Exhibit 10.22


 


REGISTRATION RIGHTS AGREEMENT


 


This Registration Rights Agreement (this “Agreement”)
is made and entered into as of July 21, 2005, between WorldWater &
Power Corp., a Delaware corporation (the “Company”), and CD Capital Advisors, LLC the holder signatory hereto (the “Holder”).


 


This Agreement is made
pursuant to two Stock Purchase Warrant Agreements,
both dated as of the date hereof among the Company and the Holder.


 


The Company and the Holder
hereby agree as follows:


 


1.   Definitions


 


As used in this Agreement,
the following terms shall have the following meanings:


 


“Advice” shall have
the meaning set forth in Section 6(d).


 


“Effectiveness Date”
means, with respect to the initial Registration Statement required to be filed
hereunder, the 90th calendar day following the date hereof and, with
respect to any additional Registration Statements which may be required
pursuant to Section 3(c), the 90th calendar day following the
date on which the Company first knows, or reasonably should have known, that
such additional Registration Statement is required hereunder; provided, however,
in the event the Company is notified by the Commission that one of the above
Registration Statements will not be reviewed or is no longer subject to further
review and comments, the Effectiveness Date as to such Registration Statement
shall be the fifth Trading Day following the date on which the Company is so
notified if such date precedes the dates required above.


 


“Effectiveness Period”
shall have the meaning set forth in Section 2(a).


 


“Event” shall have
the meaning set forth in Section 2(b).


 


“Event Date” shall
have the meaning set forth in Section 2(b).


 


“Filing Date” means,
with respect to the initial Registration Statement required hereunder, the 30th
calendar day following the date hereof and, with respect to any additional
Registration Statements which may be required pursuant to Section 3(c),
the 30th day following the date on which the Company first knows, or
reasonably should have known that such additional Registration Statement is
required hereunder.


 


“Holder” or “Holders”
means the holder or holders, as the case may be, from time to time of
Registrable Securities.


 


“Indemnified Party”
shall have the meaning set forth in Section 5(c).


 


“Indemnifying Party”
shall have the meaning set forth in Section 5(c).


 





















 


“Losses” shall have
the meaning set forth in Section 5(a).


 


“Proceeding” means an
action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.


 


“Prospectus” means
the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a prospectus filed as part of an effective registration statement in reliance
upon Rule 430A promulgated under the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by a Registration
Statement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.


 


“Registrable Securities”
means (i) all of the shares of Common Stock issuable upon conversion of
the Notes or as interest on the Notes assuming all of the Notes are converted
and all permissible interest payments are made in shares of Common Stock and
the Notes are held until maturity, (ii) all shares issuable as
amortization payments on the Notes assuming all permissible amortization
payments are made in shares of Common Stock and the Notes are held until
maturity, (iii) all Warrant Shares, (iv) any securities issued or
issuable upon any stock split, dividend or other distribution recapitalization
or similar event with respect to the foregoing and (v) any additional
shares issuable in connection with any anti-dilution provisions in the Notes or
the Warrants.


 


“Registration Statement”
means the registration statements required to be filed hereunder and any
additional registration statements contemplated by Section 3(c), including
(in each case) the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.


 


“Rule 415” means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.


 


“Rule 424” means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.


 


2.   Registration


 


(a)           The Company shall prepare and file with the Commission a Registration
Statement covering the resale of 100% of the Registrable Securities for an
offering to be made on a continuous basis pursuant to Rule 415.  The Registration Statement shall be on Form SB-2
(except if the Company is not then eligible to register for resale the
Registrable Securities on Form SB-2, in which case such registration shall
be on another appropriate form in accordance herewith) and shall contain
(unless otherwise directed by the Holders) substantially the “Plan of
Distribution” attached hereto as Annex A.  Subject to the terms of this Agreement, the
Company


 


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shall
use its best efforts to cause the Registration Statement to be declared
effective under the Securities Act as promptly as possible after the filing
thereof, but in any event prior to the applicable Effectiveness Date, and shall
use its best efforts to keep such Registration Statement continuously effective
under the Securities Act until all Registrable Securities covered by such
Registration Statement have been sold or may be sold without volume
restrictions pursuant to Rule 144(k) as determined by the counsel to the
Company pursuant to a written opinion letter to such effect, addressed and
acceptable to the Company’s transfer agent and the affected Holders (the “Effectiveness
Period”).  The Company shall
immediately notify the Holders of the effectiveness of the Registration
Statement on the same day that the Company receives notification of the effectiveness
from the Commission.  Failure to so
notify the Holder within 1 Trading Day of such notification shall be deemed an
Event under Section 2(b).


 


(b)           If: (i) a Registration Statement is not filed on or prior to its
Filing Date (if the Company files a Registration Statement without affording
the Holders the opportunity to review and comment on the same as required by Section 3(a),
the Company shall not be deemed to have satisfied this clause (i)), or (ii) the
Company fails to file with the Commission a request for acceleration in
accordance with Rule 461 promulgated under the Securities Act, within five
Trading Days of the date that the Company is notified (orally or in writing,
whichever is earlier) by the Commission that a Registration Statement will not
be “reviewed,” or not subject to further review; or (iii) prior to its
Effectiveness Date, the Company fails to file a pre-effective amendment and
otherwise respond in writing to comments made by the Commission in respect of
such Registration Statement within 30 calendar days after the receipt of
comments by or notice from the Commission that such amendment is required in
order for a Registration Statement to be declared effective; or (iv) a
Registration Statement filed or required to be filed hereunder is not declared
effective by the Commission by its Effectiveness Date; or (v) after the
Effectiveness Date, a Registration Statement ceases for any reason to remain
continuously effective as to all Registrable Securities for which it is
required to be effective, or the Holders are not permitted to utilize the
Prospectus therein to resell such Registrable Securities for 10 consecutive
calendar days but no more than an aggregate of 15 calendar days during any 12-month
period (which need not be consecutive Trading Days) (any such failure or breach
being referred to as an “Event”,
and for purposes of clause (ii) or (iv) the date on which such Event
occurs, or for purposes of clause (ii) the date on which such five Trading
Day period is exceeded, or for purposes of clause (iii) the date which
such 30 calendar day period is exceeded, or for purposes of clause (v) the
date on which such 10 or 15 calendar day period, as applicable, is exceeded
being referred to as “Event Date”),
then in addition to any other rights the Holders may have hereunder or under
applicable law, on each such Event Date and on each monthly anniversary of each
such Event Date (if the applicable Event shall not have been cured by such
date) until the applicable Event is cured, the Company shall pay to each Holder
an amount in cash, as partial liquidated damages and not as a penalty, equal to
1.5% of the outstanding principal of the Notes for any Registrable Securities
then held by such Holder for the first 30 days (or part thereof) after the 30th
or 90th day, as the case may be, and an additional 1.5% for any
subsequent 30-day period (or part thereof), thereafter.  If the Company fails to pay any partial
liquidated damages pursuant to this Section in full within seven days
after the date payable, the Company will pay interest thereon at a rate of 18%
per annum (or such lesser maximum amount that is permitted to be paid by
applicable law) to the Holder, accruing daily from the date such partial
liquidated damages are due until such amounts, plus all such interest thereon,
are paid in full. The partial liquidated damages pursuant to the terms hereof
shall apply on a daily pro-rata basis for any portion of a month prior to the
cure of an Event.


 


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3.   Registration Procedures


 


In connection with the
Company’s registration obligations hereunder, the Company shall:


 


(a)           Not less than five Trading Days prior to the
filing of each Registration Statement or any related Prospectus or any
amendment or supplement thereto (including any document that would be
incorporated or deemed to be incorporated therein by reference), the Company
shall, (i) furnish to each Holder copies of all such documents proposed to
be filed, which documents (other than those incorporated or deemed to be
incorporated by reference) will be subject to the review of such Holders, and (ii) cause
its officers and directors, counsel and independent certified public
accountants to respond to such inquiries as shall be necessary, in the
reasonable opinion of respective counsel to conduct a reasonable investigation
within the meaning of the Securities Act. The Company shall not file the
Registration Statement or any such Prospectus or any amendments or supplements
thereto to which the Holders of a majority of the Registrable Securities shall
reasonably object in good faith, provided that, the Company is notified of such
objection in writing no later than 5 Trading Days after the Holders have been
so furnished copies of such documents and provided further that the Company
will not be subject to the liquidated damages payments referenced in Section 2(b) if
such objection is delivered to the Company within such five day period. Each
Holder agrees to furnish to the Company a completed Questionnaire in the form
attached to this Agreement as Annex B (a “Selling
Holder Questionnaire”) not less
than two Trading Days prior to the Filing Date or by the end of the fourth
Trading Day following the date on which such Holder receives draft materials in
accordance with this Section.


 


(b)           (i) Prepare and file with the Commission
such amendments, including post-effective amendments, to a Registration
Statement and the Prospectus used in connection therewith as may be necessary
to keep a Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period and prepare and file with
the Commission such additional Registration Statements in order to register for
resale under the Securities Act all of the Registrable Securities; (ii) cause
the related Prospectus to be amended or supplemented by any required Prospectus
supplement (subject to the terms of this Agreement), and as so supplemented or
amended to be filed pursuant to Rule 424; (iii) respond as promptly
as reasonably possible to any comments received from the Commission with
respect to a Registration Statement or any amendment thereto and as promptly as
reasonably possible provide the Holders true and complete copies of all
correspondence from and to the Commission relating to a Registration Statement;
and (iv) comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by a Registration Statement during the applicable
period in accordance (subject to the terms of this Agreement) with the intended
methods of disposition by the Holders thereof set forth in such Registration
Statement as so amended or in such Prospectus as so supplemented.


 


(c)           If during the Effectiveness Period, the
number of Registrable Securities at any time exceeds 90% of the number of
shares of Common Stock then registered in a Registration Statement, then the
Company shall file as soon as reasonably practicable but in any case prior to
the applicable Filing Date, an additional Registration Statement covering the
resale by the Holders of not less than 125% of the number of such Registrable
Securities.


 


(d)           Notify the Holders of Registrable Securities
to be sold (which notice shall, pursuant to clauses (ii) through (vi) hereof,
be accompanied by an instruction to suspend the use


 


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of the Prospectus until the requisite changes
have been made) as promptly as reasonably possible (and, in the case of (i)(A) below,
not less than five Trading Days prior to such filing) and (if requested by any
such Person) confirm such notice in writing no later than one Trading Day
following the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to a Registration Statement is proposed to be filed; (B) when
the Commission notifies the Company whether there will be a “review” of such
Registration Statement and whenever the Commission comments in writing on such
Registration Statement (the Company shall provide true and complete copies
thereof and all written responses thereto to each of the Holders); and (C) with
respect to a Registration Statement or any post-effective amendment, when the
same has become effective; (ii) of any request by the Commission or any
other Federal or state governmental authority for amendments or supplements to
a Registration Statement or Prospectus or for additional information; (iii) of
the issuance by the Commission or any other federal or state governmental
authority of any stop order suspending the effectiveness of a Registration
Statement covering any or all of the Registrable Securities or the initiation
of any Proceedings for that purpose; (iv) of the receipt by the Company of
any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; (v) of the occurrence of any event or passage of time that makes
the financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in a Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to a
Registration Statement, Prospectus or other documents so that, in the case of a
Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any 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; and (vi) the
occurrence or existence of any pending corporate development with respect to
the Company that the Company believes may be material and that, in the
determination of the Company, makes it not in the best interest of the Company
to allow continued availability of the Registration Statement or Prospectus;
provided that any and all of such information shall remain confidential to each
Holder until such information otherwise becomes public, unless disclosure by a
Holder is required by law; provided, further, notwithstanding
each Holder’s agreement to keep such information confidential, the Holders make
no acknowledgement that any such information is material, non-public
information.


 


(e)           Use its best efforts to avoid the issuance
of, or, if issued, obtain the withdrawal of (i) any order suspending the
effectiveness of a Registration Statement, or (ii) any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.


 


(f)            Furnish to each Holder, without charge, at
least one conformed copy of each such Registration Statement and each amendment
thereto, including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference to the extent
requested by such Person, and all exhibits to the extent requested by such
Person (including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the Commission.


 


(g)           Promptly deliver to each Holder, without
charge, as many copies of the Prospectus or Prospectuses (including each form
of prospectus) and each amendment or supplement thereto as such Persons may
reasonably request in connection with resales by the Holder of Registrable
Securities.  Subject to the terms of this
Agreement, the Company hereby consents to the use of such Prospectus and each
amendment or supplement thereto by each of the


 


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selling Holders in connection with the
offering and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto, except after the giving on any notice
pursuant to Section 3(d).


 


(h)           Prior to any resale of Registrable Securities
by a Holder, use its commercially reasonable efforts to register or qualify or
cooperate with the selling Holders in connection with the registration or
qualification (or exemption from the Registration or qualification) of such
Registrable Securities for the resale by the Holder under the securities or
Blue Sky laws of such jurisdictions within the United States as any Holder
reasonably requests in writing, to keep each registration or qualification (or
exemption therefrom) effective during the Effectiveness Period and to do any
and all other acts or things reasonably necessary to enable the disposition in
such jurisdictions of the Registrable Securities covered by each Registration
Statement; provided, that the Company shall not be required to qualify
generally to do business in any jurisdiction where it is not then so qualified,
subject the Company to any material tax in any such jurisdiction where it is
not then so subject or file a general consent to service of process in any such
jurisdiction.


 


(i)            If requested by the Holders, cooperate with
the Holders to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be delivered to a transferee pursuant to
a Registration Statement, which certificates shall be free, to the extent
permitted, of all restrictive legends, and to enable such Registrable
Securities to be in such denominations and registered in such names as any such
Holders may request.


 


(j)            Upon the occurrence of any event contemplated
by this Section 3, as promptly as reasonably possible under the
circumstances taking into account the Company’s good faith assessment of any
adverse consequences to the Company and its stockholders of the premature
disclosure of such event, prepare a supplement or amendment, including a
post-effective amendment, to a Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither a Registration Statement nor such Prospectus will
contain 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, in
light of the circumstances under which they were made, not misleading.  If the Company notifies the Holders in
accordance with clauses (ii) through (v) of Section 3(d) above
to suspend the use of any Prospectus until the requisite changes to such
Prospectus have been made, then the Holders shall suspend use of such
Prospectus.  The Company will use its
best efforts to ensure that the use of the Prospectus may be resumed as
promptly as is practicable.  The Company
shall be entitled to exercise its right under this Section 3(j) to suspend
the availability of a Registration Statement and Prospectus, subject to the payment
of partial liquidated damages pursuant to Section 2(b), for a period not
to exceed 60 days (which need not be consecutive days) in any 12 month period.


 


(k)           Comply with all applicable rules and
regulations of the Commission.


 


(l)            The Company may require each selling Holder
to furnish to the Company a certified statement as to the number of shares of
Common Stock beneficially owned by such Holder and, if required by the
Commission, the person thereof that has voting and dispositive control over the
Shares. During any periods that the Company is unable to meet its obligations
hereunder with respect to the registration of the Registrable Securities solely
because any Holder fails to furnish such information within three Trading Days
of the Company’s request, any liquidated damages that are accruing at such time
as to such Holder only shall be tolled and any Event that may otherwise occur
solely because of such delay shall be suspended as to such Holder only, until
such information is delivered to the Company.


 


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4.   Registration Expenses. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to
the Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and
filing fees (including, without limitation, fees and expenses (A) with
respect to filings required to be made with the Trading Market on which the
Common Stock is then listed for trading, and (B) in compliance with
applicable state securities or Blue Sky laws reasonably agreed to by the
Company in writing (including, without limitation, fees and disbursements of
counsel for the Company in connection with Blue Sky qualifications or
exemptions of the Registrable Securities and determination of the eligibility
of the Registrable Securities for investment under the laws of such
jurisdictions as requested by the Holders), (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses if the printing of
prospectuses is reasonably requested by the holders of a majority of the
Registrable Securities included in a Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel
for the Company, (v) Securities Act liability insurance, if the Company so
desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement.  In
addition, the Company shall be responsible for all of its internal expenses
incurred in connection with the consummation of the transactions contemplated
by this Agreement (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual audit and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange as required
hereunder.  In no event shall the Company
be responsible for any broker or similar commissions or, except to the extent
provided for in the Transaction Documents, any legal fees or other costs of the
Holders.


 


5.   Indemnification


 


(a)           Indemnification by
the Company. The Company
shall, notwithstanding any termination of this Agreement, indemnify and hold
harmless each Holder, the officers, directors, agents, brokers (including
brokers who offer and sell Registrable Securities as principal as a result of a
pledge or any failure to perform under a margin call of Common Stock),
investment advisors and employees of each of them, each Person who controls any
such Holder (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) and the officers, directors, agents and employees of each
such controlling Person, to the fullest extent permitted by applicable law,
from and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, reasonable attorneys’ fees) and expenses
(collectively, “Losses”), as incurred, arising out of or relating to any
untrue or alleged untrue statement of a material fact contained in a
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising
out of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case
of any Prospectus or form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, except to the extent,
but only to the extent, that (i) such untrue statements or omissions are
based solely upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and approved by such
Holder expressly for use in a Registration Statement, such Prospectus or such
form of Prospectus or in any amendment or supplement thereto (it being understood
that the Holder has approved Annex A hereto for this purpose) or (ii) in
the case of an occurrence of an event of the type specified in


 


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Section 3(d)(ii)-(vi), the use by such
Holder of an outdated or defective Prospectus after the Company has notified
such Holder in writing that the Prospectus is outdated or defective and prior
to the receipt by such Holder of the Advice contemplated in Section 6(d).  The Company shall notify the Holders promptly
of the institution, threat or assertion of any Proceeding arising from or in
connection with the transactions contemplated by this Agreement of which the
Company is aware.


 


(b)           Indemnification by
Holders. Each Holder shall,
severally and not jointly, indemnify and hold harmless the Company, its
directors, officers, agents and employees, each Person who controls the Company
(within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act), and the directors, officers, agents or employees of such
controlling Persons, to the fullest extent permitted by applicable law, from
and against all Losses, as incurred, to the extent arising out of or based
solely upon: (x) such Holder’s failure to comply with the prospectus delivery
requirements of the Securities Act or (y) any untrue or alleged untrue
statement of a material fact contained in any Registration Statement, any
Prospectus, or any form of prospectus, or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or relating to any
omission or alleged omission of a material fact required to be stated therein
or necessary to make the statements therein not misleading (i) to the
extent, but only to the extent, that such untrue statement or omission is contained
in any information so furnished in writing by such Holder to the Company
specifically for inclusion in such Registration Statement or such Prospectus or
(ii) to the extent that (1) such untrue statements or omissions are
based solely upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement (it
being understood that the Holder has approved Annex A hereto for this purpose),
such Prospectus or such form of Prospectus or in any amendment or supplement
thereto or (2) in the case of an occurrence of an event of the type
specified in Section 3(d)(ii)-(vi), the use by such Holder of an outdated
or defective Prospectus after the Company has notified such Holder in writing
that the Prospectus is outdated or defective and prior to the receipt by such
Holder of the Advice contemplated in Section 6(d). In no event shall the
liability of any selling Holder hereunder be greater in amount than the dollar
amount of the net proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.


 


(c)           Conduct of
Indemnification Proceedings.
If any Proceeding shall be brought or asserted against any Person entitled to
indemnity hereunder (an “Indemnified Party”), such Indemnified Party
shall promptly notify the Person from whom indemnity is sought (the “Indemnifying
Party”) in writing, and the Indemnifying Party shall have the right to
assume the defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all fees and expenses
incurred in connection with defense thereof; provided, that the failure of any
Indemnified Party to give such notice shall not relieve the Indemnifying Party
of its obligations or liabilities pursuant to this Agreement, except (and only)
to the extent that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal or further review)
that such failure shall have prejudiced the Indemnifying Party.


 


An Indemnified Party shall
have the right to employ separate counsel in any such Proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party or Parties unless:  (1) the Indemnifying Party has agreed in
writing to pay such fees and expenses; (2) the Indemnifying Party shall
have failed promptly to assume the defense of such Proceeding and to employ
counsel reasonably


 


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satisfactory to such Indemnified Party in any
such Proceeding; or (3) the named parties to any such Proceeding
(including any impleaded parties) include both such Indemnified Party and the
Indemnifying Party, and such Indemnified Party shall reasonably believe that a
material conflict of interest is likely to exist if the same counsel were to
represent such Indemnified Party and the Indemnifying Party (in which case, if
such Indemnified Party notifies the Indemnifying Party in writing that it elects
to employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
the reasonable fees and expenses of one separate counsel shall be at the
expense of the Indemnifying Party).  The
Indemnifying Party shall not be liable for any settlement of any such
Proceeding effected without its written consent, which consent shall not be
unreasonably withheld.  No Indemnifying
Party shall, without the prior written consent of the Indemnified Party, effect
any settlement of any pending Proceeding in respect of which any Indemnified
Party is a party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the subject matter
of such Proceeding.


 


Subject to the terms of this
Agreement, all reasonable fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within ten Trading Days of written notice thereof to the Indemnifying
Party; provided, that the Indemnified Party shall promptly reimburse the
Indemnifying Party for that portion of such fees and expenses applicable to
such actions for which such Indemnified Party is not entitled to
indemnification hereunder, determined based upon the relative faults of the
parties.


 


(d)           Contribution. If a claim for indemnification under Section 5(a) or
5(b) is unavailable to an Indemnified Party (by reason of public policy or
otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable
considerations.  The relative fault of
such Indemnifying Party and Indemnified Party shall be determined by reference
to, among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of
a material fact, has been taken or made by, or relates to information supplied
by, such Indemnifying Party or Indemnified Party, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such action, statement or omission.  The
amount paid or payable by a party as a result of any Losses shall be deemed to
include, subject to the limitations set forth in this Agreement, any reasonable
attorneys’ or other reasonable fees or expenses incurred by such party in
connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in
this Section was available to such party in accordance with its terms.


 


The parties hereto agree
that it would not be just and equitable if contribution pursuant to this Section 5(d) were
determined by pro rata allocation or by any other method of allocation that
does not take into account the equitable considerations referred to in the
immediately preceding paragraph. 
Notwithstanding the provisions of this Section 5(d), no Holder
shall be required to contribute, in the aggregate, any amount in excess of the
amount by which the proceeds actually received by such Holder from the sale of
the Registrable Securities subject to the Proceeding exceeds the amount of any
damages that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission, except in
the case of fraud by such Holder.


 


9





















 


The indemnity and
contribution agreements contained in this Section are in addition to any
liability that the Indemnifying Parties may have to the Indemnified Parties.


 


6.   Miscellaneous


 


(a)           Remedies.  In the event of a breach by
the Company or by a Holder, of any of their obligations under this Agreement,
each Holder or the Company, as the case may be, in addition to being entitled
to exercise all rights granted by law and under this Agreement, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement.  The Company and
each Holder agree that monetary damages would not provide adequate compensation
for any losses incurred by reason of a breach by it of any of the provisions of
this Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.


 


(b)           No Piggyback on
Registrations. Except as set
forth on Schedule 6(i), neither the Company nor any of its security
holders (other than the Holders in such capacity pursuant hereto) may include
securities of the Company in the Registration Statement other than the Registrable
Securities.  Each Holder acknowledges and
agrees that the Company may, in its sole discretion, file one registration
statement to fulfill its obligations to the Holder hereunder.  The Company shall not file any other
registration statements until the initial Registration Statement required
hereunder is declared effective by the Commission, provided that this Section 6(b) shall
not prohibit the Company from filing amendments to registration statements
already filed.


 


(c)           Compliance. Each Holder covenants and agrees that it
will comply with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of Registrable Securities pursuant to
the Registration Statement.


 


(d)           Discontinued
Disposition. Each Holder
agrees by its acquisition of such Registrable Securities that, upon receipt of
a notice from the Company of the occurrence of any event of the kind described
in Section 3(d), such Holder will forthwith discontinue disposition of
such Registrable Securities under a Registration Statement until such Holder’s
receipt of the copies of the supplemented Prospectus and/or amended
Registration Statement, or until it is advised in writing (the “Advice”)
by the Company that the use of the applicable Prospectus may be resumed, and,
in either case, has received copies of any additional or supplemental filings
that are incorporated or deemed to be incorporated by reference in such
Prospectus or Registration Statement. 
The Company will use its best efforts to ensure that the use of the
Prospectus may be resumed as promptly as it practicable.  The Company agrees and acknowledges that any
periods during which the Holder is required to discontinue the disposition of
the Registrable Securities hereunder shall be subject to the provisions of Section 2(b).


 


(e)           Piggy-Back
Registrations. If at any
time during the Effectiveness Period there is not an effective Registration
Statement covering all of the Registrable Securities and the Company shall
determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under the
Securities Act of any of its equity securities, other than on Form S-4 or Form S-8
(each as promulgated under the Securities Act) or their then equivalents
relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with the stock option or other employee benefit plans, then the
Company shall send to each Holder a written notice of such determination and,
if within fifteen days after the date of


 


10





















 


such notice, any such Holder shall so request
in writing, the Company shall include in such registration statement all or any
part of such Registrable Securities such holder requests to be registered;
provided, that, the Company shall not be required to register any Registrable
Securities pursuant to this Section 6(e) that are eligible for resale
pursuant to Rule 144(k) promulgated under the Securities Act or that are
the subject of a then effective Registration Statement.


 


(f)            Amendments and
Waivers. The provisions of
this Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the same shall be in writing and
signed by the Company and each Holder of the then outstanding Registrable
Securities.  Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of Holders and that
does not directly or indirectly affect the rights of other Holders may be given
by Holders of all of the Registrable Securities to which such waiver or consent
relates; provided, however, that the provisions of this sentence
may not be amended, modified, or supplemented except in accordance with the
provisions of the immediately preceding sentence.


 


(g)           Notices. Any and all notices or other communications
or deliveries required or permitted to be provided hereunder shall be delivered
as set forth in the Stock Purchase Warrant Agreement.


 


(h)           Successors and
Assigns. This Agreement
shall inure to the benefit of and be binding upon the successors and permitted
assigns of each of the parties and shall inure to the benefit of each Holder.
The Company may not assign its rights or obligations hereunder without the
prior written consent of all of the Holders of the then-outstanding Registrable
Securities.


 


(i)            No Inconsistent
Agreements. Neither the
Company nor any of its subsidiaries has entered, as of the date hereof, nor
shall the Company or any of its subsidiaries, on or after the date of this
Agreement, enter into any agreement with respect to its securities, that would
have the effect of impairing the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof.  Except as set forth on Schedule 6(i),
neither the Company nor any of its subsidiaries has previously entered into any
agreement granting any registration rights with respect to any of its
securities to any Person that have not been satisfied in full.


 


(j)            Execution and
Counterparts. This Agreement
may be executed in any number of counterparts, each of which when so executed
shall be deemed to be an original and, all of which taken together shall
constitute one and the same Agreement. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile
signature were the original thereof.


 


(k)           Governing Law.  All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be determined
with the provisions of the Stock Purchase Warrant.


 


(l)            Cumulative
Remedies. The remedies
provided herein are cumulative and not exclusive of any remedies provided by
law.


 


(m)          Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the


 


11





















 


remainder of the terms, provisions, covenants
and restrictions set forth herein shall remain in full force and effect and
shall in no way be affected, impaired or invalidated, and the parties hereto
shall use their commercially reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.


 


(n)           Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.


 


(o)           Independent Nature
of Holders’ Obligations and Rights. The obligations of each Holder hereunder are several and not joint
with the obligations of any other Holder hereunder, and no Holder shall be
responsible in any way for the performance of the obligations of any other
Holder hereunder. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Holder pursuant
hereto or thereto, shall be deemed to constitute the Holders as a partnership,
an association, a joint venture or any other kind of entity, or create a
presumption that the Holders are in any way acting in concert with respect to
such obligations or the transactions contemplated by this Agreement. Each
Holder shall be entitled to protect and enforce its rights, including without
limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Holder to be joined as an additional party in any
proceeding for such purpose.


 


********************


 


12





















 


IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first
written above.


 


 


	
   

  	
  WORLD WATER &
  POWER CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Quentin Kelly, Chief
  Executive Officer

  



 


 


[SIGNATURE
PAGE OF HOLDERS FOLLOWS]


 


13





















 


[SIGNATURE PAGE OF HOLDERS TO WORLDWATER &
POWER CORP. RRA]


 


	
  Name of Investing Entity: Chet Dubov.

  
	
  Signature of Authorized Signatory of Investing
  Entity:

  	
   

  	
   

  
	
  Name of Authorized Signatory:

  	
   

  	
   

  
	
  Title of Authorized Signatory:

  	
   

  	
   

  
						



 


14





















 


Annex A


 


Plan of Distribution


 


Each Selling Stockholder
(the “Selling Stockholders”) of the common stock (“Common Stock”)
of WorldWater & Power Corp., a Delaware corporation (the “Company”)
and any of their pledgees, assignees and successors-in-interest may, from time
to time, sell any or all of their shares of Common Stock on the Trading Market
or any other stock exchange, market or trading facility on which the shares are
traded or in private transactions.  These
sales may be at fixed or negotiated prices. 
A Selling Stockholder may use any one or more of the following methods
when selling shares:


 


•      ordinary brokerage transactions and transactions
in which the broker-dealer solicits Holder;


 


•      block trades in which the broker-dealer will
attempt to sell the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;


 


•      purchases by a broker-dealer as principal and
resale by the broker-dealer for its account;


 


•      an exchange distribution in accordance with
the rules of the applicable exchange;


 


•      privately negotiated transactions;


 


•      settlement of short sales entered into after
the date of this prospectus;


 


•      broker-dealers may agree with the Selling
Stockholders to sell a specified number of such shares at a stipulated price
per share;


 


•      a combination of any such methods of sale;


 


•      through the writing or settlement of options
or other hedging transactions, whether through an options exchange or
otherwise; or


 


•      any other method permitted pursuant to
applicable law.


 


The Selling Stockholders may
also sell shares under Rule 144 under the Securities Act of 1933, as
amended (the “Securities Act”), if available, rather than under this
prospectus.


 


Broker-dealers engaged by
the Selling Stockholders may arrange for other brokers-dealers to participate
in sales.  Broker-dealers may receive
commissions or discounts from the Selling Stockholders (or, if any broker-dealer
acts as agent for the Holder of shares, from the Holder) in amounts to be
negotiated.  Each Selling Stockholder
does not expect these commissions and discounts relating to its sales of shares
to exceed what is customary in the types of transactions involved.


 


In connection with the sale
of our common stock or interests therein, the Selling Stockholders may enter
into hedging transactions with broker-dealers or other financial


 


15





















 


institutions, which may in turn engage in
short sales of the common stock in the course of hedging the positions they
assume.  The Selling Stockholders may
also sell shares of our common stock short and deliver these securities to
close out their short positions, or loan or pledge the common stock to
broker-dealers that in turn may sell these securities.  The Selling Stockholders may also enter into
option or other transactions with broker-dealers or other financial
institutions or the creation of one or more derivative securities which require
the delivery to such broker-dealer or other financial institution of shares
offered by this prospectus, which shares such broker-dealer or other financial
institution may resell pursuant to this prospectus (as supplemented or amended
to reflect such transaction).


 


The Selling Stockholders and
any broker-dealers or agents that are involved in selling the shares may be
deemed to be “underwriters” within the meaning of the Securities Act in
connection with such sales.  In such
event, any commissions received by such broker-dealers or agents and any profit
on the resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.  Each Selling Stockholder has informed the
Company that it does not have any agreement or understanding, directly or
indirectly, with any person to distribute the Common Stock.


 


The Company is required to
pay certain fees and expenses incurred by the Company incident to the
registration of the shares.  The Company
has agreed to indemnify the Selling Stockholders against certain losses,
claims, damages and liabilities, including liabilities under the Securities
Act.


 


Because Selling Stockholders
may be deemed to be “underwriters” within the meaning of the Securities Act,
they will be subject to the prospectus delivery requirements of the Securities
Act.  In addition, any securities covered
by this prospectus which qualify for sale pursuant to Rule 144 under the
Securities Act may be sold under Rule 144 rather than under this
prospectus.  Each Selling Stockholder has
advised us that they have not entered into any agreements, understandings or
arrangements with any underwriter or broker-dealer regarding the sale of the
resale shares.  There is no underwriter
or coordinating broker acting in connection with the proposed sale of the
resale shares by the Selling Stockholders.


 


We agreed to keep this
prospectus effective until the earlier of (i) the date on which the shares
may be resold by the Selling Stockholders without registration and without
regard to any volume limitations by reason of Rule 144(e) under the
Securities Act or any other rule of similar effect or (ii) all of the
shares have been sold pursuant to the prospectus or Rule 144 under the
Securities Act or any other rule of similar effect.  The resale shares will be sold only through
registered or licensed brokers or dealers if required under applicable state
securities laws. In addition, in certain states, the resale shares may not be
sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is
available and is complied with.


 


Under applicable rules and
regulations under the Exchange Act, any person engaged in the distribution of
the resale shares may not simultaneously engage in market making activities
with respect to our common stock for a period of two business days prior to the
commencement of the distribution.  In
addition, the Selling Stockholders will be subject to applicable provisions of
the Exchange Act and the rules and regulations thereunder, including
Regulation M, which may limit the timing of purchases and sales of shares of
our common stock by the Selling Stockholders or any other person.  We will make copies of this prospectus
available to the Selling Stockholders and have informed them of the need to
deliver a copy of this prospectus to each Holder at or prior to the time of the
sale.


 


16





















 


Annex B


 


WorldWater & Power Corp.


 


Selling Securityholder Notice and Questionnaire


 


The
undersigned beneficial owner of common stock, par value $0.001 (the “Common
Stock”), of WorldWater & Power Corp., a Delaware corporation (the “Company”),
(the “Registrable Securities”) understands that the Company has filed or
intends to file with the Securities and Exchange Commission (the “Commission”)
a registration statement on Form SB-2 (the “Registration Statement”)
for the registration and resale under Rule 415 of the Securities Act of
1933, as amended (the “Securities Act”), of the Registrable Securities,
in accordance with the terms of the Registration Rights Agreement, dated as of July 25,
2005 (the “Registration Rights Agreement”), among the Company and the
Holder named therein.  A copy of the
Registration Rights Agreement is available from the Company upon request at the
address set forth below.  All capitalized
terms not otherwise defined herein shall have the meanings ascribed thereto in
the Registration Rights Agreement.


 


Certain
legal consequences arise from being named as a selling securityholder in the
Registration Statement and the related prospectus.  Accordingly, holders and beneficial owners of
Registrable Securities are advised to consult their own securities law counsel
regarding the consequences of being named or not being named as a selling
securityholder in the Registration Statement and the related prospectus.


 


NOTICE


 


The
undersigned beneficial owner (the “Selling Securityholder”) of
Registrable Securities hereby elects to include the Registrable Securities
owned by it and listed below in Item 3 (unless otherwise specified under such
Item 3) in the Registration Statement.


 


The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:


 


QUESTIONNAIRE


 


1.             Name.


 


(a)           Full Legal Name
of Selling Securityholder


 


 


(b)           Full Legal Name
of Registered Holder (if not the same as (a) above) through which
Registrable Securities Listed in Item 3 below are held:


 


 


17





















 


(c)           Full Legal Name
of Natural Control Person (which means a natural person who directly or
indirectly alone or with others has power to vote or dispose of the securities
covered by the questionnaire):


 


 


2.  Address for Notices to Selling
Securityholder:


 


	
   

  
	
   

  
	
  Telephone:

  
	
  Fax:

  
	
  Email:

  
	
  Contact Person:

  



 


3.  Beneficial Ownership of Registrable
Securities:


 


(a)           Type and
Principal Amount of Registrable Securities beneficially owned:


 


 


 


 


4.  Broker-Dealer
Status:


 


(a)           Are you a
broker-dealer?


 


	
   

  	
  Yes

  	
  o

  	
  No

  	
  o

  



 


Note:      If yes, the
Commission’s staff has indicated that you should be identified as an
underwriter in the Registration Statement.


 


(b)           Are you an
affiliate of a broker-dealer?


 


	
   

  	
  Yes

  	
  o

  	
  No

  	
  o

  



 


(c)           If you are an
affiliate of a broker-dealer, do you certify that you bought the Registrable
Securities in the ordinary course of business, and at the time of the purchase
of the Registrable Securities to be resold, you had no agreements or
understandings, directly or indirectly, with any person to distribute the
Registrable Securities?


 


	
   

  	
  Yes

  	
  o

  	
  No

  	
  o

  



 


Note:      If no, the
Commission’s staff has indicated that you should be identified as an
underwriter in the Registration Statement.


 


18





















 


5.  Beneficial Ownership of Other Securities of
the Company Owned by the Selling Securityholder.


 


Except as set forth below in this
Item 5, the undersigned is not the beneficial or registered owner of any
securities of the Company other than the Registrable Securities listed above in
Item 3.


 


(a)           Type and Amount
of Other Securities beneficially owned by the Selling Securityholder:


 


 


 


6.  Relationships with the Company:


 


Except as set forth below, neither
the undersigned nor any of its affiliates, officers, directors or principal
equity holders (owners of 5% of more of the equity securities of the
undersigned) has held any position or office or has had any other material
relationship with the Company (or its predecessors or affiliates) during the
past three years.


 


State any exceptions here:


 


 


 


The
undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the
date hereof at any time while the Registration Statement remains effective.


 


By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related prospectus.  The undersigned understands that such
information will be relied upon by the Company in connection with the
preparation or amendment of the Registration Statement and the related
prospectus.


 


IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by
its duly authorized agent.


 


	
  Dated:

  	
   

  	
   

  	
  Beneficial
  Owner:

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						



 


PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE
AND QUESTIONNAIRE, AND RETURN THE ORIGINAL TO: WORLDWATER & POWER,
ATT: SECRETARY, 55 ROUTE 31 SOUTH, PENNINGTON, NJ 08534; FAX NO. (609) 818-0720.


 


19