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AIR PACKAGING TECHNOLOGIES INC.
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CONVERTIBLE NOTES DUE 2004
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INDENTURE
DATED AS OF JANUARY 29, 2002
INTERWEST TRANSFER CO., INC.,
TRUSTEE
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TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE 1
Section 1.01. Definitions 1
Section 1.02. Other Definitions 4
Section 1.03. Rules of Construction 4
ARTICLE 2. THE NOTES 4
Section 2.01. Form and Dating 4
Section 2.02. Title and Terms 5
Section 2.03. Execution and Authentication 5
Section 2.04. Registrar and Paying Agent 5
Section 2.05. Paying Agent to Hold Money in Trust 5
Section 2.06. Holder Lists 6
Section 2.07. Transfer and Exchange 6
Section 2.08. Replacement Notes 6
Section 2.09. Outstanding Notes 7
Section 2.10. Cancellation 7
Section 2.11. Record Date 7
Section 2.12. Computation of Fixed Interest 7
Section 2.13. Issuance of Additional Securities 7
ARTICLE 3. CONVERSION AND REDEMPTION OF NOTES 8
Section 3.01. Notices to Trustee 8
ARTICLE 4. COVENANTS 8
Section 4.01. Payment of Notes 8
Section 4.02. Maintenance of Office or Agency 8
Section 4.03. Reports 9
Section 4.04. Compliance Certificate 9
Section 4.05. Stay, Extension and Usury Laws 9
Section 4.06. Further Instruments and Acts 10
Section 4.07. Payment of Taxes and Other Claims 10
Section 4.08. Maintenance of Insurance 10
ARTICLE 5. SUCCESSORS 10
Section 5.01. Mergers and Consolidation 10
Section 5.02. Successor Corporation Substituted 11
ARTICLE 6. DEFAULTS AND REMEDIES 11
Section 6.01. Events of Default 11
Section 6.02. Acceleration 12
Section 6.03. Other Remedies 12
Section 6.04. Waiver of Past Defaults 12
Section 6.05. Control by Majority 13
Section 6.06. Limitation on Suits 13
Section 6.07. Collection Suit 14
Section 6.08. Proofs of Claim 14
Section 6.09. Priorities 14
Section 6.10. Restoration of Rights and Remedies 15
Section 6.11. Rights and Remedies Cumulative 15
Section 6.12. Delay or Omission Not Waiver 15
Section 6.13. Undertaking for Costs 15
TABLE OF CONTENTS
(continued)
ARTICLE 7. TRUSTEE 16
Section 7.01. Duties of Trustee 16
Section 7.02. Rights of Trustee 17
Section 7.03. Individual Rights of Trustee 18
Section 7.04. Disclaimer 18
Section 7.05. Notice of Defaults 18
Section 7.06. Compensation and Indemnity 18
Section 7.07. Replacement of Trustee 19
Section 7.08. Successor Trustee by Merger, etc 20
ARTICLE 8. AMENDMENT, SUPPLEMENT AND WAIVER 20
Section 8.01. Without Consent of Holders of the Notes 20
Section 8.02. With Consent of Holders of Notes 21
Section 8.03. Revocation and Effect of Consents 22
Section 8.04. Notation on or Exchange of Notes 22
Section 8.05. Trustee to Sign Amendments, etc. 22
ARTICLE 9. COLLATERAL AND SECURITY 23
Section 9.01. Security Agreement 23
Section 9.02. Recording and Officer's Certificates 23
Section 9.03. Release of Collateral 24
Section 9.04. Certificates of the Trustee 24
Section 9.05. Authorization of Actions to Be Taken by the Trustee and the
Collateral Agent Under the Security Agreement 25
Section 9.06. Authorization of Receipt of Funds by the Trustee Under the
Security Agreement 25
ARTICLE 10. SATISFACTION AND DISCHARGE 25
Section 10.01. Satisfaction and Discharge 25
Section 10.02. Application of Trust Money 26
ARTICLE 11. MISCELLANEOUS 26
Section 11.01. Notices 26
Section 11.02. Communication by Holders of Notes with Other Holders of Notes 27
Section 11.03. Certificate and Opinion as to Conditions Precedent 27
Section 11.04. Statements Required in Certificate or Opinion 28
Section 11.05. Rules by Trustee and Agents 28
Section 11.06. No Personal Liability of Directors, Officers, Employee 28
and Stockholder 28
Section 11.07. Governing Law 28
Section 11.08. Waiver of Jury Trial 29
Section 11.09. No Waiver, Remedies 29
Section 11.10. Collection Costs, Attorney's fees 29
Section 11.11. Successors 29
Section 11.12. Severability 29
Section 11.13. Counterpart Originals 29
Section 11.14. Table of Contents, Headings, etc. 30
Section 11.15. Entire Agreement; Modification 30
EXHIBITS
Exhibit A Initial Notes
Exhibit B Form Of Note
Exhibit C Security Agreement
Indenture, dated as of ___January, 2002, among Air Packaging
Technologies, Inc., a Delaware corporation (the "Company"), and Interwest
Transfer Co., Inc., a Utah Corporation, as Trustee.
WHEREAS, the Company did issue certain convertible Notes due 2004 in
2000 and 2001; and
WHEREAS, said Notes were to be secured by certain assets of the
Company and provided for the creation of an indenture to secure up to $2,500,000
in Notes due 2004; and
WHEREAS, the Company desires to appoint Interest Transfer Co., Inc.,
as trustee for the holders of said Notes and any subsequently issued Notes due
2004 ;
NOW, THEREFORE, the Company and Trustee agree as follows for the
equal and ratable benefit of the holders of the Company's Convertible Notes Due
2004:
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"Additional Notes" means Convertible Notes due 2004, issued from time
to time under this Indenture after the Issue Date of the Initial Notes.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.
"Agent" means any Registrar or Paying Agent.
"Board of Directors" means the Board of Directors of the Person or any
authorized committee of the Board of Directors.
"Business Day" means any day other than a Legal Holiday.
"Collateral" means all of the assets of the Company not secured by any
other party, including but not limited to its United States and foreign patents,
patents pending, trademarks, trademarks pending, equipment, furniture &
fixtures, inventory, accounts receivable, and cash in bank, all proceeds,
products, and substitution of any of foregoing collateral.
"Collateral Agent" means the Collateral Agent named in the Security
Agreement, in its capacity as Collateral Agent, until a successor replaces it in
accordance with the applicable provisions of this Indenture and the Security
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Agreement, and thereafter means the successor. The Trustee shall be the initial
Collateral Agent.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Fixed Interest" means the interest payable on the Notes.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Indenture.
"Holder" means the Person in whose name a Note is registered on the
Registrar's books.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Indirect Participant" means a Person who holds an interest in the
Notes through a Participant.
"Initial Notes" means the $1,000,000 principal amount 8.75%
Convertible Notes due 2004 issued between September 6, 2000 and January 4, 2001
and the $460,000 principal amount 7% Convertible Notes due 2004 issued October
1, 2001.
"Interest" means all Fixed Interest on the Notes.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, the city in which the principal Corporate
Trust Office of the Trustee is located or at a place of payment are authorized
by law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment shall be made at that place on the
next succeeding day that is not a Legal Holiday.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
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"Maturity Date" means December 31, 2004.
"Notes" means the Initial Notes and the Additional Notes, not to
exceed a total issuance of $2,500,000 in principal.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, the Administrator, any Assistant
Treasurer, the Controller, the Secretary or any Vice President of such Person.
"Officer's Certificate" means a certificate signed on behalf of each
Company by an Officer of the Company, who must be the principal executive
officer, the principal financial officer or the principal accounting officer of
the Company, that meets the requirements of Section 12.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee that meets the requirements of Section
11.04 hereof. Such counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
limited liability company or any other entity.
"Responsible Officer" when used with respect to the Trustee and/or the
Collateral Agent, means any officer of the Trustee or the Collateral Agent, as
applicable, with direct responsibility for the administration of the Indenture
or the Security Agreement and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Securities Act" means the Securities Act of 1933, as amended and the
rules and regulations of the Commission promulgated thereunder.
"Security Agreement" means the Security Agreement dated on or about
the date of this Indenture by and among the Company and the Collateral Agent
relating to the Collateral and substantially in the form attached as Exhibit C
hereto, as such Agreement may be amended, modified, supplemented or restated
from time to time.
"Stated Maturity" means, with respect to any security, including the
Notes, the date specified in such security as the fixed date on which the
payment of principal of such security is due and payable, including pursuant to
mandatory redemption provisions.
"Trustee" means the Person named as Trustee in the preamble hereto
until a successor replaces such Person or another successor in accordance with
this Indenture and, thereafter, means such successor.
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Section 1.02. Other Definitions.
Defined in
Term Section
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"Company" Preamble
"Custodian" 6.01
"Event of Default" 6.01
"Paying Agent" 2.04
"Principal Payment Date" 2.02
"Registrar" 2.04
Section 1.03. Rules of Construction.
Unless the context otherwise requires:
(A) a term has the meaning assigned to it herein;
(B) an accounting term not otherwise defined
herein has the meaning assigned to it in accordance with GAAP;
(C) "or" is not exclusive;
(D) words in the singular include the plural, and in
the plural include the singular;
(E) provisions apply to successive events and
transactions; and
(F) references to sections of or rules under the
Securities Act or the Exchange Act shall be deemed to include substitute,
replacement or successor sections or rules adopted by the Commission from time
to time.
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating.
(a) The Notes shall be as attached hereto as Exhibit A as to the
outstanding Notes and substantially in the form of Exhibit B attached hereto as
to Notes to be issued under this indenture in the future, with the exception
that the interest rate, registration rights, conversion provisions, and
redemption provisions may vary between the Notes, which are hereby incorporated
in and expressly made part of this Indenture. The Notes may have notations,
legends or endorsements required by law, stock exchange rule, custom or usage.
Each Note shall be dated the date of its issue. The Notes initially shall be
issued in denominations of $1,000 and integral multiples thereof.
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Section 2.02. Title and Terms.
Principal and Fixed Interest on the Notes, to the extent not
previously paid shall be due and payable on the Stated Maturity which shall be
December 31, 2004.
The Notes shall be known and designated as the "Convertible Notes due
2004" of the Company. Fixed Interest on the Notes shall accrue at the rate set
forth in each issued and outstanding Note. Interest shall be paid in accordance
with the provisions of each issued and outstanding Note
Section 2.03. Execution and Authentication.
Two Officers shall sign the Notes for the Company by manual signature.
The Company's seal may be reproduced on the Notes and may be in facsimile form.
Section 2.04. Registrar and Paying Agent.
The Company shall maintain (i) an office or agency where Notes may be
presented for registration of transfer or for exchange (the "Registrar") and
(ii) an office or agency where Notes may be presented for payment (the "Paying
Agent"). The Registrar shall keep a register of the Notes and of their transfer
and exchange. The Company may appoint one or more co-registrars or one or more
additional paying agents. The term "Registrar" includes any co-registrars and
the term "Paying Agent" includes any additional paying agent. The Company may
change any Paying Agent or Registrar without notice to any Holder. The Company
shall notify the Trustee in writing of the name and address of any Agent not a
party to this Indenture. If the Company fails to appoint or maintain another
entity as Registrar or Paying Agent, the Trustee shall act as such. The Company
or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially will act as the Registrar and Paying Agent with
respect to any Notes.
Section 2.05. Paying Agent to Hold Money in Trust.
Not later than 10:00 a.m. Los Angeles time on each due date for the
cash payment of the principal or Interest on any of the Notes, the Company shall
deposit with the Paying Agent money, in immediately available funds, sufficient
to pay such principal or Interest so becoming due. The Company shall require
each Paying Agent other than the Trustee to agree in writing that the Paying
Agent shall hold in trust for the benefit of Holders or the Trustee all money
held by the Paying Agent for the payment of principal, premium, if any, or
Interest on the Notes, and shall notify the Trustee of any default by the
Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other
than the Company) shall have no further liability for the money. If the Company
or a Subsidiary of the Company acts as Paying Agent, it shall segregate and hold
in a separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.
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Section 2.06. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders. If the Trustee is not the Registrar, the Company shall furnish to
the Trustee at least five Business Days before each Interest Payment Date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of the Holders of Notes.
Section 2.07. Transfer and Exchange.
(a) When Notes are presented to the Registrar with a request to
register the transfer or to exchange them for an equal principal amount of Notes
of other denominations, the Registrar shall register the transfer or make the
exchange if its requirements for such transactions are met; provided, however,
that any Note presented or surrendered for transfer or exchange shall be duly
endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar duly executed by the Holder thereof or by his
attorney duly authorized in writing. To permit registrations of transfers and
exchanges, the Company shall execute Notes at the Registrar's request.
The Registrar shall not be required to register the transfer of or
exchange any Note selected for prepayment in whole or in part, except the
portion not being paid of any Note being prepaid in part.
The Registrar shall not be required (A) to issue, to register the
transfer of or to exchange any Notes during a period beginning at the opening of
business 15 days before the day of mailing of a notice of prepayment of Notes
under Section 3.01 hereof and ending at the close of business on the day of
selection, (B) to register the transfer of or to exchange any Note so selected
for prepayment in whole or in part, except the portion not being paid of any
Note being prepaid in part or (C) to register the transfer of or to exchange a
Note between a record date and the next succeeding Interest Payment Date.
No service charge shall be made to any Holder of a Note for any
registration of transfer or exchange (except as otherwise permitted herein), but
the Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith.
Prior to due presentment for the registration of a transfer of any
Note, the Trustee, any Agent and the Company may deem and treat the Person in
whose name any Note is registered as the absolute owner of such Note for the
purpose of receiving payment of principal of and Interest on such Notes and for
all other purposes, and none of the Trustee, any Agent or the Company shall be
affected by notice to the contrary.
Section 2.08. Replacement Notes.
If any mutilated Note is surrendered to the Company or the Company
receives evidence to their satisfaction of the destruction, loss or theft of any
Note, the Company shall issue a replacement Note. An indemnity bond may be
required to be supplied by the Holder that is sufficient in the judgment of the
Company to protect the Company from any loss that it may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
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Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.09. Outstanding Notes.
The Notes Outstanding at any time are all the Notes issued by the
Company except for those cancelled by it, those delivered to it for
cancellation, and those described in this Section 2.09 as not Outstanding. A
Note does not cease to be Outstanding because the Company or an Affiliate of the
Company holds the Note.
If a Note is replaced pursuant to Section 2.08 hereof, it ceases to be
Outstanding unless the Company receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
Section 2.10. Cancellation.
All Notes surrendered for registration of transfer, exchange or payment,
if surrendered to any Person other than the Company, shall be delivered to the
Company. The Company and no one else shall cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation. All
cancelled Notes held by the Company shall be disposed of by the Company in
accordance with its customary procedure.
Section 2.11. Record Date.
The record date for purposes of determining the identity of Holders of
the Notes entitled to vote or consent to any action by vote or consent
authorized or permitted under this Indenture shall be determined by the Trustee
but shall be no sooner than 15 days nor longer than 60 days prior to the said
vote or consent.
Section 2.12. Computation of Fixed Interest.
Fixed Interest on the Notes shall be computed on the basis of a 365 or
366-day year, as the case may be.
Section 2.13. Issuance of Additional Securities.
The Company shall be entitled to issue Additional Notes under this
Indenture which shall have substantially identical terms as the Initial Notes
issued on the Issue Date, with the exception that the interest rate,
registration rights, conversion provisions, and redemption provisions may vary
between the Notes. The Initial Notes issued on the Issue Date and any Additional
Notes shall be treated as a single class for all purposes under this Indenture,
and shall not exceed $2,500,000 in principal amount.
With respect to any Additional Notes, the Company shall set forth in
an Officer's Certificate, a copy of which shall be delivered to the Trustee, the
following information:
(a) the aggregate principal amount of such Additional Notes to be
issued and delivered pursuant to this Indenture;
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(b) whether such Additional Notes shall be subject to restrictions on
transfer.
(c) the names and addresses of the registered holders of such
additional Notes.
(d) the total amount of Notes to be outstanding after such issuance.
ARTICLE 3.
CONVERSION AND REDEMPTION OF NOTES
Section 3.01. Notices to Trustee.
If the Company elects to convert or redeem any of the Notes pursuant
to the terms thereof or receives notice of optional conversion from the holder
of any of the Notes, it shall furnish to the Trustee, at least 10 days before
the taking of such action, an Officer's Certificate setting forth (i) name of
the registered holder of the redeemed or converted Note(s), (ii) the principal
amount of such Note(s) redeemed or converted, (iii) the principal amount of the
Notes to be reissued in the event of a partial redemption or conversion and (iv)
the total amount of Notes to be outstanding after said redemption or conversion.
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes.
The Company shall pay or cause to be paid the principal of and/or cash
Interest on the Notes on the dates and in the manner provided in the Notes. An
installment of principal and/or cash Interest, shall be considered paid for all
purposes hereunder on the date the Paying Agent (if other than the Company, a
Subsidiary of the Company or an Affiliate of either of them) holds, as of 10:00
a.m. (Los Angeles time) money deposited by the Company in immediately available
funds and designated for and sufficient to pay all such principal and/or cash
Interest then due. If the Company, any Subsidiary of the Company or any
Affiliate of any of them acts as Paying Agent, an installment of principal or
Interest shall be considered paid on the due date thereof only if the entity
acting as Paying Agent complies with the penultimate sentence of Section 2.05.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain in the city of Valencia, California an
office or agency (which may be an office of the Company or an affiliate of the
Company) where Notes may be surrendered for registration, transfer or for
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exchange or for presentation of prepayment and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Company.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in Valencia,
California for such purposes. The Company shall give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.04 hereof.
Section 4.03. Reports.
Whether or not required by the rules and regulations of the
Commission, so long as any Notes are Outstanding, the Company will file with the
Commission, to the extent such submissions are accepted for filing by the
Commission, and furnish to the Trustee within 15 days of the time periods
specified in the Commission's rules and regulations for filing reports, (i) all
quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the Company
were required to file such forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and, with respect to
the annual information only, a report on the annual financial statements by the
Company's certified independent accountants; (ii) all current reports that would
be required to be filed with the Commission on Form 8-K if the Company were
required to file such reports and (iii) as long as the Company is required to
file information or reports with the Commission by Section 13(a) or 15(d) under
the Exchange Act, such information or reports. The Trustee will provide, at the
Company's expense, copies of any such information or reports to any Holder that
requests copies of such information or reports.
Section 4.04. Compliance Certificate.
On or before a date not more than 90 days after the end of each
fiscal year of the Company, the Company shall deliver to the Trustee a
certificate signed by the Chief Executive Officer, the Chief Financial Officer
or the treasurer of the Company stating that a review has been conducted of the
Company's performance under this Indenture and that the Company has fulfilled
all obligations hereunder, or, if there has been a Default or an Event of
Default, specifying each such Default and Event of Default and the nature and
the status thereof. The Company shall also notify the Trustee within 30 days of
any such officer having actual knowledge of any Default or Event of Defaults
under this Indenture.
Section 4.05. Stay, Extension and Usury Laws.
The Company covenants (to the extent 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 wherever
enacted, now or at any time hereafter in force, (i) that would prohibit or
forgive the Company from paying all or a portion of the principal of or Interest
on the Notes as contemplated herein or (ii) that may otherwise affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law has been enacted.
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Section 4.06. Further Instruments and Acts.
Upon the request of the Trustee, the Company will execute and deliver
such further instruments and do such further acts as may be reasonably necessary
or proper to carry out more effectively the purpose of this Indenture.
Section 4.07. Payment of Taxes and Other Claims.
The Company shall, and shall cause each of its Subsidiaries, to pay or
discharge, or cause to be paid or discharged, before the same shall become
delinquent (i) all material taxes, assessments and governmental charges levied
or imposed upon (a) the Company or any such Subsidiary, (b) the income or
profits of any such Subsidiary which is taxed as a corporation under the Code or
(c) the property of the Company or any such Subsidiary and (ii) all material,
lawful claims for labor, materials and supplies that, if unpaid, might by law
become a Lien upon the property of the Company or any such Subsidiary; provided,
however, that there shall not be required to be paid or discharged any such tax,
assessment, charge or claim if the amount, applicability or validity thereof is
being contested in good faith by appropriate proceedings and adequate provision
therefor has made.
Section 4.08. Maintenance of Insurance.
The Company will provide or cause to be provided, for itself and its
Subsidiaries, insurance against loss or damage of the kinds customarily insured
against by entities similarly situated and owning like properties, with
reputable insurers or with the government of the United States of America, or an
agency or instrumentality thereof, in such amounts, with such deductibles and by
such methods as shall be customary for entities similarly situated in the
industry in which the Company or such Subsidiary, as the case may be, is then
conducting business.
ARTICLE 5.
SUCCESSORS
Section 5.01. Mergers and Consolidation.
The Company shall not, directly or indirectly, consolidate or merge
with or into (whether or not the Company is the surviving corporation) another
Person, unless:
(i) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) assumes all the obligations
of the Company under the Notes and this Indenture pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee;
(ii) immediately after such consolidation or merger there is
no default or event that, with the passage of time or notice or both, would be a
Default or Event of Default under this Indenture; and
(iii) the Credit Rating of the surviving entity immediately
following the merger or consolidation would not be lower than that of the
Company immediately prior to the effectiveness of the merger or consolidation.
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Section 5.02. Successor Corporation Substituted.
Upon any consolidation or merger of the Company in accordance with
Section 5.01 hereof, the successor Person formed by such consolidation or into
or with which the Company is merged shall succeed to, and be substituted for (so
that from and after the date of such consolidation or merger, the provisions of
this Indenture referring to the "Company" shall refer instead to the successor
Person and not to the Company), and may exercise every right and power of the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein; provided, however, that the predecessor
Company shall not be relieved from the obligation to pay the principal of and
Interest on the Notes.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
Each of the following constitutes an "Event of Default":
(i) the failure of the Company to pay all or any
part of the unpaid principal on the Notes when and as the same becomes due
and payable at maturity, upon prepayment, by acceleration, or otherwise;
(ii) failure by the Company to pay installments of
Fixed Interest in full on the Notes for one Interest Payment Date;
(iii) failure by the Company to observe or perform in
all material respects any other covenant or agreement on the part of the
Company contained in the Notes, this Indenture or the Security Agreement if such
failure is not remedied within 30 days after written notice is given to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in aggregate principal amount of the Notes then Outstanding, in either
case specifying such default, requiring that such default be remedied and
stating that such notice is a "Notice of Default;"
(iv) the Company, pursuant to or within the meaning of
Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for
relief against it in an involuntary case,
(C) consents to the appointment of a
Custodian of it or for all or substantially all of its
property, or
(D) makes a general assignment for the
benefit of its creditors; or
(v) a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that:
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(A) is for relief against the
Company in an involuntary case;
(B) appoints a Custodian of the
Company or for all or substantially
all of the property of either the Company; or
(C) orders the liquidation of either the
Company;
and the order or decree remains unstayed and in effect for 60
consecutive days.
The term "Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
Section 6.02. Acceleration.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of the Notes then
Outstanding, by written notice to the Company (and to the Trustee if such notice
is given by the Holders), may, and the Trustee at the request of such Holders
shall, declare the principal of and accrued Interest on the Outstanding Notes to
be immediately due and payable. Upon a declaration of acceleration, such
principal of and accrued Interest shall be immediately due and payable.
Notwithstanding the foregoing, in the case of an Event of Default as described
in (v) and (vi) of Section 6.01 hereof, the Notes shall become due and payable
without further action or notice. Holders of the Notes may not enforce this
Indenture or the Notes except as provided in this Indenture.
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy (under this Indenture, or otherwise) to collect the
payment of principal of or interest on the Notes or to enforce the performance
of any provision of the Notes, this Indenture or the Security Agreement.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults.
Subject to Section 8.02, the Holders of a majority in aggregate
principal amount of the Notes then Outstanding by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under this Indenture (including any acceleration
other than an automatic acceleration resulting from an Event of Default under
clause (v) or (vi) of Section 6.01 hereof) except a continuing Default or Event
of Default in the payment of Interest on, or the principal of, the Notes or in
respect of a covenant or provision of this Indenture which cannot be modified or
amended without the consent of the Holder of each outstanding Note affected;
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provided, however, that in determining whether the Holders of the required
principal amount of Notes have concurred in any such waiver, Notes owned by the
Company, or by any Affiliate of the Company, shall be disregarded, except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, only Notes which such Trustee knows are so owned
shall be disregarded. Upon any such waiver, such Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured
for every purpose of this Indenture; provided, however, that no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereon.
Section 6.05. Control by Majority.
The Holders of a majority in principal amount of the then Outstanding
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee with respect to the Notes; provided, however that in
determining whether the Holders of the required principal amount of Notes have
concurred in any such direction, Notes owned by the Company, or by any Affiliate
of the Company, shall be disregarded, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, only Notes which such Trustee knows are so owned shall be
disregarded. However, (i) the Trustee may refuse to follow any direction that,
in the opinion of counsel to the Trustee, conflicts with law or this Indenture,
that the Trustee reasonably determines may be unduly prejudicial to the rights
of other Holders of Notes or that may involve the Trustee in personal liability,
and (ii) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction. In case an Event of Default shall
occur (which shall not be cured), the Trustee will be required, in the exercise
of its power, to use the degree of care of a prudent person in the conduct of
its own affairs. Notwithstanding any provision to the contrary in this
Indenture, the Trustee is under no obligation to exercise any of its rights or
powers under this Indenture at the request of any Holder of Notes, unless such
Holder shall offer to the Trustee security and indemnity satisfactory to it
against any loss, liability or expense.
Section 6.06. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(i) the Holder of a Note gives to the Trustee written
notice of a continuing Event of Default or the Trustee receives such notice from
the Company;
(ii) the Holders of at least 25% in aggregate principal
amount of the then Outstanding Notes make a written request to the Trustee to
pursue the remedy;
(iii) such Holder of a Note or Holders of Notes offer
and, if requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense to be incurred in compliance with such
request;
(iv) the Trustee does not comply with the request
within 60 days after receipt of the request and the offer and, if requested,
the provision of indemnity; and
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(v) during such 60-day period the Holders of a
majority in aggregate principal amount of the then Outstanding Notes do not
give the Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07. Collection Suit.
If an Event of Default specified in Section 6.01(i) or (ii) hereof
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount of principal of, and Interest remaining unpaid on, the Notes and interest
on overdue principal, Interest and such further amount as shall be sufficient to
cover the costs and expenses of collection and to the extent lawful, with
interest on overdue principal and installments of Interest at the rate specified
in the Notes in each case, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, and its agents and counsel.
Section 6.08. Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, and its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the
Company, the Company's creditors or the Company's property, to participate as a
member, voting or otherwise, of any official committee of creditors appointed in
such manner and shall be entitled and empowered to collect, receive and
distribute any money or other securities or property payable or deliverable upon
the conversion or exchange of the Notes or on any such claims and any Custodian
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, and its agents and counsel, and any other amounts due
the Trustee under Section 7.06 hereof. To the extent that the payment of any
such compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section 7.06
hereof out of the estate in any such proceeding, shall be denied for any reason,
payment of the same shall be secured by a Lien on, and shall be paid out of, any
and all distributions, dividends, money, securities and other properties that
the Holders may be entitled to receive in such proceeding whether in liquidation
or under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 6.9. Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
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First: to the Trustee, the Collateral Agent, and its agents and
attorneys for amounts due under Section 7.06 hereof, including payment of all
compensation, expense and liabilities incurred, and all advances made, by the
Trustee and the Collateral Agent and the costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal and Interest ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes first for principal, then
for Fixed Interest, respectively;
Third: without duplication, to the Holders for any other Obligations
owing to the Holders under this Indenture, the Notes or the Security Agreement;
and
Fourth: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.09.
Section 6.10. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined to the Trustee
or to such Holder, then, and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Company, the Trustee and the Holders shall
continue as though no such proceeding had been instituted.
Section 6.11. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or wrongfully taken Notes, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 6.12. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article Six or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders, as the case may be.
Section 6.13. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
15
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.14 does not apply to a suit by the Trustee or a suit by
Holders of more than 10% in principal amount of the then Outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing of which a
Responsible Officer of the Trustee has knowledge, the Trustee shall exercise
such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in its exercise, as a prudent person would exercise or
use under the circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Trustee need perform only those
duties that are specifically set forth in this Indenture and no others, and no
implied covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to the
Trustee, and conforming to the requirements of this Indenture. However, in the
case of any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall be under
a duty to examine the same to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or investigate the accuracy
of mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liabilities for its own
grossly negligent action, its own grossly negligent failure to act, or its own
willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section 7.01;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is proved that
the Trustee was grossly negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b) and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holderof Notes, including without limitation the provisions of
16
Section 6.05 hereof, unless such Holder shall have offered to the Trustee,
security and indemnity satisfactory to it against any loss, liability or expense
that might be incurred by it in complying with such request.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely on the truth of the statements
and correctness of the opinions contained in, and shall be protected from acting
or refraining from acting upon, any document believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officer's Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officer's Certificate or Opinion of Counsel. Prior to taking, suffering or
admitting any action, the Trustee may consult with counsel of the Trustee's own
choosing and the advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities that might be incurred by it in compliance with such request or
direction.
(g) The Trustee shall not be charged with knowledge of any Default or
Event of Default with respect to the Notes unless either (1) a Responsible
Officer of the Trustee shall have actual knowledge of such Default or Event of
Default or (2) written notice of such Default or Event of Default shall have
been given to the Trustee by the Company or by any Holder of the Notes.
(h) The rights, privileges, protections, immunities and benefits given
to the Trustee, including without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder and each agent, custodian and other Person employed to act hereunder.
(i) The Trustee may request that the Company deliver an Officer's
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officer's Certificate may be signed by any Person authorized to sign an
17
Officer's Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superceded.
Section 7.03. Individual Rights of Trustee.
The Trustee, in its individual or any other capacity may become the
owner of Notes and may otherwise deal with the Company or any Affiliate of the
Company with the same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the Commission for permission to continue
as Trustee or resign. Any Agent may do the same with like rights and duties.
Section 7.04. Disclaimer.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Notes; it shall not be
accountable for any money paid to the Company or upon the Company's direction
under any provision of this Indenture; it shall not be responsible for the use
or application of any money received by any Paying Agent other than itself; and
it shall not be responsible for any statement or recital herein or any statement
in the Notes or any other document in connection with the sale of the Notes or
pursuant to this Indenture other than its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to a Responsible Officer of the Trustee, the Trustee shall mail to Holders
of Notes a notice of the Default or Event of Default within 90 days after it
occurs. Except in the case of a Default or Event of Default in payment on any
Note, the Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of the Holders of the Notes.
Section 7.06. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time compensation as
shall be agreed between the Company and the Trustee for its acceptance of this
Indenture and services hereunder. To the extent permitted by law, the Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee promptly upon request for
all reasonable disbursements, advances and actual out of pocket expenses
incurred or made by it in addition to the compensation for its services. Such
expenses shall include the reasonable compensation, disbursements and expenses
of the Trustee's agents and counsel, but shall not include expenses incurred as
a result of the Trustee's negligence or willful misconduct.
The Company shall indemnify each of the Trustee and any predecessor
Trustee against any and all losses, liabilities, damages, claims or expenses,
including taxes (other than taxes based on or measured by the income or gross
receipts of the Trustee) incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Company (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Company or any Holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder except to
the extent any such loss, liability or expense may be attributable to its
18
negligence or bad faith. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder, except to
the extent of actual prejudice to the Company resulting from such failure. The
Company shall defend the claim and the Trustee shall cooperate in the defense.
The Trustee may have separate counsel and the Company shall pay the reasonable
fees and expenses of such counsel. The Company need not pay for any settlement
made without its consent, which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.06 shall survive
the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section 7.06, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
Interest on particular Notes redeemed, defeased, repurchased or otherwise
satisfied and discharged. Such Lien shall survive the satisfaction and discharge
of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(v) or (vi) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
Section 7.07. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.07.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of the then Outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:
(a) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee, as applicable, under any
Bankruptcy Law;
(b) a Custodian or public officer takes charge of the Trustee or its
property; or
(c) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then Outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount of the then Outstanding Notes
may petition, at the expense of the Company, any court of competent jurisdiction
for the appointment of a successor Trustee.
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A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and the duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of its
succession to the Holders of the Notes. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee provided
that all sums owing to the retiring Trustee have been paid and subject to the
Lien provided for in Section 7.06 hereof. Notwithstanding replacement of the
Trustee pursuant to this Section 7.07, the Company's obligations under Section
7.06 hereof shall continue for the benefit of the retiring Trustee.
Section 7.08. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
ARTICLE 8.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 8.01. Without Consent of Holders of the Notes.
Notwithstanding Section 8.02 of this Indenture, without the consent of
any Holder of Notes, the Company and the Trustee or Collateral Agent, as
applicable, may amend or supplement this Indenture, the Security Agreement or
the Notes:
(i) to cure any ambiguity, defect or inconsistency
which, in the good faith opinion of the Board of Directors of the Company
evidenced by a Board Resolution, exists;
(ii) to provide for uncertificated Notes in addition to
or in place of certificated Notes;
(iii) to comply with Article 5 hereof;
(iv) to make any change that would provide any
additional rights or benefits to the Holders of the Notes or, in the good
faith opinion of the Board of Directors of the Company, evidenced by a Board
Resolution, does not materially adversely affect the legal rights hereunder of
any Holder of the Notes;
(v) to execute and deliver any documents necessary or
appropriate to release Liens on any Collateral as permitted by Section 9.03
hereof; or
Upon the written request of the Company accompanied by resolutions of
the Board of Directors or other governing body of the Company authorizing the
execution of any such amended or supplemental indenture, the Trustee shall join
with the Company in the execution of any amended or supplemental indenture
authorized or permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into such amended or supplemental
indenture that affects its own rights, duties or immunities under this Indenture
or otherwise.
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Section 8.02. With Consent of Holders of Notes.
Except as provided in the next two succeeding paragraphs, this
Indenture and the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the Notes then Outstanding
voting as a single class (including consents obtained in connection with a
tender offer or exchange offer for Notes), and, in such case, without prior
written notice to the Holders and subject to Section 6.04 hereof, any existing
Default or Event of Default or compliance with any provision of this Indenture
or the Notes may be waived with the consent of the Holders of a majority in
principal amount of the then Outstanding Notes (including consents obtained in
connection with a tender offer or exchange offer for Notes). It is further
understood that the provisions of any definition set forth herein (other than
the definition of "Maturity Date") may be amended or supplemented, or any such
definition waived, with the consent of the Holders of at least a majority in
principal amount of the Notes then Outstanding voting as a single class
(including consents obtained in connection with a tender offer or exchange offer
for Notes).
Upon the written request of the Company accompanied by resolutions of
the Board of Directors or other governing body of the Company authorizing the
execution of any such amended or supplemental indenture, and upon the filing
with the Trustee of evidence satisfactory to the Trustee of the consent of the
Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents
described in Section 8.05 hereof, the Trustee shall join with the Company in the
execution of such amended or supplemental indenture unless such amended or
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may, but shall not
be obligated to, enter into such amended or supplemental indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 8.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 8.02
becomes effective, the Company shall mail to the Holders of each Note affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental indenture or waiver.
Without the consent of each Holder affected, an amendment or waiver,
including a waiver pursuant to Section 6.04, may not:
(i) reduce the principal amount of Notes whose Holders
must consent to an amendment, supplement or waiver;
(ii) reduce the principal of or change the Stated Maturity
of any Note;
(iii) reduce the rate of or change the time for payment of
Interest on any Note;
(iv) waive a Default or Event of Default in the payment of
principal of or Interest on the Notes (except a rescission of acceleration of
the Notes by the Holders of at least a majority in aggregate principal amount of
21
the then Outstanding Notes and a waiver of the payment default that resulted
from such acceleration);
(v) make any Note payable in money other than that stated
in the Notes; or
(vi) change the place or currency of payment of principal of
or Interest on, any Note; (vii) impair the right to institute suit for the
enforcement of any payment on or after the Stated Maturity of any Note;
(viii) reduce the above stated percentage of Outstanding
Notes the consent of whose Holders is necessary to modify or amend this
Indenture;
(ix) reduce the percentage or aggregate principal amount of
Outstanding Notes the consent of whose Holders is necessary for waiver of
compliance with provisions of this Indenture or for waiver of defaults that
require the consent of all Holders to waive; or
(x) make any change in the foregoing amendment and waiver
provisions.
Section 8.03. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder or subsequent Holder of a Note may revoke the
consent as to its Note if the Trustee receives written notice of revocation
before the date the Trustee receives notice evidencing the taking of action by
the Holders of the specified percentage in aggregate principal amount specified
in this Indenture with respect to such waiver, supplement or amendment. When an
amendment, supplement or waiver becomes effective in accordance with its terms,
it thereafter binds every Holder.
Section 8.04. Notation on or Exchange of Notes.
The Company may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
Section 8.05. Trustee to Sign Amendments, etc.
The Trustee shall sign or direct the Collateral Agent to sign, as
applicable, any amended or supplemental indenture or amended Security Agreement
authorized pursuant to this Article 8 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental indenture or amendment to
the Security Agreement until the Board of Directors approves it. In signing or
refusing to sign any amended or supplemental indenture (or in directing the
Collateral Agent to sign or not sign an amendment to the Security Agreement) the
Trustee shall be entitled to receive and (subject to Section 7.01 hereof) shall
be fully protected in relying upon, in addition to the documents required by
22
Section 11.03 hereof, an Officer's Certificate and an Opinion of Counsel stating
that the execution of such amended or supplemental indenture or Security
Agreement is authorized or permitted by this Indenture, that it is not
inconsistent herewith and therewith, and that it will be valid and binding upon
the Company in accordance with its terms.
ARTICLE 9.
COLLATERAL AND SECURITY
Section 9.01. Security Agreement.
The due and punctual payment of the principal of and Fixed Interest on
the Notes when and as the same shall be due and payable, whether on an Interest
Payment Date, at maturity, by acceleration, repurchase, prepayment or otherwise,
and interest on the overdue principal of and interest (to the extent permitted
by law) on the Notes and performance of all other obligations of the Company
(excluding any and all obligations with respect to any Contingent Interest) to
the Holders of Notes, the Trustee or the Collateral Agent under this Indenture,
the Security Agreement and the Notes, according to the terms hereunder or
thereunder, shall be secured as provided in the Security Agreement which the
Company has entered into simultaneously with the execution of this Indenture.
Each Holder of Notes, by its acceptance thereof, consents and agrees to the
terms of the Security Agreement (including, without limitation, the provisions
providing for foreclosure and release of Collateral) as the same may be in
effect or may be amended from time to time in accordance with its terms,
appoints the Collateral Agent to act as the "Collateral Agent" thereunder and
authorizes and directs the Collateral Agent to enter into the Security Agreement
and to perform its obligations and exercise its rights thereunder in accordance
therewith. The Company shall do or cause to be done all such acts and things as
may be necessary or proper, or as may be required by the provisions of the
Security Agreement, to assure and confirm to the Trustee and the Collateral
Agent the security interest in the Collateral contemplated hereby, by the
Security Agreement or any part thereof, as from time to time constituted, so as
to render the same available for the security and benefit of this Indenture and
of the Notes secured hereby, according to the intent and purposes herein
expressed. The Company shall take, or shall cause its Subsidiaries to take any
and all actions reasonably required to cause the Security Agreement to create
and maintain, as security for the Obligations of the Company hereunder, a valid
and enforceable perfected Lien in and on all the Collateral, in favor of the
Collateral Agent for its benefit and the ratable benefit of the Holders of
Notes, superior to and prior to the rights of all third Persons other than those
holding First Lien Debt, and subject to no Liens (other than Liens permitted by
the Security Agreement).
Section 9.02. Recording and Officer's Certificates.
(a) The Company shall furnish to the Collateral Agent and the Trustee
promptly following the execution and delivery of this Indenture, an Officer's
Certificate, either (i) certifying that all actions have been taken with respect
to the recording, registering, filing, re-recording, re- registering and
re-filing of all supplemental indentures, financing statements, continuation
statements or other instruments of further assurance as is necessary to maintain
the Lien of the Security Agreement and reciting with respect to the security
interests in the Collateral the details of such actions.
(b) The Company shall furnish to the Collateral Agent and the Trustee
within three months after each anniversary of the Issue Date an Officer's
certificate, dated as of such date, either (i) (A) certifying that all actions
have been taken with respect to the recording, registering, filing,
23
re-recording, re-registering and re-filing of all supplemental indentures,
financing statements, continuation statements or other instruments of further
assurance as is necessary to maintain the Lien of the Security Agreement and
reciting with respect to the security interests in the Collateral the details of
such action or referring to prior Officer's Certificates in which such details
are given and (B) certifying that, based on relevant laws as in effect on the
date of such Opinion of Counsel, all financing statements and continuation
statements have been executed and filed that are necessary as of such date and
during the succeeding 12 months fully to preserve and protect, to the extent
such protection and preservation are possible by filing, the rights of the
Holders of Notes and the Collateral Agent and the Trustee hereunder and under
the Security Documents with respect to the security interests in the Collateral,
or (ii) stating that, in the opinion of such officer, no such action is
necessary to maintain such Lien and assignment.
Section 9.03. Release of Collateral.
(a) Subject to subsections (b)and (c) of this Section 9.03, Collateral
may be released from the Lien and security interest created by the Security
Agreement at any time or from time to time in accordance with the provisions of
the Security Agreement and as provided hereby. The Collateral will be
automatically released from the Lien at such time as the Company has paid in
full or otherwise provided for the payment in full in accordance with this
Indenture of the principal amount and Interest due on all of the Notes. If the
Trustee is not the Collateral Agent, the Trustee shall thereafter deliver a
certificate to the Collateral Agent stating that such principal amount and
Interest have been paid in full, and instruct the Collateral Agent to release
the Liens pursuant to this Indenture and the Security Agreement. Upon the
request of the Company pursuant to an Officer's Certificate certifying that all
conditions precedent to such release hereunder and under the Security Agreement
have been met, the Collateral Agent shall release the Collateral. Upon receipt
of such Officer's Certificate, the Collateral Agent shall (at the sole cost and
expense of the Company) execute, deliver or acknowledge any necessary or proper
instruments of termination, satisfaction or release to evidence the release of
any Collateral permitted to be released pursuant to this Indenture or the
Security Agreement.
(b) No Collateral shall be released from the Lien and security
interest created by the Security Agreement pursuant to the provisions of the
Security Agreement unless there shall have been delivered to the Collateral
Agent the certificate required by this Section 9.03.
(c) The release of any Collateral from the terms of this Indenture and
the Security Agreement shall not be deemed to impair the security under this
Indenture in contravention of the provisions hereof if and to the extent the
Collateral is released pursuant to the terms of the Security Agreement. Any
certificate or opinion required may be made by an Officer of the Company except
in cases where it requires that such certificate or opinion be made by an
independent Person, which Person shall be an independent engineer, appraiser or
other expert selected or approved by the Company.
Section 9.04. Certificates of the Trustee.
In the event that the Company wishes to release Collateral in
accordance with the Security Agreement and has delivered the certificates and
documents required by the Security Agreement and Sections 9.03 and 9.04 hereof,
the Trustee shall determine whether it has received all documentation required
in connection with such release and, based on such determination, shall deliver
a certificate to the Collateral Agent setting forth such determination;
provided, however, that so long as the Trustee is the Collateral Agent, the
24
requirement that the Trustee deliver a certificate to the Collateral Agent shall
not be applicable.
Section 9.05. Authorization of Actions to Be Taken by the Trustee and the
Collateral Agent Under the Security Agreement.
Subject to the provisions of Section 7.01 and 7.02 hereof, the Trustee
shall, in its sole discretion and without the consent of the Holders of Notes,
direct, on behalf of the Holders of Notes, the Collateral Agent to take all
actions it deems necessary or appropriate in order to (a) enforce any of the
terms of the Security Agreement and (b) collect, receive and distribute any and
all amounts payable in respect of the Obligations of the Company hereunder or
under the Security Agreement. The Trustee and the Collateral Agent shall have
power to institute and maintain such suits and proceedings as it may deem
expedient to prevent any impairment of the Collateral by any acts that may be
unlawful or in violation of the Security Agreement or this Indenture, and such
suits and proceedings as the Trustee or the Collateral Agent may deem expedient
to preserve or protect its interests and the interests of the Holders of Notes
in the Collateral (including power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative or
other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the security interest hereunder or be prejudicial to
the interests of the Holders of Notes or of the Trustee or the Collateral
Agent).
Section 9.06. Authorization of Receipt of Funds by the Trustee Under the
Security Agreement.
The Collateral Agent shall deliver to the Trustee and the Trustee is
authorized to receive any funds for the benefit of the Holders of Notes
distributed under the Security Agreement, and to make further distributions of
such funds to the Holders of Notes according to the provisions of this Indenture
and the Security Agreement.
ARTICLE 10.
SATISFACTION AND DISCHARGE
Section 10.01. Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further
effect as to all Notes issued hereunder, when:
(1) either:
(a) all Notes issued and outstanding (except lost, stolen or destroyed
Notes that have been replaced or paid and Notes for whose payment money has
theretofore been deposited in trust and thereafter repaid to the Company) have
been delivered to the Registrar for cancellation; or
(b) the Company has irrevocably deposited or caused to be deposited
with the Trustee as trust funds in trust solely for the benefit of the Holders,
cash in U.S. dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient without consideration of any
reinvestment of interest, to pay and discharge the entire indebtedness on the
Notes not delivered to the Trustee for cancellation for principal on, accrued
and unpaid Fixed Interest to the date of maturity or the next Interest Payment
25
Date and the maximum remaining amount of Contingent Interest payable on all
Outstanding Notes;
(2) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other material instrument to which the Company
is a party or by which the Company is bound;
(3) the Company has paid or caused to be paid all sums payable by it
under this Indenture; and
(4) the Company has delivered irrevocable instructions to the Trustee
under this Indenture to apply the deposited money toward the payment of the
Notes at maturity or the prepayment date, as the case may be.
In addition, the Company must deliver an Officer's Certificate and an
Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if
money shall have been deposited with the Trustee pursuant to subclause (b) of
clause (1) of this Section, the provisions of Section 11.01 shall survive.
Section 10.02. Application of Trust Money.
All money deposited with the Trustee pursuant to Section 10.01 shall
be held in trust and applied by it, in accordance with the provisions of the
Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and Interest, for whose payment such money has been deposited with the
Trustee; provided, however, such money need not be segregated from other funds
except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 10.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's Obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 10.01;
provided, however, that if the Company has made any payment of principal of
Interest on any Notes because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or Government Securities held by the Trustee
or Paying Agent.
ARTICLE 11.
MISCELLANEOUS
Section 11.01. Notices.
Any notice or communication by the Company, the Trustee or the
Collateral Agent to the other is duly given if in writing and delivered in
Person or mailed by first class mail (registered or certified, return receipt
26
requested), telecopier or overnight air courier guaranteeing next day delivery,
to the others' address:
If to the Company:
Air Packaging Technologies, Inc.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax (▇▇▇)▇▇▇-▇▇▇▇
If to the Trustee:
Interwest Transfer Co., Inc.
1981 East ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax (▇▇▇)▇▇▇-▇▇▇▇
If to the Collateral Agent, at the address provided in the Security
Agreement for notices to be sent.
The Company or the Trustee, by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier promising next Business Day delivery, except that notices and
communications to the Trustee or the Collateral Agent shall be deemed duly given
and effective only upon receipt.
Any notice or communication to a Holder shall be mailed by first class
mail or by overnight air courier promising next Business Day delivery to its
address shown on the register kept by the Registrar. Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its sufficiency
with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee at the same time.
Section 11.02. Communication by Holders of Notes with Other Holders of
Notes.
Holders may communicate with other Holders with respect to their
rights under this Indenture, the Notes and the Security Agreement.
Section 11.03. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee and/or
the Collateral Agent to take any action under this Indenture, the Company shall
furnish to the Trustee, upon request:
27
(a) an Officer's Certificate in form and substance reasonably
satisfactory to the Trustee, as applicable (which shall include the statements
set forth in Section 11.04 hereof) stating that, in the opinion of the signers,
all conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and/or
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.04 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
Section 11.04. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
Section 11.05. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 11.06. No Personal Liability of Directors, Officers, Employees and
Stockholders.
No director, officer, employee, incorporator or stockholder of the
Company, as such, shall have any liability for any obligations of the Company
under the Notes, this Indenture, or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Notes by accepting
a Note waives and releases all such liability. The waiver and release are part
of the consideration for issuance of the Notes.
Section 11.07. Governing Law.
The internal law of the State of Utah shall govern and be used to
construe this Indenture without giving effect to applicable principles of
conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby.
28
Section 11.08. Waiver of Jury Trial
To the extent not prohibited by applicable law which cannot be waived,
company hereby 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, or the subject matter hereof, in each case, whether
now existing or hereafter arising or whether in contract or tort or otherwise.
Section 11.09. No Waiver, Remedies.
No failure on the part of Collateral Agent to exercise and no delay in
exercising any right in connection with this Agreement shall operate as a waiver
thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies provided hereunder are cumulative and not exclusive of any
remedies provided by law.
Section 11.10. Collection Costs, Attorneys' Fees.
In the event of any breach by Company, Company shall reimburse
Collateral Agent on demand for all costs incurred by Collateral Agent relating
to such breach, including, without limitation, collection costs for payments
that have become delinquent. In any action or proceeding to enforce any rights
or obligations hereunder, the prevailing party shall be entitled to
reimbursement for its reasonable attorneys' fees and expenses and court costs.
Section 11.11. Successors.
All agreements of the Company in this Indenture and the Notes shall
bind its successors and assigns. All agreements of the Trustee and/or the
Collateral Agent in this Indenture shall bind its successors and assigns.
Section 11.12. Severability.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 11.13. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
29
Section 11.14. Table of Contents, Headings, etc.
The Table of Contents and Headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part of this Indenture and shall in no way modify or restrict
any of the terms or provisions hereof.
Section 11.15. Entire Agreement; Modification.
This Agreement expresses the entire understanding of the parties as to
the matters covered and supersedes any prior discussions, negotiations and
agreements. This Agreement may be amended only in writing that clearly states
that it amends this Agreement
SIGNATURES
Dated as of January 29, 2002
--
AIR PACKAGING TECHNOLOGIES, INC.
By: s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:President
INTERWEST TRANSFER CO., INC. as Trustee and Collateral Agent
By: s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: V. P.
30
INDENTURE EXHIBIT A
"INITIAL NOTES"
-------------------
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), IN RELIANCE UPON EXEMPTIONS CONTAINED IN SECTION 4(2) OF THE ACT
AND/OR REGULATIONS D PROMULGATED PURSUANT THERETO, NOR HAS THIS NOTE BEEN
REGISTERED OR QUALIFIED IN ANY STATE IN RELIANCE UPON EXEMPTIONS FROM
REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS. ACCORDINGLY, THIS NOTE MAY
NOT BE RESOLD OR TRANSFERRED BY THE HOLDER UNLESS IT IS SUBSEQUENTLY REGISTERED
UNDER FEDERAL AND APPLICABLE STATE SECURITIES LAWS OR EXEMPTIONS FROM
REGISTRATION AND QUALIFICATION ARE AVAILABLE.
NUMBER AMOUNT
U-1003 AIR PACKAGING TECHNOLOGIES, INC. $ 125,000
-------- ---------
8.75% Convertible Note Due 2004
AIR PACKAGING TECHNOLOGIES, INC., a corporation duly organized and existing
under the laws of the State of Delaware (the "Company"), for value received,
hereby promises to pay to Progressive Emerging Ventures Ltd , or registered
------------------------------------
assigns, the principal sum of One Hundred Twenty-Five Thousand US Dollars on
----------------------------------
December 31, 2004, and to pay interest thereon annually on December 31 (each an
"Interest Payment Date") accruing from and after the date of original issuance
of this Note in each year at 8.75% per annum, payable in common stock of the
Company at the average bid price for the twenty business days prior to an
interest payment date, until the principal hereof is paid or made available for
payment. Interest will be computed on the basis of a 365- or 366- day year, as
the case may be.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will be paid to the person in whose name this Note is
registered at the close of business on the regular record date, which shall be
the December 15 (whether or not a Business Day), as the case may be, preceding
such Interest Payment Date. Payment of the principal of and interest on this
Note will be made at the principal corporate office of the Company and at any
other office or agency maintained by the Company for such purpose, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the person entitled thereto as such address shall appear in the Note
register.
Reference is hereby made to the further provisions of this Note set forth
on the attached pages hereto, which further provisions shall for all purposes
have the same effect as if set forth at this place.
IN WITNESS WHEREOF, AIR PACKAGING TECHNOLOGIES, INC. has caused this
instrument to be executed in its corporate name by the signature of its
President and its Secretary and has caused its corporate seal to be affixed
hereunto or imprinted hereon.
Date of Issuance: October 5, 2000
---------------
s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ [Corporate Seal] s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------- --------------------------
President Secretary
ASSIGNMENT FORM
To assign this note, fill in form below:
For Value received,______________________________hereby sells, assigns and
transfers this note to
______________________________ _______________________________________
Assignee's name Social security or taxpayer I.D. Number
______________________________ _______________________________________
Assignee's mailing address City, State, Country, Zip
and does hereby irrevocably constitute and appoint______________________________
Attorney to transfer this note of the books of the registrar with full power of
substitution in the premises.
DATED this ___________________, ______
___________________________________
Bondholder's Signature
___________________________________
Bondholder's Signature
Sign exactly as your name appears on the other side of this Note.
********************************************************************************
CONVERSION NOTICE
The Undersigned does hereby elect to convert this note (if only a partial
conversion state amount here $_________) into Common Stock of Air Packaging
Technologies, Inc. and requests that the certificate(s) issuable upon conversion
be issued in my name or (if filled out) as below:
______________________________ _______________________________________
Name Social security or taxpayer I.D. Number
______________________________ _______________________________________
Mailing address City, State, Country, Zip
DATED this ___________________, ______
___________________________________
Bondholder's Signature
___________________________________
Bondholder's Signature
Sign exactly as your name appears on the other side of this Note.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), IN RELIANCE UPON EXEMPTIONS CONTAINED IN SECTION 4(2) OF THE ACT
AND/OR REGULATIONS D PROMULGATED PURSUANT THERETO, NOR HAS THIS NOTE BEEN
REGISTERED OR QUALIFIED IN ANY STATE IN RELIANCE UPON EXEMPTIONS FROM
REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS. ACCORDINGLY, THIS NOTE MAY
NOT BE RESOLD OR TRANSFERRED BY THE HOLDER UNLESS IT IS SUBSEQUENTLY REGISTERED
UNDER FEDERAL AND APPLICABLE STATE SECURITIES LAWS OR EXEMPTIONS FROM
REGISTRATION AND QUALIFICATION ARE AVAILABLE.
NUMBER AMOUNT
U-1006 AIR PACKAGING TECHNOLOGIES, INC. $ 75,000
------ --------
8.75% Convertible Note Due 2004
AIR PACKAGING TECHNOLOGIES, INC., a corporation duly organized and existing
under the laws of the State of Delaware (the "Company"), for value received,
hereby promises to pay to Beckford Advisors Ltd., or registered assigns, the
-----------------------
principal sum of Seventy-five Thousand US Dollars on December 31, 2004, and to
----------------------
pay interest thereon annually on December 31 (each an "Interest Payment Date")
accruing from and after the date of original issuance of this Note in each year
at 8.75% per annum, payable in common stock of the Company at the average bid
price for the twenty business days prior to an interest payment date,until the
principal hereof is paid or made available for payment. Interest will be
computed on the basis of a 365- or 366- day year, as the case may be.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will be paid to the person in whose name this Note is
registered at the close of business on the regular record date, which shall be
the December 15 (whether or not a Business Day), as the case may be, preceding
such Interest Payment Date. Payment of the principal of and interest on this
Note will be made at the principal corporate office of the Company and at any
other office or agency maintained by the Company for such purpose, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the person entitled thereto as such address shall appear in the Note
register.
Reference is hereby made to the further provisions of this Note set forth
on the attached pages hereto, which further provisions shall for all purposes
have the same effect as if set forth at this place.
IN WITNESS WHEREOF, AIR PACKAGING TECHNOLOGIES, INC. has caused this
instrument to be executed in its corporate name by the signature of its
President and its Secretary and has caused its corporate seal to be affixed
hereunto or imprinted hereon.
Date of Issuance: November 22, 2000
------------------
s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ [Corporate Seal] s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------- --------------------------
President Secretary
ASSIGNMENT FORM
To assign this note, fill in form below:
For Value received,______________________________hereby sells, assigns and
transfers this note to
______________________________ _______________________________________
Assignee's name Social security or taxpayer I.D. Number
______________________________ _______________________________________
Assignee's mailing address City, State, Country, Zip
and does hereby irrevocably constitute and appoint______________________________
Attorney to transfer this note of the books of the registrar with full power of
substitution in the premises.
DATED this ___________________, ______
___________________________________
Bondholder's Signature
___________________________________
Bondholder's Signature
Sign exactly as your name appears on the other side of this Note.
********************************************************************************
CONVERSION NOTICE
The Undersigned does hereby elect to convert this note (if only a partial
conversion state amount here $_________) into Common Stock of Air Packaging
Technologies, Inc. and requests that the certificate(s) issuable upon conversion
be issued in my name or (if filled out) as below:
______________________________ _______________________________________
Name Social security or taxpayer I.D. Number
______________________________ _______________________________________
Mailing address City, State, Country, Zip
DATED this ___________________, ______
___________________________________
Bondholder's Signature
___________________________________
Bondholder's Signature
Sign exactly as your name appears on the other side of this Note.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), IN RELIANCE UPON EXEMPTIONS CONTAINED IN SECTION 4(2) OF THE ACT
AND/OR REGULATIONS D PROMULGATED PURSUANT THERETO, NOR HAS THIS NOTE BEEN
REGISTERED OR QUALIFIED IN ANY STATE IN RELIANCE UPON EXEMPTIONS FROM
REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS. ACCORDINGLY, THIS NOTE MAY
NOT BE RESOLD OR TRANSFERRED BY THE HOLDER UNLESS IT IS SUBSEQUENTLY REGISTERED
UNDER FEDERAL AND APPLICABLE STATE SECURITIES LAWS OR EXEMPTIONS FROM
REGISTRATION AND QUALIFICATION ARE AVAILABLE.
NUMBER AMOUNT
U-1008 AIR PACKAGING TECHNOLOGIES, INC. $125,000
------ --------
8.75% Convertible Note Due 2004
AIR PACKAGING TECHNOLOGIES, INC., a corporation duly organized and existing
under the laws of the State of Delaware (the "Company"), for value received,
hereby promises to pay to Innovative Investments Network, Ltd, or registered
--------------------------------------
assigns, the principal sum of One Hundred Twenty-five US Dollars on December 31,
-----------------------
2004, and to pay interest thereon annually on December 31 (each an "Interest
Payment Date") accruing from and after the date of original issuance of this
Note in each year at 8.75% per annum, payable in common stock of the Company at
the average bid price for the twenty business days prior to an interest payment
date,until the principal hereof is paid or made available for payment. Interest
will be computed on the basis of a 365- or 366- day year, as the case may be.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will be paid to the person in whose name this Note is
registered at the close of business on the regular record date, which shall be
the December 15 (whether or not a Business Day), as the case may be, preceding
such Interest Payment Date. Payment of the principal of and interest on this
Note will be made at the principal corporate office of the Company and at any
other office or agency maintained by the Company for such purpose, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the person entitled thereto as such address shall appear in the Note
register.
Reference is hereby made to the further provisions of this Note set forth
on the attached pages hereto, which further provisions shall for all purposes
have the same effect as if set forth at this place.
IN WITNESS WHEREOF, AIR PACKAGING TECHNOLOGIES, INC. has caused this
instrument to be executed in its corporate name by the signature of its
President and its Secretary and has caused its corporate seal to be affixed
hereunto or imprinted hereon.
Date of Issuance: January 4, 2001
---------------
s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ [Corporate Seal] s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------- --------------------------
President Secretary
ASSIGNMENT FORM
To assign this note, fill in form below:
For Value received,______________________________hereby sells, assigns and
transfers this note to
______________________________ _______________________________________
Assignee's name Social security or taxpayer I.D. Number
______________________________ _______________________________________
Assignee's mailing address City, State, Country, Zip
and does hereby irrevocably constitute and appoint______________________________
Attorney to transfer this note of the books of the registrar with full power of
substitution in the premises.
DATED this ___________________, ______
___________________________________
Bondholder's Signature
___________________________________
Bondholder's Signature
Sign exactly as your name appears on the other side of this Note.
********************************************************************************
CONVERSION NOTICE
The Undersigned does hereby elect to convert this note (if only a partial
conversion state amount here $_________) into Common Stock of Air Packaging
Technologies, Inc. and requests that the certificate(s) issuable upon conversion
be issued in my name or (if filled out) as below:
______________________________ _______________________________________
Name Social security or taxpayer I.D. Number
______________________________ _______________________________________
Mailing address City, State, Country, Zip
DATED this ___________________, ______
___________________________________
Bondholder's Signature
___________________________________
Bondholder's Signature
Sign exactly as your name appears on the other side of this Note.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), IN RELIANCE UPON EXEMPTIONS CONTAINED IN SECTION 4(2) OF THE ACT
AND/OR REGULATIONS D PROMULGATED PURSUANT THERETO, NOR HAS THIS NOTE BEEN
REGISTERED OR QUALIFIED IN ANY STATE IN RELIANCE UPON EXEMPTIONS FROM
REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS. ACCORDINGLY, THIS NOTE MAY
NOT BE RESOLD OR TRANSFERRED BY THE HOLDER UNLESS IT IS SUBSEQUENTLY REGISTERED
UNDER FEDERAL AND APPLICABLE STATE SECURITIES LAWS OR EXEMPTIONS FROM
REGISTRATION AND QUALIFICATION ARE AVAILABLE.
NUMBER AMOUNT
U-1005 AIR PACKAGING TECHNOLOGIES, INC. $250,000
------ --------
8.75% Convertible Note Due 2004
AIR PACKAGING TECHNOLOGIES, INC., a corporation duly organized and existing
under the laws of the State of Delaware (the "Company"), for value received,
hereby promises to pay to ▇▇▇▇▇▇▇ Worldwide Inc., or registered assigns, the
------------------------
principal sum of Two Hundred Fifty Thousand US Dollars on December 31, 2004, and
--------------------------
to pay interest thereon annually on December 31 (each an "Interest Payment
Date") accruing from and after the date of original issuance of this Note in
each year at 8.75% per annum, payable in common stock of the Company at the
average bid price for the twenty business days prior to an interest payment
date,until the principal hereof is paid or made available for payment. Interest
will be computed on the basis of a 365- or 366- day year, as the case may be.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will be paid to the person in whose name this Note is
registered at the close of business on the regular record date, which shall be
the December 15 (whether or not a Business Day), as the case may be, preceding
such Interest Payment Date. Payment of the principal of and interest on this
Note will be made at the principal corporate office of the Company and at any
other office or agency maintained by the Company for such purpose, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the person entitled thereto as such address shall appear in the Note
register.
Reference is hereby made to the further provisions of this Note set forth
on the attached pages hereto, which further provisions shall for all purposes
have the same effect as if set forth at this place.
IN WITNESS WHEREOF, AIR PACKAGING TECHNOLOGIES, INC. has caused this
instrument to be executed in its corporate name by the signature of its
President and its Secretary and has caused its corporate seal to be affixed
hereunto or imprinted hereon.
Date of Issuance: November 22, 2000
-----------------
s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ [Corporate Seal] s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------- --------------------------
President Secretary
ASSIGNMENT FORM
To assign this note, fill in form below:
For Value received,______________________________hereby sells, assigns and
transfers this note to
______________________________ _______________________________________
Assignee's name Social security or taxpayer I.D. Number
______________________________ _______________________________________
Assignee's mailing address City, State, Country, Zip
and does hereby irrevocably constitute and appoint______________________________
Attorney to transfer this note of the books of the registrar with full power of
substitution in the premises.
DATED this ___________________, ______
___________________________________
Bondholder's Signature
___________________________________
Bondholder's Signature
Sign exactly as your name appears on the other side of this Note.
********************************************************************************
CONVERSION NOTICE
The Undersigned does hereby elect to convert this note (if only a partial
conversion state amount here $_________) into Common Stock of Air Packaging
Technologies, Inc. and requests that the certificate(s) issuable upon conversion
be issued in my name or (if filled out) as below:
______________________________ _______________________________________
Name Social security or taxpayer I.D. Number
______________________________ _______________________________________
Mailing address City, State, Country, Zip
DATED this ___________________, ______
___________________________________
Bondholder's Signature
___________________________________
Bondholder's Signature
Sign exactly as your name appears on the other side of this Note.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), IN RELIANCE UPON EXEMPTIONS CONTAINED IN SECTION 4(2) OF THE ACT
AND/OR REGULATIONS D PROMULGATED PURSUANT THERETO, NOR HAS THIS NOTE BEEN
REGISTERED OR QUALIFIED IN ANY STATE IN RELIANCE UPON EXEMPTIONS FROM
REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS. ACCORDINGLY, THIS NOTE MAY
NOT BE RESOLD OR TRANSFERRED BY THE HOLDER UNLESS IT IS SUBSEQUENTLY REGISTERED
UNDER FEDERAL AND APPLICABLE STATE SECURITIES LAWS OR EXEMPTIONS FROM
REGISTRATION AND QUALIFICATION ARE AVAILABLE.
NUMBER AMOUNT
U-1007 AIR PACKAGING TECHNOLOGIES, INC. $ 50,000
------ --------
8.75% Convertible Note Due 2004
AIR PACKAGING TECHNOLOGIES, INC., a corporation duly organized and existing
under the laws of the State of Delaware (the "Company"), for value received,
hereby promises to pay to Paradigm Financial AVV, or registered assigns, the
-----------------------
principal sum of Fifty Thousand US Dollars on December 31, 2004, and to pay
---------------
interest thereon annually on December 31 (each an "Interest Payment Date")
accruing from and after the date of original issuance of this Note in each year
at 8.75% per annum, payable in common stock of the Company at the average bid
price for the twenty business days prior to an interest payment date,until the
principal hereof is paid or made available for payment. Interest will be
computed on the basis of a 365- or 366- day year, as the case may be.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will be paid to the person in whose name this Note is
registered at the close of business on the regular record date, which shall be
the December 15 (whether or not a Business Day), as the case may be, preceding
such Interest Payment Date. Payment of the principal of and interest on this
Note will be made at the principal corporate office of the Company and at any
other office or agency maintained by the Company for such purpose, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the person entitled thereto as such address shall appear in the Note
register.
Reference is hereby made to the further provisions of this Note set forth
on the attached pages hereto, which further provisions shall for all purposes
have the same effect as if set forth at this place.
IN WITNESS WHEREOF, AIR PACKAGING TECHNOLOGIES, INC. has caused this
instrument to be executed in its corporate name by the signature of its
President and its Secretary and has caused its corporate seal to be affixed
hereunto or imprinted hereon.
Date of Issuance: November 27, 2000
-----------------
s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ [Corporate Seal] s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------- --------------------------
President Secretary
ASSIGNMENT FORM
To assign this note, fill in form below:
For Value received,______________________________hereby sells, assigns and
transfers this note to
______________________________ _______________________________________
Assignee's name Social security or taxpayer I.D. Number
______________________________ _______________________________________
Assignee's mailing address City, State, Country, Zip
and does hereby irrevocably constitute and appoint______________________________
Attorney to transfer this note of the books of the registrar with full power of
substitution in the premises.
DATED this ___________________, ______
___________________________________
Bondholder's Signature
___________________________________
Bondholder's Signature
Sign exactly as your name appears on the other side of this Note.
********************************************************************************
CONVERSION NOTICE
The Undersigned does hereby elect to convert this note (if only a partial
conversion state amount here $_________) into Common Stock of Air Packaging
Technologies, Inc. and requests that the certificate(s) issuable upon conversion
be issued in my name or (if filled out) as below:
______________________________ _______________________________________
Name Social security or taxpayer I.D. Number
______________________________ _______________________________________
Mailing address City, State, Country, Zip
DATED this ___________________, ______
___________________________________
Bondholder's Signature
___________________________________
Bondholder's Signature
Sign exactly as your name appears on the other side of this Note.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), IN RELIANCE UPON EXEMPTIONS CONTAINED IN SECTION 4(2) OF THE ACT
AND/OR REGULATIONS D PROMULGATED PURSUANT THERETO, NOR HAS THIS NOTE BEEN
REGISTERED OR QUALIFIED IN ANY STATE IN RELIANCE UPON EXEMPTIONS FROM
REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS. ACCORDINGLY, THIS NOTE MAY
NOT BE RESOLD OR TRANSFERRED BY THE HOLDER UNLESS IT IS SUBSEQUENTLY REGISTERED
UNDER FEDERAL AND APPLICABLE STATE SECURITIES LAWS OR EXEMPTIONS FROM
REGISTRATION AND QUALIFICATION ARE AVAILABLE.
NUMBER AMOUNT
U-1001 AIR PACKAGING TECHNOLOGIES, INC. $ 125,000
------ ---------
8.75% Convertible Note Due 2004
AIR PACKAGING TECHNOLOGIES, INC., a corporation duly organized and existing
under the laws of the State of Delaware (the "Company"), for value received,
hereby promises to pay to Comprehensive Ventures Inc. Ltd. , or registered
----------------------------------
assigns, the principal sum of One Hundred Twenty-Five Thousand US Dollars on
----------------------------------
December 31, 2004, and to pay interest thereon annually on December 31 (each an
"Interest Payment Date") accruing from and after the date of original issuance
of this Note in each year at 8.75% per annum, payable in common stock of the
Company at the average bid price for the twenty business days prior to an
interest payment date, until the principal hereof is paid or made available for
payment. Interest will be computed on the basis of a 365- or 366- day year, as
the case may be.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will be paid to the person in whose name this Note is
registered at the close of business on the regular record date, which shall be
the December 15 (whether or not a Business Day), as the case may be, preceding
such Interest Payment Date. Payment of the principal of and interest on this
Note will be made at the principal corporate office of the Company and at any
other office or agency maintained by the Company for such purpose, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the person entitled thereto as such address shall appear in the Note
register.
Reference is hereby made to the further provisions of this Note set forth
on the attached pages hereto, which further provisions shall for all purposes
have the same effect as if set forth at this place.
IN WITNESS WHEREOF, AIR PACKAGING TECHNOLOGIES, INC. has caused this
instrument to be executed in its corporate name by the signature of its
President and its Secretary and has caused its corporate seal to be affixed
hereunto or imprinted hereon.
Date of Issuance: September 7, 2000
-----------------
s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ [Corporate Seal] s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------- --------------------------
President Secretary
ASSIGNMENT FORM
To assign this note, fill in form below:
For Value received,______________________________hereby sells, assigns and
transfers this note to
______________________________ _______________________________________
Assignee's name Social security or taxpayer I.D. Number
______________________________ _______________________________________
Assignee's mailing address City, State, Country, Zip
and does hereby irrevocably constitute and appoint______________________________
Attorney to transfer this note of the books of the registrar with full power of
substitution in the premises.
DATED this ___________________, ______
___________________________________
Bondholder's Signature
___________________________________
Bondholder's Signature
Sign exactly as your name appears on the other side of this Note.
********************************************************************************
CONVERSION NOTICE
The Undersigned does hereby elect to convert this note (if only a partial
conversion state amount here $_________) into Common Stock of Air Packaging
Technologies, Inc. and requests that the certificate(s) issuable upon conversion
be issued in my name or (if filled out) as below:
______________________________ _______________________________________
Name Social security or taxpayer I.D. Number
______________________________ _______________________________________
Mailing address City, State, Country, Zip
DATED this ___________________, ______
___________________________________
Bondholder's Signature
___________________________________
Bondholder's Signature
Sign exactly as your name appears on the other side of this Note.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), IN RELIANCE UPON EXEMPTIONS CONTAINED IN SECTION 4(2) OF THE ACT
AND/OR REGULATIONS D PROMULGATED PURSUANT THERETO, NOR HAS THIS NOTE BEEN
REGISTERED OR QUALIFIED IN ANY STATE IN RELIANCE UPON EXEMPTIONS FROM
REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS. ACCORDINGLY, THIS NOTE MAY
NOT BE RESOLD OR TRANSFERRED BY THE HOLDER UNLESS IT IS SUBSEQUENTLY REGISTERED
UNDER FEDERAL AND APPLICABLE STATE SECURITIES LAWS OR EXEMPTIONS FROM
REGISTRATION AND QUALIFICATION ARE AVAILABLE.
NUMBER AMOUNT
U-1004 AIR PACKAGING TECHNOLOGIES, INC. $ 125,000
------ ---------
8.75% Convertible Note Due 2004
AIR PACKAGING TECHNOLOGIES, INC., a corporation duly organized and existing
under the laws of the State of Delaware (the "Company"), for value received,
hereby promises to pay to Comprehensive Ventures Inc. Ltd. , or registered
----------------------------------
assigns, the principal sum of One Hundred Twenty-Five Thousand US Dollars on
----------------------------------
December 31, 2004, and to pay interest thereon annually on December 31 (each an
"Interest Payment Date") accruing from and after the date of original issuance
of this Note in each year at 8.75% per annum, payable in common stock of the
Company at the average bid price for the twenty business days prior to an
interest payment date, until the principal hereof is paid or made available for
payment. Interest will be computed on the basis of a 365- or 366- day year, as
the case may be.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will be paid to the person in whose name this Note is
registered at the close of business on the regular record date, which shall be
the December 15 (whether or not a Business Day), as the case may be, preceding
such Interest Payment Date. Payment of the principal of and interest on this
Note will be made at the principal corporate office of the Company and at any
other office or agency maintained by the Company for such purpose, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the person entitled thereto as such address shall appear in the Note
register.
Reference is hereby made to the further provisions of this Note set forth
on the attached pages hereto, which further provisions shall for all purposes
have the same effect as if set forth at this place.
IN WITNESS WHEREOF, AIR PACKAGING TECHNOLOGIES, INC. has caused this
instrument to be executed in its corporate name by the signature of its
President and its Secretary and has caused its corporate seal to be affixed
hereunto or imprinted hereon.
Date of Issuance: October 5, 2000
---------------
s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ [Corporate Seal] s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------- --------------------------
President Secretary
ASSIGNMENT FORM
To assign this note, fill in form below:
For Value received,______________________________hereby sells, assigns and
transfers this note to
______________________________ _______________________________________
Assignee's name Social security or taxpayer I.D. Number
______________________________ _______________________________________
Assignee's mailing address City, State, Country, Zip
and does hereby irrevocably constitute and appoint______________________________
Attorney to transfer this note of the books of the registrar with full power of
substitution in the premises.
DATED this ___________________, ______
___________________________________
Bondholder's Signature
___________________________________
Bondholder's Signature
Sign exactly as your name appears on the other side of this Note.
********************************************************************************
CONVERSION NOTICE
The Undersigned does hereby elect to convert this note (if only a partial
conversion state amount here $_________) into Common Stock of Air Packaging
Technologies, Inc. and requests that the certificate(s) issuable upon conversion
be issued in my name or (if filled out) as below:
______________________________ _______________________________________
Name Social security or taxpayer I.D. Number
______________________________ _______________________________________
Mailing address City, State, Country, Zip
DATED this ___________________, ______
___________________________________
Bondholder's Signature
___________________________________
Bondholder's Signature
Sign exactly as your name appears on the other side of this Note.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT O 1933, AS AMENDED
(THE "ACT"), IN RELIANCE UPON EXEMPTIONS CONTAINED IN SECTIONS 4(6), 4(2) OF THE
ACT AND/OR REGULATIONS D AND S PROMULGATED PURSUANT THERETO, NOR HAS THIS NOTE
BEEN REGISTERED OR QUALIFIED IN ANY STATE IN RELIANCE UPON EXEMPTIONS FROM
REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS. ACCORDINGLY, THIS NOTE MAY
NOT BE RESOLD OR TRANSFERRED BY THE HOLDER UNLESS IT IS SUBSEQUENTLY REGISTERED
UNDER FEDERAL AND APPLICABL STATE SECURITIES LAWS OR EXEMPTIONS FROM
REGISTRATION AND QUALIFICATION ARE AVAILABLE.
NUMBER AMOUNT
2001-1 AIR PACKAGING TECHNOLOGIES, INC. $ 460,000
------ ---------
7.0% Convertible Note Due 2004
AIR PACKAGING TECHNOLOGIES, INC., a corporation duly organized and existing
under the laws of the State of Delaware (the "Company"), for value received,
hereby promises to pay to OTC OPPORTUNITIES LIMITED, or registered assigns, the
-------------------------
principal sum of FOUR HUNDRED SIXTY THOUSAND US Dollars on December 31, 2004,
-----------------------------
and to pay interest thereon annually on December 31 (each an "Interest Payment
Date") accruing from and after the date of original issuance of this Note in eac
year at 7.0% per annum, payable in common stock of the Company a the average bid
price for the twenty business days prior to an interest payment date, until the
principal hereof is paid or made available for payment Interest will be computed
on the basis of a 365- or 366- day year, as the case may be.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will be paid to the person in whose name this Note is
registered at the close of business on the regular record date, which shall be
the December 15 (whether or not a Business Day), as the case may be, preceding
such Interest Payment Date. Payment of the principal of and interest on this
Note will be made at the principal corporate office of the Company and at any
other office or agency maintained by the Company for such purpose, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the person entitled thereto as such address shall appear in the Note
register.
Reference is hereby made to the further provisions of this Note set forth
on the attached pages hereto, which further provisions shall for all purposes
have the same effect as if set forth at this place.
IN WITNESS WHEREOF, AIR PACKAGING TECHNOLOGIES, INC. has caused this
instrument to be executed in its corporate name by the signature of its
President and its Secretary and has caused its corporate seal to be affixed
hereunto or imprinted hereon.
Date of Issuance: October 1, 2001
---------------
s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ [Corporate Seal] s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------- --------------------------
President Secretary
ASSIGNMENT FORM
To assign this note, fill in form below:
For Value received,______________________________hereby sells, assigns and
transfers this note to
______________________________ _______________________________________
Assignee's name Social security or taxpayer I.D. Number
______________________________ _______________________________________
Assignee's mailing address City, State, Country, Zip
and does hereby irrevocably constitute and appoint______________________________
Attorney to transfer this note of the books of the registrar with full power of
substitution in the premises.
DATED this ___________________, ______
___________________________________
Bondholder's Signature
___________________________________
Bondholder's Signature
Sign exactly as your name appears on the other side of this Note.
********************************************************************************
CONVERSION NOTICE
The Undersigned does hereby elect to convert this note (if only a partial
conversion state amount here $_________) into Common Stock of Air Packaging
Technologies, Inc. and requests that the certificate(s) issuable upon conversion
be issued in my name or (if filled out) as below:
______________________________ _______________________________________
Name Social security or taxpayer I.D. Number
______________________________ _______________________________________
Mailing address City, State, Country, Zip
DATED this ___________________, ______
___________________________________
Bondholder's Signature
___________________________________
Bondholder's Signature
Sign exactly as your name appears on the other side of this Note.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), IN RELIANCE UPON EXEMPTIONS CONTAINED IN SECTION 4(2) OF THE ACT
AND/OR REGULATIONS D PROMULGATED PURSUANT THERETO, NOR HAS THIS NOTE BEEN
REGISTERED OR QUALIFIED IN ANY STATE IN RELIANCE UPON EXEMPTIONS FROM
REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS. ACCORDINGLY, THIS NOTE MAY
NOT BE RESOLD OR TRANSFERRED BY THE HOLDER UNLESS IT IS SUBSEQUENTLY REGISTERED
UNDER FEDERAL AND APPLICABLE STATE SECURITIES LAWS OR EXEMPTIONS FROM
REGISTRATION AND QUALIFICATION ARE AVAILABLE.
NUMBER AMOUNT
U-1002 AIR PACKAGING TECHNOLOGIES, INC. $ 125,000
------ ---------
8.75% Convertible Note Due 2004
AIR PACKAGING TECHNOLOGIES, INC., a corporation duly organized and existing
under the laws of the State of Delaware (the "Company"), for value received,
hereby promises to pay to Progressive Emerging Ventures Ltd, or registered
-----------------------------------
assigns, the principal sum of One Hundred Twenty-Five Thousand US Dollars on
----------------------------------
December 31, 2004, and to pay interest thereon annually on December 31 (each an
"Interest Payment Date") accruing from and after the date of original issuance
of this Note in each year at 8.75% per annum, payable in common stock of the
Company at the average bid price for the twenty business days prior to an
interest payment date, until the principal hereof is paid or made available for
payment. Interest will be computed on the basis of a 365- or 366- day year, as
the case may be.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will be paid to the person in whose name this Note is
registered at the close of business on the regular record date, which shall be
the December 15 (whether or not a Business Day), as the case may be, preceding
such Interest Payment Date. Payment of the principal of and interest on this
Note will be made at the principal corporate office of the Company and at any
other office or agency maintained by the Company for such purpose, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the person entitled thereto as such address shall appear in the Note
register.
Reference is hereby made to the further provisions of this Note set forth
on the attached pages hereto, which further provisions shall for all purposes
have the same effect as if set forth at this place.
IN WITNESS WHEREOF, AIR PACKAGING TECHNOLOGIES, INC. has caused this
instrument to be executed in its corporate name by the signature of its
President and its Secretary and has caused its corporate seal to be affixed
hereunto or imprinted hereon.
Date of Issuance: September 7, 2000
-----------------
s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ [Corporate Seal] s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------- --------------------------
President Secretary
ASSIGNMENT FORM
To assign this note, fill in form below:
For Value received,______________________________hereby sells, assigns and
transfers this note to
______________________________ _______________________________________
Assignee's name Social security or taxpayer I.D. Number
______________________________ _______________________________________
Assignee's mailing address City, State, Country, Zip
and does hereby irrevocably constitute and appoint______________________________
Attorney to transfer this note of the books of the registrar with full power of
substitution in the premises.
DATED this ___________________, ______
___________________________________
Bondholder's Signature
___________________________________
Bondholder's Signature
Sign exactly as your name appears on the other side of this Note.
********************************************************************************
CONVERSION NOTICE
The Undersigned does hereby elect to convert this note (if only a partial
conversion state amount here $_________) into Common Stock of Air Packaging
Technologies, Inc. and requests that the certificate(s) issuable upon conversion
be issued in my name or (if filled out) as below:
______________________________ _______________________________________
Name Social security or taxpayer I.D. Number
______________________________ _______________________________________
Mailing address City, State, Country, Zip
DATED this ___________________, ______
___________________________________
Bondholder's Signature
___________________________________
Bondholder's Signature
Sign exactly as your name appears on the other side of this Note.
INDENTURE EXHIBIT B
"FORM OF NOTE"
-------------------
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), IN RELIANCE UPON EXEMPTIONS CONTAINED IN SECTION 4(2) OF THE ACT
AND/OR REGULATIONS D PROMULGATED PURSUANT THERETO, NOR HAS THIS NOTE BEEN
REGISTERED OR QUALIFIED IN ANY STATE IN RELIANCE UPON EXEMPTIONS FROM
REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS. ACCORDINGLY, THIS NOTE MAY
NOT BE RESOLD OR TRANSFERRED BY THE HOLDER UNLESS IT IS SUBSEQUENTLY REGISTERED
UNDER FEDERAL AND APPLICABLE STATE SECURITIES LAWS OR EXEMPTIONS FROM
REGISTRATION AND QUALIFICATION ARE AVAILABLE.
NUMBER AMOUNT
AIR PACKAGING TECHNOLOGIES, INC. $
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8.75% Convertible Note Due 2004
AIR PACKAGING TECHNOLOGIES, INC., a corporation duly organized and existing
under the laws of the State of Delaware (the "Company"), for value received,
hereby promises to pay to __________________________, or registered assigns, the
principal sum of _______________________US Dollars on December 31, 2004, and to
pay interest thereon annually on December 31 (each an "Interest Payment Date")
accruing from and after the date of original issuance of this Note in each year
at 8.75% per annum, payable in common stock of the Company at the average bid
price for the twenty business days prior to an interest payment date,until the
principal hereof is paid or made available for payment. Interest will be
computed on the basis of a 365- or 366- day year, as the case may be.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will be paid to the person in whose name this Note is
registered at the close of business on the regular record date, which shall be
the December 15 (whether or not a Business Day), as the case may be, preceding
such Interest Payment Date. Payment of the principal of and interest on this
Note will be made at the principal corporate office of the Company and at any
other office or agency maintained by the Company for such purpose, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the person entitled thereto as such address shall appear in the Note
register.
Reference is hereby made to the further provisions of this Note set forth
on the attached pages hereto, which further provisions shall for all purposes
have the same effect as if set forth at this place.
IN WITNESS WHEREOF, AIR PACKAGING TECHNOLOGIES, INC. has caused this
instrument to be executed in its corporate name by the signature of its
President and its Secretary and has caused its corporate seal to be affixed
hereunto or imprinted hereon.
Date of Issuance:
_______________________
[Corporate Seal]
_________________________ ____________________________
President Secretary
ASSIGNMENT FORM
To assign this note, fill in form below:
For Value received,______________________________hereby sells, assigns and
transfers this note to
______________________________ _______________________________________
Assignee's name Social security or taxpayer I.D. Number
______________________________ _______________________________________
Assignee's mailing address City, State, Country, Zip
and does hereby irrevocably constitute and appoint______________________________
Attorney to transfer this note of the books of the registrar with full power of
substitution in the premises.
DATED this ___________________, ______
___________________________________
Bondholder's Signature
___________________________________
Bondholder's Signature
Sign exactly as your name appears on the other side of this Note.
********************************************************************************
CONVERSION NOTICE
The Undersigned does hereby elect to convert this note (if only a partial
conversion state amount here $_________) into Common Stock of Air Packaging
Technologies, Inc. and requests that the certificate(s) issuable upon conversion
be issued in my name or (if filled out) as below:
______________________________ _______________________________________
Name Social security or taxpayer I.D. Number
______________________________ _______________________________________
Mailing address City, State, Country, Zip
DATED this ___________________, ______
___________________________________
Bondholder's Signature
___________________________________
Bondholder's Signature
Sign exactly as your name appears on the other side of this Note.
AIR PACKAGING TECHNOLOGIES, INC.
8.75% CONVERTIBLE NOTES DUE 2004
ADDITIONAL TERMS AND CONDITIONS
1. General.
This Note is one of a duly authorized issue of Notes of the Company
designated as its 8.75% Convertible Notes Due 2004. The terms of the Notes
include those stated below. The Notes are general obligations of the Company
limited to $2,500,000 in aggregate principal amount. The Notes may be secured as
to payment by certain assets of the Company.
2. Paying Agent, Conversion Agent and Registrar.
Initially, the Company will act as its own Paying Agent, Conversion Agent
and Registrar. The Company may change any Paying Agent, Conversion Agent,
Registrar or co-registrar without notice.
3. Definitions.
"Act" shall mean the Securities Act of 1933, as amended, and the Rules
promulgated thereunder.
"Business Day" shall mean Monday through Friday of each week,
excluding any day that is a legal holiday in the State of California
or upon which the New York Stock Exchange is closed.
"Common Stock" shall mean the Common Stock, $0.001 par value, of the
Company, as designated on the date hereof, or shares of any class or
classes of Capital Stock resulting from reclassification or
reclassification thereof.
"Company" shall mean Air Packaging Technologies, Inc., a Delaware
Corporation.
"Holder" shall mean the person in whose name the Notes are registered
on the Company's books.
"Interest Payment Date" or "Payment Date" shall mean December 31 of
each year.
"Interest Payment Issuance Price" shall mean the average of the
highest bid prices among the ones shown by all market makers in the
Company's common stock at the closing of each market session for each
of the twenty (20) business days, immediately prior to Payment Date,
on the OTC Bulletin Board or such other place that the Company's
common stock may be trading on Payment Date.
"Notes" shall mean the 8.75% Convertible Debentures Due 2004.
"Regular Record Date" shall mean December 15 of each year.
"SEC" shall mean the United States Securities and Exchange Commission.
4. Interest Payments to be Made in Stock in Lieu of Cash Interest Payment
All interest payments on the Notes shall be made as follows:
(a) All interest payments to be made on this Note hall be made on or
about the Interest Payment Date and shall be paid in Common Stock of
the Company at the Interest Payment Issuance Price.
(b) All stock to be issued shall be "restricted" as tha term is
generally used under the Act and, as such, shall contain a legend
thereon restricting their sale, transfer, or hypothecation unless an
effective registration statement is in effect or an exemption from
registration applies to the specific instance.
5. Registration Rights.
Upon receipt of subscriptions for a minimum o $1,000,000, Company
undertakes to use its best efforts to register, for resale, the Notes and/or the
common stock issuable upon conversion of the notes, with the SEC on an
applicable registration form and to maintain said registration until six (6)
months after conversion of all of the debentures, expiration of the conversion
rights, or until the Company shall have received an opinion of Counsel that the
shares of the Common Stock issued or issuable upon conversion of the Notes may
be resold by the Holders thereof without an effective registration statement
under the Act pursuant to Rule 144 (k).
6. Optional Conversion.
Subject to the provisions contained herein, a Holder of a Note is entitled,
upon sixty-one (61) days prior notice, at any time on or before the close of
business on September 30, 2004, to convert the principal amount of such Note or
any portion of the principal amount thereof which is $1,000 or an integral
multiple of $1,000, into shares of Common Stock of the Company at a Conversion
Price as provided below (or at the current adjusted Conversion Price if an
adjustment has been made as provided in Section 10 below "Adjustments to
Conversion Price). No fractions of shares or scrip representing fractions of
shares will be issued on conversion of a Note, but an adjustment in cash will be
made for any fractional interest as provided in the Indenture.
(a) The Conversion Price shall be the lesser of $0.40 per share or a twenty per
cent (20%) discount to the closing high bid price on the date of conversion
if the closing bid price for the Company's common stock has been less than
$0.40 for the previous forty (40) consecutive Business Days.
(b) The minimum amount of debentures that may be converted by any holder at any
one time shall be $25,000 and must be in integral multiples of $1,000.
(c) To convert a Note, a Holder must (i) complete and sign the conversion
notice attached to the Note, (ii) surrender the Note with the conversion
notice to the Conversion Agent, (iii) furnish appropriate endorsements and
transfer documents if required by the Registrar or Conversion Agent, and
(iv) pay any transfer or similar tax, if required.
7. Mandatory Conversion
In the event that the closing high bid price for the Company's common stock
is $1.20 or higher for forty (40) consecutive Business Days:
(a) the Company may, at its option, notify the Holders of the notes
that it is, as of a set date no sooner than thirty (30) days nor more
than sixty (60) days after the date of the notification
("Redemption/Conversion Date");
i. Redeeming the notes or any part of them, on a pro rata basis,
at par, together with redemption instructions, and/or
ii. Demanding conversion of the Notes into Common Stock at the
Conversion Price as set forth in Section 6 above.
(b) In such an event, each note Holder shall have the right, at is
option;
i. To accept the offer of redemption if the Company has made such
an offer, or
ii. To convert its notes into Common Stock at the Conversion
Price set forth in Section 6 above, or
iii. To accept the offer of redemption, if offered by the
Company, as to part of the Notes and to convert the remainder of
its Notes into Common Stock at the Conversion Price set forth in
Section 6 above, or
iv. To do nothing, in which case the Conversion Price of the
Holder's Nots shall automatically be re-priced to the average
high bid price for the forty (40)consecutive business days prior
to the Redemption/Conversion Date.
8. Denominations, Payment, Transfer, Exchange.
The Notes are in registered form without coupons in denominations of $1,000
and integral multiples thereof. A Holder may transfer Notes in accordance with
the reasonable rules set forth by the Registrar. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law. The Registrar need not
transfer any Note until it has received an opinion of Counsel that the transfer
may be made pursuant to any effective registration or pursuant to an exemption
from registration. Holders must surrender Notes to a Paying Agent to receive
principal payments thereof.
9. Persons Deemed Owners.
Prior to due presentment of this Note for registration of a transfer, the
Company, the Trustee and any agent of either may treat the registered Holder of
this Note as the owner of it for all purposes.
10. Defaults and Rights to payment.
Event of Default. An "Event of Default" with respect to any Security occurs
if:
(a) The Company defaults in the payment of interest on any Security when
the same becomes due and payable and the default continues for a period of
30 days; or
(b) The Company defaults in the payment of Principal of any Security when
the same becomes due and payable at maturity or otherwise; or
(c) The Company fails to comply with any other material agreement set forth
in the Securities and the default continues for a period of 30 days after
notice of such default is delivered to the Company by the Holder;
provided,. however, that if the default is such that it cannot, in the
exercise of reasonable diligence be corrected within such period, it shall
not constitute an Event of Default hereunder if corrective action is
instituted promptly by the Company within said period and is diligently
pursued until the default is corrected; or
(d) A court of competent jurisdiction enters a judgment, decree or order
for relief in respect of the Company or any Subsidiary in an involuntary
case or proceeding under any Bankruptcy Law which shall (A) approve as
properly filed a petition seeking reorganization, arrangement, adjustment
or .composition in respect of the Company, (B) appoint a Custodian of the
Company for all or substantially all of the property of the Company; or (C)
provide for the winding-up or liquidation of the affairs of the Company;
and such judgment, decree or order shall remain unstayed and in effect for
a period of 90 consecutive days; or any bankruptcy or insolvency petition
or application is filed, or any bankruptcy or insolvency proceeding is
commenced against the Company and such petition, application or proceeding
is not dismissed within 90 days; or any warrant of attachment is issued
against any substantial portion of the property of the Company which is not
released, bonded or stayed within 90 days of service;
(e) The Company shall (A) commence a voluntary case or proceeding under any
Bankruptcy Law, (B) consent to the entry of a judgment, decree or order for
relief in an involuntary case or proceeding under any Bankruptcy Law, (C)
consent to the institution of bankruptcy or insolvency proceedings against
it, or (D) apply for, consent to, or acquiesce in the appointment of or
taking possession by a Custodian of the Company or for any substantial part
of the property of the Company.
The term "Bankruptcy Law" means Title 11, U.S. Code, or any similar Federal
or state law for the relief of debtors. The term "Custodian" means any
custodian, receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
Acceleration. If an Event of Default (other than an Event of Default
specified in clauses (a), (b) and (c) of Section 10 occurs and is continuing,
the Holder by notice to the Company, may declare the Principal of and accrued
interest on all the Securities to be due and payable. Upon any such declaration
such Principal and interest shall be due and payable immediately. If an Event of
Default specified in clause (d) or (e) of Section 10 occurs, such amount shall
de facto become and be immediately due and payable without any declaration.
Rights of Holders to Receive Payment. Notwithstanding any other provision
of this debenture, the right of any Holder of a Security to receive payment of
Principal of or interest on the Security on or after the respective dates
expressed in the Security or after acceleration provided for herein or to bring
suit for the enforcement of any such payment on or after such respective dates,
or for the right to convert the Security, shall not be impaired or affected
without the consent of the Holder.
11. Adjustment of Conversion Price
Adjustment of Conversion Price. The Conversion Price shall be subject to
adjustment from time to Time as follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on the outstanding shares of its Common Stock, (ii)
subdivide or reclassify the outstanding shares of its Common Stock
into a greater number of shares, or (iii) combine or reclassify the
outstanding shares of its Common Stock into a smaller number of
shares, then the Conversion Price in effect at the time of,
respectively, the record date for such dividend or distribution or the
effective date of such subdivision, combination or reclassification
shall be proportionately adjusted so that the Holder of any Security
surrendered for conversion after such time shall be entitled to
receive the number of shares of Common Stock which he would have owned
or been entitled to receive had such Security been converted
immediately prior to such time. Any shares of Common Stock issuable in
payment of a dividend shall be deemed to have been issued immediately
prior to the time of the record date for such dividend for purposes of
calculating the number of outstanding shares of Common Stock under
subsections (b) and (c) below. Such adjustments shall be made
successively whenever any event specified above shall occur. In the
event that any such dividend, subdivision, reclassification or
combination causing any such adjustment does not thereafter occur,
then the adjusted Conversion Price then in effect shall be readjusted,
effective as of the date when the Board of Directors determines not to
effect such dividend, subdivision, reclassification or combination, to
the Conversion Price which would then be in effect if such record date
or effective date had not been
(b) In case the Company shall fix a record date for the issuance of
rights or warrants to all holders of its Common Stock without any
charge to such holders entitling them (for a period expiring within 45
days after the record date mentioned above) to subscribe for or
purchase shares of its Common Stock (or securities convertible into
shares of its Common Stock) at a price per share (or having an initial
conversion price per share) less than the Current Market Price (as
defined) of the Common Stock on such record date, the Conversion Price
shall be adjusted immediately thereafter so that it shall equal the
price determined by multiplying the Conversion Price in effect
immediately prior thereto by a fraction, of which the numerator shall
be the number of shares of Common Stock outstanding on such record
date plus the number of shares of Common Stock which the aggregate
offering price of the number of shares of such Common Stock so offered
for subscription or purchase (or the aggregate initial conversion
price of the convertible securities so offered) would purchase at the
Current Market Price per share, and of which the denominator shall be
the number of shares of Common Stock outstanding on such record date
plus the number of additional shares of Common Stock so offered for
subscription or purchase (or into which the convertible securities so
offered are initially convertible) . Shares of Common Stock owned by
or held for the Company shall not be deemed outstanding for the
purpose of any computation. Such adjustment shall be made successively
whenever such a record date is fixed. In the event that any such
rights or warrants (or convertible securities), as the case may be, to
the Conversion Price which would then be in effect if such record date
had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of shares of its Common Stock (i) of
shares of any class other than its Common Stock or (ii) of evidences
of indebtedness of the Company or any Subsidiary or (iii) of assets
(excluding cash dividends or distributions referred to in subsection
(a) above) or (iv) of rights or warrants (excluding those referred to
in subsection (b) above), in each such case the Conversion Price shall
be adjusted immediately thereafter so that it shall equal the price
determined by multiplying the Conversion Price in effect immediately
prior thereto by a fraction, of which the numerator shall be the
number of shares of Common Stock outstanding on such record date
multiplied by the Current Market Price per share on such record date,
less the fair market value (as determined by the Board of Directors,
whose determination shall be conclusive, and described in a Board
Resolution filed with the Trustee) of said shares or evidences of
indebtedness or assets or rights or warrants so distributed, and of
which the denominator shall be the number of shares of Common Stock
outstanding on such record date multiplied by such Current Market
Price per share. Such adjustment shall be made successively whenever
such a record date is fixed. In the event that any such distribution
is thereafter no so made, then the adjusted Conversion Price then in
effect shall be readjusted, effective as of the date when the Board of
Directors determines not to distribute such shares, evidences of
indebtedness, assets, rights or warrants, as the case may be, to the
Conversion Price which would then be in effect if such record date had
not been fixed.
(d) For the purpose of any computation under subsections (b) and (c)
above, the "Current Market Price" per share at any date shall be
deemed to be the Average Closing Price of the Company's common stock.
(e) In any case in which this Article X shall require that an
adjustment shall become effective immediately after a record date for
an event, the Company may defer until the occurrence of such event (i)
issuing to the Holder of any Security converted after such record date
and before the occurrence of such event the additional shares of
Common Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the shares of Common Stock
issuable upon such conversion before giving effect to such adjustment
and (ii) paying to such Holder any amount in cash in lieu of a
fractional share of Common Stock pursuant to Section 10.6; provided,
however, that the Company shall deliver to such Holder a due ▇▇▇▇ or
other appropriate instrument evidencing such Holder's rights to
receive such additional shares of Common Stock, and such cash, upon
the occurrence of the event requiring such adjustment.
(f) No adjustment in the Conversion Price shall be required with
respect to shares of Common Stock issued upon conversion of the
Securities unless such adjustment would require an increase or
decrease in the amount equal to at least one percent of such price;
provided, however, that any such adjustment which is not required to
be made shall be carried forward and taken into account in any
subsequent adjustment made not later than three years after the
happening of the specified event or events.
(g) The Company from time to time may reduce the Conversion Price by
any amount for any period of time if the reduction is irrevocable
during the period.
(h) All calculations under this Article X shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may be.
Whenever the Conversion Price is reduced, the Company shall mail to Holders
of the Securities a notice of the reduction. The Company shall mail the notice
at least 15 days before the date the reduced Conversion Price takes effect. The
notice shall state the reduced Conversion Price and the period for which it will
be in effect.
A reduction of the Conversion Price does not change or adjust the
Conversion Price otherwise in effect for purposes of this Section.
12. Effect of Reclassification, Consolidation, Merger, Sale, Lease or
Conveyance.
(a) In case of any consolidation with or merger of the Company into
another corporation (other than a merger or consolidation in which the
Company is the continuing corporation), or in case of any sale, lease
or conveyance to another corporation of the property of the Company as
an entirety or substantially as an entirety, such successor, leasing
or purchasing corporation, as the case may be, shall execute a
supplemental debenture providing that the Holder of each Security then
outstanding shall have the right thereafter to convert such Security
solely into the kind and amount of shares of stock, other securities,
property or cash or any combination thereof receivable -upon such
consolidation, merger, sale, lease or conveyance by a holder of the
number of shares of Common Stock into which such Security might have
been converted immediately prior to such consolidation, merger, sale,
lease or conveyance.
(b) In case of any reclassification or change of the shares of Common
Stock issuable upon conversion of the Securities (other than a change
in par value, or from par value to no par value, or as a result of a
subdivision or combination, but including any change in the shares of
Common Stock into two or more classes or series of shares) or in the
case of any consolidation or merger of another corporation into the
Company in which the Company is the continuing corporation and in
which there is a reclassification or change (including a change in the
right to receive cash or other property) of the shares of Common Stock
(other than a change in par value, or from par value to no par value,
or as a result of a subdivision or combination, but including any
change in the shares of Common Stock into two or more classes or
series of shares), or any reorganization within the meaning of Section
368 (a) (1) (B) of the Internal Revenue Code of 1986, as amended, the
Company and the person obligated to deliver stock, other securities,
property or cash (or any combination thereof) upon the effectiveness
of such reorganization and the issuer of any stock or other securities
so to be delivered, if a different person, shall execute a
supplemental debenture providing that the Holder of each Security then
outstanding shall have the right thereafter to convert such Security
solely into the kind and amount of shares of stock, other securities,
property or cash or any combination thereof receivable upon such
classification, change, consolidation or merger by a holder of the
number of shares of Common Stock into which such Security might have
been converted immediately prior to such reclassification, change,
consolidation or merger.
(c) Any supplemental debenture entered into pursuant to this Section
shall (i) where appropriate, state the Conversion Price in terms of one
full share of Common Stock or one full share of the Common Stock of any
successor, leasing, purchasing or affiliate corporation (as the case
may be) and (ii) provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in
this Article. The Company shall cause notice of the execution of each
such supplemental debenture to be mailed to each Holder of Securities
at his address as the same appears in the Security register.
13. Amendment, Supplement, Waiver.
Subject to certain exceptions contained herein, the Notes may not be
amended or supplemented without unanimous consent of the Holders of the Notes
then outstanding. Any such consent by the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Note. Without the consent of any holder of a Note, the Company
may amend or supplement the Indenture or the Notes to cure any ambiguity, defect
or inconsistency or to provide for uncertificated Notes in addition to or in
place of certified Notes or to make any change that does not materially
adversely affect the rights of any Holder of a Note.
14. Secured Notes.
The Company will use its best efforts to, by December 31, 2000, secure the
8.75% Convertible Debentures Due 2004 with all of the assets of the Company not
secured by any other party, including but not limited to it patents, equipment,
furniture and fixtures, inventory, accounts receivable, and cash in the bank.
The debenture will be secured pursuant to an indenture between the Company and
the Trustee under the indenture, initially Interwest Transfer Co., Inc
15. Abbreviations.
Customary abbreviations may be used in the name of a Holder of a Note or an
assignee, such as TEN COM (=tenants in common) TENANT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=Custodian) and U/G/M/A (=Uniform Gifts to Minors
Act).
INDENTURE EXHIBIT C
"SECURITY AGREEMENT"
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SECURITY AGREEMENT
Dated as of January 29, 2002
Among
AIR PACKAGING TECHNOLOGIES. INC.
and
INTERWEST TRANSFER CO., INC.
Security Agreement, dated as of January 29, 2002 among Air Packaging
Technologies, Inc., a Delaware corporation (the "Company"), and Interwest
Transfer Co., Inc., a Utah corporation, as "Collateral Agent".
WHEREAS, the Company did issue certain convertible notes due 2004 at
various times during in 2000 and 2001; and
WHEREAS, said notes were to be secured by all of the assets of the
Company not secured by any other party and provided for the creation of an
indenture to secure up to $2,500,000 in notes all of which are to be due 2004;
and
WHEREAS, the Company desires to grant said security interest as
required pursuant to said notes by entering into this Security Agreement; for
the equal and ratable benefit of the holders of said notes and any subsequently
issued notes due 2004 up to an aggregate amount of $2,500,000; and
WHEREAS, the Company has entered into or, simultaneously with the
execution of this Security Agreement, will enter into an Indenture with
Interwest Transfer Co., Inc., as Trustee, for the benefit of the holders of the
above described notes and any subsequently issued notes due 2004 (the
"Indenture");
NOW, THEREFORE, the Company and Collateral Agent agree as follows for
the equal and ratable benefit of the holders of the Company's Convertible Notes
Due 2004;
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.1. Definitions Incorporated by Reference
The following terms used in this Security Agreement shall have the
identical meaning given to it in the Indenture. Said terms include: "Additional
Notes", "Affiliate", "Agent", "Board of Directors", "Business Day",
"Collateral", "Code", "Commission", "Corporate Trust Office of the Trustee",
"Default", "Exchange Act", "Fixed Interest", "GAAP", "Holder", "Indirect
Participant", "Initial Notes", "Interest", "Legal Holiday", "Lien", "Maturity
Date", "Notes", "Obligations", "Officer", Officer's Certificate", "Opinion of
Counsel", "Person", "Responsible Officer", "Securities Act" and "Stated
Maturity".
Section 1.2. Other Definitions
"Agreement" means this Security Agreement, as amended or supplemented
from time to time.
"Code" means the Uniform Commercial Code of California.
"Event of Default" means any event specified in Article 4 hereof.
"Indenture" means the Indenture dated on or about the date of this
Security Agreement by and among the Company and the "Trustee" relating to the
Collateral and substantially in the form attached as Exhibit A, as such
Indenture may be amended, modified, supplemented or restated from time to time.
"Notes Outstanding" at any time are all the Notes issued by Company
except for those canceled by it, those delivered to it for cancellation, and
those described in this definition as not Outstanding. A Note does not cease to
be Outstanding because Company or an Affiliate of Company holds the Note. If a
Note is replaced pursuant to Section 2.08 of the Indenture, it ceases to be
Outstanding unless Company receives proof satisfactory to it that the replaced
Note is held by a bona fide purchaser.
"Patent Assignment" means each of the patent assignments executed by
Company in favor of Collateral Agent substantially in the form attached hereto
as Exhibit B.
"Power of Sale" means the Power of Sale executed by Company in favor of
Collateral Agent substantially in the form attached hereto as Exhibit C.
"Security Agreement" means this Security Agreement, as amended or
supplemented from time to time.
"Trustee" means the Person named as Trustee in the Indenture until a
successor replaces such person or another successor in accordance with this
Indenture and, thereafter means such successor.
Section 1.3. Rules of Construction.
The Rules of Construction shall be those set forth in Section 1.04 of
the Indenture.
ARTICLE 2
SECURITY INTEREST
2.1 Security Interest. As security for the prompt payment and
performance of all Obligations, Company hereby mortgages and assigns to
Collateral Agent a first priority security interest in, and lien upon, all of
the Collateral, which security interest shall attach without any further action
by any person. Attached hereto as Exhibit A is a list of that portion of the
Collateral which consists of Patents, Pending Patents, Trademarks and Pending
Trademarks owned by Company. Company agrees that it will hold any of the
Collateral which it may receive in trust for Collateral Agent. The parties
acknowledge and agree that upon the occurrence of an Event of Default,
Collateral Agent may exercise its remedies and proceed against the Collateral,
as Collateral Agent in its sole and absolute discretion may determine and
Collateral Agent shall not be subject to any requirement to marshal any assets
constituting the Collateral.
2.2 Remedies.
(a) Collections. In the event that Company may receive any of the
payments and receipts due Company (or Collateral Agent, as Company's assignee)
attributable to the Collateral, said sums shall be held in trust by Company for
Collateral Agent and Company shall promptly pay all such collections to
Collateral Agent without offset or withholding. Collateral Agent may, in its
sole discretion, in the name of Collateral Agent or in the name of Company,
demand, ▇▇▇ for, collect and receive any of the Collateral. Collateral Agent may
also (but need not) make any compromise or settlement it elects regarding any of
the Collateral, extend the time of payment, arrange for payment in installments
, or otherwise modify the terms of any of the Collateral, without discharging or
otherwise affecting any of the Obligations.
(b) Possession, Sale of Collateral, Etc. Upon the occurrence of an
Event of Default, Collateral Agent will have all the rights and remedies of a
secured party under the Code, in addition to all other rights and remedies under
applicable law, in equity and under the Notes and Indenture. In addition,
Collateral Agent may take possession of the Collateral, wherever it is, and
whether or not in Company's possession, and /or require Company to assemble the
Collateral, in whole or in part, and deliver it to Collateral Agent at a place
reasonably designated by Collateral Agent. Collateral Agent may also take such
measures as it deems necessary or proper for the care or protection of the
Collateral and, with or without taking such possession, may sell the Collateral
in one or more sales or lots, at such prices and on such terms as Collateral
Agent deems appropriate. Collateral Agent may be the purchaser of all or any
portion of the Collateral and, in such event, thereafter will hold the same
absolutely free from any claim or right of Company. In any action under this
Security Agreement upon the occurrence of an Event of Default, Collateral Agent
is entitled to the appointment of a receiver to take possession of all or any
portion of the Collateral and to exercise such additional powers as the court
shall confer.
(c) Power of Sale. As additional security for the full and prompt
payment and performance of the Obligations, Company has concurrently with this
Agreement delivered to Collateral Agent the Power of Sale. At any time upon the
occurrence of an Event of Default, then Collateral Agent shall be entitled to
exercise all of the rights and remedies under the Power of Sale.
(d) Patent Assignments. As additional security for the full and prompt
payment and performance of the Obligations, Company has concurrently with this
Agreement delivered to Collateral Agent a patent assignment covering all of the
patents, patents pending, trademarks and trademarks pending owned by Company,
said patent assignment to be used by Collateral Agent to permit the sale of said
patents and trademarks in the event it shall be entitled to do so under the
Power of Sale.
2.3 Power of Attorney. Borrower hereby irrevocably appoints Collateral
Agent and each of its designees its true and lawful attorney-in-fact with full
power in the name of Collateral Agent and Company from and after the occurrence
of an Event of Default to endorse any notes, checks, drafts, money orders or
other evidence of payment relating to the Collateral, and to take any and all
action deemed by Collateral Agent in its sole judgment to be necessary or
appropriate to maintain or enhance the value of the Collateral, to further
exploit any of the rights included in the Collateral, and/or otherwise to
realize cash from the Collateral, in each case without effecting any foreclosure
sale. Company further irrevocably appoints Collateral Agent, its true and lawful
attorney-in-fact in the name of Company or Collateral Agent (i) upon occurrence
of an Event of Default to enforce any of Company's rights under any agreements
relating to the Collateral, (ii) to enter into and perform such agreements as
may be necessary in order to carry out the terms, covenants and conditions of
this Agreement, (iii) to execute such additional mortgages, pledges and
assignments of the Collateral or financing statements and any related amendments
and continuations with respect thereto as Collateral Agent deems necessary in
order to protect, maintain or enforce its security interest in the Collateral,
and (iv) to take any and all other actions necessary or proper to carry out the
intention of this Agreement. This appointment is deemed coupled with an interest
and is irrevocable until the Obligations have been discharged to Collateral
Agent's reasonable satisfaction.
2.4 Payment Directions. Collateral Agent shall have full authority to
notify an account debtor that all sums payable to Company relating to the
Collateral are to be paid directly to Collateral Agent. In the event that
Collateral Agent exercises such right, Collateral Agent shall send copies of any
such notices to Company; provided, however, that the inadvertent failure of
Collateral Agent to do so shall not constitute a breach of this Agreement by
Collateral Agent (and Collateral Agent shall cure any such failure promptly upon
notice by Company.
2.5 Release of Liens. Upon the Obligations having been indefeasibly
repaid in full in cash, together with accrued interest and charges thereon and
the discharge of all Obligations to Collateral Agent's reasonable satisfaction,
Collateral Agent shall execute, file and cause to be recorded, documents and
termination statements as necessary to evidence the termination and release of
all liens granted hereunder.
ARTICLE 3
REPRESENTATIONS, WARRANTIES AND COVENANTS
Company represents and warrants to Collateral Agent and covenants and
agrees that:
3.1 Organization, Corporate Powers and Authorization.
(a) Company is a corporation duly organized, validly existing and in
good standing under the laws of Delaware and is qualified to do business as a
foreign corporation in all jurisdictions where the nature of its business and/or
ownership of its assets makes such qualification necessary.
(b) Company has the requisite power and authority to own its properties
and assets. All of the Company's properties and assets are located at Company's
offices at ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ which is also the office
at which the Company keeps the records of its patents, patent applications,
trademarks and trademark applications.
(c) Company has the power to execute, deliver and perform this
Agreement and the other agreements and documents referred to herein to which it
is a party and to grant the security interests granted under or pursuant to the
terms of this Agreement, all of which actions have been duly authorized by all
necessary corporate action.
(d) Company's execution of and performance of all transactions
contemplated by this Agreement do not and will not in any way materially and
adversely affect the rights of Company, violate or constitute a breach of any
provision of law, any court or agency decree or judgment, rule or regulation
applicable to Company or Company's Articles of Incorporation, Bylaws or be in
conflict with or constitute a breach of any other agreement, contract or
instrument or other binding commitment to which Company is a party or by which
it is bound.
(e) This Agreement and each of the other documents executed by Company
and delivered to Collateral Agent hereunder, when executed and delivered will
constitute the legal, valid and binding obligations of Company, enforceable
against Company in accordance with their respective terms.
(f) Company is not in default in the performance of any material
obligation, undertaking or covenant contained in any contract or agreement to
which it is a party or by which it, or any portion of the Collateral is bound.
3.2 Litigation. There is no action, suit or proceeding at law or in
equity or by or before any governmental instrumentality or other agency or any
investigation into the affairs of Company or any of its properties or rights.
3.3 Collateral.
(a) No person or entity other than Company has any rights to the
Collateral and there are no liens or encumbrances against the Collateral.
(b) Upon (i) the execution by Company and delivery of the documents
contemplated by this Agreement and a financing statement and (ii) the recording
and /or filing of such documents with the Office of the California Secretary of
State and such other governmental agencies as may be required, Collateral Agent
shall have a perfected first priority security interest in the Collateral as a
matter of California and federal law.
(c) No claims or litigation are pending against Company or, to the best
of Company's knowledge, threatened and Company knows of no dispute which may
result in a claim or litigation which might adversely affect any of the rights
granted to Collateral Agent hereunder.
(d) Company has not nor will it agree to grant, sell, assign, transfer,
encumber, or hypothecate any of its rights and interest in and to the
Collateral, other than to Collateral Agent, until the Obligations have been
indefeasibly discharged to Collateral Agent's satisfaction.
(e) From time to time at Collateral Agent's request and in form and
substance satisfaction to Collateral Agent, Company shall execute and promptly
deliver to Collateral Agent for filing, financing statements, assignment of
financing statements, termination statements and any other documents that
Collateral Agent may reasonably request, in connection with the perfecting,
preserving or enforcing of Collateral Agent's security interests hereunder.
3.4 Records. Company shall keep accurate and complete records with
respect to the Collateral and will permit Collateral Agent or any of its
representatives during normal business hours to inspect such records.
3.5 Taxes and Liens. Company has filed or caused to be filed when due
all income or other tax returns in all jurisdictions in which it is required to
be filed and has paid and will pay before delinquency all taxes, assessments and
governmental charges or levies properly imposed upon and lawfully payable by it
or upon the Collateral and shall defend the Collateral against any and all
liens, claims, encumbrances, security interests and other impediments of any
nature, howsoever arising.
ARTICLE 4
DEFAULT AND REMEDIES
4.1 Each of the following constitutes an "Event of Default".
(a) Company fails to pay all or any part of the unpaid principal on the
Notes when and as the same becomes due and payable at maturity, upon prepayment,
by acceleration or otherwise;
(b) Company fails to pay installments of Fixed Interest in full on the
Notes for one Interest Payment Date;
(c) Company fails to observe or perform in all material respects any ,
covenant or agreement on its part contained in this Agreement, the Notes, or the
Indenture if such failure is not remedied within 60 days after written notice is
given to Company by Collateral Agent or to the Company and the Collateral Agent
by the Holders of at least 25% in aggregate principal amount of the Notes then
Outstanding, in either case specifying such default, requiring that such default
be remedied and stating that such notice is a "Notice of Default."
(d) Any representation or warranty made in this Agreement, the Notes or
the Indenture proves to have been false or misleading in any material respect;
(e) Any action is taken establishing or seeking to establish a lien,
charge or other right to any of the assets comprising the Collateral, or seeking
to execute upon, seize or foreclose upon any such assets, and such action is not
fully released, abandoned or dismissed within ten days after such action is
first initiated.
(f) Company pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it in an
involuntary case;
(iii) consents to the appointment of a Custodian of it for all or
substantially all of the its property; or
(iv) makes a general assignment for the benefit of its creditors; or
(g) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against Company in an involuntary case;
(ii) appoints a Custodian for Company or for all or substantially all
of its property; or
(iii) orders the liquidation of Company;
and the order or decree remains unstayed and in effect for 60
consecutive days.
The term "Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
4.2 Acceleration. If any Event of Default occurs and is continuing,
Collateral Agent or the Holders of at least 25% in aggregate principal amount of
the Notes then outstanding, by written notice to Company may and, Collateral
Agent at the request of such Holders shall, declare the principal of and accrued
interest on the Outstanding Notes to be immediately due and payable; provided
that in the case of an Event of Default described in Section 4.1 (f) or (g), the
Notes shall become due and payable without further action or notice.
ARTICLE 5
COLLATERAL AGENT
5.1 Duties of Collateral Agent
(a) If an Event of Default has occurred and is continuing of which a
Responsible Officer of Collateral Agent has knowledge, Collateral Agent shall
exercise such of the rights and powers vested in it by this Security Agreement,
and use the same degree of care and skill in its exercise, as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of Collateral Agent shall be determined solely by the
express provisions of this Agreement and Collateral Agent need perform only
those duties that are specifically set forth in this Agreement and no others,
and no implied covenants or obligations shall be read into this Agreement
against Collateral Agent; and
(ii) in the absence of bad faith on its part, Collateral Agent may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to
Collateral Agent, and conforming to the requirements of this Agreement. However,
in the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to Collateral Agent, Collateral Agent
shall be under a duty to examine the same to determine whether or not they
conform to the requirements of the Agreement (but need not confirm or
investigate the accuracy of mathematical calculations or other facts stated
therein.)
(c) Collateral Agent may not be relieved from liabilities for its own
grossly negligent action, its own grossly negligent failure to act, or its own
willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section,
(ii) Collateral Agent shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that Collateral
Agent was grossly negligent in ascertaining the pertinent facts,
(d) Whether or not therein expressly so provided, every provision of
this Agreement that in any way relates to Collateral Agent is subject to
paragraphs (a), (b) and (c) of this Section 5.1.
(e) No provision of this Agreement shall require Collateral Agent to
expend or risk its own funds or incur any liability. Collateral Agent shall be
under no obligation to exercise any of its rights and powers under this
Agreement at the request of any Holder of Notes, unless such Holder shall have
offered to Collateral Agent security and indemnity satisfactory to it against
any loss, liability or expense that might be incurred by it in complying with
such request.
(f) Collateral Agent shall not be liable for interest on any money
received by it except as Collateral Agent may agree in writing with Company.
Money held in trust by Collateral Agent need not be segregated from other funds
except to the extent required by law.
5.2. Rights of Collateral Agent
(a) Collateral Agent may conclusively rely on the truth of the
statements and correctness of the opinions contained in, and shall be protected
from acting or refraining from acting upon, any document believed by it to be
genuine and to have been signed or presented by the proper person. Collateral
Agent need not investigate any fact or matter stated in the document.
(b) Before Collateral Agent acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel or both. Collateral
Agent shall not be liable for any action it takes or omits to take in good faith
in reliance on such Officer's Certificate or Opinion of Counsel. Prior to
taking, suffering or admitting any action, Collateral Agent may consult with
counsel of Collateral Agent's own choosing and the advise of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.
(c) Collateral Agent may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) Collateral Agent shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Agreement.
(e) Unless otherwise specifically provided in this Agreement, any
demand, request, direction or notice from Company shall be sufficient if signed
by an Officer of Company.
(f) Collateral Agent shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement at the request or direction
of the Holders unless such Holders shall have offered to Collateral Agent
security or indemnity satisfactory to Collateral Agent against the costs,
expenses and liabilities that might be incurred by it in compliance with such
request or direction.
(g) Collateral Agent shall not be charged with knowledge of any Default
or Event of Default with respect to the Notes unless either (1) a Responsible
Officer of Collateral Agent shall have actual knowledge of such Default or Event
of Default or (2) written notice of such Default or Event of default shall have
been given to Collateral Agent by Company or any Holder of the Notes.
(h) The rights, privileges, protections, immunities and benefits given
to Collateral Agent including without limitation, its right to be indemnified,
are extended to, and shall be enforceable by, Collateral Agent in each of its
capacities hereunder and each agent, custodian and other Person employed to act
hereunder.
(i) Collateral Agent may request that company deliver an Officer's
Certificate setting forth the names of individuals and/or titles of officers
authorized to take specified actions pursuant to this Agreement, including any
person specified as so authorized in any such certificate previously delivered
and not superseded.
Section 5.3 Disclaimer. Collateral Agent shall not be responsible for
and makes no representation as to the validity or adequacy of this Agreement; it
shall not be responsible for any money paid to Company or upon Company's
direction under any provision of this Agreement; it shall not be responsible for
the use or application of any money received by any Paying Agent other than
itself; and it shall not be responsible for any statement or recital herein or
any statement in the Notes or any other document in connection with its
certificate of authentication.
Section 5.4. Notice of Defaults. If an Event of Default occurs and is
continuing and if it is known to a Responsible Officer of Collateral Agent,
Collateral Agent shall mail to Holders of Notes a notice of the Default or Event
of Default within 90 days after it occurs. Except in the case of a Default or
Event of Default in payment on any Note, Collateral Agent may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of the
Notes.
Section 5.5 . Compensation and Indemnity. Company shall pay to
Collateral Agent from time to time compensation as shall be agreed between
Company and Collateral Agent for its acceptance of this Agreement and services
hereunder. Company shall reimburse Collateral Agent upon request for all
reasonable disbursements, advances and actual out of pocket expenses incurred or
made by it in addition to the compensation, disbursements and expenses of
Collateral Agent's agents and counsel, but shall not include expenses incurred
as a result of Collateral Agent's negligence or willful misconduct.
Company shall indemnify each of the Collateral Agent and any
predecessor Collateral Agent against any and all losses, liabilities, damages,
claims or expenses, including taxes (other than taxes based on or measured by
the income or gross receipts of Collateral Agent) incurred by it arising out of
or in connection with the acceptance or administration of its duties under this
Agreement, including the costs and expenses of enforcing this Agreement against
Company (including this Section 5.5) and defending itself against any claim
(whether asserted by Company or any Holder or any other person) or liability in
connection with the exercise or performance of any of its powers or duties
hereunder except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. Collateral Agent shall notify
Company promptly of any claim for which it make seek indemnity. Failure by
Collateral Agent to so notify Company shall not relieve Company of its
obligations hereunder, except to the extent of actual prejudice to company
resulting from such failure. Company may have separate counsel and Company shall
pay reasonable fees and expenses of such counsel. Company need not pay for any
settlement made without its consent, which consent shall not be reasonably
withheld.
The obligations of Company under this Section 5.5 shall survive the
satisfaction and discharge of this Agreement.
To secure Company's payment obligations under this Section 5.5,
Collateral Agent shall have a Lien prior to the Notes on all money or property
held or collected by Collateral Agent, except that held in trust to pay
principal and Interest on particular Notes redeemed, defeased, repurchased or
otherwise satisfied and discharged. Such Lien shall survive the satisfaction and
discharge of this Agreement.
When Collateral Agent incurs expenses or renders services after an
Event of Default specified in Article 4 hereof, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
Section 5.6 Replacement of Collateral Agent.
A resignation or removal of Collateral Agent and appointment of a
successor Collateral Agent shall become effective only upon the successor
Collateral Agent's acceptance of appointment as provided in this Section 5.6.
Collateral Agent may resign in writing at any time and be discharged
from the agency created hereby created by so notifying Company. The Holders of a
majority in principal amount of the then Outstanding Notes may remove Collateral
Agent by so notifying Collateral Agent, as applicable, and Company in writing.
Company may remove Collateral Agent, as applicable, if:
(a) Collateral Agent, as applicable, is adjudged a bankrupt or an
insolvent or an order for relief is entered with respect to Collateral Agent, as
applicable, under a Bankruptcy Law;
(b) a Custodian or public officer takes charge of Collateral Agent, as
applicable, or its property; or
(c) Collateral Agent, as applicable, becomes incapable of acting.
If Collateral Agent resigns or is removed or if a vacancy exists in the
office of Collateral Agent for any reason, Company shall promptly appoint a
successor Collateral Agent. Within one year after the successor Collateral Agent
takes office, the Holders of a majority in principal amount of the then
Outstanding Notes may appoint a successor Collateral Agent to replace the
successor Collateral Agent appointed by Company.
If a successor Collateral Agent does not take office within 60 days
after the retiring Collateral Agent resigns or is removed, the retiring
Collateral Agent, Company, or the Holders of at least 10% in principal amount of
the then Outstanding Notes may petition, at the expense of Company, any court of
competent jurisdiction for the appointment of a successor Collateral Agent.
A successor Collateral Agent shall deliver a written acceptance of its
appointment to the retiring Collateral Agent and to Company. Thereupon, the
resignation or removal of the retiring Collateral Agent shall become effective,
and the successor Collateral Agent shall have the rights, powers and the duties
of Collateral Agent under this Agreement. The successor Collateral Agent shall
mail a notice of its succession to the Holders of the Notes, The retiring
Collateral Agent shall promptly transfer all property held by it as Collateral
Agent to the successor Collateral Agent provided that all sums owing to the
retiring Collateral Agent have been paid. Notwithstanding replacement of
Collateral Agent pursuant to this Section5.6, Company's obligations under this
Section 5.6 hereof shall continue for the benefit of the retiring Collateral
Agent.
Section 5.7 Successor Collateral Agent by Merger, etc.
If Collateral Agent consolidates or merges or coverts into, or
transfers all or substantially all of the its business, the successor
corporation without any further act shall be the successor Collateral Agent.
ARTICLE 6
AMENDMENT, SUPPLEMENT AND WAIVER
Section 6.1. With Consent of holders of Notes.
Except as provided in the next two succeeding paragraphs, this
Agreement may be amended or supplemented with the consent of the Holders of at
least a majority in principal amount of the Notes then Outstanding voting as a
single class (including consents obtained in connection with a tender offer or
exchange offer for Notes), and, in such case, without prior written notice to
the Holders , any existing Default or compliance with any provisions of this
Agreement or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then Outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for Notes). It is
further understood that the provisions of any definition set forth herein (other
than the definition of "Maturity Date") may be amended or supplemented, or any
such definition waived, with the consent of the Holders of at least a majority
in principal amount of the Notes then Outstanding voting as a single class
(including consents obtained in connection with a tender offer or exchange offer
for the Notes).
Upon the written request of Company accompanied by resolutions of the
Board of Directors or other governing body of Company authorizing the execution
of any such amended or supplemental Agreement, and upon the filing with
Collateral Agent of evidence satisfactory to Collateral Agent of the consent of
the Holders of Notes as aforesaid, and upon receipt by Collateral Agent of the
documents described in Section8.05 of the Indenture, Collateral Agent shall join
with Company in the execution of such amended or supplemental Agreement unless
such amended or supplemental Agreement affects Collateral Agent's own rights,
duti4es or immunities under this Agreement or otherwise, in which case
Collateral Agent may, but shall not be obligated to, enter into such amended or
supplemental Agreement.
It shall not be necessary for the consent of the Holders of Notes under
this Section 6.1 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 6.1 becomes
effective, Company shall mail to the Holders of each Note affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amended or supplemental Agreement
or waiver.
Without the consent of each Holder affected, amendment or waiver,
including a waiver pursuant to Section 6.04 of the Indenture, may not:
(i) reduce the principal amount of notes whose Holders must consent to
an amendment, supplement or waiver;
(ii) reduce the principal of or change the Stated Maturity of any
Note;
(iii) reduce the rate or change the time for payment of Interest on
any Note;
(iv) waive a Default or Event of Default in the payment of principal
of or Interest on the Notes (except a rescission of acceleration of the Notes by
the Holders of at least a majority in aggregate principal amount of the then
Outstanding Notes and a waiver of the payment default that resulted from such
acceleration);
(v) make any Note payable in money other than that stated in the
Notes;
or
(vi) change the place or currency of payment of principal of or
Interest on any Note;
(vii) impair the right to institute suit for the enforcement of any
payment on or after the Stated Maturity of any Note;
(viii) reduce the above stated percentage of Outstanding Notes the
consent of whose Holders is necessary to modify or amend this Agreement;
(ix) reduce the percentage or aggregate principal amount of Outstanding
Notes the consent of whose Holders is necessary for waiver of compliance with
the provisions of this Agreement or for waiver of defaults that require the
consent of all Holders to waive; or
(x) make any change to the foregoing amended and waiver provisions.
Section 6.2 Revocation and Effect of Consents
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
he consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder or subsequent Holder of a Note may revoke the
consent as to its Note if the Collateral Agent receives written notice of
revocation before the date Collateral Agent receives notice evidencing the
taking of action by the Holders of the specified percentage in aggregate
principal amount specified in this Agreement with respect to such waiver,
supplement or amendment. When an amendment, supplement or waiver becomes
effective in accordance with its terms, it thereafter binds every Holder.
Section 6.3. Notation on or Exchange of Notes.
Company may place an appropriate notation about an amendment,
supplement or waiver on any note thereafter authenticated. Company in exchange
for all Notes may issue new Notes that reflect the amendment, supplement or
waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
ARTICLE 7
ADDITIONAL PROVISIONS WITH RESPECT
TO COLLATERAL
Section 7.1 Release of Collateral
(a) Subject to subsections (b) (c) and (d) of this Section 6.4,
Collateral may be released from the Lien and security interest created by this
Agreement at any time or from time to time in accordance with the provisions of
this Agreement and as provided hereby. Collateral will be automatically released
from the Lien at such time as Company has paid in full or otherwise provided for
the payment in full in accordance with the Indenture of the principal amount and
Interest due on all of the Notes. If Collateral Agent is not the Trustee, in
accordance with Section 9.03 of the Indenture the Trustee shall deliver a
certificate to Collateral Agent stating that such principal amount and Interest
have been paid in full, and instruct Collateral Agent to release the Liens
pursuant to the Indenture and this Agreement. Upon the request of the Company
pursuant to an Officer's Certificate certifying that all conditions have been
met, Collateral Agent shall release the Collateral. Upon receipt of such
Officer's Certificate, Collateral Agent shall (at the sole cost and expense of
Company) execute, deliver or acknowledge any necessary or proper instruments of
termination, satisfaction or release to evidence the release of any Collateral
permitted to be released pursuant to the indenture or this Agreement.
(b) No Collateral shall be released from the Lien and security interest
created by this Agreement unless there shall have been delivered to Collateral
Agent the certificate required by this Section 7.1.
ARTICLE 8
MISCELLANEOUS
Section 8.1. Notices.
Any notice or communication by Company or Collateral Agent shall be
made in accordance with Section 11.01 of the Indenture and shall be sent to
Collateral Agent at the following address:
Interwest Transfer ▇▇.▇▇▇.
1981 East ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
Section 8.2. Certificate and Opinion as to Condition Precedent.
Upon request or application by Company to Collateral Agent to take any
action under this Agreement, Company shall furnish to Collateral Agent, upon
request:
(a) an Officer's Certificate in form and substance reasonably
satisfactory to Collateral Agent, as applicable (which shall include the
statements set forth in Section 8.3 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for in this
Agreement relating to the proposed action have been satisfied; and/or
(b) an Opinion of Counsel in form and substance reasonably satisfactory
to Collateral Agent (which shall include the statements set forth in Section 8.3
hereof) stating that, in the opinion of each counsel, all such conditions
precedent and covenants have been satisfied.
Section 8.3. Statements Required in Certificate or Opinion
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Agreement shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate are based;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such statement has been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
Section 8.4. Rules by Collateral Agent and Agents
Collateral Agent may make reasonable rules for action by or at a
meeting of Holders.
Section 8.5. No Personal Liability of Directors, Officers, Employee
and Stockholders.
No director, officer, employee, incorporator or stockholder of Company,
as such, shall have any liability for any obligation of Company under this
Agreement or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each holder of Notes accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
Section 8.6. Governing Law.
This Agreement is to be construed in accordance with the laws of the
State of California; provided, however, that all matters relating to Collateral
Agent shall be construed in accordance with the laws of the State of Utah.
Section 8.7. Successors.
All agreements of the Company in this Agreement shall bind its
successors and assigns. All agreements of Collateral Agent in this Agreement
shall bind its successors and assigns.
Section 8.8. Severability.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 8.9. WAIVER OF JURY TRIAL RIGHTS.
TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED,
COMPANY HEREBY 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, OR THE SUBJECT MATTER HEREOF, IN EACH CASE, WHETHER
NOW EXISTING OR HEREAFTER ARISING OR WHETHER IN CONTRACT, TORT OR OTHERWISE.
Section 8.10. No Waiver, Remedies.
No failure on the part of Collateral Agent to exercise and no delay in
exercising any right in connection with this Agreement shall operate as a waiver
thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies provided hereunder are cumulative and not exclusive of any
remedies provided by law.
Section 8.11. Collection Costs. Attorneys' Fees.
In the event of any breach of this Agreement by Company, Company shall
reimburse Collateral Agent on demand for all costs incurred by Collateral Agent
relating to such breach, including, without limitation, collection costs for
payments that have become delinquent. In any action or proceeding to enforce any
rights or obligations hereunder, the prevailing party shall be entitled to
reimbursement for its reasonable attorneys' fees and expenses and court costs.
Section 8.12. Entire Agreement. Modification.
This Agreement expresses the entire understanding of the parties as to
the matters covered and supersedes any prior discussions, negotiations and
agreements. This Agreement may be amended only in writing that clearly states
that it amends this Agreement.
Section 8.13. Counterpart Originals.
The parties may sign any number of copies of this Agreement. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 8.14. Table of Contents and Headings, etc.
The Table of Contents, if any, and Headings of the Articles and
Sections of this Agreement have been inserted for convenience of reference only,
are not to be considered a part of this Agreement and shall in no way modify or
restrict any of the terms or provisions hereof.
SIGNATURES
Dated as of January 29 , 2002
---
AIR PACKAGING TECHNOLOGIES, INC.
By: s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ President
---------------------------------
Name and Title
INTERWEST TRANSFER CO. INC.
By s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ V.P.
---------------------------------
Name and Title
SECURITY AGREEMENT EXHIBIT A
"INDENTURE AGREEMENT"
----------------------------
Indenture Agreement between Air Packaging Technologies, Inc. and Interwest
Transfer, Co., Inc., dated January 29th, 2002. (See Attached)
SECURITY AGREEMENT EXHIBIT B
"PATENT ASSIGNMENT"
----------------------------
EXHIBIT B
ASSIGNMENT
Air Packaging Technologies, Inc., a corporation of the State of Delaware,
having a place of business at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
(hereinafter "Air Packaging") owns the entire right, title and interest in the
United States Patents, Patents Pending, Trademarks and Trademarks Pending set
forth in Exhibit A attached hereto (hereinafter the "Patents and Trademarks").
In consideration of $1.00 and other goods and valuable consideration and
pursuant to a certain Security Agreement dated January 23, 2002 (hereinafter the
"Security Agreement") between Air Packaging Technologies, Inc. and Interwest
Transfer Co., Inc. as Collateral Agent (hereinafter "the Assignee"), Air
Packaging hereby assigns to Assignee:
The entire right, title and interest in the Patents and Trademarks and in
all divisions, continuations and continuations in part thereof, and in all
corresponding patents issued or applications filed in countries foreign to the
United States.
Air Packaging hereby authorizes and requests the Unties States Commissioner
of Patents and Trademarks and such Patent Office officials in foreign countries
as are duly authorized by their patent laws to issue patents, to issue any and
all patents on any of the inventions set forth in Exhibit A to the Assignee as
the owner of the entire interest, for the sole use and benefit of the Assignee,
its successors, assigns and legal representatives.
Air Packaging further agrees, without further consideration and without
additional charge, to sign all lawful papers and to perform all other lawful
acts which the Assignee may request of it to make this Assignment fully
effective, including by way of example sub not of limitation, the following: (1)
Prompt execution of all original, divisional, substitute, reissue, and other
Untied States and foreign patent applications on said inventions, and all lawful
documents requested by the Assignee to further this Assignment and the
prosecution of any patent applications included herein and (2) Cooperation to
the best of its ability in the execution of all lawful documents, the production
of evidence, nullification, reissue, extension, or infringement proceedings
involving any of the Patents or Trademarks assigned hereby.
This assignment and agreement shall be binding upon Air Packaging, its
successors and assigns.
AIR PACKAGING TECHNOLOGIES, INC.
By
-----------------------------------
President and CEO
STATE OF CALIFORNIA )
COUNTY OF ____________ ) SS:
On ____________________, 2002 before me, the undersigned, a Notary Public in and
for the State of California, personally appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and acknowledged that
he executed the same in his authorized capacity.
WITNESS my hand and official seal.
---------------------------------
SECURITY AGREEMENT EXHIBIT C
"POWER OF SALE"
----------------------------
EXHIBIT C
POWER OF SALE
Pursuant to that certain Security Agreement, dated as of January 29, 2002
(the "Security Agreement") by and among AIR PACKAGING TECHNOLOGIES, INC., a
Delaware corporation ("Company") and INTERWEST TRANSFER CO., INC., a Utah
corporation ("Collateral Agent"), Company hereby irrevocably designates,
constitutes and appoints Collateral Agent its true and lawful attorney-in-fact
with full power of substitution and with full and irrevocable power (which power
shall be deemed coupled with and interest), in the place and stead of Company
and in the name of Company, at any time and from time to time in the sole
discretion of Collateral Agent to sell, lease or otherwise of any or all of the
Collateral (as said term is defined in the Security Agreement) at any time upon
the occurrence of an Event of Default as defined in the Security Agreement and
to execute any and all instruments, agreements or documents as may be necessary
or desirable in connection with the foregoing.
In case any one or more of the provisions hereof should be invalid, illegal
or unenforceable in any respect, such provision shall be curtailed or limited
only to the extent necessary to bring it within legal requirements and the
validity and enforceability of the remaining provisions herein shall not in any
way be affected or impaired thereby.
This Power of Sale and the rights and obligations of Company and Collateral
Agent hereunder shall be construed in accordance with the laws of the State of
California.
AIR PACKAGING TECHNOLOGIES, INC.
By: _________________________________
Name and Title
ACKNOWLEDGEMENT
STATE OF CALIFORNIA )
COUNTY OF ____________ ) SS:
On ____________________, 2002 before me, the undersigned, a Notary Public in and
for the State of California, personally appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and acknowledged that
he executed the same in his authorized capacity.
WITNESS my hand and official seal.
---------------------------------
SECURITY AGREEMENT EXHIBIT D
"LIST OF PATENTS"
----------------------------
AIR PACKAGING TECHNOLOGIES
Docket No. Title Inventors Serial No./ Status
Filing Date Pending/Issue Date
------------------------------------------------------------------------------------------------------------------------------------
2699.2.7.4 PCT Bag-In-Bag Packaging System ▇▇▇▇▇▇ ▇. Patent No.: 64998
Korea ▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------------------------
2699.2.7.5.1 & 2 Packaging Systems (Short Title) ▇▇▇▇▇▇ ▇. App No.: Patent No.: 3160241
PCT ▇▇▇▇▇ 203,938/88
Japan SN: 12923/98
------------------------------------------------------------------------------------------------------------------------------------
2699.2.7.6.1 & 2 Packaging Systems (Short Title) ▇▇▇▇▇▇ ▇. Patent No.: 0306207
PCT ▇▇▇▇▇ 03/31/93 and 88307838.8
Europe 08/24/88
------------------------------------------------------------------------------------------------------------------------------------
2699.2.7.7 PCT Packaging Systems and Method ▇▇▇▇▇▇ ▇. Patent No.: UM-63865
Taiwan ▇▇▇▇▇ 06/01/91
------------------------------------------------------------------------------------------------------------------------------------
2699.2.7.8 PCT Packaging Systems and Method ▇▇▇▇▇▇ ▇. App. No.: 21103/88 Patent No.: 627428
Australia ▇▇▇▇▇ 08/17/88
------------------------------------------------------------------------------------------------------------------------------------
2699.2.8 Clam-Like Packaging System ▇▇▇▇▇▇ ▇. 07/262,537 Issued: 10/17/89
▇▇▇▇▇ 10/25/88 Patent No.: 4,874,093
------------------------------------------------------------------------------------------------------------------------------------
2699.2.9 Method for Forming Clam-Like ▇▇▇▇▇▇ ▇. 07/392,431 Issued: 04/24/90
Packaging System ▇▇▇▇▇ 08/11/89 Patent No.: 4,918,904
------------------------------------------------------------------------------------------------------------------------------------
2699.2.10 Method for Forming Bag-In-Bag ▇▇▇▇▇▇ ▇. 07/392,443 Issued: 08/21/90
Packaging System ▇▇▇▇▇ 08/11/89 Patent No.: 4,949,530
------------------------------------------------------------------------------------------------------------------------------------
2699.2.11 Method for Forming an Inflated ▇▇▇▇▇▇ ▇. 06/634,986 Issued: 07/01/86
Wrapping ▇▇▇▇▇ 07/27/84 Patent No.: 4,597,244
------------------------------------------------------------------------------------------------------------------------------------
2699.2.1p Quilted Inflatable Packaging ▇▇▇▇▇ ▇. 60/114/205 Filed Utility Application from
Device ▇▇▇▇▇▇ 12/29/98 this provisional: 12/29/99
------------------------------------------------------------------------------------------------------------------------------------
2699.2.1 Quilted Inflatable Packaging ▇▇▇▇▇ ▇. 09/474,310 Issued: 09/04/01
Device ▇▇▇▇▇▇ 12/29/99 Patent No.: 6,283,296
------------------------------------------------------------------------------------------------------------------------------------
2699.2.2 Bag with Squees Valve and ▇▇▇▇▇▇ ▇. 08/276,535 Issued: 09/05/95
Method for Packaging and Article ▇▇▇▇▇ 07/18/94 Patent No.: 5,447,235
Therein
------------------------------------------------------------------------------------------------------------------------------------
2699.2.4 Self-Seating Inflatable Bag and ▇▇▇▇▇▇ ▇. 08/306,883 Issued: 12/31/96
Method for Packaging an Article ▇▇▇▇▇ 9/15/94 Patent No.: 5,588,532
Therein
------------------------------------------------------------------------------------------------------------------------------------
2699.2.5 Merchandise Encapsulating ▇▇▇▇▇▇ ▇. 08/367,678 Issued: 01/30/96
Packaging System and Method ▇▇▇▇▇ Patent No.: 5,487,470
Therefor
------------------------------------------------------------------------------------------------------------------------------------
2699.2.5.1 PCT Merchandise Encapsulating ▇▇▇▇▇▇ ▇. App No.: 41521/91 Published in the Japanese Official
Japan Packaging System and Method ▇▇▇▇▇ Gazette 04/25/01
Therefor Japanese Patent No.: ▇▇▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------------------------
2699.2.7 Bag-In-Bag Packaging System ▇▇▇▇▇▇ ▇. 07/089,228 Issued: 10/10/89
▇▇▇▇▇ 08/25/87 Patent No.: 4,872,558
------------------------------------------------------------------------------------------------------------------------------------
2699.2.7.1 PCT Bag-In-Bag Packaging System ▇▇▇▇▇▇ ▇. App No.: 37325 Issue: 01/15/96
Philippines ▇▇▇▇▇ Filed: 08/01/88 Patent No.: 29288
------------------------------------------------------------------------------------------------------------------------------------
2699.2.7.3 PCT Packaging System and Method Patent No.: 87815
▇▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------------------------
2699.3.7 SUSPEND-A-PAK 75/896,233 Pending
01/13/00
------------------------------------------------------------------------------------------------------------------------------------
2699.2.12 Packaging Device that is Flexible, ▇▇▇▇▇▇ ▇. 07/922,618 Issued: 12/28/93
Inflatable and Reusable and ▇▇▇▇▇ 07/30/92 Patent No.: 5,272,856
Shipping Method Using the Device
------------------------------------------------------------------------------------------------------------------------------------
2699.2.13 Self-Closing and Self-Sealing ▇▇▇▇▇▇ ▇. 08/645,094 Issued: 01/27/98
Valve Device for Use with Damask 05/13/96 Patent No.: 5,711,691
Inflatable Structures
------------------------------------------------------------------------------------------------------------------------------------
2699.2.14 Continuous Inflatable Plastic ▇▇▇▇▇▇ ▇. 07/960,942 Issued: 06/27/95
Wrapping Material ▇▇▇▇▇ 10/14/92 Patent No.: 5,427,830
------------------------------------------------------------------------------------------------------------------------------------
2699.2.18p Tubular Suspension Air Packaging ▇▇▇▇▇ ▇. 60/169,479 Filed Utility Application from this
Device ▇▇▇▇▇▇ 12/07/99 Provisional: 12/06/00
------------------------------------------------------------------------------------------------------------------------------------
2699.2.18 Suspension Air Packaging Device ▇▇▇▇▇ ▇. 09/731,089 Pending
▇▇▇▇▇▇
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2699.3.1 TM AIRENVIRO 75/644,749 Pending
------------------------------------------------------------------------------------------------------------------------------------
2699.3.1.1 AIRENVIRO Community APTI has protection of the ▇▇▇▇ in
Community Trademark Reg. the European community until
Trademark No. 1088152 02/25/2009
------------------------------------------------------------------------------------------------------------------------------------
2699.3.3 TM AIR BOX 74/063,995 Reg. Date: 12/28/93
05/29/90 Registration No.: 1,814,423
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2699.3.5 TM APTI AIR PACKAGING 75/335,466 Pending
TECHNOLOGIES 08/04/97
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