Exhibit 10.26


 


AMENDMENT NO. 2 TO

TERM CREDIT AGREEMENT


 


This Amendment No. 2 to Term Credit Agreement (the “Amendment”) is entered into as of December 31, 2004 by and
among WORLDWATER CORP., a Delaware corporation (“Borrower”),
HONG KONG LEAGUE CENTRAL CREDIT UNION, in its capacity as a lender hereunder (“Hong Kong League”), HIT CREDIT UNION, in its capacity as a
lender hereunder (“HIT”), (HIT and
Hong Kong League shall be collectively referred to as “Lenders”), and SBI
ADVISORS, LLC, a California limited liability company (“Agent”),
in its capacity as agent for Lenders, each of whom is a party to the Agreement.


 


WITNESSETH:


 


WHEREAS, on or
about March 29, 2004, the parties hereto entered into the Term Credit
Agreement, as amended as of September 23, 2004 by Amendment No. 1 to Term
Credit Agreement (collectively, the “Agreement”);


 


WHEREAS, the
parties hereto desire to amend the Agreement; and,


 


WHEREAS,
except as expressly modified and amended herein, the Agreement remains in full
force and effect without amendment.


 


NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereby agree as follows:


 


3.             Except as provided
herein, all defined terms have the same meaning as set forth in the Agreement.


 


2.             (a)           Borrower,
in its sole discretion, may elect at any time to convert all or any portion of
the outstanding principal amount of the Loan, and all or any portion of accrued
and unpaid interest thereon (collectively, the “Debt”),
into Common Stock of Borrower, subject to the conditions described in Section
2(b) below. Upon Borrower’s election to convert any of the Debt as described
herein, Borrower will provide Lenders with a written notice of conversion. The
conversion price at which the Common Stock is issuable to the Lenders will be
the average closing price of the Common Stock of Borrower for the 10 trading
days immediately preceding the date of the notice of conversion, less a thirty
percent (30%) discount; provided, however, that in no event will the conversion
price be greater than $0.30 or less than $0.10 per share of Borrower’s Common
Stock. The number of shares of Common Stock issuable hereunder and the
conversion price are subject to adjustment as provided in Section 4 of the
Warrant Agreement attached to the Agreement as Exhibit “B-2.”


 





















 


(b)           The Debt
may be converted by Borrower only into shares of the Borrower’s Common Stock
that have been registered under the Securities Act of 1933, as amended, and
that upon issuance, are fully paid and nonassessable.


 


(c)           Provided
that the conditions described in Section 2(b) above have been satisfied, the
portion of the Debt subject to conversion hereunder will be deemed paid in full
as of the date of the conversion notice. In the event Borrower elects to
convert all of the Debt hereunder, Lenders will be obligated to return to
Borrower the originally executed copies of the Notes marked “satisfied” as a
condition to the delivery of Common Stock to Lenders.


 


3.             Miscellaneous.


 


(a)           Failure
or Indulgence Not Waiver.  No failure
or delay on the part of Agent, any Lender, or any holder of a Note in the
exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof or of any other right,
power or privilege.


 


(b)           Modification.  No modification, amendment or waiver of any
provision of this Agreement or the Notes, nor the consent to any departure by
Borrower therefrom, shall in any event be effective unless the same shall have
been approved by Agent and Lenders and shall be in writing signed by Agent and
Lenders and, with respect to any amendment, Borrower.  Such waiver or consent shall then be
effective only in the specific instance and for the purpose for which
given.  No notice to or demand on
Borrower in any case shall entitle Borrower to any other or further notice or
demand in the same, similar or other circumstances.


 


(c)           Notices.  Except as otherwise expressly provided
herein, any notice herein required or permitted to be given shall be in writing
and shall be deemed effective when personally delivered, mailed, telecopied
(with a confirming copy sent by mail) or delivered by telex to the appropriate
party at the address set forth below (or at such other address as may be
designated by either party in a written notice sent in accordance with this
Section):


 


 


	
  If
  to Borrower:

  	
   

  	
  Worldwater
  Corp.

  
	
   

  	
   

  	
  Pennington
  Business Park

  
	
   

  	
   

  	
  55
  Route 31 South

  
	
   

  	
   

  	
  Pennington,
  New Jersey

  
	
   

  	
   

  	
  Attention:
  President

  
	
   

  	
   

  	
  Telecopy
  No.: 609-818-0720

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  If
  to Hong

  	
   

  	
  Hong
  Kong League Central Credit Union

  
	
  Kong
  League

  	
   

  	
  Party
  Room 1-2, G/F, Kam Wah House

  
	
  Central
  Credit

  	
   

  	
  Choi
  Hung Estate, Kowloon, Hong Kong

  
	
  Union:

  	
   

  	
  Telecopy
  No.: +852-3101-0332

  



 





















 


	
  with a copy to:

  	
   

  	
  SBI Advisors, LLC

  
	
   

  	
   

  	
  2361 Campus Drive,
  Suite 210

  
	
   

  	
   

  	
  Irvine, CA 92612

  
	
   

  	
   

  	
  Telecopy No.:
  949-679-7280

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  If
  to HIT Credit Union:

  	
   

  	
  HIT
  Credit Union

  
	
   

  	
   

  	
  Berth
  4, Block 2, 2/F

  
	
   

  	
   

  	
  Container
  Port Road, South Kwai Chung

  
	
   

  	
   

  	
  New
  Territories, Hong Kong

  
	
   

  	
   

  	
  Telecopy No.:
  +852-3101-0332

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  SBI Advisors, LLC

  
	
   

  	
   

  	
  2361 Campus Drive,
  Suite 210

  
	
   

  	
   

  	
  Irvine, CA 92612

  
	
   

  	
   

  	
  Telecopy No.:
  949-679-7280

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  If to Agent:

  	
   

  	
  SBI Advisors, LLC

  
	
   

  	
   

  	
  2361 Campus Drive,
  Suite 210

  
	
   

  	
   

  	
  Irvine, CA 92612

  
	
   

  	
   

  	
  Telecopy No.:
  949-679-7280

  



 


(d)           Severability.  In case any provision in this Agreement or
the Notes shall be invalid, illegal or unenforceable, such provision shall be
severable from the remainder of such contract and the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.


 


(e)           Applicable
Law.  This Agreement, the Notes and
the rights and obligations of the parties thereto shall be governed by the laws
of the State of California, exclusive of its conflicts of laws and choice of
laws rules that would or may cause the application of the laws of any
jurisdiction other than the State of California.


 


(f)            Assignability.  Borrower shall not assign its rights or
obligations hereunder, or under the Notes to any other Person without the prior
written consent of Agent and Lenders, and any attempted assignment in violation
hereof shall be null and void ab initio.  Agent and Lenders shall have the right to
assign their rights and obligations hereunder and no consent or approval from
Borrower is required in connection with any such assignment.


 


(g)           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.


 





















 


(h)           Section
Headings.  The various headings used
in this Agreement are inserted for convenience only and shall not affect the
meaning or interpretations of this Agreement or any provision hereof.


 


(i)            Attorneys’
Fees.  In the event any party
institutes any action or proceeding to enforce the terms and conditions of this
Agreement or the Notes, the prevailing party shall be entitled to reasonable
attorneys’ fees and costs.


 


(j)            WAIVER
OF TRIAL BY JURY.  EACH OF THE
PARTIES HERETO IRREVOCABLY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER
AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM
IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT
OF OR BASED UPON THIS AGREEMENT, THE NOTES, OR THE SUBJECT MATTER HEREOF AND
THEREOF OR ANY DOCUMENT RELATING HERETO OR THERETO, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING OR WHETHER IN CONTRACT, TORT OR OTHERWISE.


 


(j)            Integration.  This Agreement, the Notes and the Exhibits
hereto reflect the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, whether before or after the date hereof.


 


 


[signatures appear
on the following page]


 





















 


IN WITNESS WHEREOF, the parties hereto do execute this
Amendment as of the date first above written.


 


	
   

  	
  “BORROWER”

  
	
   

  	
   

  	
   

  
	
   

  	
  WORLDWATER CORP., a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Quentin T. Kelly

  	
   

  
	
   

  	
  Name:

  	
    Quentin T. Kelly

  	
   

  
	
   

  	
  Its:

  	
    Chairman and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
						



 


	
   

  	
  “AGENT”

  
	
   

  	
   

  	
   

  
	
   

  	
  SBI ADVISORS, LLC, solely in its capacity as Agent
  hereunder

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Shelly Singhal

  	
   

  
	
   

  	
  Name:

  	
    Shelly Singhal

  	
   

  
	
   

  	
  Its:

  	
    Managing Member

  	
   

  
	
   

  	
   

  	
   

  
						



 


	
   

  	
  “LENDERS”

  
	
   

  	
   

  	
   

  
	
   

  	
  HONG KONG LEAGUE CENTRAL CREDIT UNION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Shelly Singhal

  	
   

  
	
   

  	
  Name:

  	
    Shelly Singhal

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
						



 


	
   

  	
  HIT CREDIT UNION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Shelly Singhal

  	
   

  
	
   

  	
  Name:

  	
    Shelly Singhal

  	
   

  
	
   

  	
  Its: