-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BODomYYumuyd6/cdSWlZX7HUGx6L2SJ0umwTsqcXHz3mcw1WAZC8udhK8BErG8SD NmmUs+p5jfDcffNAq0Chuw== 0001144204-05-013946.txt : 20050504 0001144204-05-013946.hdr.sgml : 20050504 20050504163901 ACCESSION NUMBER: 0001144204-05-013946 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20050428 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Termination of a Material Definitive Agreement ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year FILED AS OF DATE: 20050504 DATE AS OF CHANGE: 20050504 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WORLD WASTE TECHNOLOGIES INC CENTRAL INDEX KEY: 0000890447 STANDARD INDUSTRIAL CLASSIFICATION: REFUSE SYSTEMS [4953] IRS NUMBER: 953977501 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11476 FILM NUMBER: 05799698 BUSINESS ADDRESS: STREET 1: 13520 EVENING CREEK DRIVE STREET 2: SUITE 130 CITY: SAN DIEGO STATE: CA ZIP: 93065 BUSINESS PHONE: 8583913400 MAIL ADDRESS: STREET 1: 13520 EVENING CREEK DRIVE STREET 2: SUITE 130 CITY: SAN DIEGO STATE: CA ZIP: 93065 FORMER COMPANY: FORMER CONFORMED NAME: VOICE POWERED TECHNOLOGY INTERNATIONAL INC DATE OF NAME CHANGE: 19940831 8-K 1 v017490_8k.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: May 4, 2005 Date of Earliest Event Reported: April 28, 2005 WORLD WASTE TECHNOLOGIES, INC. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) California - -------------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 1-11476 95-3977501 - ------------------------ ------------------------------------ (Commission File Number) (I.R.S. Employer Identification No.) 13520 Evening Creek Drive, Suite 130, San Diego, California 92128 - ----------------------------------------------------------- ---------- (Address of Principal Executive Offices) (Zip Code) (858) 391-3400 (Registrant's Telephone Number, Including Area Code) N/A (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425). |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12). |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)). |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)). Item 1.01. Entry into a Material Definitive Agreement Securities Purchase Agreement On April 28, 2005, World Waste Technologies, Inc., a California corporation (the "Company"), entered into a Securities Purchase Agreement with Trellus Partners, LP ("Trellus") and certain affiliates of Trellus (collectively, the "Investors"), whereby the Company sold and issued to the Investors 4,000,000 shares of newly created 8% Series A Cumulative Redeemable Convertible Participating Preferred Stock of the Company (the "Series A Preferred") and warrants (the "Warrants," and, together with the Series A Preferred, the "Securities") to purchase up to 400,000 shares of common stock of the Company (the "Common Stock"). The gross aggregate proceeds to the Company from the sale of the securities was $10,000,000. The Company is authorized to sell up to an additional 2,000,000 shares of Series A Preferred and Warrants to purchase up to an additional 200,000 shares of Common Stock for aggregate additional proceeds of up to $5,000,000, provided that the closing of such additional sale takes place on May 9, 2005 (or such later date agreed to by the Company and the Investors). The Company has not yet identified any purchasers for these additional Securities and there can therefore be no assurance that these Securities will be sold. Use of Proceeds. The Company is required to apply the proceeds of the sale of the Securities to the construction and operation of the Company's initial plant in Anaheim, California, the repayment of a $750,000 promissory note held by an affiliate of Trellus (the "Bridge Note"), up to $750,000 for site identification, planning, permitting and designing of an additional plant, and the balance for general working capital purposes. Corporate Governance. The Investors are entitled to recommend for election to the Company's Board of Directors two individuals designated by such Investors. Each of Mr. Steven Racoosin and Mr. Fred Lundberg have agreed to resign as directors effective upon the appointment or election of the Investors' designees. Restrictions on Use of Proceeds. The Company is prohibited from expending the proceeds of the sale of the Securities until the Company's license agreement with its technology licensor is amended to the reasonable satisfaction of the Investors. In the event such amendment is not executed by May 28, 2005, the Investors have the right (exercisable until June 12, 2005) to require that the Company return the proceeds to the Investors in exchange for the return of such holders' Securities. Notwithstanding the foregoing, the Company may spend up to $500,000 of the net proceeds and repay the Bridge Note (which repayment was made upon the closing of the sale of the Securities). If the Investors require a return of the proceeds, then the Company is only required to return the funds that have not been spent, and the Investors will return the securities to the extent that such funds have been spent by the Company. Terms of the Series A Preferred The Company is authorized under its Articles of Incorporation to issue 100,000,000 shares of Common Stock and 10,000,000 shares of blank check preferred stock. The Board of Directors of the Company approved the filing of the Certificate of Determination of Rights, Preferences and Privileges of the 8% Series A Cumulative Redeemable Convertible Participating Preferred Stock, which was filed with and accepted by the Secretary of State of the State of California on April 27, 2005. 1 Dividends. Holders of Series A Preferred are entitled to receive cumulative dividends, payable quarterly in additional shares of Series A Preferred, at the rate of 8% per annum. This dividend rate is subject to increase to 9% in the event the Company does not comply with certain registration rights provisions. The holders of the Series A Preferred are also entitled to fully participate in any dividends paid to the holders of Common Stock on a common stock equivalent basis. Voting Rights. Each share of Series A Preferred is entitled to that number of votes equal to the number of whole shares of the Common Stock into which it is convertible. In addition, so long as at least 50% of the shares of Series A Preferred remain outstanding (but prior to the "Operational Date," generally defined as when the Company's initial plant in Anaheim, California first generates total operating cash flow of at least $672,000 for any consecutive three month period), the Company is prohibited from taking certain actions without the approval of the holders of a majority of the outstanding shares of Series A Preferred, including, among other things, a sale of all or substantially all of the Company's assets, a transfer or cancellation of the Company's license from its technology licensor, the making of certain restricted payments, the incurrence of any indebtedness (subject to certain exceptions), or a change in the Company's principal business. Except as provided by law, holders of Common Stock and Series A Preferred otherwise vote together as a single class. Board Change of Control. In the event the Operational Date has not occurred by September 30, 2006, the holders of the Series A Preferred have the right to elect a majority of the members of the Board of Directors. This right would terminate, however, upon the first to occur of the Operational Date or the date on which less than 50% of the shares of Series A Preferred remain outstanding. Liquidation Rights. Upon any liquidation, dissolution or winding-up of the Company (including a sale of the Company), the holders of Series A Preferred have the right to receive $2.50 per share (plus accrued but unpaid dividends), prior to and in preference over any liquidation payment on the Common Stock or any other class of preferred stock. Following payment of the aforementioned liquidation preference, holders of the Series A Preferred are entitled to participate fully with the holders of Common Stock on a common stock equivalent basis with respect to the distribution of any remaining assets. Redemption. The holders of a majority of the shares of Series A Preferred have the option to require the Company to redeem all outstanding shares of Series A Preferred on the five year anniversary of issuance at a redemption price equal to $2.50 per share, plus accrued and unpaid dividends to that date. In the event the holders do not exercise this redemption right, all shares of Series A Preferred will automatically convert into shares of Common Stock on such five-year anniversary, as described below. Mandatory Conversion. Each share of Series A Preferred will automatically convert into one share of Common Stock (i) in the event the Company consummates an underwritten public offering of its securities at a price per share not less than $5.00 and for a total gross offering amount of at least $10 million, (ii) in the event of a sale of the Company resulting in proceeds to the holders of Series A Preferred of a per share amount of at least $5.00, (iii) in the event that the closing market price of the Common Stock averages at least $7.50 per share over a period of 20 consecutive trading days and the daily trading volume averages at least 75,000 shares over such period, (iv) at any time following the first to occur of September 30, 2006 or the Operational Date, upon the approval of a majority of the then-outstanding shares of Series A Preferred, or (v) unless the Company is otherwise obligated to redeem the shares as described above, on April 28, 2010. 2 Optional Conversion. Each holder has the right to convert its shares Series A Preferred into shares of Common Stock on a one-for-one basis, provided that no such conversion may take place prior to the first to occur of September 30, 2006 or the Operational Date. Terms of the Warrants The Warrants are exercisable for a period of five years commencing as of their issuance date, at an exercise price of $4.00 per share. Registration Rights Agreement In connection with the issuance of the Securities, on April 28, 2005, the Company entered into a Registration Rights Agreement granting the Investors certain demand and piggyback registration rights. Employment Agreements On April 28, 2005, the Company entered into new employment agreements with each of Thomas L. Collins, the Company's Chief Executive Officer, Fred Lundberg, the Company's Senior Vice President, Steven Racoosin, the Company's President, and David Rane, the Company's Chief Financed Officer. The new agreements supersede and replace each officer's existing employment agreement with the Company. Pursuant to the new agreements, the executives will continue to serve the Company in the same capacities but on an "at-will" basis. Messrs. Collins, Lundberg, Racoosin and Rane will receive an annual salary of $224,000, $204,000, $225,000 and $224,000, respectively, and are each entitled to bonuses as may be deemed appropriate by the Board of Directors. Each executive is entitled to receive 12 months salary and continuation of benefits in the event the Company terminates his agreement for other than "good cause" or the executive resigns from the Company for "good reason" (as such terms are defined in the agreements). In addition, each executive will be entitled to 12 months salary and continuation of benefits in the event of disability or death during the term of his agreement. Engagement Agreement with John Pimentel On April 28, 2005, the Company entered into an engagement agreement with John Pimentel, a director of the Company, to serve as an advisor to the Company with respect to business development and corporate strategy issues. The agreement provides that Mr. Pimentel will be nominated as a director during the term of the agreement. The Company agreed to pay Mr. Pimentel a monthly advisory fee of $15,000. The term of the agreement extends until December 31, 2007 and may be automatically extended for additional one-year periods. 3 Engagement Agreement with Cagan McAfee Capital Partners, LLC On April 28, 2005, the Company entered into an engagement agreement with Cagan McAfee Capital Partners to serve as a financial advisor to the Company. John Pimentel, a director, is a Director of Cagan McAfee Capital Partners, LLC ("CMCP"). The agreement provides that Mr. Pimentel will be nominated as a director during the term of the agreement so long as CMCP or its affiliates collectively own at least 500,000 shares of the Company's capital stock. CMCP is paid a monthly advisory fee of $5,000. The term of the agreement extends until December 31, 2006 and may be automatically extended for additional one-year periods. Engagement Agreement with Chadbourn Securities, Inc. On April 28, 2005, the Company entered into an engagement agreement with Chadbourn Securities, Inc., an NASD broker/dealer ("Chadbourn"), to serve the Company as a financial advisor and as placement agent in private equity and debt financings. Chadbourn will be paid a cash fee equal to 1.0% of any debt financing to the extent Chadbourn assisted in securing the debt financing and a cash fee equal to 2.0% of any equity financing. In addition, if Chadbourn is an investor or raises funds for the Company directly from investors, it will also receive a cash fee equal to 8% of gross equity proceeds and warrants equal to 10% of the shares purchased in such equity financings. The term of the agreement extends until June 30, 2005. Item 1.02 Termination of a Material Definitive Agreement. The new employment agreements with each of Messrs. Collins, Lundberg, Racoosin and Rane each supersede their original employment agreements in their entireties. To the extent applicable, the discussion above regarding the supersession of the original employment agreements by the new employment agreements for each executive is incorporated herein by reference to this Item 1.02. Item 3.02. Unregistered Sales of Equity Securities. See Item 1.01. WWT issued and sold the Securities pursuant to certain exemptions from registration provided by Rule 506 of Regulation D and Section 4(2) and Section 4(6) of the Securities Act of 1933, as amended. Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers. See Item 1.01 Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. See Item 1.01. 4 Item 9.01. Financial Statements and Exhibits. (c) Exhibits Exhibit No. Description - ----------- ----------- 3.1 Certificate of Determination of Rights, Preferences and Privileges of the 8% Series A Cumulative Redeemable Convertible Participating Preferred Stock of World Waste Technologies, Inc. 10.1 Securities Purchase Agreement dated as of April 28, 2005 by and among World Waste Technologies, Inc., Trellus Offshore Fund Limited, and Trellus Partners, LP, Trellus Partners II, LP 10.2 Form of Warrant 10.3 Registration Rights Agreement dated as of April 28, 2005 by and among World Waste Technologies, Inc., Trellus Offshore Fund Limited, Trellus Partners, LP, and Trellus Partners II, LP, a Delaware limited partnership and the individuals and entities set forth on the signature pages thereto 10.4 Employment Agreement dated as of April 28, 2005 by and between World Waste Technologies, Inc. and Thomas L. Collins 10.5 Employment Agreement dated as of April 28, 2005 by and between World Waste Technologies, Inc. and Fred Lundberg 10.6 Employment Agreement dated as of April 28, 2005 by and between World Waste Technologies, Inc. and Steve Racoosin 10.7 Employment Agreement dated as of April 28, 2005 by and between World Waste Technologies, Inc. and David Rane 10.8 Engagement Agreement dated as of April 28, 2005 by and between World Waste Technologies, Inc. and John Pimentel 10.9 Engagement Agreement dated as of April 28, 2005 by and between World Waste Technologies, Inc. and Cagan McAfee Capital Partners, LLC 10.10 Engagement Agreement dated as of April 28, 2005 by and between World Waste Technologies, Inc. and Chadbourn Securities, Inc. and Addendum dated April 29, 2005 5 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. WORLD WASTE TECHNOLOGIES, INC. By: /s/ Thomas L. Collins ------------------------------------- Thomas L. Collins Chief Executive Officer Date: May 4, 2005 6 Exhibit Index Exhibit No. Description - ----------- ----------- 3.1 Certificate of Determination of Rights, Preferences and Privileges of the 8% Series A Cumulative Redeemable Convertible Participating Preferred Stock of World Waste Technologies, Inc. 10.1 Securities Purchase Agreement dated as of April 28, 2005 by and among World Waste Technologies, Inc., Trellus Offshore Fund Limited, Trellus Partners, LP, and Trellus Partners II, LP 10.2 Form of Warrant 10.3 Registration Rights Agreement dated as of April 28, 2005 by and among World Waste Technologies, Inc., Trellus Offshore Fund Limited, Trellus Partners, LP, and Trellus Partners II, LP, a Delaware limited partnership and the individuals and entities set forth on the signature pages thereto 10.4 Employment Agreement dated as of April 28, 2005 by and between World Waste Technologies, Inc. and Thomas L. Collins 10.5 Employment Agreement dated as of April 28, 2005 by and between World Waste Technologies, Inc. and Fred Lundberg 10.6 Employment Agreement dated as of April 28, 2005 by and between World Waste Technologies, Inc. and Steve Racoosin 10.7 Employment Agreement dated as of April 28, 2005 by and between World Waste Technologies, Inc. and David Rane 10.8 Engagement Agreement dated as of April 28, 2005 by and between World Waste Technologies, Inc. and John Pimentel 10.9 Engagement Agreement dated as of April 28, 2005 by and between World Waste Technologies, Inc. and Cagan McAfee Capital Partners, LLC 10.10 Engagement Agreement dated as of April 28, 2005 by and between World Waste Technologies, Inc. and Chadbourn Securities, Inc. and Addendum dated April 29, 2005 EX-3.1 2 v017490_ex3-1.txt Exhibit 3.1 CERTIFICATE OF DETERMINATION OF RIGHTS, PREFERENCES AND PRIVILEGES OF THE 8% SERIES A CUMULATIVE REDEEMABLE CONVERTIBLE PARTICIPATING PREFERRED STOCK OF WORLD WASTE TECHNOLOGIES, INC. a California Corporation Thomas L. Collins and David Rane hereby certify that: 1. They are the duly elected and acting Chief Executive Officer and Chief Financial Officer, respectively, of World Waste Technologies, Inc., a California corporation (the "Corporation"). 2. The Amended and Restated Articles of Incorporation of the Corporation authorize the issuance of up to 10,000,000 shares of preferred stock (the "Preferred Stock"), none of which shares have been issued. 3. The Board of Directors of the Corporation has duly adopted the following recitals and resolutions. "WHEREAS, the Amended and Restated Articles of Incorporation of the Corporation authorize that the Preferred Stock of the Corporation may be issued from time to time in one or more series; WHEREAS, the Board of Directors of the Corporation is authorized to determine the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Stock and to fix the number of shares and designation of any such series; and WHEREAS, the Board of Directors of the Corporation desires, pursuant to its authority as aforesaid, to determine and fix the rights, preferences, privileges and restrictions relating to a series of Preferred Stock and the number of shares constituting and the designation of said series; NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby fixes and determines the designation of, the number of shares constituting, and the rights, preferences, privileges and restrictions relating to, said series of Preferred Stock as follows: 1. DESIGNATION AND AMOUNT. There shall be created from the 10,000,000 shares of Preferred Stock, without par value, of the Corporation authorized to be issued pursuant to the Amended and Restated Articles of Incorporation, a series of Preferred Stock, designated as the "8% Series A Cumulative Redeemable Convertible Participating Preferred Stock" (the "Series A Preferred Stock"), and the number of shares of such series shall be 9,100,000. Such number of shares may be decreased by resolution of the Board of Directors; provided, however, that no such decrease shall reduce the number of authorized shares of the Series A Preferred Stock to a number less than the number of shares of the Series A Preferred Stock then issued and outstanding plus the number of shares reserved for issuance upon the declaration and payment of dividends thereon or upon the exercise of outstanding options, rights or warrants, if any, to purchase shares of Series A Preferred Stock, or upon the conversion of any outstanding securities issued by the Corporation that are convertible into shares of Series A Preferred Stock. 2. DEFINITIONS. As used herein, in addition to those terms otherwise defined herein, the following terms shall have the following meanings: 2.1 "Acquisition" shall mean any consolidation or merger of the Corporation with or into any other corporation or other entity or person, or any other binding share exchange or corporate reorganization, in which the shareholders of the Corporation immediately prior to such consolidation, merger, binding share exchange or reorganization, own less than fifty percent (50%) of the Corporation's voting power immediately after such consolidation, merger, binding share exchange or reorganization, or any transaction or series of related transactions in which in excess of fifty percent (50%) of the Corporation's voting power is transferred. 2.2 "Applicable Percentage" shall mean 8% per annum provided, however, that if the registration of securities contemplated by Section 2 of the Registration Rights Agreement shall have not been declared effective within 270 days after the Issue Date or if there shall occur any suspension or delay contemplated by Section 4(h) of the Registration Rights Agreement that exceeds the applicable periods stated in the proviso to such Section 4(h) or if any discontinuance of any registration statement contemplated by the last paragraph of Section 4 thereof shall exceed more than 30 consecutive days or more than 90 days in any 360 day period, the "Applicable Percentage" shall mean 9% per annum, provided, further, however, that once such registration statement is declared effective or any suspension or delay is removed, the Applicable Percentage shall revert to 8% per annum. 2.3 "Board of Directors" shall mean the Board of Directors of the Corporation or, with respect to any action to be taken by the Board of Directors, any committee of the Board of Directors duly authorized to take such action. 2.4 "Business Day" shall mean any day other than a Saturday, Sunday or other day on which commercial banks in the State of California are authorized or required by law or executive order to close. 2.5 "Common Stock" shall mean the common stock of the Corporation, or any other class of stock resulting from successive changes or reclassifications of such common stock consisting solely of changes in par value, or as a result of a subdivision, combination, or merger, consolidation or similar transaction in which the Corporation is a constituent corporation. 2.6 "Dividend Payment Date" shall mean the first Business Day of January, April, July and October in each year. 2.7 "EBITDA" shall mean, for the period in question, (i) net income for WWA as determined in accordance with generally accepted accounting principles, plus (ii) any extraordinary loss and other expenses of WWA not considered to be operating in nature reflected in such net income, minus (iii) any extraordinary gain and other income of WWA not considered operating in nature reflected in such net income, plus (iv) depreciation, depletion, amortization and all other non-cash expenses of WWA for that period, plus (v) all interest, fees, charges and related expenses of WWA paid or payable for that period, together with that portion of rent of WWA paid or payable for the period under capital lease obligations attributable to the interest component of such rent, plus (vi) the aggregate amount of federal, state and local taxes of WWA, on or measured by income for that period (whether or not payable during that period). For the purposes of this definition of EBITDA, corporate costs of the Corporation will not be allocated to WWA. Costs that will be considered corporate and therefore not allocated to WWA shall be executive salaries (Thomas L. Collins, Steve Racoosin, Fred Lundberg, and David Rane, and their respective successors), the accounting function, the IT function, the human resources function, the legal function, the business development, sales and marketing function, professional fees, dividends and interest, all costs related to the Corporation's corporate facility and all costs related to any facility other than Plant Number One. 2 2.8 "Holder" shall mean a holder of record of an outstanding share or shares of Series A Preferred Stock. 2.9 "Issue Date" shall mean the original date of issuance of shares of the Series A Preferred Stock. 2.10 "Junior Stock" shall mean the Common Stock and each other class of capital stock or series of Preferred Stock of the Corporation established after the Issue Date, the terms of which do not expressly provide that such class or series ranks senior to or on parity with the Series A Preferred Stock upon the liquidation, winding-up or dissolution of the Corporation. 2.11 "Liquidation Preference" shall mean, with respect to each share of the Series A Preferred Stock, $2.50, subject to equitable adjustment from time to time pursuant to Section 8.4. 2.12 "Market Price" of the Common Stock on any day shall be deemed to be the closing price of the Common Stock on such day as officially reported by the principal securities exchange in which the shares of Common Stock are listed or admitted to trading or by the Nasdaq Stock Market, or if the Common Stock is not listed or admitted to trading on any securities exchange or the Nasdaq Stock Market, the last sale price, or if there is no last sale price, the closing bid price, as furnished by the National Association of Securities Dealers, Inc. (such as through the OTC Bulletin Board) or a similar organization if Nasdaq is no longer reporting such information. If the Market Price cannot be determined pursuant to the sentence above, the Market Price shall be determined in good faith (using customary valuation methods) by the Board of Directors based on the information best available to it. 2.13 "Operational Date" shall mean the first day of the month immediately following the end of the first three-month period during which WWA has generated aggregate EBITDA of at least $672,000 for such three-month period, as determined in accordance with the definition of EBITDA set forth above. 2.14 "Parity Stock" shall mean each class of capital stock or series of Preferred Stock established after the Issue Date, the terms of which expressly provide that such class or series will rank on parity with the Series A Preferred Stock upon the liquidation, winding-up or dissolution of the Corporation. 3 2.15 "Permitted Indebtedness" shall mean (i) trade payables incurred in the ordinary course of business, (ii) indebtedness in existence as of the Issue Date, (iii) indebtedness constituting purchase money obligations and up to $3.0 million of capital lease obligations, (iv) up to $5.0 million principal amount of additional indebtedness outstanding at any one time and (v) indebtedness incurred to refinance the then-outstanding aggregate principal amount of indebtedness otherwise described in clause (ii) of this Section; provided, however, that Permitted Indebtedness shall not include indebtedness convertible into the capital stock of the Corporation. 2.16 "Person" shall mean any individual, corporation, general partnership, limited partnership, limited liability partnership, joint venture, association, joint-stock corporation, trust, limited liability company, unincorporated organization or government or any agency or political subdivision thereof. 2.17 "Plant Number One" shall mean the Company's facility under construction at 2740 Coronado Street, Anaheim, California. 2.18 "Record Date" shall mean, with respect to a Dividend Payment Date, the last day of the calendar month immediately preceding the calendar month in which the Dividend Payment Date occurs. 2.19 "Registration Rights Agreement" shall mean that certain Registration Rights Agreement dated as of April 27, 2005, by and among the Corporation, Trellus Offshore Fund Limited, a Cayman Islands corporation, Trellus Partners, LP, a Delaware limited partnership, and Trellus Partners II, LP, a Delaware limited partnership, the individuals and entities set forth on Exhibit A thereto, and the individuals set forth on Exhibit B thereto. 2.20 "Senior Stock" shall mean each class of capital stock or series of Preferred Stock established after the Issue Date, the terms of which expressly provide that such class or series will rank senior to the Series A Preferred Stock upon the liquidation, winding-up or dissolution of the Corporation. 2.21 "WWA" shall mean World Waste of Anaheim, Inc., a California corporation. 3. LIQUIDATION RIGHTS. 3.1 In the event of any liquidation, winding-up or dissolution of the Corporation, whether voluntary or involuntary, each Holder shall, subject to the prior rights of any holders of Senior Stock, be entitled to receive and to be paid out of the assets of the Corporation available for distribution to its shareholders an amount equal to the Liquidation Preference for each outstanding share of the Series A Preferred Stock held by such Holder, plus an amount equal to all accrued and unpaid dividends thereon, including Additional Dividends (as defined in Section 5.2 below) (collectively, "Accrued Dividends") to the date fixed for distribution, in preference to the holders of, and before any payment or distribution is made on (or any setting apart for any payment or distribution), any Junior Stock. After the payment to the Holders of the Liquidation Preference plus Accrued Dividends for each outstanding share of the Series A Preferred Stock plus Accrued Dividends, the remaining assets shall be distributed ratably to the holders of any Junior Stock and the Series A Preferred Stock of the Corporation, and in satisfaction of any accrued and unpaid dividends thereon, including Additional Dividends, on a common stock equivalent basis. 4 3.2 In addition to any voluntary or involuntary dissolution, liquidation or winding-up of the Corporation, the following events shall be considered a liquidation, winding-up or dissolution for the purpose of this Section 3: (i) the sale, conveyance, exchange or transfer (for cash, shares of stock, other securities or other consideration) of all or substantially all the assets or business of the Corporation; or (ii) any consolidation or merger of the Corporation with or into any other corporation or other entity or person, or any other corporate reorganization, in which the shareholders of the Corporation immediately prior to such consolidation, merger or reorganization, own fifty percent (50%) or less of the Corporation's voting power immediately after such consolidation, merger or reorganization. 3.3 In the event the assets of the Corporation legally available for distribution to the Holders upon any liquidation, winding-up or dissolution of the Corporation, whether voluntary or involuntary, shall be insufficient to pay in full all amounts to which such Holders are entitled pursuant to Section 3.1, no such distribution shall be made on account of any shares of Parity Stock upon such liquidation, winding-up or dissolution unless proportionate distributable amounts shall be paid with equal priority on account of the Series A Preferred Stock, ratably, in proportion to the full distributable amounts for which Holders and holders of any Parity Stock are entitled upon such liquidation, winding-up or dissolution. 3.4 All distributions made with respect to the Series A Preferred Stock in connection with any liquidation, winding-up or dissolution shall be made pro rata to the Holders. 4. VOTING RIGHTS. 4.1 Except as otherwise provided herein or as required by California law, the Series A Preferred Stock shall be voted equally with the shares of the Common Stock of the Corporation and not as a separate class, at any annual or special meeting of shareholders of the Corporation, and may act by written consent in the same manner as the Common Stock, in either case upon the following basis: each holder of shares of Series A Preferred Stock shall be entitled to that number of votes as equals the number of shares of Common Stock into which such holder's aggregate shares of Series A Preferred Stock are convertible (pursuant to Section 6 hereof) immediately after the close of business on the record date fixed for such meeting or the effective date of such written consent. 4.2 For so long as any shares of Series A Preferred Stock remain outstanding, in addition to any other vote or consent required herein or by California law, the vote or written consent of the holders of at least a majority of the then-outstanding shares of Series A Preferred Stock shall be necessary for effecting, validating, or approving the following actions and the Corporation shall not, without such vote or consent, take or permit to be taken any such actions: 5 (i) Any amendment, alteration, or repeal of any provision of the Corporation's Amended and Restated Articles of Incorporation or this Certificate of Determination that would have an adverse effect on the voting powers, preferences, or other special rights or privileges, qualifications, limitations, or restrictions of the Series A Preferred Stock; (ii) Any increase in the authorized number of shares of Series A Preferred Stock; (iii) Any authorization, creation, designation, whether by reclassification or otherwise, or issuance of any Senior Stock or Parity Stock or any amendment, alteration or repeal of any right, power, preference, privilege, qualification, limitation, restriction or other term or provision pertaining thereto; (iv) Any redemption, repurchase, declaration, payment of dividends or other distributions ("Payments"), or setting aside of funds in respect thereof with respect to any shares of Common Stock or other series of Preferred Stock (except for any Payments with respect to shares of Series A Preferred Stock made in accordance with the terms and restrictions of this Certificate of Determination); (v) Any merger, consolidation, binding share exchange, or Acquisition involving the Corporation, the sale of all or substantially all of the assets of the Corporation, or the transfer or cancellation by the Corporation of its license from Bio-Products International, Inc.; (vi) The incurrence by the Corporation of any indebtedness, other than Permitted Indebtedness; (vii) Increasing or decreasing the authorized number of directors constituting the Board of Directors of the Corporation; (viii) (A) The creation, authorization, designation or issuance of any shares of Parity Stock or Junior Stock having a mandatory redemption date or purchase, put or similar rights, which require the Corporation to purchase, redeem or otherwise acquire any shares of Parity Stock or Junior Stock prior to the redemption date for, and the actual redemption of, the Series A Preferred Stock pursuant hereto or (B) exercising any optional redemption, purchase or other right to acquire shares of Parity Stock or Junior Stock prior to the repurchase or redemption date for, and the actual redemption of, the Series A Preferred Stock pursuant hereto; (ix) Any voluntary dissolution, liquidation or winding up of the Corporation; (x) A change in the principal business conducted or proposed to be conducted by the Corporation; 6 (xi) An increase in the number of shares available for issuance under the Corporation's stock option plans in effect as of the date hereof, or the creation of any new stock option plans, or any issuance of options under such plans with an exercise price at below the fair market value of the Company's common stock; or (xii) Any transaction by the Corporation with any Affiliate, except for transactions the terms of which in good faith are fair and reasonable to the Corporation and are at least as favorable as the terms that could be obtained by the Corporation in a comparable transaction made on an arm's length basis between unaffiliated parties (as determined by the Board of Directors acting reasonably and in good faith, as evidenced by a Board resolution). Notwithstanding the foregoing, (x) the provisions that a separate vote of the Series A Preferred Stock is required with respect to the matters referred to in Sections 4.2(iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), and (xii) shall cease to be in effect once less than 3.0 million shares of Series A Preferred Stock (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares) remain outstanding, and (y) the provisions that a separate vote of the Series A Preferred Stock is required with respect to the matters referred to in Sections 4.2(iv), (v), (vi), (viii), (x), (xi) and (xii) shall cease to be in effect as of the Operational Date. 4.3 So long as at least 3.0 million shares of Series A Preferred Stock remain outstanding (as adjusted for any stock dividends, combinations, splits, recapitalizations, and the like with respect to such shares), in the event that the Operational Date has not occurred on or prior to September 30, 2006, then the holders of the Series A Preferred Stock shall, 30 days following the receipt by the Corporation of a written notice given to the Corporation by the holders of a majority of the then-outstanding shares of Series A Preferred (such notice being referred to as a "Notice of Board Change") be entitled to elect the smallest number of directors that shall constitute a majority of the authorized number of directors of the Corporation, and the holders of the Common Stock shall be entitled to elect the remaining members of the Board of Directors. Upon the election by the holders of the Series A Preferred Stock of the directors they are entitled to elect as hereinabove provided, the terms of office of all persons who were theretofore directors of the Corporation shall forthwith terminate, whether or not the holders of the Common Stock shall then have elected the remaining directors of the Corporation. If, after the election of a new Board of Directors pursuant to Section 4.4, either (i) the Operational Date occurs or (ii) there ceases to be at least 3.0 million shares of Series A Preferred Stock outstanding (as adjusted for any stock dividends, combinations, splits, recapitalizations, and the like with respect to such shares), then the holders of the Series A Preferred Stock shall be divested of the special voting rights specified in this Section. Upon the termination of any such special voting rights as hereinabove provided, the Board of Directors shall promptly call a special meeting of the shareholders at which all directors will be elected, and the terms of office of all persons who are then directors of the Corporation shall terminate immediately upon the election of their successors. 4.4 Whenever under the provisions of Section 4.3 hereof, the right shall have accrued to the holders of the Series A Preferred Stock to vote to elect a majority of the Corporation's directors, the Board of Directors shall, within ten (10) days after delivery to the Corporation at its principal office of a request to such effect by the holders of a majority of the then-outstanding shares of the Series A Preferred Stock, call a special meeting of the holders of the Series A Preferred Stock for the election of directors, to be held upon not less than ten (10) nor more than twenty (20) days' notice to such holders. If such notice of meeting is not given within the ten (10) days required above, the holders of Series A Preferred Stock requesting such meeting may also call such meeting and for such purposes shall have access to the stock books and records of the Corporation. At any meeting so called or at any other meeting held while the holders of shares of Series A Preferred Stock shall have the voting power provided in Section 4.3, the holders of a majority of the shares of Series A Preferred Stock present in person or by proxy or voting by written consent, shall be sufficient to constitute a quorum for the election of directors as herein provided. In the case of any vacancy in the office of a director occurring among the directors elected by the holders of Series A Preferred Stock pursuant to Section 4.3, such vacancy shall be filled by the affirmative vote of the holders of a majority of the shares of Series A Preferred Stock, given either at a special meeting of such shareholders duly called for the purpose or pursuant to written consent of shareholders. Any directors who shall have been elected by the holders of Series A Preferred Stock as provided in the next preceding sentence hereof may be removed during the aforesaid term of office, either with or without cause, by the affirmative vote of the holders of shares of the Series A Preferred Stock, given either at a special meeting of such shareholders duly called for that purpose or pursuant to a written consent of shareholders, and any vacancy thereby created may be filled by the holders of Series A Preferred represented at such meeting or pursuant to such written consent. 7 4.5 In that event that the Corporation grants any special voting rights to holders of Parity Stock or Junior Stock, such voting rights shall also be granted to the holders of Series A Preferred Stock. 4.6 At the option of the holders of the Series A Preferred Stock, to the extent permitted by law and by the rules of any securities exchange on which the securities of the Corporation are then listed, each director elected by the holders of Series A Preferred Stock shall also be a member of each committee of the Board of Directors. Such representative shall be compensated for service on the Board of Directors and reimbursed for out-of-pocket expenses in respect thereof only if and to the extent that any non-independent director that serves on the Board of Directors is compensated for service in respect thereof or reimbursed for out-of-pocket expenses in respect thereof. 5. DIVIDENDS. 5.1 Subject to the prior and superior rights of the holders of any shares of any series of Preferred Stock ranking prior and superior to the shares of Series A Preferred Stock with respect to dividends, the Holders shall be entitled to receive out of assets legally available therefor, cumulative quarterly dividends, at a rate per annum (subject to adjustment as provided in Section 8.4) equal to the Applicable Percentage of the Liquidation Preference, payable in arrears, in shares of Series A Preferred Stock (valued at the then-Liquidation Preference) on July 1, 2005 with respect to the period commencing on the Issue Date and ending June 30, 2005 and thereafter quarterly, on each Dividend Payment Date with respect to the quarterly period ending on such Dividend Payment Date, to the Holders at the close of business on the Record Date for such Dividend Payment Date. The amount of dividends payable on shares of Series A Preferred Stock for each full quarterly dividend period shall be computed by dividing by four the annual rate per share set forth above. The initial dividend payable on July 1, 2005 will be computed on the basis of the annual dividend multiplied by the actual number of days elapsed between the Issue Date and June 30, 2005 divided by 360. Dividends payable on the Series A Preferred Stock for any period less than a full quarterly period shall be computed on the basis of a 360-day year of twelve 30-day months. After the payments of all preferential amounts required to be paid to the Holders, any remaining dividends shall be distributed ratably among the holders of any Junior Stock and the Series A Preferred Stock, treating for this purpose all such securities and any accrued and unpaid dividends thereon, including Additional Dividends (as defined in Section 5.2 below), as if they had been converted to Common Stock pursuant to the terms of this Certificate of Determination immediately prior to the Dividend Payment Date. Any additional shares of Series A Preferred Stock issued pursuant to this paragraph shall be governed by this Certificate of Determination and shall be subject in all respects, except the Issue Date, to the same terms as the shares of Series A Preferred Stock originally issued hereunder. 8 5.2 Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from the date of issue of such shares of Series A Preferred Stock whether or not earned or declared. Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. Notwithstanding anything to the contrary set forth above, unless and until such dividends are declared by the Board of Directors, such dividends shall continue to cumulate and shall be paid at the time of repurchase as provided herein if not earlier declared and paid. Accrued dividends on the Series A Preferred Stock if not paid on the first or any subsequent Dividend Payment Date following accrual shall thereafter accrue additional dividends in respect thereof, compounded quarterly, at the Applicable Percentage (the "Additional Dividends"). 5.3 So long as any shares of Series A Preferred Stock shall be outstanding, no dividend, whether in cash or property, shall be paid or declared, nor shall any other distribution be made on Junior Stock without the affirmative vote or consent of the Holders of a majority of the outstanding shares of Series A Preferred Stock, nor shall any shares of any Junior Stock of the Corporation be purchased, redeemed, or otherwise acquired for value by the Corporation until all payments of all preferential amounts required to be paid to the Holders (set forth in Section 5.1 above) shall have been paid or declared and set apart. 6. CONVERSION. 6.1 Each Holder shall have the right, at such Holder's option, exercisable at any time on or after the earlier to occur of (i) September 30, 2006 or (ii) the Operation Date, and from time to time thereafter, to convert, subject to the terms and provisions of this Section 6, any or all of such Holder's shares of the Series A Preferred Stock into shares of Common Stock at a conversion ratio equal to one share of Common Stock for each one share of Series A Preferred Stock being converted. To exercise such right, a Holder must deliver to the Corporation at its principal offices during usual business hours of the Corporation: (i) a written notice that such Holder elects to convert the number of shares of the Series A Preferred Stock specified in such notice and (ii) the certificate(s) evidencing the shares of Series A Preferred Stock to be converted, properly endorsed or assigned for transfer. Thereupon, the Corporation shall promptly issue and deliver to such Holder a certificate or certificates for the number of shares of Common Stock to which such holder is entitled, together with, in full satisfaction of any accrued but unpaid dividends thereon including Additional Dividends, the number of additional shares of Common Stock as equals the number of shares of Common Stock that would be issued upon conversion of any accrued but unpaid dividends on the Series A Preferred Stock being so converted, had such dividend been paid. The conversion shall be deemed to occur at the close of business on the day the notice of conversion and certificate(s) are received by the Corporation. 9 6.2 Each share of Series A Preferred Stock shall be converted into one share of Common Stock automatically and without further action by the Corporation or any Holder, upon the first to occur of any of the following: (i) on or after the earlier to occur of (A) September 30, 2006 or (B) the Operation Date, pursuant to the affirmative vote or written consent of the Holders of a majority of the then-outstanding Series A Preferred Stock; (ii) the closing Market Price of the Common Stock averages at least $7.50 per share over a period of 20 consecutive trading days and the daily trading volume over the same 20-day period averages at least 75,000 shares; (iii) the closing of the sale of the Corporation's Common Stock in a public offering underwritten by an investment bank reasonably acceptable to the holders of a majority of the then-outstanding shares of Series A Preferred Stock, registered under the Securities Act of 1933, as amended (the "Securities Act"), with a per share price to the public of at least $5.00 per share and for a total gross offering amount of at least $10 million, other than a registration relating solely to a transaction under Rule 145 under the Securities Act (or any successor thereto) or to an employee benefit plan of the Corporation; (iv) the closing of an Acquisition resulting in proceeds to the holders of the Series A Preferred Stock of at least $5.00 per outstanding share of Series A Preferred Stock, as such number shall be adjusted to include the shares of Series A Preferred Stock to be issued in full satisfaction of any accrued and unpaid dividends thereon, including Additional Dividends; or (v) April 27, 2010, unless the Corporation becomes obligated to redeem the Series A Preferred Stock prior to April 27, 2010 pursuant to Section 7.1 as a result of its receipt of a Redemption Notice (as defined, and in accordance with the provisions of, Section 7.2). The Corporation shall give notice to the Holders of the automatic conversion of the Series A Preferred Stock pursuant to this Section 6.2, whereupon each Holder shall be obligated to surrender to the Corporation the certificate(s) evidencing its shares of Series A Preferred Stock, properly endorsed or assigned for transfer. Upon such automatic conversion, all accrued and unpaid dividends, including Additional Dividends, shall be paid in accordance with the provisions of Section 6.1. 6.3 On the date of any conversion, all rights of any Holder with respect to the shares of the Series A Preferred Stock so converted, including the rights, if any, to receive distributions of the Corporation's assets (including, but not limited to, the Liquidation Preference) or notices from the Corporation, will terminate, except only for the rights of any such Holder to receive certificates (if applicable) for the number of whole shares of Common Stock into which such shares of the Series A Preferred Stock have been converted and cash in lieu of any fractional share as provided in Section 6.5. 6.4 The Corporation shall reserve out of the authorized but unissued shares of its Common Stock, sufficient shares of its Common Stock to provide for the conversion of shares of Series A Preferred Stock, including any shares of Series A Preferred Stock issuable as dividends, including Additional Dividends, from time to time as such shares of Series A Preferred Stock are presented for conversion. The Corporation shall take all action necessary so that all shares of Common Stock that may be issued upon conversion of shares of Series A Preferred Stock will upon issue be validly issued, fully paid and nonassessable, and free from all liens and charges in respect of the issuance or delivery thereof. 10 6.5 No fractional shares or securities representing fractional shares of Common Stock shall be issued upon any conversion of any shares of the Series A Preferred Stock. If more than one share of the Series A Preferred Stock held by the same Holder shall be subject to conversion at one time, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the conversion of all of such shares of the Series A Preferred Stock. If the conversion of any share or shares of the Series A Preferred Stock results in a fraction, an amount equal to such fraction multiplied by the Market Price of the Common Stock on the conversion date shall be paid to such Holder in cash by the Corporation. 6.6 If the outstanding shares of Common Stock are subdivided, by stock split or otherwise, into a greater number of shares of Common Stock, or if the Corporation shall declare or pay any dividend on the Common Stock payable in shares of Common stock, then the conversion ratio shall be proportionately adjusted upon the record date for the occurrence of such event or, if no record date is fixed with respect to such event, upon the occurrence of such event. If the outstanding shares of Common Stock are combined or consolidated, by reclassification, reverse stock split or otherwise, into a lesser number of shares of Common Stock, then the conversion ratio shall be proportionately adjusted upon the record date for the occurrence of such event or, if no record date is fixed with respect to such event, upon the occurrence of such event. 6.7 If the Corporation fixes a record date for the determination of holders of Common Stock entitled to receive any distribution payable in securities of the Corporation other than shares of Common Stock (excluding any distribution in which the Series A Preferred Stock participates on an as-converted basis, and any distribution for which adjustment is otherwise made pursuant to this Section 6), then in each such case provision shall be made so that the holders of Series A Preferred Stock receive the other securities of the Corporation which they would have received had their shares of Series A Preferred Stock been converted into Common Stock immediately prior to such event, subject to all other adjustments called for during such period under this Section 6. 6.8 If the Common Stock is changed into the same or a different number of shares of any other class or series of stock, whether by capital reorganization, reclassification or otherwise (other than a stock dividend, combination, split or other event for which adjustment is made pursuant to Section 6.6), the conversion ratio then in effect shall, concurrently with the effectiveness of the record date for the such reorganization or reclassification, be adjusted such that the Series A Preferred Stock shall be convertible into, in lieu of the Common Stock which the holders would otherwise have been entitled to receive, a number of shares of such other class or series of stock equivalent to the number of shares of Common Stock that the holders would have been entitled to receive upon conversion of their Series A Preferred Stock immediately prior to such reclassification or capital reorganization. 6.9 Upon any increase or decrease in the conversion ratio pursuant to this Section 6, the Corporation promptly shall deliver to each Holder a notice describing in reasonable detail the event requiring the increase or decrease in the conversion ratio and the method of calculation thereof and specifying the increased or decreased conversion ratio in effect following such adjustment. 11 6.10 The Corporation will at all times in good faith assist in the carrying out of all the provisions of this Section 6 and in the taking of all such actions as may be necessary or appropriate in order to protect the conversion rights of the Holders of the Series A Preferred Stock against impairment. 6.11 In the event that the Corporation (i) issues as a dividend or other similar distribution (an "Extraordinary Dividend") on all of its then outstanding Common Stock, (A) securities of the Corporation of a class other than Common Stock, (B) rights, warrants or options (individually, a "Right" and collectively, the "Rights") to acquire any securities of the Corporation (including Common Stock) or (C) evidences of its indebtedness or assets, or (ii) issues any dividend or other similar distribution (a "Secondary Extraordinary Dividend") on any such securities in the form of securities of the Corporation (including Common Stock) (any securities (other than Rights) issued as an Extraordinary Dividend or Secondary Extraordinary Dividend or issued upon exercise of any Rights issued as an Extraordinary Dividend or Secondary Extraordinary Dividend shall be referred to as "Dividend Securities"): (i) the Series A Preferred Stock shall thereafter be convertible into (1) the original number of shares of Common Stock set forth in Section 6 hereof (subject to adjustment as herein provided), (2) such Dividend Securities and Rights as would theretofore have been issued in respect of such shares (adjusted as herein provided) had such shares been outstanding at the time of such Extraordinary Dividend, and (3) any Dividend Securities that would theretofore have been issued as a Secondary Extraordinary Dividend in respect of such Dividend Securities had such Dividend Securities been outstanding at the time of such Secondary Extraordinary Dividend; and (ii) any Right issued as an Extraordinary Dividend or a Secondary Extraordinary Dividend shall (1) expire upon the later of (a) the original expiration date of such Right or (b) the 180th day following the conversion of the Series A Preferred Stock, and (2) be exercisable for (a) the Dividend Securities issuable upon exercise of such Right and (b) any property theretofore issued as a Secondary Extraordinary Dividend in respect of such Dividend Securities. 6.12 In the event that at any time while the Series A Preferred Stock is outstanding, the Corporation shall offer to sell to all of the holders of Common Stock as a class, rights or options to purchase Common Stock or rights or options to purchase any stock or securities convertible into or exchangeable for Common Stock (such exchangeable or convertible stock or securities being herein called "Convertible Securities"), whether or not such rights or options are immediately exercisable, and the price per share for which Common Stock is issuable upon the exercise of such rights or options or upon conversion or exchange of such Convertible Securities (determined by dividing (i) the total amount received or receivable by the Corporation upon issuance and sale of such rights or options, plus the aggregate amount of additional consideration payable to the Corporation upon the exercise of all such rights or options, plus, in the case of rights or options which relate to Convertible Securities, the aggregate amount of additional consideration, if any, payable upon the conversion or exchange of all such Convertible Securities, by (ii) the total maximum number of shares of Common Stock issuable upon the exercise of all such rights or options or upon the conversion or exchange of all such Convertible Securities issuable upon the exercise of all such rights or options) shall be less than the Redemption Price in effect immediately prior to the initial sale of any such rights or options, the Corporation shall offer to sell to the Holder, at the price and upon the terms at which such rights or options are offered to holders of its Common Stock, such number of such rights or options as the Holder would have been entitled to purchase had the Holder converted such Holder's shares of Series A Preferred Stock into shares of Common Stock immediately prior to the commencement of the offering of such rights or options. 12 7. REDEMPTION 7.1 The Corporation shall, subject to the conditions set forth in Section 7.3 below, upon receipt, not earlier than April 2, 2010 nor later than April 27,2010, of written request(s) for redemption from Holders of at least a majority of the then-outstanding shares of Series A Preferred Stock (a "Redemption Request"), redeem from each Holder, from any source of funds legally available therefore, all outstanding shares of Series A Preferred Stock. The Corporation shall effect such redemption on May 27, 2010 by paying in cash in exchange for the shares of Series A Preferred Stock to be redeemed a sum equal to $2.50 per share of Series A Preferred Stock (as adjusted for any stock dividends, combinations or splits with respect to such shares) plus all accrued but unpaid dividends on such shares, including Additional Dividends (the "Redemption Price"). 7.2 At least 15 but not more than 30 days prior to the redemption date, the Corporation shall mail written notice of any Redemption Request, first class postage prepaid, to each holder of record (at the close of business on the Business Day next preceding the day on which notice is given) of the Series A Preferred Stock at the address last shown on the records of the Corporation for such holder, notifying such holder of the redemption to be effected, specifying the number of shares to be redeemed from such holder, the redemption date, the Redemption Price, the place at which payment may be obtained and calling upon such holder to surrender to the Corporation in the manner and at the place designated, his certificate or certificates representing shares to be redeemed (the "Redemption Notice"). Except as provided in Section 7.3, on or after the redemption date, each holder of Series A Preferred Stock shall surrender to the Corporation the certificate or certificates representing such shares, in the manner and at the place designated in the Redemption Notice, and thereupon the Redemption Price of such shares shall be payable to the order of the person whose name appears on such certificate or certificates as the owner thereof and each surrendered certificate shall be cancelled. 7.3 From and after the redemption date, unless there shall have been a default in payment of the Redemption Price, all rights of the holders of shares of Series A Preferred Stock designated for redemption in the Redemption Notice as holders of Series A Preferred Stock (except the right to receive the Redemption Price without interest upon surrender of their certificate or certificates) shall cease with respect to such shares, and such shares shall not thereafter be transferred on the books of the Corporation or be deemed to be outstanding for any purpose whatsoever. If the funds of the Corporation legally available for redemption of shares of Series A Preferred Stock on the redemption date are insufficient to redeem the total number of shares of Series A Preferred Stock to be redeemed on such date, those funds which are legally available will be used to redeem the maximum possible number of such shares ratably among the holders of such shares to be redeemed based upon their holdings of Series A Preferred Stock. The shares of Series A Preferred Stock not redeemed shall remain outstanding and entitled to all the rights, preferences and privileges provided herein. At any time thereafter when additional funds of the Corporation are legally available for the redemption of shares of Series A Preferred Stock such funds will immediately be used to redeem the balance of the shares which the Corporation has become obliged to redeem on the redemption date, but which it has not redeemed. 13 8. MISCELLANEOUS 8.1 If any Series A Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall, subject to Article V, Section 2 of the Bylaws of the Corporation, upon the request and at the expense of the Holder, issue, in exchange and in substitution for and upon cancellation of the mutilated Series A Preferred Stock certificate, or in lieu of and substitution for the Series A Preferred Stock certificate lost, stolen or destroyed, a new Series A Preferred Stock certificate of like tenor and representing an equivalent amount of shares of the Series A Preferred Stock, but only upon receipt of evidence of such loss, theft or destruction of such Series A Preferred Stock certificate and indemnity, if requested, satisfactory to the Corporation. The Corporation shall not be required to issue any physical certificates representing shares of the Series A Preferred Stock on or after any conversion date with respect to such shares of the Series A Preferred Stock. In place of the delivery of a replacement certificate following any such conversion date, upon delivery of the evidence and indemnity described above, the Corporation will deliver the shares of Common Stock. 8.2 With respect to any notice to a Holder required to be provided hereunder, such notice shall be mailed to the registered address of such Holder, and neither failure to mail such notice, nor any defect therein or in the mailing thereof, to any particular Holder shall affect the sufficiency of the notice or the validity of the proceedings referred to in such notice with respect to the other Holders or affect the legality or validity of any redemption, conversion, distribution, rights, warrant, reclassification, consolidation, merger, conveyance, transfer, dissolution, liquidation, winding-up or other action, or the vote upon any action with respect to which the Holders are entitled to vote. All notice periods referred to herein shall commence on the date of the mailing of the applicable notice. Any notice which was mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the Holder receives the notice. 8.3 Subject to Section 6.5 hereof, the shares of the Series A Preferred Stock shall be issuable, convertible and redeemable only in whole shares and cash shall be paid in lieu of fractional shares. 8.4 The Liquidation Preference, the amount of dividends per share set forth in Section 5 and the dollar amounts and share numbers set forth herein shall be subject to adjustment, as appropriate, whenever there shall occur a stock split, stock dividend, combination, reclassification or other similar event involving shares of the Series A Preferred Stock. Such adjustments shall be made in such manner and at such time as the Board of Directors in good faith determines to be equitable in the circumstances, any such determination to be evidenced in a resolution duly adopted by the Board of Directors. Upon any such equitable adjustment, the Corporation shall promptly deliver to each Holder a notice describing in reasonable detail the event requiring the adjustment and the method of calculation thereof and specifying the increased or decreased Liquidation Preference or annual dividend rate in effect following such adjustment. 14 8.5 Shares of the Series A Preferred Stock converted into Common Stock shall be retired and canceled and shall have the status of authorized but unissued shares of Preferred Stock of the Corporation undesignated as to series and may with any and all other authorized but unissued shares of Preferred Stock of the Corporation be designated or redesignated and issued or reissued, as the case may be, as part of any series of Preferred Stock of the Corporation. 8.6 In case, at any time while any of the shares of the Series A Preferred Stock are outstanding: 8.6.1 The Corporation shall declare a dividend (or any other distribution) on any Junior Stock; or 8.6.2 The Corporation shall authorize the issuance to all holders of its shares of any Junior Stock of rights or warrants to subscribe for or purchase shares of Common Stock or of any other subscription rights or warrants; or 8.6.3 There is any reclassification of the Common Stock, any consolidation, merger or binding share exchange to which the Corporation is a party or the sale or transfer of all or substantially all of the assets of the Corporation; or 8.6.4 There is the voluntary or involuntary dissolution, liquidation or winding up of the Corporation; then the Corporation shall cause to be mailed to Holders at least 30 days before the date hereinafter specified, a notice stating (i) the date on which a record is to be taken for the purpose of such dividend, distribution, rights or warrants, or, if a record is not to be taken, the date as of which the holders of shares of Common Stock of record to be entitled to such dividend, distribution, rights or warrants are to be determined, and/or (ii) the date on which any such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of shares of Common Stock of record shall be entitled to exchange their shares for the applicable consideration, deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up. 8.7 The headings of the various sections and subsections of this Certificate of Determination are for convenience of reference only and shall not affect the interpretation of any of the provisions of this Certificate of Determination. 8.8 Whenever possible, each provision of this Certificate of Determination shall be interpreted in a manner as to be effective and valid under applicable law and public policy. If any provision set forth herein is held to be invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or otherwise adversely affecting the remaining provisions of this Certificate of Determination. No provision herein set forth shall be deemed dependent upon any other provision unless so expressed herein. If a court of competent jurisdiction should determine that a provision of this Certificate of Determination would be valid or enforceable if a period of time were extended or shortened, then such court may make such change as shall be necessary to render the provision in question effective and valid under applicable law. 15 8.9 The Corporation will provide to the holders of the Series A Preferred Stock all communications sent by the Corporation to the holders of the Common Stock and any other class of Preferred Stock. 8.10 Except as may otherwise be required by law, the shares of the Series A Preferred Stock shall not have any powers, designations, preferences and relative, participating, optional or other special rights, other than those specifically set forth in this Certificate of Determination or the Amended and Restated Articles of Incorporation." We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this Certificate of Determination are true and correct of our own knowledge. Dated: April 27, 2005 ------------------------------ Name: Thomas L. Collins Title: Chief Executive Officer ------------------------------ Name: David Rane Title: Chief Financial Officer EX-10.1 3 v017490_ex10-1.txt Exhibit 10.1 ================================================================================ SECURITIES PURCHASE AGREEMENT DATED AS OF APRIL 28, 2005 BY AND AMONG WORLD WASTE TECHNOLOGIES, INC., TRELLUS OFFSHORE FUND LIMITED, TRELLUS PARTNERS, LP, TRELLUS PARTNERS II, LP, AND THE OTHER INVESTORS NAMED HEREIN ================================================================================ TABLE OF CONTENTS
Page ARTICLE I: AUTHORIZATION AND SALE OF THE SECURITIES......................................................1 1.1 Authorization of Issuance and Sale of the Securities..........................................1 1.2 Sale and Issuance.............................................................................1 1.3 The Initial Closing...........................................................................1 1.4 Additional Closing............................................................................2 1.5 Use of Proceeds...............................................................................2 ARTICLE II: THE CLOSINGS..................................................................................3 2.1 Deliveries at Each Closing....................................................................3 ARTICLE III: REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................................................4 3.1 Subsidiaries; Organization; Good Standing; Qualification and Power............................4 3.2 Authorization.................................................................................5 3.3 Non-contravention.............................................................................5 3.4 Capitalization of the Company.................................................................6 3.5 Financial Statements and Liabilities..........................................................6 3.6 Legal Compliance..............................................................................7 3.7 Litigation....................................................................................7 3.8 Environment, Safety and Permits...............................................................8 3.9 Offering Exemption............................................................................9 3.10 Ownership of Purchased Securities.............................................................9 3.11 Securities Filings...........................................................................10 3.12 Transactions With Affiliates And Employees...................................................10 3.13 Internal Accounting Controls.................................................................10 3.14 Listing And Maintenance Requirements.........................................................11 3.15 No Integrated Offering.......................................................................11 3.16 No Investment Company........................................................................11 3.17 Insurance....................................................................................11 3.18 Labor Relations..............................................................................12 3.19 Taxes........................................................................................12 3.20 No Brokers...................................................................................13 3.21 Reliance.....................................................................................14 3.22 Employee Benefits............................................................................14 ARTICLE IV: REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.............................................15 4.1 Authority....................................................................................15 4.2 Experience...................................................................................15 4.3 Investment...................................................................................15
- i - ARTICLE V: ADDITIONAL AGREEMENTS........................................................................16 5.1 Survival of Representations, Warranties and Agreements.......................................16 5.2 Transaction Expenses and Taxes...............................................................16 5.3 Corporate Governance.........................................................................16 5.4 Securities Laws..............................................................................17 5.5 Reporting Matters............................................................................18 5.6 USRPHC.......................................................................................18 5.7 Restriction on Use of Proceeds...............................................................19 5.8 Restrictive Covenants........................................................................19 ARTICLE VI: PRE-EMPTIVE RIGHTS...........................................................................20 ARTICLE VII: MISCELLANEOUS................................................................................21 7.1 No Third Party Beneficiaries.................................................................21 7.2 Entire Agreement.............................................................................21 7.3 Successors and Assigns.......................................................................22 7.4 Counterparts.................................................................................22 7.5 Notices......................................................................................22 7.6 Governing Law................................................................................23 7.7 Submission to Jurisdiction; Waivers..........................................................23 7.8 Waiver of Jury Trial.........................................................................24 7.9 Amendments and Waivers; Purchasers Consent...................................................24 7.10 Certain Definitions..........................................................................24 7.11 Incorporation of Schedules and Exhibits......................................................29 7.12 Construction.................................................................................29 7.13 Interpretation...............................................................................29 7.14 Remedies.....................................................................................29 7.15 Severability.................................................................................30 7.16 Delivery by Facsimile........................................................................30
- ii - Schedules DISCLOSURE SCHEDULE Exhibits Exhibit A - Allocation Schedule Exhibit B - Form of Warrant Exhibit C - Form of Registration Rights Agreement Exhibit D - Certificate of Determination Exhibit E - Form of Legal Opinion - iii - THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of April 28, 2005, by and among World Waste Technologies, Inc., a California corporation (the "Company"), Trellus Offshore Fund Limited, a Cayman Islands corporation, Trellus Partners, LP, a Delaware limited partnership, and Trellus Partners II, LP, a Delaware limited partnership (collectively, "Trellus") and each of the purchasers, if any, set forth on the Allocation Schedule attached hereto as Exhibit A (together with Trellus, the "Purchasers"). WHEREAS, subject to the terms and conditions set forth in this Agreement, the Company desires to sell to the Purchasers, and the Purchasers desire to purchase from the Company, up to 6,000,000 shares of the Company's 8% Series A Cumulative Redeemable Convertible Participating Preferred Stock (the "Series A Preferred Stock"), together with common stock purchase warrants. NOW, THEREFORE, in consideration of the mutual promises herein made and the representations, warranties, and covenants herein contained, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties, intending to be legally bound, agree as follows: ARTICLE I: AUTHORIZATION AND SALE OF THE SECURITIES 1.1 Authorization of Issuance and Sale of the Securities. Subject to the terms and conditions hereof, the Company has authorized (i) the issuance and sale of up to 6,000,000 shares of Series A Preferred Stock and warrants to acquire up to 600,000 shares of Common Stock (the "Warrants"), at the Closings (as defined herein), for an aggregate purchase price of $15.0 million, and (ii) the issuance of shares of the Company's Common Stock upon conversion of such shares of Series A Preferred Stock and exercise of the Warrants (the "Underlying Shares"). 1.2 Sale and Issuance. Subject to the terms and conditions hereof, at the Initial Closing (as defined below), each Purchaser severally and not jointly, agrees to purchase, and the Company agrees to sell and issue to such Purchaser, that number of shares of Series A Preferred Stock (the "Initial Purchased Shares") and warrants (the "Initial Warrants" and, together with the Initial Purchased Shares, the "Initial Purchased Securities"), as set forth opposite such Purchaser's name on Exhibit A attached hereto. 1.3 The Initial Closing. (a) Simultaneously with the execution and delivery of this Agreement, the initial closing hereunder (the "Initial Closing") with respect to the issuance, sale and delivery of the Initial Purchased Securities shall take place (the date on which the Initial Closing occurs, the "Initial Closing Date"). (b) At the Initial Closing, on the terms and subject to the conditions contained herein, (i) the Company shall issue, sell and deliver to the Purchasers, and the Purchasers shall purchase from the Company, all of the Initial Purchased Securities free and clear of any liens, claims, charges and encumbrances whatsoever and with no restrictions on the voting rights thereof and other incidents of record and beneficial ownership pertaining thereto, and (ii) the Purchasers shall deliver to the Company, by wire transfer of immediately available funds to an account designated by the Company, the aggregate purchase price (the "Purchase Price") for such Initial Purchased Securities in the individual amounts set forth on the Allocation Schedule attached hereto as Exhibit A. 1.4 Additional Closing. If the full number of the authorized shares of Series A Preferred Stock and Warrants is not sold at the Initial Closing, one additional closing (the "Additional Closing", and the Additional Closing and the Initial Closing being referred to as a "Closing") may occur on any day on or prior to May 9, 2005 (or such later date as agreed to in writing by the Company and the Purchasers) for the sale of up to the balance of the authorized but unissued Series A Preferred Stock and Warrants to such persons as the Company may determine, so long as the sale of such securities at the Additional Closing is effected pursuant to the terms of this Agreement and at a price per share paid in cash, no less than the per share Purchase Price. The Additional Closing shall be effected in the manner set forth in Section 1.3. Any individual or entity purchasing securities at the Additional Closing (each, an "Additional Purchaser," and collectively "Additional Purchasers") shall execute a signature page to this Agreement and the Company shall update Exhibit A hereto to include each such Additional Purchaser, at which time each such Additional Purchasers shall be deemed to be a "Purchaser" hereunder for purposes of this Agreement and all other agreements contemplated hereby, and a "Holder" under the Rights Agreement (as defined in Section 2.1). At the Additional Closing, (i) the Company will deliver to the Additional Purchasers the various certificates, instruments and documents referred to in Section 2.1(a) hereof, (ii) the Additional Purchasers will deliver to the Company the various certificates, instruments and documents referred to in Section 2.1(b) below, and (iii) the Company shall deliver to each Additional Purchaser a share certificate and Warrant registered in such Additional Purchaser's name representing the shares of Series A Preferred Stock and Warrants that such Additional Purchaser is to receive from the Company at the Additional Closing to be set forth opposite such Additional Purchaser's name on the updated Exhibit A hereto, against payment of the purchase price therefor by check or wire transfer to an account designated by the Company or other means acceptable to the Company. The Initial Purchased Securities and the securities, if any, purchased at the Additional Closing, are referred to herein as the "Purchased Securities." 1.5 Use of Proceeds. The Company will use the net proceeds of the Purchased Securities purchased by the Purchasers pursuant to this Agreement for the construction and operation by its wholly owned subsidiary, World Waste of Anaheim, Inc., Plant Number One located at 2740 Coronado Street, Anaheim, California, for the repayment of principal and interest on a $750,000 promissory note in favor of Trellus Management, LLC (the "Trellus Note"), and for working capital and, subject to the approval of the holders of a majority of the shares of Series A Preferred Stock, for the site identification, planning, permitting and designing of an additional plant (the "Additional Expenditures"); provided, however, that the Company may use up to $750,000 of the net proceeds from the Purchased Securities for Additional Expenditures without the approval of the holders of the shares of Series A Preferred Stock. 2 ARTICLE II: THE CLOSINGS 2.1 Deliveries at Each Closing. (a) As a condition to each Purchaser's obligation to purchase its respective portion of the Purchased Securities, at each Closing all representations and warranties set forth in Article III shall be true and correct in each case, as of the date of this Agreement (other than those that by their terms are to be true and correct as of a specified date, in which case, such representations and warranties shall be true and correct as of such date), and the Company shall deliver to each Purchaser: (i) a stock certificate registered in the name of such Purchaser, representing the Purchased Shares being purchased by such Purchaser pursuant to Section 1.3(b); (ii) a Warrant Certificate in the form attached hereto as Exhibit B in the name of such Purchaser representing the Warrants being purchased by such Purchaser pursuant to Section 1.3(b); (iii) a counterpart of the Registration Rights Agreement, in the form attached hereto as Exhibit C (the "Rights Agreement"), duly executed by the Company and the other shareholders of the Company party thereto; (iv) evidence, satisfactory to such Purchaser, of the filing of the Certificate of Determination, in the form attached hereto as Exhibit D, with the Secretary of State of the State of California; (v) a certificate of the Secretary of the Company dated as of such Closing Date, certifying: (A) the Company's Amended and Restated Articles of Incorporation, Certificate of Determination and Bylaws, as in effect on the date hereof, as true and complete and attaching certified copies of same; (B) as to the incumbency and genuineness of the specimen signatures of each officer of the Company executing any of the Documents; (C) the resolutions of the Board authorizing the execution, delivery and performance of the Documents and the consummation of the transactions contemplated thereby, as true and complete and attaching copies of same (including but not limited to the issuance of the Purchased Shares, the Warrants and the Underlying Shares); and (D) that all consents, approvals and other actions of, and notices and filings with, all entities and persons as may be necessary or required with respect to the execution of the parties of the transactions contemplated thereby, have been obtained or made; (vi) a good standing certificate, as of a date not more than ten (10) days prior to such Closing Date, issued by the Secretary of State of the State of California and such other jurisdictions in which the Company and its Subsidiaries may be duly organized or qualified; (vii) executed employment agreements and inventions/confidentiality agreements for each of Steve Racoosin, Thomas L. Collins, Fred Lundberg and David Rane, in form and substance reasonably satisfactory to the Purchasers; 3 (viii) director resignation letters from each of Steve Racoosin and Fred Lundberg (such resignations not to take effect until immediately prior to the election or appointment of the directors to be nominated by the holders of the Series A Preferred Stock as provided for in Section 5.3); (ix) a legal opinion of Troy & Gould substantially in the form attached hereto as Exhibit D; and (x) such other documents as the Purchasers may reasonably request. (b) As a condition to the Company's obligation to sell the Purchased Securities to each Purchaser, at each Closing all representations and warranties set forth in Article IV shall be true and correct in all material respects, in each case, as of the date of this Agreement, and each Purchaser shall deliver to the Company: (i) the Purchase Price for the Purchased Securities being purchased by such Purchaser pursuant to Section 1.3(b); (ii) a counterpart of the Rights Agreement, duly executed by such Purchaser; and (iii) a duly executed Form W-9 or W-8, as appropriate. ARTICLE III: REPRESENTATIONS AND WARRANTIES OF THE COMPANY Except as set forth on the Disclosure Schedule attached hereto, or as disclosed in any of the SEC Reports, the Company represents and warrants to the Purchasers as of the date hereof and as of each Closing Date as follows: 3.1 Subsidiaries; Organization; Good Standing; Qualification and Power. (a) The Company has the subsidiaries (each a "Subsidiary") as set forth in the SEC Reports (as defined below). The Company owns, directly or indirectly, all of the capital stock of each Subsidiary, free and clear of any liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are duly authorized, validly issued, fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. (b) The Company and each Subsidiary is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), has all requisite power to own, lease and operate its Assets and to carry on its business as presently being conducted, and is qualified to do business and in good standing in every jurisdiction in which the failure to so qualify or be in good standing would have a Material Adverse Effect. 4 3.2 Authorization. (a) The Company has all requisite power and authority to execute and deliver each Document and any and all instruments necessary or appropriate in order to effectuate fully the terms and conditions of each Document and all related transactions and to perform its obligations under each Document. Each Document has been duly authorized by all necessary action (corporate, shareholder or otherwise) on the part of the Company, and no further action is required by the Company in connection therewith, and each Document has been duly executed and delivered by the Company, and constitutes the valid and legally binding obligation of the Company, enforceable in accordance with its terms and conditions, except as enforceability thereof may be limited by any applicable bankruptcy, reorganization, insolvency or other Laws affecting creditors' rights generally or by general principles of equity. (b) The authorization, issuance, sale and delivery of the Purchased Securities and the Underlying Shares and the execution and delivery of the Documents and the performance by the Company of its obligations thereunder have each been authorized by all requisite action (corporate, shareholder or otherwise), and no further action is required by the Company in connection therewith. 3.3 Non-contravention. The execution, delivery and performance by the Company of the Documents, the consummation of the transactions contemplated thereby and compliance with the provisions thereof, including the issuance, sale and delivery of the Purchased Securities and upon conversion or exercise thereof, the issuance of the Underlying Shares, have not and shall not, (a) violate any Law to which any Assets of the Company or any Subsidiary is subject, (b) violate any provision of the Company's Amended and Restated Articles of Incorporation and/or Bylaws or of a Subsidiary's certificate or articles of incorporation, bylaws or other organizational documents, (c) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice under any contract, decree, judgment or order to which the Company or a Subsidiary is a party or by which any of the Assets of the Company or a Subsidiary is bound, or (d) result in the imposition of any Lien upon any of the Assets of the Company or Subsidiary, except in the case of clause (c) or (d) as would not have a Material Adverse Effect. To the Company's knowledge, neither the Company nor any of its Subsidiaries is in violation of its Articles of Incorporation, By-laws or other organizational documents and neither the Company nor any of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time or both could put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries has taken any action or failed to take any action that would give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or by which any Assets of the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not, individually or in the aggregate, have a Material Adverse Effect. To the Company's knowledge, the businesses of the Company and its Subsidiaries are not being conducted, and shall not be conducted so long as a Purchaser owns any of the Purchased Securities, in violation of any law, rule or regulation of any Governmental Entity, except as would not have a Material Adverse Effect. Other than as specifically contemplated by this Agreement and as required by the Securities Act and any state securities laws, the Company has not been nor is required to give any notice to, make any filing with, or obtain any authorization, consent or approval of any Governmental Entity, self regulatory organization, stock market or any other Person for the valid authorization, issuance and delivery of the Purchased Securities and Underlying Shares or the authorization, execution and delivery of the Documents. 5 3.4 Capitalization of the Company. (a) Immediately upon consummation of the Initial Closing, the authorized capital stock of the Company shall consist of: (i) 100,000,000 shares of Common Stock, of which 24,413,692 shares will be issued and outstanding, 9,100,000 shares of which will have been reserved for issuance upon conversion in full of the Purchased Shares (including shares of Series A Preferred Stock issuable as dividends thereon) and 600,000 shares of which will have been reserved for issuance upon exercise in full of the Warrants; and (ii) 10,000,000 shares of Preferred Stock, 9.1 million of which shares will be designated Series A Preferred Stock. (b) Except as contemplated by the Documents, there are, and immediately after consummation of each Closing there will be, no (i) outstanding warrants, options, calls, agreements, convertible securities, exchangeable securities or other commitments or instruments pursuant to which the Company is or may become obligated to issue or sell any shares of its capital stock or other securities, or (ii) preemptive right, right of first refusal or similar rights, of any character whatsoever, to purchase or otherwise acquire shares of the capital stock or other securities of the Company pursuant to any provision of Law, the Company's Bylaws or equivalent document or any contract to which the Company or, to the Company's knowledge, any shareholder of the Company thereof is a party; and, except as contemplated by the Documents, there is, and, immediately after the consummation of the Closing there will be, no Lien (such as a right of first refusal, right of first offer, proxy, voting trust, voting agreement, etc.) with respect to the sale or voting of shares of capital or securities of the Company (whether outstanding or issuable). (c) All shares of the capital stock and other securities issued by the Company (i) have been duly authorized and validly issued, (ii) are fully paid and nonassessable and (iii) have been issued in transactions in accordance with applicable Laws governing the sale and purchase of securities and any preemptive rights and rights of first refusal. 3.5 Financial Statements and Liabilities. (a) As of their respective dates, the financial statements of the Company included in the SEC Reports complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements) and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). 6 (b) The Company and its Subsidiaries have no liability or obligation, absolute or contingent (individually or in the aggregate), including, without limitation, any tax liability due and payable, which is not reflected on the Balance Sheet, other than (i) liabilities and obligations that would not be required to be included since the date of the Balance Sheet reflected on financial statements prepared in accordance with GAAP, which, individually or in the aggregate, are not material to the financial condition or operating results of the Company, or (ii) legal and fundraising costs incurred in connection with the transactions contemplated hereby, or (iii) liabilities that may have arisen in the ordinary course of the Company's business consistent with past practice, which, individually or in the aggregate, are not material to the financial condition or operating results of the Company. (c) Subsequent to the date of the financial statements, none of the Company and any of its Subsidiaries has made or changed any election, changed an annual accounting period, adopted or changed any accounting method, filed any amended Tax Return, entered into any closing agreement, settled any Tax claim or assessment, surrendered any right to claim a refund of Taxes, consented to any extension or waiver of the limitations period applicable to any Tax claim or assessment or taken any other similar action relating to the filing of any Tax Return or the payment of any Tax. 3.6 Legal Compliance. The Company and its Subsidiaries have complied in all Material respects with, all applicable Laws, Orders and permits, and no Proceeding is pending or, to the Company's knowledge, threatened, alleging any failure to so comply. 3.7 Litigation. (a) Except as disclosed in the SEC Reports or as would not have a Material Adverse Effect, individually or in the aggregate, there is no Proceeding pending or, to the Company's knowledge, threatened by or against, or affecting the Assets of, the Company (or any of its predecessors) or the Subsidiaries, and the Company and the Subsidiaries are not bound by any Order. No Proceeding pending or threatened by or against, or affecting the Assets of, the Company (or any of its predecessors) or the Subsidiaries will or could reasonably be expected to result in a Material Adverse Change. (b) Neither the Company nor any Subsidiary, nor, to the knowledge of the Company, any director or officer thereof who has served as such since August 24, 2004, is or has been the subject of any Proceeding involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. To the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. Since August 24, 2004, the Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act. 7 3.8 Environment, Safety and Permits. (a) The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its properties and to carry on its business as it is now being conducted (collectively, the "Company Permits"), and there is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company Permits, except in each case as would not, individually or in the aggregate, have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not have a Material Adverse Effect. Since August 24, 2004, neither the Company nor any of its Subsidiaries has received any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices relating to possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse Effect. (b) Except as disclosed in Schedule 3.8 or as would not, individually or in the aggregate, have a Material Adverse Effect: (i) The Company and its Subsidiaries hold and formerly held, and are and have been, in compliance with, all Environmental Permits; (ii) The Company and its Subsidiaries are, and have been in compliance with all applicable Environmental Laws; (iii) Neither the Company nor any of its Subsidiaries has received any Environmental Claim, and the Company is not aware, after due inquiry, of any threatened Environmental Claim or of any circumstances, conditions or events that could reasonably be expected to give rise to an Environmental Claim against the Company or any of the Subsidiaries; (iv) There are no (1) underground storage tanks, (2) polychlorinated biphenyls, (3) asbestos or asbestos-containing materials, (4) urea-formaldehyde insulation, (5) sumps, (6) surface impoundments, (7) landfills, (8) sewers or septic systems or (9) Hazardous Substances present at any facility currently or formerly owned, leased, operated or otherwise used by the Company and/or any of the Subsidiaries that could reasonably be expected to give rise to liability of any of the Company or its Subsidiaries under any Environmental Laws; (v) There are no past (including, without limitation, with respect to assets or businesses formerly owned, leased or operated by the Company or any Subsidiary) or present actions, activities, events, conditions or circumstances, including without limitation the release, threatened release, emission, discharge generation, treatment, storage or disposal of Hazardous Substances, that could reasonably be expected to give rise to liability of the Company or any Subsidiary under any Environmental Laws or any contract or agreement; 8 (vi) No modification, revocation, reissuance, alteration, transfer, or amendment of the Company's or any Subsidiary's Environmental Permits, or any review by, or approval of, any third party of such Environmental Permits is required in connection with the execution or delivery of this Agreement or the consummation of the transactions contemplated hereby or the continuation of the business of the Company or any Subsidiary following such consummation; (vii) Hazardous Substances have not been generated, transported, treated, stored, disposed of, released or threatened to be released at, on, from or under any of the properties or facilities currently or formerly owned, leased or otherwise used, including without limitation for receipt of the Company's or any Subsidiary's wastes, by the Company or any Subsidiary, in violation of or in a manner or to a location that could reasonably be expected to give rise to liability under any Environmental Laws; (viii) Neither the Company nor any Subsidiary has contractually assumed any liabilities or obligations under any Environmental Laws; (ix) The Company and each of the Subsidiaries have accrued or otherwise provided, in accordance with and as required by GAAP, for all damages, liabilities, penalties or costs that they may incur in connection with any claim pending or threatened against them, or any requirement that is or may be applicable to them, under any Environmental Laws, and such accrual or other provisions is reflected in the Company's most recent financial statements. 3.9 Offering Exemption. Based in part upon and assuming the accuracy of the representations of the Purchasers in Article IV, the offering, sale and issuance of the Purchased Securities have been, are, and will be, exempt from registration under the Securities Act, and such offering, sale and issuance is, and the issuance of the Underlying Shares upon conversion of the Purchased Securities or exercise of the Warrants, as the case may be, will be exempt from registration under applicable state securities and "blue sky" laws. The Company has made or will make all requisite filings and has taken or will take all action necessary to be taken to comply with such state securities or "blue sky" laws. 3.10 Ownership of Purchased Securities. Upon issuance and delivery of the Purchased Securities (and the Underlying Shares upon conversion or exercise thereof) to each Purchaser pursuant to this Agreement in consideration of the Purchasers' payments therefor, the Purchased Securities and Underlying Shares will be duly and validly issued, fully paid and non-assessable, free and clear of all Liens and encumbrances or restrictions on transfer, other than (i) restrictions on transfer set forth herein or in the Documents, and (ii) any liens, charges or encumbrances created by a Purchaser. The delivery of the Purchased Securities to each Purchaser at each Closing and the delivery of the Underlying Shares upon conversion or exercise of the Purchased Securities will transfer good and valid title to, and beneficial ownership of, the Purchased Securities and the Underlying Shares, other than as a result of any encumbrances, Liens and claims described in clauses (i) and (ii) of the preceding sentence. The issuance and sale of the Purchased Securities pursuant hereto (and the issuance of the Underlying Shares upon the conversion or exercise thereof) will not give rise to any preemptive rights or rights of first refusal that have not been complied with or waived. 9 3.11 Securities Filings. Since August 24, 2004, the Company has filed with the Securities and Exchange Commission (the "Commission") all documents (the "SEC Reports") required to be filed by it under the Securities Exchange Act of 1934 as amended (the "Exchange Act"). Each such SEC Report, at the time of its filing, was in compliance with the requirements of its respective form as in effect on the date such document was filed and neither the SEC Reports, nor the financial statements (and the notes thereto) included therein, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except to the extent superseded by an SEC Report filed subsequently and prior to the date hereof. 3.12 Transactions With Affiliates And Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case in excess of $60,000 other than (a) for payment of salary or consulting fees for services rendered, (b) reimbursement for expenses incurred on behalf of the Company and (c) for other employee benefits, including stock option agreements under any stock option plan of the Company. 3.13 Internal Accounting Controls. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Company and designed such disclosure controls and procedures to ensure that material information relating to the Company, including its Subsidiaries, is made known to the certifying officers by others within those entities, particularly during the period in which the Company's Form 10-KSB or 10-QSB, as the case may be, is being prepared. The Company's certifying officers have evaluated the effectiveness of the Company's disclosure controls and procedures as of a date within 90 days prior to the filing date of the most recently filed periodic report under the Exchange Act (such date, the "Evaluation Date"). The Company presented in its most recently filed Form 10-KSB or Form 10-QSB the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no significant changes in the Company's internal controls (as such term is defined in Item 307(b) of Regulation S-K under the Exchange Act). There has been no disclosure to the Company's Board, Audit Committee or independent auditors of any significant deficiencies or material weakness in the design or operation of interim controls over financial reporting requiring corrective action, any fraud that involves management or other employees who have a significant role in the Company's or any Subsidiary's internal controls, any material complaints or claims made relating to the Company's or any Subsidiary's internal accounting controls, and any report by any attorney representing the Company or any of its Subsidiaries of a material violation of Law or similar matters (provided that the foregoing representations shall be limited to the knowledge of the Company with respect to any of the foregoing that may have occurred prior to August 24, 2004). 10 3.14 Listing And Maintenance Requirements. (a) The Company's Common Stock is registered pursuant to Section 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. (b) To the Company's knowledge, the Company is not in violation of the listing requirements of the Over-the-Counter Bulletin Board (the "OTCBB") and does not reasonably anticipate that the Common Stock will be delisted by the OTCBB in the foreseeable future. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing. 3.15 No Integrated Offering. Neither the Company, nor, to the knowledge of the Company, any of its affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Purchased Securities to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable shareholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the Company are listed or designated. 3.16 No Investment Company. The Company is not, and upon the issuance and sale of the Purchased Securities as contemplated by this Agreement will not be an "investment company" required to be registered under the Investment Company Act of 1940 (an "Investment Company"). The Company is not controlled by an Investment Company. 3.17 Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect. 11 3.18 Labor Relations. (a) No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company or any of its Subsidiaries or any unfair practice which, individually or in the aggregate, would result in a Material Adverse Effect. (b) Except as described in the Schedules, (i) there has been no work stoppage due to labor disagreements experienced by the Company or any Subsidiary, (ii) no written notice has been received from any Governmental Entity of any unfair labor practice charge or complaint against the Company pending or threatened before the National Labor Relations Board or any other Governmental Entity with respect to the employees of the Company or any Subsidiary and (iii) there is no labor strike, slowdown or stoppage actually pending or, to the Company's knowledge, threatened by the employees of the Company or any Subsidiary against or affecting the Company or any Subsidiary, except in any such case set forth in clauses (i) through (iii) above as would not, individually or in the aggregate, have a Material Adverse Effect. 3.19 Taxes. (a) Since August 24, 2004, each of the Company and its Subsidiaries has timely filed all Tax Returns that it was required to file under applicable laws and regulations. All such Tax Returns are true, correct and complete in all Material respects and were prepared in Material compliance with all applicable laws and regulations. All Taxes due, owed by, or with respect to, any of the Company and its Subsidiaries (whether or not shown or reportable on any Tax Return) with respect to any period ending on or prior to the date of this Agreement have been timely paid. The amount of the liability of the Company and each of its Subsidiaries for unpaid Taxes for all periods ending on or before the Closing Date shall not, in the aggregate, exceed the amount of the current liability accruals for Taxes (excluding reserves for deferred Taxes) as such accruals are reflected on the face of the Balance Sheet, as adjusted in accordance with past custom and practice for operations and transactions in the ordinary course of business of the Company and its Subsidiaries since the date of the Balance Sheet. Since the date of the Balance Sheet, neither the Company nor any of its Subsidiaries has incurred any liability for Taxes arising from extraordinary gains or losses outside the ordinary course of business. (b) The Company and each of its Subsidiaries has properly classified for Tax purposes all employees, consultants, independent contractors and other service providers, and has timely made all filings and has withheld, deposited and paid all Taxes required to have been filed, withheld, deposited or paid in connection with services provided by such persons or in connection with any amounts paid or owing to any other person. To the Company's knowledge, no deficiencies for any Tax have been assessed against the Company or any of its Subsidiaries, none of the Company or any of its Subsidiaries has received any notice of deficiency or proposed adjustment for any Taxes proposed, asserted or assessed by any Taxing authority against the Company or any of its Subsidiaries, and no Tax Return of the Company or any of its Subsidiaries has ever been audited and, to the knowledge of the Company and its officers, directors and employees, there is no such audit pending or contemplated. There is no Lien, whether imposed by any federal, state, local or foreign Taxing authority or otherwise, outstanding against the assets, properties or business of the Company or any of its Subsidiaries, other than any Lien for current Taxes not yet due and payable. To the Company's knowledge, no claim has been made since August 24, 2004 by any authority in a jurisdiction where the Company or any of its Subsidiaries does not file Tax Returns that it is or may be subject to Taxation by that jurisdiction. Neither the Company nor any of its Subsidiaries has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency, since August 24, 2004. 12 (c) None of the Company and its Subsidiaries will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (A) change in method of accounting for a taxable period ending on or prior to the Closing Date; (B) "closing agreement" as described in Code Section 7121 (or any corresponding or similar provision of state, local or foreign income Tax law) executed on or prior to the Closing Date; (C) intercompany transactions or any excess loss account described in Treasury Regulations under Code Section 1502 (or any corresponding or similar provision of state, local or foreign income Tax law); (D) installment sale or open transaction disposition made on or prior to the Closing Date; (E) recapture of a pre-Closing Tax benefit; or (F) prepaid amount received on or prior to the Closing Date. No item of income or gain reported by the Company or any Subsidiary of the Company for financial accounting purposes in any pre-Closing period is required to be included in Taxable income for a post-Closing period. (d) To the Company's knowledge, neither the Company nor any Subsidiary of the Company has any liability for or any obligation to pay the Taxes of any person under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee or successor, by contract, pursuant to a Tax sharing agreement, indemnification or guaranty, or otherwise. Neither the Company nor any Subsidiary of the Company has filed a consent under Section 341(f) of the Code concerning collapsible corporations, or agreed to have Section 341(f)(2) of the Code apply to any disposition of an asset owned by the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries is, or during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code has ever been, a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code (a "USRPHC"). The use of the proceeds of the sale of the Purchased Securities and any other actions by the Company or its Subsidiaries in connection with the transactions contemplated hereby will not trigger a Determination Date (as defined in Section 5.6 below) or cause the Company to qualify as a USRPHC. None of the Company nor any of its Subsidiaries has engaged in any listed transaction as set forth in written guidance or a notice issued by the Internal Revenue Service. None of the Company nor its Subsidiaries are foreign entities or conduct business in a foreign country. 3.20 No Brokers. Except for Harris Williams Advisors, Inc. and Chadbourn Securities, Inc., whose fees and expenses are the sole responsibility of the Company, no broker or finder has acted directly or indirectly for the Company in connection with this Agreement or the transactions contemplated hereby, and no broker or finder is entitled to any brokerage or finder's fee or other commission in respect thereof based in any way on agreements, arrangements or understandings made by or on behalf of the Company. The Company may, however, be responsible for the payment of fees and expenses to other finders in connection with the Additional Closing. 13 3.21 Reliance. The Company understands and confirms that the Purchasers will rely on the representations and covenants contained in this Agreement in acquiring the Purchased Securities. 3.22 Employee Benefits. (a) The Company and its ERISA Affiliates have performed in all material respects all obligations required to be performed by them under each Employee Plan, and each Employee Plan has been established and maintained in all Material respects in accordance with its terms and in Material compliance with all applicable laws, statutes, orders, rules and regulations, including but not limited to ERISA, the Code, COBRA, and HIPAA. Any Employee Plan intended to be qualified under Section 401(a) of the Code and each trust intended to qualify under Section 501(a) of the Code has obtained a favorable determination, notification, advisory and/or opinion letter, as applicable, as to its qualified status from the IRS. For each Employee Plan that is intended to be qualified under Section 401(a) of the Code, to the Company's knowledge, there has been no event, condition or circumstance that has adversely affected or is likely to adversely affect such qualified status. No "prohibited transaction," within the meaning of Section 4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise exempt under Section 408 of ERISA, has occurred with respect to any Employee Plan. There are no actions, suits or claims pending, or, to the knowledge of the Company, threatened (other than routine claims for benefits) against any Employee Plan or against the assets of any Employee Plan. There are no audits, inquiries or proceedings pending or, to the knowledge of the Company or any ERISA Affiliates, threatened by the IRS or DOL, or any other governmental authority with respect to any Employee Plan. Neither the Company nor any ERISA Affiliate is subject to any Material penalty or tax with respect to any Employee Plan under Section 502(i) of ERISA or Sections 4975 through 4980 of the Code. The Company and each ERISA Affiliate have timely made all contributions and other payments required by and due under the terms of each Employee Plan. (b) Neither the Company nor any ERISA Affiliate has ever maintained, established, sponsored, participated in, or contributed to, any Pension Plan which is subject to Title IV of ERISA or Section 412 of the Code or any Multiemployer Plan. (c) No Employee Plan or employment agreement provides, or reflects or represents any liability to provide, retiree benefits to any person for any reason, except as may be required by COBRA or other applicable statute, and the Company has not represented, promised or contracted (whether in oral or written form) to any Company Employee (either individually or to Company Employees as a group) or any other person that such Company Employee(s) or other person would be provided with retiree benefits, except to the extent required by statute. (d) Neither the Company nor any of its Subsidiaries is a party to any agreement, plan, arrangement or other contract covering any employee or independent contractor or former employee or independent contractor that, considered individually or considered collectively with any other such contracts, would reasonably be expected to, give rise directly or indirectly to the payment of any amount that would not be deductible pursuant to Section 280G or Section 162(m) the Code (or any comparable provision of state or foreign tax laws). All Employee Plans which are subject to Section 409A of the Code are in Material compliance with Section 409A. 14 ARTICLE IV: REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS Each Purchaser, individually and not jointly, represents and warrants to the Company as of the date hereof and as of each Closing Date, as follows: 4.1 Authority. Such Purchaser has full power and authority to enter into and to perform this Agreement and the Documents to which it is a party in accordance with their terms and to consummate the transactions contemplated hereby and thereby. This Agreement and the Documents to which it is a party have been duly executed and delivered by such Purchaser and constitute valid and binding obligations of such Purchaser each of which are enforceable in accordance with its respective terms and conditions, except as the enforceability thereof may be limited by any applicable bankruptcy, reorganization, insolvency or other laws affecting creditor's rights generally or by general principles of equity. To such Purchaser's knowledge, the execution and performance of the transactions contemplated by this Agreement and the Documents and compliance with their provisions by such Purchaser: (i) will not violate any provision of Law applicable to such Purchaser; and (ii) will not conflict with or result in any breach of any of the material terms, conditions or provisions of, or constitute a default under such Purchaser's partnership agreement, certificate of formation or operating agreement, or any indenture, lease, agreement or other instrument to which such Purchaser is a party or by which it or any of its properties is bound, or any decree, judgment, order, statute, rule or regulation applicable to such Purchaser, which, in any such case would impair such Purchaser's ability to purchase the Purchased Securities or otherwise comply with its obligations hereunder. 4.2 Experience. Such Purchaser is an "accredited investor" within the meaning of Regulation D promulgated by the Commission under the Securities Act and, by virtue of its experience in evaluating and investing in private placement transactions of securities in companies similar to the Company, such Purchaser is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. Such Purchaser has had access to the Company's senior management and has had the opportunity to conduct such due diligence review as it has deemed appropriate provided, however, that the foregoing shall not alter, diminish or impair such Purchaser's right or ability to rely upon any of the representations or warranties of the Company contained herein. 4.3 Investment. Such Purchaser has not been formed solely for the purpose of making this investment (or, if it has been so formed, all of the owners of such Purchaser are themselves accredited investors), and such Purchaser is acquiring the Purchased Securities for investment for its own account, not as a nominee or agent, and not with the view to, or for resale in connection with, any distribution of any part thereof, provided, however, that by making the representations herein, such Purchaser does not agree to hold any of the Purchased Securities for any minimum or other specific term and reserves the right to dispose of the Purchased Securities at any time in accordance with or pursuant to a registration statement or otherwise in compliance with federal and state securities laws. Such Purchaser understands that the Purchased Securities and the Underlying Shares have not been registered under the Securities Act or applicable state and other securities laws by reason of a specific exemption from the registration provisions of the Securities Act and applicable state and other securities laws, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of such Purchaser's representations as expressed herein. 15 ARTICLE V: ADDITIONAL AGREEMENTS 5.1 Survival of Representations, Warranties and Agreements. All representations and warranties contained herein shall survive the Initial Closing for a period of 24 months (except any representations and warranties regarding USRPHC, which shall survive for so long as Trellus Offshore Fund Limited owns any shares of the Company's equity securities) and all covenants and agreements contained herein shall survive until fully discharged. All representations, warranties, covenants and agreements made herein by the Company or in any certificate delivered at a Closing shall be deemed Material and to have been relied upon by the Purchasers. 5.2 Transaction Expenses and Taxes. (a) The Company and each Purchaser shall bear all of its respective expenses in connection with the negotiation, preparation and execution of the Documents, except that the Company shall reimburse the Purchasers for their reasonable and documented legal fees incurred in connection herewith, up to a maximum aggregate reimbursement of $30,000. (b) All sales, use, transfer, stamp (including documentary stamp taxes, if any), excise, recording, franchise and other similar taxes or governmental charges with respect to the securities issued pursuant hereto shall be borne by the Company. (c) All transfer, documentary, sales, use, stamp, registration and other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement (including any corporate-level gains Tax triggered by the sale of the Company's stock, and any similar tax imposed in other states or subdivisions) shall be paid by the Company when due, and the Company shall, at its own expense, file all necessary Tax Returns and other documentation with respect to all such transfer, documentary, sales, use, stamp, registration and other Taxes and fees. 5.3 Corporate Governance. (a) As soon as practicable, the Company shall cause the Board to nominate, recommend and solicit proxies (if necessary) for the election to the Board of two individuals designated by the holders of the Series A Preferred Stock to fill the Board seats to be vacated by the resignations of Steve Racoosin and Fred Lundberg (the "Preferred Board Seats"). Thereafter, in the event of a vacancy in such Preferred Board Seats, or in any Board election in which either or both Series A Preferred Stock-designated directors are up for re-election, the Company shall cause the vacancy or vacancies to be filled with a Series A Preferred-Stock-designated director or shall cause such Series A Preferred Stock-designated directors to be included on the slate of directors proposed by the Board at such election and cause the Board to recommend and solicit proxies (if necessary) in favor of such Series A Preferred Stock-designated director. 16 (b) With the exception of the Chief Executive Officer (the "CEO"), no employee of the Company shall be nominated by the Board to serve as a director. (c) The CEO shall not serve as the Chairman of the Board (unless otherwise authorized by the holders of a majority in interest of the Series A Preferred Stock). As of the Closing, Thomas L. Collins will resign his position as Chairman of the Board, but will remain as a director. Notwithstanding any of the foregoing, the Company's obligations under this Section 5.3 will terminate on the earliest of: (i) The date when less than 50% of the shares of Series A Preferred Stock sold at the Closings are outstanding; or (ii) when the Company shall sell, convey, or otherwise dispose of all or substantially all of its property or business or merge or consolidate with any other corporation (other than a wholly-owned subsidiary corporation) where the stockholders of the Company own less than fifty percent (50%) of the voting power of the surviving entity after such merger or consolidation, provided that this subsection (ii) shall not apply to a merger effected principally for the purpose of changing the domicile of the Company. 5.4 Securities Laws. (a) The Company agrees to timely file all documents required to be filed with the Commission, specifically, a Form D (or equivalent form required by applicable state law) with respect to the Purchased Securities if and as required under Regulation D and applicable state securities laws. (b) Each certificate representing the Purchased Shares and the Underlying Shares shall bear a legend containing substantially the following legend (in addition to any other legend required by law or applicable agreement): THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR STATE SECURITIES LAWS AND CANNOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF REGISTRATION OR THE AVAILABILITY OF AN EXEMPTION FROM OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS. 17 5.5 Reporting Matters. The Company agrees not to report any actual or deemed non-cash dividends with respect to the Series A Preferred Stock to the Purchasers or any Governmental Entity on IRS Form 1099-DIV or other information return, unless otherwise instructed to do so in writing by a Governmental Entity in connection with a Proceeding involving the Company. The Company shall not withhold any Taxes on any actual or deemed non-cash dividends to the Purchasers with respect to the Series A Preferred Stock, unless otherwise instructed to do so in writing by a Governmental Entity in connection with a Proceeding involving the Company. The Company agrees with each of the Purchasers that for Tax purposes (i) the issue price of the Series A Preferred Stock will be $2.358 per share of the Series A Preferred Stock paid by the Purchasers and that the issue price for the Warrants shall be $1.42 per share subject to the Warrants and (ii) the Series A Preferred Stock will not be designated as debt. 5.6 USRPHC. So long as Trellus Offshore Fund Limited owns any shares of the Company's equity securities, the Company hereby agrees: (a) to use commercially reasonable efforts to avoid qualifying at any time on or after the Initial Closing as a USRPHC; (b) to monitor, measure, and test on the following dates (collectively the "Testing Dates"): (i) at the end of each month, (ii) on a date at least ninety (90) days but not more than one hundred twenty (120) days prior to each of the actual or any expected determination dates for applying the USRPHC test specified in Section 1.897-2(c) of the Treasury Regulations (the "Determination Dates"), and (iii) any actual Determination Dates; whether it qualifies as a USRPHC on the Testing Date, provided that in the case of a Testing Date described in (b)(ii) the Company shall take into account the contemplated transactions that are anticipated to give rise to a Determination Date described in Section 1.897-2(c)(ii), (iii) or (iv) of the Treasury Regulations; (c) if on any of the Testing Dates the fair market value of the Company's "United States real property interests" (within the meaning of Section 897 of the Code and the Treasury Regulations promulgated thereunder) equal or exceed forty percent (40%) of the fair market value of the Company's assets described in Section 897(c)(2)(B) of the Code and the Treasury Regulations promulgated thereunder, provided that in the case of a Testing Date described in (b)(ii) the Company shall take into account the contemplated transactions that are anticipated to give rise to a Determination Date described in Section 1.897-2(c)(ii), (iii) or (iv) of the Treasury Regulations, the Company will provide the Purchasers with written notice of the results of such tests within seven (7) days after the applicable Testing Date; 18 (d) if for any reason the Company anticipates that it is likely to qualify or has qualified as a USRPHC at any time including on the Testing Dates, the Company will provide written notice to the Purchasers within seven (7) days after such determination providing information regarding the reasons the Company anticipates such qualification or believes that it so qualifies; and (e) provided the Company does not qualify as a USRPHC on the applicable Testing Date, at any Purchaser's request, the Company will within seven (7) days of such request deliver to the requesting Purchaser and to the Internal Revenue Service notices that the Series A Preferred Stock, the Underlying Shares, Common Stock, and Warrants, as applicable, are not "United States real property interests" in accordance with the Treasury Regulations under Sections 897 and 1445 of the Code. 5.7 Restriction on Use of Proceeds. The Company agrees that it shall place the proceeds of the sale of the Purchased Securities in a separate bank account and shall not expend any of such proceeds unless and until that certain Amended and Restated Technology License Agreement, dated as of June 21, 2004, between the Company and Bio-Products International, Inc., is amended to the reasonable satisfaction of the holders of a majority of the shares of Series A Preferred Stock (the "Majority Holder"). In the event such amendment is not so effectuated within 30 days of the Initial Closing, the Majority Holder shall have the right to demand that the Company return such proceeds to the Company in exchange for the return of the Purchased Securities, which shall forthwith be canceled by the Company. Any such demand must be made in writing and must be received by the Company no later than 45 days following the Initial Closing. Notwithstanding the foregoing, (i) the Company shall have the right to expend up to $500,000 of the proceeds in accordance with the provisions of Section 1.5 at any time following the Initial Closing and (ii) the Company shall be permitted to repay the Trellus Note (principal and interest) with the proceeds from the Initial Closing. If and to the extent such proceeds are expended but the demand referred to in the preceding sentence is subsequently received by the Company, the Company shall only be required to return the funds that have not been so expended, and the Purchasers shall retain the Purchased Securities to the extent that such proceeds have been expended by the Company. Upon the amendment of the Technology Agreement as aforementioned, or upon the 45th day following the Initial Closing (in the event no demand for a return of the proceeds has been received by the Company), the Company shall be free to co-mingle the proceeds with its other funds and to expend such proceeds in accordance with Section 1.5. 5.8 Restrictive Covenants. Until the earlier to occur of (i) the Operational Date or (ii) the date on which less than 50% of the shares of Series A Preferred Stock sold at the Closings remain outstanding, the vote or written consent of the holders of at least a majority of the then-outstanding shares of Series A Preferred Stock shall be necessary for effecting, validating or approving the following actions and the Company shall not, without such vote or consent, take or permit to be taken any such actions: (a) Any merger, consolidation, or binding share exchange involving WWA, the sale of all or substantially all of the assets of WWA, or the sale or issuance of any equity securities of WWA; 19 (b) The incurrence by WWA of any indebtedness, other than Permitted Indebtedness; (c) A change in the principal business conducted or proposed to be conducted by any of the Company's subsidiaries; or (d) Any transaction by any of the Company's subsidiaries with any Affiliates, except for transactions the terms of which in good faith are fair and reasonable to such subsidiary and are at least as favorable as the terms that could be obtained by such subsidiary in a comparable transaction made on an arm's-length basis between unaffiliated parties (as determined by the Board of Directors of such subsidiary acting reasonably and in good faith, as evidenced by a Board resolution). Capitalized terms used in this Section and not otherwise defined shall have the meanings given such terms in the Certificate of Determination. ARTICLE VI: PRE-EMPTIVE RIGHTS (a) Except in the case of Excluded Securities or the issuance of shares of Series A Preferred Stock and Warrants at the Additional Closing, the Company shall not issue, sell or exchange, agree to issue, sell or exchange, or reserve or set aside for issuance, sale or exchange any (i) equity security of the Company, (ii) debt security of the Company that by its terms is convertible into or exchangeable for any equity security of the Company or has any other equity or equity-linked feature, (iii) security of the Company that is a combination of a debt and equity or equity-linked security or (iv) option, warrant or other right to subscribe for, purchase or otherwise acquire any security of the Company specified in the foregoing clauses (i) through (iii), unless in each case the Company shall have first offered to sell a portion of such securities to the Purchasers (the "Offered Securities"), equal to each Purchaser's Proportionate Percentage at a price and on such other terms and conditions as shall have been specified by the Company in writing delivered to the Purchasers (the "Offer"), which Offer by its terms shall remain open and irrevocable for a period of thirty (30) days from the date it is delivered by the Company to each Purchaser. (b) The Company may specify in the Offer that all or a minimum amount of the Offered Securities must be sold in such offering (to the Purchasers and/or any third parties pursuant to (d) below), in which case any Notice of Acceptance (as defined below) shall be deemed conditioned upon (i) receipt of Notices of Acceptance of all or such minimum amount, as applicable, of the Offered Securities and/or (ii) the sale of all or such minimum amount, as applicable, of the Offered Securities pursuant to (d) below. (c) Notice of a Purchaser intention to accept, in whole or in part, an Offer shall be evidenced by a writing signed by such Purchaser and delivered to the Company prior to the end of the thirty (30) day period of such Offer, setting forth such portion of the Offered Securities that such Purchaser elects to purchase (the "Notice of Acceptance"). (d) In the event that Notices of Acceptance are not given by the Purchaser in respect of all of the Offered Securities, during the ten (10) calendar day period commencing after such information is given, each participating Purchaser shall be entitled to additionally purchase that portion of the Offered Shares for which Purchasers were entitled to subscribe but which were not subscribed for by the Purchasers which is equal to the product obtained by multiplying the number of unsubscribed Offered Shares by such Purchaser's Proportionate Percentage. 20 (e) If the Purchasers do not elect to purchase all of the Offered Securities, the Company shall have ninety (90) days from the expiration of the foregoing ten (10) day period to sell all or any part of the Offered Securities as to which Notices of Acceptance have not been given by the Purchasers to any other Person(s), but only upon terms and conditions that in all material respects (including, without limitation, unit price and interest rates), which shall in no case be less than 95% of the amount specified in respect thereof in the Offer, are no more favorable to such other Person(s) and no less favorable to the Company than those set forth in the Offer. Upon the closing, which shall include full payment to the Company, of the sale to such other Person(s), the Purchasers shall purchase from the Company, and the Company shall sell to the Purchasers, the Offered Securities in respect of which Notices of Acceptance were delivered to the Company by the Purchasers, at the terms specified in the Offer. (f) In each case, any Offered Securities not purchased by the Purchasers or any other Person(s) in accordance with (d) above may not be sold or otherwise disposed of until they are again offered to the Purchasers under the procedures specified in (a), (c) and (d) above. (g) In the event that all or a portion of the consideration to be paid for any Offered Securities is other than cash, then the Offer shall provide that the Purchasers may, in lieu of such non-cash consideration, purchase the securities for cash, at a cash equivalent purchase price to be determined in good faith by the Board and to be set forth in the Offer. (h) The rights of the Purchasers under this Article VI shall not apply to the issuance by the Company of any Excluded Securities. (i) The provisions of this Article VI shall expire as soon as less than a total of 50% of the shares of Series A Preferred Stock sold at the Closings are outstanding. ARTICLE VII: MISCELLANEOUS 7.1 No Third Party Beneficiaries. Except as expressly provided herein, this Agreement shall not confer any rights or remedies upon any Person other than the parties and their respective successors and permitted assigns, personal representatives, heirs and estates, as the case may be. 7.2 Entire Agreement. This Agreement and the other Documents constitute the entire agreement among the Parties and supersede any prior understandings, agreements or representations by or among the Parties, written or oral, that may have related in any way to the subject matter of any Document including, without limitation, any letter of intent dated as of or prior to the date hereof, between the Company and the Purchasers. 21 7.3 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. No party hereto may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other parties hereto; provided, however, that any Purchaser may assign, hypothecate or pledge any of its rights under any of the Documents to (i) an Affiliate of such Purchaser, (ii) any Person who shall acquire substantially all of the assets of such Purchaser or a majority in voting power of the capital stock of such Purchaser (whether pursuant to a merger, consolidation, stock sale or otherwise), (iii) any lender of such Purchaser (or any agent therefore) for security purposes and the assignment thereof by any such lender or agent to such Purchaser in connection with the exercise by any such lender or agent of all of its rights and remedies as a secured creditor with respect thereto, or (iv) any person to whom such Purchaser assigns or transfers any Purchased Securities, provided such transferee agrees in writing to be bound, with respect to the transfer of Purchased Securities, by the provisions hereof that apply to the Purchasers. 7.4 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. This Agreement may be executed by facsimile. 7.5 Notices. All notices, requests, demands, claims, and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered personally, telecopied, sent by nationally recognized overnight courier or mailed by registered or certified mail (return receipt requested), postage prepaid, to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): If to the Company: World Waste Technologies, Inc. 13520 Evening Creek Drive Suite 130 San Diego, California 92128 Telephone: (858) 391-3400 Facsimile: (858) 486-3352 Attention: CFO 22 with a copy to: Troy & Gould Professional Corporation 1801 Century Park East, 16th Floor Los Angeles, CA 90067 Telephone: (310) 553-4441 Facsimile: (310) 201-4746 Attention: Lawrence Schnapp, Esq. If to the Purchasers, to the addresses set forth on the signature pages hereto. All such notices and other communications shall be deemed to have been given and received (i) in the case of personal delivery, on the date of such delivery, (ii) in the case of delivery by facsimile, on the date of such delivery, (iii) in the case of delivery by nationally recognized overnight courier, on the third business day following dispatch and (iv) in the case of mailing, on the seventh business day following such mailing. 7.6 Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF NEW YORK WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION'S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY. 7.7 Submission to Jurisdiction; Waivers. The Company and each Purchaser irrevocably agrees that any legal action or proceeding with respect to this Agreement or for recognition and enforcement of any judgment in respect hereof brought by any other party hereto or its successors may be brought and determined in the Supreme Court of New York for Kings County or the federal district court in the Southern District of New York, and the Company and each Purchaser hereby irrevocably submits with regard to any such action or proceeding for itself and in respect to its property, generally and unconditionally, to the nonexclusive jurisdiction of the aforesaid courts. The Company and each Purchaser hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, (a) any claim that is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure to lawfully serve process, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise), and (c) to the fullest extent permitted by applicable law, that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper and (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. 23 7.8 Waiver of Jury Trial. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER DOCUMENT RELATED HERETO. 7.9 Amendments and Waivers; Purchasers Consent. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by the Company and the holders of at least a majority of the then-outstanding Purchased Shares. No waiver by any party hereto of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. 7.10 Certain Definitions. "Affiliate" means, with respect to any Person, any of (a) a director, officer or shareholder holding 5% or more of the capital stock (on a fully diluted basis) of such Person, (b) a spouse, parent, sibling or descendant of such Person (or a spouse, parent, sibling or descendant of any director or officer of such Person) and (c) any other Person that, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another Person. The term "control" includes, without limitation, the possession, directly or indirectly, of the power to direct the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. "Assets" means, with respect to any Person, all of the assets, rights, intellectual property, interests and other properties, real, personal and mixed, tangible and intangible, of any nature whatsoever, either owned or leased by such Person. "Balance Sheet" means the audited consolidated balance sheet of the Company as of December 31, 2004. "Board" shall mean the Board of Directors of the Company. "CERCLA" means the United States Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C ss. 9601 et seq., as amended. "Certificate of Determination" means the Company's Certificate of Determination of Rights, Preferences and Privileges of the 8% Series A Cumulative Redeemable Convertible Preferred Stock in effect as of the Closing in the form attached as Exhibit D hereto. 24 "COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended and as codified in Section 4980B of the Code and Section 601 et. seq. of ERISA. "Company Employee" shall mean any current director, employee or consultant of the Company or any ERISA Affiliate. "Documents" means this Agreement, the Certificate of Determination, the Warrants and the Registration Rights Agreement. "Employee Plan" shall mean any plan, program, policy, practice, contract, agreement or other arrangement providing for compensation, severance, termination pay, deferred compensation, performance awards, stock or stock-related awards, fringe benefits or other employee benefits or remuneration of any kind, whether written, unwritten or otherwise, funded or unfunded, including without limitation, each "employee benefit plan," within the meaning of Section 3(3) of ERISA which is or has been, within the past six (6) years, maintained, contributed to, or required to be contributed to, by the Company or any ERISA Affiliate for the benefit of any Company Employee, or with respect to which the Company or any ERISA Affiliate has or may have any liability or obligation. "Environment" means soil, soil gas, land surface or subsurface strata, surface waters (including navigable waters, ocean waters, streams, ponds, drainage basins and wetlands), groundwater, drinking water supply, stream sediments, ambient air (including indoor air), plant and animal life and any other environmental medium or natural resource. "Environmental Claim" means any written or oral notice, claim, demand, action, suit, complaint, proceeding, request for information or other communication by any person alleging liability or potential liability (including without limitation liability or potential liability for investigatory costs, cleanup costs, governmental response costs, natural resource damages, property damage, personal injury, fines or penalties) arising out of, relating to, based on or resulting from (i) the presence, discharge, emission release or threatened release of any Hazardous Substances at any location, whether or not owned, leased or operated by the Company or any Subsidiary or (ii) circumstances forming the basis of any violation or alleged violation of any Environmental Law or Environmental Permit or (iii) otherwise relating to obligations or liabilities under any Environmental laws. "Environmental Law" means all laws, rules, regulations or guidelines relating to pollution or protection of human health or the Environment, including, without limitation, (a) laws relating to the Release or threatened Release of Hazardous Materials or other substances into the Environment and (b) laws relating to the identification, generation, manufacture, processing, distribution, use, treatment, storage, disposal, recovery, transport, transfer, refinement, production, management or other handling of Hazardous Materials or other substances. Environmental Laws shall include, without limitation, CERCLA, the Federal Water Pollution Control Act (33 U.S.C. ss. 1251 et seq.), RCRA, the Safe Drinking Water Act (21 U.S.C. ss. 349, 42 U.S.C. ss.ss. 201, 300f), the Toxic Substances Control Act (15 U.S.C. ss. 2601 et seq.), the Clean Air Act (42 U.S.C. ss. 7401 et seq.), the California Health and Safety Code (ss. 25100 et seq., ss. 39000 et seq.) as enacted prior to the Closing Date and as in effect on the Closing Date. 25 "Environmental Permits" means all permits, licenses, registrations and other governmental authorizations required for each of the Company and the Subsidiaries and the operations of each of the Company's and the Subsidiaries' facilities and otherwise to conduct its business under Environmental Laws. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder. "ERISA Affiliate" shall mean each Subsidiary of the Company and any other person or entity under common control with the Company or any of its Subsidiaries within the meaning of Section 414(b), (c), (m) or (o) of the Code and the regulations issued thereunder. "Excluded Securities" means (i) shares of Common Stock issued upon conversion or redemption of the Series A Preferred Stock or any accrued dividends thereon; (ii) shares of Common Stock and/or options, warrants or other Common Stock purchase rights and the Common Stock issued pursuant to such options, warrants or other rights (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like) issued after the Issue Date (as defined in the Certificate of Determination) to employees, officers or directors of, or consultants or advisors to the Company or any subsidiary pursuant to stock purchase or stock option plans or other arrangements that are approved by the Board; (iii) shares of Common Stock or other securities of the Company issued pursuant to a strategic partnership, joint venture or similar transaction approved by the Board; (iv) shares of Common Stock or other securities of the Company issued pursuant to an acquisition or merger approved by the Board; (v) shares of Common Stock issued in a public offering; (vi) shares of Common Stock issued pursuant to the exercise of options, warrants or convertible securities outstanding as of the Issue Date; (vii) securities issued to financial institutions, equipment leasing companies or lessors in connection with any commercial credit arrangements, equipment financings or other similar transactions, or other vendors; (viii) securities issued in connection with the acquisition of intellectual property or other intangible rights in licensing transactions or otherwise to existing or potential trade partners; (ix) securities issued in connection with any stock split, recapitalization or similar transaction; (x) securities issued as dividend or other distribution on the Series A Preferred Stock; (xi) securities issued for an Effective Price (as defined below) equal to or greater than $2.50 (as adjusted for any stock dividends, combinations or splits with respect to the Company's shares); or (xii) shares issued in any other transaction as to which the holders of a majority of the shares of Series A Preferred Stock then outstanding shall have agreed in writing that such shares shall be deemed to be Excluded Securities. Notwithstanding the foregoing, only the first 250,000 shares issued in the aggregate pursuant to subsections (iii), (iv), (v), (vii) and (viii) shall be deemed to be "Excluded Securities." The "Effective Price" of securities issued shall mean: the quotient determined by dividing the total number of shares of Common Stock issued or sold into the aggregate consideration received by the Company for such shares of Common Stock. For purposes of the foregoing, (i) if the Company issues any convertible securities, the Company shall be deemed to have issued at the time of the issuance of such securities the maximum number of shares of Common Stock issuable upon exercise or conversion thereof and to have received as consideration for the issuance of such shares an amount equal to the total amount of consideration, if any, received by the Company for the issuance of such convertible securities plus the minimum amount of consideration, if any, payable to the Company upon the exercise or conversion thereof and (ii) if the Company issues any securities for other than cash, the aggregate consideration received by the Company with respect to such non-cash consideration shall be computed at the fair value of the property received as determined in good faith by the Board. 26 "GAAP" means United States Generally Accepted Accounting Principles, consistently applied. "Governmental Entity" means any court, administrative agency, tribunal, department, bureau or commission or other governmental authority or instrumentality, domestic or foreign, Federal, state or local or any arbitrator or arbitral body. "Hazardous Substances" means any dangerous, toxic or hazardous pollutant, contaminant, chemical, waste, material or substance, including those defined in or governed by any federal, state or local law, statute, code, ordinance, regulation, rule or other requirement, relating to such substance or otherwise relating to the environment or human health or safety, including without limitation any waste, material, substance, pollutant or contaminant that might cause any injury to human health or safety or to the environmental or might subject the Company or any of its Subsidiaries to any imposition of costs or liability under any Environmental Law. "HIPAA" shall mean the Health Insurance Portability and Accountability Act of 1996, as amended. "IRS" shall mean the United States Internal Revenue Service or any successor thereto. "Law" means any constitution, law, statute, treaty, rule, directive, requirement or regulation or Order of any Governmental Entity. "Lien" means any security interest, pledge, bailment (in the nature of a pledge or for purposes of security), mortgage, deed of trust, the grant of a power to confess judgment, conditional sale or title retention agreement (including any lease in the nature thereof), charge, encumbrance, easement, reservation, restriction, cloud, right of first refusal or first offer, option, or other similar arrangement or interest in real or personal property. "Material," "Material Adverse Change" and "Material Adverse Effect" shall mean the occurrence of any single event, or any series of related events, or set of related circumstances, which would have a material adverse effect on the condition (financial or other), business, results of operations, cash flows, ability to conduct business or Assets of the Company and the Subsidiaries taken as a whole. "Multiemployer Plan" shall mean any "Pension Plan" which is a "multiemployer plan," as defined in Section 3(37) of ERISA. "Orders" means judgments, writs, decrees, injunctions, orders, compliance agreements or settlement agreements of or with any Governmental Entity or arbitrator. "Pension Plan" shall mean each Employee Plan that is an "employee pension benefit plan," within the meaning of Section 3(2) of ERISA. 27 "Person" shall be construed broadly and shall include an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a Governmental Entity (or any department, agency, or political subdivision thereof). "Proceeding" means any action, suit, proceeding, complaint, charge, hearing, inquiry or investigation before or by a Governmental Entity or an arbitrator or arbitral body. "Proportionate Percentage" means the pro rata percentage of the number of shares of stock subject to purchase pursuant to Article VI that each Purchaser shall be entitled to purchase, which pro rata percentage, as to each such Purchaser, shall be the percentage figure which expresses the ratio, on a Common Stock equivalent basis (assuming the prior exercise, conversion or exchange of all equity-linked securities held by such Purchaser), between the number of shares of stock owned by such Purchaser and the aggregate number of shares of stock owned by all shareholders of the Company at the date of determination. "Registration Rights Agreement" means the Registration Rights Agreement dated as of the date hereof among the Company, the Purchasers and the other parties thereto, in form and substance reasonably satisfactory to the Purchasers and attached hereto as Exhibit C. "Release" means and includes any spilling, leaking, pumping, pouring, injecting, emitting, emptying, discharging, depositing, escaping, leaching, migrating (including passive migration), dumping, disposing or other releasing into the Environment or the workplace, whether intentional or unintentional and otherwise defined in any Environmental Law. "Tax" or "Taxes" means all federal, state, local and foreign taxes, levies, deficiencies and other assessments and charges of whatever nature (including income, franchise, property, sales, use, gross receipts, excise, license, occupation, recording, value added, transfer, withholding, backup withholding, payroll, employment, severance, stamp, occupation, premium, windfall profits, environmental, capital stock, profits, social security, unemployment, disability, real property, personal property, real property gains, registration, alternative or add-on minimum and estimated taxes; workers' compensation premiums, customs duties and other governmental charges; and other obligations of the same nature as or of a nature similar to any of the foregoing) imposed by any taxing authority, as well as any obligation to contribute to the payment of taxes determined on a consolidated, combined, unitary or similar basis with respect to the Company or any of its Subsidiaries, including any interest, penalty (civil or criminal) or addition thereto, whether disputed or not, as well as any expenses incurred in connection with the determination, settlement or litigation of any such tax liability. "Tax Return" means any federal, state, local or foreign return, declaration, report, claim for refund, amended return, excise tax report, declaration of estimated tax, information return or statement relating to Taxes, and any schedule or attachment thereto, filed or maintained, or required to be filed or maintained, in connection with the calculation, determination, assessment or collection of any Tax, and including any amendment thereof, as well as, where permitted or required, consolidated, combined, unitary or similar returns for any group of entities that include the Company or any of its Subsidiaries; and reports with respect to backup withholding and other payments to third parties. 28 7.11 Incorporation of Schedules and Exhibits. The Schedule and Exhibits identified in this Agreement are incorporated herein by reference and made a part hereof. 7.12 Construction. Where specific language is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any party. 7.13 Interpretation. Accounting terms used but not otherwise defined herein shall have the meanings given to them under GAAP. As used in this Agreement (including all Schedules, Exhibits and amendments hereto), the masculine, feminine and neuter gender and the singular or plural number shall be deemed to include the others whenever the context so requires. References to Articles and Sections refer to articles and sections of this Agreement. Similarly, references to Schedules and Exhibits refer to schedules and exhibits, respectively, attached to this Agreement. Unless the content requires otherwise, words such as "hereby," "herein," "hereinafter," "hereof" "hereto," "hereunder" and words of like import refer to this Agreement. The Article and Section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. A Person (other than an individual) will be deemed to have "knowledge" of a particular fact or other matter if any individual who is serving, or who has at any time served, as a director, officer, partner, executor, or trustee of such Person (or in any similar capacity) has, or at any time had, knowledge of such fact or other matter, except that the Company shall not be deemed to have knowledge of a particular fact or matter solely as a result of the knowledge of any individual who served as an officer or director of the Company prior to August 24, 2004 but has not served as an officer or director of the Company at any time subsequent to August 24, 2004. 7.14 Remedies. The parties hereto shall each have and retain all other rights and remedies existing in their favor at Law or equity, including, without limitation, any actions for specific performance and/or injunctive or other equitable relief (including, without limitation, the remedy of rescission) to enforce or prevent any violations of the provisions of this Agreement. Without limiting the generality of the foregoing, the Company hereby agrees that in the event the Company fails to convey any number of Purchased Securities to the Purchasers in accordance with the provisions of this Agreement or any Underlying Shares in accordance with the terms of any Purchased Securities pursuant to which they are issuable, the Purchasers' remedy at law may be inadequate. In such event, the Purchasers shall have the right, in addition to all other rights and remedies it may have, to specific performance of the obligations of the Company to convey such number of Purchased Securities or Underlying Shares, as the case may be. 29 7.15 Severability. It is the desire and intent of the Parties that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. 7.16 Delivery by Facsimile. This Agreement and any amendments hereto, to the extent signed and delivered by means of a facsimile machine, shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto, each other party hereto shall re-execute original forms and deliver them to the other party. No party hereto shall raise the use of a facsimile machine to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine as a defense to the formation or enforceability of this Agreement and each such party forever waives any such defense. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 30 IN WITNESS WHEREOF, the parties hereto have executed this Securities Purchase Agreement as of the date first above written. THE COMPANY: WORLD WASTE TECHNOLOGIES, INC., a California corporation By: ____________________________________ Name: Thomas L. Collins Title: Chief Executive Officer 31 THE PURCHASERS: TRELLUS OFFSHORE FUND LIMITED, a Cayman Islands corporation By: ____________________________________ Name: __________________________________ Title: _________________________________ 350 Madison Avenue New York, NY 10017 Telephone: _____________________________ Facsimile: _____________________________ Attention: Ryan Schedler TRELLUS PARTNERS, LP, a Delaware limited partnership By: ____________________________________ Name: __________________________________ Title: _________________________________ 350 Madison Avenue New York, NY 10017 Telephone: _____________________________ Facsimile: _____________________________ Attention: Ryan Schedler TRELLUS PARTNERS II, LP, a Delaware limited partnership By: ____________________________________ Name: __________________________________ Title: _________________________________ 350 Madison Avenue New York, NY 10017 Telephone: _____________________________ Facsimile: _____________________________ Attention: Ryan Schedler, 32 EXHIBIT A ALLOCATION SCHEDULE
Number of Shares of Series A Preferred Purchase Price of Name Stock Number of Warrants Securities - ------------------------------------------ ------------------------ --------------------- ---------------------- Trellus Offshore Fund Limited 2,800,000 280,000 $ 7,000,000 Trellus Partners, LP 1,120,000 112,000 $ 2,800,000 Trellus Partners II, LP 80,000 8,000 $ 200,000 ------------------------------------------------------------------- Total 4,000,000 400,000 $10,000,000
A - 1 EX-10.2 4 v017490_ex10-2.txt Exhibit 10.2 THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND NO INTEREST THEREIN MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION, OR SUCH TRANSACTION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND LAWS, SUCH COMPLIANCE, AT THE OPTION OF THE CORPORATION, TO BE EVIDENCED BY AN OPINION OF THE WARRANT HOLDER'S COUNSEL, IN FORM ACCEPTABLE TO THE CORPORATION, THAT NO VIOLATION OF SUCH REGISTRATION PROVISIONS WOULD RESULT FROM ANY PROPOSED TRANSFER OR ASSIGNMENT. COMMON STOCK PURCHASE WARRANT WORLD WASTE TECHNOLOGIES, INC. No. W-__ _______ Shares Issuance Date: April 28, 2005 THIS CERTIFIES that for good and valuable consideration received, _________________ or a registered assignee (the "Holder") is entitled, upon the terms and subject to the conditions hereinafter set forth, to acquire from World Waste Technologies, Inc., a California corporation (the "Corporation"), up to 112,000 fully paid and nonassessable shares (the "Warrant Shares") of common stock, no par value (the "Common Stock"), of the Corporation at a purchase price of U.S. $4.00 per share (the "Exercise Price"). This Common Stock Purchase Warrant (this "Warrant") is issued pursuant to that certain Securities Purchase Agreement dated April __, 2005 entered into between the Corporation and the purchasers named therein. 1. Term of Warrant. Subject to the other terms and conditions set forth herein, this Warrant shall be exercisable, in whole or in part, at any time on or after the date hereof and at or prior to 11:59 p.m., local time in Los Angeles, California, U.S.A., on April 28, 2010 (the "Expiration Time"). 2. Exercise of Warrant. (a) This Warrant may be exercised, in whole or in part, by the Holder during normal business hours on any business day prior to the Expiration Time by delivering to the Corporation the following: (i) a duly executed Notice of Exercise (in the form attached to this Warrant) specifying the number of Warrant Shares to be purchased, (ii) subject to Section 2(b) either (A) payment to the Corporation of the Exercise Price for the number of Warrant Shares specified in the Notice of Exercise by cash, wire transfer of immediately available funds to a bank account specified by the Corporation, or by certified or bank cashier's check or (B) payment to the Corporation of the Exercise Price in accordance with the net exercise provisions set forth in Section 2(b), specifying the number of Warrant Shares to be applied to such exercise, and (iii) this Warrant (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction). (b) The Holder shall notify the Corporation in writing one business day in advance of exercing this Warrant of its intention to pay the Exercise Price in cash or in accordance with the net exercise provisions of this Section 2(b). In the event the Holder elects to pay the Exercise Price in cash, the Corporation shall have the right to require the Holder to exercise this Warrant in accordance with the net exercise provisions of this Section 2(b). In lieu of exercising this Warrant for cash, (i) the Holder may elect to exercise this Warrant by exchanging this Warrant for shares of Common Stock equal to the value of this Warrant or (ii) the Corporation shall have the right to require the Holder upon notice from the Holder that intends it to pay the Exericse Price in cash to exercise this Warrant by exchanging this Warrant for shares of Common Stock equal to the value of this Warrant. The number of shares of Common Stock to be issued upon exercise of this Warrant pursuant to this Section 2(b) shall equal the value of this Warrant computed as of the date of delivery of this Warrant to the Corporation using the following formula: X = Y (A-B) ------- A Where: X= the number of shares of Common Stock to be issued to the Holder. Y= the number of shares of Common Stock with respect to which this Warrant is being exercised. A= the current market value per share of one share of Common Stock determined in accordance with this Section 2(b). B= the Exercise Price (as adjusted). For purposes of Section 2(b), the current market value shall be determined as follows: (a) if the Common Stock is traded in the over-the-counter market and not on any national securities exchange and not in the NASDAQ Reporting System, the average of the mean between the last bid and asked prices per share, as reported by the National Quotation Bureau, Inc., or an equivalent generally accepted reporting service, for the last business day prior to the date on which this Warrant is exercised, or, if not so reported, the average of the closing bid and asked prices for a share of Common Stock as furnished to the Corporation by any member of the National Association of Securities Dealers, Inc., selected by the Corporation for that purpose; (b) if the Common Stock is listed or traded on a national securities exchange or in the NASDAQ Reporting System, the closing price on the principal national securities exchange on which it is so listed or traded or in the NASDAQ Reporting System, as the case may be, on the last business day prior to the date of the exercise of the Warrant. The closing price referred to in this Clause (b) shall be the last reported sales price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case on the national securities exchange on which the Common Stock is then listed on in the NASDAQ Reporting System; or 2 (c) if no such closing price or closing bid and asked prices are available, as determined in any reasonable manner as may be prescribed by the Board of Directors of the Corporation. Notwithstanding the foregoing, the Corporation shall not require that this Warrant be exercised pursuant to the net provisions of this Section 2(b) in the event such net exercise would be prohibited by law. (c) Notwithstanding anything herein to the contrary, the Holder shall not have the right to exercise, in whole or in part, the Warrant, if and to the extent that the issuance to the Holder of shares of Common Stock upon such exercise would result in the Holder, Trellus Management, LLC ("Trellus") or any of its principals being deemed the "beneficial owner" of more than 5% of the then outstanding shares of Common Stock within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder, until such time as the Holder, Trellus or any of its principals, as applicable, cease to be a beneficial owner. Notwithstanding the foregoing, the restrictions set forth in this Section 2(c) shall cease to have any effect on the earlier of the Operation Date or September 30, 2006. 3. Registration and Other Rights (a) The Warrants represented hereby are entitled to certain registration rights as more fully set forth in that certain Registration Rights Agreement dated as of April 28, 2005 between the Corporation, the Holder and the other investors, if any, named therein. In the event that the Holder requests the registration of less than all of the Warrant Shares represented hereby, prior to any such registration, the Holder shall request that the Company issue in exchange therefor new warrants representing the Warrant Shares in such denominations as the Holder shall request; provided, however, that no such certificate representing any Warrant Shares being registered shall also represent Warrant Shares not being registered. (b) In the event that the Corporation (i) issues as a dividend or other similar distribution (an "Extraordinary Dividend") on all of its then outstanding Common Stock, (A) securities of the Corporation of a class other than Common Stock, (B) rights, warrants or options (individually, a "Right" and collectively, the "Rights") to acquire any securities of the Corporation (including Common Stock) or (C) evidences of its indebtedness or assets, or (ii) issues any dividend or other similar distribution (a "Secondary Extraordinary Dividend") on any such securities in the form of securities of the Corporation (including Common Stock) (any securities (other than Rights) issued as an Extraordinary Dividend or Secondary Extraordinary Dividend or issued upon exercise of any Rights issued as an Extraordinary Dividend or Secondary Extraordinary Dividend shall be referred to as "Dividend Securities"): (i) this Warrant shall thereafter be exercisable for (1) the original number of shares of Common Stock (subject to adjustment as herein provided), (2) such Dividend Securities and Rights as would theretofore have been issued in respect of such shares (adjusted as herein provided) had such shares been outstanding at the time of such Extraordinary Dividend, and (3) any Dividend Securities that would theretofore have been issued as a Secondary Extraordinary Dividend in respect of such Dividend Securities had such Dividend Securities been outstanding at the time of such Secondary Extraordinary Dividend; and 3 (ii) any Right issued as an Extraordinary Dividend or a Secondary Extraordinary Dividend shall (1) expire upon the later of (a) the original expiration date of such Right or (b) the 180th day following the exercise of this Warrant, and (2) be exercisable for (a) the Dividend Securities issuable upon exercise of such Right and (b) any property theretofore issued as a Secondary Extraordinary Dividend in respect of such Dividend Securities. (c) In the event that at any time while this Warrant is outstanding, the Corporation shall offer to sell to all of the holders of Common Stock as a class, rights or options to purchase Common Stock or rights or options to purchase any stock or securities convertible into or exchangeable for Common Stock (such exchangeable or convertible stock or securities being herein called "Convertible Securities"), whether or not such rights or options are immediately exercisable, and the price per share for which Common Stock is issuable upon the exercise of such rights or options or upon conversion or exchange of such Convertible Securities (determined by dividing (i) the total amount received or receivable by the Corporation upon issuance and sale of such rights or options, plus the aggregate amount of additional consideration payable to the Corporation upon the exercise of all such rights or options, plus, in the case of rights or options which relate to Convertible Securities, the aggregate amount of additional consideration, if any, payable upon the conversion or exchange of all such Convertible Securities, by (ii) the total maximum number of shares of Common Stock issuable upon the exercise of all such rights or options or upon the conversion or exchange of all such Convertible Securities issuable upon the exercise of all such rights or options) shall be less than the Exercise Price in effect immediately prior to the initial sale of any such rights or options, the Corporation shall offer to sell to the Holder, at the price and upon the terms at which such rights or options are offered to holders of its Common Stock, such number of such rights or options as the Holder would have been entitled to purchase had the Holder exercised this Warrant immediately prior to the commencement of the offering of such rights or options. 4. Issuance of Shares; No Fractional Shares of Scrip. Certificates for shares of Common Stock purchased hereunder shall be delivered to the Holder hereof by the Corporation's transfer agent at the Corporation's expense within a reasonable time after the date on which this Warrant shall have been exercised in accordance with the terms hereof. Each certificate so delivered shall be in such denominations as may be requested by the Holder hereof and shall be registered in the name of the Holder or, subject to applicable laws, such other name as shall be requested by the Holder. If, upon exercise of this Warrant, fewer than all of the Warrant Shares evidenced by this Warrant are purchased prior to the Expiration Time, one or more new warrants substantially in the form of, and on the terms in, this Warrant will be promptly issued for the remaining number of Warrant Shares not purchased upon exercise of this Warrant. The Corporation hereby represents and warrants that all Warrant Shares which may be issued upon the exercise of this Warrant will, upon such exercise, be duly and validly authorized and issued, fully paid and nonassessable and free from all taxes, liens and charges in respect of the issuance thereof (other than liens or charges created by or imposed upon the Holder of the Warrant Shares). The Corporation agrees that the shares of Common Stock so issued shall be and will be deemed to be issued to such Holder as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered for exercise in accordance with the terms hereof, notwithstanding that the transfer books of the Corporation shall then be closed or certificates repesenting such shares of Common Stock shall not then have been actually delivered to the Holder. For purposes of Rule 144 promulgated under the Securities Act of 1933, as amended, it is intended, understood and acknowledged that the shares of Common Stock issued in a cashless exercise transaction purusant to Section 2(b) above shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the the issue date of this Warrant. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. With respect to any fraction of a share called for upon the exercise of this Warrant, an amount equal to such fraction multiplied by the then current price at which each share may be purchased hereunder shall be paid in cash to the Holder of this Warrant. 4 5. Charges, Taxes and Expenses. Issuance of certificates for shares of Common Stock upon the exercise of this Warrant shall be made without charge to the Holder hereof for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Corporation, and such certificates shall be issued in the name of the Holder of this Warrant or in such name or names as may be directed by the Holder of this Warrant; provided, however, that in the event certificates for shares of Common Stock are to be issued in a name other than the name of the Holder of this Warrant, this Warrant when surrendered for exercise shall be accompanied by an Assignment Form (as defined below) duly executed by the Holder hereof. 6. No Rights as Stockholders. This Warrant does not entitle the Holder hereof to any voting rights or other rights as a stockholder of the Corporation prior to the exercise hereof. 7. Exchange and Registry of Warrant. This Warrant is exchangeable, upon the surrender hereof by the registered Holder at the above mentioned office or agency of the Corporation, for a new Warrant of like tenor and dated as of such exchange. The Corporation shall maintain at the above-mentioned office or agency a registry showing the name and address of the registered Holder of this Warrant. This Warrant may be surrendered for exchange, transfer or exercise, in accordance with its terms, at such office or agency of the Corporation, and the Corporation shall be entitled to rely in all respects, prior to written notice to the contrary, upon such registry. 8. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the Corporation of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant and in case of loss, theft or destruction of indemnity or security reasonably satisfactory to it, and upon reimbursement to the Corporation of all reasonable expenses incidental thereto, and upon surrender and cancellation of this Warrant, if mutilated, the Corporation will make and deliver a new Warrant of like date, tenor and denomination, in lieu of this Warrant. 9. Saturdays, Sundays and Holidays. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall be a Saturday or a Sunday or a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day not a Saturday, Sunday or legal holiday. 5 10. Merger, Sale of Assets, Etc. If at any time the Corporation proposes to merge or consolidate with or into any other corporation, effect any reorganization, or sell or convey all or substantially all of its assets to any other entity, then, as a condition of such reorganization, consolidation, merger, sale or conveyance, the Corporation or its successor, as the case may be, shall enter into a supplemental agreement to make lawful and adequate provision whereby the Holder shall have the right to receive, upon exercise of the Warrant by exchanging the Warrant for the kind and amount of equity securities, property, cash, or any combination thereof, which would have been received upon such reorganization, consolidation, merger, sale or conveyance by a Holder of a number of shares of common stock equal to the number of shares issuable upon exercise of the Warrant immediately prior to such reorganization, consolidation, merger, sale or conveyance. 11. Subdivision, Combination, Reclassification, Conversion, Etc. If the Corporation at any time shall by subdivision, combination, reclassification of securities or otherwise, change the Warrant Shares into the same or a different number of securities of any class or classes, this Warrant shall thereafter entitle the Holder to acquire such number and kind of securities as would have been issuable in respect of the Warrant Shares (or other securities which were subject to the purchase rights under this Warrant immediately prior to such subdivision, combination, reclassification or other change) as the result of such change if this Warrant had been exercised in full for cash immediately prior to such change. The Exercise Price hereunder shall be adjusted if and to the extent necessary to reflect such change. If the Warrant Shares or other securities issuable upon exercise hereof are subdivided or combined into a greater or smaller number of shares of such security, the number of shares issuable hereunder shall be proportionately increased or decreased, as the case may be, and the Exercise Price shall be proportionately reduced or increased, as the case may be, in both cases according to the ratio which the total number of shares of such security to be outstanding immediately after such event bears to the total number of shares of such security outstanding immediately prior to such event. The Corporation shall send the Holder prompt written notice by registered mail, postage prepaid, of any change in the type of securities issuable hereunder, any adjustment of the Exercise Price for the securities issuable hereunder, and any increase or decrease in the number of shares issuable hereunder, which notice shall be accompanied by an officer's certificate setting forth the number of Warrant Shares purchasable upon the exercise of this Warrant and the Exercise Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment and the computation thereof, which officer's certificate shall be conclusive evidence of the correctness of any adjustment absent manifest error. 12. Notice In case, at any time the Corporation shall propose: (a) to declare a dividend (or any other distribution) on shares of Common Stock in shares of Common Stock or make any other distribution to all holders of Common Stock; or 6 (b) to issue any rights, warrants or other securities to all holders of Common Stock entitling them to subscribe for or purchase shares of Common Stock or of any other subscription rights or warrants; or (c) to effect any reclassification of the Common Stock, any consolidation, merger or binding share exchange to which the Corporation is a party, or the sale or transfer of all or substantially all of the assets of the Corporation; or (d) to effect any voluntary or involuntary dissolution, liquidation or winding up of the Corporation; or (e) to take any other action which would cause an adjustment to the Exercise Price; then, the Corporation shall cause to be mailed to the Holder at least 30 days before the date hereinafter specified, a notice stating (i) the date on which a record is to be taken for the purpose of such dividend, distribution, rights or warrants, or, if a record is not to be taken, the date as of which the holders of shares of Common Stock of record to be entitled to such dividend, distribution, rights or warrants are to be determined, (ii) the date on which any such reclassification, consolidation, merger, binding share exchange, sale, transfer, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of shares of Common Stock of record shall be entitled to exchange their shares for the applicable consideration, deliverable upon such reclassification, consolidation, merger, binding share exchange, sale, transfer, dissolution, liquidation or winding up, or (iii) the date of such action which would require an adjustment to the Exercise Price. 13. Transferability; Compliance with Securities Laws. (a) This Warrant may not be transferred or assigned in whole or in part without compliance with all applicable federal and state securities laws by the transferor and transferee (including the delivery of investment representation letters and legal opinions reasonably satisfactory to the Corporation, if requested by the Corporation). Subject to such restrictions, prior to the Expiration Time, this Warrant and all rights hereunder are transferable by the Holder hereof, in whole or in part, at the office or agency of the Corporation. Any such transfer shall be made in person or by the Holder's duly authorized attorney, upon surrender of this Warrant together with the Assignment Form attached hereto properly endorsed (the "Assignment Form"). (b) The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and the Warrant Shares issuable upon exercise hereof are being acquired solely for the Holder's own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended, or any state securities laws. Upon exercise of this Warrant, the Holder shall, if requested by the Corporation, confirm in writing, in a form satisfactory to the Corporation, that the Warrant Shares so purchased are being acquired solely for the Holder's own account and not as a nominee for any other party, for investment, and not with a view toward distribution or resale. (c) Until the Warrant Shares have been registered under the Securities Act of 1933, as amended, this Warrant may not be exercised except by (i) the original purchaser of this Warrant from the Corporation or (ii) an "accredited investor" as defined in Rule 501(a) under the Securities Act of 1933, as amended. Each certificate representing the Common Stock or other securities issued in respect of the Warrant Shares upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event, shall be stamped or otherwise imprinted with a legend substantially in the following form (in addition to any legend required under applicable securities laws): 7 THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT. Once the Warrant Shares have been registered under the Securities Act of 1933, as amended, no such restrictive legend shall be required on any securities issued in respect of the Warrant Shares, unless otherwise required under the Securities Act of 1933, as amended. 14. Reservation of Shares of Common Stock. The Corporation hereby agrees that during the period that this Warrant is outstanding, the Corporation will reserve from its authorized and unissued Common Stock and other securities, solely for the purpose of providing for the exercise of the rights to purchase all Warrant Shares granted pursuant to this Warrant, such number of shares of Common Stock, Dividend Securities and Rights to permit the exercise in full of this Warrant. 15. Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of New York. The Corporation irrevocably consents to the jurisdication of the courts of the State of New York and of any federal court located in such State in connection with any action or proceeding arising out of or relating to this Warrant, any document or instrument delivered pursuant to, in connection with or simultaneously with this Warrant, or a breach of this Warrant or any such document or instrument. In any such action or proceeding, the Company waives personal service of any summons, complaint or other process. IN WITNESS WHEREOF, the Corporation has caused this Warrant to be executed by its duly authorized officers. Dated: April 28, 2005 WORLD WASTE TECHNOLOGIES, INC. By: ____________________________________________ Thomas L. Collins, Chief Executive Officer 8 NOTICE OF EXERCISE To: World Waste Technologies, Inc. (1) The undersigned hereby elects to purchase shares of common stock, no par value (the "Common Stock"), of World Waste Technologies, Inc., a California corporation (the "Corporation") pursuant to the terms of the attached Warrant and tenders payment herewith in the amount of $_________ by [tendering cash or delivering a certified check or bank cashier's check, payable to the order of the Corporation in accordance with the terms thereof, together with all applicable transfer taxes, if any] [surrendering ____ shares of Common Stock received upon exercise of the attached Warrant, which shares have the current market value equal to such payment]. (2) In exercising this Warrant, the undersigned hereby confirms and acknowledges that the shares of Common Stock to be issued upon exercise hereof are being acquired solely for the account of the undersigned and not as a nominee for any other party, and for investment and that the undersigned will not offer, sell or otherwise dispose of any such shares of Common Stock except under circumstances that will not result in a violation of the Securities Act of 1933, as amended, or any state securities laws. (3) Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below: - -------------------------------------- (Name) - -------------------------------------- (Address) and, if such number of shares of Common Stock shall not be all the shares of Common Stock covered by the attached Warrant, that a new Warrant for the balance of the shares of Common Stock covered by the attached Warrant be registered in the name of, and delivered to, the undersigned at the address stated above. (4) The undersigned represents that (a) he, she or it is the original purchaser from the Corporation of the attached Warrant or an 'accredited investor' within the meaning of Rule 501(a) under the Securities Act of 1933, as amended and (b) the aforesaid shares of Common Stock are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares. Date:__________________________ _______________________________ (Signature) 9 FORM OF ASSIGNMENT (To be executed by the registered holder if such holder desires to transfer the attached Warrant.) FOR VALUE RECEIVED, _________________________________ hereby sells, assigns, and transfers unto __________________ a Warrant to purchase __________ shares of Common Stock, no par value, of World Waste Technologies, Inc., a California corporation (the "Corporation"), together with all right, title, and interest therein, and does hereby irrevocably constitute and appoint ___________________________________attorney to transfer such Warrant on the books of the Corporation, with full power of substitution. Dated:__________________________________ By:_____________________________________ Signature The signature on the foregoing Assignment must correspond to the name as written upon the face of this Warrant in every particular, without alteration or enlargement or any change whatsoever. EX-10.3 5 v017490_ex10-3.txt Exhibit 10.3 REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (this "Agreement"), dated as of April 28, 2005, by and among World Waste Technologies, Inc., a California corporation (the "Company"), Trellus Offshore Fund Limited, a Cayman Islands corporation, Trellus Partners, LP, a Delaware limited partnership, and Trellus Partners II, LP, a Delaware limited partnership (collectively, "Trellus"), the individuals and entities, if any, set forth on Exhibit A hereto (together with Trellus, the "Series A Holders"), and the individuals and entities set forth on Exhibit B hereto (the "Insiders," and, together with the Series A Holders, the "Holders"). Reference is made to that certain Securities Purchase Agreement (the "Purchase Agreement") dated the date hereof by and among the Company and the Series A Holders pursuant to which the Series A Holders have agreed to purchase an aggregate of up to 6,000,000 shares of the Company's 8% Series A Cumulative Redeemable Convertible Preferred Stock (the "Series A Preferred Stock"), together with warrants to purchase shares of Common Stock (the "Warrants"). Pursuant to the terms of the Series A Preferred Stock, the Series A Holders will receive shares of Common Stock upon conversion of the Series A Preferred Stock. The parties desire to set forth herein their agreements as to the registration rights of each of the Series A Holders with respect to such shares of Common Stock and the shares of Common Stock issuable upon exercise of the Warrants, as well as to the registration rights of each of the Insiders with respect to shares of Common Stock that they hold. The execution and delivery of this Agreement is a condition to closing the transactions contemplated by the Purchase Agreement. Capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in the Purchase Agreement. NOW, THEREFORE, in consideration of the premises and mutual covenants and obligations hereinafter set forth, the Company and the Holders hereby agree as follows: Section 1. Definitions. As used in this Agreement, the following terms shall have the following meanings: (a) "Commission" means the Securities and Exchange Commission or any other Federal agency at the time administering the Securities Act. (b) "Common Stock" means the common stock of the Company. (c) "Exchange Act" means the Securities Exchange Act of 1934 or any successor Federal statute, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect from time to time. (d) "Insider Shares" means the Registrable Shares held by the Insiders. (e) "Other Shares" means at any time those shares of Common Stock which do not constitute Primary Shares or Restricted Shares. 1 (f) "Person" shall be construed broadly and shall include an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a governmental entity (or any department, agency, or political subdivision thereof). (g) "Primary Shares" means at any time the authorized but unissued shares of Common Stock and shares of Common Stock held by the Company in its treasury. (h) "Qualified Public Offering" means the sale of the Company's Common Stock in a public offering underwritten by an investment bank reasonably acceptable to the holders of a majority of the then-outstanding shares of Series A Preferred Stock, registered under the Securities Act with a per share price to the public of at least $5.00 per share (as adjusted for any stock dividends, combination or splits with respect to such shares) and for a total gross offering amount of at least $10 million, other than a registration relating solely to a transaction under Rule 145 under the Securities Act (or any successor thereto) or to an employee benefit plan of the Company. (i) "Registrable Shares" means at any time, with respect to the Holders, the shares of Common Stock (including the shares of Common Stock issuable upon conversion of the Series A Preferred Stock and exercise of the Warrants) held by or issuable to the Series A Holders which constitute Restricted Shares and the shares of Common Stock held by the Insiders which constitute Restricted Shares. (j) "Restricted Shares" means (i) shares of Common Stock held by or issuable to the Series A Holders, including shares issuable upon the conversion of shares of Series A Preferred Stock and exercise of the Warrants or issued to a Series A Holder pursuant to the terms thereof and any other securities which by their terms are exercisable or exchangeable for or convertible into Common Stock or other securities which are so exercisable or convertible and any securities received in respect thereof, which are held by the Series A Holders; and (ii) Insiders Shares and any other securities which by their terms are exercisable or exchangeable for or convertible into Common Stock or other securities which are so exercisable or convertible and any securities received in respect thereof, which are held by the Insiders. As to any particular Restricted Shares, once issued, such Restricted Shares shall cease to be Restricted Shares when (i) they have been registered under the Securities Act, the registration statement in connection therewith has been declared effective and they have been disposed of pursuant to such effective registration statement, (ii) they are eligible to be sold or distributed pursuant to Rule 144(k) of the Securities Act without notice, manner of sale or volume limitations, or (iii) they shall have ceased to be outstanding. (k) "Securities Act" means the Securities Act of 1933, as amended or any successor Federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to time. Section 2. Registration. The Company shall use commercially reasonable efforts to prepare and file, on or prior to July 28, 2005, a registration statement with the Commission under the Securities Act covering the resale of the Registrable Shares, to cause such registration statement to be declared effective under the Securities Act as promptly as possible thereafter and thereafter to keep such registration statement effective until such time as all Restricted Shares beneficially owned by Trellus or any other Series A Holder shall have been sold pursuant thereto or such shares no longer constitute Restricted Shares and all restrictive legends and any stop transfer instructions relating thereto have been removed therefrom, from this Agreement, the Purchase Agreement and the Warrants. 2 Notwithstanding the foregoing: (a) the Company shall not be obligated to use commercially reasonable efforts to file and cause to become effective (i) more than one registration statement, or (ii) any registration statement during any period in which any other registration statement (other than on Form S-8 promulgated under the Securities Act or any successor forms thereto) pursuant to which Primary Shares are to be or were sold has been filed and not withdrawn or has been declared effective within the prior ninety (90) days provided, however, that notwithstanding the forgoing, once the registration statement referred to in the first paragraph of this Section 2 shall have become effective the Company shall use commercially reasonable efforts to amend and supplement such registration statement as may be necessary to maintain the effectiveness thereof; (b) the Company may delay the filing or effectiveness of any registration statement or suspend the sale of Restricted Shares under a registration statement pursuant to this Section 2 if (i) the Company is engaged, or has fixed plans to engage within ninety (90) days of the time of such request, in a Qualified Public Offering of Primary Shares, or (ii) there is material non-public information regarding the Company which the Company's Board of Directors (the "Board") reasonably determines not to be in the Company's best interest to disclose and which the Company is not otherwise required to disclose, or (iii) there is a significant business opportunity (including, but not limited to, the acquisition or disposition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or other similar transaction) available to the Company which the Board reasonably determines not to be in the Company's best interest to disclose which the Company is not otherwise required to disclose and which the Company would be required to disclose under the registration statement, or (iv) the Company reasonably determines that such registration and offering would interfere with any material transaction involving the Company, as approved by the Board or would impair in any manner the registration rights granted to holders of Other Shares prior to the date of this Agreement provided, however, that no such delay or suspension shall exceed 30 days and all delays and suspensions pursuant to this paragraph (b) shall not exceed 90 days in any 360 day period; (c) with respect to the registration pursuant to this Section 2, the Company shall give notice of such registration to the Insiders and the holders of all Other Shares which are entitled to registration rights under a written agreement with the Company that would permit such holders to be included in such registration, and the Company may include in such registration any shares held by such holders, as well as Primary Shares, provided that, notwithstanding anything to the contrary in this Agreement, as between the Company and the Series A Holders, any additional cost of including any such shares shall be the responsibility of the Company; and provided, further, however, that if the method of disposition selected by the Series A Holders is an underwritten public offering and the managing underwriter of such offering advises the Company that the inclusion of all shares proposed to be included in such registration would interfere with the successful marketing (including pricing) of the Restricted Shares proposed to be included in such registration, then the number of shares proposed to be included in such registration shall be included in the following order: 3 (i) first, the Registrable Shares held by the Series A Holders (or, if necessary, such Registrable Shares pro rata among the holders thereof); (ii) second, the Other Shares which are entitled to registration rights; (iii) third, Primary Shares; and (iv) fourth, the Insider Shares; (d) Without the consent of a majority in interest of the Holders of Registrable Shares participating in a registration referred to in this Section 2, no securities other than Registrable Shares held by Series A Holders shall be covered by such registration if the inclusion of such other securities would result in a reduction of the number of Registrable Shares covered by such registration or included in any underwriting or if, in the opinion of the managing underwriter, the inclusion of such other securities would adversely impact the marketing of such offering; (e) if the method of disposition requested by the Series A Holders is an underwritten public offering, the Company shall have the right approve the underwriters of such offering as designated by the Series A Holders, such approval not to be unreasonably withheld (it being agreed that a regional or nationally recognized investment bank shall be acceptable to the Company); and (f) at any time before the registration statement covering Restricted Shares becomes effective, the Series A Holders may request the Company to withdraw or not to file the registration statement. In order to count as the registration to be effected pursuant to this Section 2, the registration statement in respect thereof must have not been withdrawn and all Registrable Shares held by Series A Holders must have been so included on an effective registration statement. Notwithstanding the foregoing, if such withdrawal or failure to include such shares shall not have been caused by, or made in response to, a Material Adverse Effect, the Series A Holders shall be deemed to have used their registration rights under this Agreement and the Company shall no longer be obligated to register such Restricted Shares. Section 3. Piggyback Registration. If the Company at any time proposes for any reason to register Other Shares under the Securities Act, the Company shall give written notice to the holders of Registrable Shares of its intention to file a registration statement at least ten (10) days before the initial filing of such registration statement and, upon the written request, delivered to the Company within fifteen (15) days after delivery of any such notice by the Company, of such Holders to include in such registration statement any of their Registrable Shares (which request shall specify the number of Registrable Shares proposed to be included in such registration and shall state that such holder of such shares desires to sell such shares in the public securities markets), the Company shall use commercially reasonable efforts to cause all such Registrable Shares to be included in such registration statement on the same terms and conditions as the securities otherwise being sold in such registration; provided, however, that if the method of disposition selected by the holders of Other Shares is an underwritten public offering and the managing underwriter of such offering advises that the inclusion of all Registrable Shares and/or Other Shares proposed to be included in such registration would interfere with the successful marketing (including pricing) of the shares proposed to be included in such registration, then the number of Insider Shares, Registrable Shares, and/or Other Shares proposed to be included in such registration shall be included in the following order: 4 (i) first, the Other Shares which are entitled to registration rights; (ii) second, the Registrable Shares held by the Series A Holders that have been requested to be included in such registration (or, if necessary, such Registrable Shares pro rata among the holders thereof based upon the number of Registrable Shares requested to be registered by each such holder); and (iii) third, the Insider Shares that have been requested to be included in such registration (or, if necessary, such Insider Shares pro rata among the holders thereof based upon the number of Insider Shares requested to be registered by each such holder). Notwithstanding the foregoing, no holder of Series A Preferred Stock may include its shares on any such registration statement unless approved by the holders of at least a majority of the shares of Series A Preferred Stock sold at the Closing. Section 4. Preparation and Filing. If and whenever the Company is under an obligation pursuant to the provisions of this Agreement to use commercially reasonable efforts to effect the registration of any Restricted Shares, the Company shall: (a) subject to the provisions of Section 2, use commercially reasonable efforts to cause a registration statement that registers such Restricted Shares to become and remain effective until all of such Restricted Shares have been disposed of or the such shares are no longer Restricted Shares; (b) furnish, at least five business days before filing a registration statement that registers such Restricted Shares, a prospectus relating thereto or any amendments or supplements relating to such a registration statement or prospectus, to one counsel selected by the Series A Holders, on behalf of the Series A Holders (the "Holders' Counsel"), and copies of all such documents proposed to be filed (it being understood that such five-business-day period need not apply to successive drafts of the same document proposed to be filed so long as such successive drafts are supplied to the Holders' Counsel in advance of the proposed filing by a period of time that is customary and reasonable under the circumstances); 5 (c) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for the period set forth above in (a) or until all of such Restricted Shares have been disposed of (if earlier) and to comply with the provisions of the Securities Act with respect to the sale or other disposition of such Restricted Shares; (d) notify in writing the Holders' Counsel promptly (i) of the receipt by the Company of any notification with respect to any comments by the Commission with respect to such registration statement or prospectus or any amendment or supplement thereto or any request by the Commission for the amending or supplementing thereof or for additional information with respect thereto, (ii) of the effectiveness of such registration statement or any post-effective amendment thereto, (iii) of the receipt by the Company of any notification with respect to the issuance by the Commission of any stop order suspending the effectiveness of such registration statement or prospectus or any amendment or supplement thereto or the initiation or threatening of any proceeding for that purpose and (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of such Restricted Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purposes; (e) use commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of the registration statement; (f) use commercially reasonable efforts to register or qualify such Restricted Shares under such other securities or blue sky laws of such jurisdictions as the Holders reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable the Holders to consummate the disposition in such jurisdictions of the Restricted Shares owned by the Holders; provided, however, that the Company will not be required to qualify generally to do business, subject itself to general taxation or consent to general service of process in any jurisdiction where it would not otherwise be required to do so but for this paragraph; (g) furnish to the Holders at least one signed and such additional number of copies of such registration statement and of each amendment and supplement thereto (in each case including all exhibits), such number of copies of the prospectus, including a preliminary prospectus, if any, in conformity with the requirements of the Securities Act, and such other documents as the Holders may reasonably request in order to facilitate the public sale or other disposition of such Restricted Shares; (h) notify the Holders on a timely basis at any time when a prospectus relating to such Restricted Shares is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing and prepare and furnish to the Holders a reasonable number of copies of a supplement to or an amendment of such registration statement or prospectus as may be necessary so that, as thereafter delivered to the offerees of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; 6 (i) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering; (j) furnish to any Holder on the date that such Registrable Shares are delivered to the underwriters for sale in connection with a registration pursuant to this Agreement, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such securities becomes effective, an opinion, dated such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Holders; (k) on the date that the registration statement with respect to such securities becomes effective, use commercially reasonable efforts to obtain a "comfort" letter dated such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Holders, and, if such securities are being sold through underwriters, a reaffirmation of such letter on the date that such Registrable Securities are delivered to the underwriters for sale; (l) as soon as practicable after the effective date of the registration statement, and in any event within sixteen (16) months thereafter, have "made generally available to its security holders" (within the meaning of Rule 158 under the Securities Act) an earning statement (which need not be audited) covering a period of at least twelve (12) months beginning after the effective date of the registration statement and otherwise complying with Section 11(a) of the Securities Act; (m) provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration and provide the transfer agent with printed certificates for Registrable Shares in a form eligible for deposit with The Depositary Trust Company. (n) make available for inspection by a representative of the holders of a majority in number of the Registrable Securities, any underwriter participating in any disposition pursuant to such Registration Statement, and one firm of attorneys or accountants retained by each of the sellers and underwriter all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers, directors and employees to supply all information reasonably requested by any such representative, underwriter, attorney or accountant in connection with the registration, with respect to each at such time or times as the Company shall reasonably determine; subject to reasonable restrictions and agreements to safeguard the confidentiality of confidential information; 7 (o) cooperate and assist in any filings required to be made with the NASD and in the performance of any due diligence investigation by any underwriter (including any "qualified independent underwriter" that is required to be retained in accordance with the rules and regulations of the NASD); (p) provide a transfer agent and registrar (which may be the same entity and which may be the Company) for such Restricted Shares; (q) issue to any underwriter to which the Holders holding such Restricted Shares may sell shares in such offering certificates evidencing such Restricted Shares; (r) list such Restricted Shares on any national securities exchange on which any shares of the Common Stock are listed or, if the Common Stock is not listed on a national securities exchange, use commercially reasonable efforts to qualify such Restricted Shares for inclusion on the automated quotation system of the National Association of Securities Dealers, Inc. (the "NASD") or the OTC Bulletin Board; and (s) use commercially reasonable efforts to take all other steps necessary to effect the registration of such Restricted Shares contemplated hereby in accordance with the provisions of Section 2 hereof. Each holder of the Restricted Shares, upon receipt of any notice from the Company of any event of the kind described in Section 4(h) hereof, shall forthwith discontinue disposition of the Restricted Shares pursuant to the registration statement covering such Restricted Shares until such Holder's receipt of the copies of the supplemented or amended registration statement or prospectus contemplated by Section 4(h) hereof, and, if so directed by the Company, such Holder shall deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in such Holder's possession, of the prospectus covering such Restricted Shares at the time of receipt of such notice. No Series A Holder participating in such underwriting shall be required to make any representations, warranties or indemnities except as they relate to such Holder's ownership of shares and authority to enter into the underwriting agreement and to such Holder's intended method of distribution, and the liability of such Holder shall be limited to an amount equal to the net proceeds from the offering received by such Holder. Section 5. Expenses. All expenses incurred by the Company in complying with Section 4, including, without limitation, all registration and filing fees (including all expenses incident to filing with the NASD), fees and expenses of complying with securities and blue sky laws, printing expenses, fees and expenses of the Company's counsel and accountants, and the reasonable fees and expenses of the Holders' Counsel, shall be paid by the Company. Section 6. Indemnification. (a) In connection with any registration of any Restricted Shares under the Securities Act pursuant to this Agreement, the Company shall indemnify and hold harmless the holders of Restricted Shares, each underwriter, broker or any other Person acting on behalf of the holders of Restricted Shares and each other Person, if any, who controls any of the foregoing Persons within the meaning of the Securities Act against any losses, claims, damages or liabilities, joint or several (or actions in respect thereof) and costs and expenses of enforcing this Section 6, to which any of the foregoing Persons may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or allegedly untrue statement of a material fact contained in the registration statement under which such Restricted Shares were registered under the Securities Act, any preliminary prospectus or final prospectus contained therein or otherwise filed with the Commission, any amendment or supplement thereto or any document incident to registration or qualification of any Restricted Shares, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or, with respect to any prospectus, necessary to make the statements therein in light of the circumstances under which they were made not misleading, or any violation by the Company of the Securities Act or registration thereunder, other federal securities law or regulation thereunder or state securities or blue sky laws applicable to the Company and relating to action or inaction required of the Company in connection with such registration or qualification under such state securities or blue sky laws; and shall reimburse promptly after request therefor the holders of Restricted Shares, such underwriter, such broker or such other Person acting on behalf of the holders of Restricted Shares and each such controlling Person for any legal or other expenses reasonably incurred by any of them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or action (including any legal or other expenses incurred) arises out of or is based upon an untrue statement or allegedly untrue statement or omission or alleged omission made in said registration statement preliminary prospectus, final prospectus, amendment, supplement or document incident to registration or qualification of any Restricted Shares in reliance upon and in conformity with information furnished to the Company by such Holder of Restricted Shares or its counsel in writing expressly for use in the preparation thereof; provided further, however, that the foregoing indemnity agreement is subject to the condition that, insofar as it relates to any untrue statement, allegedly untrue statement, omission or alleged omission made in any preliminary prospectus but eliminated or remedied in the final prospectus (filed pursuant to Rule 424 of the Securities Act), such indemnity agreement shall not inure to the benefit of any Holder from whom the Person asserting any loss, claim, damage, liability or expense purchased the Restricted Shares which are the subject thereof, if a copy of such final prospectus had been made available to such Holder a reasonable time prior to the sale of such Restricted Shares by such Holder, and such final prospectus was not delivered to such Person with or prior to the written confirmation of the sale of such Restricted Shares to such Person. 8 (b) In connection with any registration of Restricted Shares under the Securities Act pursuant to this Agreement, each Holder of Restricted Shares shall severally and not jointly indemnify and hold harmless (in the same manner and to the same extent as set forth in the preceding paragraph of this Section 6) the Company, each director of the Company, each officer of the Company who shall sign such registration statement, each underwriter, broker or other Person acting on behalf of the holders of Restricted Shares and each Person who controls any of the foregoing Persons within the meaning of the Securities Act with respect to any statement or omission from such registration statement, any preliminary prospectus or final prospectus contained therein or otherwise filed with the Commission, any amendment or supplement thereto or any document incident to registration or qualification of any Restricted Shares, if such statement or omission was made in reliance upon and in conformity with information furnished in writing to the Company or such underwriter by or on behalf of such Holder of Restricted Shares expressly for use in connection with the preparation of such registration statement, preliminary prospectus, final prospectus, amendment, supplement or document; provided, however, that the maximum amount of liability in respect of such indemnification shall be limited, in the case of each Holder, to an amount equal to the net proceeds actually received by such Holder from the sale of Restricted Shares effected pursuant to such registration. 9 (c) Promptly after receipt by an indemnified party of notice of the commencement of any action involving a claim referred to in the preceding paragraphs of this Section 6, such indemnified party will, if a claim in respect thereof is made against an indemnifying party, give written notice to the latter of the commencement of such action. In case any such action is brought against an indemnified party, the indemnifying party will be entitled to participate in and to assume the defense thereof, jointly with any other indemnifying party similarly notified to the extent that it may wish, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be responsible for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof; provided, however, that if any indemnified party shall have reasonably concluded, based upon the advice of counsel, that there may be one or more legal or equitable defenses available to such indemnified party which are additional to or conflict with those available to the indemnifying party, or that such claim or litigation involves or could have an effect upon matters beyond the scope of the indemnity agreement provided in this Section 6, the indemnifying party shall not have the right to assume the defense of such action on behalf of such indemnified party and such indemnifying party shall reimburse such indemnified party and any Person controlling such indemnified party for that portion of the fees and expenses of any one counsel retained by the indemnified party which is reasonably related to the matters covered by the indemnity agreement provided in this Section 6. (d) If the indemnification provided for in this Section 6 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, claim, damage, liability or action referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amounts paid or payable by such indemnified party as a result of such loss, claim, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions which resulted in such loss, claim, damage, liability or action as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. Notwithstanding anything to the contrary in this Section 6, no Holder shall be required, pursuant to this Section 6, to contribute any amount in excess of the net proceeds received by such Holder from the sale of securities in the offering to which the losses, claims, damages, liabilities or expenses of the Holder relate. 10 (e) The obligations of the Company and Holders under this Section 6 shall survive the completion of any offering of Registrable Shares in a registration statement under this Agreement, and otherwise. (f) Any indemnity agreements contained herein shall be in addition to any other rights to indemnification or contribution which any indemnified party may have pursuant to law or contract and shall remain operative and in full force and effect regardless of any investigation made or omitted by or on behalf of any indemnified party. Section 7. Lock-up Agreement. Notwithstanding any other provisions in this Agreement to the contrary: (a) Until the earlier of (i) 90 days following the conversion into Common Stock of at least 50% of the shares of Series A Preferred Stock purchased at the Closings, or (ii) 90 days following the closing of a Qualified Public Offering (the first to occur of such events being referred to as the "Trigger Event"), each Insider, individually and not jointly hereby agrees that he shall not offer, sell, contract to sell, lend, pledge, grant any option to purchase, make any short sale or otherwise dispose of any shares of Common Stock, or any options or warrants to purchase any shares of Common Stock, or any securities convertible into, exchangeable for or that represent the right to receive shares of Common Stock, whether now owned or hereinafter acquired, owned directly (including holding as a custodian) or with respect to which the he has beneficial ownership within the rules and regulations of the Commission (collectively the "Lock-up Shares"), without the prior consent of the holders of at least a majority of the then-outstanding shares of Series A Preferred Stock. (b) Notwithstanding the foregoing, (x) each Insider may transfer (i) all or any portion of his Lock-up Shares as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound by the restrictions set forth herein, (ii) all or any portion of his Lock-up Shares to any trust for the direct or indirect benefit of the Insider or the immediate family of the Insider, provided that the trustee of the trust agrees to be bound by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, and (iii) up to the number of shares equal to 5% of his holdings as of the Closing on each of the Operational Date and on each 12-month anniversary of the Operational Date (provided that if any such Insider does not sell the full 5% on the Operational Date or on any 12-month anniversary thereof, he may carry over the unsold portion to subsequent periods) and (y) each of Eddie Campos and his affiliates (collectively) and Darren Pederson and his affiliates (collectively) may transfer up to an additional 25,000 shares at any time. For purposes hereof, "immediate family" shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. On the 91st day following the Trigger Event (the "Sale Date"), the provisions of Section 7(a) shall no longer be in effect, except that each Insider agrees that he will limit his sales in each of the first four 90 day periods following the Sale Date to that number of shares as equals 25% of his holdings as of the Trigger Event. 11 (c) Each Insider also agrees (i) to the entry of stop transfer instructions with the Company's transfer agent and registrar against the transfer of the Lock-up Shares except in compliance with the foregoing restrictions and (ii) promptly following the date hereof, to deliver the certificates representing his shares of Common Stock to the Company, whereby the Company shall imprint a legend on the back of such certificates referencing the foregoing transfer restriction. After taking such action, the Company will re-deliver such certificates to the Insiders as promptly as practicable. Section 8. Information by Holder. The Holders shall furnish to the Company such written information regarding the Holders and the distribution proposed by the Holders as the Company may reasonably request and as shall be reasonably required in connection with any registration, qualification or compliance referred to in this Agreement. (a) Reports Under the Exchange Act. With a view to making available to the Holders the benefits of Rule 144 under the Securities Act and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration, the Company agrees at all times to: (i) make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act; (ii) file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and (iii) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144 under the Securities Act and the Securities Act and Exchange Act (at any time after it has become subject to such reporting requirements) or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC which permits the selling of any such securities without registration or pursuant to such form. Section 9. Termination. This Agreement shall terminate and be of no further force or effect on the earlier of (i) when there shall no longer be any Restricted Shares outstanding or (ii) such time as all of such remaining Restricted Shares may be sold in accordance with Rule 144 within any consecutive three (3) month period. 12 Section 10. Successors and Assigns. Subject to the provisions of Section 11, this Agreement shall bind and inure to the benefit of the Company and the Holders and the respective successors and assigns of the Company and the Holders. Section 11. Assignment. The rights to cause the Company to register Registrable Securities pursuant to this Agreement may be assigned in whole or in part by a Holder to one or more of its Affiliates (including, without limitation, in the case of the Series A Holders, transfers between them and to their respective members and partners and any members or partners thereof) or to one or more transferees or assignees of the Registrable Securities owned by such Holder, provided that (in each case) such transferee or assignee delivers to the Company a written instrument by which such transferee or assignee agrees to be bound by the obligations imposed on Holders under this Agreement to the same extent as if such transferee or assignee was a party hereto; provided, further, such assignment shall not require registration under the Securities Act. Except as specifically permitted in the preceding sentence, neither this Agreement nor any Holder's rights or privileges under this Agreement can be assigned or transferred in whole or in part without the prior written consent of the other parties. Section 12. Series A Holder Lockup. Each Holder hereby agrees that such Holder shall not offer, sell, contract to sell, lend, pledge, grant any option to purchase, make any short sale or otherwise dispose of any Common Stock (or other securities) of the Company held by such Holder for a period specified by the representative of the underwriters of Common Stock (or other securities) of the Company not to exceed 60 days prior to, or one hundred eighty (180) days following, the effective date of a registration statement of the Company filed under the Securities Act; provided that such agreement shall apply only to a Qualified Public Offering. Section 13. Entire Agreement. This Agreement and the other writings referred to herein or therein or delivered pursuant hereto or thereto, contain the entire agreement among the Company and the Holders with respect to the subject matter hereof and supersede all prior and contemporaneous arrangements or understandings with respect thereto. Section 14. Notices. All notices, requests, consents and other communications hereunder to any party shall be deemed to be sufficient if contained in a written instrument delivered in Person or sent by facsimile, nationally-recognized overnight courier or first class registered or certified mail, return receipt requested, postage prepaid, addressed to such party at the address set forth below or such other address as may hereafter be designated in writing by such party to the other parties: 13 (i) if to the Company to: World Waste Technologies, Inc. 13520 Evening Creek Drive Suite 130 San Diego, California 92128 Telephone: (858) 391-3400 Facsimile: (858) 486-3352 Attention: CFO with a copy to (which shall not constitute notice): Troy & Gould Professional Corporation 1801 Century Park East, 16th Floor Los Angeles, CA Facsimile: (310) 201-4746 Attention: Lawrence Schnapp, Esq. (ii) if to the Holders, to the addresses set forth on the signature pages hereto. All such notices, requests, consents and other communications shall be deemed to have been delivered (a) in the case of personal delivery or delivery by telecopy, on the date of such delivery, (b) in the case of dispatch by nationally-recognized overnight courier, on the next business day following such dispatch and (c) in the case of mailing, on the third business day after the posting thereof. Section 15. Modifications; Amendments, Waivers. The terms and provisions of this Agreement may not be modified or amended, nor may any provision be waived, except pursuant to a writing signed by the Company, the holders of at least a majority of the Registrable Shares held by the Series A Holders, and, with respect to any change to Section 7; the holders of at least a majority of the Registrable Shares held by the Insiders. Section 16. Counterparts; Facsimile Signatures. This Agreement may be executed in any number of counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. Facsimile counterpart signatures to this Agreement shall be acceptable at the Closing if the originally executed counterpart is delivered within a reasonable period thereafter. Section 17. Severability; Delays and Omissions. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement. It is agreed that no delay or omission to exercise any right, power or remedy accruing to the parties shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach or default, or any acquiescence therein, or of any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. It is further agreed that any waiver, permit, consent or approval of any kind or character by a party of any breach or default under this Agreement, or any waiver by a party of any provisions or conditions of this Agreement must be in writing and shall be effective only to the extent specifically set forth in writing and that all remedies, either under this Agreement, or by law or otherwise afforded to a party, shall be cumulative and not alternative. 14 Section 18. Headings. The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement. Section 19. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed wholly therein. Section 20. Submission to Jurisdiction; Waivers. The Company and each Purchaser irrevocably agrees that any legal action or proceeding with respect to this Agreement or for recognition and enforcement of any judgment in respect hereof brought by any other party hereto or its successors may be brought and determined in the Supreme Court of New York for Kings County or the federal district court in the Southern District of New York, and the Company and each Purchaser hereby irrevocably submits with regard to any such action or proceeding for itself and in respect to its property, generally and unconditionally, to the nonexclusive jurisdiction of the aforesaid courts. The Company and each Purchaser hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, (a) any claim that is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure to lawfully serve process, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise), and (c) to the fullest extent permitted by applicable law, that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper and (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. Section 21. Waiver of Jury Trial EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER DOCUMENT RELATED HERETO. 15 IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed on its behalf, by its officer(s) thereunto duly authorized or for himself, as of the day and year first set forth above. COMPANY: WORLD WASTE TECHNOLOGIES, INC. By: ____________________________________ Name: Title: TRELLUS OFFSHORE FUND LIMITED, a Cayman Islands corporation By: ____________________________________ Name: __________________________________ Title: _________________________________ 350 Madison Avenue New York, NY 10017 Telephone: _____________________________ Facsimile: _____________________________ Attention: Ryan Schedler TRELLUS PARTNERS II, LP, a Delaware limited partnership By: ____________________________________ Name: __________________________________ Title: _________________________________ 350 Madison Avenue New York, NY 10017 Telephone: _____________________________ Facsimile: _____________________________ Attention: Ryan Schedler 16 TRELLUS PARTNERS, LP, a Delaware limited partnership By: ____________________________________ Name: __________________________________ Title: _________________________________ 350 Madison Avenue New York, NY 10017 Telephone: _____________________________ Facsimile: _____________________________ Attention: Ryan Schedler INSIDERS: ________________________________________ Steve Racoosin Address: ________________________________________ Thomas L. Collins Address: ________________________________________ Trustees Collins Family Trust u/a dated 4/28/88 Address: 17 ________________________________________ Fred Lundberg Address: ________________________________________ David Rane Address: ________________________________________ Darren Pederson Address: ________________________________________ Eddie Campos Address: ________________________________________ The Eddie Campos Family Trust u/d/t dated June 25, 2000 Address: ________________________________________ John Pimentel Address: ________________________________________ Eric McAfee Address: 18 ________________________________________ Laird Cagan Address: ________________________________________ John Liviakis Address: ________________________________________ Liviakis Financial Communications, Inc. Address: ________________________________________ One World Zero Waste Address: ________________________________________ Jan-Can LLP Address: ________________________________________ Cagan McAfee Capital Partners, LLC Address: ________________________________________ P2 Capital, LLC Address: ________________________________________ George G. Zabka and Alisa Zabka Peterson trustee, u/d/t/ dated 3 July 2004 19 ________________________________________ Michael Bayes Address: ________________________________________ Mark E. Bernhard Address: 20 EXHIBIT A [List additional Series A Holders] A - 1 Exhibit B Steve Racoosin Thomas L. Collins Trustees Collins Family Trust u/a dated 4/28/88 Fred Lundberg David Rane Darren Pederson Eddie Campos The Eddie Campos Family Trust u/d/t dated June 25, 2000 John Pimentel Eric McAfee Laird Cagan John Liviakis Liviakis Financial Communications, Inc. One World Zero Waste Jan-Can LP Cagan McAfee Capital Partners, LLC P2 Capital, LLC George G. Zabka and Alisa Zabka Peterson trustees, u/d/t dated 3 July 2004 Michael Bayes Mark E. Bernhard B - 1 EX-10.4 6 v017490_ex10-4.txt Exhibit 10.4 April 28, 2005 Thomas L. Collins 13205 Vinter Way Poway, CA. 92064 Re: Employment Agreement Dear Mr. Collins: This employment agreement (this "Agreement") sets forth the terms and conditions of your employment with World Waste Technologies, Inc. (the "Company"). Unless otherwise set forth in this Agreement, you acknowledge that your employment with the Company is "at-will". Duties: You agree to serve the Company as its Chief Executive Officer. You agree to perform such duties as are customarily performed by chief executive officers of companies similar to the Company and such other duties as are specified by the Board of Directors. Notwithstanding the foregoing, you shall not take any of the actions set forth on Schedule I hereto without obtaining the prior written approval of the Board of Directors. So long as you remain employed by the Company, you will devote full time to, and use your best efforts to advance, the business and welfare of the Company. You shall report directly to the Board of Directors. Status: Exempt. Effective Date: April 28, 2005. Base Salary: $224,000 per year payable biweekly and subject to payroll deductions as may be necessary or customary in respect of the Company's salaried employees in general. Bonus: You shall be entitled to bonuses as deemed appropriate by the Board of Directors. You shall also be entitled to participate in all annual bonus, incentive, savings and retirement plans, practices, policies and programs applicable generally to the Company's executive officers, in each case at the discretion of the Board of Directors. Vacation: You shall be entitled to three (3) weeks paid vacation during each 12-month period that you are employed by the Company pursuant to the terms of this Agreement. Vacation shall accrue biweekly on a pro-rata basis. Accrued vacation cannot exceed six (6) weeks. Vacation shall not accrue in excess of six (6) weeks. Any unused pro-rata portion of your annual paid vacation shall be paid to you upon termination of employment for any reason. It is understood that as of the date of this Agreement you have three (3) weeks accrued. Page 1 of 8 Severance: Upon the termination of this Agreement by the Company for other than "good cause", or upon your resignation from the Company for "good reason" and subject to you entering into a severance agreement as per the terms and conditions hereof: the Company shall, for a period of twelve (12) months, (a) pay to you in monthly installments, as severance pay, your full salary that you were receiving as of the time of termination of this Agreement and (b) provide you the same level of benefits you were receiving as of the time of termination of this Agreement, unless otherwise required by law. Benefits: You shall be entitled to such benefits provided by the Company to its other executive officers. Equity: You were previously granted 1,050,000 shares of common stock and a warrant to acquire up to an additional 100,000 shares of common stock. The terms of the foregoing equity grants shall remain in effect provided, however that the terms and definitions relating to Change in Control and Involuntary Termination in the Company's 2004 Stock Option Plan shall also apply to your warrant. Termination Because of Disability. If, at the end of any calendar month during the term of this Agreement, you are and have been for three (3) consecutive full calendar months then ending, or for thirty percent (30%) or more of the normal working days during the twelve (12) consecutive full calendar months then ending, unable due to mental or physical illness or injury to perform duties under this Agreement in the normal and regular manner, this Agreement may be terminated by the Board of Directors; however, the salary provisions of this Agreement shall continue for twelve (12) months thereafter. Termination on Death. If you die during the term of this Agreement, the salary provisions of this Agreement shall continue for twelve (12) months thereafter to the benefit of your estate. The Company, will have the option of purchasing a life insurance policy on you in an amount comparable to your annual salary and payable to your estate. Proprietary Information Agreement, Insider Trading Policy and Code of Ethics. You will be required to sign and abide by the terms of the attached proprietary information agreement, insider trading policy and code of ethics, which are incorporated into this agreement by reference as Exhibit A, Exhibit B and Exhibit C, respectively. Termination for Good Cause. Your employment under this Agreement may be terminated immediately by the Company for "good cause" upon ten (10) days advance written notice specifying the reasons for such termination. You shall have ten (10) days from the date such notice is given in which to cure such cause (if and to the extent such cause is capable of being cured). Absent such cure within the cure period, your employment shall be deemed terminated for good cause on the expiration of such ten (10) day period. The term "good cause" is defined as any one or more of the following occurrences: Page 2 of 8 (I) Negligence or a material violation by you of any duty or any other material or repetitive misconduct or failure on your part; (II) Your conviction by, or entry of a plea of guilty or nolo contendere in, a court of competent and final jurisdiction for any crime punishable by imprisonment in the jurisdiction involved; (III) Your commission of an act of fraud, prior to or subsequent to the date of this Agreement, upon the Company; or (IV) Failure to execute and deliver to the Company any document(s) as requested by the Board of Directors and which are required by all employees of the Company. Resignation for Good Reason. You have the right to terminate your employment under this Agreement in the event (i) there is a reduction in, or failure to pay, your salary or any other payments or benefits due to you hereunder, after receipt by the Company of written notice from you giving the Company at least 30 days in which to cure such reduction or failure; (ii) the Company commits a material breach of any of the terms of this Agreement, provided that with respect to any breach capable of being cured, only if such breach is not cured within 30 days of receipt by the Company of written notice from you; (iii) the Company has filed for bankruptcy or is adjudged insolvent or has failed to make payments to creditors when due; (iv) you are required to perform services under this Agreement at a location which is more than seventy-five (75) miles from the your current principal work site (provided that you may from time to time be required to travel temporarily to other locations); or(v) a material change in your title or responsibilities as described in this Agreement. Any such termination shall be referred to as a resignation for good reason. Nothing in this section or the availability of termination by the Company for good cause or your resignation for good reason is intended to alter the at-will status of employment with the Company. Either you or the Company may terminate the employment relationship at any time, with or without cause. Your Consideration for Severance. As consideration for receiving severance pay and benefits provided hereunder, during the period that you are receiving severance pay or benefits hereunder, you shall: (I) Consulting. Be available, on a reasonable basis, in person and/or by telephone, as a consultant to the Company on projects or tasks as defined by the Board of Directors or its designated representative. (II) Non-Compete. For the period commencing on the date of this Agreement and ending upon the date of the last severance payment hereunder, you shall not without written permission from the Board of Directors, directly or indirectly, as employee, agent, consultant, stockholder, director, partner or in any other individual or representative capacity, own, operate, manage, control, engage in, invest in or participate in any manner in, act as a consultant or advisor to, render services for (alone or in association with any person, firm, corporation or entity), or otherwise assist, for compensation or otherwise, any person or entity that engages in or owns, invests in, operates, manages or controls any venture or enterprise that is a direct competitor of the Company; provided, however, that nothing contained in this Agreement shall be construed to prevent you from investing in the stock of any competing corporation listed on a national securities exchange or traded in the over-the-counter market, but only if: (1) you are not involved in the business of said corporation, and (2) if you and your affiliates collectively do not own more than an aggregate of 5% of the stock of such corporation, and (3) such investment does not violate the Company's Insider Trading Policy. Page 3 of 8 (III) Non-Solicitation. Not interfere with or disrupt or attempt to disrupt the Company's business relationship with its customers or suppliers or solicit any of the employees of the Company to leave the employment of the Company. (IV) Severance Agreement. Enter into a severance agreement and general release with the Company within 90 (ninety) days from date of termination notice. Arbitration. You and the Company agree that any dispute arising under or in connection with this Agreement, including any dispute involving your employment or the termination of that employment (whether based on contract, tort or statutory duty or prohibition, including any prohibition against discrimination or harassment), shall be submitted to binding arbitration in accordance with California Code of Civil Procedure ss.ss. 1280 - 1294.2 before a single neutral arbitrator. You and the Company understand that each is waiving its rights to a jury trial. The party demanding arbitration shall submit a written claim to the other party setting out the basis of the claim. Demands shall be presented in the same manner as notices under this Agreement. You and the Company will attempt to reach agreement on an arbitrator within ten (10) business days of delivery of the arbitration demand. After this ten (10) business day period, either you or the Company may request a list of seven professional arbitrators from the American Arbitration Association or another mutually agreed service. You and the Company will alternately strike names until only one person remains and that person shall be designated as the arbitrator. The party demanding arbitration shall make the first strike. The arbitration shall take place in or within five miles of San Diego, California, at a time and place determined by the arbitrator. Each party shall be entitled to discovery of essential documents and witnesses and to deposition discovery, as determined by the arbitrator, taking into account the mutual desire to have a fast, cost-effective, dispute-resolution mechanism. You and the Company will attempt to cooperate in the discovery process before seeking the determination of the arbitrator. Except as otherwise determined by the arbitrator, you and the Company will each be limited to no more than three (3) depositions. The arbitrator shall have the powers provided in California Code of Civil Procedure ss.ss. 1282.2 - 1284.2 and may provide all appropriate remedies at law or equity. The arbitrator will have the authority to entertain a motion to dismiss and/or a motion for summary judgment by either you or the Company and shall apply the standards governing such motions under California law, unless the standards of another judicial forum supercede California law. The Arbitrator shall render, within sixty (60) days of the completion of the arbitration, an award and a written, reasoned opinion in support of that award. Judgment on the award may be entered in any court having jurisdiction. Page 4 of 8 The Company will pay the arbitrator's expenses and fees, all meeting room charges and any other expenses that would not have been incurred if the case were litigated in the judicial forum having jurisdiction over it. Unless otherwise ordered by the arbitrator pursuant to law or this Agreement, each party shall pay its own attorney fees, witness fees and other expenses incurred by the party for his or her own benefit. Your share of any filing, administration or similar fee shall be no more than the then current filing or other applicable fee in California Superior Court or, if applicable, other appropriate tribunal with jurisdiction. Modification and Waiver of Breach. No waiver or modification of this Agreement shall be binding unless it is in writing signed by you and the Company. No waiver of a breach of this Agreement shall be deemed to constitute a waiver of a future breach, whether of a similar or dissimilar nature. Notices. All notices and other communications required or permitted under this Agreement shall be in writing, served personally on, or mailed by nationally recognized express mail courier. Notices and other communications served by express mail courier shall be deemed given 72 hours after deposit with such express mail courier duly addressed to whom such notice or communication is to be given. In the case of (a) the Company, 13520 Evening Creek Drive, Suite 130, San Diego, California 92128, Attention: CFO, or (b) to you, at the address of record provided by you to the Company. Either party may change their address for purposes of this Section by giving written notice, in the manner stated herein. You agree to promptly update the Company with any changes to your contact information. Counterparts and Facsimile Signatures. This instrument may be executed in counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same Agreement. The parties agree that a signature delivered by facsimile transmission will be treated in all respects as having the same effect as an original signature. Construction of Agreement. This Agreement shall be construed in accordance with, and governed by, the internal laws of the State of California and both parties irrevocably agree to the exclusive jurisdiction and venue of the state and local courts of San Diego County, California. Legal Fees. If any legal action, arbitration or other proceeding is brought for the enforcement of this Agreement, or because of any alleged dispute, breach, default or misrepresentation in connection with this Agreement, the successful or prevailing party shall be entitled to recover reasonable attorneys' fees and other costs it incurred in that action or proceeding, in addition to any other relief to which it may be entitled. Severability Clause. If any provision of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of the Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of this Agreement are declared to be severable. Complete Agreement. This instrument constitutes and contains the entire agreement and understanding concerning your employment and the other subject matters addressed in this Agreement between you and the Company, and supersedes and replaces all prior negotiations and all agreements proposed or otherwise, whether written or oral, concerning the subject matters hereof, including but not limited to that certain Employment Contract, dated as of January 20, 2003, between you and World Waste of America, Inc. This is an integrated document. Page 5 of 8 Third Party Beneficiaries. This Agreement does not create, and shall not be construed as creating, any rights enforceable by any person not a party to this Agreement, except as expressly contemplated herein. Non-transferability of Interest. None of your rights to receive any form of compensation payable pursuant to this Agreement shall be assignable or transferable except through a testamentary disposition or by the laws of descent and distribution upon your death. Any attempted assignment, transfer, conveyance, or other disposition (other than as set forth herein) of any interest in your rights to receive any form of compensation to be made by the Company pursuant to this Agreement shall be void. Other Agreements. A condition of your continued employment with the Company is a signed Confidentiality, Non-Disclosure and Employee Invention Agreement. Your failure to complete this document in a timely manner may result in your termination for good cause. You also understand and agree that, except as expressly provided in this Agreement, you are subject to all of the Company's general business and human resources polices and procedures as they presently exist or as they may exist in the future and failure to abide by such provisions may result in your termination for good cause, provided, however, that the at-will status of employment may only be changed as provided below. At-Will. By signing this letter, you understand and agree that your employment with the Company is "at-will." Your employment with the Company is voluntarily entered into and we recognize you are free to resign at any time. Similarly, it is recognized that the Company is free to conclude an employment relationship at any time we feel is appropriate. While other terms of your employment may change with or without notice, this at-will relationship can be changed only in a written agreement signed by you and an authorized officer of the Company. Sincerely, _____________________________________ Acceptance: _____________________________________ Thomas L. Collins Date: _______________________________ Page 6 of 8 AGREEMENT OF AT WILL EMPLOYMENT I understand and agree that my employment with the Company is on an at-will basis. This means that either the Company or I or may terminate the employment relationship at any time at its or his sole discretion without cause. I further understand that while other personnel policies, procedures, and benefits of the Company may change from time to time in the Company's discretion, this at-will employment relationship can only be changed by an express written employment agreement signed by me and a duly authorized officer of the Company. _____________________________________ Employee Name (PRINT) _____________________________________ Employee Signature Date: _______________________________ Page 7 of 8 Schedule I Activities Prohibited Without Board of Director Approval 1. Borrowing or obtaining credit, other than trade credit in the ordinary course of business, or executing any guaranty, other than trade guarantees in the ordinary course of business; 2. Expending funds for major piece of capital equipment in excess of One Million Dollars ($1,000,000); 3. Selling or transferring capital assets exceeding One Million Dollars ($1,000,000) in market value; 4. Executing any contract or making any commitment for the purchase or sale of the Company's products or facilities in an amount exceeding One Million Dollars ($1,000,000); or outside the ordinary course of business; 5. Executing any lease of real or personal property providing for an annual rent in excess of One Hundred Thousand Dollars ($100,000), or term greater than five (5) years; 6. Exercising any discretionary authority or control over the management of any employee welfare or pension benefit plan or over the disposition of the assets of any such plan; 7. Hiring or firing any employee with annual compensation exceeding One Hundred Thousand Dollars ($100,000). Page 8 of 8 EX-10.5 7 v017490_ex10-5.txt Exhibit 10.5 April 28, 2005 Mr. Fred Lundberg 1095 N. Desert Deer Pass Green Valley, AZ. 85614-5528 Re: Employment Agreement Dear: Mr. Lundberg: This employment agreement (this "Agreement") sets forth the terms and conditions of your employment with World Waste Technologies, Inc. (the "Company"). Unless otherwise set forth in this Agreement, you acknowledge that your employment with the Company is "at-will". Duties: You agree to serve the Company as its Senior Vice-President. You agree to perform such duties as are customarily performed by senior vice-presidents of companies similar to the Company and such other duties as are specified by the Board of Directors. Notwithstanding the foregoing, you shall not take any of the actions set forth on Schedule I hereto without obtaining the prior written approval of the CEO. So long as you remain employed by the Company, you will devote full time to, and use your best efforts to advance, the business and welfare of the Company. It is understood that you wish to work from your home office in Green Valley, AZ; and therefore, you agree to travel on Company business when required by the Company in order to perform your duties. You shall report directly to the Chief Executive Officer. Status: Exempt. Effective Date: April 28, 2005. Base Salary: $202,000 per year payable biweekly and subject to payroll deductions as may be necessary or customary in respect of the Company's salaried employees in general. Bonus: You shall be entitled to bonuses as deemed appropriate by the Board of Directors. You shall also be entitled to participate in all annual bonus, incentive, savings and retirement plans, practices, policies and programs applicable generally to the Company's executive officers, in each case at the discretion of the Board of Directors. Page 1 of 9 Vacation: You shall be entitled to three (3) weeks paid vacation during each 12-month period that you are employed by the Company pursuant to the terms of this Agreement. Vacation shall accrue biweekly on a pro-rata basis. Accrued vacation cannot exceed six (6) weeks. Vacation shall not accrue in excess of six (6) weeks. Any unused pro-rata portion of your annual paid vacation shall be paid to you upon termination of employment for any reason. It is understood that as of the date of this Agreement you have three (3) weeks accrued. Severance: Upon the termination of this Agreement by the Company for other than "good cause", or upon your resignation from the Company for "good reason", and subject to you entering into a severance agreement as per the terms and conditions hereof: the Company shall, for a period of twelve (12) months, (a) pay to you in monthly installments, as severance pay, your full salary that you were receiving as of the time of termination of this Agreement, and (b) provide you the same level of benefits you were receiving as of the time of termination of this Agreement, unless otherwise required by law. Benefits: You shall be entitled to such benefits provided by the Company to its other executive officers. Equity: You were previously granted 660,000 shares of common stock and a warrant to acquire up to an additional 75,000 shares of common stock. The terms of the foregoing equity grants shall remain in effect provided, however that the terms and definitions relating to Change and Control and Involuntary Termination in the Company's 2004 Stock Option Plan shall also apply to your warrant. Termination Because of Disability. If, at the end of any calendar month during the term of this Agreement, you are and have been for three (3) consecutive full calendar months then ending, or for thirty percent (30%) or more of the normal working days during the twelve (12) consecutive full calendar months then ending, unable due to mental or physical illness or injury to perform duties under this Agreement in the normal and regular manner, this Agreement may be terminated by the Board of Directors; however, the salary provisions of this Agreement shall continue for twelve (12) months thereafter. Termination on Death. If you die during the term of this Agreement, the salary provisions of this Agreement shall continue for twelve (12) months thereafter to the benefit of your estate. The Company, will have the option of purchasing a life insurance policy on you in an amount comparable to your annual salary and payable to your estate. Proprietary Information Agreement, Insider Trading Policy and Code of Ethics. You will be required to sign and abide by the terms of the attached proprietary information agreement, insider trading policy and code of ethics, which are incorporated into this agreement by reference as Exhibit A, Exhibit B and Exhibit C, respectively. Page 2 of 9 Termination for Good Cause. Your employment under this Agreement may be terminated immediately by the Company for "good cause" upon ten (10) days advance written notice specifying the reasons for such termination. You shall have ten (10) days from the date such notice is given in which to cure such cause (if and to the extent such cause is capable of being cured). Absent such cure within the cure period, your employment shall be deemed terminated for good cause on the expiration of such ten (10) day period. The term "good cause" is defined as any one or more of the following occurrences: (I) Negligence or a material violation by you of any duty or any other material or repetitive misconduct or failure on your part; (II) Your conviction by, or entry of a plea of guilty or nolo contendere in, a court of competent and final jurisdiction for any crime punishable by imprisonment in the jurisdiction involved; (III) Your commission of an act of fraud, prior to or subsequent to the date of this Agreement, upon the Company; or (IV) Failure to execute and deliver to the Company any document(s) as requested by the Board of Directors and which are required by all employees of the Company. Resignation for Good Reason. You have the right to terminate your employment under this Agreement in the event (i) there is a reduction in, or failure to pay, your salary or any other payments or benefits due to you hereunder, after receipt by the Company of written notice from you giving the Company at least 30 days in which to cure such reduction or failure; (ii) the Company commits a material breach of any of the terms of this Agreement, provided that with respect to any breach capable of being cured, only if such breach is not cured within 30 days of receipt by the Company of written notice from you; (iii) the Company has filed for bankruptcy or is adjudged insolvent or has failed to make payments to creditors when due; or (iv) a material change in your title or responsibilities as described in this Agreement. Any such termination shall be referred to as a resignation for good reason. Nothing in this section or the availability of termination by the Company for good cause or your resignation for good reason is intended to alter the at-will status of employment with the Company. Either you or the Company may terminate the employment relationship at any time, with or without cause. Your Consideration for Severance. As consideration for receiving severance pay and benefits provided hereunder, during the period that you are receiving severance pay or benefits hereunder, you shall: (I) Consulting. Be available, on a reasonable basis, in person and/or by telephone, as a consultant to the Company on projects or tasks as defined by the Board of Directors or its designated representative. (II) Non-Compete. For the period commencing on the date of this Agreement and ending upon the date of the last severance payment hereunder, you shall not without written permission from the Board of Directors, directly or indirectly, as employee, agent, consultant, stockholder, director, partner or in any other individual or representative capacity, own, operate, manage, control, engage in, invest in or participate in any manner in, act as a consultant or advisor to, render services for (alone or in association with any person, firm, corporation or entity), or otherwise assist, for compensation or otherwise, any person or entity that engages in or owns, invests in, operates, manages or controls any venture or enterprise that is a direct competitor of the Company; provided, however, that nothing contained in this Agreement shall be construed to prevent you from investing in the stock of any competing corporation listed on a national securities exchange or traded in the over-the-counter market, but only if: (1) you are not involved in the business of said corporation, and (2) if you and your affiliates collectively do not own more than an aggregate of 5% of the stock of such corporation, and (3) such investment does not violate the Company's Insider Trading Policy. Page 3 of 9 (III) Non-Solicitation. Not interfere with or disrupt or attempt to disrupt the Company's business relationship with its customers or suppliers or solicit any of the employees of the Company to leave the employment of the Company. (IV) Severance Agreement. Enter into a severance agreement and general release with the Company within 90 (ninety) days from date of termination notice. Arbitration. You and the Company agree that any dispute arising under or in connection with this Agreement, including any dispute involving your employment or the termination of that employment (whether based on contract, tort or statutory duty or prohibition, including any prohibition against discrimination or harassment), shall be submitted to binding arbitration in accordance with California Code of Civil Procedure ss.ss. 1280 - 1294.2 before a single neutral arbitrator. You and the Company understand that each is waiving its rights to a jury trial. The party demanding arbitration shall submit a written claim to the other party setting out the basis of the claim. Demands shall be presented in the same manner as notices under this Agreement. You and the Company will attempt to reach agreement on an arbitrator within ten (10) business days of delivery of the arbitration demand. After this ten (10) business day period, either you or the Company may request a list of seven professional arbitrators from the American Arbitration Association or another mutually agreed service. You and the Company will alternately strike names until only one person remains and that person shall be designated as the arbitrator. The party demanding arbitration shall make the first strike. The arbitration shall take place in or within five miles of San Diego, California, at a time and place determined by the arbitrator. Each party shall be entitled to discovery of essential documents and witnesses and to deposition discovery, as determined by the arbitrator, taking into account the mutual desire to have a fast, cost-effective, dispute-resolution mechanism. You and the Company will attempt to cooperate in the discovery process before seeking the determination of the arbitrator. Except as otherwise determined by the arbitrator, you and the Company will each be limited to no more than three (3) depositions. The arbitrator shall have the powers provided in California Code of Civil Procedure ss.ss. 1282.2 - 1284.2 and may provide all appropriate remedies at law or equity. Page 4 of 9 The arbitrator will have the authority to entertain a motion to dismiss and/or a motion for summary judgment by either you or the Company and shall apply the standards governing such motions under California law, unless the standards of another judicial forum supercede California law. The Arbitrator shall render, within sixty (60) days of the completion of the arbitration, an award and a written, reasoned opinion in support of that award. Judgment on the award may be entered in any court having jurisdiction. The Company will pay the arbitrator's expenses and fees, all meeting room charges and any other expenses that would not have been incurred if the case were litigated in the judicial forum having jurisdiction over it. Unless otherwise ordered by the arbitrator pursuant to law or this Agreement, each party shall pay its own attorney fees, witness fees and other expenses incurred by the party for his or her own benefit. Your share of any filing, administration or similar fee shall be no more than the then current filing or other applicable fee in California Superior Court or, if applicable, other appropriate tribunal with jurisdiction. Modification and Waiver of Breach. No waiver or modification of this Agreement shall be binding unless it is in writing signed by you and the Company. No waiver of a breach of this Agreement shall be deemed to constitute a waiver of a future breach, whether of a similar or dissimilar nature. Notices. All notices and other communications required or permitted under this Agreement shall be in writing, served personally on, or mailed by nationally recognized express mail courier. Notices and other communications served by express mail courier shall be deemed given 72 hours after deposit with such express mail courier duly addressed to whom such notice or communication is to be given. In the case of (a) the Company, 13520 Evening Creek Drive, Suite 130, San Diego, California 92128, Attention: CEO, or (b) to you, at the address of record provided by you to the Company. Either party may change their address for purposes of this Section by giving written notice, in the manner stated herein. You agree to promptly update the Company with any changes to your contact information. Counterparts and Facsimile Signatures. This instrument may be executed in counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same Agreement. The parties agree that a signature delivered by facsimile transmission will be treated in all respects as having the same effect as an original signature. Construction of Agreement. This Agreement shall be construed in accordance with, and governed by, the internal laws of the State of California and both parties irrevocably agree to the exclusive jurisdiction and venue of the state and local courts of San Diego County, California. Legal Fees. If any legal action, arbitration or other proceeding is brought for the enforcement of this Agreement, or because of any alleged dispute, breach, default or misrepresentation in connection with this Agreement, the successful or prevailing party shall be entitled to recover reasonable attorneys' fees and other costs it incurred in that action or proceeding, in addition to any other relief to which it may be entitled. Severability Clause. If any provision of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of the Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of this Agreement are declared to be severable. Page 5 of 9 Complete Agreement. This instrument constitutes and contains the entire agreement and understanding concerning your employment and the other subject matters addressed in this Agreement between you and the Company, and supersedes and replaces all prior negotiations and all agreements proposed or otherwise, whether written or oral, concerning the subject matters hereof, including but not limited to that certain Employment Contract, dated as of January 1 2003, between you and World Waste of America, Inc. This is an integrated document. Third Party Beneficiaries. This Agreement does not create, and shall not be construed as creating, any rights enforceable by any person not a party to this Agreement, except as expressly contemplated herein. Non-transferability of Interest. None of your rights to receive any form of compensation payable pursuant to this Agreement shall be assignable or transferable except through a testamentary disposition or by the laws of descent and distribution upon your death. Any attempted assignment, transfer, conveyance, or other disposition (other than as set forth herein) of any interest in your rights to receive any form of compensation to be made by the Company pursuant to this Agreement shall be void. Other Agreements. A condition of your continued employment with the Company is a signed Confidentiality, Non-Disclosure and Employee Invention Agreement. Your failure to complete this document in a timely manner may result in your termination for good cause. You also understand and agree that, except as expressly provided in this Agreement, you are subject to all of the Company's general business and human resources polices and procedures as they presently exist or as they may exist in the future and failure to abide by such provisions may result in your termination for good cause, provided, however, that the at-will status of employment may only be changed as provided below. At-Will. By signing this letter, you understand and agree that your employment with the Company is "at-will." Your employment with the Company is voluntarily entered into and we recognize you are free to resign at any time. Similarly, it is recognized that the Company is free to conclude an employment relationship at any time we feel is appropriate. While other terms of your employment may change with or without notice, this at-will relationship can be changed only in a written agreement signed by you and an authorized officer of the Company. Sincerely, ______________________________________ Thomas L. Collins, CEO Page 6 of 9 Acceptance: ______________________________________ Fred Lundberg Date: ________________________________ Page 7 of 9 AGREEMENT OF AT WILL EMPLOYMENT I understand and agree that my employment with the Company is on an at-will basis. This means that either the Company or I or may terminate the employment relationship at any time at its or his sole discretion without cause. I further understand that while other personnel policies, procedures, and benefits of the Company may change from time to time in the Company's discretion, this at-will employment relationship can only be changed by an express written employment agreement signed by me and a duly authorized officer of the Company. ______________________________________ Employee Name (PRINT) ______________________________________ Employee Signature Date: ________________________________ Page 8 of 9 Schedule I Activities Prohibited Without CEO Approval 1. Borrowing or obtaining credit, other than trade credit in the ordinary course of business in excess of $10,000, or executing any guaranty, other than trade guarantees in the ordinary course of business in excess of $10,000; 2. Expending funds for major piece of capital equipment in excess of Ten Thousand Dollars ($10,000); 3. Selling or transferring capital assets exceeding Ten Thousand Dollars ($10,000) in market value; 4. Executing any contract or making any commitment for the purchase or sale of the Company's products or facilities in an amount exceeding Ten Thousand Dollars ($10,000); or outside the ordinary course of business; 5. Executing any lease of real or personal property providing for an annual rent in excess of Ten Thousand Dollars ($10,000), or term greater than one (1) year; 6. Exercising any discretionary authority or control over the management of any employee welfare or pension benefit plan or over the disposition of the assets of any such plan; 7. Hiring or firing any employee with annual compensation exceeding Fifty Thousand Dollars ($50,000). Page 9 of 9 EX-10.6 8 v017490_ex10-6.txt Exhibit 10.6 April 28, 2005 Mr. Steve Racoosin 3849 Pala Mesa Dr. Fallbrook, CA. 92028 Re: Employment Agreement Dear: This employment agreement (this "Agreement") sets forth the terms and conditions of your employment with World Waste Technologies, Inc. (the "Company"). Unless otherwise set forth in this Agreement, you acknowledge that your employment with the Company is "at-will". Duties: You agree to serve the Company as its President. You agree to perform such duties as are customarily performed by presidents of companies similar to the Company and such other duties as are specified by the Board of Directors. Notwithstanding the foregoing, you shall not take any of the actions set forth on Schedule I hereto without obtaining the prior written approval of the CEO. So long as you remain employed by the Company, you will devote full time to, and use your best efforts to advance, the business and welfare of the Company. You shall report directly to the Chief Executive Officer. Status: Exempt. Effective Date: April 28, 2005. Base Salary: $225,000 per year payable biweekly and subject to payroll deductions as may be necessary or customary in respect of the Company's salaried employees in general. Bonus: You shall be entitled to bonuses as deemed appropriate by the Board of Directors. You shall also be entitled to participate in all annual bonus, incentive, savings and retirement plans, practices, policies and programs applicable generally to the Company's executive officers, in each case at the discretion of the Board of Directors. Page 1 of 9 Vacation: You shall be entitled to three (3) weeks paid vacation during each 12-month period that you are employed by the Company pursuant to the terms of this Agreement. Vacation shall accrue biweekly on a pro-rata basis. Accrued vacation cannot exceed six (6) weeks. Any accrued vacation in excess of six (6) weeks will be forfeited. Any unused pro-rata portion of your annual paid vacation shall be paid to you upon termination of this Agreement for any reason. It is understood that as of the date of this Agreement you have three (3) weeks accrued. Severance: Upon the termination of this Agreement by the Company for other than "good cause", or upon your resignation from the Company for "good reason" and subject to you entering into a severance agreement as per the terms and conditions hereof, the Company shall, for a period of twelve (12) months, (a) pay to you in monthly installments, as severance pay, your full salary that you were receiving as of the time of termination of this Agreement (subject to your duty to mitigate as set forth below), and (b) provide you the same level of benefits you were receiving as of the time of termination of this Agreement, unless otherwise required by law. Benefits: You shall be entitled to such benefits provided by the Company to its other executive officers. Equity: You were previously granted 3,461,900 shares of common stock and a warrant to acquire up to an additional 75,000 shares of common stock. The terms of the foregoing equity grants shall remain in effect provided, however that the terms and definitions relating to Change in Control and Involuntary Termination in the Company's 2004 Stock Option Plan shall also apply to your warrant. Termination Because of Disability. If, at the end of any calendar month during the term of this Agreement, you are and have been for three (3) consecutive full calendar months then ending, or for thirty percent (30%) or more of the normal working days during the twelve (12) consecutive full calendar months then ending, unable due to mental or physical illness or injury to perform duties under this Agreement in the normal and regular manner, this Agreement may be terminated by the Board of Directors; however, the salary provisions of this Agreement shall continue for twelve (12) months thereafter. Termination on Death. If you die during the term of this Agreement, the salary provisions of this Agreement shall continue for twelve (12) months thereafter to the benefit of your estate. The Company, will have the option of purchasing a life insurance policy on you in an amount comparable to your annual salary and payable to your estate. Proprietary Information Agreement, Insider Trading Policy and Code of Ethics. You will be required to sign and abide by the terms of the attached proprietary information agreement, insider trading policy and code of ethics, which are incorporated into this agreement by reference as Exhibit A, Exhibit B and Exhibit C, respectively. Page 2 of 9 Termination for Good Cause. Your employment under this Agreement may be terminated immediately by the Company for "good cause" upon ten (10) days advance written notice specifying the reasons for such termination. You shall have ten (10) days from the date such notice is given in which to cure such cause (if and to the extent such cause is capable of being cured). Absent such cure within the cure period, your employment shall be deemed terminated for good cause on the expiration of such ten (10) day period. The term "good cause" is defined as any one or more of the following occurrences: (I) Negligence or a material violation by you of any duty or any other material or repetitive misconduct or failure on your part; (II) Your conviction by, or entry of a plea of guilty or nolo contendere in, a court of competent and final jurisdiction for any crime punishable by imprisonment in the jurisdiction involved; (III) Your commission of an act of fraud, prior to or subsequent to the date of this Agreement, upon the Company; or (IV) Failure to execute and deliver to the Company any document(s) as requested by the Board of Directors and which are required by all employees of the Company. Resignation for Good Reason. You have the right to terminate your employment under this Agreement in the event (i) there is a reduction in, or failure to pay, your salary or any other payments or benefits due to you hereunder, after receipt by the Company of written notice from you giving the Company at least 30 days in which to cure such reduction or failure; (ii) the Company commits a material breach of any of the terms of this Agreement, provided that with respect to any breach capable of being cured, only if such breach is not cured within 30 days of receipt by the Company of written notice from you; (iii) the Company has filed for bankruptcy or is adjudged insolvent or has failed to make payments to creditors when due; (iv) you are required to perform services under this Agreement at any location which is more than seventy-five (75) miles from Fallbrook, CA. (provided that you may from time to time be required to travel temporarily to other locations); or (v) a material change to your title or responsibilities as described in this Agreement. Any such termination shall be referred to as a resignation for good reason. Nothing in this section or the availability of termination by the Company for good cause or your resignation for good reason is intended to alter the at-will status of employment with the Company. Either you or the Company may terminate the employment relationship at any time, with or without cause. Your Consideration for Severance. As consideration for receiving severance pay and benefits provided hereunder, during the period that you are receiving severance pay or benefits hereunder, you shall: Page 3 of 9 (I) Consulting. Be available, on a reasonable basis, in person and/or by telephone, as a consultant to the Company on projects or tasks as defined by the Board of Directors or its designated representative. (II) Non-Compete. For the period commencing on the date of this Agreement and ending upon the date of the last severance payment hereunder, you shall not without written permission from the Board of Directors, directly or indirectly, as employee, agent, consultant, stockholder, director, partner or in any other individual or representative capacity, own, operate, manage, control, engage in, invest in or participate in any manner in, act as a consultant or advisor to, render services for (alone or in association with any person, firm, corporation or entity), or otherwise assist, for compensation or otherwise, any person or entity that engages in or owns, invests in, operates, manages or controls any venture or enterprise that is a direct competitor of the Company; provided, however, that nothing contained in this Agreement shall be construed to prevent you from investing in the stock of any competing corporation listed on a national securities exchange or traded in the over-the-counter market, but only if: (1) you are not involved in the business of said corporation, and (2) if you and your affiliates collectively do not own more than an aggregate of 5% of the stock of such corporation, and (3) such investment does not violate the Company's Insider Trading Policy. (III) Non-Solicitation. Not interfere with or disrupt or attempt to disrupt the Company's business relationship with its customers or suppliers or solicit any of the employees of the Company to leave the employment of the Company. (IV) Severance Agreement. Enter into a severance agreement and general release with the Company within 90 (ninety) days from date of termination notice. Arbitration. You and the Company agree that any dispute arising under or in connection with this Agreement, including any dispute involving your employment or the termination of that employment (whether based on contract, tort or statutory duty or prohibition, including any prohibition against discrimination or harassment), shall be submitted to binding arbitration in accordance with California Code of Civil Procedure ss.ss. 1280 - 1294.2 before a single neutral arbitrator. You and the Company understand that each is waiving its rights to a jury trial. The party demanding arbitration shall submit a written claim to the other party setting out the basis of the claim. Demands shall be presented in the same manner as notices under this Agreement. You and the Company will attempt to reach agreement on an arbitrator within ten (10) business days of delivery of the arbitration demand. After this ten (10) business day period, either you or the Company may request a list of seven professional arbitrators from the American Arbitration Association or another mutually agreed service. You and the Company will alternately strike names until only one person remains and that person shall be designated as the arbitrator. The party demanding arbitration shall make the first strike. The arbitration shall take place in or within five miles of San Diego, California, at a time and place determined by the arbitrator. Each party shall be entitled to discovery of essential documents and witnesses and to deposition discovery, as determined by the arbitrator, taking into account the mutual desire to have a fast, cost-effective, dispute-resolution mechanism. You and the Company will attempt to cooperate in the discovery process before seeking the determination of the arbitrator. Except as otherwise determined by the arbitrator, you and the Company will each be limited to no more than three (3) depositions. The arbitrator shall have the powers provided in California Code of Civil Procedure ss.ss. 1282.2 - 1284.2 and may provide all appropriate remedies at law or equity. Page 4 of 9 The arbitrator will have the authority to entertain a motion to dismiss and/or a motion for summary judgment by either you or the Company and shall apply the standards governing such motions under California law, unless the standards of another judicial forum supercede California law. The Arbitrator shall render, within sixty (60) days of the completion of the arbitration, an award and a written, reasoned opinion in support of that award. Judgment on the award may be entered in any court having jurisdiction. The Company will pay the arbitrator's expenses and fees, all meeting room charges and any other expenses that would not have been incurred if the case were litigated in the judicial forum having jurisdiction over it. Unless otherwise ordered by the arbitrator pursuant to law or this Agreement, each party shall pay its own attorney fees, witness fees and other expenses incurred by the party for his or her own benefit. Your share of any filing, administration or similar fee shall be no more than the then current filing or other applicable fee in California Superior Court or, if applicable, other appropriate tribunal with jurisdiction. Modification and Waiver of Breach. No waiver or modification of this Agreement shall be binding unless it is in writing signed by you and the Company. No waiver of a breach of this Agreement shall be deemed to constitute a waiver of a future breach, whether of a similar or dissimilar nature. Notices. All notices and other communications required or permitted under this Agreement shall be in writing, served personally on, or mailed by nationally recognized express mail courier. Notices and other communications served by express mail courier shall be deemed given 72 hours after deposit with such express mail courier duly addressed to whom such notice or communication is to be given. In the case of (a) the Company, 13520 Evening Creek Drive, Suite 130, San Diego, California 92128, Attention: CEO, or (b) to you, at the address of record provided by you to the Company. Either party may change their address for purposes of this Section by giving written notice, in the manner stated herein. You agree to promptly update the Company with any changes to your contact information. Counterparts and Facsimile Signatures. This instrument may be executed in counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same Agreement. The parties agree that a signature delivered by facsimile transmission will be treated in all respects as having the same effect as an original signature. Construction of Agreement. This Agreement shall be construed in accordance with, and governed by, the internal laws of the State of California and both parties irrevocably agree to the exclusive jurisdiction and venue of the state and local courts of San Diego County, California. Page 5 of 9 Legal Fees. If any legal action, arbitration or other proceeding is brought for the enforcement of this Agreement, or because of any alleged dispute, breach, default or misrepresentation in connection with this Agreement, the successful or prevailing party shall be entitled to recover reasonable attorneys' fees and other costs it incurred in that action or proceeding, in addition to any other relief to which it may be entitled. Severability Clause. If any provision of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of the Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of this Agreement are declared to be severable. Complete Agreement. This instrument constitutes and contains the entire agreement and understanding concerning your employment and the other subject matters addressed in this Agreement between you and the Company, and supersedes and replaces all prior negotiations and all agreements proposed or otherwise, whether written or oral, concerning the subject matters hereof, including but not limited to that certain Employment Contract, dated as of January 1 2003, between you and World Waste of America, Inc. This is an integrated document. Third Party Beneficiaries. This Agreement does not create, and shall not be construed as creating, any rights enforceable by any person not a party to this Agreement, except as expressly contemplated herein. Non-transferability of Interest. None of your rights to receive any form of compensation payable pursuant to this Agreement shall be assignable or transferable except through a testamentary disposition or by the laws of descent and distribution upon your death. Any attempted assignment, transfer, conveyance, or other disposition (other than as set forth herein) of any interest in your rights to receive any form of compensation to be made by the Company pursuant to this Agreement shall be void. Other Agreements. A condition of your continued employment with the Company is a signed Confidentiality, Non-Disclosure and Employee Invention Agreement. Your failure to complete this document in a timely manner may result in your termination for good cause. You also understand and agree that, except as expressly provided in this Agreement, you are subject to all of the Company's general business and human resources polices and procedures as they presently exist or as they may exist in the future and failure to abide by such provisions may result in your termination for good cause, provided, however, that the at-will status of employment may only be changed as provided below. At-Will. By signing this letter, you understand and agree that your employment with the Company is "at-will." Your employment with the Company is voluntarily entered into and we recognize you are free to resign at any time. Similarly, it is recognized that the Company is free to conclude an employment relationship at any time we feel is appropriate. While other terms of your employment may change with or without notice, this at-will relationship can be changed only in a written agreement signed by you and an authorized officer of the Company. Page 6 of 9 Sincerely, ______________________________________ Thomas L. Collins, CEO Acceptance: ______________________________________ Steve Racoosin Date: ________________________________ Page 7 of 9 AGREEMENT OF AT WILL EMPLOYMENT I understand and agree that my employment with the Company is on an at-will basis. This means that either the Company or I or may terminate the employment relationship at any time at its or his sole discretion without cause. I further understand that while other personnel policies, procedures, and benefits of the Company may change from time to time in the Company's discretion, this at-will employment relationship can only be changed by an express written employment agreement signed by me and a duly authorized officer of the Company. ______________________________________ Employee Name (PRINT) ______________________________________ Employee Signature Date: ________________________________ Page 8 of 9 Schedule I Activities Prohibited Without CEO Approval 1. Borrowing or obtaining credit, other than trade credit in the ordinary course of business, in excess of $10,000, or executing any guaranty, other than trade guarantees in the ordinary course of business, in excess of $10,000; 2. Expending funds for a major piece of capital equipment in excess of Ten Thousand Dollars ($10,000); 3. Selling or transferring capital assets exceeding Ten Thousand Dollars ($10,000) in market value; 4. Executing any contract or making any commitment for the purchase or sale of the Company's products or facilities in an amount exceeding Ten Thousand Dollars ($10,000); or outside the ordinary course of business; 5. Executing any lease of real or personal property providing for an annual rent in excess of Ten Thousand Dollars ($10,000), or term greater than one (1) year; 6. Exercising any discretionary authority or control over the management of any employee welfare or pension benefit plan or over the disposition of the assets of any such plan; 7. Hiring or firing any employee with annual compensation exceeding Fifty Thousand Dollars ($50,000). Page 9 of 9 EX-10.7 9 v017490_ex10-7.txt Exhibit 10.7 April 28, 2005 David Rane 2402 Calle San Clemente Encinitas, CA. 92024 Re: Employment Agreement Dear: This employment agreement (this "Agreement") sets forth the terms and conditions of your employment with World Waste Technologies, Inc. (the "Company"). Unless otherwise set forth in this Agreement, you acknowledge that your employment with the Company is "at-will". Duties: You agree to serve the Company as its Chief Financial Officer. You agree to perform such duties as are customarily performed by chief financial officers of companies similar to the Company and such other duties as are specified by the Board of Directors. Notwithstanding the foregoing, you shall not take any of the actions set forth on Schedule I hereto without obtaining the prior written approval of the Board of Directors. So long as you remain employed by the Company, you will devote full time to, and use your best efforts to advance, the business and welfare of the Company. You shall report directly to the Chief Executive Officer. Status: Exempt. Effective Date: April 28, 2005. Base Salary: $224,000 per year payable biweekly and subject to payroll deductions as may be necessary or customary in respect of the Company's salaried employees in general. Bonus: You shall be entitled to bonuses as deemed appropriate by the Board of Directors. You shall also be entitled to participate in all annual bonus, incentive, savings and retirement plans, practices, policies and programs applicable generally to the Company's executive officers, in each case at the discretion of the Board of Directors. Page 1 of 9 Vacation: You shall be entitled to three (3) weeks paid vacation during each 12-month period that you are employed by the Company pursuant to the terms of this Agreement. Vacation shall accrue biweekly on a pro-rata basis. Accrued vacation cannot exceed six (6) weeks. Vacation shall not accrue in excess of six (6) weeks. Any unused pro-rata portion of your annual paid vacation shall be paid to you upon termination of employment for any reason. It is understood that as of the date of this Agreement you have one (1) week accrued. Severance: Upon the termination of this Agreement by the Company for other than "good cause", or upon your resignation from the Company for "good reason", and subject to you entering into a severance agreement as per the terms and conditions hereof: the Company shall, for a period of twelve (12) months, (a) pay to you in monthly installments, as severance pay, your full salary that you were receiving as of the time of termination of this Agreement, and (b) provide you the same level of benefits you were receiving as of the time of termination of this Agreement, unless otherwise required by law. Benefits: You shall be entitled to such benefits provided by the Company to its other executive officers. Equity: You were previously granted two Stock Option Grants for a total of 500,000 shares of common stock. The terms of the foregoing stock options shall remain in effect. Termination Because of Disability. If, at the end of any calendar month during the term of this Agreement, you are and have been for three (3) consecutive full calendar months then ending, or for thirty percent (30%) or more of the normal working days during the twelve (12) consecutive full calendar months then ending, unable due to mental or physical illness or injury to perform duties under this Agreement in the normal and regular manner, this Agreement may be terminated by the Board of Directors; however, the salary provisions of this Agreement shall continue for twelve (12) months thereafter. Termination on Death. If you die during the term of this Agreement, the salary provisions of this Agreement shall continue for twelve (12) months thereafter to the benefit of your estate. The Company, will have the option of purchasing a life insurance policy on you in an amount comparable to your annual salary and payable to your estate. Proprietary Information Agreement, Insider Trading Policy and Code of Ethics. You will be required to sign and abide by the terms of the attached proprietary information agreement, insider trading policy and code of ethics, which are incorporated into this agreement by reference as Exhibit A, Exhibit B and Exhibit C, respectively. Termination for Good Cause. Your employment under this Agreement may be terminated immediately by the Company for "good cause" upon ten (10) days advance written notice specifying the reasons for such termination. You shall have ten (10) days from the date such notice is given in which to cure such cause (if and to the extent such cause is capable of being cured). Absent such cure within the cure period, your employment shall be deemed terminated for good cause on the expiration of such ten (10) day period. The term "good cause" is defined as any one or more of the following occurrences: Page 2 of 9 (I) Negligence or a material violation by you of any duty or any other material or repetitive misconduct or failure on your part; (II) Your conviction by, or entry of a plea of guilty or nolo contendere in, a court of competent and final jurisdiction for any crime punishable by imprisonment in the jurisdiction involved; (III) Your commission of an act of fraud, prior to or subsequent to the date of this Agreement, upon the Company; or (IV) Failure to execute and deliver to the Company any document(s) as requested by the Board of Directors and which are required by all employees of the Company. Resignation for Good Reason. You have the right to terminate your employment under this Agreement in the event (i) there is a reduction in, or failure to pay, your salary or any other payments or benefits due to you hereunder, after receipt by the Company of written notice from you giving the Company at least 30 days in which to cure such reduction or failure; (ii) the Company commits a material breach of any of the terms of this Agreement, provided that with respect to any breach capable of being cured, only if such breach is not cured within 30 days of receipt by the Company of written notice from you; (iii) the Company has filed for bankruptcy or is adjudged insolvent or has failed to make payments to creditors when due; (iv) you are required to perform services under this Agreement at a location which is more than seventy-five (75) miles from your current principal work site (provided that you may from time to time be required to travel temporarily to other locations); or (v) a material change in your title or responsibilities as described in this Agreement. Any such termination shall be referred to as a resignation for good reason. Nothing in this section or the availability of termination by the Company for good cause or your resignation for good reason is intended to alter the at-will status of employment with the Company. Either you or the Company may terminate the employment relationship at any time, with or without cause. Your Consideration for Severance. As consideration for receiving severance pay and benefits provided hereunder, during the period that you are receiving severance pay or benefits hereunder, you shall: (I) Consulting. Be available, on a reasonable basis, in person and/or by telephone, as a consultant to the Company on projects or tasks as defined by the Board of Directors or its designated representative. (II) Non-Compete. For the period commencing on the date of this Agreement and ending upon the date of the last severance payment hereunder, you shall not without written permission from the Board of Directors, directly or indirectly, as employee, agent, consultant, stockholder, director, partner or in any other individual or representative capacity, own, operate, manage, control, engage in, invest in or participate in any manner in, act as a consultant or advisor to, render services for (alone or in association with any person, firm, corporation or entity), or otherwise assist, for compensation or otherwise, any person or entity that engages in or owns, invests in, operates, manages or controls any venture or enterprise that is a direct competitor of the Company; provided, however, that nothing contained in this Agreement shall be construed to prevent you from investing in the stock of any competing corporation listed on a national securities exchange or traded in the over-the-counter market, but only if: (1) you are not involved in the business of said corporation, and (2) if you and your affiliates collectively do not own more than an aggregate of 5% of the stock of such corporation, and (3) such investment does not violate the Company's Insider Trading Policy. Page 3 of 9 (III) Non-Solicitation. Not interfere with or disrupt or attempt to disrupt the Company's business relationship with its customers or suppliers or solicit any of the employees of the Company to leave the employment of the Company. (IV) Severance Agreement. Enter into a severance agreement and general release with the Company within 90 (ninety) days from date of termination notice. Arbitration. You and the Company agree that any dispute arising under or in connection with this Agreement, including any dispute involving your employment or the termination of that employment (whether based on contract, tort or statutory duty or prohibition, including any prohibition against discrimination or harassment), shall be submitted to binding arbitration in accordance with California Code of Civil Procedure ss.ss. 1280 - 1294.2 before a single neutral arbitrator. You and the Company understand that each is waiving its rights to a jury trial. The party demanding arbitration shall submit a written claim to the other party setting out the basis of the claim. Demands shall be presented in the same manner as notices under this Agreement. You and the Company will attempt to reach agreement on an arbitrator within ten (10) business days of delivery of the arbitration demand. After this ten (10) business day period, either you or the Company may request a list of seven professional arbitrators from the American Arbitration Association or another mutually agreed service. You and the Company will alternately strike names until only one person remains and that person shall be designated as the arbitrator. The party demanding arbitration shall make the first strike. The arbitration shall take place in or within five miles of San Diego, California, at a time and place determined by the arbitrator. Each party shall be entitled to discovery of essential documents and witnesses and to deposition discovery, as determined by the arbitrator, taking into account the mutual desire to have a fast, cost-effective, dispute-resolution mechanism. You and the Company will attempt to cooperate in the discovery process before seeking the determination of the arbitrator. Except as otherwise determined by the arbitrator, you and the Company will each be limited to no more than three (3) depositions. The arbitrator shall have the powers provided in California Code of Civil Procedure ss.ss. 1282.2 - 1284.2 and may provide all appropriate remedies at law or equity. Page 4 of 9 The arbitrator will have the authority to entertain a motion to dismiss and/or a motion for summary judgment by either you or the Company and shall apply the standards governing such motions under California law, unless the standards of another judicial forum supercede California law. The Arbitrator shall render, within sixty (60) days of the completion of the arbitration, an award and a written, reasoned opinion in support of that award. Judgment on the award may be entered in any court having jurisdiction. The Company will pay the arbitrator's expenses and fees, all meeting room charges and any other expenses that would not have been incurred if the case were litigated in the judicial forum having jurisdiction over it. Unless otherwise ordered by the arbitrator pursuant to law or this Agreement, each party shall pay its own attorney fees, witness fees and other expenses incurred by the party for his or her own benefit. Your share of any filing, administration or similar fee shall be no more than the then current filing or other applicable fee in California Superior Court or, if applicable, other appropriate tribunal with jurisdiction. Modification and Waiver of Breach. No waiver or modification of this Agreement shall be binding unless it is in writing signed by you and the Company. No waiver of a breach of this Agreement shall be deemed to constitute a waiver of a future breach, whether of a similar or dissimilar nature. Notices. All notices and other communications required or permitted under this Agreement shall be in writing, served personally on, or mailed by nationally recognized express mail courier. Notices and other communications served by express mail courier shall be deemed given 72 hours after deposit with such express mail courier duly addressed to whom such notice or communication is to be given. In the case of (a) the Company, 13520 Evening Creek Drive, Suite 130, San Diego, California 92128, Attention: CEO, or (b) to you, at the address of record provided by you to the Company. Either party may change their address for purposes of this Section by giving written notice, in the manner stated herein. You agree to promptly update the Company with any changes to your contact information. Counterparts and Facsimile Signatures. This instrument may be executed in counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same Agreement. The parties agree that a signature delivered by facsimile transmission will be treated in all respects as having the same effect as an original signature. Construction of Agreement. This Agreement shall be construed in accordance with, and governed by, the internal laws of the State of California and both parties irrevocably agree to the exclusive jurisdiction and venue of the state and local courts of San Diego County, California. Legal Fees. If any legal action, arbitration or other proceeding is brought for the enforcement of this Agreement, or because of any alleged dispute, breach, default or misrepresentation in connection with this Agreement, the successful or prevailing party shall be entitled to recover reasonable attorneys' fees and other costs it incurred in that action or proceeding, in addition to any other relief to which it may be entitled. Page 5 of 9 Severability Clause. If any provision of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of the Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of this Agreement are declared to be severable. Complete Agreement. This instrument constitutes and contains the entire agreement and understanding concerning your employment and the other subject matters addressed in this Agreement between you and the Company, and supersedes and replaces all prior negotiations and all agreements proposed or otherwise, whether written or oral, concerning the subject matters hereof, including but not limited to that certain Employment Letter, dated September 27, 2000, between you and the Company. This is an integrated document. Third Party Beneficiaries. This Agreement does not create, and shall not be construed as creating, any rights enforceable by any person not a party to this Agreement, except as expressly contemplated herein. Non-transferability of Interest. None of your rights to receive any form of compensation payable pursuant to this Agreement shall be assignable or transferable except through a testamentary disposition or by the laws of descent and distribution upon your death. Any attempted assignment, transfer, conveyance, or other disposition (other than as set forth herein) of any interest in your rights to receive any form of compensation to be made by the Company pursuant to this Agreement shall be void. Other Agreements. A condition of your continued employment with the Company is a signed Confidentiality, Non-Disclosure and Employee Invention Agreement. Your failure to complete this document in a timely manner may result in your termination for good cause. You also understand and agree that, except as expressly provided in this Agreement, you are subject to all of the Company's general business and human resources polices and procedures as they presently exist or as they may exist in the future and failure to abide by such provisions may result in your termination for good cause, provided, however, that the at-will status of employment may only be changed as provided below. At-Will. By signing this letter, you understand and agree that your employment with the Company is "at-will." Your employment with the Company is voluntarily entered into and we recognize you are free to resign at any time. Similarly, it is recognized that the Company is free to conclude an employment relationship at any time we feel is appropriate. While other terms of your employment may change with or without notice, this at-will relationship can be changed only in a written agreement signed by you and an authorized officer of the Company. Sincerely, ______________________________________ David Rane Page 6 of 9 Acceptance: ______________________________________ Thomas L. Collins, CEO Date: ________________________________ Page 7 of 9 AGREEMENT OF AT WILL EMPLOYMENT I understand and agree that my employment with the Company is on an at-will basis. This means that either the Company or I or may terminate the employment relationship at any time at its or his sole discretion without cause. I further understand that while other personnel policies, procedures, and benefits of the Company may change from time to time in the Company's discretion, this at-will employment relationship can only be changed by an express written employment agreement signed by me and a duly authorized officer of the Company. ______________________________________ Employee Name (PRINT) ______________________________________ Employee Signature Date: ________________________________ Page 8 of 9 Schedule I Activities Prohibited Without Board of Director Approval 1. Borrowing or obtaining credit, other than trade credit in the ordinary course of business, or executing any guaranty, other than trade guarantees in the ordinary course of business; 2. Expending funds for major piece of capital equipment in excess of One Million Dollars ($1,000,000); 3. Selling or transferring capital assets exceeding One Million Dollars ($1,000,000) in market value; 4. Executing any contract or making any commitment for the purchase or sale of the Company's products or facilities in an amount exceeding One Million Dollars ($1,000,000); or outside the ordinary course of business; 5. Executing any lease of real or personal property providing for an annual rent in excess of One Hundred Thousand Dollars ($100,000), or term greater than five (5) years; 6. Exercising any discretionary authority or control over the management of any employee welfare or pension benefit plan or over the disposition of the assets of any such plan; 7. Hiring or firing any employee with annual compensation exceeding One Hundred Thousand Dollars ($100,000). Page 9 of 9 EX-10.8 10 v017490_ex10-8.txt Exhibit 10.8 13520 Evening Creek Dr. North, Suite 130, San Diego, CA 92128 main: 858.391.3400 fax: 858.486.3352 [LOGO] WORLD WASTE TECHNOLOGIES, INC. April 28, 2005 Mr. John Pimentel 168 East Creek Drive Menlo Park, CA. 94025 Dear John: World Waste Technologies, Inc. (the "Company") desires to engage John Pimentel ("Pimentel") as its Advisor with respect to various matters involving the business of the Company (the "Advisory Services"). We look forward to working with you, and have set forth below the agreed upon terms of this Agreement. 1. Scope of Engagement As discussed, Pimentel will undertake certain advisory services on behalf of the Company, including: (a) Providing strategic advice and analysis on business development, capital markets, and corporate strategy issues. (b) Providing introductions to potential strategic partners, customers, management and board members, and other value-added relationships. Preparing information and presentations for use by the Company and representing the Company when appropriate. (c) Any information prepared by Pimentel under this section 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. 2. Fees and Expenses. For services provided hereunder, the Company will pay to Pimentel the following: (a) A monthly advisory fee (the "Monthly Fee") in the amount of $15,000 per month. The Monthly Fee shall be paid by bank transfer to the account of Pimentel on the first day of each month. The Monthly Fee amount shall continue to be paid by the Company for as long as Pimentel provides assistance and advisory services to the company (the "Advisory Services") and will only discontinue at the end of the term (December 31, 2007), as described in Section 6. (b) Pimentel'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 Pimentel, 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 Pimentel does not assume responsibility for and may rely, without independent verification, on the accuracy and completeness of any such information. The Company warrants to Pimentel that to the best if its knowledge all information concerning the Company furnished to Pimentel 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 Pimentel all necessary or appropriate information for use in your engagement and the Company agrees that any information or advice rendered by Pimentel or any of his affiliates or representatives in connection with this engagement is for the confidential use of the Company 4. Certain Acknowledgements. The Company acknowledges that Pimentel has been retained by the Company, and that the Company's engagement of Pimentel 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 Pimentel or our affiliates or their respective directors, officers, agents and employees. The Company also acknowledges that Pimentel 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 Pimentel may make investments in or act as advisor to companies that later become strategic partners or customers of the Company. Pimentel shall disclose to the Company in advance of any potential or actual conflicts of interest Pimentel has or may have in connection with any party to any transaction which may be contemplated by this agreement. The Company acknowledges that Pimentel may, from time to time, effect transactions for his own account or the account of his clients; and may hold positions in securities of other companies, which may become a lender or investor for the purpose of this agreement. Pimentel 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 Pimentel'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 Pimentel to the Company shall rest with the Company, and Pimentel shall not have the authority to bind the Company to any obligation or commitment other than those enumerated herein. 5. Indemnity. Pimentel and the Company have entered into a separate letter agreement (Exhibit A), dated the date hereof, providing for the indemnification of Pimentel by the Company in connection with Pimentel's engagement hereunder, the terms of which are incorporated into this agreement in their entirety. 6. Term of Engagement. Pimentel's engagement shall commence on the date hereof and shall continue until December 31, 2007 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, 2007 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, Pimentel 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. For the term of this Agreement Pimentel 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. 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, Pimentel and their respective successors and assigns. Neither this Agreement nor any duties or obligations under this Agreement may be assigned by Pimentel without the prior written consent of the Company. The Company and Pimentel 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 Pimentel 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 Pimentel also hereby submit to the jurisdiction of the courts of the State of California, San Diego 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 Pimentel'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 offer 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. WORLD WASTE TECHNOLOGIES, INC. By: ____________________________________________ Thomas L. Collins, CEO Date: __________________________________________ Accepted and agreed to as of the date set forth above: By: ______________________________ John Pimentel Date: ____________________________ Exhibit A INDEMNIFICATION AGREEMENT In consideration for the agreement of John Pimentel ("Pimentel") 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 Pimentel, 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) (Pimentel 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 Pimentel 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 Pimentel 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 Pimentel'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 Pimentel's services. John Pimentel: ____________________________________________ Date: _________ World Waste Technologies, Inc.: ____________________________ Date: _________ EX-10.9 11 v017490_ex10-9.txt Exhibit 10.9 [LOGO] CAGAN - MCAFEE CAPITAL PARTNERS April 28, 2005 Mr. Thomas L. Collins, CEO World Waste Technologies, Inc. 13520 Evening Creek Drive, Suite 130 San Diego, CA 92128 Dear Tom, 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 CAGAN 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 Cagan 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, John Pimentel 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 Clara 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. CAGAN MCAFEE CAPITAL PARTNERS, LLC By: _____________________________ Eric A. McAfee Managing Director Date: ____________________________ Accepted and agreed to as of the date set forth above: WORLD WASTE TECHNOLOGIES, INC. By: ______________________________ Thomas L. Collins Chief Executive Officer Date: ____________________________ Page 5 of 6 Exhibit A INDEMNIFICATION AGREEMENT In consideration for the agreement of Cagan 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. Cagan McAfee Capital Partners, LLC.: ___________________________ Date: _________ World Waste Technologies, Inc.: ________________________________ Date: _________ EX-10.10 12 v017490_ex10-10.txt Exhibit 10.10 Chadbourn Securities Member NASD and SIPC April 29, 2005 Mr. Thomas L. Collins Chief Executive Officer WORLD WASTE TECHNOLOGIES, INC. 13520 Evening Creek Drive, Suite 130 San Diego, CA 92128 Re : Addendum to Chadbourn Engagement Agreement dated April 28, 2005 Dear Tom, 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 Harris Williams Advisors, Inc. (HWA) 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 Trellus, 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: _____________________________ Laird Q. Cagan Managing Director Date: ____________________________ 10600 North De Anza Blvd, Suite 250 o Cupertino, CA 95014 o (408) 873-0400 Accepted and agreed to as of the date first set forth above: WORLD WASTE TECHNOLOGIES, INC. By: ______________________________ Thomas L. Collins Chief Executive Officer Date: ____________________________ 2 Chadbourn Securities Member NASD and SIPC April 28, 2005 Mr. Thomas L. Collins Chief Executive Officer WORLD WASTE TECHNOLOGIES, INC. 13520 Evening Creek Drive, Suite 130 San Diego, CA 92128 Re : Engagement Agreement Dear Tom, 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. 10600 North De Anza Blvd, Suite 250 o Cupertino, CA 95014 o (408) 873-0400 (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. 2 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. 3 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 Clara 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: _____________________________ Laird Q. Cagan Managing Director 4 Date: ____________________________ Accepted and agreed to as of the date first set forth above: WORLD WASTE TECHNOLOGIES, INC. By: ______________________________ Thomas L. Collins 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. 9 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: _________ 10 -----END PRIVACY-ENHANCED MESSAGE-----