Exhibit 10.3
THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITY.
THIS DEBENTURE WAS ISSUED WITH WARRANTS AND AS SUCH IS ISSUED AT AN ORIGINAL
ISSUE DISCOUNT
Original Issue Date: ____________ __, 200__
$_________
10% SENIOR SECURED DEBENTURE
THIS 10% SECURED DEBENTURE is one of a series of duly authorized and
issued 10% Senior Secured Debentures of World Waste Technologies, Inc., a
California corporation, having a principal place of business at 00000 X. Xx Xxxx
Xxxx., Xxxxx 000, Xxxxxxxxx, XX 00000 (the "Company"), designated as its 10%
Senior Secured Debentures (the "Debentures").
FOR VALUE RECEIVED, the Company promises to pay to ___________________ or
its registered assigns (the "Holder"), the principal sum of $________ on the
earlier of (a) June __, 2007, (b) the closing of one or more financings of
Common Stock or Common Stock Equivalents (as defined in the Purchase Agreement)
occurring after the date hereof generating gross cash proceeds to the Company in
the aggregate amount of at least $9.0 million, excluding any proceeds from the
sale of securities issued pursuant to the Transaction Documents and excluding
any securities issued pursuant to the Exchange Offer (as defined in the Purchase
Agreement), (c) or such earlier date as this Debenture is required or permitted
to be repaid as provided hereunder (the "Maturity Date"), and to pay interest to
the Holder on the then outstanding principal amount of this Debenture in
accordance with the provisions hereof. This Debenture is subject to the
following additional provisions:
Section 1. Definitions. For the purposes hereof, in addition to the terms
defined elsewhere in this Debenture: (a) capitalized terms not otherwise defined
herein have the meanings given to such terms in the Purchase Agreement, and (b)
the following terms shall have the following meanings:
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"Agent" shall have the meaning set forth in the Security Agreement.
"Business Day" means any day except Saturday, Sunday and any day
which shall be a federal legal holiday in the United States or a day on
which banking institutions in the State of New York are authorized or
required by law or other government action to close.
"Change of Control Transaction" means the occurrence after the
date hereof of any of (i) an acquisition after the date hereof by an
individual or legal entity or "group" (as described in Rule 13d-5(b)(1)
promulgated under the Exchange Act), other than pursuant to the
Transaction Documents, of effective control (whether through legal or
beneficial ownership of capital stock of the Company, by contract or
otherwise) of in excess of 40% of the voting securities of the Company,
or (ii) other than a merger the sole purpose of which is to
reincorporate the Company, the Company merges into or consolidates with
any other Person, or any Person merges into or consolidates with the
Company and, after giving effect to such transaction, the stockholders
of the Company immediately prior to such transaction own less than 60%
of the aggregate voting power of the Company or the successor entity of
such transaction, or (iii) the Company sells or transfers its assets,
as an entirety or substantially as an entirety, to another Person and
the stockholders of the Company immediately prior to such transaction
own less than 60% of the aggregate voting power of the acquiring entity
immediately after the transaction, or (iv) a replacement at one time or
within a three year period of more than one-half of the members of the
Company's board of directors which is not approved by a majority of
those individuals who are members of the board of directors on the date
hereof (or by those individuals who are serving as members of the board
of directors on any date whose nomination to the board of directors was
approved by a majority of the members of the board of directors who are
members on the date hereof), or (v) the execution by the Company of an
agreement to which the Company is a party or by which it is bound,
providing for any of the events set forth above in (i) or (iv)
Notwithstanding the foregoing, (i) the acquisition of the Company's
securities by any holder of the Company's Series A Preferred Stock (or
any of such holders' Affiliates) shall in no event be deemed to be a
"Change of Control Transaction" and (ii) any transaction the proceeds
of which are used to repay the Debentures in full shall not be deemed a
"Change of Control Transaction".
"Common Stock" means the common stock, par value $0.001 per
share, of the Company and stock of any other class of securities into
which such securities may hereafter have been reclassified or changed
into.
"Debenture Register" shall have the meaning set forth in Section
2(a).
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"Event of Default" shall have the meaning set forth in Section 6.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Fundamental Transaction" shall mean (A) the Company effects any
sale of all or substantially all of its assets in one or a series of
related transactions, (B) any tender offer or exchange offer (other than
the Exchange Offer)(whether by the Company or another Person) is completed
pursuant to which holders of Common Stock are permitted to tender or
exchange their shares for other securities, cash or property, or (C) the
Company effects any reclassification of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property.
"Late Fees" shall have the meaning set forth in Section 2(b).
"Mandatory Default Amount" shall equal the sum of (i) 100% of the
principal amount of this Debenture then outstanding, plus all accrued and
unpaid interest thereon and (ii) all other amounts, costs, expenses and
liquidated damages due in respect of this Debenture.
"New York Courts" shall have the meaning set forth in Section 7(e).
"Original Issue Date" shall mean the date of the first issuance of
this Debenture regardless of the number of transfers of any Debenture and
regardless of the number of instruments which may be issued to evidence
such Debenture.
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"Permitted Indebtedness" shall mean the individual and collective
reference to the following: (a) the Debentures, the Existing Securities
(provided that the holders of at least $3,515,000 aggregate principal
amount of such Existing Securities have entered into the Security
Agreement (in the form attached to the Purchase Agreement)) and up to
approximately $________ of Indebtedness existing on the date of the
Purchase Agreement as described in Schedule 3.1(aa) attached to the
Purchase Agreement, (b) Indebtedness incurred in connection with the
acquisition of capital assets and obligations under sale-leaseback
arrangements with respect to newly acquired or leased assets to Persons up
to, in the aggregate at any one time outstanding, a maximum of $3,000,000,
(c) purchase money Indebtedness with respect to newly acquired assets, and
(d) up to $10 million of additional Indebtedness incurred by the Company
that does not mature or require payments of principal prior to the
Maturity Date and is made expressly subordinate in right of payment to the
Indebtedness evidenced by this Debenture, as reflected in a written
agreement reasonably acceptable to the Agent and approved by the Holder in
writing.
"Permitted Lien" shall mean the individual and collective reference
to the following: (a) Liens for taxes, assessments and other governmental
charges or levies not yet due or Liens for taxes, assessments and other
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves (in the good faith
judgment of the management of the Company) have been established in
accordance with GAAP; (b) any Liens incurred in connection with Permitted
Indebtedness under clause (b) and (c) in the definition of Permitted
Indebtedness above, provided that such liens are not secured by assets of
the Company or its Subsidiaries other than the assets so acquired or
leased; (c) Liens imposed by law which were incurred in the ordinary
course of business, such as carriers', warehousemen's and mechanics'
Liens, statutory landlords' Liens, and other similar Liens arising in the
ordinary course of business, and (x) which do not individually or in the
aggregate materially detract from the value of such property or assets or
materially impair the use thereof in the operation of the business of the
Company and its consolidated Subsidiaries or (y) which are being contested
in good faith by appropriate proceedings, which proceedings have the
effect of preventing the forfeiture or sale of the property or asset
subject to such Lien; and (d) Liens created in favor of the Purchasers
pursuant to the Security Documents and Liens created in favor of the
holders of the Existing Securities (provided that the holders of at least
$3,515,000 aggregate principal amount of such Existing Securities have
entered into the Security Agreement (in the form attached to the Purchase
Agreement)).
"Person" means a corporation, an association, a limited liability
company, a partnership, an organization, a business, an individual, a
government or political subdivision thereof or a governmental agency.
"Purchase Agreement" means the Securities Purchase Agreement, dated
as of December 27, 2005, to which the Company, the original Holder and
other investors signatory thereto are parties, as amended, modified or
supplemented from time to time in accordance with its terms.
"Subsidiary" shall have the meaning given to such term in the
Purchase Agreement.
"Trading Day" means a day on which the Common Stock is traded on a
Trading Market.
"Trading Market" means the following markets or exchanges on which
the Common Stock is listed or quoted for trading on the date in question:
the Nasdaq SmallCap Market, the American Stock Exchange, the New York
Stock Exchange, the Nasdaq National Market or the OTC Bulletin Board.
"Transaction Documents" shall have the meaning set forth in the
Purchase Agreement.
Section 2. Interest.
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a) Interest Calculations. Interest on the then outstanding principal
amount of this Debenture shall accrue at the rate of 10% per annum,
payable quarterly on December 31, March 31, June 30 and September 30,
beginning on March 31, 2006 and on the Maturity Date. Interest shall be
calculated on the basis of a 360-day year and shall accrue daily
commencing on the Original Issue Date until payment in full of the
principal sum, together with all accrued and unpaid interest and other
amounts which may become due hereunder, has been made. Interest shall
compound quarterly. Interest hereunder will be paid to the Person in whose
name this Debenture is registered on the records of the Company regarding
registration and transfers of this Debenture (the "Debenture Register").
b) Late Fee. All overdue accrued and unpaid interest to be paid
hereunder shall entail a late fee at the rate of 18% per annum (or such
lower maximum amount of interest permitted to be charged under applicable
law) ("Late Fees") which will accrue daily, from the date such interest is
due hereunder through and including the date of payment.
c) Prepayment. The Company may prepay this Debenture at any time
without penalty provided that the Company acknowledges and agrees that the
Warrants issued pursuant to the Purchase Agreement shall not be reduced by
any such prepayment and that the rights of the Holder pursuant to Section
4.13(g) of the Purchase Agreement shall pre-empt the Company's prepayment
right hereunder.
Section 3. Registration of Transfers and Exchanges.
a) Different Denominations. This Debenture is exchangeable for an
equal aggregate principal amount of Debentures of different authorized
denominations, as requested by the Holder surrendering the same. No
service charge will be made for such registration of transfer or exchange.
b) Investment Representations. This Debenture has been issued
subject to certain investment representations of the original Holder set
forth in the Purchase Agreement and may be transferred or exchanged only
in compliance with the Purchase Agreement and applicable federal and state
securities laws and regulations.
c) Reliance on Debenture Register. Prior to due presentment to the
Company for transfer of this Debenture, the Company and any agent of the
Company may treat the Person in whose name this Debenture is duly
registered on the Debenture Register as the owner hereof for the purpose
of receiving payment as herein provided and for all other purposes,
whether or not this Debenture is overdue, and neither the Company nor any
such agent shall be affected by notice to the contrary.
Section 4. Intentionally Omitted.
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Section 5. Negative Covenants. So long as any portion of this Debenture is
outstanding, without the consent of the holders of at least 30% in interest of
the principal amount outstanding on all Debentures, the Company will not and
will not permit any of its Subsidiaries to directly or indirectly:
a) other than Permitted Indebtedness, enter into, create, incur,
assume, guarantee or suffer to exist any indebtedness for borrowed money
of any kind, including but not limited to, a guarantee, on or with respect
to any of its property or assets now owned or hereafter acquired or any
interest therein or any income or profits therefrom;
b) other than Permitted Liens, enter into, create, incur, assume or
suffer to exist any liens of any kind, on or with respect to any of its
property or assets now owned or hereafter acquired or any interest therein
or any income or profits therefrom;
c) amend its certificate of incorporation, bylaws or other charter
documents so as to materially and adversely affect any rights of the
Holder;
d) repay, repurchase or otherwise acquire shares of its Common Stock
or Common Stock Equivalents other than repurchases of shares of Common
Stock or other equity securities of departing officers and directors of
the Company; provided such repurchases shall not exceed $130,000, in the
aggregate, for all officers and directors during the term of this
Debenture;
e) enter into any agreement with respect to any of the foregoing; or
f) pay cash dividends or cash distributions on any equity securities
of the Company.
Section 6. Events of Default.
a) "Event of Default", wherever used herein, means any one of the
following events (whatever the reason and whether it shall be voluntary or
involuntary or effected by operation of law or pursuant to any judgment,
decree or order of any court, or any order, rule or regulation of any
administrative or governmental body):
i. any default in the payment of (A) the principal amount of
any Debenture, or (B) interest (including Late Fees) on, or
liquidated damages in respect of, any Debenture, as and when the
same shall become due and payable (whether on the Maturity Date or
by acceleration or otherwise) which default is not cured within 5
Trading Days;
ii. the Company shall materially fail to observe or perform
any other covenant or agreement contained in (A) this Debenture or
(B) any of the other Transaction Documents, which failure is not
cured, if possible to cure, within the earlier to occur of (A) 30
Trading Days after notice of such default sent by the Holder or by
any other Holder and (B) 45 Trading Days after the Company shall
become or should have become aware of such failure;
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iii. a default or event of default (subject to any grace or
cure period provided for in the applicable agreement, document or
instrument) shall occur under any material agreement (other than the
Transaction Documents), lease, document or instrument to which the
Company or any Subsidiary is bound and would have a Material Adverse
Effect on the Company, and such default shall not be cured by the
Company within 60 days thereafter;
iv. any representation or warranty made herein, in any other
Transaction Documents shall be materially untrue or incorrect in any
material respect as of the date when made or deemed made;
v. (i) the Company or any of its material Subsidiaries shall
commence a case, as debtor, under any applicable bankruptcy or
insolvency laws as now or hereafter in effect or any successor
thereto, or the Company or any material Subsidiary commences any
other proceeding under any reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency or liquidation
or similar law of any jurisdiction whether now or hereafter in
effect relating to the Company or any material Subsidiary thereof;
or (ii) there is commenced a case against the Company or any
material Subsidiary thereof, under any applicable bankruptcy or
insolvency laws, as now or hereafter in effect or any successor
thereto which remains undismissed for a period of 60 days; or (iii)
the Company or any material Subsidiary thereof is adjudicated by a
court of competent jurisdiction insolvent or bankrupt; or any order
of relief or other order approving any such case or proceeding is
entered; or (iv) the Company or any material Subsidiary thereof
suffers any appointment of any custodian or the like for it or any
substantial part of its property which continues undischarged or
unstayed for a period of 60 days; or (v) the Company or any material
Subsidiary thereof makes a general assignment for the benefit of
creditors; or (vi) the Company or any material Subsidiary thereof
shall call a meeting of its creditors with a view to arranging a
composition, adjustment or restructuring of its debts; or (vii) the
Company or any material Subsidiary thereof shall by any act or
failure to act expressly indicate its consent to, approval of or
acquiescence in any of the foregoing; or (viii) any corporate or
other action is taken by the Company or any material Subsidiary
thereof for the purpose of effecting any of the foregoing;
vi. the Company or any Subsidiary shall default in any of its
obligations under any mortgage, credit agreement or other facility,
indenture agreement, factoring agreement or other instrument under
which there may be issued, or by which there may be secured or
evidenced any indebtedness for borrowed money or money due under any
long term leasing or factoring arrangement of the Company in an
amount exceeding $350,000, whether such indebtedness now exists or
shall hereafter be created and such default shall continue for more
than the period of grace, if any, specified therein and shall not
have been waived pursuant thereto;
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vii. the Common Stock shall not be eligible for quotation on
or quoted for trading on a Trading Market and shall not again be
eligible for and quoted or listed for trading thereon within five
Trading Days;
viii. the Company shall be a party to any Change of Control
Transaction or Fundamental Transaction, shall agree to sell or
dispose of all or in excess of 40% of its assets in one or more
transactions (whether or not such sale would constitute a Change of
Control Transaction) or shall redeem or repurchase more than a de
minimis number of its outstanding shares of Common Stock or other
equity securities of the Company (other than repurchases of shares
of Common Stock or other equity securities of departing officers and
directors of the Company; provided such repurchases shall not exceed
$130,000, in the aggregate, for all officers and directors during
the term of this Debenture);
ix. the Company shall fail to have available a sufficient
number of authorized and unreserved shares of Common Stock to issue
to such Holder upon exercise of the Warrants in full;
x. any monetary judgment, writ or similar final process shall
be entered or filed against the Company, any Subsidiary or any of
their respective property or other assets for more than $200,000,
and shall remain unvacated, unbonded or unstayed for a period of 45
calendar days; or
xi. the Company shall fail, at any time, to have a perfected,
first priority security interest in any material portion of the
Collateral (as defined in the Security Agreement) and all other
assets pledged to Holder as security for the loan evidenced by this
Debenture, in each case in accordance with and subject to the
exceptions in the Security Agreement.
b) Remedies Upon Event of Default. If any Event of Default occurs,
(i) the full principal amount of this Debenture, together with interest
and other amounts owing in respect thereof, to the date of acceleration
shall become, solely at the election of holders of at least 30% in
interest of the principal amount outstanding under all Debentures,
immediately due and payable in cash. The aggregate amount payable upon an
Event of Default shall be equal to the Mandatory Default Amount.
Commencing 5 days after the occurrence of any Event of Default that
results in the eventual acceleration of this Debenture, the interest rate
on this Debenture shall accrue at the rate of 18% per annum, or such lower
maximum amount of interest permitted to be charged under applicable law.
Upon the payment in full of the Mandatory Default Amount on this entire
Debenture the Holder shall promptly surrender this Debenture to or as
directed by the Company. The Holder need not provide and the Company
hereby waives any presentment, demand, protest or other notice of any
kind, and the Holder may immediately and without expiration of any grace
period enforce any and all of its rights and remedies hereunder and all
other remedies available to it under applicable law. Such declaration may
be rescinded and annulled by Xxxxxx at any time prior to payment hereunder
and the Holder shall have all rights as a Debenture holder until such
time, if any, as the full payment under this Section shall have been
received by it. No such rescission or annulment shall affect any
subsequent Event of Default or impair any right consequent thereon.
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Section 7. Miscellaneous.
a) Notices. Any and all notices or other communications or
deliveries to be provided by the Holder hereunder shall be in writing and
delivered personally, by facsimile, sent by a nationally recognized
overnight courier service, addressed to the Company, at the address set
forth above, facsimile number _________, Attn: _____________ or such other
address or facsimile number as the Company may specify for such purposes
by notice to the Holder delivered in accordance with this Section. Any and
all notices or other communications or deliveries to be provided by the
Company hereunder shall be in writing and delivered personally, by
facsimile, sent by a nationally recognized overnight courier service
addressed to each Holder at the facsimile telephone number or address of
such Xxxxxx appearing on the books of the Company, or if no such facsimile
telephone number or address appears, at the principal place of business of
the Holder. Any notice or other communication or deliveries hereunder
shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile
at the facsimile telephone number specified in this Section prior to 5:30
p.m. (New York City time), (ii) the date after the date of transmission,
if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Section later than 5:30 p.m.
(New York City time) on any date and earlier than 11:59 p.m. (New York
City time) on such date, (iii) the second Business Day following the date
of mailing, if sent by nationally recognized overnight courier service, or
(iv) upon actual receipt by the party to whom such notice is required to
be given.
b) Absolute Obligation. Except as expressly provided herein, no
provision of this Debenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of,
interest and liquidated damages (if any) on, this Debenture at the time,
place, and rate, and in the coin or currency, herein prescribed. This
Debenture is a direct debt obligation of the Company. This Debenture ranks
pari passu with all other Debentures now or hereafter issued under the
terms set forth herein.
c) Security Interest. This Debenture is a direct debt obligation of
the Company and, pursuant to the Security Documents, is secured by a first
priority security interest in all of the assets of the Company and certain
other collateral for the benefit of the Holders.
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d) Lost or Mutilated Debenture. If this Debenture shall be
mutilated, lost, stolen or destroyed, the Company shall execute and
deliver, in exchange and substitution for and upon cancellation of a
mutilated Debenture, or in lieu of or in substitution for a lost, stolen
or destroyed Debenture, a new Debenture for the principal amount of this
Debenture so mutilated, lost, stolen or destroyed but only upon receipt of
evidence of such loss, theft or destruction of such Debenture, and of the
ownership hereof, and indemnity, if requested, all reasonably satisfactory
to the Company.
e) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Debenture shall be
governed by and construed and enforced in accordance with the internal
laws of the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal proceedings
concerning the interpretations, enforcement and defense of the
transactions contemplated by any of the Transaction Documents (whether
brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced in the
state and federal courts sitting in the City of New York, Borough of
Manhattan (the "New York Courts"). Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts for the
adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of any of the Transaction Documents), and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, or such New York Courts are improper or
inconvenient venue for such proceeding. Each party hereby irrevocably
waives personal service of process and consents to process being served in
any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under
this Debenture and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any
manner permitted by law. Each party hereto hereby irrevocably waives, to
the fullest extent permitted by applicable law, any and all right to trial
by jury in any legal proceeding arising out of or relating to this
Debenture or the transactions contemplated hereby. If either party shall
commence an action or proceeding to enforce any provisions of this
Debenture, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its reasonable attorneys' fees and other
costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.
f) Waiver. Any waiver by the Company or the Holder of a breach of
any provision of this Debenture shall not operate as or be construed to be
a waiver of any other breach of such provision or of any breach of any
other provision of this Debenture. The failure of the Company or the
Holder to insist upon strict adherence to any term of this Debenture on
one or more occasions shall not be considered a waiver or deprive that
party of the right thereafter to insist upon strict adherence to that term
or any other term of this Debenture. Any waiver must be in writing.
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g) Severability. If any provision of this Debenture is invalid,
illegal or unenforceable, the balance of this Debenture shall remain in
effect, and if any provision is inapplicable to any person or
circumstance, it shall nevertheless remain applicable to all other persons
and circumstances. If it shall be found that any interest or other amount
deemed interest due hereunder violates applicable laws governing usury,
the applicable rate of interest due hereunder shall automatically be
lowered to equal the maximum permitted rate of interest. The Company
covenants (to the extent that it may lawfully do so) that it shall not at
any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay, extension or usury law or other law
which would prohibit or forgive the Company from paying all or any portion
of the principal of or interest on this Debenture as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this indenture, and the Company
(to the extent it may lawfully do so) hereby expressly waives all benefits
or advantage of any such law, and covenants that it will not, by resort to
any such law, hinder, delay or impeded the execution of any power herein
granted to the Holder, but will suffer and permit the execution of every
such as though no such law has been enacted.
h) Next Business Day. Whenever any payment or other obligation
hereunder shall be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day.
i) Headings. The headings contained herein are for convenience only,
do not constitute a part of this Debenture and shall not be deemed to
limit or affect any of the provisions hereof.
j) Usury. To the extent it may lawfully do so, the Company hereby
agrees not to insist upon or plead or in any manner whatsoever claim, and
will resist any and all efforts to be compelled to take the benefit or
advantage of, usury laws wherever enacted, now or at any time hereafter in
force, in connection with any claim, action or proceeding that may be
brought by any Purchaser in order to enforce any right or remedy under any
Transaction Document. Notwithstanding any provision to the contrary
contained in any Transaction Document, it is expressly agreed and provided
that the total liability of the Company under the Transaction Documents
for payments in the nature of interest shall not exceed the Maximum Rate,
and, without limiting the foregoing, in no event shall any rate of
interest or default interest, or both of them, when aggregated with any
other sums in the nature of interest that the Company may be obligated to
pay under the Transaction Documents exceed such Maximum Rate. It is agreed
that if the maximum contract rate of interest allowed by law and
applicable to the Transaction Documents is increased or decreased by
statute or any official governmental action subsequent to the date hereof,
the new maximum contract rate of interest allowed by law will be the
Maximum Rate applicable to the Transaction Documents from the effective
date of such increase or decrease forward, unless such application is
precluded by applicable law. If under any circumstances whatsoever,
interest in excess of the Maximum Rate is paid by the Company to any
Purchaser with respect to indebtedness, if any, evidenced by the
Transaction Documents, such excess shall be applied by such Purchaser to
the unpaid principal balance of any such indebtedness or be refunded to
the Company, the manner of handling such excess to be at such Purchaser's
election in the event any principal amount remains outstanding.
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k) Assumption. Any successor to the Company or surviving entity in a
Fundamental Transaction or any merger or consolidation of the Company with
or into another Person ("Merger") shall (i) assume in writing all of the
obligations of the Company under this Debenture and the other Transaction
Documents pursuant to written agreements in form and substance
satisfactory to the Holder (such approval not to be unreasonably withheld
or delayed) prior to such Fundamental Transaction or Merger and (ii) to
issue to the Holder a new debenture of such successor entity evidenced by
a written instrument substantially similar in form and substance to this
Debenture, including, without limitation, having a principal amount and
interest rate equal to the principal amounts and the interest rates of the
Debentures held by the Holder and having similar ranking to this
Debenture, and satisfactory to the Holder (any such approval not to be
unreasonably withheld or delayed). The provisions of this Section 7(k)
shall apply similarly and equally to successive Fundamental Transactions
or Merger and shall be applied without regard to any limitations of this
Debenture.
l) Waivers and Amendments. With the written consent of the Qualified
Purchasers, the obligations of the Company and the rights of the Holder
under this Debenture may be amended or waived (either generally or in a
particular instance, either retroactively or prospectively, and either for
a specified period of time or indefinitely).
*********************
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IN WITNESS WHEREOF, the Company has caused this Debenture to be duly
executed by a duly authorized officer as of the date first above indicated.
WORLD WASTE TECHNOLOGIES, INC.
By:
---------------------------------
Name:
Title:
13