WARRANT PURCHASE AGREEMENT
This WARRANT PURCHASE AGREEMENT ("Warrant Agreement"), dated as
of January 30, 1997 by and among VANGUARD AIRLINES, INC., a
Delaware corporation ("the "Company"), and the persons and
entities named on the Schedule I attached hereto and their
permitted successors and assigns (individually, a "Purchaser"
and, collectively, the "Purchasers").
SECTION 1. AMOUNT AND TERMS OF THE GUARANTEE; PURCHASE AND
SALE OF WARRANTS
1.1 THE GUARANTEE. Subject to the terms of this Agreement, the
Purchasers shall guarantee and promise to pay to Commerce Bank,
N.A. (Wichita, Kansas) ("Lender") or its order, the indebtedness
of the Company to the Lender in the amount of, and on the terms
and conditions set forth in that certain Agreement, dated January
30, 1997, executed by each of the Purchasers (the "Loan
Agreement"). A copy of the Loan Agreement is attached hereto as
Exhibit A. Upon the expiration of the Loan Agreement and in
consideration for the issuance of the Warrants, as hereinafter
defined, pursuant to Section 1.2 of this Warrant Agreement, the
Purchasers agree to enter into agreements to guarantee and
promise to pay the indebtedness of the Company, in the aggregate
maximum amount of two million two hundred seventy-five thousand
dollars ($2,275,000), until January 30, 1999.
1.2 ISSUANCE OF WARRANTS. In consideration of the Guaranty, the
Company will issue to each of the Purchasers a warrant to
purchase shares of the Common Stock in the form attached hereto
as Exhibit B (individually, a "Warrant" and, collectively, the
"Warrants"), which Warrants will be exercisable into the number
of shares of Common Stock pursuant to a vesting schedule set
forth in the Warrant up to an aggregate maximum amount set forth
opposite such Purchaser's name on Schedule I at a purchase price
of $1.00 per share (the "Exercise Price"). The number of the
shares of Common Stock (or other capital stock) issuable upon
exercise of the Warrants (collectively, the "Warrant Shares") and
Exercise Prices are subject to adjustment as provided in the
Warrants.
1.3 EXERCISE OF WARRANT. Each Purchaser may exercise his or its
Warrant at any time or from time to time on any business day
during the Exercise Period (as defined in the respective Warrant)
of such Warrant.
SECTION 2. THE CLOSINGS
2.1 CLOSING DATE. The closing (the "Closing") of the issuance
of the Warrants shall be held on January 30, 1997 at 3:00 p.m. at
the offices of the Company, or at such other time or place as the
Company and Purchasers shall
agree (the "Closing Date").
2.2 DELIVERY. At the Closing, the Company shall deliver to each
Purchaser a Warrant, and the Purchasers shall deliver to the
Company the Agreement executed by the Purchasers.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each Purchaser
as follows:
3.1 ORGANIZATION, GOOD STANDING, QUALIFICATION. The Company is
a corporation duly organized, validly existing and in good
standing under the laws of the state of Delaware. The Company
has full power and authority to own and operate its properties
and assets, and to carry on its business as currently conducted
and as currently proposed to be conducted. The Company is duly
qualified and is authorized to do business and is in good
standing as a foreign corporation in all jurisdictions in which
the nature of its activities and of its properties (both owned
and leased) makes such qualification necessary, except for those
jurisdictions in which failure to do so would not have a material
adverse effect on the Company or its business.
3.2 AUTHORIZATION. All corporate action on the part of the
Company, its directors and its stockholders necessary for the
authorization, execution, delivery and performance of this
Agreement by the Company and the performance of the Company's
obligations hereunder, including the issuance and delivery of the
Warrants has been taken or will be taken prior to the Closing.
This Agreement and the Warrants, when executed and delivered by
the Company, shall constitute valid and binding obligations of
the Company enforceable in accordance with their terms, except as
rights to indemnity may be limited by applicable laws and except
as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, arrangement, moratorium or other
similar laws affecting creditors' rights and subject to general
equity principles and to limitations on availability of equitable
relief, including specific performance. The Common Stock
issuable upon exercise of the Warrants has been or will be duly
and validly reserved and, when issued in compliance with the
provisions of this Warrant Agreement, the Warrants and the
Restated Certificate of Incorporation of the Company (as the same
may hereinafter be amended, the "Certificate of Incorporation"),
will be validly issued, fully paid and nonassessable and free of
any liens or encumbrances.
3.3 GOVERNMENT CONSENTS. All consents, approvals, orders, or
authorizations of, or registrations, qualifications,
designations, declarations, or filings with, any government
authority, required on the part of the Company in accordance with
the valid execution and delivery of this Warrant Agreement, the
offer, sale or issuance of the Warrants and the capital stock
issuable upon exercise of the Warrants, or the consummation of
any other transaction contemplated have been obtained, except for
the filing of notices pursuant to Regulation D under the
Securities Exchange Act of 1933, as amended (the "Securities
Act"), and any filing required under applicable state securities
laws which will be effective by the time required thereby.
3.4 OFFERING. Assuming the accuracy of the representations and
warranties of the Purchasers contained in Section 4 hereto, the
offer, issue, and sale of the Warrants are and will be exempt
from the registration and prospectus delivery requirements of the
Securities Act, and have been registered or qualified (or are
exempt from registration and qualifications) under the
registration, permit, or qualification requirements of all
applicable state securities laws.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
4.1 REQUISITE POWER AND AUTHORITY. Each Purchaser has all
necessary power and authority under all applicable provisions of
law to execute and deliver this Agreement and to carry out its
provisions. All actions on each Purchaser's part required for
the lawful execution and delivery of this Warrant Agreement has
been or will be effectively taken prior to the Closing. Upon
execution and delivery of this Warrant Agreement, this Warrant
Agreement will be a valid and binding obligation of each
Purchaser, enforceable in accordance with its terms, except (i)
as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting
enforcement of creditors' rights and (ii) general principles of
equity that restrict the availability of equitable remedies.
4.2 PURCHASE FOR OWN ACCOUNT. Each Purchaser represents that it
is acquiring the Warrants and the capital stock issuable upon
exercise of the Warrants (collectively, the "Securities") solely
for its own account and beneficial interest for investment and
not for sale or with a view to distribution of the Securities or
any part thereof, has no present intention of selling (in
connection with a distribution or otherwise), granting any
participation in, or otherwise distributing the same, and does
not currently have reason to anticipate a change in such
intention.
4.3 INFORMATION AND SOPHISTICATION. Each Purchaser acknowledges
having received all the information such Purchaser has requested
from the Company and considers necessary or appropriate for
deciding whether to acquire the Warrants. Each Purchaser
represents that such Purchaser has had an opportunity to ask
questions and receive answers from the Company regarding the
terms and conditions of the offering of the Warrants and to
obtain any additional information necessary to verify the
accuracy of the information given the Purchaser. Each Purchaser
further represents that such Purchaser has sufficient knowledge
and experience in financial and business matters so as to be
capable of evaluating the merits and risk of this investment.
4.4 ABILITY TO BEAR ECONOMIC RISK. Each Purchaser acknowledges
that investment in the Warrants involves a high degree of risk,
and represents that such Purchaser is able, without material
impairment of financial condition, to hold the Securities for an
indefinite period of time and to suffer a complete loss of its
investment.
4.5 FURTHER LIMITATIONS ON DISPOSITION. Without any way
limiting the representations set forth above, each Purchaser
further agrees not to make any disposition of all or any portion
of the Securities unless and until;
(a) There is then in effect a Registration Statement under the
Securities Act covering such proposed disposition and such
disposition is made in accordance with such Registration
Statement; or
(b) (i) The Purchaser shall have notified the Company of the
proposed disposition and shall have furnished the Company with a
detailed statement of the circumstances surrounding the proposed
disposition, and (ii) if reasonably requested by the Company,
such Purchaser shall have furnished the Company with an opinion
of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration under the Securities
Act.
(c) Notwithstanding the provisions of paragraphs (a) and (b)
above, no such registration statement or opinion of counsel shall
be necessary for a transfer by such Purchaser to a stockholder or
partner (or retired partner) or "affiliate" (as defined under the
Securities Exchange Act of 1934) of such Purchaser, or transfers
by gift, will or interstate succession to any spouse or lineal
descendants or ancestors, if all transferees agree in writing to
be subject to the terms hereof to the same extent as if they were
Purchasers hereunder.
4.6 EXPERIENCE. Each Purchaser is an "accredited investor" as
such term is defined in Rule 501 promulgated under the Securities
Act.
SECTION 5. MISCELLANEOUS.
5.1 REGISTRATION RIGHTS. The Purchasers and the Company agree
that all Securities issuable upon exercise of the Warrants shall
be subject to the terms and conditions of that certain Amended
and Restated Investor Rights Agreement, dated August 24, 1994 (as
the same may hereinafter be amended, the "Investors' Rights
Agreement"), by and among the Company and those certain parties
identified therein.
5.2 BINDING AGREEMENT. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties. Nothing in
this Agreement, express or implied, is intended to confer upon
any third party any rights, remedies, obligations, or liabilities
under or by reason of this Agreement, except as expressly
provided in this Agreement.
5.3 GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of Missouri as applied to
agreements made and to be performed entirely within the State of
Missouri.
5.4 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
5.5 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.
5.6 NOTICES. Any notice required or permitted under this
Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery or upon deposit with the
United States Post Office, postage prepaid, addressed to the
Company at 00 XX Xxxx Xxxxxx, Xxxxxxxx X, Xxxxxx Xxxx
International Airport, Mezzanine, Xxxxxx Xxxx, XX 00000 or to a
Purchaser at its address shown on Schedule I, or at such other
address as such party may designate by ten (10) days advance
written notice to the other party.
5.7 MODIFICATION; WAIVER. No modification or waiver of any
provision of this Warrant Agreement or consent to departure
therefrom shall be effective unless in writing and approved by
the Company and the holders of more than fifty percent (50%) of
the outstanding Warrants.
IN WITNESS WHEREOF, the parties have executed this Agreement as
to the date first written above.
VANGUARD AIRLINES, INC.
By:_______________________
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
General Counsel
PURCHASER
__________________________
Name:
Title:
VANGUARD AIRLINES, INC.
WARRANT PURCHASE AGREEMENT
AS OF JANUARY 30, 1997
SCHEDULE I
PURCHASERS; NUMBER OF SHARES
Name and Address No. of Shares/Warrant
Xxxxxxx X. Xxxxxx
000 Xx. Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000 1,250,000
Xxxxxx X. Xxxxxx
0000 X. 00xx Xxxxxx, Xxxxx
Xxxxxxxx 0000
Xxxxxxx, XX 00000 650,000
Starwood Investments, L.P.
X.X. Xxx 0000 - Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000-0000 375,000
Total 2,275,000
