such Restricted Shares have been disposed of or the such shares are
no longer Restricted Shares;
(b) furnish, at least five business days before filing a
registration statement that registers such Restricted Shares, a prospectus
relating thereto or any amendments or supplements relating to such a
registration statement or prospectus, to one counsel selected by the Preferred
Holders, on behalf of the Preferred Holders (the "Holders' Counsel"), and copies
of all such documents proposed to be filed (it being understood that such
five-business-day period need not apply to successive drafts of the same
document proposed to be filed so long as such successive drafts are supplied to
the Holders' Counsel in advance of the proposed filing by a period of time that
is customary and reasonable under the circumstances);
(c) subject to the provisions of Section 2, prepare and file with
the Commission such amendments and supplements to such registration statement
and the prospectus used in connection therewith as may be necessary to keep such
registration statement effective for the period set forth above in (a) or until
all of such Restricted Shares have been disposed of (if earlier) and to comply
with the provisions of the Securities Act with respect to the sale or other
disposition of such Restricted Shares;
(d) notify in writing the Holders' Counsel promptly (i) of the
receipt by the Company of any notification with respect to any comments by the
Commission with respect to such registration statement or prospectus or any
amendment or supplement thereto or any request by the Commission for the
amending or supplementing thereof or for additional information with respect
thereto, (ii) of the effectiveness of such registration statement or any
post-effective amendment thereto, (iii) of the receipt by the Company of any
notification with respect to the issuance by the Commission of any stop order
suspending the effectiveness of such registration statement or prospectus or any
amendment or supplement thereto or the initiation or threatening of any
proceeding for that purpose and (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of such
Restricted Shares for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purposes;
(e) use commercially reasonable efforts to obtain the withdrawal of
any order suspending the effectiveness of the registration statement;
(f) use commercially reasonable efforts to register or qualify such
Restricted Shares under such other securities or blue sky laws of such
jurisdictions as the Holders reasonably requests and do any and all other acts
and things which may be reasonably necessary or advisable to enable the Holders
to consummate the disposition in such jurisdictions of the Restricted Shares
owned by the Holders; provided, however, that the Company will not be required
to qualify generally to do business, subject itself to general taxation or
consent to general service of process in any jurisdiction where it would not
otherwise be required to do so but for this paragraph;
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(g) furnish to the Holders at least one signed and such additional
number of copies of such registration statement and of each amendment and
supplement thereto (in each case including all exhibits), such number of copies
of the prospectus, including a preliminary prospectus, if any, 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 such Restricted Shares;
(h) notify the Holders on a timely basis at any time when a
prospectus relating to such Restricted Shares is required to be delivered under
the Securities 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 light of the circumstances then existing and prepare and furnish
to the Holders a reasonable number of copies of a supplement to or an amendment
of such registration statement or prospectus as may be necessary so that, as
thereafter delivered to the offerees of such shares, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading;
(i) 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 managing underwriter of such offering;
(j) furnish to any Holder on the date that such Registrable Shares
are delivered to the underwriters for sale in connection with a registration
pursuant to this Agreement, if such securities are being sold through
underwriters, or, if such securities are not being sold through underwriters, on
the date that the registration statement with respect to such securities becomes
effective, an opinion, dated such date, of the counsel representing the Company
for the purposes of such registration, in form and substance as is customarily
given to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and to the Holders;
(k) on the date that the registration statement with respect to such
securities becomes effective, use commercially reasonable efforts to obtain a
"comfort" letter dated such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to the Holders, and,
if such securities are being sold through underwriters, a reaffirmation of such
letter on the date that such Registrable Securities are delivered to the
underwriters for sale;
(l) as soon as practicable after the effective date of the
registration statement, and in any event within sixteen (16) months thereafter,
have "made generally available to its security holders" (within the meaning of
Rule 158 under the Securities Act) an earning statement (which need not be
audited) covering a period of at least twelve (12) months beginning after the
effective date of the registration statement and otherwise complying with
Section 11(a) of the Securities Act;
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(m) provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration and provide the transfer agent with printed certificates for
Registrable Shares in a form eligible for deposit with The Depositary Trust
Company.
(n) make available for inspection by a representative of the holders
of a majority in number of the Registrable Securities, any underwriter
participating in any disposition pursuant to such Registration Statement, and
one firm of attorneys or accountants retained by each of the sellers and
underwriter all financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such
representative, underwriter, attorney or accountant in connection with the
registration, with respect to each at such time or times as the Company shall
reasonably determine; subject to reasonable restrictions and agreements to
safeguard the confidentiality of confidential information;
(o) cooperate and assist in any filings required to be made with the
NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter" that is required
to be retained in accordance with the rules and regulations of the NASD);
(p) provide a transfer agent and registrar (which may be the same
entity and which may be the Company) for such Restricted Shares;
(q) issue to any underwriter to which the Holders holding such
Restricted Shares may sell shares in such offering certificates evidencing such
Restricted Shares;
(r) list such Restricted Shares on any national securities exchange
on which any shares of the Common Stock are listed or, if the Common Stock is
not listed on a national securities exchange, use commercially reasonable
efforts to qualify such Restricted Shares for inclusion on the automated
quotation system of the National Association of Securities Dealers, Inc. (the
"NASD") or the OTC Bulletin Board; and
(s) use commercially reasonable efforts to take all other steps
necessary to effect the registration of such Restricted Shares contemplated
hereby in accordance with the provisions of Section 2 hereof.
Each holder of the Restricted Shares, upon receipt of any notice from the
Company of any event of the kind described in Section 4(h) hereof, shall
forthwith discontinue disposition of the Restricted Shares pursuant to the
registration statement covering such Restricted Shares until such Holder's
receipt of the copies of the supplemented or amended registration statement or
prospectus contemplated by Section 4(h) hereof, and, if so directed by the
Company, such Holder shall deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in such Holder's possession, of
the prospectus covering such Restricted Shares at the time of receipt of such
notice. No Preferred Holder participating in such underwriting shall be required
to make any representations, warranties or indemnities except as they relate to
such Holder's ownership of shares and authority to enter into the underwriting
agreement and to such Holder's intended method of distribution, and the
liability of such Holder shall be limited to an amount equal to the net proceeds
from the offering received by such Holder.
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Section 5. Expenses.
All expenses incurred by the Company in complying with Section 4,
including, without limitation, all registration and filing fees (including all
expenses incident to filing with the NASD), fees and expenses of complying with
securities and blue sky laws, printing expenses, fees and expenses of the
Company's counsel and accountants, and the reasonable fees and expenses of the
Holders' Counsel, shall be paid by the Company. In addition, in connection with
any proposed sale or transfer by a Preferred Holder of any Restricted Shares,
shares of Preferred Stock or Warrants, the Company shall provide, at its
expense, any transfer agent instructions or fees or legal opinions to allow any
such transfer or sale (subject to applicable law) by such Preferred Holder.
Section 6. Indemnification.
(a) In connection with any registration of any Restricted Shares
under the Securities Act pursuant to this Agreement, the Company shall indemnify
and hold harmless the holders of Restricted Shares, each underwriter, broker or
any other Person acting on behalf of the holders of Restricted Shares and each
other Person, if any, who controls any of the foregoing Persons within the
meaning of the Securities Act against any losses, claims, damages or
liabilities, joint or several (or actions in respect thereof) and costs and
expenses of enforcing this Section 6, to which any of the foregoing Persons may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or allegedly untrue statement of a material
fact contained in the registration statement under which such Restricted Shares
were registered under the Securities Act, any preliminary prospectus or final
prospectus contained therein or otherwise filed with the Commission, any
amendment or supplement thereto or any document incident to registration or
qualification of any Restricted Shares, 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,
with respect to any prospectus, necessary to make the statements therein in
light of the circumstances under which they were made not misleading, or any
violation by the Company of the Securities Act or registration thereunder, other
federal securities law or regulation thereunder or state securities or blue sky
laws applicable to the Company and relating to action or inaction required of
the Company in connection with such registration or qualification under such
state securities or blue sky laws; and shall reimburse promptly after request
therefor the holders of Restricted Shares, such underwriter, such broker or such
other Person acting on behalf of the holders of Restricted Shares and each such
controlling Person for any legal or other expenses reasonably incurred by any of
them in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage, liability or
action (including any legal or other expenses incurred) arises out of or is
based upon an untrue statement or allegedly untrue statement or omission or
alleged omission made in said registration statement preliminary prospectus,
final prospectus, amendment, supplement or document incident to registration or
qualification of any Restricted Shares in reliance upon and in conformity with
information furnished to the Company by such Holder of Restricted Shares or its
counsel in writing expressly for use in the preparation thereof; provided
further, however, that the foregoing indemnity agreement is subject to the
condition that, insofar as it relates to any untrue statement, allegedly untrue
statement, omission or alleged omission made in any preliminary prospectus but
eliminated or remedied in the final prospectus (filed pursuant to Rule 424 of
the Securities Act), such indemnity agreement shall not inure to the benefit of
any Holder from whom the Person asserting any loss, claim, damage, liability or
expense purchased the Restricted Shares which are the subject thereof, if a copy
of such final prospectus had been made available to such Holder a reasonable
time prior to the sale of such Restricted Shares by such Holder, and such final
prospectus was not delivered to such Person with or prior to the written
confirmation of the sale of such Restricted Shares to such Person.
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(b) In connection with any registration of Restricted Shares under
the Securities Act pursuant to this Agreement, each Holder of Restricted Shares
shall severally and not jointly indemnify and hold harmless (in the same manner
and to the same extent as set forth in the preceding paragraph of this Section
6) the Company, each director of the Company, each officer of the Company who
shall sign such registration statement, each underwriter, broker or other Person
acting on behalf of the holders of Restricted Shares and each Person who
controls any of the foregoing Persons within the meaning of the Securities Act
with respect to any statement or omission from such registration statement, any
preliminary prospectus or final prospectus contained therein or otherwise filed
with the Commission, any amendment or supplement thereto or any document
incident to registration or qualification of any Restricted Shares, if such
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company or such underwriter by or on
behalf of such Holder of Restricted Shares expressly for use in connection with
the preparation of such registration statement, preliminary prospectus, final
prospectus, amendment, supplement or document; provided, however, that the
maximum amount of liability in respect of such indemnification shall be limited,
in the case of each Holder, to an amount equal to the net proceeds actually
received by such Holder from the sale of Restricted Shares effected pursuant to
such registration.
(c) Promptly after receipt by an indemnified party of notice of the
commencement of any action involving a claim referred to in the preceding
paragraphs of this Section 6, such indemnified party will, if a claim in respect
thereof is made against an indemnifying party, give written notice to the latter
of the commencement of such action. In case any such action is brought against
an indemnified party, the indemnifying party will be entitled to participate in
and to assume the defense thereof, jointly with any other indemnifying party
similarly notified to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be responsible for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof; provided, however, that if any indemnified party shall have
reasonably concluded, based upon the advice of counsel, that there may be one or
more legal or equitable defenses available to such indemnified party which are
additional to or conflict with those available to the indemnifying party, or
that such claim or litigation involves or could have an effect upon matters
beyond the scope of the indemnity agreement provided in this Section 6, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party and such indemnifying party shall reimburse
such indemnified party and any Person controlling such indemnified party for
that portion of the fees and expenses of any one counsel retained by the
indemnified party which is reasonably related to the matters covered by the
indemnity agreement provided in this Section 6.
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(d) If the indemnification provided for in this Section 6 is held by
a court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, claim, damage, liability or action referred to herein, then
the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amounts paid or payable by such indemnified
party as a result of such loss, claim, damage, liability or action 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 in connection
with the statements or omissions which resulted in such loss, claim, damage,
liability or action as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of 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 or alleged 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. 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. Notwithstanding
anything to the contrary in this Section 6, no Holder shall be required,
pursuant to this Section 6, to contribute any amount in excess of the net
proceeds received by such Holder from the sale of securities in the offering to
which the losses, claims, damages, liabilities or expenses of the Holder relate.
(e) The obligations of the Company and Holders under this Section 6
shall survive the completion of any offering of Registrable Shares in a
registration statement under this Agreement, and otherwise.
(f) Any indemnity agreements contained herein shall be in addition
to any other rights to indemnification or contribution which any indemnified
party may have pursuant to law or contract and shall remain operative and in
full force and effect regardless of any investigation made or omitted by or on
behalf of any indemnified party.
Section 7. Lock-up Agreement.
Notwithstanding any other provisions in this Agreement to the contrary:
(a) Until the earlier of (i) 90 days following the conversion into
Common Stock of at least 50% of the shares of Series A Preferred Stock purchased
at the Closings (as defined in the Original Purchase Agreement), or (ii) 90 days
following the closing of a Qualified Public Offering (the first to occur of such
events being referred to as the "Trigger Event"), each Insider, individually and
not jointly hereby agrees that he shall not offer, sell, contract to sell, lend,
pledge, grant any option to purchase, make any short sale or otherwise dispose
of any shares of Common Stock, or any options or warrants to purchase any shares
of Common Stock, or any securities convertible into, exchangeable for or that
represent the right to receive shares of Common Stock, whether now owned or
hereinafter acquired, owned directly (including holding as a custodian) or with
respect to which the he has beneficial ownership within the rules and
regulations of the Commission (collectively the "Lock-up Shares"), without the
prior consent of the holders of at least a majority of the then-outstanding
shares of Series A Preferred Stock.
12
(b) Notwithstanding the foregoing, (x) each Insider may transfer (i)
all or any portion of his Lock-up Shares as a bona fide gift or gifts, provided
that the donee or donees thereof agree to be bound by the restrictions set forth
herein, (ii) all or any portion of his Lock-up Shares to any trust for the
direct or indirect benefit of the Insider or the immediate family of the
Insider, provided that the trustee of the trust agrees to be bound by the
restrictions set forth herein, and provided further that any such transfer shall
not involve a disposition for value, and (iii) up to the number of shares equal
to 5% of his holdings as of the Closing (as defined in the Original Purchase
Agreement) on each of the Operational Date (as defined in the Original Purchase
Agreement) and on each 12-month anniversary of the Operational Date (provided
that if any such Insider does not sell the full 5% on the Operational Date or on
any 12-month anniversary thereof, he may carry over the unsold portion to
subsequent periods), (y) each of Xxxxx Xxxxxx and his affiliates (collectively)
and Xxxxxx Xxxxxxxx and his affiliates (collectively) may transfer up to an
additional 25,000 shares at any time, and (z) Xxxxx Xxxxxxxx may transfer
additional shares in accordance with a 10b5-1 trading plan previously approved
by the Series A Holders. For purposes hereof, "immediate family" shall mean any
relationship by blood, marriage or adoption, not more remote than first cousin.
On the 91st day following the Trigger Event (the "Sale Date"), the provisions of
Section 7(a) shall no longer be in effect, except that each Insider agrees that
he will limit his sales in each of the first four 90 day periods following the
Sale Date to that number of shares as equals 25% of his holdings as of the
Trigger Event.
(c) Each Insider also agrees (i) to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of the Lock-up Shares except in compliance with the foregoing
restrictions and (ii) promptly following the date hereof, to deliver the
certificates representing his shares of Common Stock to the Company, whereby the
Company shall imprint a legend on the back of such certificates referencing the
foregoing transfer restriction. After taking such action, the Company will
re-deliver such certificates to the Insiders as promptly as practicable.
Section 8. Information by Holder.
The Holders shall furnish to the Company such written information
regarding the Holders and the distribution proposed by the Holders as the
Company may reasonably request and as shall be reasonably required in connection
with any registration, qualification or compliance referred to in this
Agreement.
(a) Reports Under the Exchange Act. With a view to making available
to the Holders the benefits of Rule 144 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, the Company agrees
at all times to:
13
(i) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act;
(ii) 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;
(iii) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144 under
the Securities Act and the Securities Act and Exchange Act (at any time after it
has become subject to such reporting requirements) or that it qualifies as a
registrant whose securities may be resold pursuant to Form S-3 (at any time it
so qualifies), (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
(A) furnish to any Preferred Holder an opinion of counsel to
the Company addressed to the Company's transfer agent authorizing the proposed
sale under Rule 144 (assuming such Rule is available).
Section 9. Termination.
This Agreement shall terminate and be of no further force or effect on the
earlier of (i) when there shall no longer be any Restricted Shares outstanding
or (ii) such time as all of such remaining Restricted Shares may be sold in
accordance with Rule 144 within any consecutive three (3) month period.
Section 10. Successors and Assigns.
Subject to the provisions of Section 11, this Agreement shall bind and
inure to the benefit of the Company and the Holders and the respective
successors and assigns of the Company and the Holders.
Section 11. Assignment.
The rights to cause the Company to register Registrable Securities
pursuant to this Agreement may be assigned in whole or in part by a Holder to
one or more of its Affiliates (including, without limitation, in the case of the
Preferred Holders, transfers between them and to their respective members and
partners and any members or partners thereof) or to one or more transferees or
assignees of the Registrable Securities owned by such Holder, provided that (in
each case) such transferee or assignee delivers to the Company a written
instrument by which such transferee or assignee agrees to be bound by the
obligations imposed on Holders under this Agreement to the same extent as if
such transferee or assignee was a party hereto; provided, further, such
assignment shall not require registration under the Securities Act. Except as
specifically permitted in the preceding sentence, neither this Agreement nor any
Holder's rights or privileges under this Agreement can be assigned or
transferred in whole or in part without the prior written consent of the other
parties.
14
Section 12. Holder Lockup.
Each Holder hereby agrees that such Holder shall not offer, sell, contract
to sell, lend, pledge, grant any option to purchase, make any short sale or
otherwise dispose of any Common Stock (or other securities) of the Company held
by such Holder for a period specified by the representative of the underwriters
of Common Stock (or other securities) of the Company not to exceed 60 days prior
to, or one hundred eighty (180) days following, the effective date of a
registration statement of the Company filed under the Securities Act; provided
that such agreement shall apply only to a Qualified Public Offering.
Section 13. Entire Agreement.
This Agreement and the other writings referred to herein or therein or
delivered pursuant hereto or thereto, contain the entire agreement among the
Company and the Holders with respect to the subject matter hereof and supersede
the Prior Registration Rights Agreement and all other prior and contemporaneous
arrangements or understandings with respect thereto.
Section 14. Notices.
All notices, requests, consents and other communications hereunder to any
party shall be deemed to be sufficient if contained in a written instrument
delivered in Person or sent by facsimile, nationally-recognized overnight
courier or first class registered or certified mail, return receipt requested,
postage prepaid, addressed to such party at the address set forth below or such
other address as may hereafter be designated in writing by such party to the
other parties:
(i) if to the Company to:
World Waste Technologies, Inc.
00000 Xxxxxxx Xxxxx Xxxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: CFO
with a copy to (which shall not constitute notice):
Xxxx & Xxxxx Professional Corporation
0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX
Facsimile: (000) 000-0000
Attention: Xxxxxxxx Xxxxxxx, Esq.
(ii) if to the Holders, to the addresses set forth on the signature pages
hereto.
All such notices, requests, consents and other communications shall be deemed to
have been delivered (a) in the case of personal delivery or delivery by
telecopy, on the date of such delivery, (b) in the case of dispatch by
nationally-recognized overnight courier, on the next business day following such
dispatch and (c) in the case of mailing, on the third business day after the
posting thereof.
15
Section 15. Modifications; Amendments, Waivers.
The terms and provisions of this Agreement may not be modified or amended,
nor may any provision be waived, except pursuant to a writing signed by the
Company, the holders of at least a majority of the Registrable Shares held by
the Preferred Holders, and, with respect to any change to Section 7; the holders
of at least a majority of the Registrable Shares held by the Insiders.
Section 16. Counterparts; Facsimile Signatures.
This Agreement may be executed in any number of counterparts, and each
such counterpart hereof shall be deemed to be an original instrument, but all
such counterparts together shall constitute but one agreement. Facsimile
counterpart signatures to this Agreement shall be acceptable at the Closing if
the originally executed counterpart is delivered within a reasonable period
thereafter.
Section 17. Severability; Delays and Omissions.
Whenever possible, each provision of this Agreement will be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited by or invalid under
applicable law, such provision will be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of this Agreement.
It is agreed that no delay or omission to exercise any right, power or remedy
accruing to the parties shall impair any such right, power or remedy, nor shall
it be construed to be a waiver of any such breach or default, or any
acquiescence therein, or of any similar breach or default thereafter occurring;
nor shall any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. It is further
agreed that any waiver, permit, consent or approval of any kind or character by
a party of any breach or default under this Agreement, or any waiver by a party
of any provisions or conditions of this Agreement must be in writing and shall
be effective only to the extent specifically set forth in writing and that all
remedies, either under this Agreement, or by law or otherwise afforded to a
party, shall be cumulative and not alternative.
Section 18. Headings.
The headings of the various sections of this Agreement have been inserted
for convenience of reference only and shall not be deemed to be a part of this
Agreement.
16
Section 19. Additional Holders. Notwithstanding anything to the contrary
herein, if the Company shall issue additional shares of its Series B Preferred
Stock pursuant to the Purchase Agreement, any purchaser of such shares may
become a party to this Agreement by executing and delivering to the Company an
additional counterpart signature page to this Agreement and shall be deemed a
"Holder" and "Series B Holder" hereunder.
Section 20. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be performed
wholly therein.
Section 21. Submission to Jurisdiction; Waivers. The Company and each
Holder irrevocably agrees that any legal action or proceeding with respect to
this Agreement or for recognition and enforcement of any judgment in respect
hereof brought by any other party hereto or its successors may be brought and
determined in the Supreme Court of New York for Kings County or the federal
district court in the Southern District of New York, and the Company and each
Holder hereby irrevocably submits with regard to any such action or proceeding
for itself and in respect to its property, generally and unconditionally, to the
nonexclusive jurisdiction of the aforesaid courts. The Company and each Holder
hereby irrevocably waives, and agrees not to assert, by way of motion, as a
defense, counterclaim or otherwise, in any action or proceeding with respect to
this Agreement, (a) any claim that is not personally subject to the jurisdiction
of the above-named courts for any reason other than the failure to lawfully
serve process, (b) that it or its property is exempt or immune from jurisdiction
of any such court or from any legal process commenced in such courts (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution of judgment, execution of judgment or otherwise), and (c) to the
fullest extent permitted by applicable law, that (i) the suit, action or
proceeding in any such court is brought in an inconvenient forum, (ii) the venue
of such suit, action or proceeding is improper and (iii) this Agreement, or the
subject matter hereof, may not be enforced in or by such courts.
Section 22. Waiver of Jury Trial
EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER DOCUMENT RELATED HERETO.
17
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed on its behalf, by its officer(s) thereunto duly authorized
or for himself, as of the day and year first set forth above.
COMPANY:
WORLD WASTE TECHNOLOGIES, INC.
By: ______________________________________
Name:
Title:
SERIES A HOLDERS
TRELLUS OFFSHORE FUND LIMITED,
a Cayman Islands corporation
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: _______________________________
Facsimile: _______________________________
Attention: Xxxx Xxxxxxxx
18
TRELLUS PARTNERS II, LP,
a Delaware limited partnership
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: _______________________________
Facsimile: _______________________________
Attention: Xxxx Xxxxxxxx
TRELLUS PARTNERS, LP,
a Delaware limited partnership
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: _______________________________
Facsimile: _______________________________
Attention: Xxxx Xxxxxxxx
SERIES B HOLDERS:
__________________________________________
Address:
__________________________________________
Address:
19
__________________________________________
Address:
__________________________________________
Address:
__________________________________________
Address:
__________________________________________
Address:
__________________________________________
Address:
__________________________________________
Address:
__________________________________________
Address:
20
__________________________________________
Address:
__________________________________________
Address:
__________________________________________
Address:
__________________________________________
Address:
__________________________________________
Address:
__________________________________________
Address:
__________________________________________
Address:
21
__________________________________________
Address:
__________________________________________
Address:
22
EXHIBIT A
---------
LAST NAME
Seminary Seminary Investments I
Xxxx Xxxxxxxxx Xxxx
Xxxxx Xx Xxxxx Xx. Trust UTD 4/9/02
Xxxxx Xxxxxxxxx XX Xxxxx
Xxxxx V7, LLC (Xxxx Xxxxx Shelby Inc.)
Xxxxxxxxxx Xxxxx & Xxxxxxx Xxxxxxxxxx
Seminary Seminary Investments II
Diamond Diamondback- Master Fund (NY)
Wilshire Wilshire Camp Assoc. (Xxxx Xxxxxx)
Kranenburg Kranenburg Fund
Childrey Xxxxxx X. Childrey
Xxxxx Xxxxxxxxx X. Xxxxx, Xx.
Saisc SAISC, Inc.
Xxxx Xxxxxxxx Xxxx
Gerdz Gerdz Investments LP, RLLLP (Xxx Xxxxx)
Xxxxxx Xxxxxx Living Trust (Legent Clearing LLC)
de Sejournet Antoine de Sejournet (ING Belgium)
Keystone Keystone Private Equity Investment -
Xxxxxx Xxxxx
Xxxxxx Xxxxxx Investment Partners Equity Fund
Xxxxxxxx Xxxxxxxx Family Trust dtd 8/16/2000
(Mellon Bank)
Xxxx Xxxxxxxxx Xxxx
Kranenburg Kranenburg 1998 Trust (Vanguard)
Xxxxxx Xxxxxxx Xxxxxx Self Employed Pension Plan
& Trust
Xxx Xxx Family Trust UTD 3/16/84
Xxxxxxxxxx Xxxx Xxxxxxxxxx
Frontage Frontage Road Freres ( Xxxx Xxxxxx)
Colby RBC Xxxx Xxxxxxx Custodian FBO Xxxxxx
Xxxxx XXX
Xxxxx Xxxxxx Xxxxx (Xxxx Xxxxxxxx)
Xxxxxxx Xxxx X. Xxxxxxx
Xxxxx Xxxxx Xxxxx
Xxxx Xxxxxx Xxxx (National Financial)
A - 1
LAST NAME
Moldow Moldow Family Trust
Xxxxxxxx Xxxx X. Xxxxxxxx
White White Sand Investor Group LP
Xxxxxx Xxxx & Xxxxx Xxxxxx, Xxxxxx Family
Trust(Ellenoff)
Xxxxxxx Xxxxxxxx Xxxxx Xxxxxxx
Xxxxxx Xxxxxxx X.Xxxxxx
Xxxxxx Xxxxxx X. Xxxxxx
Evergreen Evergreen Highland LLC
Xxxxxx Xxxxxx X. Xxxxxx
Xxxxxxx Xxxx Xxxxxxx
Xxxxxxxx L. Xxxxxx Xxxxxxxx, Xx.
Xxxxxx Xxxxxxx X. Xxxxxx
Xxxxxx Xxxx X. Xxxxxx Living Trust
Newport Newport Private Investments Limited
Osselo Guy & Xxxxxxxx Xxxxxxx, JTWROS
Xxxxxx Xxx Xxxxxx
Xxxxx Xxxxx Living Trust, Xxxxxx X. (Truliant
Federal) Xxx Xxxxxx Xxx Xxxxx Xxxxx X. Xxxxx Xxxxxxx Xxxxx
Xxxxxxx Purjes Xxx Xxxxxx Xxxxxxxxxx Xxxxxx Xxxxxxxxxx
Teller HSBC, Xxxx Xxxxxx
O'Xxxxx Xxxxxx X. X'Xxxxx, Xx.
RST RST Network, LLC
Vision Vision Opportunity Master Fund DB Cayman
Ltd
Paragon Paragon Capital LP
Vision Vision Opportunity Master Fund, Ltd. (DB
Cayman)
Xxxxx Xxxxxx Xxxxx
Millenium Millenium Technology Value Partners, LP
Millenium Millenium Technology Value Partners (RCM)
LP
TWM TWM Associates, LLC (Xxxxx X. Xxxxxxxxxxx)
Bessemer Old Westbury Real Return Fund - Bessemer
Investment Mgmt (Owl)
Xxxxxxxx Xxxx X. Xxxxxxxx
Xxxxxxxx Xxxxxx X. Xxxxxxxx
TFF TFFS, Inc.
Uy Xxxxxxxxx Xx
Xxxxx Xxxxxx X. Xxxxx (Xxxxx Trading)
Diamond Diamond Oppty Fund LLC
Nite Nite Capital
Iroquois Iroquois Master Fund (Salmon Xxxxx)
Xxxxxx Capital Ventures (Xxxxxx Xx Heights
Capital)
Xxxxxx Xxxxx
A-2
Exhibit B
---------
Xxxxx Xxxxxxxx
Xxxxxx X. Xxxxxxx
Trustees Xxxxxxx Family Trust u/a dated 4/28/88
Xxxx Xxxxxxxx
Xxxxx Xxxx
Xxxxxx Xxxxxxxx
Xxxxx Xxxxxx
The Xxxxx Xxxxxx Family Trust u/d/t dated June 25, 2000
Xxxx Xxxxxxxx
Xxxx XxXxxx
Xxxxx Xxxxx
Xxxx Xxxxxxxx
Liviakis Financial Communications, Inc.
One World Zero Waste
Jan-Can XX
Xxxxx McAfee Capital Partners, LLC
P2 Capital, LLC
Xxxxxx X. Xxxxx and Xxxxx Xxxxx Xxxxxxxx trustees, u/d/t dated 3 July 2004
Xxxxxxx Xxxxx
Xxxx X. Xxxxxxxx
B - 1
