Exhibit 10.9
[LOGO]
XXXXX - XXXXXX
CAPITAL PARTNERS
April 28, 2005
Xx. Xxxxxx X. Xxxxxxx, CEO
World Waste Technologies, Inc.
00000 Xxxxxxx Xxxxx
Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Dear Xxx,
THIS ENGAGEMENT LETTER DATED APRIL 28, 2005 REPLACES AND SUPERCEDES IN ITS
ENTIRETY ANY PREVIOUS WRITTEN, SPOKEN OR IMPLIED ARRANGEMENT BETWEEN THE PARTIES
HEREIN, INCLUDING THE AGREEMENT DATED MARCH 9, 2004, INCLUDING ITS ATTACHMENTS,
BETWEEN XXXXX MCAFEE CAPITAL PARTNERS, LLC AND WORLD WASTE OF AMERICA, INC.
We are pleased that World Waste Technologies, Inc. (the "Company") desires to
continue its engagement of Xxxxx McAfee Capital Partners, LLC, a strategic
advisory firm as its advisor with respect to various matters involving the
business of the Company (the "Advisory Services"). We look forward to continuing
our work with you and your management team, and have set forth below the agreed
upon terms of our involvement.
1. Scope of Engagement
As discussed, CMCP will undertake certain advisory services on behalf of
the Company, including:
(a) Working with the Company to develop business summary, financial
projections and other presentation materials for use in marketing
the Company to potential business partners, investors and merger
candidates. Any information prepared by CMCP under this paragraph
shall be reviewed and approved by the Company in advance of its
dissemination. The accuracy of all such information shall be the
responsibility of the Company.
(b) Assisting the Company to develop and refine its corporate and
financial strategy, understand certain trends in financial markets
and capital structures, and provide advice and assistance on other
general corporate matters.
(c) Providing introductions to potential strategic partners, customers,
management and board members, and other value-added relationships.
Page 2 of 6
2. Fees and Expenses.
For services provided hereunder, the Company will pay to CMCP the
following:
(a) A monthly advisory fee (the "Monthly Fee") in the amount of $5,000
per month. The Monthly Fee shall be paid by bank transfer to the
account of CMCP on the first day of each month. The Monthly Fee
amounts shall continue to be paid by the Company for as long as CMCP
provides assistance and advisory services to the company (the
"Advisory Services") and will only discontinue at the end of the
term (December 31, 2006), as described in Section 6.
(b) CMCP's actual and reasonable expenses shall be reimbursed by the
Company. Any individual expense over $1,000 shall be pre-approved by
the Company. Total monthly expenses shall not exceed $2,000 without
prior approval by the Company.
3. Use of Information.
The Company recognizes and confirms that CMCP, in acting pursuant to this
engagement, will be using publicly available information and information
in reports and other materials provided by others, including, without
limitation, information provided by or on behalf of the Company, and that
CMCP does not assume responsibility for and may rely, without independent
verification, on the accuracy and completeness of any such information.
The Company warrants to CMCP that to the best if its knowledge all
information concerning the Company furnished to CMCP in connection with
the Advisory Services will be true and accurate in all material respects
and will not contain any untrue statement of material fact or omit to
state a material fact necessary in order to make statements therein not
misleading in the light of the circumstances under which such statements
are made. The Company agrees to furnish or cause to be furnished to CMCP
all necessary or appropriate information for use in their engagement and
the Company agrees that any information or advice rendered by CMCP or any
of our representatives in connection with this engagement is for the
confidential use of the Company.
4. Certain Acknowledgements.
The Company acknowledges that CMCP has been retained by the Company, and
that the Company's engagement of CMCP is as an independent contractor.
Neither this engagement, nor the delivery of any advice in connection with
this engagement, is intended to confer rights upon any persons not a party
hereto (including security holders, employees or creditors of the Company)
as against CMCP or our affiliates or their respective directors, officers,
agents and employees.
The Company also acknowledges that CMCP may also be a significant
shareholder or retained advisor to entities that merge with the Company,
or who may otherwise do business with the Company, and CMCP may make
investments in or act as advisor to companies that later become strategic
partners or customers of the Company. CMCP shall disclose to the Company
in advance of any potential or actual conflicts of interest CMCP has or
may have in connection with any party to any transaction which may be
contemplated by this agreement.
Page 3 of 6
The Company acknowledges that CMCP is a full service advisory firm and as
such may, from time to time, effect transactions for our own account or
the account of our clients; and we hold positions in securities of other
companies, which may become a lender or investor for the purpose of this
agreement. CMCP shall not by this agreement be prevented or barred from
rendering services of the same or similar nature as herein described, or
services of any nature whatsoever for, or on behalf of, other persons,
firms, or corporations unless said proposed client is a direct competitor
to the Company.
The Company also acknowledges CMCP's Advisory Services do not include the
rendering of any legal services or opinions or the performance of any work
that is in the ordinary purview of a Certified Public Accountant. All
final decisions with respect to consulting, advice, and services rendered
by CMCP to the Company shall rest with the Company, and CMCP shall not
have the authority to bind the Company to any obligation or commitment
other than those enumerated herein.
5. Indemnity.
CMCP and the Company have entered into a separate letter agreement
(Exhibit A), dated the date hereof, providing for the indemnification of
CMCP by the Company in connection with CMCP's engagement hereunder, the
terms of which are incorporated into this agreement in their entirety.
6. Term of Engagement.
CMCP's engagement shall commence on the date hereof and shall continue
until December 31, 2006 and thereafter shall be automatically extended for
one-year periods on each anniversary date, unless terminated by either
party prior to each respective extension period, or otherwise extended.
The Company may terminate this agreement at any time; but, shall pay the
monthly fee through December 31, 2006 provided, however, that no such
termination will affect the matters set out in this section or sections 2,
3, 4, 5, or 8, or in the separate letter agreement relating to
indemnification. It is expressly agreed that following the expiration or
termination of this agreement, CMCP shall be entitled to receive any fees
as described above that have accrued prior to such expiration or
termination but are unpaid, as well as reimbursement for expenses as set
forth herein.
7. Board Participation Rights.
So long as CMCP or its affiliates, officers or directors, shall
collectively own a minimum of five hundred thousand (500,000) shares (as
adjusted for any stock splits, stock dividends, recapitalizations and the
like) of the Company's stock, Xxxx Xxxxxxxx shall be nominated to be a
Director of the Company and shall have the right to attend all of the
Company's board meetings with equal advance notice as all other board
members are given and shall have access to Company information equal to
the access granted to all other board members if elected to the board
8. Miscellaneous.
Page 4 of 6
This Agreement is governed by the laws of the State of California, without
regard to conflicts of law principles, and will be binding upon and inure
to the benefit of the Company, CMCP and their respective successors and
assigns. Neither this Agreement nor any duties or obligations under this
Agreement may be assigned by CMCP without the prior written consent of the
Company.
The Company and CMCP agree to submit all disputes, actions, proceedings or
counterclaims brought by or on behalf of either party with respect to any
matter whatsoever relating to or arising out of any actual or proposed
transaction or the engagement of or performance by CMCP hereunder to
binding arbitration in accordance with the rules of procedure according to
the Judicial Arbitration and Mediation Service (JAMS). The Parties will
select an arbiter and shall divide the cost of arbitration between them,
and each party shall pay its own attorney's fees. The Company and CMCP
also hereby submit to the jurisdiction of the courts of the State of
California, Santa Xxxxx County in any proceeding arising out of an
arbitration proceeding or judgment relating to this Agreement. This
Agreement may be executed in two or more counterparts, each of which shall
be deemed to be an original, but all of which shall constitute one and the
same Agreement. The provisions of this Agreement relating to the payment
of fees and expenses, confidentiality and accuracy of information,
indemnification and CMCP's status as an independent contractor shall
survive any termination of this Agreement. In the event that any provision
of this Agreement shall be held to be invalid, illegal, or unenforceable
in any circumstances, the remaining provisions shall nevertheless remain
in full force and effect and shall be construed as if the unenforceable
provisions were deleted.
We are pleased to accept this engagement and look forward to working with you.
Please confirm that the foregoing is in accordance with your understanding of
our agreement by signing and returning to us a copy of this letter.
XXXXX MCAFEE CAPITAL PARTNERS, LLC
By: _____________________________
Xxxx X. XxXxxx
Managing Director
Date: ____________________________
Accepted and agreed to as of the date set forth above:
WORLD WASTE TECHNOLOGIES, INC.
By: ______________________________
Xxxxxx X. Xxxxxxx
Chief Executive Officer
Date: ____________________________
Page 5 of 6
Exhibit A
INDEMNIFICATION AGREEMENT
In consideration for the agreement of Xxxxx McAfee Capital Partners, LLC
("CMCP") to act on behalf of World Waste Technologies, Inc. (the "Company")
pursuant to the attached Engagement Letter dated as of April 28, 2005, the
Company agrees (the "Indemnitor") to indemnify and hold harmless CMCP, its
affiliates, and each of their respective directors, officers, agents,
shareholders, consultants, employees and controlling persons (within the meaning
of the Securities Act of 1933) (CMCP and each such other person or entity are
hereinafter referred to as an "Indemnified Person"), to the extent lawful, from
and against any losses, claims, damages, expenses and liabilities or actions in
respect thereof (collectively, "Losses"), as they may be incurred (including
reasonable legal fees and other expenses as incurred in connection with
investigating, preparing, defending, paying, settling or compromising any
Losses, whether or not in connection with any pending or threatened litigation
in which any Indemnified Person is a named party) to which any of them may
become subject (including in any settlement effected with the Indemnitor's
consent) and which are related to or arise out of any act, omission, disclosure
(written or oral), transaction or event arising out of, contemplated by, or
related to the Engagement Letter.
The Indemnitor will not, however, be responsible under the foregoing
provisions with respect to any Losses to an Indemnified Person to the extent
that a court of competent jurisdiction shall have determined by a final judgment
that such Losses resulted primarily from actions taken or omitted to be taken by
such Indemnified Person due to his gross negligence, bad faith or willful
misconduct. If multiple claims are brought against CMCP in an arbitration, with
respect to at least one of which indemnification is permitted under applicable
law and provided for under this agreement, any arbitration award shall be
conclusively deemed to be based on claims as to which indemnification is
permitted and provided for, except to the extent the arbitration award expressly
states that the award, or any portion thereof, is based solely on a claim as to
which indemnification is not available. No indemnified Party shall settle,
compromise or otherwise dispose of any action for which indemnification is
claimed hereunder without the written consent of the Indemnitor. No expenses
shall be forwarded to any Indemnified Party unless such party agrees in writing
to reimburse the Indemnitor for such forwarded expenses in the event it is
determined that such Indemnified Party was not entitled to indemnification
hereunder.
If the indemnity referred to in this agreement should be, for any reason
whatsoever, unenforceable, unavailable or otherwise insufficient to hold each
Indemnified Person harmless, the Indemnitor shall pay to or on behalf of each
Indemnified Person contributions for Losses so that each Indemnified Person
ultimately bears only a portion of such Losses as is appropriate to reflect the
relative benefits received by and the relative fault of each such Indemnified
Person, respectively, on the one hand and the Indemnitor on the other hand in
connection with the transaction; provided, however, that in no event shall the
aggregate contribution of all Indemnified Persons to all Losses in connection
with any transaction exceed the amount of any fees actually received by CMCP
pursuant to the Engagement Letter. The relative fault of each Indemnified Person
and the Indemnitor shall be determined by reference to, among other things,
whether the actions or omissions to act were by such Indemnified Person or the
Indemnitor and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such action to omission to act.
Page 6 of 6
The Indemnitor also agrees that no Indemnified Person shall have any
liability to the Indemnitor or its affiliates, directors, officers, employees,
agents or shareholders, directly or indirectly, related to or arising out of the
Engagement Letter, except Losses incurred by the Indemnitor which a court of
competent jurisdiction shall have determined by a final judgement to have
resulted primarily from actions taken or omitted to be taken by such Indemnified
Person due to its gross negligence, bad faith or willful misconduct. In no
event, regardless of the legal theory advanced, shall Company or Indemnified
Person be liable for any consequential, indirect, incidental or special damages
of any nature. The Indemnitor agrees that without CMCP's prior written consent
(which consent shall not be unreasonably withheld) it shall not settle,
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding related to the Engagement Letter unless the
settlement, compromise or consent also includes an express unconditional release
of all Indemnified Persons from all liability and obligations arising therefrom.
The obligations of the Indemnitor referred to above shall be in addition
to any rights that any Indemnified Person may otherwise have and shall be
binding upon and inure to the benefit of any successors, assigns, heirs and
personal representatives of any Indemnified Person and the Indemnitor. It is
understood that these obligations of the Indemnitor will remain operative
regardless of any termination or completion of CMCP's services.
Xxxxx McAfee Capital Partners, LLC.: ___________________________ Date: _________
World Waste Technologies, Inc.: ________________________________ Date: _________
