This SECURITY AGREEMENT (this
“Agreement”) is entered into as of the 22nd day of
October, 2008, by CleanTechBiofuels, Inc., a Delaware corporation
(“Debtor”), in favor of World Waste Technologies, Inc.
(the “Secured Party”).
WHEREAS , pursuant to that certain Patent Purchase
Agreement between Debtor and the Secured Party of even date
herewith (the “Purchase Agreement”), the Secured Party
has agreed to make certain loans and advances to Debtor which are
to be evidenced by that certain Promissory Note of even date
herewith (the “Note”).
WHEREAS , it is a condition precedent to the
effectiveness of the Note that Debtor shall grant the security
interest contemplated by this Agreement.
NOW, THEREFORE , in consideration of the premises and in order
to induce the Secured Party to make the loans and advances
contemplated by the Note, Debtor hereby agrees with the Secured
Party as follows:
Section 1. Grant of
Security . Debtor
hereby assigns and pledges to the Secured Party and grants to the
Secured Party a security interest in all of Debtor’s right,
title and interest in and to the U.S. Patent No. 6,306,248
(“Patent”), all the rights associated with such Patent
as set forth in Section 1.1 of the Purchase Agreement, and all
collections, receipts and other proceeds (cash and non-cash) of any
of the foregoing (the “Collateral”).
Section 2. Security for
Obligations . This
Agreement secures the payment of all obligations of Debtor now or
hereafter existing under the Note (all such obligations of Debtor
being the “Obligations”). Without limiting the
generality of the foregoing, this Agreement secures the payment of
all amounts that constitute part of the Obligations, including all
amounts that would be owed by Debtor to the Secured Party under the
Note but for the fact that they are unenforceable or not allowable
due to the existence of a bankruptcy, reorganization or similar
proceeding involving Debtor.
Section 3. Release of
Security . As of the
date of the repayment in full of all indebtedness under the Note,
the security interest granted hereby shall terminate and all rights
to the Collateral shall revert to Debtor.
Section 4. Representations and
Warranties . Debtor
represents and warrants, which representations and warranties shall
survive execution and delivery of this Security Agreement, as
follows: (a) The exact legal name, the type of organization,
and the jurisdiction of organization of the Company is accurately
set forth on the first page of this Agreement. (b) This
Agreement has been duly executed and delivered by Debtor and is a
valid and binding obligation of Debtor, enforceable against Debtor
in accordance with its terms. (c) The execution and delivery
by Debtor of this Agreement and the performance of its obligations
hereunder are within Debtor’s authority and capacity and do
not contravene any law, regulation, order or contractual
restriction binding on or affecting Debtor. (d) The pledge and
grant of security interest in the Collateral pursuant to this
Agreement creates a valid and perfected security interest in the
Collateral in favor of the Secured Party, securing the payment of
all of the Obligations. (g) The Company will be the sole,
legal and equitable owner of the Collateral, and no financing
statement or other evidence of lien covering or purporting to cover
the Collateral will be on file in any public office other than the
financing statements filed in connection with the security interest
granted to the Secured Party hereunder.
Section 5. Further Assurances
.
(a) Debtor agrees that from time to time,
at the expense of Debtor, Debtor will promptly execute and deliver
all further instruments and documents, and take all further action,
that may be necessary or desirable, or that the Secured Party may
reasonably request, in order to perfect and protect any pledge,
assignment or security interest granted or purported to be granted
hereby or to enable the Secured Party to exercise and enforce its
rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, Debtor will:
(i) deliver and pledge to the Secured Party promptly upon
receipt thereof all instruments or certificates representing or
evidencing any of the Collateral duly endorsed and accompanied by
duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Secured Party; and
(ii) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Secured Party
may request, in order to perfect and preserve the pledge,
assignment and security interest granted or purported to be granted
hereby.
(b) Debtor hereby authorizes the Secured
Party to file one or more financing or continuation statements, and
amendments thereto, relating to all or any part of the Collateral
without the signature of Debtor where permitted by law. A photocopy
or other reproduction of this Agreement or any financing statement
covering the Collateral or any part thereof shall be sufficient as
a financing statement where permitted by law.
(c) Debtor will furnish to the Secured
Party from time to time statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as the Secured Party may reasonably
request, all in reasonable detail.
(d) Until payment in full of all of the
Obligations, Debtor agrees: (i) to defend the title of the
Collateral and the lien thereon of the Secured Party against the
claim of any other person; (ii) to maintain and preserve such
lien until payment; (iii) not use or permit any Collateral to
be used unlawfully or in violation of any provision of this
Agreement or any applicable statute, regulation or ordinance or any
policy of insurance covering the Collateral; (iv) to give the
Secured Party at least 30 days’ prior written notice of
any change in Debtor’s name, domicile, or structure;
(v) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and
all claims against, the Collateral except to the extent the
validity thereof is being contested in good faith; provided that
such Debtor shall in any event pay such taxes, assessments,
charges, levies or claims not later than five days prior to the
date of any proposed sale under any judgment, writ or warrant of
attachment entered or filed against such Debtor or any of the
Collateral as a result of the failure to make such payment; and
(vi) not sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to, any of
the Collateral, or create or suffer to exist any lien upon or with
respect to any of the Collateral.
Page 2
If Debtor fails
to perform any agreement contained herein, the Secured Party may
itself perform, or cause performance of, such agreement. Debtor
agrees to reimburse the Secured Party on demand for any payments
made or expenses incurred by the Secured Party pursuant to the
foregoing authorization and any unreimbursed amounts shall
constitute amounts outstanding under the Note for all purposes
hereo
|
