SUBSCRIPTION AGENT AGREEMENT
This SUBSCRIPTION AGENT AGREEMENT (the "Agreement") is made
and entered into this ___ day of September, 1997, by and between
Vanguard Airlines, Inc., a corporation organized under the laws
of Delaware (the "Company") and UMB Bank, N.A., a national
banking association organized and existing under the laws of the
United States of America, as subscription agent (the
"Subscription Agent").
W I T N E S S E T H :
WHEREAS, the Company has outstanding 15,227,857 shares of
common stock, $0.001 par value (the "Common Stock") and it
desires to offer nontransferable subscription rights to the
holders of the Common Stock (the "Subscription Rights"); and
WHEREAS, the Subscription Rights are to be offered by the
Company through a rights offering (the "Rights Offering"), and
each holder desiring to exercise such Subscription Rights (the
"Applicant") will execute an exercise form attached hereto as
EXHIBIT A (the "Exercise Form") with the Company; and
WHEREAS, in compliance with the terms of the proposed
offering set forth in the Rights Offering Prospectus,
dated _____________ (the "Prospectus"), the Company will (i) offer
each Rights holder the opportunity to subscribe for the purchase
of Common Stock (the "Subscription Privilege") and for excess
shares, if any (the "Oversubscription Privilege"); and (ii)
establish a segregated escrow account with the Subscription Agent
(the "Subscription Account") into which subscription application
payments (the "Subscription Proceeds") and the Exercise Form (the
Subscription Proceeds and the Exercise Form, collectively
referred to as the "Subscriptions") will be deposited; and
WHEREAS, the offering period for Subscriptions will begin on
the close of business on the date, October ____, 1997 and will
terminate at the close of business on the date November ____,
1997 (the "Offering Period"); and
WHEREAS, upon the happening of certain conditions enumerated
in the Prospectus, the Company shall deliver an affidavit to the
Subscription Agent (the "Affidavit") instructing the Subscription
Agent to deliver the portion of the Subscription Proceeds to the
Company representing the Subscription Privilege and on or after
such date a second Affidavit in connection with the portion of
the Subscription Privilege related to the Oversubscription
Privilege, and following receipt of such instructions to
terminate the Subscription Account (the "Closing Date"), which
date is to be selected by the Company and to be promptly
following the end of the Offering Period; and
WHEREAS, the Company desires that UMB Bank, N.A. serve as
Subscription Agent, and UMB Bank, N. A. has agreed to act as
subscription agent in connection with and pursuant to the terms
of this Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements herein contained, the parties
hereto hereby agree as follows:
l. The Company represents and warrants that:
a) the Company is duly organized under the laws of
the state of Delaware and is authorized to do business in
and is in good standing with the laws of the state of
Missouri;
b) all corporate action has been taken by the Company
and the Company is duly authorized to enter into this
Agreement and all other documents related to the
transactions described herein;
c) this Agreement and all other documents related to
the transactions described herein have been duly executed
and delivered by the Company and constitute the legal, valid
and binding obligations of the Company, enforceable in
accordance with their respective terms; and
d) the execution, delivery and performance of this
Agreement and all other documents related to the
transactions described herein by the Company do not and will
not breach or violate or cause a default under its charter
or by-laws or any provision of any agreement, instrument,
judgment, injunction or order applicable to or binding upon
the Company.
2. All Subscriptions received by the Subscription Agent
shall be deposited by the Subscription Agent in the Subscription
Account. In addition, the Company shall deliver to the
Subscription Agent such other information regarding any Applicant
as the Subscription Agent may from time to time request in
writing. The Subscription Agent shall provide the Company a
statement of the assets held and transactions of the Subscription
Account as the Company shall from time to time request in
writing.
3. Notwithstanding the provisions of Paragraph 3 hereof,
if at any time the Company shall provide written notice to the
Subscription Agent that any Exercise Form is invalid or
unacceptable, in whole or in part, or that any Exercise Form
deposited with the Subscription Agent cannot be lawfully
accepted, in whole or in part, the Subscription Agent shall
promptly (within not less than ten (10) days) deliver to the
Applicant submitting such Subscription, without deduction or
interest thereon, the Subscription Proceeds (or portion thereof)
which have been rejected.
4. Upon acceptance of any Exercise Form and the deposit of
the related Subscription Proceeds into the Subscription Account,
each Applicant shall become a party to and bound by the terms of
this Agreement.
5. Promptly upon the Subscription Agent's receipt of
Subscription Proceeds, the Subscription Agent shall proceed to
collect upon such payment instrument(s). All such collection
efforts shall be subject to the Subscription Agent's usual
collection procedures; provided, however, that if any payment
instrument at any time delivered to Subscription Agent hereunder
shall be returned to Subscription Agent as being uncollectable,
Subscription Agent shall attempt a second time to collect such
item before returning such item to the Applicant as
uncollectable. Subject to the foregoing, Subscription Agent
shall promptly give written notice to Company of any uncollected
item delivered to Subscription Agent under this Agreement.
Subscription Agent shall not be required or have a duty to take
legal action to enforce payment of any uncollected item delivered
to it under this Agreement. The Subscription Agent shall have no
duty or obligation to collect (except for collection in the
ordinary course of its banking business) any amounts at any time
due in respect of any Subscription, and shall not be responsible
for any defaults thereunder or hereunder by any other party, or
for the application of any funds received by it from the
Applicants after payment of such funds by it to the Company as
herein provided. In the event that Subscription Agent shall have
disbursed Subscription Proceeds to the Company or returned such
monies to the Applicant in accordance with this Agreement with
respect to any payment instrument and subsequently it shall be
determined that such item shall be uncollectable, the Company
shall upon Subscription Agent's demand reimburse it for the
amount so disbursed.
6. Subscription Agent shall invest all Subscription
Proceeds deposited with it hereunder, and earnings thereon, if
any, in Fidelity Treasury Portfolio I money market.
7. If Subscription Proceeds for not less than ten million
Dollars ($10,000,000.00) of Common Stock are received by the
Subscription Agent and accepted by the Company, the Subscription
Agent, upon receipt of an Affidavit from the Company on or before
the termination of the Offering Period verifying: (a) that an
aggregate of at least ten million Dollars ($10,000,000.00) of
Subscription Proceeds have been delivered to the Subscription
Agent and cleared the US banking system; and (b) and all other
prerequisites related to the sale and delivery of the Common
Stock have been completed, will pay over to the Company the
portion of the Subscription Proceeds related to such Affidavit
then on deposit in the Subscription Account, together with all
interest or other income, if any, earned on such portion of the
Subscription Proceeds. In the event that the Affidavit is not
received by the Subscription Agent on or before the end of the
Offering Period, the Subscription Agent shall pay the
Subscription Proceeds without the earnings thereon to the
Applicants.
8. Following payment of the portion of the Subscription
Proceeds representing the Subscription Privilege to the Company,
the Subscription Agent shall hold the portion of the Subscription
Proceeds related to the Oversubscription Privilege, until either
the Subscription Agent receives an Affidavit from the Company
instructing it to deliver the Oversubscription Privilege for the
balance of the common stock available, and if such amount of
Common Stock is less than the Subscription Proceeds, on a pro
rata basis from each Subscriber and returning the balance without
interest or earnings thereon to each Subscriber, or an Affidavit
from the Company to return the balance of the Subscription
Proceeds to each Subscriber without earnings thereon.
9. Prior to delivery to the Company of the Subscription
Proceeds, the Company shall have no title, right, claim, lien or
any other interest in the funds held in escrow hereunder, and
such funds shall under no circumstances be available to the
Company or its creditors for payment or reimbursement for
liabilities or indebtedness.
10. It is understood and agreed, further, that the
Subscription Agent shall:
a. be under no duty to deliver any Exercise Form, or
to pay and transfer any monies hereunder, unless the same
shall have been first received by the Subscription Agent
pursuant to the provisions of this Agreement;
b. be under no duty to enforce payment of any
Exercise Form which is to be paid to and held by it
hereunder;
c. be under no duty to accept any information from
any person or entity other than the Company, or their
designated agents, and then only to the extent and in the
manner expressly provided for in this Agreement;
d. act hereunder as a depository only and be
protected in acting upon any Exercise Form and the
information contained therein without responsibility to
determine the validity or sufficiency of the same, and be
protected in acting upon any other notice, opinion, request,
certificate, approval, consent or other paper delivered to
it and represented to it to be genuine and to be signed by
the proper party or parties;
e. be deemed conclusively to have given and delivered
any notice required to be given or delivered hereunder if
the same is in writing, signed by any one of its authorized
officers and (i) mailed, by registered or certified mail,
postage prepaid, or (ii) by hand delivery, in a sealed
wrapper, addressed to the Company (with a copy mailed to the
Company at the address set forth in Paragraph 11 hereof) and
manually receipted for by the Company;
f. be indemnified and held harmless by the Company
against any claim made against it by reason of its acting or
failing to act in connection with any of the transactions
contemplated hereby and against any loss, liability, cost,
suit or expense, including attorneys' fees and expenses in
connection with defending itself against any claim of
liability it may sustain in carrying out the terms of this
Agreement except such claims which are occasioned by its
gross negligence or willful misconduct;
g. have no liability or duty to inquire into the
terms and conditions of the Rights Offering, or any of the
exhibits annexed thereto, and that its duties and
responsibilities shall be limited to those expressly set
forth under this Agreement and are purely ministerial in
nature;
h. be permitted to consult with counsel of its
choice, including in-house counsel, and shall not be liable
for any action taken, suffered or omitted by it in good
faith in accordance with the advice of such counsel,
provided, however, that nothing contained in this
Subparagraph h, nor any action taken by the Subscription
Agent, or of any such counsel, shall relieve the
Subscription Agent from liability for any claims which are
occasioned by its gross negligence or willful misconduct,
all as provided in Subparagraph f above;
i. not be bound by any amendment or revocation of
this Agreement, unless the same shall be in writing and
signed by all of the parties to this Agreement;
j. be entitled to refrain from taking any action
other than to keep all property held by it in escrow
hereunder until it shall be directed otherwise in writing by
the Company, or by a final judgment by a court of competent
jurisdiction, provided that if it shall be uncertain as to
its duties and rights hereunder (including, without
limitation, the receipt of conflicting instructions or
directions from any of the parties hereto or any third
parties);
k. have no liability for following the instructions
herein contained or expressly provided for, or written
instructions given by, the Company;
l. have the right, at any time, to resign hereunder
by giving written notice of its resignation to the Company
at their address as set forth in Paragraph 11 hereof, at
least thirty (30) days before the date specified for such
resignation to take effect, and upon the effective date of
such resignation:
(i) all cash and other funds and all other
property then held by the Subscription Agent hereunder
shall be delivered by it to such successor Subscription
Agent as may be designated in writing by the Company,
whereupon the Subscription Agent's obligations
hereunder shall cease and terminate;
(ii) if no such successor Subscription Agent has
been designated by such date, all obligations of the
Subscription Agent hereunder shall, nevertheless, cease
and terminate, and the Subscription Agent's sole
responsibility thereafter shall be to keep all property
then held by it and to deliver the same to a person
designated in writing by the Company or in accordance
with the directions of a final order or judgment of a
court of competent jurisdiction; yet, if no such
designation, order or judgment is received by
Subscription Agent within thirty (30) days after its
giving such resignation notice, it is unconditionally
and irrevocably authorized and empowered to petition a
court of competent jurisdiction for directions.
m. be reimbursed by the Company upon its request for
all reasonable costs, fees, charges, expenses, disbursements
and advances (including , but not limited to, acceptance and
administration fees and expenses as provided in Exhibit B
hereto, as well as legal, consultant and advisor fees and
charges) incurred or made by it in accordance with any
provision of this Agreement, or as a result of the
acceptance of this Agreement.
11. All deliveries and notices to the Subscription Agent
shall be effective upon receipt by the Subscription Agent, if in
writing and shall be sent or delivered to:
UMB Bank, N.A.
Corporate Trust Department
000 Xxxxx Xxxx.
Xxxxxx Xxxx, XX 00000
Attn: K. Xxxxx Xxxxxxx
Any notice given on behalf of the Company shall be
signed by one or more of the officers of the Company and such
notice shall be sufficient for all purposes hereunder, including
any notice given hereunder to pay over to the Company the
Subscription Proceeds then held in the Subscription Account
pursuant to this Agreement.
All deliveries and notices hereunder to the Company
shall be in writing and shall be sent or delivered to:
Vanguard Airlines, Inc.
0000 Xxxxxx Xx., 0xx Xxxxx
Xxxxxxx, XX 00000
Attn: Rights Offering Department
12. Nothing in this Agreement is intended to or shall
confer upon anyone other than the parties hereto any legal or
equitable right, remedy or claim. This Agreement shall be
construed in accordance with the laws of the State of Missouri
and may be amended or revised only by a writing executed by the
parties hereto.
13. If any provision of this Agreement shall be held or
deemed to be invalid, inoperative or unenforceable as applied in
any particular case in any jurisdiction or jurisdictions or in
all jurisdictions, or in all cases because it confilicts with any
other provision or provisions hereof or any constitution or
statute or rule of public policy, or for any other reason, such
circumstances shall not have the effect of rendering the
provision in question inoperative or unenforceable in any other
case or circumstance or of rendering any other provision or
provisions herein contained invalid, inoperative or unenforceable
to any extent whatever.
The invalidity of any one or more phrases, sentences, clauses or
Sections in this Agreement shall not affect the remaining portions of
this Agreement or any part thereof.
IN WITNESS WHEREOF, this Agreement has been executed by or on
behalf of each of the parties hereto as of the day and year first
above written.
VANGUARD AIRLINES, INC.,
Company
By: ___________________________
Title __________________________
UMB BANK, N.A., as Subscription Agent
By: ___________________________
Title __________________________
EXHIBIT A
EXHIBIT B
Acceptance Fee
review Subscription Agent Agreement ($110.00 per hour)
Annual Fee
establish and maintain account $500.00
Transaction Fees
(a) per subscriber deposit 5.00
(b) per subscriber interest payment 10.00
(c) per subscriber subscription rejection 10.00
(d) per returned check 10.00
(e) per Form 1099 (Int., B or Misc.) 2.00
In addition to the specified fees, all expenses related to the
administration of the Agreement and the Subscription Account
(other than normal overhead expenses of the regular staff) such
as, but not limited to, travel, postage, shipping, courier,
telephone, facsimile, supplies, legal fees, accounting fees,
etc., will be reimbursable. The acceptance and annual fee will
be payable by Vanguard Airlines, Inc. at the termination of the
escrow. Other fees and expenses will be billed as incurred or at
the termination of the escrow.
