Exhibit 10.15
PATENT PURCHASE AGREEMENT
This Patent Purchase Agreement (this “Agreement”), between World Waste
Technologies, Inc., a California corporation (the “Seller”), and CleanTech
Biofuels, Inc., a Delaware corporation (the “Buyer”), is entered into as of
October 22, 2008 (the “Effective Date”). The Seller and the Buyer together may
be referred to herein as the “Parties” and each of them may be referred to
herein as a “Party.”
RECITALS
WHEREAS, the Seller owns U.S. Patent No. 6,306,248 (the “Patent”); and
WHEREAS, the Buyer wishes to buy the Patent and certain other associated rights,
and the Seller is willing to sell the Patent and certain associated rights, all
in accordance with the terms of this Agreement;
NOW THEREFORE, in consideration of the foregoing recitals and of the following
covenants, the sufficiency of which are hereby acknowledged, the Seller and the
Buyer hereby agree as follows:

1.   Sale of Patent

1.1. Purchase and Sale of Patent. At the Closing (as defined below), the Seller
hereby agrees to sell, transfer and deliver to the Buyer, and the Buyer hereby
agrees to purchase and pay for, all of the Seller’s right, title and interest in
and to the Patent, including (i) all rights, claims, credits, judgments, choses
in action, or rights for past, present or future infringement against third
parties relating to the Patent, (ii) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), improvements thereto, and
patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (iii) all trademarks, service marks, trade dress, logos,
and trade names (whether or not registered), together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill
associated therewith, and all applications, registrations, and renewals in
connection therewith, (iv) all copyrightable works, all copyrights, and all
applications, registrations, and renewals in connections therewith, (v) all
trade secrets and confidential business information (including research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, and
specifications), (vi) all computer software (including data and related
documentation), (vii) all other proprietary rights, and (viii) all copies and
tangible embodiments thereof (in whatever form or medium), in the case of each
of (i) through (viii), if and solely to the extent that they (1) directly relate
to, directly describe or directly involve the technology described in the
Patent, (2) are, to the Seller’s Knowledge (as defined below), in the actual
possession of the Seller, and (3) do not violate any of the Ancillary Agreements
(as defined below). All of the foregoing are referred to herein as the “Acquired
Patent.” The Seller makes no representations or warranties as to what, if
anything, is in its possession with respect to the foregoing, other than the
actual Patent. The term “Seller’s Knowledge” means the actual knowledge of
Seller’s chief executive officer or chief operating officer, without independent
inquiry or investigation.

 

 

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1.2. Consideration. At the Closing, the Buyer shall pay the Seller a total of
$600,000.00 for the Acquired Patent. The foregoing purchase price shall be paid
on the Closing Date as follows: (i) $150,000.00 in the form of cash in
immediately available funds (the “Initial Payment”), and (ii) $450,000.00 in the
form of a Note for a term of nine months bearing interest at the rate of 6.0%
(the “Note”) to be issued on the Closing Date in the form of Exhibit A attached
hereto. The Note shall be secured by a pledge of the Patent pursuant to a
Security Agreement in the form of Exhibit B attached hereto (the “Security
Agreement”). In addition, in consideration for the Seller entering into this
Agreement, Buyer shall, on the Closing Date, issue to Seller (i) an immediately
exercisable warrant to purchase up to 900,000 shares of the Common Stock of the
Buyer at a price equal to $0.45 per share (the “Warrant”) and (ii) a contingent
warrant to purchase up to an additional 900,000 shares of the Common Stock of
the Buyer at a price equal to $0.45 per share (the “Contingent Warrant”), in the
respective forms of Exhibit C and Exhibit D attached hereto.
1.3. Assignment of Litigation Rights. The Seller may currently have the right to
initiate legal proceedings against third parties and to collect damages and
other payments relating to the Acquired Patent, including claims for patent
infringement (any such possible rights and actions relating to the Acquired
Patent that are assigned hereunder are referred to as the “Potential Claims”).
Effective as of the Closing, the Seller hereby assigns and transfers any and all
rights it currently has or hereafter may acquire (i) to initiate legal
proceedings against any party related to the Potential Claims, if any, and
(ii) to collect and keep for its own benefit all damages or other payments that
it may collect from any party based on any Potential Claims. Nothing herein,
however, shall grant the Buyer any rights that the Seller currently has or may
hereafter acquire to initiate and pursue legal proceedings based on any patents,
patent applications or other intellectual property owned by the Seller other
than the Acquired Patent, all of which are expressly retained by the Seller.
1.4. Status of Various Agreements. The Buyer understands that the Seller
initially acquired the Patent from the University of Alabama in Huntsville
(“UAH”) pursuant to a Patent Assignment Agreement, a copy of which is attached
hereto as Exhibit E (the “UAH Patent Assignment”). The Buyer acknowledges that
it is acquiring the Patent hereunder subject in all respects to the UAH Patent
Assignment. The Buyer further understands that the Seller had sub-licensed the
Patent pursuant to a Revised Amended and Restated Technology License Agreement
between the Seller and Bio-Products International, Inc. (“BPI”), dated
August 19, 2005, a copy of which is attached hereto as Exhibit F (the “BPI
License Agreement”). Although the Seller believes that the BPI License Agreement
is no longer effective, the Buyer acknowledges that the Seller is making no
representations or warranties with respect to the status of such agreement, and
that if such agreement is in effect, the Buyer is acquiring the Acquired Patent
subject in all respects thereto. The Buyer further acknowledges that the use of
the Acquired Patent is subject to a license agreement between UAH and BPI (the
“Main License Agreement”). In this regard, the Buyer acknowledges that it is
acquiring the Acquired Patent subject to an exclusive worldwide license and
subject to any other licenses and sub-licenses that the holder of such license
may have granted.

 

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1.5. Closing. The closing of the transactions contemplated hereby (the
“Closing”) shall take place at the offices of TroyGould PC, 1801 Century Park
East, Los Angeles, California, on the Effective Date (the “Closing Date”).
1.6. The Seller’s Deliveries at Closing. On the Closing Date, the Seller shall
execute and deliver, or cause to be executed and delivered, to the Buyer, an
Assignment of Patent (the “Assignment of Patent”) in the form set forth on
Exhibit G hereto, the Security Agreement (duly executed by the Seller), and such
other instruments of conveyance and assignment as the Buyer and its counsel
shall deem reasonably necessary to vest in the Buyer the right, title and
interest in and to the Acquired Patent. Notwithstanding the foregoing, the
Seller shall not be obligated to deliver to the Buyer any documentation or other
materials relating to the Patent (as described in Section 1.1) unless and until
the Note has been repaid in full.
1.7. The Buyer’s Deliveries at Closing. On the Closing Date, the Buyer shall
deliver to the Seller the Closing Payment by wire transfer of immediately
available funds in accordance with the wire instructions set forth in Schedule 1
hereto, the Note, the Warrant, the Contingent Warrant and the Security Agreement
(each duly executed by the Buyer).

2.   Representations and Warranties.

2.1. Representations and Warranties of the Seller. The Seller hereby represents
and warrants to the Buyer as follows, which representations shall be true and
correct as of the date of this Agreement and as of the Closing Date:
2.1.1. Organization and Authorization. (i) The Seller is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, with all requisite corporate power and authority to enter into
this Agreement and the transactions contemplated hereby, (ii) the execution,
delivery and performance of this Agreement and the Assignment of Patent has been
authorized by all necessary corporate action of the Seller, (iii) each of this
Agreement and the Assignment of Patent is a valid, binding obligation of the
Seller, enforceable against the Seller in accordance with its terms except as
may be limited by applicable federal or state bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally;
and (iv) the CES Agreement (as defined below) is the full and complete agreement
on the subject matter thereof and there have been no extensions, modifications,
waivers, or amendments thereto. Notwithstanding the foregoing, the Buyer
acknowledges its understanding that the Seller has granted to CES (as defined
below) a series of extensions of time to conclude the consummation of the
transactions contemplated by the CES Agreement. Although the Seller believes
that it currently has no obligations to CES under the CES Agreement, the Seller
makes no representations or warranties to the Buyer with respect thereto and the
Buyer agrees to assume any risk associated therewith as provided for in
Section 2.2.2 hereof.

 

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2.1.2. Status of Patent. To the Seller’s actual knowledge, without independent
investigation or inquiry, (i) the Acquired Patent includes all of the
applications owned or controlled by the Seller on the date hereof that relate to
processes for cleaning and separating municipal solid waste into its component
parts or any equipment designed for such purposes, (ii) there are no other US or
foreign filings owned or controlled by the Seller filed prior to the date hereof
which claim rights in any technology that could be used to clean and separate
municipal solid waste into its component parts, and (iii) the Seller has
provided the Buyer with copies of all existing agreements relating to the right
to use all or part of the Acquired Patent that are in the Seller’s possession.
The Buyer expressly acknowledges that it understands that the holder of the
worldwide license to the Patent and other parties (i) may have foreign patent
applications pending relating to technology that could be used to clean and
separate municipal solid waste into its component parts, and (ii) may have
granted sublicenses to third parties with respect to the Patent.
2.1.3. Indemnification. The Seller shall indemnify, defend and hold harmless the
Buyer and each of its shareholders, directors, officers, employees, agents,
attorneys and representatives, from and against any and all Losses (as defined
below) which may be incurred or suffered by any such party and which arises out
of or results from any breach of any representation, warranty, covenant or
agreement of the Seller contained in this Agreement. “Losses” means any claim,
liability, obligation, loss, damage, assessment, penalty, judgment, settlement,
cost and expense, and including reasonable fees and disbursements incurred in
investigating, preparing, defending against or prosecuting any claim.
2.2. Representations and Warranties of the Buyer. The Buyer hereby represents
and warrants to the Seller as follows:
2.2.1. Organization and Authorization. (i) The Buyer is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, with all requisite corporate power and authority to enter into
this Agreement, the Security Agreement, the Note, the Warrant and the Contingent
Warrant (collectively, the “Transaction Documents”) and the transactions
contemplated hereby and thereby; (ii) the execution, delivery and performance of
each Transaction Document has been authorized by all necessary corporate action
of the Buyer; and (iii) each Transaction Document is a valid, binding obligation
of the Buyer, enforceable against the Buyer in accordance with its terms except
as may be limited by applicable federal or state bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally.

 

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2.2.2. CES Agreement. The Buyer hereby acknowledges that it is aware that the
Seller is party to an agreement (the “CES Agreement”) relating to the sale of
the Acquired Patent to Clean Earth Solutions, Inc. (“CES”). A copy of the CES
Agreement is attached hereto as Exhibit H. The Buyer further acknowledges that
it is fully aware of all of the circumstances surrounding the CES Agreement and
that in entering into this Agreement, it is assuming all risks associated with
any possible claims that might be made against it or the Seller by CES arising
under the CES Agreement with respect to the performance thereof after the date
of this Agreement.
2.2.3. Indemnification. The Buyer shall indemnify, defend and hold harmless the
Seller, the Seller’s current and future affiliates, and each of their respective
shareholders, directors, officers, employees, agents, attorneys and
representatives, from and against any and all Losses which may be incurred or
suffered by any such party and which arises out of or results from (i) any
breach of any representation, warranty, covenant or agreement of the Buyer
contained in any Transaction Document, (ii) any action taken by CES or any of
the License Parties (as defined below) (or any of their sub-licensees) against
the Seller as a result of the Seller entering into this Agreement, and (iii) any
use by the Buyer of the Acquired Patent following the Closing.
2.2.4. Capitalization; Warrants The capitalization of the Buyer is as set forth
on the Capitalization Schedule attached hereto as Schedule 2. The shares of
Common Stock issuable upon exercise of each of the Warrant and the Contingent
Warrant will, upon issuance, be validly issued and outstanding, fully paid and
non-assessable shares of the Buyer’s Common Stock, with no personal liability
attaching to the ownership thereof, free and clear of any liens whatsoever and
with no restrictions on the voting rights or transfer thereof and other
incidents of record and beneficial ownership pertaining thereto.
2.3. Definitions. As used herein, the following terms shall be defined as
follows:
2.3.1. “Ancillary Agreements” means the UAH Patent Assignment, the BPI License
Agreement, the Main License Agreement and the CES Agreement.
2.3.2. “License Parties” means the UAH, BPI and CES, and their respective
affiliates.
2.4. Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 2.1, THE ACQUIRED
PATENT IS BEING SOLD “AS-IS AND WHERE-IS” AND THE SELLER MAKES NO, AND HEREBY
DISCLAIMS ANY, REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, TO THE BUYER
WITH RESPECT TO THE ACQUIRED PATENT OR THE TRANSACTIONS CONTEMPLATED HEREBY,
INCLUDING, WITHOUT LIMITATION, WARRANTIES OF VALIDITY, MERCHANTABILITY,
NONINFRINGEMENT, AND FITNESS FOR A PARTICULAR PURPOSE. Without limiting the
generality of the foregoing, the Seller makes no representations as to the
efficacy or usefulness of the Acquired Patent and the associated licenses and
sub-licenses, and the Seller assumes no responsibility for the successful or
unsuccessful application of the technology contained in the Acquired Patent or
in the Buyer’s ability to successfully defend the Acquired Patent, collect fees
from licensees, resell the Acquired Patent, or use the Acquired Patent in any
way.

 

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2.5. LIMITATION ON LIABILITY. THE SELLER SHALL HAVE NO LIABILITY WITH RESPECT TO
ITS OBLIGATIONS UNDER THIS AGREEMENT OR OTHERWISE FOR CONSEQUENTIAL, EXEMPLARY,
SPECIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES, EVEN IF IT HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES. IN ANY EVENT, THE LIABILITY OF THE SELLER TO
THE BUYER FOR ANY REASON AND UPON ANY CAUSE OF ACTION OR CLAIM IN CONTRACT, TORT
OR OTHERWISE WITH RESPECT TO THIS AGREEMENT SHALL BE LIMITED TO THE AMOUNTS
ACTUALLY PAID BY THE BUYER TO THE SELLER HEREUNDER. BOTH PARTIES UNDERSTAND AND
AGREE THAT THE LIMITATIONS AND EXCLUSIONS SET FORTH HEREIN REPRESENT THE
PARTIES’ AGREEMENT AS TO THE ALLOCATION OF RISK BETWEEN THE PARTIES UNDER THIS
AGREEMENT.

3.   Conditions to Closing

3.1. Seller’s Closing Conditions. The Seller’s obligations to consummate the
transactions contemplated hereby are subject to the satisfaction of the
following conditions as of the Closing Date:
3.1.1. Representations and Warranties; Performance of Obligations. All
representations and warranties of the Buyer contained in each Transaction
Document shall be true and correct in all material respects as of the Closing
Date with the same force and effect as though made at and as of the Closing Date
and all of the terms, covenants and conditions of each Transaction Document to
be complied with, performed and satisfied by the Buyer at or before the Closing
Date shall have been complied with, performed and satisfied in all material
respects.
3.2. Buyer’s Closing Conditions. The Buyer’s obligations to consummate the
transactions contemplated hereby are subject to the satisfaction of the
following conditions as of the Closing Date:
3.2.1. Representations and Warranties; Performance of Obligations. All
representations and warranties of the Seller contained in this Agreement shall
be true and correct in all material respects as of the Closing Date with the
same force and effect as though made at and as of the Closing Date and all of
the terms, covenants and conditions of this Agreement to be complied with,
performed and satisfied by the Seller at or before the Closing Date shall have
been complied with, performed and satisfied in all material respects.

 

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4. Omitted
5. Confidentiality.
5.1. Either Party may disclose or may have disclosed (the “Disclosing Party”) to
the other party (the “Receiving Party”) certain information that the Disclosing
Party considers to be confidential and/or proprietary, including, but not
limited to confidential and/or proprietary information relating to the Acquired
Patent, the Disclosing Party’s technical processes and formulas, product
designs, customer lists, product and business plans, revenues, projections,
marketing and other data (collectively, “Confidential Information”).
Notwithstanding the foregoing, Confidential Information does not include
information (i) already known by the Receiving Party without an obligation of
confidentiality, (ii) publicly known or which becomes publicly known through no
omission or unauthorized act of the Receiving Party, (iii) rightfully received
from a third party without any obligation of confidentiality, or
(iv) independently developed by the Receiving Party without use of the
Disclosing Party’s Confidential Information.
5.2. The Receiving Party shall make use of the Confidential Information only for
the purposes of this Agreement and shall protect the Disclosing Party’s
Confidential Information by using the same degree of care, but not less than a
reasonable degree of care, to prevent the unauthorized access, use,
dissemination, or publication of the Confidential Information as the Receiving
Party uses to protect its own Confidential Information of a like nature.
5.3. All Confidential Information shall remain the property of the Disclosing
Party, and such Confidential Information and all copies thereof (if any), shall
be promptly returned to the Disclosing Party upon request or upon termination of
this Agreement or, at the Disclosing Party’s sole option, destroyed, in which
case the Disclosing Party shall be notified promptly in writing when its
Confidential Information has been destroyed. The furnishing of any Confidential
Information between the Parties shall not constitute the granting of any right
or license to use such Confidential Information.
5.4. The Buyer acknowledges and agrees that (i) certain Confidential Information
about the Seller, including this Agreement, constitutes “confidential
information” within the meaning of Regulation FD promulgated by the Securities
and Exchange Commission, and (ii) it is are aware that federal securities laws
prohibit any person who has confidential information about a public company from
purchasing or selling, directly or indirectly, securities of such public company
(including entering into hedging transactions involving such securities), or
from communicating such information to any other person under circumstances in
which it is reasonably foreseeable that such person is likely to trade in such
securities.

 

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6. Notices. Any notice or communication required or permitted to be delivered to
any Party under this Agreement shall be in writing and shall be deemed properly
delivered, given and received when delivered (by hand, by registered mail, by
courier or express delivery service or by fax) to the address or fax number set
forth beneath the name of such Party below (or to such other address or fax
number as such Party shall have specified in a written notice given to the other
Party hereto):

     
If to the Seller:
  World Waste Technologies, Inc.
 
  13500 Evening Creek Drive North
 
  Suite 440
 
  San Diego, California 92128
 
  Attention: Chief Executive Officer
 
  Facsimile: (858) 486-3352
 
   
With a copy to:
  TroyGould PC
 
  1801 Century Park East, 16th Floor
 
  Los Angeles, California 90067
 
  Attention: Lawrence P. Schnapp
 
  Fax: (310) 201-4746
 
   
If to the Buyer to:
  CleanTech Biofuels, Inc.
 
  7386 Pershing Avenue
 
  St. Louis, Missouri 63130
 
  Attention: Michael D. Kime
 
  Facsimile: (314) 802-8675

7. Termination; Survival of Representations, Warranties and Covenants; Etc. This
Agreement shall terminate automatically if the Closing does not occur on or
before October   _____  , 2008. No termination of this Agreement shall relieve
any Party from liability for any breach of this Agreement committed prior to
termination. All representations and warranties contained in this Agreement
shall survive for a period of two years following the Closing Date. The
provisions of Sections 2.1.3, 2.2.3, 2.3, 2.4, 2.5, 5, 6 and 8 and shall survive
the termination of this Agreement.

8.   Miscellaneous.

8.1. Governing Law; Jurisdiction. This Agreement was executed in, and the
transactions contemplated by and the provisions of this Agreement shall be
governed by and construed in accordance with, the laws of the State of
California, without giving effect to the conflict of laws provisions thereof;
and both Parties consent to the jurisdiction of the state and federal courts
sitting in California.
8.2. Expenses. Except as provide for in Section 2.1.3 and 2.2.3, each Party
shall be responsible for its own expenses incurred in connection with this
Agreement and the transactions contemplated hereby, and the Buyer shall be
responsible for all filing and recordation fees relating to the transfer of the
Acquired Patent hereunder.
8.3. Entire Agreement; Third Party Beneficiaries; Assignment; Etc. This
Agreement, including all exhibits and schedules attached hereto, constitutes and
contains the entire agreement of the Parties and supersedes any and all prior
negotiations, correspondence, understandings and agreements between the Parties
respecting the subject matter hereof, except that the terms and conditions of
that certain Confidentiality Agreement between the Parties shall remain in
effect. No Transaction Document is intended to confer upon any person other than
the Parties thereto any rights or remedies. Neither Party may assign its rights
or obligations under any Transaction Document without the prior written consent
of the other Party (not to be unreasonably withheld).

 

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8.4. Counterparts. This Agreement may be executed in counterparts and shall be
effective when each Party has executed at least one of the counterparts even
though both Parties have not executed the same counterpart.
IN WITNESS WHEREOF, this Agreement has been executed as of the date first
written above.

            SELLER: WORLD WASTE TECHNOLOGIES, INC.

  By:           Name:   John Pimentel        Title:   President and Chief
Executive Officer   

            BUYER:      CLEANTECH BIOFUELS, INC.

    By:           Name:   Edward P. Hennessey        Title:   President   

 

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EXHIBIT A
FORM OF NOTE

 

 

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EXHIBIT B
FORM OF SECURITY AGREEMENT

 

 

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EXHIBIT C
FORM OF WARRANT

 

 

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EXHIBIT D
FORM OF CONTINGENT WARRANT

 

 

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EXHIBIT E
UAH PATENT ASSIGNMENT

 

 

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EXHIBIT F
BPI LICENSE AGREEMENT

 

 

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EXHIBIT G
FORM OF PATENT ASSIGNMENT

 

 

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EXHIBIT H
CES AGREEMENT

 

 

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Schedule 1
Wire Instructions

 

 

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Schedule 2
Capitalization Schedule