-3-
EXTENSION OF WARRANT AGREEMENT
BETWEEN THE FAIRCHILD CORPORATION AND
STINBES LIMITED
FOR 375,000 SHARES OF CLASS A OR CLASS B COMMON STOCK
This Extension of Warrant Agreement (the "Extension") is made as
of September 26, 1997, effective retroactively as of February 21,
1997, for the purpose of extending and modifying (as provided
below) the Warrant Agreement dated as of March 13, 1986 (the
"Warrant Agreement"), between The Fairchild Corporation, p/k/a
Banner Industries, Inc., a Delaware corporation (the "Company"),
and Stinbes Limited. Capitalized terms used but not otherwise
defined herein shall have the meaning ascribed to them in the
Warrant Agreement.
RECITALS
A. On March 13, 1986, the Company entered into the Warrant
Agreement with Drexel Burnham Lambert ("DBL"), and (pursuant to
the terms of the Warrant Agreement) issued to DBL warrants to
purchase up to an aggregate of 200,000 shares of either Class A
or Class B common stock of the Company (the "Warrants"). The
Warrants were issued in conjunction with DBL acting as the
underwriter for the public offering of certain of the Company's
debentures.
B. Pursuant to a Purchase and Sale Agreement dated as of
January 4, 1989, Jeffrey J. Steiner ("Steiner"), DBL and the
Company, Steiner purchased 187,500 Warrants from DBL (subject to
all the benefits and obligations under the Warrant Agreement).
C. Section 5.1 of the Warrant Agreement provides that the
Warrant Price and the number of Warrant Shares are subject to
adjustment upon the occurrence of certain events pursuant to the
terms of Section 9 of the Warrant Agreement. In June, 1989, as a
result of a two-for-one stock split (an adjustable event as
defined in Section 9 of the Warrant Agreement) the number of
Warrant Shares in favor of Steiner was increased to 375,000, and
the Warrant Price was decreased to $7.67 per share.
D. On September 12, 1991, the Board of Directors of the Company
voted to renew the Warrants issued in favor of Steiner, which had
expired on March 13, 1991, for an extended term to expire on
March 13, 1993. On March 8, 1993, the Board of Directors of the
Company voted to extend the Expiration Date of the Warrants to
March 13, 1995. On February 16, 1995, the Board of Directors of
the Company voted to extend the Expiration Date of the Warrants
to March 13, 1997.
E. On March 22, 1993, Steiner assigned the Warrants to Bestin
Ltd. On May 31, 1993, Bestin Ltd. assigned the Warrants to
Stinbes Limited. Stinbes Limited is an affiliate of Steiner.
F. By Board action taken on February 21, 1997, and again on
September 11, 1997, and September 26, 1997, the Board of
Directors of the Company voted to extend the Expiration Date of
the Warrants to March 13, 2002, subject to the modifications set
forth below.
G. Section 17 of the Warrant Agreement provides that the
Company and the Holder may, from time to time, supplement or
amend the Warrant Agreement in any manner which "the Company may
deem necessary or desirable and which shall not be inconsistent
with the provisions of the Warrants and which shall not adversely
affect the interest of the Holders."
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein, and for other good and valuable consideration
(the receipt and adequacy of which are hereby acknowledged), the
parties hereto agree as follows:
1. Effective as of February 21, 1997, the Expiration Date of
any issued Warrants, outstanding and unexpired on that date,
shall be March 13, 2002.
2. Effective as of February 21, 1997, the Warrant Price shall
be $7.67 per share, increased by two tenths of one cent ($.002)
for each day subsequent to March 13, 1997, but fixed at $7.80 per
share after June 30, 1997.
3. Effective as of February 21, 1997, the Warrants may not be
exercised except within the following window periods: (a) within
365 days after the merger of Shared Technologies Fairchild Inc.
with AT&T Corporation, MCI Communications, Worldcom Inc., Tel-
Save Holdings, Inc., or Teleport Communications Group, Inc.; (b)
within 365 days after a change of control of the Company, as
defined in the Fairchild Holding Corp. Credit Agreement with
Citicorp et. al.; or (c) within 365 days after a change of
control of Banner Aerospace, Inc., as defined in the Banner
Aerospace, Inc. Credit Agreement with Citicorp. et. al. In no
event may the Warrants be exercised after March 13, 2002.
4. Effective as of February 21, 1997, each reference in the
Warrant Agreement to "this Agreement" "hereunder", "hereof",
"herein", or words of like import shall mean and be a reference
to the Warrant Agreement, as amended previously and as extended
and modified hereby, and each reference to the Warrant Agreement
and any other document, instrument or agreement executed and/or
delivered in connection with the Warrant Agreement shall mean and
be a reference to the Warrant Agreement as amended previously and
as extended and modified hereby.
5. Except as specifically modified herein, the Warrant
Agreement shall remain in full force and effect and is hereby
ratified and confirmed.
6. This Extension may be executed in multiple counterparts.
IN WITNESS WHEREOF, the parties hereto have caused this Extension
to be executed by their respective officers thereunto duly
authorized as of the date first written above.
THE FAIRCHILD CORPORATION
By: Donald E. Miller
Senior Vice President and Corporate Secretary
STINBES LIMITED
By: David Faust
Vice President