Exhibit 10.57
A form of note in substantially this format was
provided to certain lessors and lenders.
THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF
ANY STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE TERMS OF THIS NOTE, THE ACT AND
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY
BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY
REQUIRE AN OPINION OF COUNSEL TO THE HOLDER IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT, ANY
APPLICABLE STATE SECURITIES LAWS AND THE TERMS OF THE
NOTE.
Form of Convertible Note
FLYi, INC., a Delaware corporation
(herein called the “Issuer,” which term includes any
successor Person), for value received, hereby promises to pay to
(or its permitted and registered successors and assigns,
“Holder”), the principal sum of Five
Dollars
($ )
on or before
,
20 as specified herein (the “Maturity
Date”), without interest, subject to the automatic conversion
feature and conversion right set forth below. Principal shall
be payable in full on the Maturity Date upon presentation of this
Note. Capitalized terms used herein and not otherwise defined
have the meanings ascribed to them in Section 10 hereof.
1.
Conversion upon
Maturity . Unless
this Note has been converted pursuant to the provisions of Section
2 hereof, and provided that on the Maturity Date neither the Issuer
nor Independence Air, Inc. (“IA”) is a debtor in any
bankruptcy or insolvency proceeding, then on
,
20 this Note shall automatically be
converted into a whole number of fully paid and non-assessable
shares of the Issuer’s common stock, par value $0.02 per
share (“Common Stock”), determined by dividing such
unpaid principal amount by the Conversion Price then in effect as
determined pursuant to Section 2 and the indebtedness represented
by this Note shall thereupon be discharged in full; provided,
however, that this Section 1 shall not apply in the event of a
default under Section 4.
2.
Conversion Right
.
2.1.
Conversion to Common
Stock . Provided
that on the date of conversion neither the Issuer nor IA is a
debtor in any bankruptcy or insolvency proceeding, the
Holder shall have the right to
convert all of the unpaid principal amount of this Note into a
whole number of fully paid and non-assessable shares of the
Issuer’s Common Stock determined by dividing such unpaid
principal amount by the Conversion Price (such right being referred
to herein as the “Conversion Right”). For
purposes of this Note, the “Conversion Price” on the
Issue Date shall be
,
and thereafter shall be adjusted only as provided in this Section
2.
2.2.
Adjustments Upon Changes in
Capitalization .
The Conversion Right and the Conversion Price shall be adjusted by
the Issuer from time to time as follows:
2.2.1.
Common Stock Splits and
Combinations . If
the Issuer at any time or from time to time after the Issue Date
effects a subdivision of the outstanding shares of Common Stock,
then the Conversion Price in effect immediately before that
subdivision shall be proportionately decreased, and conversely, if
the Issuer at any time or from time to time after the Issue Date
combines the outstanding shares of Common Stock, the Conversion
Price then in effect immediately before the combination shall be
proportionately increased. Any adjustment under this
subsection 2.2.1 shall become effective as of the opening of
business on the day following the day upon which such subdivision
or combination becomes effective.
2.2.2.
Dividends and
Distributions . In
the event the Issuer at any time or from time to time after the
Issue Date makes, or fixes a record date for the determination of
holders of Common Stock entitled to receive, without consideration,
a dividend or other distribution payable in additional Common
Stock, then the Conversion Price then in effect shall be decreased
as of the opening of business on the day following the day of such
issuance or, in the event such a record date is fixed, as of the
opening of business on the day following such record date, by
multiplying the Conversion Price then in effect by a fraction
(i) the numerator of which shall be the total number of shares
of Common Stock issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date,
and (ii) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to
the time of such issuance or the close of business on such record
date plus the number of shares of Common Stock constituting such
dividend or distribution; provided , however , that
if such record date is fixed and such dividend is not fully paid or
such distribution is not fully made on the date fixed therefore,
the Conversion Price shall be recomputed accordingly as of the
close of business on such record date and thereafter the Conversion
Price shall be adjusted pursuant to this subsection 2.2.2 as of the
time of actual payment of such dividend or distribution.
2.2.3.
Recapitalization or
Reclassification .
If the shares of Common Stock issuable upon the conversion of this
Note are changed into the same or a different number of shares of
any class or classes of securities of the Issuer, whether by
recapitalization, reclassification or otherwise (other than
a
2
subdivision or combination of Common
Stock or dividend payable in Common Stock provided for in Section
2.2.1 or in Section 2.2.2), then the Conversion Right and the
Conversion Price shall thereafter refer to the right to convert the
unpaid principal amount of this Note into such number and kind of
securities as would have been issuable to Holder as a result of
such change if, immediately prior to such change, the Holder had
exercised the Conversion Right as to the entire unpaid principal
amount hereof, and the Conversion Price shall be fixed by dividing
such unpaid principal amount of this Note on the date of such event
by the number of shares or other units of such securities
determined thereby, subject to further adjustment with respect to
any other event as provided herein.
2.2.4.
Reorganization or Sale of
Issuer . If there
is a capital reorganization of the Issuer (other than a
recapitalization, subdivision, combination, reclassification or
exchange of Common Stock provided for elsewhere in this Section
2.2) or a merger or consolidation of the Issuer with or into
another company, or the sale of all or substantially all of the
Issuer’s properties and assets to any other Person and there
is a resulting distribution of cash and/or securities and/or
property in exchange for, payment of or cancellation of the Common
Stock (other than a cash dividend, and other than a dividend or
distribution of shares of Common Stock provided for in Section
2.2.1 or in Section 2.2.2) and if the Issuer shall not exercise its
mandatory conversion right (if applicable) pursuant to Section 2.3,
then the Conversion Right shall refer to the right to convert the
unpaid principal amount of this Note into such amount, number and
kind of cash, securities and/or property as would have been
issuable or distributable to Holder on account of such
reorganization, merger, consolidation, sale or distribution if,
immediately prior to the record date for such event, or in the
absence of a record date, immediately prior to such event, the
Holder had exercised the Conversion Right as to the entire unpaid
principal amount under the Note. In any such case, the Issuer
shall make an appropriate adjustment in the application of the
provisions of this Section 2.2 with respect to the rights of Holder
after the reorganization, merger, consolidation, sale or
distribution to the end that the provisions of this Section 2.2
shall be applicable after that event an
