MOUNTASIA ENTERTAINMENT INTERNATIONAL, INC.
AND
CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
AS TRUSTEE
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Supplemental Indenture
Dated as of August 27, 1996
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9% Subordinated Convertible Debentures due November 1, 1999
SUPPLEMENTAL INDENTURE FOR
9% SUBORDINATED CONVERTIBLE DEBENTURES DUE NOVEMBER 1, 1999
OF MOUNTASIA ENTERTAINMENT INTERNATIONAL, INC.
SUPPLEMENTAL INDENTURE, dated as of the 27th day of August, 1996, between
MOUNTASIA ENTERTAINMENT INTERNATIONAL, INC., a corporation duly organized and
existing under the laws of the State of Georgia (the "Company") and Continental
Stock Transfer & Trust Company, a limited purpose trust company duly organized
and existing under the laws of the State of New York, as trustee (the
"Trustee").
WHEREAS, the Company and the Trustee are parties to that certain
Indenture, dated as of November 15, 1994, (the "Indenture") providing for an
issue of debentures designated 9% Subordinated Convertible Debentures Due
November 1, 1999 (the "Debentures"); and
WHEREAS, the Company now wishes to provide for the waiver of certain
defaults and to modify the Indenture, with the consent of Holders of 66-2/3% in
aggregate principal amount of the Debentures, as permitted under Sections 7.6
and 11.2 of the Indenture and the Trustee, having been requested by the Company
to join in the execution of this Supplemental Indenture, is willing to do so;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the mutual covenants and
agreements herein made and other good and valuable consideration, the receipt
and sufficiency of which is hereby expressly acknowledged, the Company and the
Trustee hereby agree as follows:
1. All capitalized terms not otherwise defined herein have the meanings
set forth in the Indenture.
2. The terms of the Indenture and the Debentures are hereby amended to
provide that (a) all amounts to or for the benefit of any Debentureholder
payable under the Indenture and the Debentures, other than interest, will be
made only in shares of the Company's common stock ("Conversion Shares") at the
Amended Conversion Price, as defined herein; (b) any Debentureholder may convert
up to 25% of the principal amount of the Debentures held by such Debentureholder
as of the date hereof into the Conversion Shares commencing on September 3, 1996
at the Amended Conversion Price as defined herein; (c) such Debentureholder may
convert the remaining 75% of the principal amount of the Debentures into
Conversion Shares after February 1, 1997 at the Amended Conversion Price, as
defined herein; (d) any Debentureholder may convert the total principal amount
of the Debentures into Conversion Shares upon an Event of Default by the Company
under the Indenture and the Debentures, as amended hereby, not cured within the
time period permitted under the Debentures or the Indenture, as amended hereby;
and (e) upon August 1, 1997 or, if on such date, (x) the average of the reported
closing bid prices for a share of the Company's Common Stock (unless such stock
is traded on a registered national securities exchange, in which case, the
average of the last reported sale prices on the principal exchange on which such
securities are traded) for the thirty (30) days immediately preceding such date
does not equal or exceed $2.00 per share and (y) the average of the reported
daily trading volume does not equal or exceed 50,000 shares (unless the
principal market for such common stock is such an exchange, in which case,
25,000 shares) then on the first day following August 1, 1997 on which the
conditions described in subclauses (x) and
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(y) are both met, (the "Mandatory Conversion Date"), all outstanding Debentures
that have not theretofore been converted into the Conversion Shares shall
automatically convert into Conversion Shares at the Amended Conversion Price, as
defined herein. The Conversion Price of the Debentures (as defined therein)
shall be the lesser of (i) $4.50 per share or (ii) ninety-five percent (95%) of
the average of the reported closing bid prices for a share of the Company's
Common Stock (unless such stock is traded on a registered national securities
exchange, in which case, the average of the last reported sale prices on the
principal exchange on which the Conversion Shares may be traded), for the three
(3) trading days prior to the date of written notification of conversion (the
"Optional Conversion Date") by such Debentureholder or the Mandatory Conversion
Date, (the "Amended Conversion Price"). Upon receipt by the Company of notice
and conversion pursuant to Article IV of the Indenture, the Company shall
compute the Amended Conversion Price and notify the Trustee in writing thereof.
The Trustee may conclusively rely upon the Company's computation of the Amended
Conversion Price and shall have no duty to verify such computation.
3. If the Company desires to issue Senior Indebtedness, and the providers
of the Senior Indebtedness require amendments to certain existing subordination
provisions in the Indenture and the Debentures, each Debentureholder will either
(a) grant approval to amendments to the Indenture and the Debentures which are
required to facilitate the new Senior Indebtedness, or (b) allow the Company to
convert the Debentureholder's remaining Debentures at the Amended Conversion
Price. Under the provisions set forth in this Section 2(b), upon receipt of
written notice from the Company of its intent to convert the remaining
Debentures, ("Demand Conversion Notice"), a Debentureholder may determine the
Optional Conversion Date by submitting written notification of conversion to the
Company no later than ninety (90) days after receipt of the Demand Conversion
Notice. If after ninety (90) days from the receipt of Demand Conversion Notice,
a Debentureholder has not elected an Optional Conversion Date within the
respective ninety (90) day period by submitting written notice to the Company,
such Debentureholder's remaining Debentures will be automatically converted into
the Conversion Shares at the Amended Conversion Price without any action by or
for the Trustee or the Company's transfer agent for its Common Stock (the
"Transfer Agent").
4. No conversion of the Debentures into Conversion Shares will be
considered a prepayment as provided for in the Indenture or Debenture. The
Company agrees to instruct the Transfer Agent to prepare and deliver to any
Debentureholder, upon receipt of such Debentureholder's request for conversion
pursuant to the terms hereof, certificates representing the Conversion Shares
without a restrictive legend (assuming Regulation S of the Securities and
Exchange Commission under the Securities Act of 1933, as amended, has not been
rescinded or modified in such a manner as to preclude the issuance of unlegended
Conversion Shares). Subject to the Transfer Agent's customary requirements when
it is instructed to issue unlegended stock certificates, such certificates will
be delivered to such Debentureholder within three (3) business days after
receipt of notification of conversion by the Company. If such certificates are
not received within five (5) business days after receipt of notification of
conversion, the Company shall pay such Debentureholder, in liquidated damages,
$500 per day for each day after said five (5) business day period until delivery
of the certificates. In no event will the Trustee or the Transfer Agent be
liable for such damages. If notice of default is given to the Company and such
default is not cured within the time periods permitted under the Indenture and
the Debentures, as amended hereby, and if the Company fails to deliver
Conversion Shares to the Debentureholders within five (5) business days
thereafter, all default remedies provided in the Indenture and the Debentures
shall be available to the Debentureholders. All registration rights under the
terms of the Indenture and the Debentures are hereby waived except that such
rights shall be reinstated if, but only if, the Debentureholder is unable to
rely upon such
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Regulation S to resell Conversion Shares. All other provisions of the Indenture
and Debentures not amended hereby shall remain in full force and effect.
5. In accordance with Section 7.6 of the Indenture, (i) the Company's past
defaults of the covenants contained in Sections 5.3, 5.9, 5.10, 5.11, 5.12,
5.13, 5.15, 5.16, 5.17, 5.19 and 5.20 of the Indenture and (ii) the requirement
of the Company to comply with the covenants contained in Sections 5.9(a)(i),
5.9(a)(ii), and 5.9(d) of the Indenture through August 1, 1997, are hereby
waived.
6. Section 5.13 of the Indenture is hereby amended in its entirety to read
as follows:
"Section 5.13 Merger of Sale of Assets. The Company will not, and
will not permit any Subsidiary to, merge, consolidate or exchange
shares with any other corporation, or sell, lease or transfer or
otherwise dispose of any of its assets to any Person, other than
sales, leases, transfers or other dispositions of inventory in the
ordinary course of business or particular items of obsolete or
unnecessary equipment in the ordinary course of business, except
(i) any Subsidiary may merge or consolidate with the Company
(provided that Company shall be the surviving corporation in any
such transaction) or with any one or more other Subsidiaries;
(ii) the Company and any Subsidiary may sell, lease, transfer or
otherwise dispose of up to a total of $10,000,000 in book value of
assets (determined net of accumulated depreciation) as shown on the
Company's most recent audited balance sheet after the date of this
Indenture;
(iii) any Subsidiary may sell, lease, transfer or otherwise dispose
of all or any substantial part of its assets to the Company or
another Subsidiary; and
(iv) as otherwise expressly permitted by this Indenture.
7. Section 5.19 of the Indenture is hereby amended in its entirety to read
as follows:
"Section 5.19 Dividends, Etc. The Company shall not declare or pay
any dividend on its capital stock (other than stock dividends) or
make any payment to purchase, redeem, retire or acquire any of its
capital stock."
8. All other provisions of the Indenture and the Debentures are and shall
remain in full force and effect.
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IN WITNESS WHEREOF, the Company has caused this Supplemental Indenture to
be signed in its corporate name and acknowledged by its Chairman of the board,
Chief Executive Officer and President and its corporate seal to be affixed
hereunto, duly attested by its Secretary or an Assistant Secretary; and the
Trustee has caused this Supplemental Indenture to be signed and acknowledged by
its President and its corporate seal to be affixed hereunto, duly attested by
its Secretary, all as of the day and year first above written.this Agreement on
the date first above written.
MOUNTASIA ENTERTAINMENT
INTERNATIONAL, INC.
By: __________________________________
Name: L. Xxxxx Xxxxxxx
Title: President
Attest:
Secretary
(Seal)
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY
By: __________________________________
Name: Xxxxxxx Xxxxxx
Title: President
Attest:
Secretary
(Seal)
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STATE OF_________________
COUNTY OF________________
On this ____ day of ____________________, 1996, before me personally
appeared __________________________, who, being by me duly sworn, did say that
he is the President of Mountasia Entertainment International, Inc., one of the
corporations described in and which executed the foregoing instrument; that he
knows the corporate seal of the said corporation and that the seal affixed to
said instrument is the corporate seal of said corporation; and that said
instrument was signed and sealed in behalf of said corporation by authority of
its Board of Directors and that he subscribed his name thereto by like
authority.
Notary Public
(Seal)
STATE OF_________________
COUNTY OF________________
On this ____ day of ____________________, 1996, before me personally
appeared __________________________, who, being by me duly sworn, did say that
he is the __________________ of Continental Stock Transfer & Trust Company, a
limited purpose trust company described in and which executed the foregoing
instrument; that he knows the corporate seal of the said corporation and that
the seal affixed to said instrument is the corporate seal of said corporation;
and that said instrument was signed and sealed in behalf of said corporation by
authority of its Board of Directors and that he subscribed his name thereto by
like authority.
Notary Public
(Seal)
