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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
BUCKHEAD AMERICA CORPORATION
(Name of Issuer)
COMMON STOCK, PAR VALUE $.01
(Title of Class of Securities)
11835A105
(CUSIP Number)
STEVEN A. VAN DYKE
TOWER INVESTMENT GROUP, INC.
BAY HARBOUR MANAGEMENT, L.C.
777 South Harbour Island Boulevard, Suite 270
Tampa, Florida 33602
(813) 272-1992
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
December 22, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]
Page 1 of __ Pages
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CUSIP No. 11835 A 105 13D Page 2 of __ Pages
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<TABLE>
<C> <S> <C>
- -----------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON Steven A. Van Dyke
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON N/A
- -----------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [x]
- -----------------------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------------------
4 SOURCE OF FUNDS OO
- -----------------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR
2(e) [ ]
- -----------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION United States
- -----------------------------------------------------------------------------------------
7 SOLE VOTING POWER 820,086
Number of -----------------------------------------------------------------------
Shares
Beneficially 8 SHARED VOTING POWER -0-
Owned by
Each Reporting -----------------------------------------------------------------------
Person With
9 SOLE DISPOSITIVE POWER 820,086
-----------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER -0-
- -----------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
820,086
- -----------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- -----------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
33.4%
- -----------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON IN, HC
- -----------------------------------------------------------------------------------------
</TABLE>
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CUSIP No. 11835 A 105 13D Page 3 of __ Pages
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<TABLE>
<C> <S> <C>
- -----------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON Tower Investment Group, Inc.
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 59-2924229
- -----------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [x]
- -----------------------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------------------
4 SOURCE OF FUNDS OO
- -----------------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR
2(e) [ ]
- -----------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION Florida
- -----------------------------------------------------------------------------------------
7 SOLE VOTING POWER 817,555
Number of -----------------------------------------------------------------------
Shares
Beneficially 8 SHARED VOTING POWER -0-
Owned by
Each Reporting -----------------------------------------------------------------------
Person With
9 SOLE DISPOSITIVE POWER 817,555
-----------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER -0-
- -----------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
817,555
- -----------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- -----------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
33.3%
- -----------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON HC
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</TABLE>
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CUSIP No. 11835 A 105 13D Page 4 of __ Pages
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<TABLE>
<C> <S> <C>
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1 NAME OF REPORTING PERSON Bay Harbour Management, L.C.
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 59-3418243
- -----------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [x]
- -----------------------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------------------
4 SOURCE OF FUNDS OO
- -----------------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR
2(e) [ ]
- -----------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION Florida
- -----------------------------------------------------------------------------------------
7 SOLE VOTING POWER 817,555
Number of -----------------------------------------------------------------------
Shares
Beneficially 8 SHARED VOTING POWER -0-
Owned by
Each Reporting -----------------------------------------------------------------------
Person With
9 SOLE DISPOSITIVE POWER 817,555
-----------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER -0-
- -----------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
817,555
- -----------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- -----------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
33.3%
- -----------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON IA
- -----------------------------------------------------------------------------------------
</TABLE>
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This Statement is filed by Bay Harbour Management, L.C., ("Bay
Harbour"), Tower Investment Group, Inc. ("Tower"), as the majority stockholder
of Bay Harbour, and Steven A. Van Dyke ("Van Dyke"), in his capacity as the sole
stockholder and President of Tower (collectively, the "Reporting Persons").
ITEM 1. SECURITY AND ISSUER.
Common Stock, par value $0.01 per share ("Buckhead Common Stock")
of Buckhead America Corporation, a Delaware corporation ("Buckhead"). The
principal executive offices of Buckhead are located at 4243 Dunwoody Club Drive,
Suite 200, Atlanta, Georgia 30350-5206.
ITEM 2. IDENTITY AND BACKGROUND.
Bay Harbour is a Florida limited company and a registered
investment advisor under the Investment Advisors Act of 1940, as amended. Tower,
a Florida corporation, is the majority stockholder of Bay Harbour. Van Dyke, a
resident of Florida, is the sole stockholder of Tower. The executive officers
and directors of Bay Harbour and Tower are as follows:
<TABLE>
<CAPTION>
Name Address Occupation Place of Employment
---- ------- ---------- -------------------
<S> <C> <C> <C>
Steven A. Van Dyke 777 South Harbour Island Investment Bay Harbour
Boulevard, Suite 270 Management Management, L.C.
Tampa, Florida 33602
Douglas P. Teitelbaum 885 Third Avenue, 34th Floor Investment Bay Harbour
New York, New York 10022 Management Management, L.C.
</TABLE>
The principal business address of each Reporting Person is 777
South Harbour Island Boulevard, Suite 270, Tampa, Florida 33602.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On December 22, 1997, Buckhead issued to certain managed accounts
of Bay Harbour its Five-Year Convertible Debentures (the "Debentures"), in the
aggregate principal amount of $5,000,000. The Debentures are convertible into
shares of Buckhead Common Stock at a conversion price of $9.00 per share
(subject to certain adjustments as set forth in the Debentures).
The source of the funds used by Bay Harbour to purchase the
Debentures were the following investment accounts managed on a discretionary
basis by Bay Harbour:
Trophy Hunter Investments, L.P. $1,000,000
Lipstick, Ltd. $750,000
Bay Harbour 90-1, L.P. $1,250,000
Bay Harbour Partners, Ltd. $2,000,000
ITEM 4. PURPOSE OF TRANSACTION.
The Reporting Persons consider their beneficial ownership of
Buckhead Common Stock as an investment in the ordinary course of business. From
time to time, the Reporting Persons may acquire
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additional shares of Buckhead Common Stock or dispose of all or some of the
shares of Buckhead Common Stock which they beneficially own. The Reporting
Persons have no plans to acquire control of Buckhead but intend to review the
investment in Buckhead on a continuing basis and may change their plans
depending upon future developments.
Except as set forth in this Item 4, the Reporting Persons presently
have no plans or proposals that relate to or would result in any of the actions
specified in clauses (a) through (j) of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
As of the filing date of this Statement, (i) Van Dyke beneficially
owns 820,086 shares of Buckhead Common Stock which, assuming the conversion of
the Debentures, represent approximately 33.4% of Buckhead Common Stock
outstanding, (ii) Tower beneficially owns 817,555 shares of Buckhead Common
Stock which, assuming the conversion of the Debentures, represent approximately
33.3% of Buckhead Common Stock outstanding and (iii) Bay Harbour beneficially
owns 817,555 shares of Buckhead Common Stock which, assuming the conversion of
the Debentures, represent approximately 33.3% of Buckhead Common Stock
outstanding. For purposes of disclosing the number of shares beneficially owned
by each of the Reporting Persons, (A) Van Dyke is deemed to beneficially own all
shares of Buckhead Common Stock that are beneficially owned by Tower and Bay
Harbour and (B) Tower is deemed to beneficially own all shares of Buckhead
Common Stock that are beneficially owned by Bay Harbour.
Except for the purchase of the Debentures, to the best knowledge
and belief of the undersigned, no transactions involving Buckhead Common Stock
have been effected during the past sixty (60) days by the Reporting Persons or
by their directors, executive officers or controlling persons.
Both the Debentures and 262,000 of the shares of Buckhead Common
Stock reported in this Statement are beneficially owned by Van Dyke, Tower and
Bay Harbour for the benefit of certain managed accounts over which Van Dyke,
Tower and Bay Harbour control the power to (i) convert the Debentures into
shares of Buckhead Common Stock, (ii) direct the voting of such shares of
Buckhead Common Stock and (iii) dispose of such shares of Buckhead Common
Stock.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDING OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
A copy of the form of Amended and Restated Debenture is attached
hereto as Exhibit II.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT I Joint Filing Agreement, dated December 29, 1997,
by and among Bay Harbour, Tower and Van Dyke.
EXHIBIT II Form of Amended and Restated Debenture.
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SIGNATURE
After reasonable inquiry and to the best of its knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated as of: December 29, 1997
TOWER INVESTMENT GROUP, INC.
By: /s/ Steven A. Van Dyke
___________________________
Name: Steven A. Van Dyke
Title: President
BAY HARBOUR MANAGEMENT, L.C.
By: /s/ Steven A. Van Dyke
___________________________
Name: Steven A. Van Dyke
Title: President
/s/ Steven A. Van Dyke
________________________________________
STEVEN A. VAN DYKE
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Exhibit Index
EXHIBIT I Joint Filing Agreement, by and among Bay Harbour, Tower and Van
Dyke.
EXHIBIT II Form of Amended and Restated Debenture.
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EXHIBIT I
Joint Filing Agreement
The undersigned acknowledge and agree that the foregoing
statement on Schedule 13D is filed on behalf of each of the undersigned and that
all subsequent amendments to this statement shall be filed on behalf of each of
the undersigned without the necessity of filing additional joint filing
agreements. The undersigned acknowledge that each shall be responsible for the
timely filing of such amendments, and for the completeness and accuracy of the
information concerning it contained therein, but shall not be responsible for
the completeness and accuracy of the information concerning the others, except
to the extent that it knows or has reason to believe that such information is
inaccurate.
This Agreement may be executed counterparts and each of such
counterparts taken together shall constitute one and the same instrument.
Date: December 29, 1997 BAY HARBOUR MANAGEMENT, L.C.
By: /s/ Steven A. Van Dyke
___________________________
Name: Steven A. Van Dyke
Title: President
Date: December 29, 1997 TOWER INVESTMENT GROUP, INC.
By: /s/ Steven A. Van Dyke
___________________________
Name: Steven A. Van Dyke
Title: President
/s/ Steven A. Van Dyke
Date: December 29, 1997 _________________________________________
STEVEN A. VAN DYKE
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EXHIBIT II
Form of Amended and Restated Debenture
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
ANY STATE SECURITIES ACTS OR LAWS, AND HAVE BEEN ISSUED AND SOLD IN RELIANCE
UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SUCH ACTS AND LAWS,
INCLUDING BUT NOT LIMITED TO THE EXEMPTION CONTAINED IN SECTION 4(2) OF THE
SECURITIES ACT OF 1933. THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED UNLESS A
REGISTRATION STATEMENT HAS BECOME AND IS THEN EFFECTIVE WITH RESPECT TO SUCH
SECURITIES OR BUCKHEAD HAS RECEIVED AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO IT, TO THE EFFECT THAT THE PROPOSED SALE OR TRANSFER IS EXEMPT
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ALL
APPLICABLE STATE SECURITIES ACTS AND LAWS.
AMENDED AND RESTATED
FIVE YEAR CONVERTIBLE DEBENTURE
OF
BUCKHEAD AMERICA CORPORATION
$________________ December 22, 1997
BUCKHEAD AMERICA CORPORATION, a Delaware corporation
("Buckhead"), for value received, hereby promises to pay to the order of
____________________ (the "Investor") or its permitted assigns (the "Holder") at
4243 Dunwoody Club Drive, Suite 200, Dunwoody, Georgia 30305, the sum of
$____________, plus interest on the unpaid principal balance at the rate
specified below, in accordance with the provisions set forth herein. During the
term of this Debenture, interest shall accrue at the rate of 8% per annum
(calculated on the basis of a year of 360 days comprised of 12 30-day months).
Accrued interest shall be payable quarterly in arrears on each March 31, June
30, September 30, and December 31 of each year in which any principal payable
hereunder is outstanding, commencing December 31, 1997. Buckhead shall also pay
interest (to the extent permitted by law) on any overdue principal of this Note
at the rate of 10% per annum (calculated as set forth above), from the due date
of such principal or interest until payment in full thereof. The full principal
amount of this Debenture, including any accrued interest thereon, shall be due
and payable on December 22, 2002 (the "Maturity Date"). This Debenture is
originally being issued pursuant to a Debentures Purchase Agreement, dated
December 22, 1997 (the "Original Issue Date"), between Buckhead and Bay Harbour
Management, L.C., for its managed accounts (the "Purchase Agreement"). All
Debentures issued under the Purchase Agreement or upon transfer or exchange of
other Debentures are referred to herein as the "Debentures."
The following is a statement of the rights of the Holder and the
conditions to which this Debenture is subject, and to which the Holder hereof,
by the acceptance of this Debenture, agrees:
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1. Optional Prepayment
1.1 Right to Prepay. At, or at any time after, the third
anniversary of the Original Issue Date, Buckhead may at any time and from time
to time prepay in whole or in part (but only in increments of $100,000 of
principal balance) the Debentures on a pro rata basis (the amount of any
principal prepayment being hereinafter referred to as the "Prepayment Amount").
Buckhead shall pay to the Holder, in addition to the Prepayment Amount, a
prepayment premium in an amount which, together with the interest payments
theretofore made with respect to the Prepayment Amount and the allocable portion
of the origination fee paid by Buckhead to the Investor on the Original Issue
Date pursuant to Section 5(b) of the Purchase Agreement, results in the Investor
earning an Internal Rate of Return of 25% per annum on the Prepayment Amount
from the Original Issue Date to and including the date of prepayment. "Internal
Rate of Return" means the rate calculated on an annual compounded basis, which
when used to calculate the net present value as of the Original Issue Date of
all payments of principal, premium, interest and origination fee received with
respect to the Prepayment Amount causes such net present value to equal the
Prepayment Amount; provided that such rate shall be calculated using Microsoft
Excel 5.0 spreadsheet software, or any updated version thereof or other
comparable software reasonably selected by Buckhead. Notwithstanding anything
herein contained, the prepayment premium provided for in this Section 1.1, and
any prepayment premium payable under Section 7(b), shall not exceed the maximum
amount, if any, permitted by applicable law.
1.2 Notice. At least 45 days prior to the date fixed for any
prepayment of the Debenture (the "Prepayment Date"), written notice shall be
delivered to the Holder at its address last shown on the records of Buckhead,
notifying the Holder of the election of Buckhead to prepay the Debentures, in
whole or in part, and specifying the Prepayment Date, the Prepayment Amount and
the prepayment premium, and calling upon the Holder to surrender to Buckhead, in
the manner and at the place designated, its Debenture certificate (such notice
is hereinafter referred to as the "Prepayment Notice") unless the Holder shall
convert this Debenture in accordance with Section 8 hereof by providing the
required notice on or prior to the Prepayment Date. Upon delivery of the
Prepayment Notice, the Prepayment Amount and the prepayment premium shall become
due and payable at the Prepayment Date.
1.3 Surrender of Debenture. On or prior to the Prepayment Date,
unless the Holder shall have converted the Debenture by providing notice of
conversion on or before the Prepayment Date pursuant to the provisions of
Section 8 hereof, the Holder shall surrender its Debenture certificate, in the
manner and at the place designated in the Prepayment Notice, and thereupon the
Prepayment Amount and the prepayment premium shall be paid to the order of the
Holder, and the Debenture, if prepaid in full, shall be canceled. In the event
the Debenture is prepaid in part, the Debenture shall be returned to the Holder
appropriately marked to show partial prepayment and reduction of principal.
2. Mandatory Prepayment. (a) In the event of the consummation of
a Control Transaction, Buckhead shall, upon at least 10 days' prior written
request of the Holder, prepay the principal amount of this Debenture in whole,
together with all interest accrued thereon to the prepayment date plus a
prepayment premium equal to 1% of such principal amount. "Control Transaction"
means:
(i) The merger or consolidation of Buckhead under
circumstances in which the common stockholders of Buckhead
receive as a result of such merger or consolidation,
distributions of cash, securities, or other property with an
aggregate fair value exceeding 50% of the aggregate fair value of
the common stockholders' equity of Buckhead immediately prior to
such merger or consolidation;
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(ii) the sale, transfer or other disposition of assets
(including, without limitation, the merger, sale of capital
stock, or sale of assets of any subsidiary of Buckhead)
accounting for more than 50% of the consolidated revenues or net
income of Buckhead and its subsidiaries for their most recently
ended fiscal year; or
(iii) the sale or transfer in a single transaction or
series of transactions of a majority of the then outstanding
capital stock of Buckhead (other than in an underwritten public
offering).
(b) Buckhead shall give written notice of any proposed or
anticipated Control Transaction or underwritten public offering to the Holder
not less than 30 days prior to the proposed or anticipated date of consummation
of such Control Transaction or underwritten public offering; provided, however,
that failure by Buckhead to give such prior written notice shall not affect or
impair the obligation of Buckhead to make the prepayment at the request of the
Holder required by paragraph (a) above.
3. Covenants.
3.1 Payment of Obligations. Buckhead will pay and discharge, and
will cause each subsidiary to pay and discharge, all their respective material
obligations and liabilities, including, without limitation, tax liabilities,
except where the same may be contested in good faith by appropriate proceedings.
3.2 Maintenance of Property; Insurance. (a) Buckhead will keep,
and will cause each subsidiary to keep, all property useful and necessary in its
business in good working order and condition, ordinary wear and tear excepted.
(b) Buckhead and its subsidiaries will maintain, with
financially sound and responsible insurance companies, insurance in at least
such amounts and against such risks as are usually insured against in the same
geographic region by companies of comparable size that are engaged in the same
or a similar business.
3.3 Conduct of Business and Maintenance of Existence. Buckhead
and its subsidiaries will continue to engage in business of the same general
type as now conducted by Buckhead and its subsidiaries, and will preserve, renew
and keep in full force and effect, their respective corporate existence and
their respective rights, privileges and franchises to the extent necessary or
desirable in the normal conduct of business.
3.4 Compliance with Laws. Buckhead will comply, and will cause
each subsidiary to comply, in all material respects with all applicable laws,
ordinances, rules, regulations, decisions, orders and requirements of
governmental authorities and courts (including, without limitation,
environmental laws) except (i) where compliance therewith is contested in good
faith by appropriate proceedings or (ii) where non-compliance therewith could
not reasonably be expected to have a material adverse effect on the business,
condition (financial or otherwise), operations, performance, properties or
prospects of Buckhead and its subsidiaries in the aggregate.
4. Exchange or Replacement of Debenture. (a) The Holder, at its option,
may in person or by duly authorized attorney surrender this Debenture for
exchange, at the office or agency of Buckhead maintained pursuant to Section
6(a) and receive in exchange therefor a new Debenture in the same aggregate
principal amount as the unpaid principal amount of the Debenture so surrendered,
each such new Debenture to be dated as of the date to which interest has been
paid on the Debenture so surrendered and
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payable to the Holder or its assignee, as the Holder may designate in writing
(subject to the restrictions on transfer set forth in this Debenture and in the
Purchase Agreement).
(b) Upon receipt by Buckhead of evidence satisfactory to it of
the loss, theft, destruction, or mutilation of this Debenture, and (in case of
loss, theft or destruction) of indemnity reasonably satisfactory to it, and upon
reimbursement to Buckhead of all reasonable expenses incidental thereto, and
upon surrender and cancellation of this Debenture, if mutilated, Buckhead shall
make and deliver a new Debenture of like tenor in lieu of this Debenture. Any
Debenture made and delivered in accordance with this paragraph shall be dated
the date hereof.
5. Amendments. This Debenture may not be amended, modified or waived in
any respect unless set forth in writing and signed by (A) Buckhead and (B)
either (i) in the case of any change in the amount or timing of any payment to
be made hereunder, any adverse change in conversion rights hereunder, or any
change in the percentage of outstanding Debentures required to take any action
hereunder, the Holder or (ii) in the case of any other amendment, modification
or waiver, the holders of a majority in principal amount of the Debentures then
outstanding. Any such amendment, modification or waiver shall be binding upon
each future holder of this Debenture.
6. Office or Agency. (a) So long as this Debenture remains outstanding,
Buckhead shall maintain an office or agency (which shall initially be the
principal place of business of Buckhead located at 4243 Dunwoody Club Drive,
Suite 200, Dunwoody, Georgia 30305) where notices, presentations and demands to
or upon Buckhead in respect of this Debenture may be given.
(b) All notices to be given by Buckhead to the Holder in respect
of this Debenture shall be delivered or mailed to the address of the Holder set
forth on the records of Buckhead or such other address as shall be designated in
writing by the Holder to Buckhead.
7. Events of Default. (a) The following shall constitute an "Event of
Default" under this Debenture:
(i) Default shall be made in any payment of principal of
or premium or interest on this Debenture when the same shall
become due and payable, and such principal, interest or premium
shall remain unpaid for 15 days after written notice thereof is
given to Buckhead by the Holder;
(ii) any representation or warranty made by Buckhead under
or in connection with the Purchase Agreement, or any
certification or other instrument furnished in connection with
the Purchase Agreement or the transactions contemplated thereby,
shall prove to have been false or misleading in any material
respect;
(iii) any indebtedness of Buckhead or any subsidiary
exceeding $500,000 in principal amount shall be declared to
become due and payable prior to its stated maturity as a result
of an event of default with respect thereto;
(iv) default shall be made in the due observance or
performance of any covenant or agreement (other than as
contemplated by clause (i) above) to be observed or performed by
Buckhead or any of its subsidiaries for the benefit of the Holder
under this Debenture or the Purchase Agreement and such default
shall remain uncured and unwaived for a period of 30 days after
written notice thereof is given to Buckhead by the Holder, unless
the
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Holder determines that Buckhead has diligently instituted and is
continuing diligently to pursue corrective action sufficient to
cure such default;
(v) Buckhead or any Included Subsidiary (as defined below)
shall (A) voluntarily commence any proceeding or file any
petition seeking relief under Title 11 of the United States Code
or any other Federal or state bankruptcy, insolvency or similar
law, (B) consent to the institution of any such proceeding or the
filing of any such petition, (C) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator or
similar official for Buckhead or such Included Subsidiary or for
all or a substantial part of its properties, (D) file an answer
admitting the material allegations of a petition filed against it
in any such proceeding, (E) make a general assignment for the
benefit of creditors, or (F) admit in writing its inability to
pay its debts as they become due;
(vi) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (A) relief in respect of Buckhead or any
Included Subsidiary, or of all or a substantial part of the
properties thereof, under Title 11 of the United States Code or
any other Federal or state bankruptcy, insolvency or similar law,
(B) the appointment of a receiver, trustee, custodian,
sequestrator or similar official for Buckhead or any Included
Subsidiary or for a substantial part of the properties thereof,
or (C) the winding up or liquidation of Buckhead or any Included
Subsidiary; and an order or decree approving or ordering any of
the foregoing shall be issued by a court having jurisdiction and
continue unstayed and in effect for 60 days; or
(vii) an unappealed final judgment for the payment of
money in excess of $500,000 shall be rendered against Buckhead or
any Included Subsidiary and the same shall remain undischarged or
unbonded for a period of 60 consecutive days during which
execution shall be effectively stayed.
"Included Subsidiary" means, at any time, each subsidiary
of Buckhead listed on the attached Schedule I.
(b) In case of any Event of Default and at any time thereafter
during the continuance of such Event of Default, the holders of a majority in
principal amount of the Debentures then outstanding may, by written notice to
Buckhead, declare the Debentures to be due and payable in full both as to
principal and interest, together with a prepayment premium calculated in the
same manner as the premium provided for in Section 1.1 (whether or not such
acceleration occurs prior to the third anniversary of the Original Issue Date);
provided, however, that no notice need be given to Buckhead if acceleration is
based upon the Events of Default described in clauses (v) or (vi) of paragraph
(a) above, in either of which cases this Debenture shall automatically become
due and payable without any action on the part of the holders.
(c) In case an Event of Default shall have occurred and be
continuing, the Holder may proceed to protect and enforce its rights either by
suit in equity or by action at law, whether for the specific performance of any
covenant or agreement contained in the Purchase Agreement or this Debenture or
in aid of the exercise of any power granted in the Purchase Agreement or in this
Debenture, or proceed to enforce the payment of this Debenture or to enforce any
other legal or equitable right of the Holder. No remedy conferred hereunder is
intended to be exclusive of any other remedy and each such remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or
currently or hereafter existing at law or in equity or by statute or otherwise.
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8. Conversion.
8.1 Election by Holder. The Holder has the right, at any time
until the Maturity Date, to convert this Debenture in accordance with the
provisions of Subsection 8.2 hereof, in whole or in part, into fully paid and
nonassessable shares of the Common Stock of Buckhead (the "Common Stock"). In
the event that Buckhead gives a Prepayment Notice pursuant to Section 1, such
conversion right in respect of the portion of the Debenture being prepaid shall
expire at the close of business on the Prepayment Date, unless Buckhead fails to
make the payment due upon prepayment. The number of shares of Common Stock into
which this Debenture may be converted at any given time shall be determined by
dividing the unpaid principal amount by the Conversion Price. As used herein,
the term "Conversion Price" shall mean a price of $9.00 per share, subject to
adjustment as set forth in Section 10. Accrued but unpaid interest on the
converted principal shall become due and payable upon such conversion.
8.2 Conversion Procedure. Before the Holder shall be entitled to
convert this Debenture into shares of Common Stock, it shall surrender this
Debenture at the office of Buckhead and shall give written notice, to Buckhead
at its principal corporate office, of the election to convert the same, or a
portion thereof (but only in increments of $100,000 of principal balance)
pursuant to this Subsection 8.2, and shall state therein the name or names in
which the certificate or certificates for the shares issuable upon such
conversion (the "Conversion Shares") are to be issued. Buckhead shall, as soon
as practicable thereafter, issue and deliver to the Holder a certificate or
certificates for the number of Conversion Shares to which the Holder shall be
entitled. Such conversion shall be deemed to have been made immediately prior to
the close of business on the date of such surrender of this Debenture and the
receipt of the notice required herein, and the person or persons entitled to
receive the Conversion Shares shall be treated for all purposes as the record
holder or holders of such Conversion Shares as of such date.
8.3 No Fractional Shares. No fractional shares of Common Stock
shall be issued upon conversion of this Debenture. In lieu of Buckhead issuing
any fractional shares to the Holder upon the conversion of this Debenture,
Buckhead shall pay to the Holder in immediately available funds the amount of
outstanding principal that is not so converted. Upon conversion in whole of this
Debenture and the proper issuance of the Conversion Shares and payment in lieu
of fractional shares, Buckhead shall be forever released from all its
obligations and liabilities under this Debenture.
9. Reservation of Common Stock. Buckhead has duly reserved, and shall at
all times duly reserve, a sufficient number of shares of authorized Common Stock
for issuance upon conversion of this Debenture. Upon issuance, sale and delivery
of any Conversion Shares, such Conversion Shares shall be validly issued and
outstanding, fully paid and nonassessable with no personal liability attaching
to the ownership thereof, and shall not be subject to preemptive or any similar
rights of any person or entity. Without limiting the generality of the
foregoing, Buckhead shall take all such action as may be requisite to assure
that the stated or par value per share of Common Stock is at all times equal to
or less than the Conversion Price then in effect.
10. Adjustment of Conversion Price. (a) If, at any time after the
Original Issue Date, the number of outstanding shares of Common Stock is (i)
increased by a stock dividend payable in shares of Common Stock or by a
subdivision or split-up of shares of Common Stock, or (ii) decreased by a
combination or reverse split of shares of Common Stock, then, following the
record date fixed for the determination of holders of Common Stock entitled to
receive the benefits of such stock dividend, subdivision, split-up, combination
or reverse split, the Conversion Price shall be adjusted to a new amount equal
to the product of (A) the Conversion Price in effect on such record date and (B)
the quotient obtained by dividing (x) the number of shares of Common Stock
outstanding on such record date (without giving
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effect to the event referred to in the foregoing clause (i) or (ii)) by (y) the
number of shares of Common Stock which would be outstanding immediately after
the event referred to in the foregoing clause (i) or (ii), if such event had
occurred immediately following such record date.
(b) If, after the Original Issue Date, Buckhead shall issue or be
deemed to have issued (as provided below) an aggregate of 650,000 or more shares
of Common Stock, other than Excluded Stock (as defined below), for an average
consideration per share (the "Average Price") less than the last trading price
of the Common Stock on the Nasdaq Stock Market on the Original Issue Date (as
such amount may be adjusted as described in Section 10(a)) (the "Original Market
Price"), then the Conversion Price shall be lowered to a price equal to the
greater of (x) the Original Market Price and (y) 120% of the Average Price. For
the purposes of any adjustment of the Conversion Price pursuant to this
paragraph, the following provisions shall be applicable:
(i) In the case of the issuance of Common Stock for cash,
the consideration shall be deemed to be the amount of cash paid
therefor without deducting therefrom any discounts, commissions
or other expenses allowed, paid or incurred by Buckhead for any
underwriting or otherwise in connection with such issuance.
(ii) In the case of the issuance of Common Stock for no
consideration, the consideration shall be deemed to be $.01 per
share.
(iii) In the case of the issuance of Common Stock for a
consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair
market value thereof as determined in good faith by the Board of
Directors, irrespective of any accounting treatment.
(iv) In the case of the issuance of options to purchase or
rights to subscribe for Common Stock, securities by their terms
convertible into or exchangeable for Common Stock, or options to
purchase or rights to subscribe for such convertible or
exchangeable securities:
(A) The shares of Common Stock deliverable upon
exercise of such options to purchase or rights to
subscribe for Common Stock shall be deemed to have been
issued at the time such options or rights were issued and
for a consideration equal to the consideration (determined
in the manner provided in clauses (i) through (iii)
above), if any, received by Buckhead upon the issuance of
such options or rights plus the minimum purchase price
provided in such options or rights for the Common Stock
covered thereby.
(B) The shares of Common Stock deliverable upon
conversion of or in exchange for any such convertible or
exchangeable securities or upon the exercise of options to
purchase or rights to subscribe for such convertible or
exchangeable securities and subsequent conversions or
exchanges thereof shall be deemed to have been issued at
the time such securities were issued or such options or
rights were issued and for a consideration equal to the
consideration received by Buckhead for any such securities
and related options or rights (excluding any cash received
on account of accrued interest or accrued dividends), plus
the additional consideration, if any, to be received by
Buckhead upon the conversion or exchange of such
securities or the exercise of any related options or
rights (the consideration
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in each case to be determined in the manner provided in
the clauses (i) through (iii) above).
(C) Upon any change in the exercise price of shares
of Common Stock deliverable upon exercise of any such
options or rights or conversion of or exchange for such
convertible or exchangeable securities, other than a
change resulting from the antidilution provisions thereof,
the Conversion Price shall be readjusted to such
Conversion Price as would have obtained had the adjustment
made upon the issuance of such options, rights or
securities not converted prior to such change been made
upon the basis of such change.
(D) Upon expiration of any such options or rights,
the termination of any such rights to convert or exchange,
or the expiration of any options or rights related to such
convertible or exchangeable securities, the Conversion
Price shall be readjusted to such Conversion Price as
would have obtained had such options, rights, securities
or options or rights related to such securities not been
issued.
(E) No further adjustments of the Conversion Price
shall be made upon the actual issuance of such Common
Stock or of such convertible or exchangeable securities
upon exercise of such options or rights, or upon the
actual issuance of such Common Stock upon conversion or
exchange of such convertible or exchangeable securities.
(v) "Excluded Stock" means shares of Common Stock issued
by Buckhead upon the exercise of the options described in
Schedule 1(b)(ii) of the Purchase Agreement; provided, however,
that the aggregate number of shares of Common Stock issuable upon
exercise of such options shall not exceed 206,000 shares (as the
same may be adjusted for stock dividends, stock splits,
combinations of shares, or similar events).
(c) All calculations under this Section shall be made to the
nearest cent ($.01).
(d) Whenever the Conversion Price shall be adjusted as provided
above, Buckhead shall deliver to the Holder a statement, signed by its President
or Chief Financial Officer, showing in detail the facts requiring such
adjustment and the Conversion Price that shall be in effect after the
adjustment.
11. Adjustment of Conversion Shares. Following any Corporate
Reorganization (as defined below) after the Original Issue Date, this Debenture
shall be convertible into the kind and number of shares of capital stock or
other securities or property which the Holder would have owned or have been
entitled to receive with respect to the Conversion Shares had this Debenture
been converted immediately prior to such Corporate Reorganization. The foregoing
provision shall similarly apply to successive Corporate Reorganizations.
"Corporate Reorganization" means (i) any capital reorganization or
reclassification of the capital stock of Buckhead, other than (A) a change in
par value or from par value to no par value, or (B) as a result of a stock
dividend or subdivision, split-up, or combination of shares, and (ii) any merger
or consolidation of Buckhead pursuant to which the stockholders of Buckhead are
to receive cash, securities, or other properties in exchange for the shares of
capital stock of Buckhead then held by them.
12. Extension of Maturity. Should the principal of or premium or
interest on this Debenture become due and payable on other than a business day,
the maturity thereof shall be extended to the next succeeding business day, and,
with respect to the interest on the principal, interest shall be payable thereon
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at the rate per annum herein specified during such extension. The term "business
day" shall mean any day that is not a Saturday, Sunday or legal holiday in the
State of New York.
13. Costs and Expenses. Buckhead agrees to pay all reasonable costs and
expenses, including reasonable attorneys' fees, incurred by the Holder in
collecting or enforcing this Debenture.
14. No Waivers. No delay by the Holder in exercising any power or right
hereunder shall operate as a waiver of any power or right, nor shall any single
or partial exercise of any power or right preclude other or further exercise
thereof, or the exercise of any other power or right hereunder or otherwise.
15. Transfer of Debenture. Subject to the restrictions on transfer set
forth herein and in the Purchase Agreement, this Debenture and all rights
hereunder are transferable in whole or in part. Any transfer shall be effected
by the Holder in person or by duly authorized attorney by surrendering this
Debenture, properly endorsed, at the agency or office of Buckhead referred to in
Section 6(a). Each taker and holder of this Debenture, by taking or holding the
same, consents and agrees that this Debenture shall be deemed negotiable, and,
when appropriately endorsed the holder hereof may be treated by Buckhead and all
other persons dealing with this Debenture as the absolute owner hereof for any
purposes and as the person entitled to exercise the rights represented by this
Debenture, or to the transfer hereof on the books of Buckhead, any notice to the
contrary notwithstanding; but until such transfer on such books, Buckhead may
treat the registered holder hereof as the owner hereof for all purposes, any
notice to the contrary notwithstanding.
16. Governing Law. This Debenture shall be governed by and construed and
enforced in accordance with the laws of the State of New York. Whenever
possible, each provision of this Debenture shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Debenture shall be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Debenture.
17. Notices. All notices, demands or other communications hereunder
shall be in writing and shall be deemed given when delivered personally, mailed
by certified mail, return receipt requested, sent by overnight courier service,
or telecopied (transmission confirmed and a copy sent by personal delivery,
certified mail or overnight courier service) to the following addresses or such
other address as may be designated in writing by either party in accordance with
the terms of this provision:
Holder: Bay Harbour Management, L.C.
885 Third Avenue, 38th Floor
New York, NY 10022
Attn: Mr. Douglas Teitelbaum
Telefax: (212) 371-7497
Buckhead: Buckhead America Corporation
4243 Dunwoody Club Drive, Suite 200
Dunwoody, Georgia 30305
Attention: President and Chief Executive Officer
Telefax: (770) 393-2480
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IN WITNESS WHEREOF, Buckhead has caused this Convertible
Debenture to be issued as of the date first set forth hereinabove.
BUCKHEAD AMERICA CORPORATION
By:________________________________
Robert Lee
Vice President of Finance and
Chief Financial Officer
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SCHEDULE I
TO
FIVE YEAR CONVERTIBLE DEBENTURE
State of
Included Subsidiary Incorporation
------------------- -------------
BLM Virginia, Inc. Delaware
BLM Prime, Inc. Delaware
CHI - Sandy Springs, Inc. Delaware
BLM-I, Inc. Delaware
BAC Hotel Management, Inc. Delaware
BLM EB Orlando, Inc. Delaware
BLM EB, Inc. Delaware
BLM EB Miami, Inc. Delaware
BLM EB Daytona, Inc. Delaware
BLM-F, Inc. Delaware
BLM-RH, Inc. Delaware
BLM-RF, Inc. Delaware
BAC Franchising, Inc. Delaware
Country Hearth Inns/Texas, Inc. Texas
Country Hearth Inns - Dalton, Inc. Georgia
The Lodgekeeper Group, Inc. Ohio
