EXHIBIT 4.3
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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.
Original Issue Date: June 8, 2005
$_______________
SERIES B VARIABLE RATE SECURED DEBENTURE
THIS SERIES B VARIABLE RATE SECURED DEBENTURE is one of a series of
duly authorized and issued Series B Variable Rate Secured Debentures of Western
Power & Equipment Corp., a Delaware corporation, a Delaware Company (the
"Company"), having a principal place of business at 0000 X.X. 00xx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxx 00000, designated as its Series B Variable Rate Secured
Debenture (this debenture, the "Debenture" and collectively with the other such
series of debentures, the "Debentures").
FOR VALUE RECEIVED, the Company promises to pay to
________________________ or its registered assigns (the "Holder"), or shall have
paid pursuant to the terms hereunder, the principal sum of $_______________ on
December 7, 2005 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:
"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
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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 (a) 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) 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 (b) 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 (c) 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, (d) 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 (e) 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 (a) or (d).
"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(b).
"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 merger or consolidation of the Company with or into
another Person, (b) the Company effects any sale of all or
substantially all of its assets in one or a series of related
transactions, or (c) any tender offer or 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.
"Interest Payment Date" shall have the meaning set forth
in Section 2(a).
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"Interest Period" means, initially, the period beginning
on and including the Original Issue Date and ending on and including
the last day of the month of the Original Issue Date and each
successive period as follows: the period beginning on and including
the first day of each successive month and ending on and including
the last day of each successive month.
"Inventory Floor Plan Financing Agreement" means that
certain Wholesale Financing and Security Agreement, dated November
17, 1992, between the Company, Case Corporation, and Case Credit
Corporation, as amended prior to the Original Issue Date, granting
Case Corporation and Case Credit Corporation a security interest on
inventory purchased by the Company for resale from Case Corporation
"Late Fees" shall have the meaning set forth in Section
2(c).
"LIBOR" means, for each Interest Period (i) the six -month
London Interbank Offered Rate for deposits in U.S. dollars, as shown
on such the Trading Day immediately prior to the beginning of such
Interest Period in The Wall Street Journal (Eastern Edition) under
the caption "Money Rates - London Interbank Offered Rates (LIBOR)";
or (ii) if The Wall Street Journal does not publish such rate, the
offered one-month rate for deposits in U.S. dollars which appears on
the Reuters Screen LIBO Page as of 10:00 a.m., New York time, the
Trading Day immediately prior to the beginning of such Interest
Period, provided that if at least two rates appear on the Reuters
Screen LIBO Page on any such Trading Day, the "LIBOR" for such day
shall be the arithmetic mean of such rates.
"Mandatory Default Amount" shall equal the sum of 120% of
the principal amount of this Debenture to be prepaid, plus all
accrued and unpaid interest thereon and all other amounts, costs,
expenses and liquidated damages due in respect of such this
Debenture.
"Monthly Redemption" shall mean the redemption of this
Debenture pursuant to Section 4 hereof.
"Monthly Redemption Amount" shall mean $___________(1).
"Monthly Redemption Date" means the 1st of each month,
commencing on the first such date after the Original Issue Date and
ending upon the full redemption 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 the Debentures 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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(1) 1/6th of the original principal amount of this Debenture.
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"Permitted Indebtedness" shall mean the individual and
collective reference to the following: (a) Indebtedness incurred
pursuant to the Series A Debentures and the Series B Debentures, (b)
Existing Indebtedness as it exists on the date of the Purchase
Agreement but excluding any Existing Indebtedness paid off at the
Closing, including the GE Facility and the APM Purchase Note, (c)
additional Indebtedness to Case Corporation pursuant to the
Inventory Floor Plan Financing Agreement, (d) additional
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, other than
Case Corporation, up to, in the aggregate at any one time
outstanding, and together with any then outstanding Existing
Indebtedness, a maximum of $3,200,000 from the Original Issue Date
until the 18 month anniversary of the Original Issue Date (with no
such obligation (other than Existing Indebtedness as it exists on
the date of the Purchase Agreement but excluding any Existing
Indebtedness paid off at the Closing, including the GE Facility)
individually exceeding $100,000); provided such aggregate maximum
aggregate (subject still to the $100,000 individual maximum amount)
shall increase to $4,100,000 during the period following such 18
month anniversary to the 30 month anniversary of the Original Issue
Date and to $5,000,000 after the 30 month anniversary of the
Original Issue Date until this Debenture is no longer outstanding
and (e) Indebtedness incurred by the Company that does not mature
prior to the four year anniversary of the Original Issue Date and is
made expressly subordinate in right of payment to the Indebtedness
evidenced by this Xxxxxxxxx, as reflected in a written agreement
acceptable to the Holder 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 (e) 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; (d) Liens
created in favor of the Purchasers pursuant to the Security
Documents and (e) Existing Liens as they exist on the date of the
Purchase Agreement, but excluding any Existing Liens on Existing
Indebtedness paid off at the Closing, including Liens on the GE
Facility.
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"Person" means a corporation, an association, a
partnership, 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 June 8, 2005, to which the Company and the
original Holder are parties, as amended, modified or supplemented
from time to time in accordance with its terms.
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Subsidiary" shall have the meaning given to such term in
the Purchase Agreement.
Section 2. Interest.
a) Payment of Interest in Cash. The Company shall pay
interest, in cash, to the Holder on the then outstanding principal
amount of this Debenture at the rate per annum equal to LIBOR for
the applicable Interest Payment Period plus 6.0% or such lesser rate
as shall be the highest rate permitted by applicable law, payable
monthly on the first day of each month, beginning on the first such
date after the Original Issue Date, on each Monthly Redemption Date
(as to that principal amount then being redeemed) and on the
Maturity Date (except that, if any such date is not a Business Day,
then such payment shall be due on the next succeeding Business Day)
(each such date, an "Interest Payment Date").
b) Interest Calculations. 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 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 Debentures (the "Debenture Register").
c) 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 Fee") which will accrue daily, from the
date such interest is due hereunder through and including the date
of payment.
d) Prepayment. Except as otherwise set forth in this
Debenture, the Company may not prepay any portion of the principal
amount of this Debenture without the prior written consent of the
Holder.
Section 3. Registration of Transfers and Exchanges.
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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. Monthly Redemption. On each Monthly Redemption Date, the
Company shall redeem the Monthly Redemption Amount plus accrued but
unpaid interest, the sum of all liquidated damages and any other
amounts then owing to such Holder in respect of this Debenture. The
Monthly Redemption Amount due on each Monthly Redemption Date shall
be paid in cash. The payment of cash pursuant to a Monthly
Redemption shall be made on the Monthly Redemption Date. If any
portion of the cash payment for a Monthly Redemption shall not be
paid by the Company by the respective due date, interest shall
accrue thereon at the rate of 18% per annum (or the maximum rate
permitted by applicable law, whichever is less) until the payment of
the Monthly Redemption Amount, plus all amounts owing thereon is
paid in full.
Section 5. Negative Covenants. So long as any portion of this
Debenture is outstanding, the Company will not and will not permit
any of its Subsidiaries to directly or indirectly:
a) except in connection with Permitted Liens, enter into,
create, incur, assume, guarantee or suffer to exist any
Indebtedness;
b) except in connection with Permitted Liens, enter into,
create, incur, assume or suffer to exist any Lien;
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 offer to repay, repurchase or
otherwise acquire more than a de minimis number of shares of its
Common Stock or Common Stock Equivalents
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other than as to the Conversion Shares to the extent permitted or
required under the Transaction Documents or as otherwise permitted
by the Transaction Documents;
e) enter into any agreement with respect to any of the
foregoing; or
f) pay cash dividends on any equity securities of the
Company or effect 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.
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 a Monthly Redemption Date, the
Maturity Date or by acceleration or otherwise);
ii. the Company shall fail to observe or perform any
other covenant or agreement contained in this Debenture or
any other Debenture which failure is not cured, if
possible to cure, within the earlier to occur of (A) 10
calendar days after notice of such default sent by the
Holder or by any other Holder and (B)10 Business 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 (A)
any of the Transaction Documents, or (B) any other
material agreement, lease, document or instrument to which
the Company or any Subsidiary of the Company is bound;
iv. any representation or warranty made herein, in
any other Transaction Documents, in any written statement
pursuant hereto or thereto, or in any other report,
financial statement or certificate made or delivered to
the Holder or any other holder of Debentures shall be
untrue or incorrect in any material respect as of the date
when made or deemed made;
v. if (i) the Company or any of its material
Subsidiaries shall commence a case, as debtor, or there
shall be commenced against the Company or any material
Subsidiary of the Company, a case under any applicable
bankruptcy
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or insolvency laws as now or hereafter in effect or any
successor thereto, or the Company or any such material
Subsidiary of the Company 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 such
Subsidiary of the Company or (ii) there is commenced
against the Company or any material Subsidiary of the
Company any such bankruptcy, insolvency or other
proceeding which remains undismissed for a period of 60
days; or (iii) the Company or any material Subsidiary of
the Company 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 of
the Company 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 of
the Company makes a general assignment for the benefit of
creditors; or (vi) the Company shall fail to pay, or shall
state that it is unable to pay, or shall be unable to pay,
its debts generally as they become due; or (vii) the
Company or any material Subsidiary of the Company thereof
shall call a meeting of its creditors with a view to
arranging a composition, adjustment or restructuring of
its debts; or (viii) the Company or any Subsidiary of the
Company thereof shall by any act or failure to act
expressly indicate its consent to, approval of or
acquiescence in any of the foregoing; or (ix) any
corporate or other action is taken by the Company or any
material Subsidiary of the Company for the purpose of
effecting any of the foregoing;
vi. the Company or any Subsidiary of the Company
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
$300,000, whether such Indebtedness now exists or shall
hereafter be created and such default shall result in such
Indebtedness becoming or being declared due and payable
prior to the date on which it would otherwise become due
and payable; or
vii. 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 $100,000, in the
aggregate, for all officers and directors during the term
of this Debenture).
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b) Remedies Upon Event of Default. If any Event of Default
occurs, the full principal amount of this Debenture, together with
interest and other amounts owing in respect thereof, to the date of
acceleration shall become, at the Holder's election, 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. 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 7. Miscellaneous.
a) Notices. Any and all notices or other communications or
deliveries to be provided by the Holder hereunder, including,
without limitation, any Notice of Conversion, 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:
CHIEF EXECUTIVE OFFICER, 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
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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 Agreement
shall be secured by a perfected security interest in all of the
assets of the Company for the benefit of the holders of the Series A
Debentures and the Series B Debentures.
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
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reimbursed by the other party for its 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.
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) Assumption. Any successor to the Company or surviving
entity in a Fundamental Transaction 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 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
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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 shall apply similarly and
equally to successive Fundamental Transactions and shall be applied
without regard to any limitations of this Debenture.
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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.
WESTERN POWER & EQUIPMENT CORP.
By:_____________________________________
Name:
Title:
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