WORLD WASTE TECHNOLOGIES, INC.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of
_____________________, 2004, by and among World Waste Technologies, Inc., a
California corporation (the "Company"), and the persons and entities listed on
Exhibit A hereto (each, a "Holder" and, collectively, the "Holders").
RECITALS:
A. The Company has sold Units comprised of shares of common stock ("Common
Shares") and warrants to purchase Common Shares ("Warrants") (collectively, the
"Shares") to the Holders pursuant to one or more Subscription Agreements (each a
"Subscription").
B. The sale of the Shares is conditional upon the extension of the rights
set forth herein, and by this Agreement the Company and the Holders desire to
provide for certain rights as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants contained herein, the parties, severally and not jointly,
hereby agree as follows:
AGREEMENT:
1. Registration Rights.
1.1 Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
(a) The terms "register", "registered" and "registration"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act of 1933, as amended (the
"Securities Act"), and the declaration or ordering of the effectiveness of such
registration statement.
(b) The term "Registrable Securities" means (i) any and all
Shares issued and sold by the Company pursuant to the Subscriptions; (ii) stock
issued in lieu of the Shares referred to in (i) in any reorganization which has
not been sold to the public; or (iii) stock issued in respect of the Shares
referred to in (i) and (ii) as a result of a stock split, stock dividend,
recapitalization or the like, which has not been sold to the public.
(c) The terms "Holder" or "Holders" means any person or
persons to whom Registrable Securities were originally issued or qualifying
transferees under subsection 1.9 hereof who hold Registrable Securities.
(d) The term "SEC" means the Securities and Exchange
Commission.
(e) The term "Registration Expenses" shall mean all expenses
incurred by the Company in complying with subsections 1.2, 1.3 and 1.4 hereof,
including, without limitation, all registration, qualification and filing fees,
printing expenses, escrow fees, fees and disbursements of counsel for the
Company, blue sky fees and expenses, and the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company which shall be paid in any event by the
Company).
1.2 Company Registration.
(a) Registration. If at any time or from time to time, the
Company shall determine to register any shares of its common stock, for its own
account or the account of any of its shareholders, other than a registration on
Form S-8 relating solely to employee, director or consultant stock option or
purchase plans or other equity compensation plans, or a registration on Form S-4
relating solely to a SEC Rule 145 transaction, the Company will:
(i) promptly give to each Holder written notice thereof
at least 10 days prior to the initial filing of the registration statement
relating to such registration;
(ii) include in such registration, and in any
underwriting involved therein, all the Registrable Securities specified in a
written request or requests, made within 5 days after receipt of such written
notice from the Company, by any Holder or Holders, except as set forth in
subsection 1.2(b) below; and
(iii) include in such registration statement the "Plan
of Distribution" attached hereto as Exhibit B.
Notwithstanding the foregoing, if the Company shall have already registered for
resale pursuant to a registration in accordance with Section 1.3 all of the
Registrable Securities, the Company shall not be required to include such
Registrable Securities in the Company's registration or to deliver the written
notice to each Holder as provided in subsection 1.2(a)(i).
(b) Underwriting.
(i) If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to subsection 1.2(a)(i). In such event the right of any Holder to
registration pursuant to subsection 1.2 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein.
Notwithstanding the foregoing, if the Company proposes to commence an
underwriting with respect to shares of its common stock and shall not have
otherwise been required to deliver a notice of the registration to the Holders
of its Registrable Securities pursuant to the last sentence of subsection
1.2(a), the Company shall deliver a written notice of such underwriting at least
10 days prior to the commencement of such underwriting and provide the Holders
an opportunity to participate in such underwriting in accordance with this
subsection 1.2(b). The Company shall, subject to subsection 1.2(b)(ii) below,
include the Registrable Securities of any Holder in such underwriting that
specifies in a written request or requests, made within 5 days after receipt of
such written notice from the Company. All Holders proposing to distribute their
Registrable Securities through any such underwriting pursuant to this subsection
1.2(b) shall (together with the Company and the other shareholders distributing
their shares of common stock through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company.
(ii) Notwithstanding any other provision of this
subsection 1.2, if the underwriter managing such public offering determines that
marketing factors require a limitation of the number of shares of common stock
to be underwritten, and (A) if such registration is the first registered
offering of the sale of the Company's common stock to the general public, the
underwriter may limit the number of Registrable Securities to be included in the
registration and underwriting, or may exclude Registrable Securities entirely
from such registration and underwriting, or (B) if such registration is other
than the first registered offering of the sale of the Company's common stock to
the general public, the underwriter may limit the amount of Registrable
Securities to be included in the registration and underwriting by the Company's
shareholders; provided however, the number of Registrable Securities to be
included in such registration and underwriting under this subsection 1.2(b)(ii)
shall not be reduced to less than thirty percent (30%) of the aggregate shares
of common stock included in such underwriting without the prior consent of at
least a majority of the Holders who have requested their Registrable Securities
to be included in such underwriting. The Company shall so advise all Holders of
Registrable Securities which would otherwise be underwritten pursuant hereto,
and the number of shares of Registrable Securities that may be included in the
underwriting shall be allocated among Holders requesting inclusion in such
underwriting in proportion, as nearly as practicable, to the respective amounts
of Registrable Securities held by each of such Holders as of the date of the
notice pursuant to subsection 1.2(a)(i) above; provided that the number of
shares of Registrable Securities requested to be included in such underwriting
shall not be reduced unless all other shares of common stock being sold by
shareholders other than the Holders are first entirely excluded from the
underwriting. If any Holder disapproves of the terms of any such underwriting,
such Holder may elect to withdraw therefrom by written notice to the Company and
the underwriter. Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.
1.3 Form SB-2 or S-3. In addition to the rights and obligations set
forth in subsection 1.2 above, within ninety (90) days of completion of the
private placement of Units pursuant to the Company's private placement
memorandum dated September___, 2004, Company will use commercially reasonable
efforts to prepare and file a registration statement to register the resale from
time to time of the Holder's Registrable Securities. The registration shall be
on on Forms SB-2 or S-3 (or any successor to Forms SB-2 or S-3) and shall
contain the "Plan of Distribution" attached hereto as Exhibit B. In such a
registration, the Company shall use commercially reasonable efforts to cause
such registration statement on Forms SB-2 or S-3 (or any successor form to Forms
SB-2 or S-3) to be declared effective by the SEC as soon as practicable;
provided, however the Company shall not be required to effect a registration
pursuant to this subsection 1.3:
(a) in any particular jurisdiction in which the Company would
be required to execute a general consent to service of process in effecting such
registration, qualification or compliance unless the Company is already subject
to service in such jurisdiction and except as may be required by the Securities
Act; or
(b) during the period starting with the date of filing of, and
ending on a date 90 days following the effective date of, a registration
statement pursuant to subsection 1.2, provided that the Company is actively
employing in good faith all reasonable efforts to cause such registration
statement to become effective and further provided that no other person or
entity could require the Company to file a registration statement in such
period.
Any Holder that intends to dispose of Registrable Securities pursuant to a
registration under this subsection 1.3 shall not offer, sell or otherwise
dispose of any Registrable Securities unless it has provided to the Company a
written notice of its intent to offer and sell the Registrable Securities
pursuant to a registration under this subsection 1.3 at least ten (10) days
prior to the offer or sale of the Registrable Securities. Upon receipt of such
notice by the Company from a Holder, the Company may voluntarily suspend the
effectiveness of any registration statement filed pursuant to this subsection
1.3 for a limited time, which in no event shall be longer than 90 days in any
six-month period, if the Company has been advised by counsel or underwriters to
the Company that the offering for resale of any Registrable Securities pursuant
to the registration statement would materially adversely affect, or would be
improper in view of (or improper without disclosure in a prospectus), a proposed
financing, a reorganization, recapitalization, merger, consolidation or other
transaction involving the Company.
Notwithstanding any other provision of this subsection 1.3, if the
Company's Board of Directors reasonably determines that marketing factors
require a limitation of the number of shares of common stock to be registered,
the Company may limit the amount of Registrable Securities to be included in the
registration; provided however, the number of Registrable Securities to be
included in such registration and underwriting under this subsection shall not
be reduced to less than thirty percent (30%) of the Registrable Securities
without the prior consent of at least a majority of the Holders. The Company
shall so advise all Holders of Registrable Securities which would otherwise be
registered pursuant hereto, and the number of shares of Registrable Securities
that may be included in the registration shall be allocated among Holders in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities held by each of such Holders; provided that the number of shares of
Registrable Securities included in such registration shall not be reduced unless
all other shares of common stock being sold by shareholders other than the
Holders are first entirely excluded from the registration. Any Registrable
Securities excluded or withdrawn from such underwriting shall be withdrawn from
such registration.
1.4 Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Section 1 shall be borne by the Company except as follows:
(a) The Company shall not be required to pay fees or
disbursements of more than one firm of legal counsel to the Holders, such fees
to not exceed $10,000 in the aggregate.
(b) The Company shall not be required to pay underwriters'
fees, discounts or commissions relating to Registrable Securities.
1.5 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Agreement,
the Company will keep each Holder participating therein advised in writing as to
the initiation of each registration, qualification and compliance and as to the
completion thereof. Except as otherwise provided in subsection 1.4, at its
expense the Company will:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its commercially reasonable
efforts to cause such registration statement to become effective, and, upon the
request of the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for up to 120 days, or if
such registration statement is on Form SB-2 or S-3 (or any successor to Form
SB-2 or S-3) and provides for sales of securities from time to time pursuant to
Rule 415 under the Securities Act, for up to one year.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such registration statement.
(c) Furnish, without charge, to the Holders such numbers of
copies of a prospectus, including each preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other documents as they
may reasonably request in order to facilitate the disposition of Registrable
Securities owned by them. The Holders shall not be entitled to use any selling
materials other than a prospectus and such other materials as may be approved by
the Company, which approval shall not be unreasonably withheld.
(d) Use its commercially reasonable efforts to register and
qualify the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders or any managing underwriter, provided that the Company
shall not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in any
such states or jurisdictions.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Notwithstanding
the foregoing, the Company shall not be obligated to enter into an underwriting
agreement with any underwriter unless the Company was previously consulted with
respect to the selection of each underwriter and the Company consented to such
selection, which consent shall not be unreasonably withheld. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act or the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
(g) The Company shall:
(i) make available for inspection by a representative of
the Holders, the managing underwriter participating in any disposition pursuant
to such registration statement and one firm of attorneys designated by the
Holders (upon execution of customary confidentiality agreements reasonably
satisfactory to the Company and its counsel), at reasonable times and in
reasonable manner, financial and other records, documents and properties of the
Company that are pertinent to the conduct of due diligence customary for an
underwritten offering, and cause the officers, directors and employees of the
Company to supply all information reasonably requested by any such
representative, underwriter or attorney in connection with a registration
statement as shall be necessary to enable such persons to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act.
(ii) use its commercially reasonable efforts to cause
all Registrable Securities covered by a registration statement to be listed on
any securities exchange or any automated quotation system on which the shares of
common stock of the Company are then listed;
(iii) cause to be provided to the Holders that are
selling Registrable Securities pursuant to such registration statement and to
the managing underwriter if any disposition pursuant to such registration
statement is an underwritten offering, upon the effectiveness of such
registration statement, a customary "10b-5" opinion of independent counsel (an
"Opinion") and a customary "cold comfort" letter of independent auditors (a
"Comfort Letter") in each case addressed to such Holders and managing
underwriter, if any;
(iv) notify in writing the Holders that are selling
Registrable Securities pursuant to such registration statement and any managing
underwriter if any disposition pursuant to such registration statement is an
underwritten offering, (A) when the registration statement has become effective
and when any post-effective amendment thereto has been filed and becomes
effective, (B) of any request by the SEC or any state securities authority for
amendments and supplements to the registration statement or of any material
request by the SEC or any state securities authority for additional information
after the registration statement has become effective, (C) of the issuance by
the SEC or any state securities authority of any stop order suspending the
effectiveness of the registration statement or the initiation of any proceedings
for that purpose, (D) if, between the effective date of the registration
statement and the closing of any sale of Registrable Securities covered thereby,
the representations and warranties of the Company contained in any underwriting
agreement, securities sales agreement or other similar agreement, including this
Agreement, relating to disclosure cease to be true and correct in all material
respects or if the Company receives any notification with respect to the
suspension of the qualification of the Registrable Securities for sale in any
jurisdiction or the initiation of any proceeding for such purpose, (E) of the
happening of any event during the period the registration statement is effective
such that such registration statement or the related prospectus contains an
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make statements therein not misleading (in
the case of a prospectus, in light of circumstances under which they were made)
and (F) of any determination by the Company that a post-effective amendment to
the registration statement would be appropriate. The Holders hereby agree to
suspend, and to cause any managing underwriter to suspend, use of the prospectus
contained in a registration statement upon receipt of such notice under clause
(C), (E) or (F) above until, in the case of clause (C), such stop order is
removed or rescinded or, in the case of clauses (E) and (F), the Company has
amended or supplemented such prospectus to correct such misstatement or omission
or otherwise.
If the notification relates to an event described in
clauses (E) or (F), the Company shall promptly prepare and furnish to each
selling Holder and each underwriter, if any, a reasonable number of copies of a
prospectus supplemented or amended so that, as thereafter delivered to the
purchasers of such Registrable Securities, 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.
(v) provide and cause to be maintained a transfer agent
and registrar for all such Registrable Securities covered by such registration
statement not later than the effective date of such registration statement;
(vi) deliver promptly upon request to each Holder
participating in the offering and each underwriter, if any, copies of all
correspondence between the SEC and the Company, its counsel or auditors and all
memoranda relating to discussions with the SEC and its staff with respect to the
registration statement, other than those portions of any such correspondence and
memoranda which contain information subject to attorney-client privilege with
respect to the Company, and, upon receipt of such confidentiality agreements as
the Company may reasonably request, make reasonably available for inspection by
any Holder of such Registrable Securities covered by such registration
statement, by any underwriter, if any, participating in any disposition to be
effected pursuant to such registration statement and by any attorney, accountant
or other agent retained by any such Holder or any such underwriter, all
pertinent financial and other records, pertinent corporate documents and
properties of the Company, and cause all of the Company's officers, directors
and employees to supply all information reasonably requested by any such Holder,
underwriter, attorney, accountant or agent in connection with such registration
statement;
(vii) use commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of the registration
statement;
(viii) provide a CUSIP number for all Registrable
Securities not later than the effective date of any registration statement;
(ix) make reasonably available its employees and
personnel and otherwise provide reasonable assistance to the underwriters in the
marketing of Registrable Securities in any underwritten offering;
(x) promptly prior to the filing of any document which
is to be incorporated by reference into the registration statement or the
prospectus (after the initial filing of such registration statement) (other than
a registration statement or prospectus prepared pursuant to subsection 1.3)
provide copies of such document to counsel to the seller of Registrable
Securities and to the managing underwriter, if any, and make the Company's
representatives reasonably available for discussion of such document and make
such changes in such document concerning such sellers prior to the filing
thereof as counsel for such sellers or underwriters may reasonably request; and
(xi) cooperate with the sellers of Registrable
Securities and the managing underwriter, if any, to facilitate the timely
preparation and delivery of certificates not bearing any restrictive legends
representing the Registrable Securities to be sold, and cause such Registrable
Securities to be issued in such denominations and registered in such names in
accordance with the underwriting agreement prior to any sale of Registrable
Securities to the underwriters or, if not an underwritten offering, in
accordance with the instructions of the sellers of Registrable Securities at
least three business days prior to any sale of Registrable Securities.
1.6 Indemnification.
(a) The Company will indemnify and hold harmless to the
fullest extent permitted by law each Holder of Registrable Securities and each
of its officers, directors and partners, and each person controlling such
Holder, with respect to which such registration, qualification or compliance has
been effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls any underwriter of the Registrable Securities held by or
issuable to such Holder, against all claims, losses, expenses, damages and
liabilities (or actions in respect thereto) arising out of or based on (i) any
untrue statement (or alleged untrue statement) of a material fact contained in
any registration statement under which such securities were registered under the
Securities Act or 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; (ii) any untrue statement (or alleged untrue statement) of a
material fact contained in any preliminary or final prospectus, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statement therein, in light of the
circumstances under which they were made, or not misleading, or (iii) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act or any state securities law applicable to the Company or any rule
or regulation promulgated under the Securities Act, the Exchange Act or any such
state law and relating to action or inaction required of the Company in
connection with any such registration, qualification of compliance, and will
reimburse each such Holder, each of its officers, directors and partners, and
each person controlling such Holder, each such underwriter and each person who
controls any such underwriter, within a reasonable amount of time after incurred
for any reasonable legal and any other expenses incurred in connection with
investigating, defending or settling any such claim, loss, damage, liability or
action; provided, however, that the indemnity agreement contained in this
subsection 1.6(a) shall not apply to amounts paid in settlement of any such
claim, loss, damage, liability, or action if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably withheld);
and provided further, that the Company will not be liable in any such case to
the extent that any such claim, loss, damage or liability arises out of or is
based on any untrue statement or omission based upon written information
furnished to the Company by such Holder or underwriter specifically for use
therein; and provided further, however, that the Company will not be liable in
any such case to the extent that any such claim, loss, damage or liability
arises directly out of or is based primarily upon an untrue statement or
omission made in any preliminary or final prospectus if (i) such Holder failed
to send or deliver a copy of the final prospectus or prospectus supplement with
or prior to the delivery of written confirmation of the sale of the Registrable
Securities and (ii) the final prospectus or prospectus supplement would have
corrected such untrue statement or omission.
(b) Each Holder will, if Registrable Securities held by or
issuable to such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, severally and not
jointly, indemnify and hold harmless to the fullest extent permitted by law the
Company, each of its directors and officers, each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company within the meaning of the Securities Act, and each other
such Holder, each of its officers, directors and partners and each person
controlling such Holder, against all claims, losses, expenses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement or final prospectus, or based on any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Company, such Holders, such directors, officers, partners, persons
or underwriters for any reasonable legal or any other expenses incurred in
connection with investigating, defending or settling any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement or prospectus in reliance upon
and in conformity with information furnished to the Company by such Holder
specifically for use therein; provided, however, that the indemnity agreement
contained in this subsection 1.6(b) shall not apply to amounts paid in
settlement of any such claim, loss, damage, liability or action if such
settlement is effected without the consent of the Holder, (which consent shall
not be unreasonably withheld); and provided further, that the total amount for
which any Holder shall be liable under this subsection 1.6(b) shall not in any
event exceed the net proceeds received by such Holder from the sale of
Registrable Securities held by such Holder in such registration; and provided
further, that a Holder will not be liable in any such case to the extent that
any such claim, loss, damage or liability arises out of or is based on any
untrue statement or omission based upon written information furnished to the
Holder by the Company or underwriter specifically for use therein.
(c) Each party entitled to indemnification under this
subsection 1.6 (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom; provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld), and the Indemnified Party may participate in such
defense at such party's expense; and provided further, that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations hereunder, except to the extent such
failure resulted in material prejudice to the Indemnifying Party; and provided
further, that an Indemnified Party (together with all other Indemnified Parties
which may be represented without conflict by one counsel) shall have the right
to retain one separate counsel, with the fees and expenses to be paid by the
Indemnifying Party, if representation of such Indemnified Party by the counsel
retained by the Indemnifying Party would be inappropriate due to actual or
potential differing interests between such Indemnified Party and any other party
represented by such counsel in such proceeding. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation.
(d) If for any reason the foregoing indemnity is unavailable
or is insufficient to hold harmless an indemnified party under subsection 1.6,
then each Indemnifying Party shall contribute to the amount paid or payable by
such Indemnified Party as a result of any claim in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party, on the one
hand, and the Indemnified Party, on the other hand, with respect to such
offering of securities. The relative fault 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 the Indemnified Party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. If, however, the
allocation provided in the second preceding sentence is not permitted by
applicable law, then each Indemnifying Party shall contribute to the amount paid
or payable by such Indemnified Party in such proportion as is appropriate to
reflect not only such relative faults, but also any other relevant equitable
considerations. The parties hereto agree that it would not be just and equitable
if contributions pursuant to this subsection 1.6(d) were to be determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in the preceding sentences of
this subsection 1.6(d). The amount paid or payable in respect of any claim shall
be deemed to include any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such claim.
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 in this subsection 1.6 to the contrary, no Indemnifying Party (other
than the Company) shall be required pursuant to this subsection 1.6(d) to
contribute any amount in excess of the net proceeds received by such
Indemnifying Party from the sale of Registrable Securities in the offering to
which the losses, claims, damages or liabilities of the Indemnified Parties
relate, less the amount of any indemnification payment made pursuant to
subsection 1.6.
(e) The 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 and shall survive the transfer of the
Registrable Securities by any such party.
1.7 Information by Holder. Any Holder or Holders of Registrable
Securities included in any registration shall promptly furnish to the Company
such information regarding such Holder or Holders and the distribution proposed
by such Holder or Holders as the Company may reasonably request and as shall be
required in connection with any registration, qualification or compliance
referred to herein.
1.8 Rule 144 Reporting. With a view to making available to Holders
the benefits of certain rules and regulations of the SEC which may permit the
sale of the Registrable Securities to the public without registration, the
Company agrees at all times to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144, after 90 days after the effective
date of the first registration filed by the Company for an offering of its
securities to the general public;
(b) 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
(at any time after it has become subject to such reporting requirements); and
(c) so long as a Holder owns any Registrable Securities, to
furnish to such Holder forthwith upon receipt of a written request a written
statement by the Company as to its compliance with the reporting requirements of
said Rule 144 (at any time after 90 days after the effective date of the first
registration statement filed by the Company for an offering of its securities to
the general public), and of the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents so filed by the Company as the Holder may reasonably request in
complying with any rule or regulation of the SEC allowing the Holder to sell any
such securities without registration.
1.9 Transfer of Registration Rights. Holders' rights to cause the
Company to register their securities and keep information available, granted to
them by the Company under subsections 1.2, 1.3 and 1.8, may be assigned to a
transferee or assignee of (i) at least 100,000 shares (as adjusted for stock
splits, stock dividends, recapitalizations and like events), (ii) the transfer
is in connection with the transfer of all the Registrable Securities of a
Holder, or (iii) to any constituent partners or members of a Holder which is a
partnership or limited liability company, or to affiliates (as such term is
defined in SEC Rule 405) of a Holder, provided, that (a) the Company is given
written notice by such Holder at the time of or within a reasonable time after
said transfer, stating the name and address of said transferee or assignee, and
identifying the securities with respect to which such registration rights are
being assigned; (b) the assignee or transferee of such rights agrees in writing
to be bound by the terms and conditions of this Agreement, and (c) solely as to
transfers pursuant to clause (iii) above, any transferees or assignees agree to
act through a single representative. The Company may prohibit the transfer of
any Holders' rights under this subsection 1.9 to any proposed transferee or
assignee who the Company reasonably believes is a competitor of the Company, or
when such transfer may violate applicable securities laws. Notwithstanding
anything else in this subsection 1.9, any Holder may transfer rights to a
transferee of a Holder's Registrable Securities if such transferee is a partner,
member or shareholder or a retired partner, member or shareholder of such
Holder.
1.10 "Market Stand-Off" Agreement. Each Holder hereby agrees that,
during the period of duration (not to exceed 180 days) specified by the Company
and an underwriter of common stock or other securities of the Company following
the effective date of an IPO, it shall not, to the extent requested by the
Company and such underwriter, directly or indirectly sell, offer to sell,
contract to sell (including, without limitation, any short sale), grant any
option to purchase, pledge or otherwise transfer or dispose of (other than to
donees who agree to be similarly bound) any securities of the Company held by it
at any time during such period except common stock included in such
registration. In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of each
Holder (and the shares of securities of every other person subject to the
foregoing restriction) until the end of such period.
1.11 Delay of Registration. No Holder shall have any rights to take
any actions to restrain, enjoin, or otherwise delay any registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Section 1.
1.12 Termination of Registration Rights. No Holder shall be entitled
to exercise any right provided for in this Section 1 at any time, and the
obligations of the Company to a Holder under this Section 1 shall terminate with
respect to such Holder, when such Holder may sell all its Registrable Securities
in a three (3) month period under Rule 144 of the Act.
2. General.
2.1 Waivers and Amendments. With the written consent of the record
holders of at least a majority of the Registrable Securities, the obligations of
the Company and the rights of the parties under this Agreement may be waived
(either generally or in a particular instance, either retroactively or
prospectively, and either for a specified period of time or indefinitely), and
with the same consent the Company, when authorized by resolution of its Board of
Directors, may enter into a supplementary agreement for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement; provided, however, that no such modification, amendment or
waiver shall reduce the aforesaid percentage of Registrable Securities without
the consent of all of the Holders of the Registrable Securities. Upon the
effectuation of each such waiver, consent, agreement of amendment or
modification, the Company shall promptly give written notice thereof to the
record holders of the Registrable Securities or Qualified Holders, as the case
may be, who have not previously consented thereto in writing. This Agreement or
any provision hereof may be changed, waived, discharged or terminated only by a
statement in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, except to the extent
provided in this subsection 3.1.
2.2 Governing Law. This Agreement shall be governed in all respects
by the laws of the State of California without regard the principles of
conflicts of law thereof.
2.3 Consent to Jurisdiction. The Company and each Holder (i) hereby
irrevocably submit to the non-exclusive jurisdiction of the United States
District Court for the Southern District of California and the courts of the
State of California located in the City of San Diego, California, for the
purposes of any suit, action or proceeding arising out of or relating to this
Agreement or the Subscription Agreement, and (ii) hereby waive, and agree not to
assert in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper. The Company and each Holder consent to process
being served in any such suit, action or proceeding by mailing a copy thereof to
such party at the address in effect for notices to it under this Agreement and
agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing in this Section 2.3 shall affect or limit any right
to serve process in any other manner permitted by law.
2.4 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
2.5 Entire Agreement. Except as set forth below, this Agreement and
the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof, and this Agreement shall supersede and cancel all prior
agreements between the parties hereto with regard to the subject matter hereof.
2.6 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be delivered by overnight
courier service or mailed by first class mail, postage prepaid, certified or
registered mail, return receipt requested, addressed (a) if to any Purchaser, at
such party's address as set forth in the Company's records, or at such other
address as such party shall have furnished to the Company in writing, or (b) if
to the Company, at such address as the Company shall have furnished to the
Purchaser in writing.
2.7 Severability. In case any provision of this Agreement shall be
invalid, illegal, or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement or any provision of the other
Agreement s shall not in any way be affected or impaired thereby.
2.8 Titles and Subtitles. The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
2.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date set forth underneath their respective signatures below.
"COMPANY"
World Waste Technologies, Inc.,
a California corporation
By:
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Print:
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Date: _________________________________, 2004
"HOLDER"
By:
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Print:
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Date: ______________________________, 2004
EXHIBIT A
PURCHASERS
Names and Addresses Number of Shares Number of Warrants Dollar Amount
of Purchasers Purchased Purchased of Purchase Price
------------- --------- --------- -----------------
A-1
EXHIBIT B
PLAN OF DISTRIBUTION
We are registering the shares of common stock on behalf of the selling
stockholders. The common stock may be sold in one or more transactions at fixed
prices, at prevailing market prices at the time of sale, at prices related to
the prevailing market prices, at varying prices determined at the time of sale,
or at negotiated prices. These sales may be effected at various times in one or
more of the following transactions:
o transactions on the NASDAQ Stock Market or on any national
securities exchange or U.S. inter-dealer system of a registered
national securities association on which the common stock and the
warrants may be listed or quoted at the time of sale;
o in the over-the-counter market;
o in private transactions and transactions otherwise than on these
exchanges or systems or in the over-the-counter market;
o through a combination of any of the above transactions.
The selling stockholders and their successors, including their
transferees, pledgees or donees or their successors, may sell the common stock
directly to purchasers or through underwriters, broker-dealers or agents, who
may receive compensation in the form of discounts, concessions or commissions
from the selling stockholders or the purchasers. These discounts, concessions or
commissions as to any particular underwriter, broker-dealer or agent may be in
excess of those customary in the types of transactions involved.
In addition, any securities covered by this prospectus which qualify for
sale pursuant to Rule 144 of the Securities Act may be sold under Rule 144
rather than pursuant to this prospectus.
The selling stockholders also may transfer the shares of common stock in
other circumstances, in which case the transferees, pledgees or other successors
in interest will be the selling beneficial owners for purposes of this
prospectus and may sell the shares of common stock from time to time under this
prospectus after we have filed an amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act amending the list
of selling stockholders to include the pledgee, transferee or other successors
in interest as selling stockholders under this prospectus.
The selling stockholders and any broker-dealers or agents that are
involved in selling the shares of common stock may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with such
sales. In such event, any commissions received by such broker-dealers or agents
and any profit on the resale of the shares of common stock purchased by them may
be deemed to be underwriting commissions or discounts under the Securities Act.
We entered into a registration rights agreement for the benefit of the
selling stockholders to register the common stock under applicable federal and
state securities laws. The registration rights agreement provides for
cross-indemnification of the selling stockholders and us and our respective
directors, officers and controlling persons against specific liabilities in
connection with the offer and sale of the common stock, including liabilities
under the Securities Act. We will pay substantially all of the expenses incurred
by the selling stockholders incident to the registration of the common stock.
2
The selling stockholders have advised us that they have not entered into
any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their shares of common stock, nor is there
an underwriter or coordinating broker acting in connection with a proposed sale
of shares of common stock by any selling stockholder. If we are notified by any
selling stockholder that any material arrangement has been entered into with a
broker-dealer for the sale of shares of common stock, if required, we will file
a supplement to this prospectus. If the selling stockholders use this prospectus
for any sale of the shares of common stock, they will be subject to the
prospectus delivery requirements of the Securities Act.
The anti-manipulation rules of Regulation M under the Securities Exchange
Act may apply to sales of our common stock and activities of the selling
stockholders.
3
