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AMENDMENT OF WARRANT AGREEMENT
BETWEEN THE FAIRCHILD CORPORATION AND
STINBES LIMITED
FOR 375,000 SHARES OF CLASS A OR CLASS B COMMON STOCK
This Amendment of Warrant Agreement (the "Amendment") is
made as of February 9, 1998, for the purpose of 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 following
modifications: (i) effective as of February 21, 1997, the
Expiration Date of any issued Warrants, outstanding and
unexpired on that date, shall be March 13, 2002; (ii)
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.
G. On February 9, 1997, the Board voted to modify the Warrant
Agreement to: (i) revise the window periods during which the
Warrants may be exercised; and (ii) to provide that the
payment of the Warrant Price may be made in shares of the
Company's Class A or Class B Common Stock.
H. 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 9, 1998, 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., Teleport Communications Group, Inc., or
Intermedia Communications 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.
2. Effective as of February 9, 1998, the payment of the Warrant
Price may be made in cash or in shares of the Company's
Class A or Class B Common Stock valued at Fair Market Value
at the time of exercise, or combination thereof. For
purposes hereof, "Fair Market Value" shall mean, in respect
of any share of the Company's Common Stock, the closing
price of the Company's Common Stock as reported on the New
York Stock Exchange Composite Tape on the last trading day
immediately preceding the day of exercise of the Warrant.
3. Effective as of February 9, 1998, 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, extended or
modified previously or 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, extended, or modified
previously or hereby.
4. Except as specifically modified herein, the Warrant
Agreement shall remain in full force and effect and is
hereby ratified and confirmed.
5. This Amendment may be executed in multiple counterparts.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
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