LINE OF CREDIT NOTE
$2,275,000 August 1, 1997
Maximum Amount and Interest Wichita, Kansas
FOR VALUE RECEIVED, VANGUARD AIRLINES, INC., a Delaware
corporation ("Company") hereby promises to pay to the order of
COMMERCE BANK, N.A. ("Bank"), at its offices in Wichita, Kansas,
on demand due to an Event of Default (as defined in the Agreement
dated January 30, 1997), or on January 31, 1998, whichever first
occurs, the aggregate unpaid principal amount and accrued
interest of all borrowings hereunder. Company may, at any time,
make principal prepayments without penalty.
1. Interest. Interest on this Line of Credit Note shall
be calculated on the actual number of days outstanding on the
basis of a year consisting of 360 days. The outstanding
principal amount hereunder shall bear interest at a per annum
variable rate equal to the Prime Rate, as published in the
Monthly Rates section of The Wall Street Journal, adjustable the
date of any change in such rate. Accrued interest shall be
payable the first day of each month, in arrears, until and
including the maturity of this Line of Credit Note, whether by
acceleration or otherwise. After any expressed or accelerated
maturity, this Line of Credit Note shall bear interest at 3%
above the stated rate, but not to exceed the maximum rate allowed
by law, and if not paid monthly, such interest shall be
compounded monthly. Company shall have a ten (10) day grace
period to make any interest payment hereunder.
2. Advances. So long as there is no Event of Default, the
Company may, from the date of this Line of Credit Note through
January 31, 1998 borrow, repay and reborrow the same not to
exceed at any time outstanding $2,275,000.
3. Credit to Account. All advances under this Line of
Credit Note will be credited to checking account no. 677494745
carried on the books of Bank in the name of Company. All
advances and repayments hereunder shall be recorded in a
reasonable manner selected by Bank, and as between Company and
Bank such endorsements or recordings shall be prima facie
evidence of the amount advanced and repaid hereunder and the then
outstanding and unpaid balance of sums advanced or readvanced
hereunder, absent manifest error by Bank. Payments will be
applied first to interest and then to principal.
4. Costs of Collection. Unless prohibited by law, Company
will pay on demand all costs of collection, legal expenses and
reasonable attorneys' fees incurred or paid in collecting and/or
enforcing this Line of Credit Note. Furthermore, Bank reserves
the right to offset without notice all funds held by Bank against
matured debts owing to Bank by Company.
5. Waivers. Company wives presentment, protest, demand
and notice of dishonor or default.
6. Jury Trial Waiver. THE COMPANY AND BANK XXXXXX 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
LINE OF CREDIT NOTE, ANY RELATIONSHIP OR TRANSACTION BETWEEN
COMPANY AND BANK, THE ORIGINATION, ADMINISTRATION OR ENFORCEMENT
OF THE INDEBTEDNESS EVIDENCED OR SECURED BY THIS LINE OF CREDIT
NOTE, OR ANY OTHER MATTER.
7. Choice of Law. This Line of Credit Note shall be
governed by, and construed in accordance with, the laws of the
State of Kansas.
IN WITNESS WHEREOF, Company has duly caused this Line of
Credit Note to be executed and delivered at the place specified
above and as of the date first written above.
Vanguard Airlines, Inc.
By:\s\Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President and
Chief Financial Officer
