Document:

Form Sec Agmt 10% Conv Deb

COMPANY SECURITY AGREEMENT

Date: February ___, 2004

The undersigned (herein referred to as “Debtor”) hereby agrees in favor of ___________________ (herein referred to as “Secured Party”), as follows:

1.   In consideration of the delivery of a promise to pay $__________ under that certain Trinity3 Corporation 10% Convertible Debenture between Secured Party and Debtor of even date herewith (the “Agreement”), Debtor hereby grants to Secured Party a continuing security interest in, and Debtor hereby assigns to Secured Party the Collateral described in Exhibit A hereto, to secure the payment, performance and observance of the obligations of Debtor under the Agreement (the foregoing being herein referred to as the “Obligations”). 

Notwithstanding the foregoing, Secured Party expressly agrees to subordinate this Company Security Agreement and its rights hereunder to any providers of bank financing, bank debt, senior bank debt, subordinated debt from commercial lenders, and mezzanine debt to the Company. Secured Party expressly agrees to execute any and all documents reasonably requested by the Company or any of the above parties in order to evidence this subordination.

2.   Debtor warrants, represents and covenants that: (a) the chief executive office and other places of business of Debtor, the books and records relating to the Collateral and the Collateral will not change without prior written notice to and consent of Secured Party; (b) the Collateral is now, and at all times will be, owned by Debtor free and clear of all liens, security interest, claims and encumbrances, unless previously disclosed to Secured Party; (c) Debtor will not assign, sell, mortgage, lease, transfer, pledge, grant a security interest in or lien upon, encumber, or otherwise dispose of or abandon, nor will Debtor suffer or permit any of the same to occur with respect to, any part or all of the Collateral, without prior written notice to Secured Party; (d) Debtor has made, and will continue to make payment or deposit or otherwise provide for the payment, when due, of all taxes, assessments or contributions required by law which have been or may be levied or assessed against Debtor with respect to any of the Collateral; (e) Secured Party shall at all times have free access to and right of inspection of the Collateral and any records pertaining thereto; (f) at any time and from time to time, Debtor shall, at its sole cost and expense, execute and deliver to Secured Party such financing statements pursuant to the Uniform Commercial Code (“UCC”), applications for certificate of title and other papers, documents or instruments as may be requested by Secured Party in connection with this Security Agreement, and Debtor hereby authorizes Secured Party to execute and file at any time and from time to time one or more financing statements or copies thereof of this Security Agreement with respect to the Collateral signed only by Secured Party.

3.   Each of the following events shall constitute an event of default (“Default”) under this Security Agreement: (a) Debtor shall default in the punctual payment of any sum payable with respect to, or in the observance or performance of any of the terms and conditions of any Obligations; (b) the making or filing of any lien, levy, or execution on or seizure, attachment of or garnishment of, any Collateral; (c) Debtor shall become insolvent or commit an act of bankruptcy or make an assignment for the benefit of creditors; (d) there shall be filed by or against any Obligor any petition for any relief under the bankruptcy laws of the United States now or hereafter in effect; (e) the usual business of Debtor shall be terminated or suspended.

	 
	 	1 of 3	 
	

	 

 

4.   Upon the occurrence of any Default and at any time thereafter, Secured Party may, without notice to or demand upon Debtor, declare any Obligations immediately due and payable and Secured Party shall have all rights and remedies of a secured party under the UCC.

5.   Debtor hereby releases Secured Party from any claims, causes of action and demands at any time arising out of or with respect to this Security Agreement, the Obligations, the Collateral and its use and/or actions taken or omitted to be taken by Secured Party with respect thereto, and Debtor hereby agrees to hold Secured Party harmless from and with respect to any and all such claims, causes of action and demands. No act, omission or delay by Secured Party shall constitute a waiver of its rights and remedies hereunder or otherwise. Debtor hereby waives presentment, notice of dishonor and protest of all instruments included in or evidencing any Obligations or Collateral, and all other notices and demands whatsoever (except as expressly provided herein). No provision hereof shall be modified, altered or limited except by a written instrument expressly referring to this Security Agreement and to such provision, and executed by the party to be charged. This Security Agreement and all Obligations shall be binding upon the heirs, executors, administrators, successors, or assigns of Debtor and shall, together with the rights and remedies of Secured Party hereunder, inure to the benefit of Secured Party, its successors, endorses and assigns. This Security Agreement and the Obligations shall be governed in all respects by the laws of the State of California applicable to contracts executed and to be performed in such state. If any term of this Security Agreement shall be held to be invalid, illegal or unenforceable, the validity of all other terms hereof shall in no way be affected thereby.

IN WITNESS WHEREOF, the undersigned has executed or caused this Security Agreement to be executed as of the date first above set forth.

	
“Debtor”
	
“Secured Party”

	
 
	
 

	
Trinity3 Corporation,
	
 

	
a Delaware corporation
	
 

	
 
	
 

	
 
	
 

	
               
	
               

	
By:   Steven D. Hargreaves
	
[Insert name]

	
Its:   President
	
 

	
 
	
 

	
 
	
 

	
               
	
 

	
By:   Shannon T. Squyres
	
 

	
Its:   Chief Executive Officer
	
 

	 
	 	2 of 3	 
	

	 

EXHIBIT A

PROPERTY SUBJECT TO SECURITY INTEREST

With respect to Trinity3 Corporation, a Delaware corporation (the “Company”), the Collateral includes (i) all equipment, machinery, vehicles, furniture, tools, dies, jigs, and fixtures, and all attachments, accessions and equipment now or hereafter affixed thereto or used in connection therewith, and all substitutions and replacements thereof, wherever located, whether now owned or hereafter acquired (the “Equipment”); (ii) all raw materials, work in process, finished goods, and all other inventory (as defined in the Uniform Commercial Code) of whatsoever kind or nature, and all wrapping, packaging, advertising and shipping materials, and any documents relating thereto, and all labels and other devices, names or marks affixed or to be affixed thereto for purposes of selling or of identifying the same or the seller or manufacturer thereof and all of the Company’s right, title and interest therein and thereto, wherever located, whether now owned or hereafter acquired (the “Inventory”); (iii) all present and future accounts, contract rights, chattel paper, documents, instruments, trademarks, trade names, service names and general intangibles, whether now owned or hereafter acquired, the Company's interest in the goods represented thereby or described in copies of invoices delivered to the Company; all returned, reclaimed or repossessed goods with respect thereto; all rights and remedies of Debtor under or in connection with such collateral (the “Accounts”); (iv) all books, records and other property and general intangibles at any time relating to the Equipment, Inventory and Accounts (“Records”); and (v) all products and proceeds of the foregoing, in any form, including without limitation, any claims against third parties for loss or damage to or destruction of any or all of the Equipment, Inventory and Accounts (the "Proceeds").

 

	 
	 	3 of 3Form of War u SPA 10% Con Deb War Unit

WARRANT

For the Purchase of ______________

Shares of Common Stock

of

Trinity3 Corporation,

a Delaware Corporation

THIS CERTIFIES THAT, for value received, ___________________________________ (the “Holder”), is entitled to, within the time frame set forth in Section 1 below (“Expiration Date”), but not thereafter, to subscribe for, purchase and receive up to _______________________________ (______________) fully paid and nonassessable shares of the common stock (the “Common Stock”), of Trinity3 Corporation, a Delaware corporation (the “Company”), at the initial price of $0.01 per share, but subject to adjustment as provided in Section 2 below, (the “Exercise Price”), upon payment by cashier’s check or wire transfer of the Exercise Price for such shares of the Common Stock to the Company at the Company’s offices.

1.   Exercise of Warrant. This Warrant may be exercised in whole or in part at any time or from time to time during the two (2) year period beginning with the date that a registration statement filed for the purpose of registering the resale of the Common Stock is declared effective by the Securities and Exchange Commission, by presentation and surrender hereof to the Company of a notice of election to purchase duly executed and accompanied by payment by cashier’s check or wire transfer of the Exercise Price for the number of shares specified in such election.

2.   Adjustment in Number of Shares.

(A)   Adjustment for Reclassifications. In case at any time or from time to time after the issue date the holders of the Common Stock of the Company (or any shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall have received, or, on or after the record date fixed for the determination of eligible stockholders, shall have become entitled to receive, without payment therefore, other or additional stock or other securities or property (including cash) by way of stock split, spin-off, reclassification, combination of shares or similar corporate rearrangement (exclusive of any stock dividend of its or any subsidiary=s capital stock), then and in each such case the Holder of this Warrant, upon the exercise hereof as provided in Section 1, shall be entitled to receive the amount of stock and other securities and property which such Holder would hold on the date of such exercise if on the issue date he had been the holder of record of the number of shares of Common Stock of the Company called for on the face of this Warrant and had thereafter, during the period from the issue date, to and including the date of such exercise, retained such shares and/or all other or additional stock and other securities and property receivable by him as aforesaid during such period, giving effect to all adjustments called for during such period. In the event of any such adjustment, the Exercise Price shall be adjusted proportionally.

(B)   Adjustment for Reorganization, Consolidation, Merger. In case of any reorganization of the Company (or any other corporation the stock or other securities of which are at the time receivable on the exercise of this Warrant) after the issue date, or in case, after such date, the Company (or any such other corporation) shall consolidate with or merge into another corporation or convey all or substantially all of its assets to another corporation, then and in each such case the Holder of this Warrant, upon the exercise hereof as provided in Section 1 at any time after the consummation of such reorganization, consolidation, merger or conveyance, shall be entitled to receive, in lieu of the stock or other securities or property to which such Holder would be entitled had the Holder exercised this Warrant immediately prior thereto, all subject to further adjustment as provided herein; in each such case, the terms of this Warrant shall be applicable to the shares of stock or other securities or property receivable upon the exercise of this Warrant after such consummation.

	 
	 	1 of 3	 
	

	 

 

3.   Reservation of Common Stock. The Company shall at all times reserve and keep available out of its authorized but unissued shares of common stock solely for the purpose of effecting the exercise of this warrant such number of its shares of common stock as shall from time to time be sufficient to effect the exercise hereof.

4.   Registration Rights. If the Company at any time proposes to register any of its securities under the Act, including under an S-1 Registration Statement or otherwise, it will each such time give written notice to all holders of outstanding warrants of its intention so to do. Upon the written request of a holder or holders of any such warrants given within 30 days after receipt of any such notice, the Company will use its best efforts to cause all shares underlying the exercise of such warrants to be registered under the Act (with the securities which the Company at the time propose to register); provided, however, that the Company may, as a condition precedent to its effective such registration, require each Holder to agree with the Company and the managing underwriter or underwriters of the offering to be made by the Company in connection with such registration that such Holder will not sell any securities of the same class or convertible into the same class as those registered by the Company (including any class into which the securities registered by the Company are convertible) for such reasonable period after such registration becomes effective (not exceeding 90 days) as shall then be specified in writing by such underwriter or underwriters if in the opinion of such underwriter or underwriters the Company's offering would be materially adversely affected in the absence of such an agreement. All expenses incurred by the Company in complying with this Section, including without limitation all registration and filing fees, listing fees, printing expenses, fees and disbursements of all independent accountants, or counsel for the Company and the expense of any special audits incident to or required by any such registration and the expenses of complying with the securities or blue sky laws of any jurisdiction shall be paid by the Company. 

5.   Notices. All notices and other communications from the Company to the Holder of this Warrant shall be mailed by first class registered or certified mail, postage prepaid, to the address set forth in the records of the Company.

6.   Change; Waiver; Assignment. Neither this Warrant nor any term hereof may be changed, waived, discharged or terminated orally but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought. This Warrant may only be assigned by the Holder pursuant to the terms of that certain Securities Purchase Agreement of even date herewith pursuant to which this Warrant was purchased.

 

	 
	 	2 of 3	 
	

	 

 

7.   Law Governing. This Warrant shall be construed and enforced in accordance with and governed by the laws of California. Any action or proceeding arising under or pursuant to this Warrant shall be brought in the appropriate court in the County of Orange, California.

8.   Entire Agreement. This Warrant sets forth and includes the entire obligation of the Company with respect to any warrants held or due to Holder as of the date hereof, and any other agreement, arrangement, writing, contract, letter, or agreement dated prior to or of even date herewith shall be null and void upon execution of this Agreement.

IN WITNESS WHEREOF, the undersigned has caused this Warrant to be signed as of this _____ day of _____________________, 2004.

 

 

	
 
	
 
	
Trinity3 Corporation,

	
 
	
 
	
a Delaware corporation 

	
 
	
 
	
                                             

	
 
	
 

	
 
	
 

	
 
	
 
	
By: Steven D. Hargreaves

	
 
	
 
	
Its: President 

	
 
	
 
	
 

	
 
	
 
	
 

			                                            
	
 
	
 
	
By: Shannon T. Squyres  

	
 
	
 
	
Its: Chief Executive Officer 

	 Acknowledged and Accepted:	 
	 	 
	 	 
	 [Insert name of Holder]	 
	 	 
	

By:

	 
	 Its:

	 

 

	 
	 	3 of 3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}]]