Exhibit 10.10
Chadbourn
Securities
Member NASD and SIPC
April 29, 2005
Xx. Xxxxxx X. Xxxxxxx
Chief Executive Officer
WORLD WASTE TECHNOLOGIES, INC.
00000 Xxxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Re : Addendum to Chadbourn Engagement Agreement dated April 28, 2005
Dear Xxx,
This Addendum updates the Chadbourn Engagement Agreement (the Chadbourn
Engagement Agreement ) with World Waste Technologies, Inc. (the Company) dated
April 28, 2005 (attached) in the following circumstances.
1. Chadbourn specifically acknowledges the Company has retained Xxxxxx
Xxxxxxxx Advisors, Inc. (XXX) pursuant to an engagement letter
signed on April 8, 2005, and any success fees paid to HWA shall be
deducted from the total fundrasing related fee and unallocated
expense reimbursement due to Chadbourn.
2. Chadbourn specifically acknowledges the Company has retained
Infrastar Advisors pursuant to an engagement letter signed on
November 29, 2004 (Attachment A), any fees paid to Infrastar
Advisors shall be deducted from the total fundrasing related fee and
unallocated expense reimbursement due to Chadbourn.
3. Chadbourn specifically acknowledges that for any equity investment
from Trellus Investments and or HWA (or HWA's principals) for gross
investment amount of $8,000,000 or greater the Chadbourn commission
structure shall be reduced to 6.0% of the amount invested by
Xxxxxxx, and as described in 1 above, all HWA fees shall be deducted
from the amount due to Chadbourn. The original fee structure in the
Chadbourn Engagement Agreement shall continue to apply for any
investors other than Trellus and HWA in any other debt or equity
investment.
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.
CHADBOURN SECURITIES, INC.
By: _____________________________
Xxxxx X. Xxxxx
Managing Director
Date: ____________________________
00000 Xxxxx Xx Xxxx Xxxx, Xxxxx 000 x Xxxxxxxxx, XX 00000 o (000) 000-0000
Accepted and agreed to as of the date first set forth above:
WORLD WASTE TECHNOLOGIES, INC.
By: ______________________________
Xxxxxx X. Xxxxxxx
Chief Executive Officer
Date: ____________________________
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Chadbourn
Securities
Member NASD and SIPC
April 28, 2005
Xx. Xxxxxx X. Xxxxxxx
Chief Executive Officer
WORLD WASTE TECHNOLOGIES, INC.
00000 Xxxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Re : Engagement Agreement
Dear Xxx,
We are pleased that World Waste Technologies, Inc. (the "Company") desires to
engage Chadbourn Securities, Inc, an NASD broker/dealer ("Chadbourn") as its
financial advisor with respect to capital raising of the Company (the "Advisory
Services"). We look forward to working with you and your management team, and
have set forth below the agreed upon terms of our involvement.
1. Scope of Engagement
As discussed, Chadbourn will undertake certain Advisory Services on behalf
of the Company, including:
(a) Advising the Company regarding debt and equity financial market
conditions, including presentations to management and the board of
directors, as needed. Any information prepared by Chadbourn under
this paragraph shall be reviewed and approved by the Company in
advance of its dissemination to any party outside of the Company;
(b) Identifying and assisting in the negotiation and placement of senior
debt and/or lease financing (the "Debt Financing") for the Company,
in one or more closings;
(c) Identifying and assisting in the negotiation and placement of
preferred and common equity and/or subordinated and convertible debt
(the "Equity Financing") for the Company, in one or more closings.
2. Fees and Expenses.
For services provided hereunder, the Company will pay to Chadbourn the
following:
(a) An advisory fee equal to one percent (1.0%) of any Debt Financing,
including lease financing and senior debt received by the Company
and sourced by Chadbourn, to be paid from escrow at the closing. If
Chadbourn plays no role in introducing, negotiating, providing
references for the Company, or otherwise assisting in securing the
Debt Financing in any way, and if the Company in discussions with
the funding source does not utilize any materials, analyses,
spreadsheets, presentations, or business summaries prepared by
Chadbourn on behalf of the Company, then no advisory fee will be
payable to Chadbourn.
(b) An unallocated expense reimbursement equal to two percent (2.0%) of
any Equity Financing received by the Company from any investor, bank
or financing source, including equity funding provided directly to
the Company or specific projects from strategic partners, or any
other equity investor, to be paid from escrow at each closing. In
addition, in the event that Chadbourn is a principal investor or
funds are raised by Chadbourn directly from equity investors, or by
a third party directly referred or engaged by Chadbourn, Chadbourn
shall receive: (1) an additional advisory fee equal to eight percent
(8.0%) of any Equity Financing received by the Company; and, (2)
warrants equal to 10% of the number of shares sold in the offering,
such warrants to have a five year maturity, registration rights on
the same basis as the related offering, a net exercise provision and
an exercise price equal to the offering price of each respective
offering by the Company. In the event any Equity Financing is
received from sources originated by the Company, as shown in the
attached list of Company Sourced Potential Investors (see Exhibit A
attached hereto), Chadbourn shall receive an unallocated expense
reimbursement of one percent (1.0%), an additional advisory fee of
four percent (4.0%) and warrants for five percent (5.0%) of the
number of shares sold in the offering, and terms of all fees and
warrants are the same as those described previously in this section.
00000 Xxxxx Xx Xxxx Xxxx, Xxxxx 000 x Xxxxxxxxx, XX 00000 o (000) 000-0000
(c) Chadbourn'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
$2,500 without prior approval by the Company.
3. Use of Information; Financing Matters.
(a) The Company recognizes and confirms that Chadbourn, 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 Chadbourn does not assume
responsibility for and may rely, without independent verification,
on the accuracy and completeness of any such information. The
Company warrants to Chadbourn that to the best if its knowledge all
information concerning the Company furnished to Chadbourn 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 Chadbourn all
necessary or appropriate information for use in their engagement and
the Company agrees that any information or advice rendered by
Chadbourn or any of our representatives in connection with this
engagement is for the confidential use of the Company.
(b) The Company and Chadbourn each agree to conduct any offering and
sale of securities in any private placement transaction in
accordance with applicable federal and state securities laws, and
neither the Company nor Chadbourn nor any person acting on behalf of
either of them, will offer or sell any securities in a transaction
by any form of general solicitation, general advertising, or by any
other means that would be deemed a public offering under applicable
law. Chadbourn has no obligation, express or implied, to purchase or
underwrite any transaction or to itself provide any type of
financing to the Company or be a party to any funding transaction,
or to solicit investors outside the United States.
4. Certain Acknowledgements.
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The Company acknowledges that Chadbourn has been retained by the Company,
and that the Company's engagement of Chadbourn 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 Chadbourn or our affiliates or their
respective directors, officers, agents and employees. Upon prior written
consent of the Company (which consent will not be unreasonably withheld)
and approval by the Company of the text, proof and format thereof,
Chadbourn may, at its own expense, place announcements or advertisements
in financial newspapers and journals describing its services hereunder
(provided such announcement or advertisement is made in a manner and
contains only such information as would not violate federal or state
securities laws).
The Company also acknowledges that Chadbourn may also be a significant
shareholder or retained advisor to entities that merge with the Company,
and Chadbourn may make investments in or act as advisor to companies that
later become strategic partners or customers of the Company. Chadbourn
shall disclose to the Company in advance of any potential or actual
conflicts of interest Chadbourn has or may have in connection with an M &
A transaction, any Equity Financing, Debt Financing or any other
transaction contemplated by this agreement. Chadbourn shall ensure that
any such advertising, investments and related party transactions
contemplated by this paragraph shall comply with federal and applicable
state securities laws. With respect to this paragraph, Chadbourn shall
include its employees and representatives.
The Company acknowledges that Chadbourn is a full service investment
banking firm and as such may, from time to time, effect transactions for
its own account or the account of its clients; and we hold positions in
securities of other companies, which may become a lender or investor for
the purpose of this agreement. Chadbourn 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 Chadbourn's 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 Chadbourn to the Company shall rest with the Company, and Chadbourn
shall not have the authority to bind the Company to any obligation or
commitment other than those enumerated herein.
5. Indemnity.
Chadbourn and the Company have entered into a separate indemnification
letter (Exhibit C) dated the date hereof, providing for the
indemnification of Chadbourn by the Company in connection with Chadbourn's
engagement hereunder, the terms of which are incorporated into this
agreement in their entirety.
6. Term of Engagement.
Chadbourn's engagement shall commence on the date hereof and shall
continue until June 30, 2005. It is expressly agreed that following the
expiration or termination of this agreement, Chadbourn 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.
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It is also expressly agreed that if during a period of 12 months following
termination of this agreement, a transaction with an investor, bondholder,
bank, financing entity, strategic partner, public company, or other entity
based upon services provided by Chadbourn hereunder is consummated by the
Company, or a successor entity to the Company, or a shareholder, advisor
or related party to the Company, or if a definitive agreement that results
in a transaction is entered into during such 12 month period with any
party where Chadbourn played a significant role in introducing the Company
as listed on Exhibit B and attached hereto (a "Chadbourn Investor") in its
capacity as financial advisor hereunder, the Company will pay Chadbourn
the fees and expense reimbursements equal to the fees and expenses which
would have been payable to Chadbourn as if the transaction had occurred
during the term of this agreement. In the event a Chadbourn Investor does
invest during the 12 months following the termination of this Agreement,
then Chadbourn will work with the Company and its new broker-dealer to
agree to an appropriate fee sharing arrangement in which the total fees
shall not exceed the amounts described in Section 2 this Agreement.
7. Miscellaneous. 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, Chadbourn and their
respective successors and assigns. Neither this Agreement nor any duties
or obligations under this Agreement may be assigned by Chadbourn without
the prior written consent of the Company.
The Company and Chadbourn 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 Chadbourn
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 Chadbourn 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 Chadbourn'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.
CHADBOURN SECURITIES, INC.
By: _____________________________
Xxxxx X. Xxxxx
Managing Director
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Date: ____________________________
Accepted and agreed to as of the date first set forth above:
WORLD WASTE TECHNOLOGIES, INC.
By: ______________________________
Xxxxxx X. Xxxxxxx
Chief Executive Officer
Date: ____________________________
5
Exhibit C
INDEMNIFICATION AGREEMENT
In consideration for the agreement of Chadbourn Securities, Inc.
("Chadbourn") 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 Chadbourn, 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) (Chadbourn 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 Chadbourn 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
Chadbourn 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.
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 Chadbourn'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.
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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 Chadbourn's services.
Chadbourn Securities, Inc.: ____________________________________ Date: _________
World Waste Technologies, Inc.: ________________________________ Date: _________
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