EXHIBIT 99.3
INVESTOR RIGHTS AGREEMENT
This Investor Rights Agreement (the "Agreement") is made as of November 8,
2002 among WorldWater Corp., a Delaware corporation (the "Company"), certain
existing stockholders of the Company listed on Exhibit A attached hereto (the
"Existing Stockholders") and the persons and entities listed on Exhibit B
attached hereto (the "Investors"). The Existing Stockholders and the Investors
are hereinafter collectively referred to as the "Stockholders."
BACKGROUND
WHEREAS, the Company is issuing and selling to the Investors an aggregate
of up to $2 million of 10% convertible promissory notes (the "Notes"), and
warrants to purchase Common Stock (the "Warrants"), pursuant to the terms of a
Securities Purchase Agreement dated the date hereof, among the Investors and the
Company (the "Purchase Agreement"); and
WHEREAS, the parties hereto desire to enter into this Agreement to govern
their respective rights, duties and obligations after consummation of the
transactions contemplated by the Purchase Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, unless the context otherwise
requires, the following terms shall have the respective meanings set forth
below:
"Affiliate" shall mean, with respect to any Person, any other Person who
directly or indirectly, through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, such Person.
"Board" shall mean the Board of Directors of the Company.
"Business Day" shall mean any day except a Saturday, Sunday or other day on
which commercial banks located in New York, New York are not open for the
general transaction of business.
"Common Stock" shall mean the Common Stock, par value $.001 per share, of
the Company and any other securities into which or for which such Common Stock
may be converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, consolidation, sale of assets or other similar
transaction.
"Control" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlled" and "controlling" have meanings correlative thereto.
"Convertible Securities" shall mean all securities of a corporation which,
directly or indirectly, are convertible into or are exercisable or exchangeable
for common stock of a corporation, including without limitation, stock
appreciation rights, options, warrants, convertible debt instruments,
convertible preferred stock, and other rights to directly or indirectly
purchase, subscribe for or acquire shares of common stock, whether or not such
Convertible Securities have then vested or are then exercisable or exchangeable.
"Co-Sale Stockholder" shall mean Xx. Xxxxxxx X. Xxxxx and any Person who
subsequently becomes a Co-Sale Stockholder by reason of being a Transferee of
Co-Sale Securities pursuant to Article III hereof.
"Existing Option Plan" means the Company's equity incentive plan as such
plan was in effect on October 29, 2002, and with the shares reserved for
issuance thereunder as of October 29, 2002.
"Family Members" shall mean, with respect to a Person, such Person's
spouse, direct descendants (including adopted children and stepchildren, if
any), siblings, parents, mother- and father- in-law, brothers- and sisters-
in-law, aunts, uncles, nieces and nephews.
"Five Percent Stockholder" shall mean, as of the time measured, any Person
who is the "beneficial owner" (as that term is defined in Rule 13d-3 promulgated
under the Securities Exchange Act of 1934, or any successor or replacement rule
thereof) of Common Stock which represents five percent (5%) or more of the
Common Stock then outstanding.
"Fully-Diluted Basis" shall mean, with respect to measuring a number of
shares of capital stock of a corporation or a percentage of shares of capital
stock of a corporation, measuring based on all of the common stock then
outstanding, assuming the conversion into common stock of all Convertible
Securities then outstanding.
"GAAP" shall mean United States generally accepted accounting principles as
in effect from time to time.
"Person" shall mean an individual, corporation, partnership, joint stock
company, limited liability company, joint venture, trust or unincorporated
organization, or a governmental authority or any agency or political subdivision
thereof, or any other business entity.
"Subsidiary" or "Subsidiaries" or "subsidiary" or "subsidiaries" shall mean
at any date, any Person of which securities or other ownership interests
representing more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests or in the case
of a partnership or limited liability company more than 50% of the profits or
losses of which are, as of such date, owned, controlled or held by the Company
or one or more subsidiaries of the Company.
Section 1.2 Certain Other Definitions. The following terms are defined in the
following sections of this Agreement:
Term Section
1934 Act Section 5.1(b)
Agreement Lead-in
Agreement Matters Section 8.5
Existing Stockholders Lead-in
Company Lead-in
Company Securities Section 2.1
Co-Sale Securities Section 3.1
Exempt Issuances Section 2.3
Investor Director Section 4.1(a)
Investors Lead-in
New Issuance Section 2.1
New Tag-Along Exercise Notice Section 3.3
New Tag-Alone Notice Section 3.3
Notes Lead-in
Offer Notice Section 2.1
Offer Period Section 2.1
Price Section 3.1
Proceeding Section 8.5
Proposed Number Section 3.1
Purchase Agreement Lead-in
Representative Section 4.1(c)
SEC Section 5.1(b)
Shares Section 8.11
Stockholders Lead-in
Tag-Along Exercise Notice Section 3.1
Tag-Along Notice Section 3.1
Transfer Section 3.1
Warrant Lead-in
ARTICLE II
PREEMPTIVE RIGHTS
Section 2.1 Notice of Proposed Issuance. Except with respect to Exempt
Issuances (as defined in Section 2.3 below), in the event that the Company
proposes to issue any (i) shares of Common Stock, (ii) warrants, options or
other rights to acquire shares of Common Stock or (iii) any notes, debentures or
other securities convertible into, exercisable for or exchangeable for shares of
Common Stock (collectively, "Company Securities"), the Company will deliver to
the Investors a written notice (the "Offer Notice") prior to effecting any such
issuance (the "New Issuance"), informing each Investor of such New Issuance and
advising the Investors that upon notice to the Company given within thirty (30)
days after the Offer Notice is deemed to have been given to the Investors
hereunder (the "Offer Period"), they will have the right to purchase for cash
(assuming the New Issuance is completed) at an amount equal to the price or
other consideration (the value of which to be determined in good faith by the
Board) for which such securities are proposed to be issued and on the same terms
and conditions as the Company is offering such Company Securities to
third-parties, a number of such securities so that, after giving effect to such
New Issuance (and the conversion, exercise and exchange into or for (whether
directly or indirectly) shares of Common Stock of all such Company Securities),
such Investor will continue to maintain its same proportionate equity ownership
in the Company on a Fully Diluted Basis as of the date of the Offer Notice
(treating each Investor, for the purpose of such computation, as the holder of
the number of shares of Common Stock which would be issuable to such Investor
upon conversion, exercise and exchange of all securities, assuming the like
conversion, exercise and exchange of all such other securities held by other
Persons). The Offer Notice shall describe in reasonable detail the securities
proposed to be issued by the Company and specify the number, price, payment
terms, whether the offering is to the public or to a specific purchaser or
purchasers, and, if to a specific purchaser or purchasers, the name(s) of such
purchaser or purchasers.
Section 2.2 Right to Purchase Company Securities.
(a) Each Investor may indicate its desire to purchase the full number of
Company Securities to which it is entitled pursuant to Section 2.1 or any lesser
number, by providing written notice thereof to the Company prior to the
expiration of Offer Period. The giving of such a written notice (which notice
shall specify the number (or amount) of Company Securities which such Investor
wishes to purchase up to such Investor's proportionate equity ownership in the
Company on a Fully Diluted Basis as of the date of the Offer Notice) shall
constitute an irrevocable offer of such Investor to purchase, at the price and
on the terms specified in the Offer Notice, the number (or amount) of Company
Securities specified in such Investor's written notice to the Company. If prior
to 5:00 p.m., New York, New York time, on the last day of the Offer Period any
Investor shall not have exercised its rights to purchase Company Securities
pursuant to this ARTICLE II, such Investor shall be deemed to have waived any
and all of its rights under this ARTICLE II with respect to the purchase of such
Company Securities pursuant only to that specific Offer Notice.
(b) The Company shall have sixty (60) days from the expiration of the Offer
Period to consummate, if it so elects, the proposed issuance of any or all of
such Company Securities that the Investors have not elected to purchase, at the
price and upon terms that are not less favorable to the Company than those
specified in the Offer Notice and, if a purchaser or purchasers was or were
specified in such Offer Notice, then only to such purchaser or purchasers;
provided that, if such issuance is subject to regulatory approval, such sixty
(60) day period shall be extended until the expiration of five (5) Business Days
after all such approvals have been received, but in no event later than one
hundred and eighty (180) days from the date the Offer Notice is deemed to have
been given to the Investors hereunder. If the Company elects to consummate such
issuance, each Investor purchasing Company Securities pursuant to this Section
2.2 shall deliver a subscription agreement or purchase agreement to the Company
and such other documents reasonably requested by the Company (in each case on
the same terms and conditions as all other purchasers and as set forth in the
Offer Notice), and at the consummation of the proposed issuance, the Company
shall issue certificates representing the Company Securities to be purchased by
each Investor purchasing such Company Securities registered in the name of such
Investor, against payment by such Investor of the purchase price for such
Company Securities. If the Company proposes to issue any class of Company
Securities after the period described in the first sentence of this subparagraph
(b), the Company must again comply with the procedures set forth in this ARTICLE
II.
Section 2.3 Exempt Issuances. For purposes of this ARTICLE II, "Exempt
Issuances" shall mean issuances of Company Securities (i) as a dividend, stock
split or other distribution payable pro rata to all holders of Common Stock,
(ii) to employees, officers, directors or consultants of the Company pursuant to
the Existing Option Plan and, only in the event that the Company has validly
increased its authorized Common Stock above 100 million shares such that there
are authorized shares of Common Stock available to expand the Existing Option
Pool after reserving for issuance all shares of Common Stock underlying all
Notes and all Warrants issuable to the Investors pursuant to the Purchase
Agreement and otherwise measuring the Company's outstanding securities on a
Fully-Diluted Basis, then up to an additional 3 million shares of Common Stock
to be issued pursuant to the Company's then-effective equity incentive plan,
(iii) in connection with the conversion or exercise of the Notes, Warrants, or
any options, warrants or other rights to purchase Common Stock (A) outstanding
on the date hereof, (B) issued in accordance with the foregoing clause (ii) or
(C) which constitute a prior New Issuance with respect to which the Company
complied with the provisions of this ARTICLE II, (iv) solely in consideration
for the acquisition (by merger or otherwise) by the Company or any Subsidiary of
the Company of assets or equity interests of another entity approved by a
majority of the Board, which majority includes the Investor Director (if an
Investor Director has been designated by the Investors), (v) Company Securities
issued in a transaction approved by Investors holding in the aggregate a
majority of the outstanding Shares (on a Fully-Diluted Basis) then held by all
of the Investors, or (vi) to X. X. Xxxxxxxx for up to 70,000 shares of Common
Stock.
ARTICLE III
CO-SALE RIGHTS
Section 3.1 Subject Transfers; Exercise. If any Co-Sale Stockholder
proposes, directly or indirectly, to transfer, sell, assign, pledge, encumber,
mortgage, hypothecate, give, or otherwise dispose of, whether or not by
operation of law and whether voluntarily or involuntarily (collectively,
"Transfer"), to any Person an aggregate number (the "Proposed Number") of shares
of Common Stock ("Co-Sale Securities") in one transaction or a series of related
transactions, such Co-Sale Stockholder shall give written notice to the
Investors as soon as practicable but in no event later than thirty (30) days
prior to the consummation of such Transfer, which notice shall specify the name
and address of the proposed Transferee, the Proposed Number of Co-Sale
Securities to be Transferred, the amount and form of consideration ("Price"),
and, in reasonable detail, the other terms and conditions of the proposed
Transfer, and shall be accompanied by a copy of any written agreement (whether
in draft or definitive form at such time) or offer relating to such Transfer (a
"Tag-Along Notice"). Each Investor shall either elect or decline to participate
in the proposed Transfer by delivering a written notice (a "Tag-Along Exercise
Notice") to the Co-Sale Stockholder who gave the Tag-Along Notice within fifteen
(15) days after the Tag-Along Notice is deemed to have been given to the
Investors. If an Investor desires to participate in the proposed Transfer upon
the same terms and conditions (including at the same Price per share), then that
Investor shall specify in its Tag Along Exercise Notice the number of shares of
Common Stock that the Investor shall desire to so Transfer. Notwithstanding the
foregoing, the provisions of this Section 3.1 shall not apply to any Transfer by
any Co-Sale Stockholder of any Co-Sale Securities in any of the following
circumstances, if and only if each Transferee of such Co-Sale Securities shall,
immediately prior to and as a condition of such Transfer, become a party to this
Agreement as both an Existing Stockholder and a Co-Sale Stockholder: (i) by
gift, (ii) as collateral security for any indebtedness of such Co-Sale
Stockholder, (iii) to a Family Member of such Co-Sale Stockholder, or (iv) to a
trust, the sole beneficiaries of which, or to a corporation, partnership or
limited liability company, the sole stockholders, partners or members, as the
case may be, of which, include only such Co-Sale Stockholder and the Family
Members of such Co-Sale Stockholder.
Section 3.2 Cut-Back. If the proposed Transferee does not agree to purchase
all of the securities specified in each Tag-Along Exercise Notice delivered by
the Investors in addition to the Proposed Number of shares of Common Stock, no
Co-Sale Stockholder shall sell any Co-Sale Securities to the proposed Transferee
unless the extent to which the Investors and the Co-Sale Stockholder participate
in the proposed Transfer is proportionately reduced in the manner described in
the immediately following sentence. The Investors and Co-Sale Stockholder shall
be entitled to Transfer a number of shares (determined on a Fully-Diluted Basis)
equal to the number of shares which such Transferee has agreed to purchase from
the Investors and the Co-Sale Stockholder multiplied by a fraction, the
numerator of which is the number of shares (determined on a Fully Diluted Basis)
owned by the Investors or Co-Sale Stockholder, as the case may be, on the last
day of the fifteen (15) day Tag-Along Exercise Notice period, and the
denominator of which is the total number of shares (determined on a
Fully-Diluted Basis) owned by all of the Co-Sale Stockholders participating in
such Transfer and the Investors on the last day of the fifteen (15) day
Tag-Along Exercise Notice period. If, after any such calculation, any Investor
or any Co-Sale Stockholder shall no longer desire to participate to the full
extent as calculated in the immediately preceding sentence, then the Investors
shall be entitled to proportionately increase their respective participation in
such manner as shall be reasonably agreed upon by the remaining participating
Investors.
Section 3.3 Increases. If, after delivery of a Tag-Along Notice, but before
the closing of the transactions pursuant thereto, the proposed Transferee offers
to purchase from the Co-Sale Stockholder(s) an additional number of Co-Sale
Securities and/or increases the Price to be paid (or otherwise improves (from
the perspective of the sellers) the terms and conditions of the proposed
purchase), then, within fifteen (15) days after such offer the participating
Co-Sale Stockholder(s) shall give a new Tag-Along Notice ("New Tag-Along
Notice") to the Investors in accordance with the provisions set forth above in
Section 3.1 for Tag-Along Notices. The Investors shall either elect or decline
to participate in such offer by giving a new Tag-Along Exercise Notice (a "New
Tag-Along Exercise Notice") to the Co-Sale Stockholders who gave such notice
within fifteen (15) days after the New Tag-Along Notice is deemed to have been
given to the Investors hereunder. All of the provisions of ARTICLE III shall
apply to any Transfers subject to any New Tag-Along Notice.
Section 3.4 Survival. If, within 120 days after the Tag-Along Notice (or
New Tag-Along Exercise Notice, if applicable) is deemed to have been given to
the Investors hereunder, the Co-Sale Stockholders have not completed the sale of
their Co-Sale Securities in accordance with the terms described in the Tag-Along
Notice (or New Tag-Along Notice, if applicable) and this ARTICLE III, then such
shares shall once again be subject to this ARTICLE III.
ARTICLE IV
CORPORATE GOVERNANCE
Section 4.1 Board of Directors.
(a) The Investors, as a group shall have the right, but not the obligation,
to designate one (1) member for election to the Board (the "Investor Director").
If the Board is comprised of classes of directors, when and if designated by the
Investors, the Investor Director shall become a member the class of directors
most recently elected by the stockholders. So long as the Investors have the
right to designate an Investor Director pursuant to this Section 4.1 and
actually designate an Investor Director, the Company will use its best efforts
to ensure that such person is included in the proxy solicitation materials for
the Company's annual meeting and that such person is duly elected to the Board.
The Investor Director shall also serve on the compensation committee of the
Board and if formed, the executive committee of the Board. The Investor Director
shall be entitled to the same perquisites, including stock options,
reimbursement of expenses and other similar rights in connection with such
person's membership on the Board, as each other non-executive member of the
Board.
(b) The Investors as a group shall have the right, but not the obligation,
to designate two members of the Company's Advisory Board. The Company shall,
promptly after designation by the Investors, cause such designee(s) to be
appointed to the Company's Advisory Board.
(c) The Investors as a group shall have the right, but not the obligation,
to have one representative (the "Representative") attend as an observer all
meetings of the Board (and each committee meeting thereof), provided that in the
case of telephonic meetings conducted in accordance with the Company's by-laws
and applicable law, the Representative shall be given the opportunity to
participate in such telephonic meetings. The Company shall give the
Representative written notice of every meeting of its Board (and any committee
meeting thereof) at the same time and in the same manner as notice is given to
the directors of the Company. The Representative shall be entitled to receive
all written materials and other information given to the directors of the
Company in connection with such meetings or otherwise at the same time such
materials and information are given to the directors. The Representative shall
be entitled to consult with and advise the Board on significant business issues
with respect to the Company and its Subsidiaries. The Representative shall not
be permitted to vote at any meeting of the Company's Board of Directors or be
counted for purposes of determining whether there is sufficient quorum for the
Company's Board of Directors to conduct its business. The parties hereto hereby
acknowledge and agree that the Representative shall not owe any fiduciary or
other duties to the Company or the stockholders of the Company or otherwise have
any directorial or other duties or liabilities to the Company or its
stockholders. Investors owning at least a majority of the Shares owned by all
Investors shall designate, and may replace, the Representative with or without
cause in their sole discretion by providing written notice to the Company at
least five (5) Business Days prior to the taking of any such action.
Section 4.2 Election and Removal of Directors; Filling of Vacancies. For so
long as the Investors collectively hold, on a Fully-Diluted Basis, 5% or more of
the Company's outstanding Common Stock, (a) each of the Existing Stockholders
hereby agrees to promptly vote all of the Shares held by such Existing
Stockholder and entitled to vote thereon in favor of the Investor Director at
each election of directors, (b) subject to the provisions of the Company's
Certificate of Incorporation, as amended or amended and restated from time to
time, each Existing Stockholder shall take all action necessary to remove
forthwith the Investor Director when (and only when) such removal is requested
for any reason, with or without cause, by Investors owning at least a majority
of the Shares (on a Fully-Diluted Basis) then owned by all Investors, and (c) in
the case of the death, resignation or removal as herein provided of an Investor
Director, each Existing Stockholder shall promptly vote all Shares owned by that
Person to elect another individual designated by the Investors.
Section 4.3 Meetings of the Board. The Company will cause the Board to meet
at least four times each year and at least once each quarter.
Section 4.4 Conflicting Provisions in Certificate of Incorporation or
Bylaws. Each Existing Stockholder agrees to promptly vote its Shares or execute
proxies or written consents, as the case may be, and to take all other actions
necessary or desirable to ensure that the Company's Certificate of Incorporation
and Bylaws do not at any time conflict with any provision of this Agreement.
Section 4.5 Expenses. The Company shall promptly reimburse each of the
Investors, the Investor Director, the Representative and/or any Person
designated by the Investors to the Company's Advisory Board, for any and all
out-of-pocket expenses incurred by such Person in connection with conducting
Company-business.
ARTICLE V
COVENANTS OF THE COMPANY
Section 5.1 Affirmative Covenants. The Company agrees as follows:
(a) The Company will retain regionally or nationally recognized
independent public accountants as selected by the Board, which independent
public accountants shall certify the Company's financial statements at the end
of each fiscal year.
(b) If at any time the Company shall cease to be required to make
filings of reports and other documents with the Securities Exchange Commission
(the "SEC") under the Securities Exchange Act of 1934, as amended (the "1934
Act"), the Company will deliver in writing the following to each Investor or
permitted transferee of such Investor:
(i) Within forty-five (45) days after the end of each quarter in
each fiscal year, a consolidated balance sheet of the Company as of the end of
such quarter and a consolidated statement of operations of the Company for the
period from the beginning of the fiscal year to the end of such quarter and for
the comparable periods of the immediately preceding fiscal year, in each case
unaudited but prepared in accordance with GAAP and accompanied by a statement of
the Chief Financial Officer or other senior executive officer of the Company to
the effect that the quarterly financial statements are true, complete and
correct in all material respects and have been prepared in accordance with GAAP,
subject to normal year-end adjustments and the omission of notes;
(ii) Within ninety (90) days after the end of each fiscal year of
the Company, a consolidated balance sheet of the Company as of the end of such
fiscal year and the related consolidated statements of operations, changes in
Stockholders' equity and cash flows for the fiscal year then ended and for the
immediately preceding fiscal year, prepared in accordance with GAAP and audited
by the Company's independent public accountants, together with such firm's
report thereon;
(iii) Such other information regarding the business, prospects,
financial condition, operations and affairs of the Company and its Subsidiaries
as such Investor may reasonably request. To such end, except when necessary to
preserve the confidentiality of information or to avoid real or apparent
conflicts of interest, the Company will permit such Investor or transferee or
such Person's authorized representatives to visit and inspect the properties and
records of the Company and to discuss its business, prospects, financial
condition, operations and affairs with directors, officers and employees of the
Company, during normal business hours and upon reasonable notice, as often as
may be reasonably requested.
(c) The Company shall use the proceeds from the sale of the Notes and
Warrants as follows: for pending revenue projects, for current working capital,
and the payment of expenses pursuant to the Purchase Agreement.
(d) The Company shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock, such number of its duly
authorized shares of Common Stock as shall be sufficient to effect the
conversion of the Notes and the Warrants. If at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of all of the outstanding Notes and the Warrants, the Company
shall use its best efforts to, as soon as reasonably practical, take such
corporate action, subject to such approvals as may be required by applicable
law, as may be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purposes.
The Company will use its best efforts to obtain promptly any authorization,
consent, approval or take any other action or make any filing with any court or
administrative body that may be required under applicable state securities laws
in connection with the issuance of shares of Common Stock upon conversion of the
Notes and Warrants.
Section 5.2 Negative Covenants. The Company shall not, without the prior
written consent of Investors owning at least a majority of the Shares (on a
Fully-Diluted Basis) then owned by all Investors:
(a) amend the Certificate of Incorporation or Bylaws of the Company or
any of its Subsidiaries, if such amendment would change any of the rights,
preferences or privileges of the Investors under the Notes or the Warrants;
(b) take any action or permit any Subsidiary to take any action which
the Company is precluded from taking by this Agreement, the Purchase Agreement
or the Company's Certificate of Incorporation, as amended or restated from time
to time;
(c) make any loans, enter into any contracts or engage in other
transactions with or permit any of its Subsidiaries to make any loans, enter
into any contracts or engage in other transactions with, any of the Company's
officers, directors, or any Person who, at the time, is a Five Percent
Stockholder (or any Affiliates of any of the foregoing) in an amount equal to or
in excess of $25,000 alone or when aggregated with other transactions with such
Person in any rolling twelve (12) month period (other than employment agreements
in effect on October 29, 2002, awards to employees, consultants, officers and
directors of the Company under an equity incentive plan but only to the extent
that such awards would be deemed to be "Exempt Issuances" under Section 2.3
hereof, and obligations of the Company reflected on its books and records as of
October 29, 2002); or
(d) agree to any of the foregoing.
ARTICLE VI
COVENANTS OF THE INVESTORS
Section 6.1 No Open Market Purchases. During the period commencing on the
Closing Date (as defined in the Purchase Agreement) and running for three (3)
years thereafter, the Investors shall not purchase any shares of the Company's
Common Stock in open market transactions, unless such purchase is approved by
the Board.
ARTICLE VII
COVENANTS OF THE EXISTING STOCKHOLDERS
Section 7.1 Over Issuances. If at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the conversion
of all of the outstanding Notes and the Warrants, each of the Existing
Stockholders hereby agrees to promptly vote all of their Shares entitled to vote
thereon to grant such approvals as may be required by applicable law to increase
the amount of the Company's authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for such purposes.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Notices. All notices and other communications required or
permitted to be given pursuant to this Agreement shall be in writing signed by
the sender, and shall be deemed duly given (i) on the date delivered if
personally delivered, (ii) on the date sent by telecopier with automatic
confirmation by the transmitting machine showing the proper number of pages were
transmitted without error, (iii) on the Business Day after being sent by Federal
Express or another recognized overnight mail service which utilizes a written
form of receipt for next day or next business day delivery, or (iv) two (2)
Business Days after mailing, if mailed by United States postage-prepaid
certified or registered mail, return receipt requested, in each case addressed
to the applicable party at the address set forth below; provided that a party
hereto may change its address for receiving notice by the proper giving of
notice hereunder:
If to the Company to: WorldWater Corp.
00 Xxxxx 00 Xxxxx
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxxxx
With a copy (which shall not constitute notice) to:
Xxxxx, Xxxxxxx, Xxxxxxx & Xxxxxx
000 Xxxxxxxx Xxxx Xxxx
Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxxx Xxxxx, Esq.
If to the Investors, to the address set forth on the signature page to the
Purchase Agreement. A copy (which shall not constitute notice) must also be sent
to: Xxxxxxxxxx Xxxxxxx PC, 00 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000,
Attention: Xxxxxx X. Xxxxxxxxx, Esq., Telecopier No.: (000) 000-0000; Telephone
No.: (000) 000-0000.
Section 8.2 Entire Agreement. This Agreement and the other Transaction
Documents, and the exhibits and schedules hereto and thereto, contains, and is
intended to be, a complete statement of all the terms of the arrangements
between or among the parties hereto with respect to the matters set forth
herein, and supersedes any previous agreements, understandings and discussions
between the parties hereto with respect to those matters. There are no promises,
representations, warranties, covenants or undertakings other than those set
forth herein and in the other Transaction Documents, and the exhibits and
schedules hereto and thereto
Section 8.3 Modifications and Amendments. This Agreement may not be amended
or modified without the written consent of the Company and Investors owning at
least a majority of the outstanding Shares (on a Fully-Diluted Basis) then owned
by all Investors; provided, that any amendment or modification of any provision
hereof requiring the consent, approval or other action by a greater percentage
of the outstanding Shares owned by all Investors, shall require the written
consent of such greater percentage of such Investors.
Section 8.4 Benefit; Assignability. This Agreement shall be binding on and
shall inure to the benefit of the parties hereto and their respective heirs,
successors, permitted assigns and legal representatives and is not intended, nor
shall be construed, to give any Person, other than the parties hereto and their
respective heirs, successors, assigns and legal representatives, any legal or
equitable right, remedy or claim hereunder. The Common Stock, the Notes and the
Warrants (together with the rights of the Investors relating to the Common
Stock, the Notes and the Warrants) shall be transferable and assignable by each
Investor to any investors in, and officers, directors, members, managers and
partners of, an Investor, and any Affiliate (and each of its officers,
directors, members, managers and partners) or heirs, personal representatives,
or successors, of any of the foregoing.
Section 8.5 Governing Law; Jurisdiction. This Agreement and any and all
matters arising directly or indirectly herefrom ("Agreement Matters") shall be
governed by and construed and enforced in accordance with the internal laws of
the State of New Jersey applicable to agreements made and to be performed
entirely in such state, without giving effect to the conflict of law principles
thereof. Each of the parties hereto hereby (i) irrevocably consents and submits
to the sole exclusive jurisdiction of the United States District Court for the
District of New Jersey and any state court in the State of New Jersey (and of
the appropriate appellate courts from any of the foregoing) in connection with
any suit, arbitration, mediation, action or other proceeding (each a
"Proceeding") directly or indirectly arising out of or relating to any Agreement
Matter; provided that a party to this Agreement shall be entitled to enforce an
order or judgment of a such court in any United States or foreign court having
jurisdiction over the other party hereto, (ii) irrevocably waives, to the
fullest extent permitted by law, any objection that it may now or hereafter have
to the laying of the venue of any such Proceeding in any such court or that any
such Proceeding which is brought in any such court has been brought in an
inconvenient forum, (iii) waives, to the fullest extent permitted by law, any
immunity from jurisdiction of any such court or from any legal process therein,
and (iv) agrees that service of any summons, complaint, notice or other process
relating to such Proceeding may be effected in the manner provided for the
giving of notice hereunder.
Section 8.6 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the fullest extent
permitted by applicable law, the parties hereby waive any provision of law which
renders any provisions hereof prohibited or unenforceable in any respect. If it
is ever held that any restriction hereunder is too broad to permit enforcement
of such restriction to its fullest extent, such restriction shall be enforced to
the maximum extent permitted by applicable law.
Section 8.7 Interpretation.
(a) Article, Section, and Subsection headings are not to be considered part
of this Agreement, are included solely for convenience of reference and are not
intended to be full or accurate descriptions of the contents thereof.
(b) Use of the terms "herein," "hereunder," "hereof," and like terms shall
be deemed to refer to this entire Agreement and not merely to the particular
provision in which the term is contained, unless the context clearly indicates
otherwise.
(c) Use of the word "including" or a like term shall be construed to mean
"including, but not limited to."
(d) Words importing a particular gender shall include every other gender,
and words importing the singular shall include the plural and vice-versa, unless
the context clearly indicates otherwise.
Section 8.8 No Waiver of Rights, Powers and Remedies. No failure or delay
by a party hereto in exercising any right, power or remedy under this Agreement,
and no course of dealing among the parties hereto, shall operate as a waiver of
any such right, power or remedy of the party. No single or partial exercise of
any right, power or remedy under this Agreement by a party hereto, nor any
abandonment or discontinuance of steps to enforce any such right, power or
remedy, shall preclude such party from any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder. The election of any
remedy by a party hereto shall not constitute a waiver of the right of such
party to pursue other available remedies. No notice to or demand on a party not
expressly required under this Agreement shall entitle the party receiving such
notice or demand to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the party giving such
notice or demand to any other or further action in any circumstances without
such notice or demand.
Section 8.9 Counterparts; Facsimile. This Agreement may be executed in one
or more counterparts, and by different parties hereto on separate counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument and shall be effective upon delivery of
counterpart signatures by all parties hereto. Execution and delivery of this
Agreement by facsimile transmission shall constitute execution and delivery of
this Agreement for all purposes, with the same force and effect as execution and
delivery of an original manually signed copy hereof.
Section 8.10 No Jury Trial. Each party acknowledges and agrees that any
controversy which may arise under this Agreement is likely to involve
complicated and difficult issues. Accordingly, each such party hereby
irrevocably and unconditionally waives any right such party may have to a trial
by jury in respect to any litigation directly or indirectly arising out of or
relating to this Agreement or the transactions contemplated by this Agreement.
Each party certifies and acknowledges that (i) no other party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver, (ii) each such party
understands and has considered the implications of this waiver, (iii) each such
party makes this waiver voluntarily, and (iv) each such party has been induced
to enter into this Agreement by, among other things, the waivers and
certifications in this Section 8.10.
Section 8.11 Shares Subject to this Agreement. The Stockholders expressly
agree that the terms and restrictions of this Agreement shall apply to all
shares of capital stock of the Company which any of them now owns or hereafter
acquires by any means, including without limitation by purchase, assignment or
operation of law, or as a result of any stock dividend, stock split,
reorganization, reclassification, whether voluntary or involuntary, or other
similar transaction, and to any shares of capital stock of any successor in
interest of the Company, whether by sale, merger, consolidation or other similar
transaction, or by purchase, assignment or operation of law (the "Shares").
Section 8.12 Legend. Each certificate representing the Shares held of
record or beneficially owned by the Stockholders shall bear a legend in
substantially the following form, until such time as the shares of capital stock
represented thereby are no longer subject to the provisions hereof:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF AN INVESTOR RIGHTS AGREEMENT AMONG THE COMPANY
AND CERTAIN OF ITS STOCKHOLDERS DATED AS OF NOVEMBER 8, 2002, AS
AMENDED OR AMENDED AND RESTATED FROM TIME TO TIME, A COPY OF WHICH
AGREEMENT IS AVAILABLE FOR INSPECTION AT THE OFFICES OF THE COMPANY OR
MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST TO THE SECRETARY OF THE
COMPANY."
IN WITNESS WHEREOF, the parties hereto have executed this Investor Rights
Agreement or caused this Investor Rights Agreement to be executed by their duly
authorized representatives, as of the date first written above.
WORLDWATER CORP.
By:
/s/Xxxxxxx Xxxxx
----------------------------------------
Name: Xxxxxxx Xxxxx
Title:Chief Executive Officer
MILLENNIUM 3 OPPORTUNITY FUND, LLC
By: /s/Xxx Xxxxxxxx
----------------------------------------
Name: Xxx Xxxxxxxx
Title: Member Manager
JOINDER SIGNATURE PAGE FOR "EXISTING STOCKHOLDERS" TO
INVESTOR RIGHTS AGREEMENT DATED AS OF NOVEMBER 8, 2002
The undersigned hereby agrees to be bound as an "Existing Stockholder" and
as a "Co-Sale Stockholder" by the Investor Rights Agreement dated as of November
8, 2002 among WorldWater Corp. (the "Company"), a Delaware corporation, certain
existing stockholders of the Company listed on Exhibit A attached thereto and
the persons and entities listed on Exhibit B attached thereto, and agrees that
such undersigned's signature below shall constitute execution of the Investor
Rights Agreement.
Dated: /s/Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
JOINDER SIGNATURE PAGE FOR "EXISTING STOCKHOLDERS" TO
INVESTOR RIGHTS AGREEMENT DATED AS OF NOVEMBER 8, 2002
The undersigned hereby agrees to be bound as an "Existing Stockholder" by
the Investor Rights Agreement dated as of November 8, 2002 among WorldWater
Corp. (the "Company"), a Delaware corporation, certain existing stockholders of
the Company listed on Exhibit A attached thereto and the persons and entities
listed on Exhibit B attached thereto, and agrees that such undersigned's
signature below shall constitute execution of the Investor Rights Agreement.
Dated: /s/Xxxxxxxx Xxxxx
------------------------------------------------
Xxxxxxxx Xxxxx
JOINDER SIGNATURE PAGE FOR "EXISTING STOCKHOLDERS" TO
INVESTOR RIGHTS AGREEMENT DATED AS OF NOVEMBER 8, 2002
The undersigned hereby agrees to be bound as an "Existing Stockholder" by
the Investor Rights Agreement dated as of November 8, 2002 among WorldWater
Corp. (the "Company"), a Delaware corporation, certain existing stockholders of
the Company listed on Exhibit A attached thereto and the persons and entities
listed on Exhibit B attached thereto, and agrees that such undersigned's
signature below shall constitute execution of the Investor Rights Agreement.
Dated: /s/Xxxxx Xxxxxxxxxxxx
----------------------------------------
Xxxxx Xxxxxxxxxxxx
JOINDER SIGNATURE PAGE FOR "EXISTING STOCKHOLDERS" TO
INVESTOR RIGHTS AGREEMENT DATED AS OF NOVEMBER 8, 2002
The undersigned hereby agrees to be bound as an "Existing Stockholder" by
the Investor Rights Agreement dated as of November 8, 2002 among WorldWater
Corp. (the "Company"), a Delaware corporation, certain existing stockholders of
the Company listed on Exhibit A attached thereto and the persons and entities
listed on Exhibit B attached thereto, and agrees that such undersigned's
signature below shall constitute execution of the Investor Rights Agreement.
Dated: /s/Rolf Frauendelder
------------------------------------
Xxxx Xxxxxxxxxxxx
JOINDER SIGNATURE PAGE FOR "EXISTING STOCKHOLDERS" TO
INVESTOR RIGHTS AGREEMENT DATED AS OF NOVEMBER 8, 2002
The undersigned hereby agrees to be bound as an "Existing Stockholder" by
the Investor Rights Agreement dated as of November 8, 2002 among WorldWater
Corp. (the "Company"), a Delaware corporation, certain existing stockholders of
the Company listed on Exhibit A attached thereto and the persons and entities
listed on Exhibit B attached thereto, and agrees that such undersigned's
signature below shall constitute execution of the Investor Rights Agreement.
Dated: /s/Xxxxx Xxxxxx
----------------------------------------
Xxxxx Xxxxxx
JOINDER SIGNATURE PAGE FOR "EXISTING STOCKHOLDERS" TO
INVESTOR RIGHTS AGREEMENT DATED AS OF NOVEMBER 8, 2002
The undersigned hereby agrees to be bound as an "Existing Stockholder" by
the Investor Rights Agreement dated as of November 8, 2002 among WorldWater
Corp. (the "Company"), a Delaware corporation, certain existing stockholders of
the Company listed on Exhibit A attached thereto and the persons and entities
listed on Exhibit B attached thereto, and agrees that such undersigned's
signature below shall constitute execution of the Investor Rights Agreement.
Dated: /s/Xxxx Xxxxxxx
-------------------------------
Xxxx Xxxxxxx
