Exhibit 4.1
NOTE
$10,000,000.00 Dallas, Texas September 11, 1997
FOR VALUE RECEIVED, the undersigned WESTERN PACIFIC AIRLINES, INC., a
Delaware corporation (referred to herein as "Borrower") hereby unconditionally
promises to pay to the order of BANK ONE, TEXAS, N.A., a national banking
association (referred to herein as "Bank"), at its banking offices in Dallas
County, Texas, the principal sum of TEN MILLION AND NO/100 DOLLARS
($10,000,000.00), or so much thereof as may be advanced hereunder from time to
time, in lawful money of the United States of America together with interest
from the date hereof until paid at a fluctuating rate per annum which shall from
day to day be equal to the lesser of (a) the Maximum Rate (as defined below); or
(b) a rate, calculated on the basis of a year consisting of 360 days equal to
either (i) the sum of (A) the Eurodollar Rate (as hereinafter defined) plus (B)
one and one-eighths percent (1.125%), or (ii) the Prime Rate (as hereinafter
defined) as elected from time to time by the Borrower pursuant to the provisions
of this Note; each change in the rate to be charged on this Note to become
effective notice to Borrower on the effective date of each change in the Maximum
Rate, the Eurodollar Rate or the Prime Rate, as the case may be; provided,
however, that if at any time a rate of interest specified in (b) preceding shall
exceed the Maximum Rate as provided in (a) preceding, then any subsequent
reduction in the Eurodollar Rate or the Prime Rate, as the case may be, shall
not reduce the rate of interest on this Note below the Maximum Rate until the
total amount of interest accrued on this Note exceeds the amount of interest
which would have accrued on this Note if the rate specified in (b) preceding had
at all times been in effect. The term "Maximum Rate," as used herein, shall
mean at the particular time in question the maximum rate of interest which,
under applicable law, may be charged on this Note. If such maximum rate of
interest changes after the date hereof, the Maximum Rate shall be automatically
increased or decreased, as the case may be, without notice to Borrower from time
to time as of the effective time of each change in such Maximum Rate. If
applicable law ceases to provide for such a maximum rate of interest, the
Maximum Rate shall be equal to eighteen percent (18%) per annum. All past due
principal and interest of this Note shall bear interest from the date of
maturity until paid at a rate of interest equal to Maximum Rate. All payments
of principal and interest due hereunder are payable at the offices of Bank at
0000 Xxxx Xxxxxx, 0xx Xxxxx, Bank One Center, P.O. Box 655415, Dallas, Texas,
75265-5415, attention: Energy Department, or at such other address as Bank shall
designate in writing to Borrower.
The principal of this Note shall be due and payable within seven (7) days
of demand, or if no demand is made, then on March 11, 1998 (the "Maturity
Date"); PROVIDED, HOWEVER, that upon the consummation of the proposed merger of
Frontier Airlines, Inc. and Borrower as described in that certain Merger
Agreement dated June 30, 1997 (the "Merger Agreement"), the availability under
this Note shall immediately be reduced to $5,000,000, and any principal
outstanding on this Note on such date in excess of $5,000,000 shall be repaid by
Borrower to Bank on or before the seventh
(7th) day after such merger consummation. All accrued and unpaid interest on
this Note shall be due and payable (i) at the end of each Eurodollar Interest
Period (as hereinafter defined) for loans bearing interest at the Eurodollar
Rate, or (ii) on the last day of each calendar month for loans bearing interest
at the Prime Rate.
If any amount advanced hereunder is repaid by the Borrower prior to the
date the same becomes due and payable either upon demand or upon the maturity
date, the amount so repaid may not be reborrowed.
The term "Prime Rate" shall mean, as of any date, the fluctuating rate of
interest per annum established from time to time by Bank as its Prime Rate
(which rate of interest may not be the lowest, best or most favorable rate of
interest which Bank may charge on loans to its customers).
The term "Eurodollar Rate" as used herein, shall mean the rate of interest
per annum at which deposits in immediately available and fully transferable
funds in U.S. Dollars are offered to Bank (at approximately 10:00 a.m. Dallas,
Texas time three (3) days prior to the first day of the applicable Eurodollar
Interest Period) in the London Interbank market for delivery on the first day of
each Eurodollar Interest Period in an amount equal to or comparable to the
principal amount due on this Note as of such date. The term "Eurodollar
Interest Period" as used herein, shall mean initially a period commencing on the
date of the first advance on this Note and ending one (1), two (2) or three
(3) months thereafter as selected by the Borrower, and (ii) thereafter, each
period commencing on the day following the last day of the next preceding
Eurodollar Interest Period and ending one (1), two (2) or three (3) months
thereafter as selected by the Borrower; provided, however, that (i) if any
Eurodollar Interest Period would otherwise expire on a day which is not a day
when dealings in U.S. Dollar deposits are carried on in the London Interbank
market ("Business Day"), such Eurodollar Business Period shall expire on the
next succeeding business Day unless the result of such extension would be to
extend such Eurodollar Interest Period into the next calendar month, in which
case such Eurodollar Interest Period shall end on the immediately preceding
Business Day, and (ii) any Eurodollar Interest Period which would otherwise
expire after the maturity date of this Note shall end on the maturity date of
this Note. Borrower shall not be permitted to have outstanding at any time more
than three (3) tranches.
Upon three (3) Business Days' written notice prior to making by the Bank of
the initial loan hereunder or the expiration date of each succeeding Eurodollar
Interest Period, Borrower shall give the Bank notice of the Eurodollar Interest
Period selected for the next succeeding period. If Bank shall not have received
timely notice of the designation of such Eurodollar Interest Period as herein
provided, Borrower shall be deemed to have elected to convert all maturing
tranches to Prime Rate loans.
If any time prior to payment in full of this Note, (A) there is any change
in the applicable law, treaty or regulation or in the interpretation or
administration thereof, or in the event any central bank or other fiscal
monetary or other authority having jurisdiction over the Bank or the loans
represented by this Note shall impose, modify or deem applicable in any reserve
requirement of the Board of
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Governors of the Federal Reserve System on any loans bearing interest at a
Eurodollar Rate or any other reserve, special deposit or similar requirements
against assets or deposits with or for the account of, or credit extended by,
the Bank or shall impose on the Bank or the London Interbank market, as the case
may be, any other condition affecting this Note and the amounts due hereunder
and the result of any of the foregoing as to increase the cost to the Bank in
making or maintaining the loans represented by this Note or to reduce the amount
received by the Bank hereunder, or (B) any taxes levied or imposed on or with
respect to this Note or if at any time when this Note is outstanding any laws
enacted or promulgated, or any court of law or governmental agency interprets or
administers any law, which, in any such case, materially changes the basis of
taxation of payments to the Bank of principal and interest on this Note by
reason of subjecting such payments to double taxation or otherwise (except
through an increase in the rate of tax on the overall net income of Bank), then
Borrower shall either (i) pay to Bank an demand of the Bank as additional
interest on the Note, such additional amount or amounts as will reimburse the
Bank for such additional costs, reductions or taxes or (ii) repay in full the
principal and interest due on this Note. If at any time any new law or any
change in existing laws or in the interpretation of any new law or existing laws
shall make it unlawful for the Bank to maintain or fund hereunder, then the Bank
shall promptly notify Borrower in writing and Borrower shall either (i) repay
the outstanding principal and interest owed to Bank on this Note, without
penalty, on the last day of the current Eurodollar Interest Period (or, if the
Bank may not lawfully continue to maintain and fund the amounts outstanding on
this Note, immediately), or (ii) Borrower may convert such outstanding balances
at such appropriate time to loans bearing interest at the Prime Rate. If the
Borrower makes any payment of principal with respect to any loans hereunder on
any day other than the last of the Eurodollar Interest Period applicable to such
loan, then Borrower shall reimburse on demand for any loss, cost or expense
incurred by the Bank as a result of the timing of such payment or re-depositing
such principal amount.
Borrower hereby represents and warrants to Bank that as of the date hereof
it is not in default under the terms of any material agreement to which it is a
party or with respect to any material obligation of Borrower.
Borrower shall pay to the Bank an unused commitment fee (the "Unused Fee")
equivalent to three-eighths of one percent (3/8%) per annum on the daily average
of the unadvanced portion of the $10,000,000 available hereunder. The Unused
Fee shall be payable in arrears on the last day of each calendar quarter
beginning December 31, 1997 with the final Unused Fee payment due on the
Maturity Date for any period then ending for which the Unused Fee shall not have
been paid. If the outstanding balance of this Note is paid at any time prior to
the end of any such quarterly period, the Borrower shall pay to Bank on the date
of such payment the total Unused Fee due for the period in which such payment
occurs.
Borrower shall also pay to the Bank an origination fee (the "Origination
Fee") equal to $12,500, said Origination Fee to be paid on the date of the
original advance hereunder.
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Failure to pay when due or declared or declared due the principal of, or
interest on this Note shall be an Event of Default.
Upon the occurrence of any Event of Default, the entire principal amount
due on this Note and all interest then accrued thereon and any other liabilities
of Borrower hereunder shall become immediately due and payable all without
notice or without presentment, demand, protest, notice of protest or dishonor or
any other notice of default of any kind, all of which is expressly waived by
Xxxxxxxx.
Regardless of any provision contained in this Note, the holder hereof shall
never be entitled to receive, collect or apply, as interest on this Note, any
amount in excess of the Maximum Rate, and, if the holder hereof ever receives,
collects, or applies as interest, any such amount which would be excessive
interest, it shall be deemed a partial prepayment of principal and treated
hereunder as such; and, if the indebtedness evidenced hereby is paid in full,
any remaining excess shall forthwith be paid to Borrower. In determining
whether or not the interest paid or payable, under any specific contingency,
exceeds the Maximum Rate, Borrower and the holder hereof shall, to the maximum
extent permitted under applicable law (i) characterize any non-principal payment
as an expense, fee or premium rather than as interest, (ii) exclude voluntary
prepayments and the effects thereof, and (iii) spread the total amount of
interest throughout the entire contemplated term of the obligations evidenced by
this Note so that the interest rate is uniform throughout the entire term of
this Note; provided that, if this Note is paid and performed in full prior to
the end of the full contemplated term thereof; and if the interest received for
the actual period of existence thereof exceeds the Maximum Rate, the holder
hereof shall refund to the Borrower the amount of such excess or credit the
amount of such excess against the indebtedness evidenced hereby, and, in such
event, the holder hereof shall not be subject to any penalties provided by any
laws for contracting for, charging, taking, reserving or receiving interest in
excess of the Maximum Rate.
If any payment of principal or interest on this Note shall become due on a
Saturday, Sunday or public holiday or while the Bank is not open for business,
such payment shall be made on the next succeeding business day and such
extension of time shall in such case be included in computing interest in
connection with such payment.
If this Note is placed in the hands of an attorney for collection, or if it
is collected through any legal proceeding at law or in equity or in bankruptcy,
receivership or other court proceedings, Xxxxxxxx agrees to pay all costs of
collection, including, but not limited to, court costs and reasonable attorneys'
fees.
Borrower and each surety, endorser, guarantor and other party ever liable
for payment of any sums of money payable on this Note, jointly and severally
waive presentment and demand for payment, notice of intention to accelerate the
maturity, notice of acceleration of the maturity, protest, notice of protest and
nonpayment, as to this Note, and as to each and all installments hereof, and
agree that their liability under this Note shall not be affected by any renewal
or extension in the time of payment hereof, or in any indulgences, or by any
release or change in any security for the payment
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of this Note, and hereby consent to any and all renewals, extensions,
indulgences, releases or changes.
THIS WRITTEN NOTE REPRESENTS THE FINAL AGREEMENTS BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES
Executed as of the 11th day of September, 1997.
BORROWER:
WESTERN PACIFIC AIRLINES, INC.
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Vice President/CFO
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