Exhibit 10.4
GUARANTY
This Guaranty (the "GUARANTY") is made as of February 2, 2009 by
Xxxxxxxx X. Xxxxxx ("GUARANTOR") in favor of World Waste Technologies, Inc. a
California corporation ("WORLD WASTE").
RECITALS
A. World Waste and Vertex Energy, L.P., a Texas limited partnership
("VERTEX"), are parties to a Note Purchase Agreement, dated the same date as
this Guaranty (the "PURCHASE AGREEMENT"), which provides for, among other
things, the issuance by Vertex to World Waste of a senior subordinated secured
promissory note, dated the same date as this Guaranty (the "NOTE"), in the
original principal amount of $1,000,000. Guarantor is the controlling partner of
Vertex.
B. World Waste and Vertex are also parties to a Security Agreement,
dated the same date as this Guaranty (the "SECURITY AGREEMENT"), pursuant to
which Vertex has granted to World Waste a security interest in certain of the
assets of Vertex in order to secure its obligations under the Note.
C. World Waste was unwilling to execute the Purchase Agreement and the
Security Agreement and to enter into the transactions described in the Purchase
Agreement, the Security Agreement and the Note without receipt from Guarantor of
(1) a guaranty of all of the obligations of Vertex under the Note, the Purchase
Agreement and the Security Agreement and (2) a pledge of Guarantor's ownership
interest in Vertex to secure his obligations under this Guaranty and Vertex's
obligations under the Note, the Purchase Agreement and the Security Agreement.
The Note, the Purchase Agreement and the Security Agreement collectively are
referred to in this Guaranty as the "VERTEX AGREEMENTS" and are referred to
individually as a "VERTEX AGREEMENT."
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, receipt of which hereby is acknowledged, Guarantor
hereby agrees as follows:
1. GUARANTY. Guarantor hereby unconditionally and irrevocably
guarantees to World Waste and its successors and assigns (a) the full and
punctual payment (in lawful money of the United States and in immediately
available funds), as and when due, of all principal, interest, attorneys' fees,
costs, expenses and other amounts which are or may become payable by Vertex
under the Vertex Agreements (the "VERTEX DEBT") and (b) the full and punctual
performance of all other obligations of Vertex under the Vertex Agreements. The
obligations of Vertex under the Vertex Agreements, including the payment
obligations regarding the Vertex Debt, are referred to in this Guaranty as the
"VERTEX OBLIGATIONS," and the covenants and obligations of Guarantor that are
described in the preceding sentence and elsewhere in this Guaranty are referred
to in this Guaranty as "GUARANTOR'S OBLIGATIONS."
2. SECURITY INTEREST IN GUARANTOR'S OWNERSHIP INTEREST IN VERTEX.
(a) GRANT OF A SECURITY INTEREST. As security for the full and
timely payment and performance of the Vertex Obligations and Guarantor's
Obligations, Guarantor hereby grants to World Waste a continuing and
first-priority security interest (the "SECURITY INTEREST") in the following
(collectively, the "COLLATERAL"): all right, title and interest of Guarantor in
and to Vertex, including, without limitation, his ownership interest in Vertex
and his voting rights as a partner of Vertex; all securities receivable in
respect of or in exchange for the foregoing; all rights to subscribe for
additional ownership interests in Vertex; all cash and other dividends or
distributions paid or payable with respect to Guarantor's ownership interest in
Vertex; all of Guarantor's books and records pertaining to the foregoing; and
all proceeds from sales, transfers or other dispositions of the foregoing.
Without limiting the generality of the foregoing, if Guarantor receives any
additional ownership interests in Vertex or ownership interests in any successor
to Vertex through a merger, recapitalization or another transaction, such
ownership interests shall be considered "Collateral" for purposes of this
Guaranty and shall be subject to the Security Interest.
(b) NO TRANSFER OF THE COLLATERAL. Prior to the payment and
performance in full of all of the Vertex Obligations, Guarantor shall not sell,
pledge or otherwise transfer (whether voluntarily, involuntarily, by operation
of law, pursuant to a marital dissolution decree or by gift or for
consideration) any of the Collateral or any of his interest therein. Any such
sale, pledge or other transfer shall be null and void and shall confer no rights
on the purported transferee.
(c) GUARANTOR'S VOTING RIGHTS. Prior to the occurrence of an
Event of Default (defined in Section 8(a) below), Guarantor shall retain the
right to exercise his voting rights with respect to the Collateral, provided
that he may not exercise such voting rights in contravention of any term of this
Guaranty. Following the occurrence of an Event of Default and until the Vertex
Obligations are paid and performed in full, Guarantor's voting rights in the
Collateral shall be assigned to World Waste and may be exercised by World Waste
without Guarantor's consent.
(d) PRESERVATION AND PROTECTION OF THE SECURITY INTEREST.
Guarantor shall preserve and protect World Waste's first-priority security
interest in the Collateral and shall cause the Security Interest to be perfected
and to continue to be perfected until the Vertex Obligations are paid and
performed in full. Guarantor shall execute and deliver to World Waste (within
ten days after receipt of World Waste's request) such other security agreements,
endorsements, pledges, assignments and other documents (including, without
limitation, financing statements and continuation statements and amendments
thereto) as World Waste may request from time to time to effectuate the grant to
World Waste of the Security Interest and the perfection of the Security
Interest, and World Waste is authorized to file and/or record such documents
with appropriate regulatory authorities. Within ten days after receipt of World
Waste's request, all instruments representing or evidencing the Collateral shall
be delivered to World Waste for retention pursuant to this Guaranty and shall be
in suitable form for transfer by delivery or, as applicable, shall be
accompanied by Guarantor's endorsement, where necessary, of duly executed
instruments of transfer, all in form and substance satisfactory to World Waste.
(e) TITLE TO THE COLLATERAL. Guarantor shall at all times
maintain good and marketable title to the Collateral free and clear of all
liens, encumbrances and other security interests. Guarantor shall pay in full
any tax that is imposed on any of the Collateral prior to its delinquency and,
within ten days after any other lien or encumbrance is imposed on any of the
Collateral, Guarantor shall pay and discharge such lien or other encumbrance in
full.
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(f) POWER OF ATTORNEY. Guarantor hereby appoints World Waste
as his attorney-in-fact (with full power of substitution) to execute, deliver
and file, effective upon the occurrence of an Event of Default, on Guarantor's
behalf and at Guarantor's expense, (1) any financing statements, continuation
statements or other documents required to perfect or continue the Security
Interest and (2) any other documents and instruments that World Waste determines
are necessary or appropriate in order to enable it to exercise its rights and
remedies that are provided hereunder and by applicable law upon the occurrence
of an Event of Default. This power, being coupled with an interest, shall be
irrevocable until the Vertex Obligations are paid and performed in full.
(g) TERMINATION OF THE SECURITY INTEREST. The Security
Interest shall terminate only if and when the Vertex Obligations have been paid
and performed in full.
3. CERTAIN RIGHTS OF WORLD WASTE. Guarantor authorizes World Waste,
without giving notice to Guarantor or obtaining Guarantor's consent in his
individual capacity and without affecting the liability of Guarantor, but
subject to obtaining Vertex's written agreement to the extent its written
agreement is required, from time to time to: (a) renew, extend or increase the
Vertex Debt or any portion thereof; (b) declare all Vertex Debt due and payable
upon the occurrence of a default under the Note; (c) make changes in the dates
on which the Vertex Debt is payable; (d) otherwise modify the terms of the
Vertex Debt; (e) amend the Vertex Agreements in any respect; (f) take and hold
additional security for the Vertex Debt and exchange, enforce, waive and release
any such security; (g) apply such security and direct the order or manner of
sale thereof as World Waste in its discretion may determine; and (h) add any one
or more guarantors of the Vertex Debt.
4. GUARANTOR'S WAIVERS. Guarantor waives: (a) any defense based upon
any legal disability or other defense of Vertex or any other guarantor or person
or based upon Vertex's cessation for any reason of liability under any Vertex
Agreement; (b) any defense based upon any lack of authority of Vertex's officers
or other agents acting or purporting to act on behalf of Vertex or any defect in
the formation of Vertex; (c) any defense of Guarantor based upon World Waste's
election of any remedy against Guarantor or Vertex or both, including, without
limitation, any right to require World Waste to proceed against Vertex or
another person or to proceed against any other security for the Vertex
Obligations; (d) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
any other respects more burdensome than that of a principal; (e) any right of
subrogation, any right to enforce any remedy which World Waste may have against
Vertex and any right to participate in, or benefit from, any security for the
Vertex Obligations now or hereafter held by World Waste; (f) presentment,
demand, protest and notice of any kind; (g) the benefit of any statute of
limitations affecting the liability of Guarantor hereunder or the enforcement
hereof; (h) any right to require World Waste to pursue any other remedy in World
Waste's power; (i) any right to revoke this Guaranty; and (j) any right to
require World Waste to exercise its rights under the Security Interest before
filing an action against Guarantor in his personal capacity. Guarantor waives
any other circumstance or event, in existence now or in the future, that might
otherwise constitute a legal or equitable defense to the enforcement of this
Guaranty.
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5. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents,
warrants and agrees that: (a) World Waste would not have entered into the Vertex
Agreements but for this Guaranty; (b) there are no conditions precedent to the
effectiveness of this Guaranty; (c) this Guaranty shall continue in full force
and effect and shall be binding on Guarantor regardless of whether World Waste
obtains other collateral or any guaranties from others or takes any other
action; and (d) Guarantor is the controlling partner of Vertex and owns the
Collateral free and clear of all liens and encumbrances. Guarantor consents to
Vertex's execution, delivery and performance of the Vertex Agreements.
6. SUBORDINATION. Guarantor subordinates all present and future
indebtedness owing by Vertex to Guarantor to the Vertex Debt and other
obligations under the Vertex Agreements at any time owing by Vertex to World
Waste. Guarantor assigns to World Waste all such indebtedness owed by Vertex to
Guarantor as security for this Guaranty. Guarantor further agrees not to assign
all or any part of such indebtedness prior to the full payment and performance
of the Vertex Obligations.
7. NATURE OF GUARANTOR'S LIABILITY UNDER THIS GUARANTY. This is a
guaranty of payment and performance and not merely of collection. Guarantor's
obligations under this Guaranty are independent of Vertex's obligations to World
Waste under the Vertex Agreements. World Waste may bring a separate action to
enforce the provisions hereof against Guarantor without taking action against
Vertex or the Collateral or joining Vertex as a party to such action. The
obligations of Guarantor under this Guaranty constitute the full recourse
obligations of Guarantor and are enforceable against him to the full extent of
his assets.
8. EVENT OF DEFAULT; WORLD WASTE'S REMEDIES.
(a) EVENT OF DEFAULT. An "EVENT OF DEFAULT" for purposes of
this Guaranty means (1) Vertex's or Guarantor's failure to pay when due any
Vertex Debt, (2) Vertex's or Guarantor's failure to perform any other Vertex
Obligations when due or in accordance with the terms of such obligations, (3)
Guarantor's failure to perform any of Guarantor's Obligations when due or in
accordance with their terms, or (4) the failure to be true of any representation
or warranty of Guarantor that is contained in this Guaranty, if Guarantor does
not remedy in full any such failure described in this sentence within ten days
after receipt of written notice from World Waste.
(b) REMEDIES ON AN EVENT OF DEFAULT. Upon the occurrence of an
Event of Default, World Waste shall have the immediate right to file an action
at law or equity against Guarantor and/or to take control of all or any part of
the Collateral, with or without judicial process, and without demand of
performance, advertisement or notice to Guarantor, which are expressly waived by
Guarantor; provided, however, that if any notice is required by law in
connection with the exercise by World Waste of its rights and remedies,
Guarantor agrees that ten days' prior written notice is a reasonable time and
manner for notice. Furthermore, World Waste may exercise all of the other rights
and remedies that are provided to it under this Guaranty and to a secured party
by the Uniform Commercial Code and otherwise by applicable law. World Waste's
rights and remedies shall include, without limitation, the power (1) to transfer
into World Waste's name or into the name of its nominee any or all of the
Collateral and thereafter to receive and retain all cash and other dividends,
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distributions and payments made on account of the Collateral, and otherwise act
with respect thereto as though it were the absolute owner thereof, (2) to sell
all or any portion of the Collateral at a public or private sale at such place
and time and at such prices and other terms as World Waste may determine, and
(3) to file an action against Guarantor in his personal capacity for repayment
of the Vertex Debt. Guarantor recognizes that World Waste may be compelled to
resort to one or more private sales of any or all of the Collateral to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire the Collateral for their own account for investment and not with a
view to the distribution or resale thereof. Guarantor acknowledges and agrees
that any such private sale may result in prices and other terms less favorable
to the seller than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall not, for such reason
alone, be deemed to have been made in a commercially unreasonable manner. World
Waste shall not be under any obligation to delay a sale of any Collateral for
the period of time necessary to permit the registration of such Collateral for
public sale under the Securities Act of 1933, as amended, or under applicable
state securities laws. At any sale, World Waste may, to the extent permissible
under applicable law, purchase the whole or any part of the Collateral, and
World Waste shall be entitled to use and apply any or all of the Vertex Debt as
a credit on account of the purchase price of any Collateral. World Waste and any
other purchaser of the Collateral at any such sale shall hold the purchased
Collateral free from any claim or right on the part of Guarantor, and Guarantor
hereby waives any right of redemption, stay or appraisal that he might otherwise
have under applicable law.
(c) APPLICATION OF PROCEEDS. Any Collateral or the proceeds of
the Collateral held or realized upon at any time by World Waste following an
Event of Default shall be applied in satisfaction of the Vertex Debt, in such
order of application as World Waste shall determine in its reasonable
discretion, until the Vertex Debt is fully paid, and thereafter any balance
shall be distributed to Guarantor or as otherwise required by applicable law.
(d) NO IMPLIED WAIVERS; CUMULATIVE REMEDIES. No delay or
failure of World Waste in exercising any right or remedy under this Guaranty
shall operate as a waiver thereof, nor shall any single or partial exercise
thereof or any abandonment or discontinuance of steps to enforce such a right or
remedy preclude any further exercise thereof or of any other right or remedy.
The rights and remedies of World Waste under this Guaranty are cumulative and
not exclusive of any rights or remedies which it might otherwise have under the
Uniform Commercial Code or other applicable law. Any waiver, permit, consent or
approval of any kind or character on the part of World Waste of any Event of
Default or any such waiver of any provision of this Guaranty must be in writing
and shall be effective only to the extent specifically set forth in writing.
Guarantor acknowledges and agrees that the exercise by World Waste of its rights
under this Section 8 and the acquisition or sale by Waste Waste of any
Collateral will not operate to release Guarantor from his personal obligation to
pay the Vertex Debt until full payment of any deficiency on the Vertex Debt has
been made in cash. Furthermore, Guarantor acknowledges and agrees that World
Waste is not obligated to exercise any of the rights or remedies provided by
this Section 8, and that World Waste shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its
possession if such Collateral is accorded treatment that is substantially
similar to that which World Waste accords its own similar property.
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9. BANKRUPTCY. This Guaranty shall continue in full force and effect in
the event of any bankruptcy, insolvency, reorganization, liquidation,
dissolution or similar proceeding involving Vertex or Guarantor, and this
Guaranty shall continue in full force and effect notwithstanding any subsequent
change in the ownership or assets of Vertex. In any bankruptcy of Vertex or
other proceeding involving Vertex in which the filing of claims is required by
law, Guarantor shall file all claims which Guarantor may have against Vertex
relating to any indebtedness of Vertex to Guarantor and shall assign to World
Waste all rights of Guarantor thereunder. If Guarantor does not file any such
claim, World Waste, as attorney-in-fact for Guarantor, is hereby authorized to
do so in the name of Guarantor or, in World Waste's discretion, to assign the
claim to a nominee and to cause proof of claim to be filed in the name of World
Waste's nominee. The foregoing power of attorney is coupled with an interest and
cannot be revoked. World Waste or its nominee shall have the right, in its
reasonable discretion, to accept or reject any plan proposed in such proceeding
and to take any other action which a party filing a claim is entitled to do. In
all such cases, whether in administration, bankruptcy or otherwise, the person
or persons authorized to pay such claim shall pay to World Waste the amount
payable on such claim and, to the full extent necessary for that purpose,
Guarantor hereby assigns to World Waste all of Guarantor's rights to any such
payments or distributions; provided, however, Guarantor's obligations hereunder
shall not be satisfied except to the extent that World Waste receives cash by
reason of any such payment or distribution. If all or any portion of the Vertex
Debt and other obligations guaranteed hereunder is paid or performed, the
obligations of Guarantor hereunder shall continue and shall remain in full force
and effect in the event that all or any part of such payment or performance is
avoided or recovered directly or indirectly from World Waste as a preference,
fraudulent transfer or otherwise under the Bankruptcy Code or other similar
laws.
10. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon, and
shall inure to the benefit of, the respective successors and assigns of
Guarantor and World Waste, provided that the foregoing provision shall not be
construed as permitting Guarantor to assign his obligations hereunder.
11. ATTORNEYS' FEES. If any attorney is engaged by World Waste to
enforce or defend any provision of this Guaranty, with or without the filing of
any legal action or proceeding, Guarantor shall pay to World Waste, within ten
days after demand therefor, all reasonable attorneys' fees and costs incurred by
World Waste in connection therewith (including, without limitation, in any
appellate or post-judgment proceedings), together with interest thereon from the
date of such demand until paid at the rate of ten percent per annum (or, if
lower, at the maximum rate allowed by applicable law).
12. RULES OF CONSTRUCTION. The term "person" as used herein shall
include any individual, corporation, trust or other legal entity of any kind
whatsoever. When the context and construction so require, all words used in the
singular herein shall be deemed to have been used in the plural and vice versa.
All headings appearing in this Guaranty are for convenience only and shall be
disregarded in construing this Guaranty. This Guaranty is the result of
arms-length negotiations between Guarantor and World Waste and their respective
attorneys. Accordingly, neither Guarantor nor World Waste shall be deemed to be
the author of this Guaranty, and this Guaranty shall not be construed against
either party.
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13. NOTICES. All notices required or permitted by this Guaranty to be
delivered to Guarantor or World Waste shall be delivered in writing, by personal
delivery, by overnight courier, by facsimile transmission or by registered or
certified mail, return receipt requested, postage prepaid, to the address for
such party set forth on the signature page of this Guaranty. Any such notice
shall be deemed given as follows: (a) if personally delivered, when served; (b)
if sent by overnight courier, on the first business day after delivery to the
courier; (c) if sent by facsimile, on the date of transmission if delivered on a
business day (or, if not delivered on a business day, on the next business day
after transmission); or (d) if sent by registered or certified mail, on the
third day after deposit in the mail.
14. GENERAL PROVISIONS. If any provision of this Guaranty shall be
determined by a court of competent jurisdiction to be invalid, illegal or
unenforceable, that portion shall be deemed severed from this Guaranty and the
remaining parts shall remain in full force as though the invalid, illegal or
unenforceable portion had never been part of this Guaranty. This Guaranty
constitutes the only agreement between Guarantor and World Waste with respect to
the subject matter hereof and supersedes all previous agreements with respect
thereto. This Guaranty may be amended or terminated only by an agreement in
writing executed by Guarantor and World Waste. This Guaranty may be executed in
two counterparts, which together shall constitute but one and the same
instrument. This Guaranty may be executed by facsimile transmission or by e-mail
transmission in PDF format.
15. GOVERNING LAW. This Guaranty shall be governed by, and construed in
accordance with, the internal laws of the State of Texas without giving affect
to such state's conflict-of-law principles.
16. WAIVER OF JURY TRIAL. Guarantor and World Waste each hereby
irrevocably waives all rights that it may have under applicable law to a trial
by jury of any issue or claim arising under this Guaranty in any action to
enforce or interpret this Guaranty.
[signature page follows]
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IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty
as of the date appearing on the first page of this Guaranty.
/S/ XXXXXXXX X. XXXXXX
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XXXXXXXX X. XXXXXX
Address:
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AGREED TO AND ACCEPTED:
WORLD WASTE TECHNOLOGIES, INC.
By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Title: CEO
Address:
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