AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into as of the
______ day of January, 1997, by and between Vanguard Airlines,
Inc. ("Company"); Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, and
Starwood Investments, L.P., a Kansas limited partnership
(collectively "Guarantors"); and COMMERCE BANK, N.A. (WICHITA,
KANSAS) a national banking association ("Bank");
In consideration of the mutual benefits accruing to each of the
parties, the receipt and sufficiency of which are hereby
acknowledged, and in further consideration of the mutual
performance of this Agreement, the parties hereto agree as
follows:
ARTICLE I
Loan
1.01. Amount. Subject to the terms of this Agreement, Bank
agrees to lend to Company, from time to time until the
termination thereof, such sums as Company may request, but shall
not exceed in the aggregate principal amount at any time
outstanding of TWO MILLION TWO HUNDRED SEVENTY-FIVE THOUSAND
DOLLARS ($2,275,000) (the "Loan").
1.02. Note. On the date of closing, Company shall execute and
deliver its promissory note to Bank, in form and substance
satisfactory to Bank, and in the principal amount of the Loan
(the "Company Note").
1.03. Interest. The Company Note shall bear interest at a per
annum variable rate equal to the Prime Rate as published in the
Money Rates section of The Wall Street Journal, adjustable the
date of any change in the Prime Rate.
Interest on the Company Note shall be computed based upon a year
consisting of 360 days, actual number of days elapsed.
Interest after or during the continuation of any Event of Default
under Section 6.01, shall be at a rate equal to 3% in excess of
the stated rate, but not to exceed the maximum rate allowed by
law, and if not paid monthly, such interest shall be compounded
monthly.
1.04. Repayment. Interest shall be payable in monthly
installments, in arrears, beginning on March 1, 1997, and
continuing on the first day of each month thereafter, until July
31, 1997, when the outstanding principal balance, together with
accrued interest, shall be due and payable in full.
ARTICLE II
Representations and Warranties
In borrowing hereunder the Company represents and warrants to
Bank (which representations and warranties will survive the
delivery of the Company Note and shall continue so long as any
sums remain outstanding under the Company Note or under this
Agreement) that:
2.01. Corporation Standing. Company is a corporation duly
organized and in good standing under the laws of the State of
Delaware and has the power to own its property and to carry on
its business and is qualified to do business and is in good
standing in each jurisdiction in which the character of the
properties owned by it or in which the transaction of its
business makes such qualification necessary, except where failure
to do so would not adversely affect Company's operations.
2.02. Authority. Company has the full power and authority to
execute and deliver this Agreement, and the Company Note
(hereinafter collectively referred to as the "Loan Documents"),
and the same constitute the binding and enforceable obligations
of Company in accordance with their terms.
2.03. Litigation. Except as set forth in Schedule 2.03 attached
hereto, there are no actions, suits or proceedings pending or, to
the knowledge of Company, threatened, or any basis therefor,
against or affecting Company at law or in equity, in any court or
before any governmental department or agency, which may result in
any material adverse change in the properties, assets, business
or condition, financial or otherwise, of Company or the ability
of Company to perform the obligations under this Agreement and/or
the other Loan Documents.
2.04. Conflicting Agreements. There are no bylaw provisions of
Company and no provision of any existing mortgage, indenture,
contract or agreement binding on Company or affecting its
property, which would conflict with or in any way prevent the
execution, delivery, or carrying out of the terms of this
Agreement and the other Loan Documents.
2.05. Other. All written statements by Company contained in any
certificate, statement, document or other instrument delivered by
or on behalf of Company at any time pursuant to this Agreement or
the other Loan Documents shall constitute representations and
warranties made by Company hereunder.
2.06. Regulation U. No part of the proceeds of the Loan will be
used to purchase or carry any margin stock or to extend credit to
others for the purpose of purchasing or carrying any such margin
stock or to reduce or retire any indebtedness incurred for any
such purpose. If requested by Bank, Company will furnish to Bank
a statement in conformity with the requirements of Federal
Reserve Form U-1 referred to in Regulation U to the foregoing
effect.
ARTICLE III
Guaranty of Payment
3.01. Guaranties. The Company Note and all other indebtedness
arising hereunder or in connection herewith is hereby supported
by this guaranty of repayment by each of the Guarantors limited
to the following percentages of the outstanding indebtedness owed
on the Company Note, including principal, interest, and
reasonable attorney fees and expenses incurred in connection with
collection of the indebtedness ("Obligation"):
Xxxxxxx X. Xxxxxx 54.95%
Xxxxxx X. Xxxxxx 28.57%
Starwood Investments, L.P. 16.48%
In connection with this guaranty of repayment, each Guarantor, on
the date of this Agreement shall execute a line of credit
promissory note ("Personal Note") in form and substance
acceptable to Bank, limited to the percentages set forth above.
Bank may unilaterally, at any time and at Bank's sole discretion,
regardless of whether or not the Company Note is due, by
acceleration or otherwise, without prior notice or consent of the
Guarantors, advance funds on each Personal Note based on the
percentages set forth above, in such amounts as necessary to pay
the Obligation owed on the Company Note and assign the Company
Note, without representation or warranty, to Guarantors. The
Personal Notes shall have maturity dates one year from the date
of making advances to pay the Company Note, or July 31, 1998,
whichever is earlier, and shall include such other terms as more
fully set forth in the Personal Notes.
ARTICLE IV
Closing
The Bank will not be obligated to make the Loan until it has
received fully executed copies of all documents required by this
Agreement and any other documents, instruments and reports as
Bank may reasonably require, including, but not limited to:
(A) Certificate of Good Standing for the Company issued by the
Secretary of State where Company is incorporated.
(B) Borrowing Resolution of Company in form satisfactory to Bank.
(C) Fully and properly executed Loan Documents.
(D) Fully and properly executed Personal Notes from each
Guarantor in form acceptable to Bank.
(E) Certificate of good standing for guarantor, Starwood
Investments, L.P.
(F) Certification of guarantor, Starwood Investments, L.P. as to
authenticity and completeness of partnership agreement and
authorization to execute Guaranty Agreement and Personal Note.
ARTICLE V
Affirmative Covenants
The Company and Guarantors, as applicable, covenant and agree
that during the term of this Agreement and until all of the
Obligations shall have been paid in full, they will duly perform
and observe each and all of the covenants and agreements
hereinafter set forth.
4.01. Financial Reporting. Deliver to Bank financial
information in such form and detail and at such times as are
satisfactory to Bank, including, without limitation:
(A) Within ninety (90) days after the end of each calendar year,
the personal financial statements of each of the Guarantors for
the preceding year; and from time to time such further
information regarding the financial condition, business and/or
properties of each of the Guarantors as Bank may reasonably
request; and
(B) Such other financial information concerning the Guarantors as
Bank may reasonably require from time to time.
All financial statements required hereunder shall be complete and
correct in all respects and shall be prepared in reasonable
detail.
4.02. Corporate Existence; Compliance With Laws. Take or cause
to be taken such action as from time to time may be necessary to
maintain its organizational existence as a corporation (provided,
however, Company may change its organizational existence with the
prior written consent of Bank, which consent shall not be
unreasonably withheld or delayed) and use due diligence to comply
with all laws pertaining to the business or property of Company,
or any part thereof, and with all other lawful government
requirements relating to its business and property.
4.03. Litigation; Adverse Events. Notify Bank immediately of
the commencement of any material action, suit, proceeding or
investigation against Company or Guarantors, or the making of any
counterclaim against Company or Guarantors and promptly advise
Bank in writing of any other condition, event or act which comes
to the Company's of Guarantors' attention that would or might
prejudice Bank's rights under this Agreement or the Loan
Documents.
4.04. Notification. Notify Bank immediately if it becomes aware
of the occurrence of any Event of Default (as defined under
Article VI hereof) or of any fact, condition, or event that, only
with the giving of notice or passage of time or both, would
become an Event of Default, or if it becomes aware of a material
adverse change in the business prospects, financial condition
(including, without limitation, proceedings in bankruptcy,
insolvency, reorganization or the appointment of a receiver or
trustee of Company or any Guarantor), or results of operations of
Company, or the failure of Company to observe any of its
undertakings under the Loan Documents.
ARTICLE V
Negative Covenants
So long as this Agreement remains in effect, or as long as there
is any principal or interest due under the Company Note or
Personal Notes, Company and Guarantors, as applicable, shall not,
without the prior written consent of Bank:
5.01. Fundamental Changes. Wind up, liquidate, or dissolve
Starwood Investments, L.P. or as to all Guarantors, sell,
transfer, convey or lease all or a substantial part of their
respective assets, to another person or entity.
5.02. Conduct of Business. Materially alter the character in
which Company conducts its business or the location of such
business or the nature of such business conducted at the date
hereof.
ARTICLE VI
Default
6.01. Events of Default. The occurrence of one or more of the
following events ("Events of Default") shall constitute a
"Default" by the Company hereunder:
(A) nonpayment of interest (within the ten (10) day grace period)
or nonpayment of principal when due on the Company Note; or
(B) any representation or warranty made by the Company or any
Guarantor herein or in any writing furnished in connection with
or pursuant to this Agreement shall prove to be false in any
material respect as of the date on which it is made; or
(C) a breach by Company or any Guarantor in the performance or
observance of any agreement, term, covenant or condition
contained herein (other than in (A) above), and such breach shall
not have been remedied within thirty (30) days after written
notice thereof shall have been given by Bank to Company,
provided, however, if Company or the applicable Guarantor, as the
case may be, has commenced to remedy such breach, and continues
to
diligently pursue such remedy, the time period to remedy such
breach shall be extended for an additional period of time, not to
exceed sixty (60) days,
necessary for Company to complete the remedy of such breach; or
(D) any report, certificate, financial statement or other
instrument furnished in connection with this Agreement shall
prove to be false or misleading in any material respect; or
(E) Company or any Guarantor shall (i) generally not pay, or
admit in writing its inability to pay its debts as such debts
become due; or (ii) make an assignment for the benefit of
creditors, or petition or apply to any tribunal for the
appointment of a custodian, receiver, or trustee for it or for a
substantial part of its assets; or (iii) commence any proceeding
under any bankruptcy, reorganization, arrangement, readjustment
of debt, dissolution, or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect; or (iv) have
any such petition or application filed or any such proceeding
commenced against it which is not discharged within thirty (30)
days; or (v) take any action indicating its consent to, approval
of, or acquiescence in any such proceeding, or order for relief,
or the appointment of a custodian, receiver, or trustee for all
or any substantial part of its properties; (vi) suffer any
judgment, writ of attachment, execution or similar process to be
issued or levied against all or a substantial part of its
property which is not released, stayed or bonded within thirty
(30) days; or
(F) Company or any Guarantor suffers any judgment, writ of
attachment or execution or similar process to be issued or levied
against all or a substantial part of its property and which is
not released, stayed, bonded, insured or vacated within thirty
(30) days.
6.02. Remedies. In the event the Obligations are not paid when
due, whether by acceleration or otherwise, Bank may resort to any
and all security and to any remedy existing at law or in equity
for the collection of the Company Note according to its tenor and
enforcement of the covenants and provisions hereof, including,
but not limited to the option of funding the Personal Notes of
Guarantors and assigning the Loan Documents to Guarantors. In
addition to the remedies provided herein, in the event the
Company Note is due and payable, the Bank shall have the right of
setoff, without demand or notice to anyone, against the funds of
the Company on deposit with it. In the event of the Bankruptcy of
Company or any other event which acts as a stay or injunction
prohibiting the Bank from making demand on the Company Note, such
act or actions of the Company shall not act as a stay or
otherwise prevent the Bank from funding the Personal Notes in
order to pay the Obligation owed
on the Company Note. Notwithstanding the foregoing, even if no
event of default exists, Bank, in its sole discretion, may fund
the Personal Notes in order to pay the Obligations, at any time.
6.03. Expenses of Collection. All reasonable costs, expenses
and liabilities incurred by Bank in collecting or attempting to
collect on the Company Note, including costs and expenses
incurred in proposing or selling or otherwise deriving upon any
security, and all reasonable attorneys' fees in connection with
such matters, shall constitute a demand obligation of the Company
and shall bear interest from the date of expenditure until paid
at the per annum rate of 3% in excess of the stated rate in the
Company Note, but not to exceed the maximum rate allowed by law.
6.04. Waiver. Any waiver of an Event of Default by Bank shall
not extend to or affect any subsequent Event of Default. No
failure or delay by Bank in exercising any right hereunder shall
operate as a waiver, nor shall any single or partial exercise of
any right preclude the exercise of any other right hereunder.
ARTICLE VII
Miscellaneous
7.01. Payment on Holidays. Whenever any payment to be made
pursuant to this Agreement or the Note shall be stated to be due
on a public holiday, Saturday or Sunday, such payment may be made
on the next succeeding business day of Bank and such extension of
time shall in such case be included in computing interest, if
any, in connection with such payment.
7.02. Delay; Waiver. No omission or delay by the Bank in
exercising any right, power or privilege under this Agreement,
the Note or any other agreement executed in connection herewith,
will impair such right, power or privilege or be construed to be
a waiver or acquiescence therein and any single or partial
exercise of any right, power or privilege will not preclude other
or further exercise of any other right, power or privilege and no
waiver will be valid unless in writing and signed by Bank and
then only to the extent specified. All remedies herein by law
afforded will be cumulative.
7.03. Binding Effect. This Agreement shall continue until
payment in full of all Obligations and shall be binding upon and
inure to the benefit of Company, Guarantors and their respective
heirs, legal representatives, successors and
assigns and shall be binding upon and inure to the benefit of
Bank, its successors and assigns.
7.04. Notices. All notices, requests or demands required or
permitted by this Agreement shall be given to, or made upon, the
respective parties hereto by depositing the same in the United
States mail, postage prepaid, or by overnight (next day) courier,
charges prepaid, to the following addresses:
Commerce Bank, N.A.
000 Xxxxx Xxxx
X.X. Xxx 000
Xxxxxxx, Xxxxxx 00000
Attention: Commercial Loan Department
Vanguard Airlines, Inc.
00 X.X. Xxxx Xxxxxx
Mezzanine Level, KCI Airport
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
Xxxxxxx X. Xxxxxx
X.X. Xxx 0000
Xxxxxxx, Xxxxxx 00000
Xxxxxx X. Xxxxxx
Building 1900
0000 Xxxx 00xx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxx 00000-0000
Starwood Investments, L.P.
X.X. Xxx 0000, Xxxxxx Xxxxxxx
Xxxxxxx, Xxxxxx 00000-0000
7.05. Amendments. The parties hereto may from time to time
enter into written agreements supplemental hereto for the purpose
of modifying or adding any provision to this Agreement or
changing the rights and privileges of the parties hereto. Any
such supplemental agreement shall be binding upon the parties
hereto and the Bank and their respective successors and assigns.
7.06 Headings. Article and Section headings in this Agreement
are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose.
7.07. Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the
validity or enforceability of such provisions in any other
jurisdiction.
7.08. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Kansas.
7.09. Counterpart Agreements. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an
original and all of which together shall constitute one and the
same Agreement.
7.10 Jury Trial Waiver. THE BORROWER AND BANK HEREBY AGREE TO
TRIAL BY COURT AND IRREVOCABLY WAIVE JURY TRIAL IN ANY ACTION OR
PROCEEDING (INCLUDING BUT NOT LIMITED TO ANY COUNTERCLAIM)
ARISING OUT OF OR IN ANY WAY RELATING TO OR CONNECTED TO THIS
AGREEMENT,
ANY RELATIONSHIP OR TRANSACTION BETWEEN BORROWER AND BANK, THE
ORIGINATION, ADMINISTRATION OR ENFORCEMENT OF THE INDEBTEDNESS
EVIDENCED OR SECURED BY THIS AGREEMENT, OR ANY OTHER MATTER.
7.11 Expenses. Company shall pay all reasonable attorney fees
and expenses of Bank in connection with the preparation of this
Agreement and related documents not to exceed $3,000.
7.12. Statutory Notice. ORAL AGREEMENTS OR COMMITMENTS TO LOAN
MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A
DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT
ENFORCEABLE. TO PROTECT YOU (BORROWER) AND US (CREDITOR) FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH
COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE
COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US,
EXCEPT AS WE MAY LATER
AGREE IN WRITING TO MODIFY IT. BY SIGNING BELOW, YOU AND WE
AGREE THAT THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN US.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed on the day and year first above written.
VANGUARD AIRLINES, INC.
By: _______________________________
__________________, Vice President
COMMERCE BANK, N.A.
By: _______________________________
Title: _______________________________
_____________________________________
Xxxxxxx X. Xxxxxx, Individually
_____________________________________
Xxxxxx X. Xxxxxx, Individually
STARWOOD INVESTMENTS, L.P.
By: Xxxxxx X. Xxxxx Revocable Trust, as
General Partner and Managing Partner
By: __________________________
Xxxxxx X. Xxxxx, Trustee
