Exhibit 4.2
FORM OF SECURED CONVERTIBLE NOTE
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE
NOR THE SECURITIES
INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN
REGISTERED UNDER THE
SECURITIES ACT OF
1933, AS AMENDED, OR
APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL, IN A
GENERALLY ACCEPTABLE
FORM, THAT
REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A
UNDER SAID
ACT. NOTWITHSTANDING
THE FOREGOING, SUBJECT TO COMPLIANCE WITH APPLICABLE
SECURITIES LAWS, THE
SECURITIES MAY BE
PLEDGED IN CONNECTION
WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY
THE SECURITIES.
ANY TRANSFEREE
OF THIS NOTE
SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE,
INCLUDING SECTIONS
3(C)(III) AND 18(A) HEREOF. THE PRINCIPAL AMOUNT REPRESENTED
BY THIS NOTE AND,
ACCORDINGLY, THE
SECURITIES ISSUABLE
UPON CONVERSION HEREOF
MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION
3(C)(III) OF
THIS NOTE. THIS INSTRUMENT IS SUBJECT TO THE TERMS OF A
INTERCREDITOR
AGREEMENT BY AND BETWEEN FORTRESS CREDIT CORP., AS AGENT
(OR ANY
SUCCESSOR OR REPLACEMENT AGENT) FOR CERTAIN OTHER FINANCIAL
INSTITUTIONS UNDER
THE SENIOR LOAN AGREEMENT (HEREINAFTER DEFINED), AND LAW DEBENTURE
TRUST COMPANY
OF NEW YORK (OR ANY SUCCESSOR OR REPLACEMENT COLLATERAL AGENT), IN ITS
CAPACITY
AS COLLATERAL
AGENT, FOR THE HOLDER OF THIS NOTE AND
THE HOLDERS OF THE OTHER
NOTES, DATED AS OF
NOVEMBER 6, 2006 (AS
THE SAME MAY BE AMENDED SUPPLEMENTED,
RESTATED, NOVATED OR
REPLACED (INCLUDING IN
CONNECTION WITH REPLACEMENT SENIOR
FINANCING) FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT").
AEROBIC CREATIONS, INC.
SECURED CONVERTIBLE NOTE
Issuance Date: November 8, 2006 Original
Principal Amount: U.S. $__________
FOR VALUE RECEIVED,
Aerobic Creations, Inc., a Delaware corporation
(which company has
indicated its
intention to change its name to Summit Global
Logistics, Inc.,
the "COMPANY"), hereby promises to pay to the order of
[_________]or
registered permitted
assigns ("HOLDER") the amount set out above
as the Original
Principal Amount (as reduced pursuant to the terms hereof
pursuant to
redemption
(or prepayment), conversion or otherwise, the
"PRINCIPAL") when due,
whether upon the Maturity Date (as defined below),
acceleration,
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redemption (or
prepayment)
or otherwise (in each
case in accordance
with the
terms hereof) and to pay interest ("INTEREST") on any outstanding
Principal at
the applicable Interest Rate, from November 8, 2006 (the "INTEREST
COMMENCEMENT
DATE") until the same becomes due and payable, whether upon an
Interest Date (as
defined below),
the Maturity Date,
acceleration,
conversion,
redemption (or
prepayment) or
otherwise (in each
case in accordance
with the terms
hereof).
This Senior Secured
Convertible Note (including all Senior Secured Convertible
Notes issued in exchange, transfer or replacement hereof, as
amended, restated,
supplemented and/or modified from time to time in accordance with
the provisions
hereof, this
"NOTE") is one of an
issue of Senior
Secured Convertible
Notes
issued pursuant to the Securities Purchase Agreement (as defined below) on
the
Closing Date
(collectively,
the "NOTES" and such other Senior Secured
Convertible Notes, the "OTHER NOTES"). Certain capitalized terms
used herein are
defined in Section 28.
Capitalized terms used but not defined herein shall have
the meanings ascribed to them in the Securities Purchase
Agreement.
(1) MATURITY.
On the Maturity
Date, the Company shall pay to the
Holder an amount in cash representing all outstanding Principal, accrued and
unpaid Interest
and accrued and unpaid Late Charges on such Principal and
Interest. The
"MATURITY DATE" shall
be November 8, 2011, as may be extended at
the option of the Holder (i) in the event that, and for so long as, an Event
of
Default (as defined in Section 4(a)) shall have occurred and be continuing on
the Maturity Date (as
may be extended
pursuant to this Section 1) or any event
that shall have occurred and be continuing that with the passage of
time and the
failure to cure would
result in an Event of Default and (ii) through the date
that is ten (10) Business Days after the consummation of a Change of
Control in
the event that a Change of Control is publicly announced or a Change of
Control
Notice (as defined in Section 5(b)) is delivered prior to the Maturity Date.
Except as specifically set forth in Section 8 hereof, this Note is not
voluntarily prepayable.
(2) INTEREST;
INTEREST RATE. (a) Interest on this Note (i)
shall
accrue interest at the
Interest Rate,
commencing on the Interest Commencement
Date, (ii) shall be
computed on the basis of a 360-day year comprised of twelve
(12) thirty
(30) day months and (iii) shall be payable in arrears for each
Calendar Quarter on the first day of the succeeding Calendar Quarter during the
period beginning on the Interest Commencement Date and ending on,
and including,
the Maturity Date (each, an "INTEREST DATE") with the first Interest
Date being
January 1,
2007. Interest on this Note shall accrue from the Interest
Commencement Date
until the earlier to occur of the date (i) the
Principal
Amount is paid or, if a paying agent is engaged by the Company,
transferred
to
such paying
agent with instructions to pay the same and (ii) all amounts
outstanding under this Note are converted to Common Stock in
accordance with the
provisions hereof. Interest shall be payable on each Interest Date
to the record
holder of this Note on the applicable Interest Date, and to the extent
that any
principal amount of this Note is converted prior to such Interest
Date, accrued
and unpaid Interest in
respect of such converted principal amount and accrued
and unpaid
Late Charges in respect of such converted principal amount and
Interest shall be paid on the Conversion Date (as defined below) to the
record
holder of this Note on the applicable Conversion Date, in cash.
(b) Interest on this Note that is payable, and is punctually
paid or duly provided
for, on any Interest
Date shall be paid to the Person in
whose name this Note is registered at the close of business on the
Record Date
for such interest
at the office or
agency of
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the Company
maintained
for such purpose or at the office of a
payment agent
located in the state
of New York engaged
by the Company for the purpose of
making payments under this Note and the Other Notes. Each payment
of interest on
this Note shall be made by check mailed to the address of the
Holder specified
in the register of Notes; PROVIDED, HOWEVER, that, at the request of
the Holder
in writing to the
Company, interest on
the Holder's Note(s)
shall be paid by
wire transfer in immediately available funds in accordance with the
written wire
transfer instruction
supplied by the Holder from time to time to the Company at
least ten (10) Business Days prior to the applicable Interest Date
or Conversion
Date.
(c) From and after the occurrence and during the continuance
of an Event of Default, the Interest Rate shall be increased to two percent
(2.0%) in excess of the Interest Rate otherwise payable at such time. In the
event that such Event of Default is subsequently cured or waived,
the adjustment
referred to in the preceding sentence shall cease to be effective
as of the date
of such cure or waiver; provided that the Interest as
calculated and unpaid
at
such increased
rate during the continuance of such Event of Default shall
continue to apply to
the extent relating to
the days after the
occurrence of
such Event of Default to but excluding the date of cure or
waiver of such Event
of Default.
For purposes of this Section 2(c), the period of the Event of
Default in respect of Section 4(a)(i) only, shall commence the first day
after
the grace periods
specified therein
expire and shall end on the day upon which
the applicable
Registration
Statement becomes effective or again becomes
available, as applicable.
(3) CONVERSION OF NOTES. This Note shall be convertible
into shares
of the Company's
common stock, par value $0.001 per share (the "COMMON STOCK"),
on the terms and conditions set forth in this Section 3.
(a) CONVERSION
RIGHT. Subject to the provisions of Section
3(d), at any time or
times on or after the date hereof (the "Issuance Date"),
the Holder shall be
entitled to convert
all or any
portion of the
Principal
then-outstanding into
fully paid and
nonassessable shares
of Common Stock in
accordance with
Section 3(c), at the Conversion Rate (as defined below). The
Company shall not
issue any fraction of a share of Common Stock upon any
conversion. If the
issuance would result in the issuance of a fraction of a
share of Common Stock,
the Company shall round such fraction of a share of
Common Stock up or down, as applicable, to the nearest whole share. The
Company
shall pay any and all taxes that may be payable in respect of the
issuance and
delivery of shares of Common Stock upon conversion of any
Principal.
(b) CONVERSION
RATE. The number of shares of Common
Stock
issuable upon conversion of any Conversion Amount pursuant to
Section 3(a) shall
be determined by dividing (x) such Conversion Amount by (y) the
Conversion Price
(the "CONVERSION RATE").
(i) "CONVERSION
AMOUNT"
means the portion of the
Principal to be
converted,
redeemed or otherwise in respect of which the
applicable determination is being made.
(ii) "CONVERSION PRICE" means, as of any Conversion Date
(as defined below) or
other date of
determination, $11.00
per share of Common
Stock after the
effectiveness of the
Reverse Split
subject to
adjustment as
provided herein.
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<PAGE>
(c) MECHANICS OF CONVERSION.
(i) OPTIONAL
CONVERSION.
To convert any Conversion
Amount into shares of Common Stock on any date (a "CONVERSION
DATE"), the Holder
shall (A) transmit by facsimile (or otherwise deliver),
for receipt on or
prior
to 11:59 p.m., New
York Time, on such
date, a copy of an
executed notice of
conversion in the form attached hereto as EXHIBIT I (the
"CONVERSION NOTICE") to
the Company and (B) if required by Section 3(c)(iii), surrender this Note to a
common carrier
for delivery to the Company as soon as practicable on or
following such date (or an indemnification undertaking in respect of this
Note
in the case of its loss, theft or destruction). On or before the second (2nd)
Trading Day following
the date of receipt of a Conversion Notice, the Company
shall transmit by facsimile a confirmation of receipt of such
Conversion Notice
to the Holder and the Company's transfer agent (the "TRANSFER AGENT"), which
confirmation shall
constitute an
instruction to the
Transfer Agent to process
such Conversion Notice
in accordance with the terms herein (the "SHARE DELIVERY
DATE"), and (X)
provided that the Transfer Agent is participating in the
Depository Trust Company ("DTC") Fast Automated Securities Transfer
Program, the
applicable
registration statement
is effective under the 1933 Act and provided
that the Holder is
eligible to receive
shares of Common
Stock through DTC,
credit such aggregate number of shares of Common Stock to which the
Holder shall
be entitled to the Holder's or its designee's balance account with DTC through
its Deposit Withdrawal
Agent Commission system, or (Y) if the Transfer Agent is
not participating in the DTC Fast Automated Securities Transfer Program or the
Holder is not eligible to receive shares of Common Stock through
DTC, issue and
deliver to the address as specified in the Conversion Notice, a certificate,
registered in the name of the Holder or its designee, for the number of shares
of Common Stock to which the Holder shall be entitled, pay to the
Holder in cash
an amount equal to the accrued and unpaid Interest and Late Charges (as
defined
in Section 25(b)),
if any, on the
Conversion
Amount up to and
including the
Conversion Date.
The Holder
undertakes
that whenever the Company credits
securities as set
forth in clause (1)(X) of the preceding sentence, (A) upon
receipt of notice from the Company that the applicable registration
statement is
not, or no longer is, effective in respect of the resale of such
securities, the
Holder will not transfer such securities (other than (I) in connection
with a
transfer, wherein
the Holder provides ShellCo with an opinion of counsel
reasonably
satisfactory to
ShellCo, in a
generally acceptable
form, to the
effect that such transfer may be made without registration under the
applicable
requirements of the
1933 Act, or (II) the Holder provides ShellCo with
assurances reasonably
acceptable
to ShellCo that the
transfer may be effected
pursuant to Rule 144 or Rule 144) until the Company notifies the
Holder that the
applicable
registration statement becomes effective (again), and (B) the
Holder
shall indemnify and
hold the Company
harmless against any
claim of securities
laws violations
in respect
of the transfer (after the receipt of the first
notice from the Company provided for in clause (A) of this sentence
but prior to
the receipt of the second notice from the Company provided for in clause (A) of
this sentence) by the
Holder of any security as to which such credit at DTC has
been effected. If this Note is physically surrendered for
conversion as required
by Section 3(c)(iii) and the outstanding Principal of this Note is greater
than
the Principal being
converted,
then the Company
shall, as soon as practicable
and in no event later than three (3) Business Days after receipt of this Note
(the "NOTE DELIVERY
DATE")and at its own expense, issue and deliver to the
holder a new Note (in accordance with Section 18(d)) representing the
outstanding Principal
not converted. The
Person or Persons entitled to receive
the shares of Common Stock issuable upon a conversion of this
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<PAGE>
Note shall be treated for all purposes as the record
holder or holders of
such
shares of Common Stock on the Conversion Date.
(ii) COMPANY'S FAILURE TO TIMELY CONVERT.
(A) CONVERSION
FAILURE. Subject to the terms and
conditions
of this Note, if the
Company shall fail to issue a certificate
to the
Holder or credit the
Holder's balance account with DTC for the
number
of shares of Common
Stock to which the
Holder is entitled upon
conversion
of any Conversion Amount on or prior to the date which is three
(3)
Trading Days after the Conversion Date (a "CONVERSION FAILURE"), and
if on or
after such Trading Day
the Holder purchases
(in an open market
transaction or
otherwise) Common
Stock to deliver in
satisfaction of a
sale by
the Holder of Common Stock issuable upon such conversion that the
Holder
anticipated
receiving from the Company (a "BUY-IN"), then, in
addition
to all other remedies available to the Holder, the Company
shall,
within
three (3) Business Days after the Holder's request and in the
Holder's
discretion, either (i)
pay cash to the Holder in an amount equal
to the
Holder's total purchase price (including reasonable out of pocket
brokerage
commissions,
and other reasonable
out-of-pocket
expenses, if
any) for
the shares of Common Stock so purchased (the "BUY-IN PRICE"),
at
which
point the Company's
obligation to deliver such certificate (and to
issue such
Common Stock)
shall terminate, or (ii) promptly honor its
obligation
to deliver to the Holder a certificate or certificates
representing such
Common Stock and pay cash to the
Holder in an
amount
equal to
the excess (if any) of the Buy-In Price over the product of (A)
such
number of shares of Common Stock, times (B) the Closing Bid Price
on
the
Conversion Date.
(B) NOTICE OF VOID CONVERSION; ADJUSTMENT TO CONVERSION
PRICE.
If for any reason the
Holder has not received all of the shares of
Common
Stock prior to the tenth (10th) Business Day after the Share
Delivery
Date in respect of a conversion of this Note, other than due to
the
pendency of a dispute being resolved in accordance with Section 23 (a
"CONVERSION FAILURE"),
then the Holder, upon written notice to the
Company,
may void its
Conversion Notice in respect of, and retain or have
returned,
as the case may be,
any portion of this
Note that has not been
converted
pursuant to the Holder's Conversion Notice.
(iii) BOOK-ENTRY.
Notwithstanding
anything
to the
contrary set forth
herein, upon conversion of any portion of this Note in
accordance with the terms hereof, the Holder shall not be required
to physically
surrender this Note to
the Company
unless (A) all of the
Principal is being
converted or (B) the Holder has provided the Company with prior
written notice
(which notice may be included in a Conversion Notice) requesting reissuance of
this Note upon physical surrender of this Note. The Holder and the
Company shall
maintain records
showing the
Principal converted (and the Interest and Late
Charges paid in respect thereof) and the dates of such
conversions or shall use
such other method,
reasonably satisfactory to the Holder and the Company, so as
not to require physical surrender of this Note upon conversion.
Notwithstanding
the foregoing,
if this Note is
converted or redeemed as aforesaid, the Holder
may not transfer this Note unless the Holder first physically surrenders this
Note to the Company, whereupon the Company will forthwith issue and
deliver upon
the order of the Holder a new Note of like tenor, registered as the Holder may
request, representing in the aggregate the
5
<PAGE>
remaining Principal
represented by this
Note. The Holder and any assignee, by
acceptance of this Note, acknowledge and agree that, by reason of
the provisions
of this paragraph,
following conversion or redemption of any portion of
this
Note, the Principal of this Note may be less than the principal
amount stated on
the face hereof.
(iv) PRO RATA
CONVERSION; DISPUTES.
In the event that
the Company receives a Conversion Notice from more than one holder
of Notes for
the same Conversion
Date and the Company can convert some, but not all, of such
portions of the Notes submitted for conversion, the Company, subject to
Section
3(d), shall convert
from each holder of Notes electing to have Notes converted
on such date a pro rata amount of such holder's portion of its Notes submitted
for conversion based
on the principal
amount of Notes submitted for conversion
on such date by such holder relative to the aggregate
principal amount of all
Notes submitted for conversion on such date. In the event of a
dispute as to the
number of shares of Common Stock issuable to the Holder in
connection
with a
conversion of this
Note, the Company shall issue to the Holder the
number of
shares of Common Stock
not in dispute and resolve such dispute in accordance
with Section 23.
(d) LIMITATIONS ON CONVERSIONS.
(i) BENEFICIAL
OWNERSHIP. The Company
shall not effect
any conversion
of this Note, and the Holder of this Note shall not have
the
right to convert any
portion of this Note
pursuant to Section 3(a), to the
extent that after giving effect to such conversion, the Holder (together with
the Holder's affiliates) would beneficially own in excess of 9.99%
(the "MAXIMUM
PERCENTAGE") of the
number of shares of Common Stock outstanding immediately
after giving effect to such conversion; PROVIDED, HOWEVER, that following the
Optional Redemption
Notice Date (as defined in Section 8(a)) the Maximum
Percentage shall be of
no further force and
effect on the Optional
Redemption
Date, solely for purposes of effecting a Optional Redemption
pursuant to Section
8. For purposes of the foregoing sentence, the aggregate number of shares of
Common Stock
beneficially owned by
the Holder and its affiliates shall include
the number of shares of Common Stock issuable upon conversion of this Note in
respect of which the
determination of such
sentence is being
made, but shall
exclude the number of shares of Common Stock which would be issuable
upon (A)
conversion of the
remaining,
nonconverted
portion of this Note
beneficially
owned by the Holder or any of its affiliates and (B) exercise or conversion
of
the unexercised or nonconverted portion of any other securities of the Company
(including, without
limitation,
any Other Notes or warrants) subject to a
limitation on
conversion
or exercise
analogous to the
limitation
contained
herein beneficially owned by the Holder or any of its affiliates.
Except as set
forth in the preceding sentence, for purposes of this Section 3(d)(i),
beneficial ownership shall be calculated in accordance with Section
13(d) of the
Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"). For purposes
of this Section
3(d)(i), in
determining the number
of outstanding
shares of
Common Stock, the Holder may rely on the number of outstanding
shares of Common
Stock as reflected in (x) the Company's most recent Form 10-K, Form
10-KSB, Form
10-Q, Form
10-QSB or Form 8-K,
as the case may be,
(y) a more recent
public
announcement by the
Company or (z) any other notice by the Company or the
Transfer Agent setting
forth the number of shares of Common Stock outstanding.
For any reason at any time, upon the written or oral request of the
Holder, the
Company shall
promptly, but in no event no later than two
(2) Business Days,
confirm orally and in writing to the Holder the number of shares of
Common Stock
then outstanding. In any case,
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<PAGE>
the number of
outstanding shares of
Common Stock
shall be determined after
giving effect to the
conversion
or exercise
of securities of the Company,
including this Note, by the Holder or its affiliates since the date as of which
such number of
outstanding
shares of Common
Stock was reported. By written
notice to the
Company, the Holder may increase or decrease the Maximum
Percentage to any
other percentage
not in excess of 9.99%
specified in such
notice; provided
that (i) any such
increase will not be effective until the
sixty-first (61st) day
after such notice is delivered to the Company, and (ii)
any such increase or decrease will apply only to the Holder and not
to any other
holder of Notes.
(ii) PRINCIPAL MARKET REGULATION. The Company shall not
be obligated to issue any shares of Common Stock upon conversion of this Note,
and the Holder of this Note shall not have the right to receive
upon conversion
of this Note any
shares of Common
Stock, if the
issuance of such shares of
Common Stock would exceed the aggregate number of shares of Common Stock
which
the Company may issue upon conversion or exercise, as applicable, of the Notes
and Warrants without
breaching the Company's obligations under the rules or
regulations of the applicable Eligible Market (the number of shares
which may be
issued without violating such rules and regulations, the "EXCHANGE
CAP"), except
that such limitation
shall not apply in the
event that the Company (A) obtains
the approval of its
stockholders as
required by the
applicable rules of
such
Eligible Market for issuances of shares of Common Stock in excess
of such amount
(the "STOCKHOLDER
APPROVAL")
or (B) obtains a
written opinion
from outside
counsel to the Company that such approval is not required, which opinion shall
be reasonably
satisfactory
to the Required Holders. Unless and until such
Stockholder Approval
or written opinion is obtained, no purchaser of the Notes
pursuant to the Securities Purchase Agreement (each, a "PURCHASER") shall be
issued in the aggregate, upon conversion or exercise or otherwise, as
applicable, of Notes
or Warrants, shares of
Common Stock in an amount greater
than the product of the Exchange Cap multiplied by a fraction,
the numerator of
which is the principal amount of Notes issued to such Purchaser
pursuant to the
Securities Purchase
Agreement on the
Closing Date and the denominator of which
is the aggregate principal amount of all Notes issued to the
Purchasers pursuant
to the Securities
Purchase Agreement on the Closing Date (in respect of
each
Purchaser, the "EXCHANGE CAP ALLOCATION"). In the event that any
Purchaser shall
sell or otherwise
transfer any of such Purchaser's Notes, the transferee shall
be allocated a pro rata portion of such Purchaser's Exchange Cap
Allocation, and
the restrictions of the prior sentence shall apply to such
transferee in respect
of the portion of the Exchange Cap Allocation allocated to such transferee.
In
the event that any holder of Notes shall convert all of such
holder's Notes into
a number of shares of Common Stock which, in the aggregate, is less than such
holder's Exchange Cap
Allocation,
then the difference between such holder's
Exchange Cap Allocation and the number of shares of Common Stock
actually issued
to such holder shall be allocated to the respective Exchange Cap Allocations of
the remaining
holders of Notes on a pro rata basis in proportion to the
aggregate principal amount of the Notes then held by each such
holder.
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(4) RIGHTS UPON EVENT OF DEFAULT.
(a) EVENT OF
DEFAULT. Each of the following events shall
constitute an "EVENT OF DEFAULT":
(i) the failure of the applicable Registration Statement
required to be
filed pursuant to the Registration Rights Agreement to be
declared effective
by the SEC on or prior
to the date that is sixty (60) days
after the applicable
Effectiveness
Deadline (as defined in the Registration
Rights Agreement), or,
while the applicable
Registration Statement is required
to be maintained
effective pursuant to the terms of the
Registration
Rights
Agreement, the effectiveness of the applicable Registration
Statement lapses for
any reason (including,
without limitation,
the issuance of a stop order) or is
unavailable to any
holder of the Notes for sale of all of such holder's
Registrable Securities
(as defined in the
Registration
Rights Agreement) in
accordance with the terms of the Registration Rights Agreement, and such lapse
or unavailability
continues for a period
of ten (10)
consecutive days or
for
more than three times
in any 365-day period
that does not exceed
thirty (30)
days in the aggregate
(other, in each case, than days during an Allowable Grace
Period or a
Maintenance Grace
Period (as defined in
the Registration
Rights
Agreement));
(ii) the suspension
from trading or failure of the
Common Stock to be
listed on an Eligible Market for a period of five (5)
consecutive Trading
Days or for more than an aggregate of ten (10) Trading Days
in any 365-day period;
(iii) the Company's
(A) failure to cure a Conversion
Failure by delivery,
subject to the Conversion Limitations set forth in Section
3(d), of the
required number of shares of Common
Stock within fifteen (15)
Business Days after the applicable Conversion Date or (B) written
notice to any
holder of the Notes,
including by way of public announcement or through any of
its agents,
at any time,
of its intention not to comply with a request for
conversion of any
Notes into
shares of Common Stock that is tendered in
accordance with the
provisions
of the Notes,
other than
pursuant to
Section
3(d);
(iv) after the
effectiveness of the
Reverse Split, at
any time following
the twentieth (20th) consecutive Business Day that the
Holder's Authorized Share Allocation is less than the number of
shares of Common
Stock that the Holder would be entitled to receive upon a
conversion of the full
Conversion Amount of
this Note (without regard to any limitations on conversion
set forth in Section 3(d) or otherwise);
(v) the Company's failure to pay to the Holder any
amount of Principal
(including, without
limitation, any
redemption payments),
Interest, Late Charges
or other amounts when
and as due under this Note or any
other Transaction
Document (as defined in the Securities Purchase Agreement) or
any other agreement,
document, certificate or other instrument delivered in
connection with the
transactions
contemplated hereby
and thereby to which the
Holder is a party,
except, (A) in the case of a failure to pay Interest or Late
Charges when and as
due, in which case
only if such failure
continues for a
period of at least five (5) Business Days and (B) if such payment is
prohibited
by the Intercreditor
Agreement due solely to the existence of an Event of
Default occurring under any of the Senior Loan Documents
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triggered pursuant to
the Intercreditor
Agreement or the Senior Loan Agreement
by the Holder's breach
of this Note or any
Transaction Document
to which such
Holder is a party;
(vi) the Company's or
any Subsidiary's
failure to pay
any principal of or
interest or premium on any of its Indebtedness (excluding
Indebtedness under the
Senior Loan and
Indebtedness
evidenced by any of the
Notes), to
the extent that the aggregate principal amount of all such
Indebtedness exceeds
$2,000,000,
when due (whether by scheduled maturity,
required prepayment,
acceleration, demand
or otherwise) and such failure shall
continue after the applicable grace period, if any, specified in the agreement
or instrument
relating to such
Indebtedness,
or any other
default under any
agreement or instrument relating to any such Indebtedness,
or any other
event,
shall occur and shall
continue after the applicable grace period, if any,
specified in such
agreement or instrument, if the effect of such default
or
event is to accelerate, or to permit the acceleration of, the maturity of
such
Indebtedness; or any
such Indebtedness shall be declared to be due and payable,
or required
to be prepaid (other than by a regularly scheduled required
prepayment), redeemed,
purchased or defeased or an offer to prepay,
redeem,
purchase or defease
such Indebtedness
shall be required to be made, in each
case, prior to the stated maturity thereof, except, if such failure
is caused by
the Holder's breach of
this Note or any of the Transaction Documents to which
such Holder is a party;
(vii) the Company or any of its Subsidiaries (A) shall
institute any
proceeding or voluntary case seeking to adjudicate it bankrupt
or
insolvent, or seeking
dissolution,
liquidation,
winding up,
reorganization,
arrangement,
adjustment,
protection, relief or
composition of it or its debts
under any law relating to bankruptcy, insolvency, reorganization or relief of
debtors, or seeking
the entry of an order
for relief or the
appointment of a
receiver, administrative receiver, administrator, trustee,
custodian, liquidator
or other similar official for any such Person or for any
substantial part of its
property, or any other Insolvency Proceeding, (B) shall be generally not
paying
its debts as such debts become due or shall admit in
writing its inability
to
pay its debts
generally or shall be
unable to pay its debts, (C) shall make a
general assignment for the benefit of creditors, or (D) shall take
any action to
authorize or effect any of the actions set forth above in this
subsection (vii);
(viii) any proceeding
shall be instituted
against the
Company or any
of its Subsidiaries seeking to adjudicate it bankrupt or
insolvent, or seeking
dissolution,
liquidation,
winding up,
reorganization,
arrangement,
adjustment, protection, relief of debtors, or seeking the entry
of
an order for relief or the appointment of a receiver, administrative receiver,
administrator,
trustee, custodian, liquidator or other similar official for
any
such Person or for any substantial part of its property, or any
other Insolvency
Proceeding shall be
instituted against the
Company or any Subsidiary, and any
such proceeding shall remain undismissed or unstayed for a period
of thirty (30)
days or any of the
actions sought in such proceeding (including, without
limitation, the entry
of an order for relief
against any such Person or the
appointment of a
receiver,
administrative
receiver,
administrator,
trustee,
custodian, liquidator
or other similar
official for it or for any substantial
part of its property) shall occur;
(ix) any provision of any Note, Security Document or the
Intercreditor
Agreement or any other
security document entered into for the
benefit of
the Collateral Agent (as defined in the Securities Purchase
Agreement) or any
Holder, after delivery thereof pursuant the Securities
Purchase Agreement or any Note shall at any time for any reason
9
<PAGE>
(other than pursuant to the express terms thereof) cease to be
valid and binding
on or enforceable
against the Company or any Guarantor under the Guaranties (as
defined in
the Securities Purchase Agreement) (each, a "GUARANTOR" and
collectively, the
"GUARANTORS") intended to be a party thereto, or the validity
or enforceability
thereof shall be contested by any party thereto, or a
proceeding shall
be commenced by the Company or any Guarantor or any
Governmental Authority
having jurisdiction over any of them, seeking to
establish the invalidity or unenforceability thereof, or any the Company or
any
Guarantor shall
deny in writing that it has any liability or obligation
purported to be created under any Note or Security Document;
(x) the Security Agreement, the Intercreditor Agreement,
any Pledge Agreement,
Guaranty (as each such
term is defined in the Securities
Purchase Agreement) or
any other security document entered into for the benefit
of the Collateral Agent (as defined in the Securities Purchase
Agreement) or any
Holder, after delivery thereof pursuant the Securities Purchase
Agreement or any
Note, shall for any
reason fail or cease to create a valid and perfected and,
except to the extent
permitted by the terms hereof or thereof, second priority
Lien (subject
to Permitted Liens) in favor of the
Collateral
Agent for the
benefit of Holders on any Collateral purported to be covered
thereby;
(xi) the loss,
suspension or revocation of, or failure
to renew, any license or permit now held or hereafter acquired by
the Company or
any Guarantor, if such
license or permit is not replaced with a similar license
or permit and, after giving effect to such replacement license or permit, such
loss, suspension,
revocation
or failure to renew
has or could
reasonably be
expected to have a Material Adverse Effect;
(xii) the indictment
of the Company or any Guarantor
under any criminal
statute, or
commencement of
criminal or civil
proceedings
against the Company or any Guarantor, pursuant to which statute or
proceedings
the penalties
or remedies sought or available include forfeiture to any
Governmental Authority of any material portion of the property of
such Person;
(xiii) a Change of Control shall have occurred;
(xiv) a breach, default, event of default or termination
shall occur
under any Acquisition Document (as defined in the Senior Loan
Agreement) or other Material Contract after giving effect to applicable
grace
periods, if any,
contained in any such
Acquisition Document
or other Material
Contract that gives any third party the right to terminate any such
Acquisition
Document or other
Material Contract or that otherwise could reasonably be
expected to have a Material Adverse Effect;
(xv) one or more
final judgments or orders for the
payment of money is rendered against any the Company or any
Subsidiary in excess
of $2,000,000 in the aggregate (provided that, any judgment covered
by insurance
where the insurer has assumed responsibility in writing for such judgment and
acknowledged that the
Company or Subsidiary,
as applicable,
will receive the
proceeds of such
insurance within
thirty (30) days of the issuance of a final,
non-appealable judgment and execution thereon is effectively stayed
shall not be
included in calculating such amount) and shall remain undischarged or unvacated
for a period in excess of sixty (60) days or execution shall at any time not be
effectively stayed, or any final
10
<PAGE>
judgment other
than for the
payment of money, or injunction, attachment,
garnishment or
execution is rendered
against the Company or any Subsidiary or
any of the Collateral
having a value in
excess of $2,000,000
and shall remain
undischarged or unvacated for a period in excess of sixty (60) days
or execution
shall at any time not be effectively stayed;
(xvi) (A) Any
representation or
warranty made by the
Company or any
Subsidiary herein (a)
containing a
materiality threshold,
is
incorrect or misleading when made or (b) in respect of any
such
representation
or warranty
which does not contain a materiality threshold, the same is
materially misleading
or materially incorrect when made or (B) the Company
breaches any covenant
(other than the covenants set forth in Section 14 of this
Note) or other term or condition of any Transaction Document, except, in the
case of a breach of a covenant, term or condition which is curable,
only if such
breach continues for a period of at least twenty (20) consecutive
Business Days
after notice thereof;
(xvii) any breach or
failure in any
respect to comply
with Section
14 of this Note, Sections 6(e), (g), or (h) of the Pledge
Agreement, or Sections
5(e)(i), (g), or the
first sentence of Section 5 (i) of
the Security Agreement;
(xviii) any Event of
Default (as
defined in the
Other
Notes) occurs in respect of any Other Note;
(xix) the occurrence of any acceleration under the
Senior Loan Documents in respect of Indebtedness outstanding
thereunder;
(xx) the Company and/or any Guarantor(s) is/are
enjoined, restrained
or in any way
prevented by the order
of any court or any
Governmental Authority
from conducting all or any material part of its or their
business for more
than ten (10) days
provided that such curtailment could
reasonably be expected to have a Material Adverse Effect;
(xxi) any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any
strike, lockout,
labor dispute,
embargo, condemnation, act of God or public enemy, or other
casualty which causes, for more than ten (10) days, the cessation
or substantial
curtailment of revenue producing activities at any facility of any
Obligor, if
any such event or
circumstance has or
could reasonably
be expected to have
a
Material Adverse Effect; or
(xxii) any
cessation of a substantial part of the
business of the
Company and/or any Guarantor(s) for a period which could
reasonably be expected to have a Material Adverse Effect.
(b) REDEMPTION RIGHT. Upon the Company's obtaining knowledge
of the occurrence
of an Event of
Default in respect of
this Note or any Other
Note, the Company shall, as soon as possible, but in any event, within two (2)
Business Days
thereafter
deliver written notice thereof via facsimile and
overnight courier (an
"EVENT OF DEFAULT NOTICE") to the Holder. Subject to the
provisions of the Intercreditor Agreement, at any time after the
earlier of the
Holder's receipt of such Event of Default Notice and the Holder's
becoming aware
of such an Event of
Default in
respect of this Note or any Other
Note, the
Holder may require
the Company to redeem all or any portion of this Note by
delivering written notice thereof (the "EVENT OF
11
<PAGE>
DEFAULT REDEMPTION
NOTICE") to the
Company, which Event
of Default Redemption
Notice shall indicate the portion of this Note the Holder is
electing to redeem.
Each portion of this Note subject to redemption by the Company
pursuant to this
Section 4(b) shall be redeemed as provided in Section 12(a),
(provided that the
Event of Default
giving rise to such redemption right has not been cured or
waived on or before the second (2nd) Business Day after the
expiration
of the
payments
standstill
period set
forth in the Intercreditor Agreement
(notwithstanding any
shorter cure period set forth in Section 4(a) or any other
provision hereof))
by the Company at a price equal to the greater of (x)
the
product of (i) the
Conversion Amount to
be redeemed together
with accrued and
unpaid Interest
and Late Charges, if any incurred up to and including the
Conversion Date, in
respect of such
Conversion Amount and
(ii) the Redemption
Premium or (y) the product of (A) the Closing Sale Price of the Common Stock
on
the date immediately
preceding such Event of Default multiplied by (B) the
number of shares of Common Stock into which the amount set forth in
clause (x)
would have converted into in accordance with Section 3(a) (the
"EVENT OF DEFAULT
REDEMPTION PRICE").
For purposes of this
Section 4(b) and
Section 12(a),
an
Event of Default
occurring under
Section 4(a)(i) hereof
shall be deemed to be
cured on the day upon
which the applicable Registration Statement becomes
effective or again becomes available, as applicable. To the extent redemptions
required by this Section 4(b) are deemed or determined by a court of competent
jurisdiction to be
prepayments
of the Note by the
Company, such
redemptions
shall be deemed to be voluntary prepayments. The parties hereto agree that in
the event of the
Company's redemption
of any portion of the Note under this
Section 4(b), the Holder's damages would be uncertain and
difficult to estimate
because of the
parties' inability
to predict
future interest rates and the
uncertainty of the availability of a suitable substitute investment
opportunity
for the Holder. Accordingly, any Redemption Premium due under
this Section 4(b)
is intended by the parties to be, and shall be deemed, a reasonable
estimate of
the Holder's actual loss of its investment opportunity and not as a
penalty.
(5) RIGHTS UPON FUNDAMENTAL TRANSACTION AND CHANGE OF CONTROL.
(a) ASSUMPTION.
The Company shall not
enter into or be party
to a Fundamental Transaction unless, in the case of a Fundamental
Transaction of
the type described in clause (ii), (iii), (iv), or (v) of the
definition thereof
if the Successor Entity in such Fundamental Transaction is a person other
than
the Company, (i) such Successor Entity assumes in writing all of
the obligations
of the Company under this Note and the other Transaction Documents
in accordance
with the provisions of this Section 5(a) pursuant to written
agreements in form
and substance
reasonably
satisfactory
to the Required Holders including
agreements to
deliver to each holder of Notes in exchange for such Notes a
security of the Successor Entity evidenced by a written instrument
substantially
similar in form and
substance to the
Notes, including, without limitation,
having a principal amount and interest rate equal to the principal
amounts then
outstanding and the
interest rates of the Notes held by such
holder, having
similar conversion
rights as the Notes and having similar ranking to the Notes,
and reasonably
satisfactory
to the Required
Holders and (ii) such
Successor
Entity (or its Parent
Entity) is a publicly
traded corporation
whose common
stock is quoted on or listed for trading on an Eligible
Market (other than the
Initial Principal Market). Upon the occurrence of any
Fundamental
Transaction,
such Successor Entity shall succeed to, and be substituted for (so
that from and
after the date of such
Fundamental
Transaction, the
provisions
of this Note
referring to the
12
<PAGE>
"Company" shall refer instead to such Successor Entity),
and may exercise
every
right and power of the Company and shall assume all of the obligations of the
Company under this
Note with the same
effect as if such
Successor Entity
had
been named
as the Company herein. Upon consummation of the Fundamental
Transaction, such Successor Entity shall deliver to the Holder
confirmation that
there shall be issued upon conversion or redemption of this Note at any time
after the consummation of the Fundamental Transaction, in lieu of the shares of
the Company's Common Stock (or other securities, cash, assets or
other property)
issuable upon
the conversion or redemption of the Notes prior to such
Fundamental
Transaction, such
shares of the publicly
traded common stock
(or
their equivalent) of
the Successor Entity
(including its Parent
Entity), as
adjusted in accordance
with the provisions of this Note. The provisions of this
Section shall apply similarly and equally to successive Fundamental
Transactions
and shall be applied
without regard to any
limitations
on the conversion or
redemption of this Note.
(b) REDEMPTION RIGHT.
No sooner than fifteen
(15) days
nor later than ten (10) days prior to the consummation of a Change of Control,
but not prior to the public announcement of such Change of Control,
the Company
shall deliver written notice thereof via facsimile and overnight
courier to the
Holder (a "CHANGE OF CONTROL NOTICE"). At any time during the period
beginning
after the Holder's
receipt of a Change of Control Notice and ending twenty (20)
Trading Days after the
consummation of such
Change of Control, the
Holder may
require the
Company to redeem all or any portion of this Note by
delivering
written notice thereof ("CHANGE OF CONTROL REDEMPTION NOTICE") to the Company,
which Change of Control Redemption Notice shall indicate the
Conversion Amount
the Holder is electing to redeem. The portion of this Note subject
to redemption
pursuant to this
Section 5 shall be
redeemed by the Company in cash at a price
equal the product of (i) the sum of the Conversion Amount being redeemed plus
accrued and
unpaid Interest and Late Charges, if any, in respect of such
Conversion Amount
up to and including the date of redemption and (ii) the
greater of (x) the
quotient determined
by dividing (A) the greatest of the
Closing Sale Price of the Common Stock immediately prior to the
consummation of
the Change of Control,
the Closing Sale Price of the Common Stock immediately
following the public
announcement of such
proposed Change of Control and the
Closing Sale
Price of the Common Stock immediately prior to the public
announcement of such proposed Change of Control by (B) the
Conversion Price, and
(y) the Change of
Control Premium (such product, the "CHANGE OF CONTROL
REDEMPTION PRICE").
Redemptions
required by this Section 5 shall be made in
accordance with the
provisions
of Section 12 and shall have priority over
payments to stockholders in connection with a Change of
Control. To the
extent
redemptions required by this Section 5(b) are deemed or determined
by a court of
competent jurisdiction
to be prepayments of the Note by the Company, such
redemptions shall
be deemed to be voluntary prepayments. Notwithstanding
anything to the contrary in this Section 5, but subject to Section
3(d), until
the Change of Control
Redemption Price is
paid in full, the Conversion Amount
submitted for redemption under this Section 5(c) may be
converted, in whole
or
in part, by the Holder
into Common Stock pursuant to Section 3. The
parties
hereto agree that in the event of the Company's redemption of any
portion of the
Note under this Section 5(b), the Holder's damages would be uncertain and
difficult to
estimate because of the parties' inability to predict future
interest rates and the uncertainty of the availability of a
suitable
substitute
investment opportunity for the Holder. Accordingly, any redemption premium due
under this Section 5(b) is intended by the parties to be, and shall
be deemed, a
reasonable estimate of
the Holder's actual
loss of its investment
opportunity
and not as
13
<PAGE>
a penalty, and the
receipt by the Holder of the Change of
Control Redemption
Price shall constitute full satisfaction of the amount
requested to be redeemed
pursuant to this Section 5.
(6) RIGHTS UPON
ISSUANCE OF
PURCHASE RIGHTS AND OTHER CORPORATE
EVENTS.
(a) PURCHASE RIGHTS. If at any time the Company grants, issues
or sells any Options,
Convertible
Securities
or rights to purchase stock,
warrants, securities
or other property pro rata to the record
holders of any
class of Common Stock
(collectively, the
"PURCHASE RIGHTS"),
then the Holder
will be entitled to acquire, upon the terms applicable to such
Purchase Rights,
the aggregate Purchase Rights which the Holder could have acquired
if the Holder
had held the
number of shares of Common Stock acquirable upon complete
conversion of this
Note (without taking into account any limitations or
restrictions on the
convertibility of this Note) immediately before the date on
which a record is taken for the grant, issuance or sale of such
Purchase Rights,
or, if no such record
is taken, the date as
of which the
record holders of
Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights.
(b) OTHER CORPORATE EVENTS. In addition to and not in
substitution for any
other rights
hereunder, but without
duplication
of the
consideration issuable
pursuant to Section
5(a), prior to the
consummation of
any Fundamental
Transaction pursuant to which holders of shares of Common Stock
are entitled to receive securities or other assets in
respect of or in exchange
for shares of Common
Stock (a "CORPORATE EVENT"), the Company shall make
appropriate provision
to insure that the Holder will thereafter have the right
to receive upon a
conversion
of this Note,
(i) in addition to the shares of
Common Stock receivable upon such conversion, such securities or
other assets to
which the Holder would
have been entitled
in respect of such
shares of Common
Stock had such shares of Common Stock been held by the Holder upon the
consummation of
such Corporate Event (without taking into account any
limitations or restrictions on the convertibility of this Note) or
(ii) in lieu
of the shares of Common Stock otherwise receivable upon such conversion, such
securities or other assets received by the holders of shares
of Common Stock in
connection with the
consummation of such Corporate Event in such amounts as the
Holder would have been entitled to receive had this Note
initially been issued
with conversion rights for the form of such consideration (as opposed to
shares
of Common Stock) at a conversion rate for such consideration commensurate with
the Conversion Rate.
Provision made pursuant to the preceding sentence shall be
in a form and substance satisfactory to the Required
Holders. The provisions of
this Section shall apply similarly and equally to
successive Corporate
Events
and shall be applied
without regard to any
limitations
on the conversion or
redemption of this Note.
(7) RIGHTS UPON ISSUANCE OF OTHER SECURITIES.
(a) ADJUSTMENT
OF CONVERSION PRICE UPON ISSUANCE OF COMMON
STOCK. If and whenever on or after the Subscription Date, the
Company (i) issues
or sells, or in
accordance
with this Section 7(a)
is deemed to have issued or
sold, any shares of
Common Stock
(including the
issuance or sale of shares of
Common Stock owned or held by or for the account of the Company,
but excluding
shares of Excluded
Securities and Common
Stock deemed to have been issued or
sold by the Company in
connection
with any Excluded Security), Convertible
Securities or Options
entitling the recipient thereof to subscribe for or
purchase
14
<PAGE>
shares of Common Stock
for a consideration
per share of Common
Stock or (ii)
amend or otherwise modify the terms of any Convertible Securities or Options to
a price per share of Common Stock (such issuance, subscription or
purchase price
or amended or modified price being referred to as the "NEW ISSUANCE
PRICE") less
than a price (the
"APPLICABLE PRICE")
equal to the Conversion Price in effect
immediately prior
to such issue or sale or deemed issuance or sale (the
foregoing a "DILUTIVE ISSUANCE"), then immediately after such
Dilutive Issuance,
the Conversion Price then in effect shall be:
(i) if such issuance occurs prior to the first
anniversary hereof, adjusted to equal the New Issuance Price,
and
(ii) if such issuance
occurs on or after the first
anniversary hereof,
reduced to an amount equal to the product of (x) the
Conversion Price in effect immediately prior to such Dilutive Issuance
and (y)
the quotient
determined by dividing
(1) the sum of (I) the product derived by
multiplying the Conversion Price in effect immediately prior to such Dilutive
Issuance and the number of shares of Common Stock Deemed
Outstanding immediately
prior to such Dilutive Issuance plus (II) the consideration, if
any, received by
the Company
upon such Dilutive Issuance, by (2) the product derived by
multiplying (I) the
Conversion
Price in effect immediately prior to such
Dilutive Issuance
by (II) the number of shares of Common Stock Deemed
Outstanding immediately after such Dilutive Issuance.
(b) CERTAIN
DISTRIBUTIONS TO HOLDERS OF COMMON STOCK. In case
the Company shall at any time or from time to time, on or after the
Subscription
Date and prior to conversion of this Note, distribute to all holders of
shares
of Common Stock
(including any such
distribution
made in connection with a
merger or
consolidation in which
the Company is the
resulting or surviving
Person and the Common
Stock is not changed or exchanged) cash, evidences of
indebtedness of the Company, any Subsidiary or another issuer,
securities of the
Company (including Convertible Securities), any Subsidiary or another issuer
or
other assets
(excluding dividends
payable in shares of
Common Stock for which
adjustment is
made under another paragraph of this Section 7 and any
distribution in
connection
with the issuance of
any Excluded
Securities) or
Options to subscribe for or purchase of any of the foregoing,
then, and in each
such case, the Conversion Price then in effect shall be
adjusted (and any other
appropriate actions shall be taken by the Company) by multiplying
the Conversion
Price in effect immediately prior to the date of such distribution
by a fraction
(x) the numerator
of which shall be the
Weighted Average
Price of the
Common
Stock for the five (5) consecutive Trading Days immediately prior
to the date of
distribution less the
then fair market value (as determined by the Company's
Board of Directors in the exercise of their fiduciary duties with the
concurrence of the
Required Holders) of
the portion of the cash, evidences of
indebtedness,
securities or other assets so distributed or of such Options to
subscribe applicable
to one share of Common
Stock and (y) the
denominator of
which shall be the Weighted Average Price of the Common Stock for the
five (5)
consecutive Trading Days immediately prior to the date of
distribution (but such
fraction shall not be greater than one). Such adjustment
shall be made
whenever
any such distribution is made and shall become effective
retroactively to a date
immediately following
the close of business on the record date for the
determination of stockholders entitled to receive such
distribution.
15
<PAGE>
(c) DIVIDENDS
AND CERTAIN OTHER EVENTS IN RESPECT OF THE
COMMON STOCK.
In the event that the
Company shall at any
time or from time to
time, on or after the
Subscription
Date and prior to the
conversion
of this
Note, (A) pay a
dividend or make a distribution payable in shares of Common
Stock on any class of shares of capital stock of the Company,
(B) subdivide its
outstanding shares of
Common Stock into a greater number of shares, (C) combine
its outstanding
shares of Common Stock
into a smaller number
of shares (other
than pursuant
to the Reverse Split (as defined in the Securities Purchase
Agreement)) or (D) issue any shares of capital stock by
reclassification of
its
shares of Common
Stock, the
Conversion
Price in effect at the opening of
business on
the day following the date fixed for the determination of
stockholders entitled to receive such dividend or distribution or
at the opening
of business on the day following the day on which such subdivision,
combination
or reclassification
becomes effective, as the case may be, shall be adjusted so
that the holder of any Notes thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common Stock that such holder would
have owned or have been entitled to receive after the happening of any of the
events described above
had such Notes been converted immediately prior to the
record date in the case of a dividend or distribution or the effective date in
the case of a subdivision, combination or reclassification.
An adjustment made
pursuant to this
Section 7(c) shall become effective immediately upon the
opening of business
on the day next
following the record date (subject to
Section 7(e) below) in the case of a dividend or distribution and shall become
effective immediately upon the opening of business on the day next
following the
effective date in the case of a subdivision, combination or
reclassification.
(d) TENDER OFFERS. In
the event that the Company shall at any
time or from time to time, on or after the Subscription Date and prior to the
conversion of this Note, make a payment of cash or other
consideration
to the
holders of shares of
Common Stock in
respect of a tender offer or exchange
offer, other
than an odd-lot offer, and the value of the sum of (i) the
aggregate cash and other consideration paid for such shares of
Common Stock, and
(ii) any other consent
or other fees paid to holders of shares of Common Stock
in respect of such tender offer or exchange offer expressed as an amount per
share of Common Stock
validly tendered or exchanged pursuant to such tender
offer or exchange offer, exceeds the Weighted Average Price
of the Common Stock
on the Trading
Day immediately prior to the date any such tender offer or
exchange offer is first publicly announced (the "ANNOUNCEMENT
DATE"), then the
Conversion Price shall be adjusted in accordance with the
formula:
R' = R x O' x P
F + (P x O)
For purposes of the foregoing formula:
R = the Conversion
Price in effect at the
expiration
time of the
tender offer or
exchange offer that is
the subject of this
Section 7(d) (the
"EXPIRATION TIME");
R' = the Conversion Price in effect immediately after the
Expiration
Time;
F = the fair market value (as determined by the Company's
Board of
Directors in the exercise of their fiduciary duties with the concurrence of
the
Required Holders) of the
16
<PAGE>
aggregate value of all
cash and any other
consideration paid or
payable for
shares of Common Stock validly tendered or exchanged (including any consent or
other fees) and not
withdrawn prior to the Expiration Time (the "PURCHASED
SHARES OF COMMON STOCK");
O = the number of
shares of Common Stock
outstanding
immediately
after the Expiration Time less any Purchased Shares of Common
Stock;
O' = the number of shares of Common Stock outstanding immediately
after the Expiration Time, plus any Purchased Shares of Common
Stock; and
P = the Weighted
Average Price of the
Common Stock on the five (5)
consecutive Trading
Days beginning two (2) Trading Days after the Announcement
Date.
Such decrease, if any,
shall become effective
immediately upon the
opening of
business on the day next following the Expiration Time. In the event that the
Company is obligated to purchase shares pursuant to any tender offer,
but the
Company is prevented by applicable law from effecting any such
purchases or all
such purchases are
rescinded, the
Conversion Price shall
again be adjusted to
the Conversion
Price that would then
be in effect if such
tender or exchange
offer had not been made. If the application of this Section 7(d) to any
tender
or exchange offer
would result in an increase in the Conversion Price, no
adjustment shall be
made for such tender or exchange offer under this Section
7(d).
(e) OTHER EVENTS. If any event occurs of the type contemplated
by the provisions
of this Section 7 but not expressly provided for by such
provisions (including,
without limitation,
the granting of stock
appreciation
rights, phantom
stock rights or other
rights with equity
features), then
the
Company's Board
of Directors will make an appropriate adjustment in the
Conversion Price so as
to protect the
rights of the
Holder under this Note;
provided that no such adjustment will increase the Conversion Price
as otherwise
determined pursuant to this Section 7.
(8) COMPANY'S RIGHT OF OPTIONAL REDEMPTION.
(a) OPTIONAL REDEMPTION. If on any Trading Day on or after the
third anniversary
of the Issuance Date and prior to the Maturity
Date, the
Weighted Average
Price of the shares of
Common Stock has
equaled or
exceeded
180% of the Conversion
Price then in effect for each of 20 consecutive Trading
Days ending on the
Redemption Period End
Day and provided that the applicable
Eligible Market is not
the Initial Principal
Market and no Equity
Conditions
Failure then
exists, the Company shall have the right to redeem all or
any
portion of the Conversion Amount then remaining under this Note (an "OPTIONAL
REDEMPTION"). The
portion of this Note subject to redemption pursuant to this
Section 8 shall be
redeemed by the
Company in cash at a price equal to the sum
of (i) the Principal
being redeemed and (ii) the amount of any
accrued and
unpaid Late
Charges on such
Principal and any accrued and unpaid Interest
through the date of redemption (the "OPTIONAL REDEMPTION PRICE"). The Company
may exercise its
redemption right under
this Section 8 by delivering a written
notice thereof by confirmed facsimile and overnight courier to all,
but not less
than all, of the holders of Notes and the Transfer Agent (the "OPTIONAL
REDEMPTION NOTICE" and
the date such notice is delivered to all the holders
is
referred to as the "OPTIONAL REDEMPTION NOTICE DATE"). The
Optional
17
<PAGE>
Redemption Notice
shall be irrevocable.
The Optional
Redemption Notice
shall
state (A) the date on which the Optional Redemption shall occur (the "OPTIONAL
REDEMPTION DATE")
which date shall be not less than 30 days nor
more than 60
days after the Optional Redemption Notice Date, and (B)
the aggregate principal
amount (the
"OPTIONAL REDEMPTION AMOUNT") of the Notes which the
Company has
elected to be subject
to Optional
Redemption
from all of the
holders of the
Notes pursuant
to this Section 8 (and analogous provisions under the Other
Notes) on the
Optional Redemption Date. The Company will make a public
announcement
containing the
information set forth
in the Optional
Redemption
Notice on or before the Optional Redemption Notice Date. The Company may not
effect more
than one Optional Redemption. Notwithstanding anything to the
contrary in this
Section 8, until the
Optional Redemption
Price is paid,
in
full, the Optional
Redemption Amount may be converted, in whole or in part, by
the Holders into
shares of Common Stock
pursuant to Section 3. All Conversion
Amounts converted by the Holder after the Optional Redemption Notice Date shall
reduce the
Conversion
Amount of this Note required to be redeemed on the
Optional Redemption
Date. Redemptions made
pursuant to this Section 8 shall be
made in accordance with Section 12 to the extent applicable.
(b) PRO RATA REDEMPTION REQUIREMENT. If the Company elects to
cause an Optional Redemption pursuant to Section 8(a), then it must
simultaneously take
the same action
in respect of the Other Notes. If the
Company elects to
cause an Optional
Redemption pursuant
to Section
8(a) (or
similar provisions
under the Other
Notes) in respect of less than all of
the
principal amount of the Notes then outstanding, then the Company shall require
redemption of a
principal amount from the Holder and each
holder of the Other
Notes equal to the product of (i) the aggregate principal amount of Notes
which
the Company
has elected to cause to be
redeemed pursuant to Section 8(a),
multiplied by (ii)
the fraction, the numerator of which is the sum of the
initial principal
amount of Notes
purchased by such holder and the denominator
of which is the
initial principal
amounts of Notes
purchased by all holders
holding outstanding
Notes (such fraction
in respect of each holder is referred
to as its "REDEMPTION ALLOCATION PERCENTAGE", and such amount in
respect of each
holder is referred to as its "PRO RATA REDEMPTION AMOUNT");
provided that in the
event that the initial holder of any Notes has sold or otherwise
transferred any
of such holder's Notes, the transferee shall be allocated
a pro rata portion of
such holder's Redemption Allocation Percentage and Pro Rata
Redemption Amount.
(9) SECURITY.
This Note and the
Other Notes
are secured to the
extent and in the manner set forth in the Security Documents (as defined in the
Securities Purchase Agreement).
(10) NONCIRCUMVENTION.
The Company hereby covenants and agrees that
the Company will not, by amendment of its Certificate of
Incorporation,
Bylaws
or through any reorganization, transfer of assets, consolidation,
merger, scheme
of arrangement, dissolution, issue or sale of securities, or any
other voluntary
action, avoid or seek to avoid the observance or performance of any
of the terms
of this Note, and will at all times in good faith carry out all of the
provisions of this
Note and take all action as may be required to protect the
rights of the Holder of this Note subject to the Intercreditor
Agreement.
18
<PAGE>
(11) RESERVATION OF AUTHORIZED SHARES.
(a) RESERVATION.
Contingent
upon the effectiveness of the
Reverse Split,
the Company shall
initially reserve out of its authorized
and
unissued Common
Stock a number of
shares of Common Stock for each of the Notes
equal to 130% of the Conversion Rate in respect of the Conversion
Amount of each
such Note as of the Issuance Date. After the effectiveness of the
Reverse Split,
for so long as any of the Notes are outstanding, the Company shall take all
action necessary
to reserve and keep available out of its authorized and
unissued Common Stock, solely for the purpose of effecting the
conversion of the
Notes, 130% of the
number of shares of Common Stock as shall from time to
time
be necessary
to effect the
conversion
of all of the Notes
then outstanding;
provided that at no
time shall the number of shares of Common Stock so reserved
be less than the
number of shares
required to be reserved by the previous
sentence (without
regard to any
limitations
on conversions) (the "REQUIRED
RESERVE AMOUNT").
The initial
number of shares of
Common Stock
reserved for
conversions of the
Notes and each
increase in the number of shares so reserved
shall be allocated pro rata among the holders of the Notes based on the
principal amount of
the Notes held by each holder at the Closing (as defined in
the Securities Purchase Agreement) or increase in the number of
reserved shares,
as the case may be (the "AUTHORIZED SHARE ALLOCATION"). In the event that a
holder shall
sell or otherwise transfer any of such holder's Notes, each
transferee shall be
allocated a pro rata
portion of such
holder's
Authorized
Share Allocation.
Any shares of Common
Stock reserved and allocated to any
Person which
ceases to hold any Notes shall be allocated to the remaining
holders of Notes, pro
rata based on the principal amount of the Notes then held
by such holders.
(b) INSUFFICIENT
AUTHORIZED SHARES. If
at any time after the
effectiveness of the
Reverse Split while
any of the Notes remain outstanding,
the Company does not
have a sufficient
number of authorized and unreserved
shares of Common Stock to satisfy its obligation to reserve for issuance
upon
conversion of the Notes at least a number of shares of Common Stock
equal to the
Required Reserve Amount (an "AUTHORIZED SHARE FAILURE"),
then the Company
shall
immediately take all
action necessary
to increase
the Company's authorized
shares of Common Stock to an amount sufficient to allow the Company to
reserve
the Required Reserve Amount for the Notes then outstanding. Without
limiting the
generality of the foregoing sentence, as soon as practicable after the
date of
the occurrence of an Authorized Share Failure, but in no event later than
sixty
(60) days after the occurrence of such Authorized Share Failure, the Company
shall hold a meeting of its stockholders for the approval of
an increase in the
number of authorized
shares of Common Stock. In connection with such meeting,
the Company shall provide each stockholder with a proxy statement
and shall use
its best efforts to
solicit its
stockholders'
approval of such increase in
authorized shares of
Common Stock and to cause its board of directors to
recommend to the stockholders that they approve such proposal.
(12) HOLDER'S REDEMPTIONS.
(a) MECHANICS. The
Company shall deliver the applicable Event
of Default Redemption
Price to the Holder
within five (5)
Business Days after
the Company's receipt of the Holder's Event of Default Redemption
Notice, if the
Intercreditor
Agreement does not
prohibit the payment by the Company of the
Default Redemption
Price at such time, and if such payment is then so
prohibited, on the
third (3rd)
Business Day after such prohibition lapses;
provided that if the
Event(s) of Default
giving rise to the
redemption right
shall have been cured or waived on or before the second (2nd)
Business Day after
such prohibition's lapsing, such
19
<PAGE>
redemption right
shall terminate. If the Holder has submitted a Change of
Control Redemption
Notice in accordance
with Section 5(b),
the Company shall
deliver the
applicable
Change of Control Redemption Price to the Holder
concurrently with the
consummation of such
Change of Control if such notice is
received prior to the consummation of such Change of Control and
within five (5)
Business Days after the Company's receipt of such notice otherwise.
In the event
of a redemption
of less than all of
the Conversion
Amount of this Note,
the
Company shall promptly cause to be issued and delivered to the
Holder a new Note
(in accordance with Section 18(d)) representing the outstanding
Principal which
has not been redeemed. In the event that the Company does not pay
the applicable
Redemption Price to
the Holder within the
time period
required, at any time
thereafter and until the Company pays such unpaid Redemption Price in full, the
Holder shall have the option, in lieu of redemption,
to require the Company
to
promptly return to the Holder all or any portion of this Note
representing
the
Conversion Amount that was submitted for redemption and for which
the applicable
Redemption Price
(together with any Late Charges thereon) has not been paid.
Upon the Company's
receipt of such notice, (x) the Redemption Notice shall be
null and void in
respect of such
Conversion
Amount, (y) the Company shall
immediately return
this Note, or issue a new Note (in accordance with Section
18(d)) to the Holder
representing such Conversion Amount and (z) the Conversion
Price of this Note or such new Notes shall be adjusted to the lesser of
(A) the
Conversion Price as in
effect on the date on
which the Redemption Notice is
voided and (B) the
lowest Closing
Bid Price of the
Common Stock during the
period beginning on
and including the date
on which the
Redemption Notice
is
delivered to the
Company and ending on and including the date on which the
Redemption Notice
is voided. The Holder's delivery of a notice voiding a
Redemption Notice and
exercise of its rights
following such notice shall not
affect the Company's obligations to make any payments of Late
Charges which have
accrued prior to the
date of such notice in
respect of the
Conversion Amount
subject to such notice.
(b) REDEMPTION BY OTHER HOLDERS. Upon the Company's receipt of
notice from any of the holders of the Other Notes for redemption or
repayment as
a result of an event
or occurrence
substantially
similar to the events or
occurrences described in Section 4(b) (each, an "OTHER REDEMPTION
NOTICE"), the
Company shall
immediately,
but no later than one
(1) Business
Day after its
receipt thereof,
forward to the Holder
by facsimile a copy of such notice. If
the Company
receives a
Redemption
Notice and one or more Other Redemption
Notices, during the seven (7) Business Day period beginning on and
including the
date which is three
(3) Business
Days prior to the
Company's receipt of the
Holder's Redemption
Notice and ending on
and including the date which is three
(3) Business Days after the Company's receipt of the Holder's
Redemption Notice
and the Company is unable to redeem all principal, interest and other amounts
designated in such Redemption Notice and such Other Redemption
Notices received
during such seven (7) Business Day period, then the Company shall redeem a pro
rata amount from each holder of the Notes (including the Holder) based on the
principal amount
of the Notes submitted for redemption pursuant to such
Redemption Notice and
such Other Redemption
Notices received by the Company
during such seven Business Day period.
(13) VOTING RIGHTS.
The Holder shall have
no voting rights as
the
holder of this Note, except as required by law, including, but not limited to,
the General
Corporation Law of the State of Delaware and as expressly
provided
in this Note.
20
<PAGE>
(14) COVENANTS.
(a) RANK. All payments
due under this Note (i) shall rank (A)
PARI PASSU
with all Other Notes, (B) junior to the Permitted Senior
Indebtedness, (C)
senior to the Subordinated Indebtedness, all Indebtedness not
constituting Permitted
Indebtedness and all
Permitted Indebtedness
expressly
designated as ranking
junior to the
Notes, and (D) PARI PASSU with all
other
Permitted Indebtedness
and (ii) shall be
secured by a
security interest in
substantially all of the assets of the Company and the
Subsidiaries, other
than
the Foreign Subsidiaries (as defined in the Securities Purchase
Agreement), the
escrowed funds
referenced in SCHEDULE
14(A) and as otherwise
provided in the
Security Agreement (junior only to the security interests securing
the Permitted
Senior Indebtedness)
and such security interests shall rank PARI PASSU with the
security
interests
securing the
Indebtedness
under
the Other Notes.
Notwithstanding the
foregoing,
if Company shall have
received notice of the
existence of any Lien, the existence or priority of which is in
violation of the
first sentence of this Section 14(a), Company shall have ten (10)
days after the
receipt of such
notice to remove
such Lien (or obtain
the agreement of the
holder of such Lien that such Lien ranks in priority in accordance with the
first sentence of this Section 14(a)).
(b) INCURRENCE
OF INDEBTEDNESS. Until this Note has been
converted, redeemed or
otherwise satisfied in
accordance with its terms (other
than in respect of contingent indemnification obligations in
respect of which no
claim has been
asserted), the Company
shall not,
and the Company shall not
permit any of its Subsidiaries to, directly or indirectly,
incur or
guarantee,
assume or suffer to
exist any
Indebtedness, other
than (i) the
Indebtedness
evidenced by this Note and the Other Notes and (ii) Permitted
Indebtedness.
(c) EXISTENCE OF
LIENS. Until this Note
has been
converted,
redeemed or otherwise
satisfied in accordance with its terms (other than in
respect of contingent
indemnification
obligations in respect of which no claim
has been asserted),
the Company shall not, and the Company shall not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon
or in respect of any of its properties, whether now owned or
hereafter acquired;
file or suffer to exist under the Uniform Commercial Code or any similar law
or
statute of any jurisdiction, a financing statement (or the equivalent
thereof)
that names it or any of its Subsidiaries as debtor; sign or suffer to exist any
security agreement
authorizing
any secured party thereunder to file such
financing statement
(or the equivalent
thereof); sell any of its property or
assets subject to an
understanding or
agreement, contingent
or otherwise, to
repurchase such property or assets (including sales of accounts) with
recourse
to it or any of its Subsidiaries or assign or otherwise transfer,
or permit any
of its Subsidiaries to assign or otherwise transfer, any account or other right
to receive
income; other than, as to all of the above, Permitted Liens.
Notwithstanding the
foregoing,
if Company shall have
received notice of the
existence of any Lien,
the existence of which is in violation of the first
sentence of this
Section 14(c), Company shall have ten (10) days after the
receipt of such notice to effect the removal of such Lien.
(d) RESTRICTED
PAYMENTS. The Company shall not, and the
Company shall not permit any of its Subsidiaries to, directly or indirectly,
redeem, defease,
repurchase,
repay or make any
payments in respect of, by the
payment of cash or cash equivalents (in whole or in part, whether
by way of open
market purchases,
tender offers, private transactions or otherwise), all or any
portion of
any Indebtedness (other than Permitted Senior Indebtedness,
Indebtedness evidenced
by the Other Notes or Permitted Indebtedness (other than
the Permitted
21
<PAGE>
Indebtedness
referenced in
clauses (vi) and (xii) hereof and any other
Subordinated Indebtedness), the payment of which shall not be
restricted by the
provisions of this Note, the Security Documents, the Warrant, the Securities
Purchase Agreement or
the Registration
Rights Agreement), whether by way of
payment in respect of
principal of (or
premium, if any) or interest on such
Indebtedness, if at the time such payment is due or is otherwise
made, or, after
giving effect to such payment, an event constituting, or that with the passage
of time and without
being cured would constitute, an Event of Default has
occurred or
would occur and is, or would be, continuing; provided that
notwithstanding the
foregoing,
no principal
(or any portion
thereof) of any
Subordinated
Indebtedness may be
paid (whether upon maturity, redemption,
acceleration or
otherwise) so long as this Note is outstanding and for at least
91 days thereafter.
(e) RESTRICTION ON REDEMPTION AND CASH DIVIDENDS. Until this
Note has been converted, redeemed or otherwise satisfied in
accordance with its
terms (other
than in respect of contingent indemnification obligations in
respect of which no claim has been asserted), the Company shall not, nor
permit
any of its Subsidiaries to, directly or indirectly,
(i) Declare or pay any
dividend or other
distribution,
or
permit any Subsidiary to declare or pay any dividend or other
distribution, in each
case directly
or indirectly, on account of any
equity of
the Company or any Subsidiary, except:
(A) any Subsidiary of the Company may pay
dividends or
make other distributions to the Company or any
Subsidiary;
(B) the Company may pay dividends in the form of
common stock or
preferred stock
otherwise permitted to be issued
hereunder (but in no
event in the form of redeemable preferred
equity requiring any payment prior to the Maturity Date); or
(ii) Make any repurchase, redemption (other than
redemption
of the Notes in accordance with the terms hereof), retirement,
defeasance, sinking fund or similar payment, purchase or other
acquisition
for
value, direct or indirect, of any equity of the Company or any
Guarantor
or any direct or indirect parent of the Company or any
Guarantor,
now or hereafter
outstanding or make any payment to retire, or
to obtain
the surrender of, any
outstanding
warrants, options or other
rights for
the purchase or acquisition of shares of any class of equity of
the
Company or any
Guarantor, now or
hereafter outstanding,
except the
Company
and the Guarantors may repurchase common stock held by
employees,
officers,
and/or directors pursuant to any Approved Stock
Plan upon the
termination,
retirement or death of any such employee, officer, and/or
director
in accordance with the provisions of such plan or pursuant to
any
special
incentive bonus plans pursuant to the terms thereof, provided
that,
as to any such
repurchase,
each of the
following conditions is
satisfied:
(A) as of the date of the payment for such repurchase and after
giving
effect thereto on a pro forma
basis, no Event of Default shall
exist or
have occurred and be
continuing, (B) such
repurchase
shall be
paid with
funds legally available therefor, (C) such repurchase shall not
violate
any law or regulation or the terms of any indenture, agreement or
undertaking to which
the Company or any
Guarantor is a party or by which
the
Company or such Guarantor or its or their property are bound,
and
22
<PAGE>
(D) the
aggregate amount of all payments for such repurchases in any
calendar
year shall not exceed $2,000,000;
(iii) Return
any equity to any
shareholders
or other
equity
holders of the Company or any of its Subsidiaries, or make any
other
distribution of property, assets, equity, warrants, rights,
options,
obligations or
securities
thereto as such (other than as permitted
hereunder
or, in the case of such distribution of property or
assets, to
the extent
not otherwise prohibited hereunder);
(iv) Pay any management fees or any other fees or
expenses
(including
the reimbursement thereof by the Company or any
Guarantor)
pursuant to any management, consulting or other services
agreement
to any of the
shareholders
or other equity holders of the
Company or
any Guarantor or other
Affiliates except any
such management
fees or
any other fees or expenses (x) paid to the Company or any
Guarantor
(whether paid by the Company, any Guarantor or any other
Subsidiary
or Affiliate of the
Company), (y) paid by
SeaMaster China to
Sea Master
Hong Kong (each as
defined in the Senior Loan Agreement);
and/or (z)
paid by a Subsidiary
that is not the Company or a Guarantor to
a
Subsidiary that is not the Company or a Guarantor or
(v) Directly or
indirectly
make or commit to make
any
optional
prepayment of, or
otherwise repurchase
any Indebtedness that is
subordinated in
right of payment to the Notes, including without
limitation, any Subordinated Indebtedness.
(f) MERGER AND
ACQUISITION
ACTIVITIES.
Until this Note
has
been converted,
redeemed or otherwise
satisfied in
accordance with its
terms
(other than with respect to contingent indemnification obligations
in respect of
which no claim has been asserted), the Company shall not and shall
not cause or
permit any of its
Subsidiaries to merge
into or with or
consolidate with
any
other Person or permit
any other Person to
merge into or with or
consolidate
with it or wind up, liquidate or dissolve, or permit any Subsidiary
to do any of
the foregoing, except that, subject to compliance with Section 5
hereof, (w) the
Company or any
Subsidiary organized
under the laws of a
jurisdiction
in the
United States may
merge with and into or
consolidate with the
Company or any
Subsidiary organized
under the laws of a jurisdiction in the United States, and
any Foreign Subsidiary
may merge with or
consolidate
with the Company or
any
Subsidiary organized
under the laws of a
jurisdiction
outside of the United
States that is acceptable to the Collateral Agent, provided that each of the
following conditions is satisfied: (A) the Collateral Agent shall
have received
not less than ten (10) Business Days' prior written notice of the intention of
the Company or such
Subsidiary to so merge or consolidate, which notice shall
set forth in reasonable detail satisfactory to the Collateral
Agent, the Persons
that are merging or
consolidating, which
person will be the surviving entity,
the locations of the
assets of the Persons
that are merging or
consolidating,
and the material agreements and documents relating to such merger or
consolidation,
(B) the Collater
