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Exhibit 10.4
GUARANTY
This Guaranty (the
"GUARANTY") is made as of February 2, 2009 by
Benjamin P. Cowart ("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
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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 pa