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: February 10, 2006
$-----------
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 his
registered assigns (the "Holder"), the principal sum of _______________________
on the earlier of (a) August 10, 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:
"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).
"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.
2
"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.
"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)).
3
"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.
(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.
4
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.
(a) 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:
(i) 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;
(ii) 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;
(iii) amend its certificate of incorporation, bylaws or other
charter documents so as to materially and adversely affect any rights of the
Holder; (iv) 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;
(v) enter into any agreement with respect to any of the
foregoing; or
5
(vi) pay cash dividends or cash distributions on any equity
securities of the Company.
Section 5. 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;
(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;
6
(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;
(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.
7
(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.
Section 6. 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 000-000-0000, Attn: CFO 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.
8
(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.
9
(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.
10
(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 holders
of at least 75% of the principal amount of all outstanding Debentures (which
holders must include all 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).
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: /s/ Xxxx Xxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxx
Title: Chief Executive Officer
11
