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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): September 11, 1997
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Western Pacific Airlines, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-27238 86-0758778
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File number) Identification No.)
2864 South Circle Drive
Colorado Springs, CO 80906
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (719) 579-7737
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Former name or former address, if changed since last report
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Item 5. OTHER EVENTS.
On September 12, 1997, Western Pacific Airlines, Inc. ("Registrant")
borrowed the principal amount of $10.0 million from Bank One, Texas, N.A.
(the "Bank") as evidenced by the promissory note (the "Note") attached hereto
as Exhibit 4.1. All amounts of outstanding principal and interest accrued on
the Note are due and payable upon the earlier of (1) March 11, 1998 or
(2) within seven (7) days of demand therefor by the Bank. Additionally, all
amounts of principal outstanding in excess of $5.0 million are due and
payable within seven (7) days of the closing of the merger between Registrant
and Frontier Airlines, Inc. The Note bears interest at Registrant's option,
at either (i) the Bank's Prime Rate or (ii) the Bank's Eurodollar Rate plus
one and one eighths percent (1.125%) (each rate as defined in the Note).
Hunt Petroleum Corporation ("HPC"), the parent corporation of Hunt
Petroleum of Texas, Inc. ("HPTI"), a stockholder of Registrant, (1) entered into
a guaranty (the "Guaranty"), attached hereto as Exhibit 4.2, whereby it
guaranteed the repayment of all amounts owing under the Note, and (2) entered
into an indemnification agreement (the "Indemnification Agreement") attached
hereto as Exhibit 4.3, whereby it agreed to indemnify the Bank for any
liabilities that might arise in connection with the Note. GFI Company ("GFI"),
another stockholder of Registrant, entered into a contribution agreement (the
"Contribution Agreement") with HPC, whereby it agreed to contribute 50% of all
amounts payable by HPC under the Guaranty or Indemnification Agreement. In
addition, Registrant entered into a reimbursement agreement (the "Reimbursement
Agreement") with HPC and GFI, attached hereto as Exhibit 4.4, whereby Registrant
agreed to reimburse HPC or GFI, as the case may be, for any amounts incurred and
paid under the Guaranty or the Indemnification Agreement.
As security for the Note, Registrant entered into a security agreement with
the Bank attached hereto as Exhibit 4.5, whereby it granted the Bank a security
interest in certain trade accounts receivable. A further security interest was
granted to HPC and GFI in the same trade accounts receivable and in the
Registrant's interest in the satellite airport terminal at the Colorado Springs,
Colorado airport, as evidenced by a security agreement attached hereto as
Exhibit 4.6. In addition, Registrant agreed to assign certain payments relating
to trade accounts receivable to (i) the Bank as evidenced by a pledge agreement
attached hereto as Exhibit 4.7, and (ii) HPC and GFI as evidenced by a pledge
agreement attached hereto as Exhibit 4.8.
As consideration for the Guaranty and the Contribution Agreement,
Registrant entered into a registration rights agreement (the "Registration
Rights Agreement") attached hereto as Exhibit 4.9 with GFI and HPTI. Under the
Registration Rights Agreement, Registrant agreed to register on demand: (1) all
shares of Registrant common stock, $0.001 par value per share (the "Common
Stock") currently owned by HPTI or GFI, or which HPTI or GFI has the right to
acquire upon the exercise of any warrants, options or convertible securities;
and (2) any additional shares of Common Stock HPTI or GFI may acquire from (i)
Registrant, (ii) an affiliate of Registrant or (iii) any "joint filer" of HPTI
or GFI, as the case may be, as determined for purposes of Section 13(d) under
the Securities Exchange Act of 1934, as amended, for a period
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of five (5) years commencing on September 11, 1997 and ending on
September 11, 2002. Any securities of Registrant which were previously subject
to registration rights on the part of HPTI or GFI are not subject to the
Registration Rights Agreement.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
4.1 Promissory Note of Registrant dated September 11, 1997
4.2 Unconditional Guaranty of Hunt Petroleum Corporation dated
September 11, 1997,
4.3 Indemnification Agreement dated September 11, 1997, between Hunt
Petroleum Corporation and bank One, Texas, N.A.
4.4 Reimbursement Agreement dated September 12, 1997, among
Registrant, Hunt Petroleum Corporation and GFI Company.
4.5 Security Agreement dated September 12, 1997, between Registrant
and Bank One, Texas, N.A.
4.6 Security Agreement dated September 12, 1997, among Registrant,
Hunt Petroleum Corporation and GFI Company.
4.7 Pledge Agreement dated September 12, 1997, between Registrant and
Bank One, Texas, N.A.
4.8 Pledge Agreement dated September 12, 1997, among Registrant, Hunt
Petroleum Corporation and GFI Company.
4.9 Registration Rights Agreement dated September 11, 1997, among
Registrant, Hunt Petroleum of Texas, Inc. and GFI Company.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: September 18, 1997 WESTERN PACIFIC AIRLINES, INC.
By: /s/Robert A. Peiser
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Name: Robert A. Peiser
Title: President and Chief
Executive Officer
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INDEX
Exhibit
Number Description of Document
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4.1 Promissory Note of Registrant dated September 11, 1997
4.2 Unconditional Guaranty of Hunt Petroleum Corporation dated
September 11, 1997,
4.3 Indemnification Agreement dated September 11, 1997, between Hunt
Petroleum Corporation and bank One, Texas, N.A.
4.4 Reimbursement Agreement dated September 12, 1997, among Registrant,
Hunt Petroleum Corporation and GFI Company.
4.5 Security Agreement dated September 12, 1997, between Registrant and
Bank One, Texas, N.A.
4.6 Security Agreement dated September 12, 1997, among Registrant, Hunt
Petroleum Corporation and GFI Company.
4.7 Pledge Agreement dated September 12, 1997, between Registrant and
Bank One, Texas, N.A.
4.8 Pledge Agreement dated September 12, 1997, among Registrant, Hunt
Petroleum Corporation and GFI Company.
4.9 Registration Rights Agreement dated September 11, 1997, among
Registrant, Hunt Petroleum of Texas, Inc. and GFI Company.
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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
1717 Main Street, 4th Floor, 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
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(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
Borrower.
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, Borrower 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/ George E. Leonard
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Name: George E. Leonard
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Title: Vice President/CFO
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Exhibit 4.2
UNCONDITIONAL GUARANTY
THIS UNCONDITIONAL GUARANTY ("GUARANTY") is made as of the 11th day of
September, 1997, by Guarantor (as hereinafter defined) for the benefit of Bank
(as hereinafter defined).
1. DEFINITIONS. As used in this Guaranty, the following terms shall have
the meanings indicated below:
(a) The term "BANK" shall mean BANK ONE, TEXAS, NATIONAL ASSOCIATION,
the address of Bank for notice purposes is the following:
1717 Main Street
Dallas, Texas 75201
Attn: Reed V. Thompson
(b) The term "BORROWER" (whether one or more) shall mean the
following:
Western Pacific Airlines, Inc.
2864 South Circle Drive, Suite 1100
Colorado Springs, Colorado 80906
(c) The term "GUARANTOR" shall mean Hunt Petroleum Corporation, whose
address for notice purposes is the following:
3400 Thanksgiving Tower
Dallas, Texas 75201
(d) The term "GUARANTEED INDEBTEDNESS" shall mean (i) all
indebtedness, obligations and liabilities of Borrower to Bank of any kind
or character now existing or hereafter arising, whether direct, indirect,
related, unrelated, fixed, contingent, liquidated, unliquidated, joint,
several or joint and several, created pursuant to that certain Note of even
date herewith by and between Bank and Borrower in the face amount of
$10,000,000 (the "Note"), (ii) all accrued but unpaid interest on any of
the indebtedness described in (i) above, (iii) all obligations of Borrower
to Bank under any documents evidencing, securing, governing and/or
pertaining to all or any part of the indebtedness described in (i) and (ii)
above, (iv) all costs and expenses incurred by Bank in connection with the
collection and administration of all or any part of the indebtedness and
obligations described in (i), (ii) and (iii) above or the protection or
preservation of, or realization upon, the collateral securing all or any
part of such indebtedness and obligations, including without limitation all
reasonable attorneys' fees, and (vi) all
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renewals, extensions, modifications and rearrangements of the indebtedness
and obligations described in (i), (ii), (iii), (iv) and (v) above.
2. OBLIGATIONS. As an inducement to Bank to extend or continue to extend
credit and other financial accommodations to Borrower, Guarantor, for value
received, does hereby unconditionally and absolutely guarantee the prompt and
full payment and performance of the Guaranteed Indebtedness when due or declared
to be due and at all times thereafter. The liability of Guarantor hereunder
with respect to the Guaranteed Indebtedness shall be limited to the maximum
amount of liability that can be incurred without rendering this Guaranty, as it
relates to the Guarantor, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer, and not for any greater amount.
3. CHARACTER OF OBLIGATIONS. This is an absolute, continuing and
unconditional Guaranty of payment and not of collection and if at any time or
from time to time there is no outstanding Guaranteed Indebtedness, the
obligations of the Guarantor with respect to any and all Guaranteed Indebtedness
of Borrower to Bank incurred thereafter shall not be affected. All Guaranteed
Indebtedness heretofore, concurrently herewith or hereafter made by Bank to
Borrower shall be conclusively presumed to have been made or acquired in
acceptance hereof. Guarantor shall be primarily liable, jointly and severally,
with Borrower and any other guarantor of all or any part of the Guaranteed
Indebtedness.
4. REPRESENTATIONS AND WARRANTIES. Guarantor hereby represents and
warrants the following to Bank:
(a) This Guaranty may reasonably be expected to benefit, directly or
indirectly, Guarantor, and (i) if Guarantor is a corporation, the Board of
Directors of Guarantor has determined that this Guaranty may reasonably be
expected to benefit, directly or indirectly, Guarantor, or (ii) if
Guarantor is a partnership, the requisite number of Guarantor's partners
have determined that this Guaranty may reasonably be expected to benefit,
directly or indirectly, Guarantor;
(b) Guarantor is familiar with, and has independently reviewed the
books and records regarding, the financial condition of Borrower and is
familiar with the value of any and all collateral intended to be security
for the payment of all or any part of the Guaranteed Indebtedness;
provided, however, Guarantor is not relying on such financial condition or
collateral as an inducement to enter into this Guaranty;
(c) Guarantor has adequate means to obtain from Borrower on a
continuing basis information concerning the financial condition of Borrower
and Guarantor is not relying on Bank to provide such information to
Guarantor either now or in the future;
(d) Guarantor has the power and authority to execute, deliver and
perform this Guaranty and any other agreements executed by Guarantor
contemporaneously herewith,
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and the execution, delivery and performance of this Guaranty and any other
agreements executed by Guarantor contemporaneously herewith does not and
will not violate (i) any agreement or instrument to which Guarantor is a
party, (ii) any law, rule, regulation or order of any governmental
authority to which Guarantor is subject, or (iii) Guarantor's Articles of
Incorporation or Bylaws if Guarantor is a corporation, or Guarantor's
Partnership Agreement if Guarantor is a partnership;
(e) Neither Bank nor any other party has made any representation,
warranty or statement to Guarantor in order to induce Guarantor to execute
this Guaranty;
(f) The financial statements and other financial information
regarding Guarantor heretofore and hereafter delivered to Bank are and
shall be true and correct in all material respects and fairly present the
financial position of Guarantor as of the dates thereof, and no material
adverse change has occurred in the financial condition of Guarantor
reflected in the financial statements and other financial information
regarding Guarantor heretofore delivered to Bank since the date of the last
statement thereof; and
(g) As of the date hereof, and after giving effect to this Guaranty
and the obligations evidenced hereby, (i) Guarantor is and will be solvent,
(ii) the fair saleable value of Guarantor's assets exceeds and will
continue to exceed Guarantor's liabilities (both fixed and contingent),
(iii) Guarantor is and will continue to be able to pay Guarantor's debts as
they mature, and (iv) if Guarantor is not an individual, Guarantor has and
will continue to have sufficient capital to carry on its business and all
businesses in which it is about to engage.
5. COVENANTS. Guarantor hereby covenants and agrees with Bank as
follows:
(a) Guarantor shall not, so long as Guarantor's obligations under
this Guaranty continue, transfer or pledge any material portion of
Guarantor's assets for less than full and adequate consideration;
(b) Guarantor shall promptly furnish to Bank at any time and from
time to time such financial statements and other financial information of
Guarantor as the Bank may require, in form and substance satisfactory to
Bank;
(c) Guarantor shall comply with all terms and provisions of the
instruments and agreements evidencing, governing and securing all or any
part of the Guaranteed Indebtedness that apply to Guarantor; and
(d) Guarantor shall promptly inform Bank of (i) any litigation or
governmental investigation against Guarantor or affecting any security for
all or any part of the Guaranteed Indebtedness or this Guaranty which, if
determined adversely, might have a material adverse effect upon the
financial condition of Guarantor or upon such
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security or might cause a default under any of the instruments or
agreements evidencing, governing or securing all or any part of the
Guaranteed Indebtedness, (ii) any claim or controversy which might become
the subject of such litigation or governmental investigation, and (iii) any
material adverse change in the financial condition of Guarantor.
6. CONSENT AND WAIVER.
(a) Guarantor waives (i) promptness, diligence and notice of
acceptance of this Guaranty and notice of the incurring of any obligation,
indebtedness or liability to which this Guaranty applies or may apply and
waives presentment for payment, notice of nonpayment, protest, demand,
notice of protest, notice of intent to accelerate, notice of acceleration,
notice of dishonor, diligence in enforcement and indulgences of every kind,
and (ii) the taking of any other action of Bank, including without
limitation giving any notice of default or any other notice to, or making
any demand on, Borrower, any other guarantor of all or any part of the
Guaranteed Indebtedness or any other party.
(b) Guarantor waives any rights Guarantor has under, or any
requirements imposed by, Chapter 34 of the Texas Business and Commerce
Code, as in effect on the date of this Guaranty or as it may be amended
from time to time.
(c) Bank may at any time, without the consent of or notice to
Guarantor, without incurring responsibility to Guarantor and without
impairing, releasing, reducing or affecting the obligations of Guarantor
hereunder: (i) change the manner, place or terms of payment of all or any
part of the Guaranteed Indebtedness, or renew, extend, modify, rearrange or
alter all or any part of the Guaranteed Indebtedness; (ii) sell, exchange,
release, surrender, subordinate, realize upon or otherwise deal with in any
manner and in any order any collateral for all or any part of the
Guaranteed Indebtedness or this Guaranty or setoff against all or any part
of the Guaranteed Indebtedness; (iii) neglect, delay, omit, fail or refuse
to take or prosecute any action for the collection of all or any part of
the Guaranteed Indebtedness or this Guaranty or to take or prosecute any
action in connection with any instrument or agreement evidencing, governing
or securing all or any part of the Guaranteed Indebtedness or this
Guaranty; (iv) exercise or refrain from exercising any rights against
Borrower or others, or otherwise act or refrain from acting; (v) settle or
compromise all or any part of the Guaranteed Indebtedness and subordinate
the payment of all or any part of the Guaranteed Indebtedness to the
payment of any obligations, indebtedness or liabilities which may be due or
become due to Bank or others; (vi) apply any deposit balance, fund,
payment, collections through process of law or otherwise or other
collateral of Borrower to the satisfaction and liquidation of the
indebtedness or obligations of Borrower to Bank not guaranteed under this
Guaranty pursuant to paragraph 4 herein; and (vii) apply any sums paid to
Bank by Guarantor, Borrower or others to the Guaranteed Indebtedness in
such order and manner as Bank, in its sole discretion, may determine.
-4-
<PAGE>
(d) Notwithstanding any provision in this Guaranty to the contrary,
Guarantor hereby waives and releases, until such time as the Guaranteed
Indebtedness has been paid in full, (i) any and all rights of subrogation
against Borrower and (ii) any and all rights to be subrogated to the rights
of Bank in any collateral or security for all or any part of the Guaranteed
Indebtedness.
(e) Should Bank seek to enforce the obligations of Guarantor
hereunder by action in any court or otherwise, Guarantor waives any
requirement, substantive or procedural, that (i) Bank first enforce any
rights or remedies against Borrower or any other person or entity liable to
Bank for all or any part of the Guaranteed Indebtedness, including without
limitation that a judgment first be rendered against Borrower or any other
person or entity, or that Borrower or any other person or entity should be
joined in such cause, or (ii) Bank shall first enforce rights against any
collateral which shall ever have been given to secure all or any part of
the Guaranteed Indebtedness or this Guaranty. Such waiver shall be without
prejudice to Bank's right, at its option, to proceed against Borrower or
any other person or entity, whether by separate action or by joinder.
(f) In addition to any other waivers, agreements and covenants of
Guarantor set forth herein, Guarantor hereby further waives and releases
all claims, causes of action, defenses and offsets for any act or omission
of Bank, its directors, officers, employees, representatives or agents in
connection with Bank's administration of the Guaranteed Indebtedness,
except for Bank's willful misconduct and gross negligence.
7. OBLIGATIONS NOT IMPAIRED.
(a) Guarantor agrees that Guarantor's obligations hereunder shall not
be released, diminished, impaired, reduced or affected by the occurrence of
any one or more of the following events: (i) the death, disability or lack
of corporate power of Borrower, Guarantor (except as provided in paragraph
10 herein) or any other guarantor of all or any part of the Guaranteed
Indebtedness, (ii) any receivership, insolvency, bankruptcy or other
proceedings affecting Borrower, Guarantor or any other guarantor of all or
any part of the Guaranteed Indebtedness, or any of their respective
property; (iii) the partial or total release or discharge of Borrower or
any other guarantor of all or any part of the Guaranteed Indebtedness, or
any other person or entity from the performance of any obligation contained
in any instrument or agreement evidencing, governing or securing all or any
part of the Guaranteed Indebtedness, whether occurring by reason of law or
otherwise; (iv) the taking or accepting of any collateral for all or any
part of the Guaranteed Indebtedness or this Guaranty; (v) the taking or
accepting of any other guaranty for all or any part of the Guaranteed
Indebtedness; (vi) any failure by Bank to acquire, perfect or continue any
lien or security interest on collateral securing all or any part of the
Guaranteed Indebtedness or this Guaranty; (vii) the impairment of any
collateral securing all or any part of the Guaranteed Indebtedness or this
Guaranty; (viii) any failure by Bank to sell any collateral securing all or
any part of the Guaranteed
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<PAGE>
Indebtedness or this Guaranty in a commercially reasonable manner or as
otherwise required by law; (ix) any invalidity or unenforceability of or
defect or deficiency in any instrument or agreement evidencing, governing
or securing all or any part of the Guaranteed Indebtedness or this
Guaranty; or (x) any other circumstances which might otherwise constitute a
defense available to, or discharge of, Borrower or any other guarantor of
all or any part of the Guaranteed Indebtedness.
(b) This Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of all or any part of the
Guaranteed Indebtedness is rescinded or must otherwise be returned by Bank
upon the insolvency, bankruptcy or reorganization of Borrower, Guarantor,
any other guarantor of all or any part of the Guaranteed Indebtedness, or
otherwise, all as though such payment had not been made.
(c) In the event Borrower is a corporation, joint stock association
or partnership, or is hereafter incorporated, none of the following shall
affect Guarantor's liability hereunder: (i) the unenforceability of all or
any part of the Guaranteed Indebtedness against Borrower by reason of the
fact that the Guaranteed Indebtedness exceeds the amount permitted by law;
(ii) the act of creating all or any part of the Guaranteed Indebtedness is
ultra vires; or (iii) the officers or partners creating all or any part of
the Guaranteed Indebtedness acted in excess of their authority. Guarantor
hereby acknowledges that withdrawal from, or termination of, any ownership
interest in Borrower now or hereafter owned or held by Guarantor shall not
alter, affect or in any way limit the obligations of Guarantor hereunder.
(d) Upon receipt by Bank of full and final payment of all obligations
of Borrower under the Note and/or all obligations of Guarantor under this
Guaranty, the Guarantor shall be released from all obligations hereunder.
8. ACTIONS AGAINST GUARANTOR. In the event of a default in the payment
or performance of all or any part of the Guaranteed Indebtedness when such
Guaranteed Indebtedness becomes due, whether by its terms, by acceleration or
otherwise or in the event of the occurrence of an Insolvency Event (as
hereinafter defined), Guarantor shall, without notice or demand, promptly
either, at the sole election of the Bank, (i) pay the amount due thereon to
Bank, in lawful money of the United States, at Bank's address set forth
hereinabove or (ii) purchase the Note from the Bank at an amount equal to the
then outstanding principal, plus all accrued but unpaid interest and fees. One
or more successive or concurrent actions may be brought against Guarantor,
either in the same action in which Borrower is sued or in separate actions, as
often as Bank deems advisable. The exercise by Bank of any right or remedy
under this Guaranty or under any other agreement or instrument, at law, in
equity or otherwise, shall not preclude concurrent or subsequent exercise of any
other right or remedy. The books and records of Bank shall be admissible in
evidence in any action or proceeding involving this Guaranty and shall be PRIMA
FACIE evidence of the payments made on, and the outstanding balance of, the
Guaranteed Indebtedness. The term "Insolvency Event" is used herein to mean (i)
-6-
<PAGE>
the commencement of either voluntary or involuntary proceedings brought by or
against Borrower seeking the liquidation, reorganization or other relief with
respect to itself or its assets under any bankruptcy, insolvency or similar law
now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator or custodian or other similar official of all of its or a substantial
portion of its assets or properties, or (ii) the consent by Borrower to any such
relief or to the appointment or taking possession of such official in an
involuntary case or other proceeding commenced against it, or (iii) the general
assignment by Borrower for the benefit of creditors or Borrower shall fail
generally to pay its debts as they become due, or (iv) the taking by Borrower of
any corporate action authorizing any of the foregoing. It is the intent of the
parties hereto that upon the occurrence of an Insolvency Event, no notice or
demand whatsoever shall be required to be given Borrower or Guarantor prior to
the effectiveness of this paragraph.
9. PAYMENT BY GUARANTOR. Whenever Guarantor pays any sum which is or may
become due under this Guaranty, written notice must be delivered to Bank
contemporaneously with such payment. Such notice shall be effective for
purposes of this paragraph when contemporaneously with such payment Bank
receives such notice either by: (a) personal delivery to the address and
designated department of Bank identified in subparagraph l (a) above, or (b)
United States mail, certified or registered, return receipt requested, postage
prepaid, addressed to Bank at the address shown in subparagraph l(a) above. In
the absence of such notice to Bank by Guarantor in compliance with the
provisions hereof, any sum received by Bank on account of the Guaranteed
Indebtedness shall be conclusively deemed paid by Borrower.
10. NOTICE OF SALE. In the event that Guarantor is entitled to receive
any notice under the Uniform Commercial Code, as it exists in the state
governing any such notice, of the sale or other disposition of any collateral
securing all or any part of the Guaranteed Indebtedness or this Guaranty,
reasonable notice shall be deemed given when such notice is deposited in the
United States mail, postage prepaid, at the address for Guarantor set forth in
subparagraph l(c) above, five (5) days prior to the date any public sale, or
after which any private sale, of any such collateral is to be held; PROVIDED,
HOWEVER, that notice given in any other reasonable manner or at any other
reasonable time shall be sufficient.
11. WAIVER OF BANK. No delay on the part of Bank in exercising any right
hereunder or failure to exercise the same shall operate as a waiver of such
right. In no event shall any waiver of the provisions of this Guaranty be
effective unless the same be in writing and signed by an officer of Bank, and
then only in the specific instance and for the purpose given.
12. SUCCESSORS AND ASSIGNS. This Guaranty is for the benefit of Bank, its
successors and assigns. This Guaranty is binding upon Guarantor's heirs,
executors, administrators, personal representatives and successors, including
without limitation any person or entity obligated by operation of law upon the
reorganization, merger, consolidation or other change in the organizational
structure of Guarantor.
-7-
<PAGE>
13. COSTS AND EXPENSES. Guarantor shall pay on demand by Bank all costs
and expenses (including without limitation all reasonable attorneys' fees)
incurred by Bank in connection with the preparation, administration, enforcement
and/or collection of this Guaranty. This covenant shall survive the payment of
the Guaranteed Indebtedness.
14. SEVERABILITY. If any provision of this Guaranty is held by a court of
competent jurisdiction to be illegal, invalid or enforceable under present or
future laws, such provision shall be fully severable, shall not impair or
invalidate the remainder of this Guaranty and the effect thereof shall be
confined to the provision held to be illegal, invalid or unenforceable.
15. NO OBLIGATION. Nothing contained herein shall be construed as an
obligation on the part of Bank to extend or continue to extend credit to
Borrower.
16. AMENDMENT. No modification or amendment of any provision of this
Guaranty, nor consent to any departure by Guarantor therefrom, shall be
effective unless the same shall be in writing and signed by an officer of Bank,
and then shall be effective only in the specific instance and for the purpose
for which given.
17. CUMULATIVE RIGHTS. All rights and remedies of Bank hereunder are
cumulative of each other and of every other right or remedy which Bank may
otherwise have at law or in equity or under any instrument or agreement, and the
exercise of one or more of such rights or remedies shall not prejudice or impair
the concurrent or subsequent exercise of any other rights or remedies.
18. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAWS.
19. VENUE. This Guaranty has been entered into in the county in Texas
where Bank's address for notice purposes is located, and it shall be performable
for all purposes in such county. Courts within the State of Texas shall have
jurisdiction over any and all disputes arising under or pertaining to this
Guaranty and venue for any such disputes shall be in the county or judicial
district where the Bank's address for notice purposes is located.
20. COMPLIANCE WITH APPLICABLE USURY LAWS. Notwithstanding any other
provision of this Guaranty or of any instrument or agreement evidencing,
governing or securing all or any part of the Guaranteed Indebtedness, Guarantor
and Bank by its acceptance hereof agree that Guarantor shall never be required
or obligated to pay interest in excess of the maximum nonusurious interest rate
as may be authorized by applicable law for the written contracts which
constitute the Guaranteed Indebtedness. It is the intention of Guarantor and
Bank to conform strictly to the applicable laws which limit interest rates, and
any of the aforesaid contracts for interest, if and to the extent payable by
Guarantor, shall be held to be subject to reduction to the maximum nonusurious
interest rate allowed under said law.
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<PAGE>
21. DESCRIPTIVE HEADINGS. The captions in this Guaranty are for
convenience only and shall not define or limit the provisions hereof.
22. GENDER. Within this Guaranty, words of any gender shall be held and
construed to include the other gender.
23. ENTIRE AGREEMENT. This Guaranty contains the entire agreement between
Guarantor and Bank regarding the subject matter hereof and supersedes all prior
written and oral agreements and understandings, if any, regarding same;
provided, however, this Guaranty is in addition to and does not replace, cancel,
modify of affect any other guaranty of Guarantor now or hereafter held by Bank
that relates to Borrower or any other person or entity.
EXECUTED as of the date first above written.
GUARANTOR:
HUNT PETROLEUM CORPORATION
a Delaware corporation
By: /s/Ivan Irwin
----------------------------------------
Ivan Irwin, Jr.
Executive Vice President
-9-
<PAGE>
Exhibit 4.3
INDEMNIFICATION AGREEMENT
THIS AGREEMENT, dated as of September 11, 1997, among HUNT PETROLEUM
CORPORATION, a Delaware corporation ("Hunt Petroleum") and BANK ONE, TEXAS,
N.A., a national banking association ("Bank").
WHEREAS, at the request of Hunt Petroleum, Bank has agreed to extend a loan
to Western Pacific Airlines, Inc. ("Western") in amounts of up to $10,000,000
(the "Loan"); and
WHEREAS, to document the Loan, Bank and Western have entered into a Note
and certain other collateral documents covering various personal property
collateral, the Note and other documents being dated as of September 11, 1997
(the "Loan Documents"); and
WHEREAS, to induce the Bank to make the Loan, Hunt Petroleum has entered
into a Limited Guaranty dated as of September 11, 1997 pursuant to which it
guarantees any and all obligations owed the Bank by Western pursuant to the Note
(the "Guaranty"); and
WHEREAS, in further consideration of the Bank's extending the Loan and
entering into the Loan Documents, Hunt Petroleum has agreed to indemnify the
Bank as provided herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. Hunt Petroleum agrees to indemnify and hold harmless the Bank and its
respective officers, employees, agents, attorneys and representatives
(singularly, an "Indemnified Party", and collectively, the "Indemnified
Parties") from and against any loss, cost, liability, damage or expense
(including the reasonable fees and out-of-pocket expenses of counsel to the
Bank, including all local counsel hired by such counsel) ("Claim") incurred by
the Bank in any respect whatsoever as a result of making the Loan, including,
but not limited to, any loss, cost, liability, damage or expense (including
reasonable fees and out-of-of pockets expenses of counsel to the Bank) incurred
by Bank in investigating or preparing for, defending against, or providing
evidence, producing documents or taking any other action in respect of any
commenced or threatened litigation, bankruptcy or other insolvency proceeding,
administrative proceeding or investigation under any federal securities law,
federal or state environmental law, federal bankruptcy statute, or any other
statute of any jurisdiction, or any regulation, or at common law or otherwise,
which is alleged to arise out of or is based upon any acts, practices or
omissions or alleged acts, practices or omissions of Western, Hunt Petroleum or
their agents or arises in connection with the duties, obligations or performance
of the Indemnified Parties in negotiating, preparing, executing, accepting,
keeping, completing, countersigning, issuing, selling, delivering, releasing,
assigning, handling, certifying, processing or receiving or taking any other
action with respect to the Loan Documents, including, but not limited to the
taking of collateral pursuant to Loan Documents or the enforcing of the same,
and all documents, items and materials contemplated thereby even if any of the
foregoing arises out of an Indemnified Party's ordinary
<PAGE>
negligence. The indemnity set forth herein shall be in addition to any other
obligations or liabilities of Hunt Petroleum to the Bank under its Guaranty or
at common law or otherwise, and shall survive any termination of the Loan
Documents, or the Guaranty, and the payment of all indebtedness of Western or
Hunt Petroleum to the Bank under the Loan Documents and the Guaranty, provided
that Hunt Petroleum shall have no obligation hereunder to the Bank with respect
to any of the foregoing arising out of the gross negligence or willful
misconduct of the Bank. THE PARTIES INTEND FOR THE PROVISIONS OF THIS SECTION 1
TO THE INDEMNIFICATION AGREEMENT TO APPLY TO AND PROTECT EACH INDEMNIFIED PARTY
FROM THE CONSEQUENCES OF STRICT LIABILITY IMPOSED OR THREATENED TO BE IMPOSED ON
ANY SUCH INDEMNIFIED PARTY AS WELL AS FROM THE CONSEQUENCES OF ITS OWN
NEGLIGENCE, WHETHER OR NOT THAT NEGLIGENCE IS THE SOLE, CONTRIBUTING, OR
CONCURRING CAUSE OF ANY CLAIM.
2. If any Claim is asserted against any Indemnified Party, the
Indemnified Party shall endeavor to notify Hunt Petroleum of such Claim (but
failure to do so shall not affect the indemnification herein made except to the
extent of the actual harm caused by such failure). The Indemnified Party shall
have the right to employ, at Hunt Petroleum's expense, counsel of the
Indemnified Parties' choosing and to control the defense of the Claim. Hunt
Petroleum may at its own expense also participate in the defense of any Claim.
Each Indemnified Party may employ separate counsel in connection with any Claim
to the extent such Indemnified Party believes it reasonably prudent to protect
such Indemnified Party.
3. Hunt Petroleum hereby acknowledges that it fully understands that the
Loan is being made by the Bank to Western solely as an accommodation to Hunt
Petroleum and that the Bank has not performed its normal level of due diligence
on Western nor has it performed its normal underwriting procedures on the Loan.
Hunt Petroleum further understands and agrees that the Bank makes no
representation or warranty whatsoever with regard to the financial ability,
solvency or other financial condition of Western nor has it performed any due
diligence with respect to the collateral being pledged to the Bank by Western.
Hunt Petroleum hereby acknowledges that neither the Bank's failure to perform
due diligence on Western nor the Bank's failure to perform its normal
underwriting procedures with respect to such loan to Western shall in any way
affect Hunt Petroleum's obligations to indemnify Bank pursuant to this
Agreement.
4. The execution, delivery and performance of this Agreement by Hunt
Petroleum has been duly authorized by all necessary corporate action by Hunt
Petroleum, and constitutes legal, valid and binding obligations of Hunt
Petroleum, enforceable in accordance with its respective terms, except as
limited by bankruptcy, insolvency or similar laws of general application
relating to the enforcement of creditors' rights and except to the extent
specific remedies may generally be limited by equitable principles.
5. This Agreement shall be binding upon and inure to the benefit of Bank
and Hunt Petroleum, and their respective successors and assigns, provided,
however, that Hunt Petroleum may not assign any rights, powers, duties or
obligations under this Agreement.
2
<PAGE>
6. This Agreement has been executed and delivered in the State of Texas,
shall be governed by and construed in accordance with the laws of the State of
Texas, and shall be performable by the parties hereto in Dallas County, Texas.
7. This Agreement may be separately executed in any number of
counterparts, each of which shall be an original, but all of which, taken
together, shall be deemed to constitute one and the same agreement.
8. THIS WRITTEN INDEMNIFICATION AGREEMENT REPRESENTS THE FINAL AGREEMENT
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.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year above written.
HUNT PETROLEUM CORPORATION
a Delaware corporation
By: /s/ Ivan Irwin
-----------------------------------------
Name: Ivan Irwin Jr.
---------------------------------------
Title: Executive Vice President
--------------------------------------
BANK ONE, TEXAS, N.A.
a national banking association
By: /s/Reed V. Thompson
-----------------------------------------
Reed V. Thompson, Vice President
3
<PAGE>
Exhibit 4.4
REIMBURSEMENT AGREEMENT
THIS REIMBURSEMENT AGREEMENT ("Agreement") is made as of September 12,
1997, by and among WESTERN PACIFIC AIRLINES, INC., a Delaware corporation (the
"Company"), and each of HUNT PETROLEUM CORPORATION, a Delaware corporation
("HPC"), and GFI COMPANY, a Nevada corporation ("GFI").
R E C I T A L S:
WHEREAS, Bank One Texas, N.A. (the "Bank") is prepared to extend a line of
credit to and loan the Company an amount equal to Ten Million Dollars
($10,000,000.00) pursuant to that certain Promissory Note (the "Note");
WHEREAS, as a condition precedent to the Bank's loan to the Company
pursuant to the Note, the Bank requires that HPC enter into an agreement (the
"Guaranty") whereby HPC unconditionally guarantees all of the Company's
obligations under the Note and an Indemnification Agreement under which HPC is
obligated to indemnify the Bank from certain matters relating to the Loan (the
"Indemnification Agreement");
WHEREAS, as a condition precedent to HPC's entering into the Guaranty and
the Indemnification Agreement, GFI has entered into an agreement to contribute
to HPC fifty percent (50%) of all liabilities and obligations that may become
payable under the Guaranty and the Indemnification Agreement (the "Contribution
Agreement"). Each of HPC and GFI are sometimes referred to herein as a
"Guarantor" and collectively as the "Guarantors"; and
WHEREAS, in order to induce the HPC to enter into the Guaranty and GFI to
enter into the Contribution Agreement, the Company has agreed to indemnify and
reimburse the Guarantors for all costs, expenses or other liabilities incurred
by the Guarantors as set forth herein.
NOW THEREFORE, in consideration of the mutual promises contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. INCORPORATION OF RECITALS. The foregoing Recitals are hereby
incorporated by reference herein.
2. REIMBURSEMENT BY THE COMPANY. The Company hereby acknowledges and
agrees that it is obligated to reimburse and indemnify each of the Guarantors
for any and all costs, expenses or other liabilities incurred and paid by HPC
pursuant to the Guaranty or Indemnification Agreement or GFI pursuant to the
Contribution Agreement, as the case may be (the "Obligation"). The Company shall
promptly and upon demand reimburse and indemnify either Guarantor for any cost,
<PAGE>
expense or other liability (including, without limitation, attorneys' fees)
incurred and paid by such Guarantor under the terms of the Guaranty, the
Indemnification Agreement or the Contribution Agreement, as the case may be,
plus interest thereon at a rate per annum equal to the lesser of (i) the "prime
rate" announced weekly in the WALL STREET JOURNAL plus 3.0%, or (ii) the maximum
lawful rate, from the date such Guarantor paid such costs, expense or other
liability until such amount is repaid to the Guarantor hereunder.
3. ACTIONS NOT RELEASES. The Company's obligation hereunder is absolute
and each of the Guarantor's rights under this Agreement shall not be released,
diminished, impaired or adversely affected by the occurrence of any one or more
of the following events: (i) the taking or accepting of any other security or
assurance for any or all of the Obligation; (ii) any release, surrender,
exchange, subordination or loss of any security or assurance at any time
existing in connection with any or all of the Obligation; (iii) the modification
of, amendment to or waiver of compliance with any terms of the Guaranty or the
Note; (iv) any renewal, extension or rearrangement of the payment of any or all
of the Guaranty or the Note; or (v) any neglect, delay, omission, failure or
refusal of either Guarantor to take or prosecute any action in connection with
this Agreement or any other agreement executed in connection herewith.
4. BINDING EFFECT. This Agreement shall be binding upon the Company and
its legal representatives, successors and assigns and shall inure to the benefit
of and be enforceable by each Guarantor and its respective successors,
transferees and assigns; PROVIDED, HOWEVER, that no party may assign any of its
obligations and/or rights hereunder without the prior written consent of the
other parties hereto.
5. NO WAIVER. No failure on the part of either Guarantor to exercise,
and no delay in exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
6. NOTICE. All notices and demands provided for hereunder shall be in
writing, and shall be given by registered or certified mail, return receipt
requested, telex, telegram, telecopy, courier service of personal delivery, and
addressed to the relevant party or parties at the following address:
(i) if to the Company:
Western Pacific Airlines, Inc.
2864 Circle Drive
Suite 1100
Colorado Springs, Colorado 80906
Telecopier No.: (719) 527-7259
Telephone No.: (719) 527-7421
Attention: Chief Executive Officer
2
<PAGE>
with a copy to:
D'Ancona & Pflaum
30 North LaSalle Street
Suite 2900
Chicago, Illinois 60602
Telecopier No.: (312) 580-0923
Telephone No.: (312) 580-2000
Attention: Allan J. Reich, Esq.
(ii) if to HPC:
Hunt Petroleum Corporation
1601 Elm, 50th Floor
Dallas, Texas 75201
Telecopier No.: (214) 922-1060
Telephone No.: (214) 922-1000
Attention: Mr. Brett Ringle
with a copy to:
Vinson & Elkins
3700 Trammell Crow Center
2001 Ross Avenue
Dallas, TX 75201-2975
Telecopier No.: (214) 220-7716
Telephone No.: (214) 220-7700
Attention: Derek McClain, Esq.
(iii) if to GFI:
GFI Company
Hughes Center
3753 Howard Hughes Parkway, Suite 200
Las Vegas, Nevada 89109
Telecopier No.: (702) 892-3950
Telephone No.: (702) 892-3746
Attention: Mr. David C. Story
3
<PAGE>
with a copy to:
Haynes & Boone
901 Main Street
3100 Nations Bank Plaza
Dallas, TX 75202
Telecopier No.: (214) 200-0588
Telephone No.: (214) 651-5088
Attention: Wilson Chu, Esq.
or to such other address as a Guarantor or the Company, as the case may be, may
designate in writing to the other parties hereto, which notice shall be deemed
given when received.
7. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute one and the same agreement.
8. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER THE LAWS OF THE STATE OF DELAWARE, AND FOR ALL PURPOSES SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF SAID STATE, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS.
9. EXPENSES. The Company shall pay all costs and expenses incurred by
GFI and HPC in connection with the negotiation, execution and performance of
this Agreement, and all other documents executed in connection herewith,
including, without limitation, the Security Agreement, Lockbox Agreement and
Registration Rights Agreement, as well as all attorneys fees and expenses
incurred by the Bank in connection with the foregoing.
10. 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 provision in any other jurisdiction. All rights granted
to Guarantors hereunder are in addition to any other rights Guarantors may have
under contract, at law or in equity.
11. HEADINGS. The Section headings used or contained in this Agreement
are for convenience of reference only and shall not affect the construction of
this Agreement.
12. AMENDMENT. No amendment or modification of this Agreement shall be
binding upon the parties unless made in writing and signed by all of the
parties.
4
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its duly authorized officer as of the date first written above.
WESTERN PACIFIC AIRLINES, INC.
By: /s/George E. Leonard
----------------------------------------------
Name: George E. Leonard
--------------------------------------------
Title: Vice President/CFO
-------------------------------------------
HUNT PETROLEUM CORPORATION
By: /s/Ivan Irwin
----------------------------------------------
Name: Ivan Irwin
--------------------------------------------
Title: Executive Vice President
-------------------------------------------
GFI COMPANY
By: /s/Edward Gaylord II
----------------------------------------------
Name: Edward Gaylord II
--------------------------------------------
Title:
-------------------------------------------
5
<PAGE>
Exhibit 4.5
SECURITY AGREEMENT
THIS SECURITY AGREEMENT is made as of September 12, 1997, between WESTERN
PACIFIC AIRLINES, INC., a Delaware corporation, with principal offices at 2864
South Circle Drive, Suite 1100, Colorado Springs, Colorado 80906 ("DEBTOR"); and
BANK ONE, TEXAS, NATIONAL ASSOCIATION, a national banking association, with
offices at 1717 Main Street, Dallas, Texas ("SECURED PARTY").
RECITALS
A. Secured Party has made a loan to Debtor in the original principal
amount of Ten Million Dollars ($10,000,000) (the "LOAN") as evidenced by that
certain promissory note of even date herewith (together with all extensions for
any period, renewals, rearrangements and/or increases thereof, the "NOTE"),
executed by Debtor and payable to the order of Secured Party with interest as
provided therein.
B. Therefore, in order to secure the Obligations, as hereinafter defined,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Debtor hereby agrees with Secured Party as
follows:
ARTICLE 1
SECURITY INTEREST
Section 1.1 GRANT OF SECURITY INTEREST. Debtor hereby assigns and
grants to Secured Party a security interest in and right of set-off against the
Collateral (defined to in Section 1.2) to secure the prompt payment and
performance of the Obligations (defined in Section 2.2) and the performance by
Debtor of this Agreement.
Section 1.2 COLLATERAL. The "COLLATERAL" consists of the following
types or items of property (including property hereafter acquired by Debtor as
well as property which Debtor now owns or in which Debtor has rights):
(a) All accounts, instruments, documents, chattel paper, and general
intangibles arising in the ordinary course of Debtor's business from or in
connection with the sale of tickets for air travel, and delivery of cargo,
including, without limitation, sales directly made by Debtor or through
interline ticket sales, and sales and accounts arising from travel agents, cargo
shippers, and the Airline Reporting Corporation, and those arising through a
clearinghouse arrangement, interline arrangement, other type of intermediary
arrangement, or otherwise, but excluding any accounts held in bank accounts of
Debtor arising from credit card receivables.
<PAGE>
(b) Account No. 1822932701 maintained by Debtor with Secured Party,
and all funds, instruments, investments, documents, chattel paper, general
intangibles, and certificates maintained therein or related thereto.
(c) Account No. 910-2-786978 maintained at The Chase Manhattan Bank,
N.A., and all funds, instruments, investments, documents, chattel paper, general
intangibles, and certificates maintained therein or related thereto.
(d) all general intangibles, rights and claims relating to and
interests in all or any of the foregoing, and proceeds of all or any of the
foregoing, including any accounts held in bank accounts of Debtor arising from
credit card receivables.
It is expressly contemplated that additional property may from time to time be
pledged, assigned or granted to Secured Party as additional security for the
Obligations, and the term "Collateral" as used herein shall be deemed for all
purposes hereof to include all such additional property, together with all other
property of the types described above related thereto.
ARTICLE 2
DEFINITIONS
Section 2.1 TERMS DEFINED ABOVE. As used in this Agreement, the terms
defined above shall have the meanings respectively assigned to them.
Section 2.2 CERTAIN DEFINITIONS. As used in this Agreement, the
following terms shall have the following meanings, unless the context otherwise
requires:
"ACCOUNT DEBTOR" means any person or entity liable (whether directly
or indirectly, primarily or secondarily) for the payment or performance of
any obligations included in the Collateral, whether as an account debtor
(as defined in the Code), obligor on an instrument, issuer of documents or
securities, guarantor or otherwise.
"AGREEMENT" means this Security Agreement, as the same may from time
to time be amended or supplemented.
"CODE" means the Uniform Commercial Code as presently in effect in the
State of Texas, Business and Commerce Code, Chapters 1 through 9. Unless
otherwise indicated by the context herein, all uncapitalized terms which
are defined in the Code shall have their respective meanings as used in
Chapter 9 of the Code.
"EVENT OF DEFAULT" means a default under any of the Loan Documents
after the expiration of any applicable cure period (if any), demand is made
for payment of the Note, or both.
<PAGE>
"HIGHEST LAWFUL RATE" means the maximum rate of nonusurious interest
allowed from time to time by applicable law.
"OBLIGATIONS" means all present and future liabilities, obligations,
covenants, duties and indebtedness of Debtor to Secured Party under the
Note, this Agreement, any other agreement evidencing or securing the
indebtedness evidenced by the Note, and any and all renewals, extensions
for any period, rearrangements or enlargements of the foregoing
(collectively, the "LOAN DOCUMENTS"). The Obligations shall also include
all interest, charges, expenses, attorneys' or other fees and any other
sums payable to or incurred by Secured Party in connection with the
execution, administration or enforcement of Secured Party's rights and
remedies under the Loan Documents.
"OBLIGOR" means any person or entity, other than Debtor, liable
(whether directly or indirectly, primarily or secondarily) for the payment
or performance of any of the Obligations whether as maker, co-maker,
endorser, guarantor, accommodation party, general partner or otherwise.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
In order to induce Secured Party to accept this Agreement, Debtor
represents and warrants to Secured Party (which representations and warranties
will survive the creation and payment of the Obligations) that:
Section 3.1 OWNERSHIP OF COLLATERAL; ENCUMBRANCES; VALID AND BINDING
AGREEMENT. Debtor is the legal and beneficial owner of the Collateral free and
clear of any adverse claim, lien, security interest, option or other charge or
encumbrance except for the security interest created by this Agreement, and
Debtor has full right, power and authority to assign and grant a security
interest in the Collateral to Secured Party. This Agreement constitutes a
legal, valid and binding obligation of Debtor enforceable against Debtor in
accordance with its terms. The execution, delivery and performance of this
Agreement will not violate the terms of any contract, agreement, law,
regulation, order, injunction, judgment, decree or writ to which Debtor is
subject and does not require the consent or approval of any other person or
entity. However, Secured Party acknowledges that Debtor has granted a security
interest in and to the Collateral to Hunt Petroleum Corporation and GFI Company
(the "SUBORDINATE SECURITY INTEREST"), which security interest is subordinate to
the security interest granted hereunder, and Secured Party consents thereto.
Section 3.2 NO REQUIRED CONSENT. No authorization, consent, approval
or other action by, and no notice to or filing with, any governmental authority
or regulatory body (other than the filing of financing statements) is required
for (a) the due execution, delivery and performance by Debtor of this Agreement,
(b) the grant by Debtor of the security interest granted by this Agreement,
(c) the perfection of such security interest or (d) the exercise by Secured
Party of its rights and remedies under this Agreement.
<PAGE>
Section 3.3 SECURITY INTEREST. The grant of the security interest in
the Collateral pursuant to this Agreement creates a valid security interest in
the Collateral, enforceable against Debtor and all third parties and securing
payment of the Obligations.
Section 3.4 NO FILINGS BY THIRD PARTIES. No financing statement or
other public notice or recording covering the Collateral is on file in any
public office (other than any financing statement or other public notice or
recording naming Secured Party as the secured party therein), and Debtor will
not execute any such financing statement or other public notice or recording so
long as any of the Obligations are outstanding. However, Secured Party hereby
acknowledges that Hunt Petroleum and GFI Company have filed a financing
statement in respect of the Collateral, and Secured Party consents thereto.
Section 3.5 LOCATION OF DEBTOR. Debtor's chief executive office and
Debtor's records concerning the Collateral are located at the address or
location set forth in the opening paragraph hereof.
Section 3.6 FINANCIAL STATEMENTS; COLLATERAL.
(a) All financial statements of Debtor provided by Debtor to Secured
Party in connection with this Agreement or the Obligations fairly present, in
conformity with generally accepted accounting principles, Debtor's financial
position and results of operations as of the dates and for the periods stated
therein (on a consolidated basis where so indicated).
(b) All statements or other information provided by Debtor to Secured
Party describing or with respect to the Collateral is or (in the case of
subsequently furnished information) will be when provided correct and complete
in all material respects. The delivery at any time by Debtor to Secured Party
of additional Collateral or of additional descriptions of Collateral shall
constitute a representation and warranty by Debtor to Secured Party hereunder
that the representations and warranties of this Article 3 are correct insofar as
they would pertain to such Collateral or the descriptions thereof.
Section 3.7 ACCOUNTS.
(a) To Debtor's knowledge, each account described in Section 1.2
represents the genuine, valid and legally enforceable indebtedness of an Account
Debtor arising from the sale, lease or rendition by Debtor of goods or services
and is not and will not be subject to contra accounts, set-offs, defenses,
counterclaims, allowances or adjustments (other than discounts for prompt
payment shown on the invoice), or objections or complaints by the Account Debtor
concerning its liability on the Account, other than the settlement adjustments
made pursuant to the Agreement Relating to Settlement of Interline Accounts
through Airlines Clearing House, Inc., dated as of February 1, 1948, between
Airlines Clearing House, Inc. and its several stockholders (Rev. October 1,
1986), as amended, and all rules and regulations applicable thereto (the "ACH
DOCUMENTS").
<PAGE>
(b) Debtor has no knowledge of any bankruptcy, insolvency or other
action affecting creditors' rights with respect to any Account Debtor.
ARTICLE 4
COVENANTS AND AGREEMENTS
Debtor will at all times comply with the covenants and agreements contained
in this Article 4, from the date hereof and for so long as any part of the
Obligations are outstanding.
Section 4.1 CHANGE IN LOCATION OF COLLATERAL OR DEBTOR. Debtor will
notify Secured Party on or before the date of any change in location of the
Collateral. Debtor will not, without Secured Party's prior written consent,
change the location of the Collateral to any state, county or other jurisdiction
in which Secured Party has not already filed a financing statement or taken
other necessary steps to perfect its security interests in the Collateral or to
maintain such perfection. Debtor will give Secured Party 30 days' prior written
notice of (a) the opening or closing of any place of Debtor's business or
(b) any change in the location of Debtor's chief executive office or address.
Section 4.2 CHANGE IN DEBTOR'S NAME OR CORPORATE STRUCTURE. Debtor
will not change its name, identity or corporate structure (including, without
limitation, any merger, consolidation or sale of substantially all of its
assets) without notifying Secured Party of such change in writing at least 30
days prior to the effective date of such change.
Section 4.3 DOCUMENTS; COLLATERAL IN POSSESSION OF THIRD PARTIES. If
certificates of title or other documents evidencing ownership or possession of
the Collateral are issued or outstanding, Debtor will cause the interest of
Secured Party to be properly noted thereon and will, forthwith upon receipt,
deliver same to Secured Party.
Section 4.4 DELIVERY OF LETTERS OF CREDIT AND INSTRUMENTS. If any
Collateral becomes evidenced by a promissory note, trade acceptance or any other
instrument for the payment of money (other than checks or drafts in payment of
Collateral collected by Debtor in the ordinary course of business prior to
notification by Secured Party under Section 5.8), Debtor will immediately
deliver such instrument to Secured Party appropriately endorsed and, regardless
of the form of presentment, demand, notice of dishonor, protest and notice of
protest with respect thereto, Debtor will remain liable thereon until such
instrument is paid in full.
Section 4.5 MAINTENANCE OF EXISTENCE. Debtor will maintain Debtor's
corporate existence and remain in good standing and qualified to do business in
all jurisdictions pursuant to the laws of which it is so required.
Section 4.6 SALE, DISPOSITION OR ENCUMBRANCE OF COLLATERAL. Except
with Secured Party's prior written consent and except for the Subordinate
Security Interest, Debtor will not in any way encumber any of the Collateral (or
permit or suffer any of the Collateral to be
<PAGE>
encumbered) or sell, assign, lend, rent, lease or otherwise dispose of or
transfer any of the Collateral to or in favor of any person or entity other than
Secured Party.
Section 4.7 PROCEEDS OF COLLATERAL. Except as permitted by
Sections 4.4 and 4.13, Debtor will deliver to Secured Party promptly upon
receipt all proceeds delivered to Debtor from the sale or disposition of any
Collateral. If chattel paper, documents or instruments are received as
proceeds, which are required to be delivered to Secured Party, they will be,
immediately upon receipt, properly endorsed or assigned and delivered to Secured
Party as Collateral. This Section 4.7 shall not be construed to permit sales or
dispositions of Collateral except as may be elsewhere expressly permitted by
this Agreement.
Section 4.8 PAYMENT OF TAXES AND LIENS. Debtor will pay prior to
delinquency all taxes, charges, liens and assessments against the Collateral.
Section 4.9 RECORDS AND INFORMATION. Debtor shall keep accurate and
complete records of the Collateral (including proceeds).
Section 4.10 REIMBURSEMENT OF EXPENSES. Debtor will pay to Secured
Party all advances, charges, costs and expenses (including, without limitation,
all costs and expenses of retaking, holding, preparing for sale and selling,
collecting or otherwise realizing upon the Collateral if an Event of Default
occurs and all attorneys' fees, legal expenses and court costs) incurred by
Secured Party in connection with the exercise of Secured Party's rights and
remedies hereunder. Debtor hereby assumes all liability for the Collateral, the
security interests created hereunder and any use, possession, maintenance,
management, enforcement or collection of any or all of the Collateral. Debtor
agrees to indemnify and hold Secured Party harmless from and against and
covenants to defend Secured Party against any and all losses, damages, claims,
costs, penalties, liabilities and expenses, including, without limitation, court
costs and attorneys' fees, incurred because of, incident to, or with respect to
the Collateral (including, without limitation, any use, possession, maintenance
or management thereof, or any injuries to or deaths of persons or damage to
property). All amounts for which Debtor is liable pursuant to this Section 4.10
shall be due and payable by Debtor to Secured Party upon demand. If Debtor
fails to make such payment upon demand (or if demand is not made due to an
injunction or stay arising from bankruptcy or other proceedings) and Secured
Party pays such amount, the same shall be due and payable by Debtor to Secured
Party, plus interest thereon from the date of Secured Party's demand (or from
the date of Secured Party's payment if demand is not made due to such
proceedings) at the Highest Lawful Rate.
Section 4.11 FURTHER ASSURANCES. Upon the request of Secured Party,
Debtor shall (at Debtor's expense) execute and deliver all such assignments,
certificates, financing statements or other documents and give further
assurances and do all other acts and things as Secured Party may reasonably
request to perfect Secured Party's interest in the Collateral or to protect,
enforce or otherwise effect Secured Party's rights and remedies hereunder.
Section 4.12 INSURANCE. Debtor shall maintain, with financially sound
and reputable insurers, insurance satisfactory in all respects to Secured Party
covering all insurable risks
<PAGE>
with respect to the Collateral, including standard extended coverage, in an
amount at least equal to the value of the Collateral. Policies evidencing any
such insurance shall contain a standard mortgagee's endorsement providing for
payment of any loss to Secured Party, and such policies shall further provide
for 30 days' minimum written cancellation notice to Secured Party. Debtor shall
furnish evidence satisfactory to Secured Party of compliance with these
insurance provisions.
Section 4.13 ACCOUNTS. Except in the ordinary course of business
consistent with past practices, Debtor will not modify, extend, or substitute
any contract, the terms of which shall at any time give rise to an Account
without the prior written consent of Secured Party. Additionally, Debtor shall
not adjust, settle, discount or compromise any of the Accounts without the prior
written consent of Secured Party or as otherwise specified in the ACH Documents.
Section 4.14 CONDITION OF COLLATERAL. Debtor will not use any
Collateral in violation of any law, statute, ordinance, regulation or
administrative order, or suffer it to be so used.
ARTICLE 5
RIGHTS, DUTIES AND POWERS OF SECURED PARTY
The following rights, duties and powers of Secured Party are applicable
irrespective of whether an Event of Default occurs and is continuing:
Section 5.1 NON-JUDICIAL ENFORCEMENT. Secured Party may enforce its
rights hereunder without prior judicial process or judicial hearing, and to the
extent permitted by law Debtor expressly waives any and all legal rights which
might otherwise require Secured Party to enforce its rights by judicial process.
Section 5.2 DISCHARGE ENCUMBRANCES. Secured Party may, at its option,
discharge any taxes, liens, security interests or other encumbrances at any time
levied or placed on the Collateral, may pay for insurance on the Collateral and
may pay for the maintenance and preservation of the Collateral. Debtor agrees
to reimburse Secured Party upon demand for any payment so made, plus interest
thereon from the date of Secured Party's demand at the Highest Lawful Rate.
Section 5.3 ATTORNEY-IN-FACT. From and after an Event of Default,
Debtor hereby irrevocably appoints Secured Party as Debtor's attorney-in-fact,
with full authority in the place and stead of Debtor and in the name of Debtor
or otherwise, from time to time in Secured Party's discretion, but at Debtor's
cost and expense and without notice to Debtor to:
(a) obtain, adjust, sell and cancel any insurance with respect to the
Collateral and endorse any draft drawn by insurers of the Collateral, and
Secured Party may apply any proceeds or unearned premiums of such insurance to
the Obligations (whether or not due);
<PAGE>
(b) take any action and to execute any assignment, certificate,
financing statement, notification, document or instrument which Secured Party
may deem necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation, to receive, endorse and collect all instruments
made payable to Debtor representing any payment or other distribution in respect
of the Collateral or any part thereof and to give full discharge for the same;
and
(c) receive, change the address for delivery, open and dispose of
mail addressed to Debtor, and to execute, assign and endorse negotiable and
other instruments for the payment of money, documents of title or other
evidences of payment, shipment or storage for any form of Collateral on behalf
of and in the name of Debtor.
Section 5.4 TRANSFER OF COLLATERAL. Secured Party may transfer any or
all of the Obligations, and upon any such transfer Secured Party may transfer
its interest in any or all of the Collateral and shall be fully discharged
thereafter from all liability therefor. Any transferee of the Collateral shall
be vested with all rights, powers and remedies of Secured Party hereunder.
Section 5.5 CUMULATIVE AND OTHER RIGHTS. The rights, powers and
remedies of Secured Party hereunder are in addition to all rights, powers and
remedies given by law or in equity. The exercise by Secured Party of any one or
more of the rights, powers and remedies herein shall not be construed as a
waiver of any other rights, powers and remedies, including, without limitation,
any other rights of set-off.
Section 5.6 DISCLAIMER OF CERTAIN DUTIES.
(a) The powers conferred upon Secured Party by this Agreement are to
protect its interest in the Collateral and shall not impose any duty upon
Secured Party to exercise any such powers. Debtor hereby agrees that Secured
Party shall not be liable for, nor shall the indebtedness evidenced by the
Obligations be diminished by, Secured Party's delay or failure to collect upon,
foreclose, sell, take possession of or otherwise obtain value for the
Collateral.
(b) Secured Party shall be under no duty whatsoever to make or give
any presentment, notice of dishonor, protest, demand for performance, notice of
non-performance, notice of intent to accelerate, notice of acceleration, or
other notice or demand in connection with any Collateral or the Obligations, or
to take any steps necessary to preserve any rights against any Obligor, Account
Debtor or other person or entity. Debtor waives any right of marshaling in
respect of any and all Collateral, and waives any right to require Secured Party
to proceed against any Obligor, Account Debtor or other person or entity,
exhaust any Collateral or enforce any other remedy which Secured Party now has
or may hereafter have against any Obligor or other person or entity.
Section 5.7 MODIFICATION OF OBLIGATIONS; OTHER SECURITY. Debtor waives
(a) any and all notice of acceptance, creation, modification, rearrangement,
renewal or extension for any period of any instrument executed by any Obligor in
connection with the Obligations and (b) any defense of any Obligor by reason of
disability, lack of authorization, cessation of the liability of any
<PAGE>
Obligor or for any other reason. Debtor authorizes Secured Party, without
notice or demand and without any reservation of rights against Debtor and
without affecting Debtor's liability hereunder or on the Obligations, from time
to time to (1) take and hold other property, other than the Collateral, as
security for the Obligations, and exchange, enforce, waive and release any or
all of the Collateral, (2) apply the Collateral in the manner permitted by this
Agreement and (3) renew, extend for any period, accelerate, amend or modify,
supplement, enforce, compromise, settle, waive or release the obligations of any
Obligor or any instrument or agreement of such other person or entity with
respect to any or all of the Obligations or Collateral.
Section 5.8 ACCOUNT DEBTORS. Secured Party may notify or require
Debtor to notify Account Debtors that the Accounts have been assigned to Secured
Party and direct such Account Debtors to make payments on the Accounts directly
to Secured Party. To the extent Secured Party does not so elect, Debtor shall
continue to collect the Accounts. Secured Party or its designee shall also have
the right, in its own name or in the name of Debtor, to do any of the following:
(a) to demand, collect, receipt for, settle, compromise any amounts due, give
acquittances for, prosecute or defend any action which may be in relation to any
monies due or to become due by virtue of, the Accounts; (b) to sell, transfer or
assign or otherwise deal in the Accounts or the proceeds thereof or the related
goods, as fully and effectively as if Secured Party were the absolute owner
thereof; (c) to extend the time of payment of any of the Accounts, to grant
waivers and make any allowance or other adjustment with reference thereto;
(d) to endorse the name of Debtor on notes, checks or other evidences of
payments on Collateral that may come into possession of Secured Party; (e) to
take control of cash and other proceeds of any Collateral; (f) to sign the name
of Debtor on any invoice or bill of lading relating to any Collateral, or any
drafts against Account Debtors or other persons making payment with respect to
Collateral; (g) to send a request for verification of Accounts to any Account
Debtor; and (h) to do all other acts and things necessary to carry out the
intent of this Agreement. In the event that Secured Party exercises its right
to settle or adjust any disputes or claims with Account Debtors on behalf of
Debtor for an amount less than the original Account in dispute, Secured Party
shall not be obligated to credit the Obligations in an amount in excess of the
amount that Secured Party receives as payment on such disputed Account. Any
exercise by Secured Party of its rights in and to the Accounts shall, as may be
applicable, be a full and complete release, discharge and acquittance of the
Account Debtor with respect to such Account, and Debtor shall take any action as
may be required by Secured Party in connection therewith. No Account Debtor
shall ever be bound to make inquiry as to the termination of this Agreement or
the rights of Secured Party to act hereunder, but shall be fully protected by
Debtor in making payment directly to Secured Party.
Section 5.9 PROCEEDS. If so requested by Debtor, any payments received
by Secured Party on the Accounts or as proceeds of other Collateral shall upon
final collection by Secured Party be credited towards payment of the
Obligations. In the absence of such request from Debtor, and until so
requested, Secured Party may at Secured Party's option either (a) hold such
collected payments as cash Collateral (and Secured Party may at any time place a
hold or freeze on all or a part of any deposit account of Debtor containing
deposits of such payments up to the amount of such deposits) or (b) credit such
collected payments towards payment of the Obligations whether such Obligations
are due or not.
<PAGE>
ARTICLE 6
EVENTS OF DEFAULT
Section 6.1 REMEDIES. Upon the occurrence and during the continuance
of any Event of Default, Secured Party may take any or all of the following
actions without notice (except where expressly required below) or demand to
Debtor:
(a) Declare all or part of the indebtedness pursuant to the
Obligations immediately due and payable and enforce payment of the same by
Debtor or any Obligor.
(b) Take possession of the Collateral, or at Secured Party's request
Debtor shall, at Debtor's cost, assemble the Collateral and make it available at
a location to be specified by Secured Party which is reasonably convenient to
Debtor and Secured Party. Secured Party may, at its option, render any
equipment unusable that may be included in the Collateral, or, at Secured
Party's request, Debtor will render it unusable. In any event, Debtor shall
bear the risk of accidental loss or damage to or diminution in value of the
Collateral, and Secured Party shall have no liability whatsoever for failure to
obtain or maintain insurance, nor to determine whether any insurance ever in
force is adequate as to amount or as to risk insured.
(c) Sell or lease, in one or more sales or leases and in one or more
parcels, or otherwise dispose of any or all of the Collateral in its then
condition or in any other commercially reasonable manner as Secured Party may
elect, in a public or private transaction, at any location as deemed reasonable
by Secured Party (including, without limitation, Debtor's premises), either for
cash or credit or for future delivery at such price as Secured Party may deem
fair, and (unless prohibited by the Code, as adopted in any applicable
jurisdiction) Secured Party may be the purchaser of any or all Collateral so
sold and may apply upon the purchase price therefor any Obligations secured
hereby. Any such sale or transfer by Secured Party either to itself or to any
other person or entity shall be absolutely free from any claim of right by
Debtor, including any equity or right of redemption, stay or appraisal which
Debtor has or may have under any rule of law, regulation or statute now existing
or hereafter adopted. Upon any such sale or transfer, Secured Party shall have
the right to deliver, assign and transfer to the purchaser or transferee thereof
the Collateral so sold or transferred. It shall not be necessary that the
Collateral or any part thereof be present at the location of any such sale or
transfer. Secured Party may, at its discretion, provide for a public sale, and
any such public sale shall be held at such time or times within ordinary
business hours and at such place or places as Secured Party may fix in the
notice of such sale. Secured Party shall not be obligated to make any sale
pursuant to any such notice. Secured Party may, without notice or publication,
adjourn any public or private sale by announcement at any time and place fixed
for such sale, and such sale may be made at any time or place to which the same
may be so adjourned. In the event any sale or transfer hereunder is not
completed or is defective in the opinion of Secured Party, such sale or transfer
shall not exhaust the rights of Secured Party hereunder, and Secured Party shall
have the right to cause one or more subsequent sales or transfers to be made
hereunder. In the event that any of the Collateral is sold or transferred on
credit, or to be held by Secured Party for future delivery to a purchaser or
transferee, the Collateral so sold or transferred may be retained by Secured
<PAGE>
Party until the purchase price or other consideration is paid by the purchaser
or transferee thereof, but in the event that such purchaser or transferee fails
to pay for the Collateral so sold or transferred or to take delivery thereof,
Secured Party shall incur no liability in connection therewith. If only part of
the Collateral is sold or transferred such that the Obligations remain
outstanding (in whole or in part), Secured Party's rights and remedies hereunder
shall not be exhausted, waived or modified, and Secured Party is specifically
empowered to make one or more successive sales or transfers until all the
Collateral shall be sold or transferred and all the Obligations are paid. In
the event that Secured Party elects not to sell the Collateral, Secured Party
retains its rights to lease or otherwise dispose of or utilize the Collateral or
any part or parts thereof in any manner authorized or permitted by law or in
equity, and to apply the proceeds of the same towards payment of the
Obligations. Each and every method of disposition of the Collateral described
in this Section 6.1(c) or in Section 6.1(f) shall constitute disposition in a
commercially reasonable manner.
(d) Take possession of all books and records of Debtor pertaining to
the Collateral. Secured Party shall have the authority to enter upon any real
property or improvements thereon in order to obtain any such books or records,
or any Collateral located thereon, and remove the same therefrom without
liability.
(e) Apply proceeds of the disposition of the Collateral to the
Obligations in any manner elected by Secured Party and permitted by the Code or
otherwise permitted by law or in equity. Such application may include, without
limitation, the reasonable expenses of retaking, holding, preparing for sale or
other disposition, and the reasonable attorneys' fees and legal expenses
incurred by Secured Party.
(f) Appoint any person or entity as agent to perform any act or acts
necessary or incident to any sale or transfer by Secured Party of the
Collateral. Additionally, any sale or transfer hereunder may be conducted by an
auctioneer or any officer or agent of Secured Party.
(g) Apply and set-off (1) any deposits of Debtor now or hereafter
held by Secured Party; (2) all claims of Debtor against Secured Party, now or
hereafter existing; (3) any other property, rights or interests of Debtor which
come into the possession or custody or under the control of Secured Party; and
(4) the proceeds of any of the foregoing as if the same were included in the
Collateral. Secured Party agrees to notify Debtor promptly after any such
set-off or application; provided, however, the failure of Secured Party to give
any notice shall not affect the validity of such set-off or application.
(h) Exercise all other rights and remedies permitted by law or in
equity.
Section 6.2 LIABILITY FOR DEFICIENCY. If any sale or other disposition
of Collateral by Secured Party or any other action of Secured Party hereunder
results in reduction of the Obligations, such action will not release Debtor
from its liability to Secured Party for any unpaid Obligations, including costs,
charges and expenses incurred in the liquidation of Collateral, together with
interest thereon, and the same shall be immediately due and payable to Secured
Party at Secured Party's address set forth in the opening paragraph hereof.
<PAGE>
Section 6.3 REASONABLE NOTICE. If any applicable provision of any law
requires Secured Party to give reasonable notice of any sale or disposition or
other action, Debtor hereby agrees that five days' prior written notice shall
constitute reasonable notice thereof. Such notice, in the case of public sale,
shall state the time and place fixed for such sale and, in the case of private
sale, the time after which such sale is to be made.
ARTICLE 7
MISCELLANEOUS PROVISIONS
Section 7.1 NOTICES. Any notice required or permitted to be given
under or in connection with this Agreement shall be in writing and shall be
mailed by first class or express mail, postage prepaid, or sent by telex,
telegram, telecopy or other similar form of rapid written transmission or
personally delivered to the receiving party. All such communications shall be
mailed, sent or delivered at the address respectively indicated in the opening
paragraph hereof or at such other address as either party may have furnished the
other party in writing. Any communication so addressed and mailed shall be
deemed to be given when so mailed, any notice so sent by rapid written
transmission shall be deemed to be given when receipt of such transmission is
acknowledged by the receiving operator or equipment, and any communication so
delivered in person shall be deemed to be given when receipted for or actually
received by Debtor or Secured Party, as the case may be.
Section 7.2 AMENDMENTS AND WAIVERS. Secured Party's acceptance of
partial or delinquent payments or any forbearance, failure or delay by Secured
Party in exercising any right, power or remedy hereunder shall not be deemed a
waiver of any obligation of Debtor or any Obligor, or of any right, power or
remedy of Secured Party; and no partial exercise of any right, power or remedy
shall preclude any other or further exercise thereof. Secured Party may remedy
any Event of Default hereunder or in connection with the Obligations without
waiving the Event of Default so remedied. Debtor hereby agrees that if Secured
Party agrees to a waiver of any provision hereunder, or an exchange of or
release of the Collateral, or the addition or release of any Obligor or other
person or entity, any such action shall not constitute a waiver of any of
Secured Party's other rights or of Debtor's obligations hereunder. This
Agreement may be amended only by an instrument in writing executed jointly by
Debtor and Secured Party and may be supplemented only by documents delivered or
to be delivered in accordance with the express terms hereof.
Section 7.3 COPY AS FINANCING STATEMENT. A photocopy or other
reproduction of this Agreement or any financing statement covering the
Collateral is sufficient as a financing statement, and the same may be filed
with any appropriate filing authority for the purpose of perfecting Secured
Party's security interest in the Collateral.
Section 7.4 POSSESSION OF COLLATERAL. Secured Party shall be deemed to
have possession of any Collateral in transit to it or set apart for it (or, in
either case, any of its agents, affiliates or correspondents).
<PAGE>
Section 7.5 REDELIVERY OF COLLATERAL. If any sale or transfer of
Collateral by Secured Party results in full satisfaction of the Obligations, and
after such sale or transfer and discharge there remains a surplus of proceeds,
Secured Party will deliver to Debtor such excess proceeds in a commercially
reasonable time; provided, however, that Secured Party shall not be liable for
any interest, cost or expense in connection with any delay in delivering such
proceeds to Debtor.
Section 7.6 GOVERNING LAW; JURISDICTION. This Agreement and the
security interest granted hereby shall be construed in accordance with and
governed by the laws of the State of Texas (except to the extent that the laws
of any other jurisdiction govern the perfection and priority of the security
interests granted hereby). Debtor consents to and submits to in personam
jurisdiction and venue in the state district and county courts of the county
wherein Secured Party's offices are located at the address specified in the
opening paragraph hereof, and in the Federal District Courts of the district
wherein such offices of Secured Party are located. This submission to
jurisdiction is nonexclusive and does not preclude Secured Party from obtaining
jurisdiction over Debtor or the Collateral in any court otherwise having
jurisdiction.
Section 7.7 CONTINUING SECURITY AGREEMENT.
(a) This Agreement shall constitute a continuing security agreement,
and all representations and warranties, covenants and agreements shall, as
applicable, apply to all future as well as existing transactions. Provisions of
this Agreement, unless by their terms exclusive, shall be in addition to other
agreements between the parties.
(b) Except as may be expressly applicable pursuant to Section 9.505
of the Code, no action taken or omission to act by Secured Party hereunder,
including, without limitation, any action taken or inaction pursuant to
Section 6.1, shall be deemed to constitute a retention of the Collateral in
satisfaction of the Obligations or otherwise to be in full satisfaction of the
Obligations, and the Obligations shall remain in full force and effect, until
Secured Party shall have applied payments (including, without limitation,
collections from Collateral) towards the Obligations in the full amount then
outstanding or until such subsequent time as is hereinafter provided in
Section 7.7(c).
(c) To the extent that any payments on the Obligations or proceeds of
the Collateral are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver or other person or entity under any bankruptcy law, common
law or equitable cause, then to such extent the Obligations so satisfied shall
be revived and continue as if such payment or proceeds had not been received by
Secured Party, and Secured Party's security interests, rights, powers and
remedies hereunder shall continue in full force and effect. In such event, this
Agreement shall be automatically reinstated if it shall theretofore have been
terminated pursuant to Section 7.8.
(d) In the event that the Obligations are structured such that there
are times when no Indebtedness is owing thereunder, this Agreement shall remain
valid and in full force and effect
<PAGE>
as to all subsequent indebtedness included in the Obligations, provided Secured
Party has not in the interim period executed a written release or termination
statement or returned possession of or reassigned the Collateral to Debtor.
Section 7.8 TERMINATION. The grant of a security interest hereunder
and all of Secured Party's rights, powers and remedies in connection therewith
shall remain in full force and effect until Secured Party has retransferred and
delivered all Collateral in its possession to Debtor, and executed a written
release or termination statement and reassigned to Debtor without recourse or
warranty any remaining Collateral and all rights conveyed hereby. Upon the
complete payment of the Obligations and the compliance by Debtor with all
covenants and agreements hereof, Secured Party, at the written request and
expense of Debtor, will release, reassign and transfer the Collateral to Debtor
and declare this Agreement to be of no further force or effect. Notwithstanding
the foregoing, the reimbursement and indemnification provisions of Section 4.10
and the provisions of Section 7.7(c) shall survive the termination of this
Agreement.
Section 7.9 COUNTERPARTS, EFFECTIVENESS. This Agreement may be
executed in two or more counterparts. Each counterpart is deemed an original,
but all such counterparts taken together constitute one and the same instrument.
This Agreement becomes effective upon the execution hereof by Debtor and
delivery of the same to Secured Party, and it is not necessary for Secured Party
to execute any acceptance hereof or otherwise signify or express its acceptance
hereof.
Section 7.10 LOCKBOX. Notwithstanding anything contained herein to the
contrary, Debtor shall cause the accounts referenced in the Deposit and
Disbursement Agreement of even date herewith between Secured Party, Hunt
Petroleum Corporation, and Debtor (the "DEPOSIT AND DISBURSEMENT AGREEMENT") to
be deposited in the lockbox account set forth in the Deposit and Disbursement
Agreement. All such accounts referenced in the Deposit and Disbursement
Agreement and the funds deposited in the lockbox account thereunder shall be
disbursed as provided therein. As to all other accounts referenced herein which
are not subject to the Deposit and Disbursement Agreement, Debtor may use such
accounts and the proceeds thereof in its ordinary course of business until such
time as an Event of Default occurs.
<PAGE>
SIGNATURE PAGE TO SECURITY AGREEMENT
DATED SEPTEMBER 12, 1997, EXECUTED FOR
THE BENEFIT OF BANK ONE, TEXAS,
NATIONAL ASSOCIATION
DEBTOR: WESTERN PACIFIC AIRLINES, INC.
By: /s/George E. Leonard
------------------------------------------
Name: George E. Leonard
----------------------------------------
Title: Vice President/CFO
---------------------------------------
<PAGE>
Exhibit 4.6
SECURITY AGREEMENT
THIS SECURITY AGREEMENT is made as of September 12, 1997, between WESTERN
PACIFIC AIRLINES, INC., a Delaware corporation, with principal offices at 2864
South Circle Drive, Suite 1100, Colorado Springs, Colorado 80906 ("DEBTOR"); and
HUNT PETROLEUM CORPORATION ("HPC"), with offices at 1601 Elm, Suite 5000,
Street, Dallas, Texas , and GFI COMPANY ("GFI") with office at
________________________________________ (collectively, "SECURED PARTY").
RECITALS
A. HPC has executed a Guaranty Agreement of even date herewith, under
which HPC has guaranteed a loan to Debtor from Bank One, Texas, National
Association (the "BANK"), in the original principal amount of Ten Million
Dollars ($10,000,000) (the "LOAN") as evidenced by that certain promissory note
of even date herewith (together with all extensions for any period, renewals,
rearrangements and/or increases thereof, the "NOTE"), executed by Debtor and
payable to the order of the Bank with interest as provided therein.
Additionally, HPC has executed an Indemnification Agreement in favor of the
Bank. The Guaranty Agreement and Indemnification Agreement are herein called
the "GUARANTY DOCUMENTS." GFI has agreed to reimburse to HPC 50% of all amounts
paid by HPC under or in respect of the Guaranty Documents pursuant to a separate
agreement.
B. HPC and GFI have required that Debtor execute the Reimbursement
Agreement of even date herewith (under which Debtor agrees to reimburse to
Secured Party all costs, liabilities, and expenses incurred by such parties in
respect of the Guaranty Documents) and the Registration Rights Agreement of even
date herewith.
C. Therefore, in order to secure the Obligations, as hereinafter defined,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Debtor hereby agrees with Secured Party as
follows:
ARTICLE 1
SECURITY INTEREST
Section 1.1 GRANT OF SECURITY INTEREST. Debtor hereby assigns and
grants to Secured Party a security interest in and right of set-off against the
Collateral (defined to in Section 1.2) to secure the prompt payment and
performance of the Obligations (defined in Section 2.2) and the performance by
Debtor of this Agreement.
<PAGE>
Section 1.2 COLLATERAL. The "COLLATERAL" consists of the following
types or items of property (including property hereafter acquired by Debtor as
well as property which Debtor now owns or in which Debtor has rights):
(a) All accounts, instruments, documents, chattel paper, and general
intangibles arising in the ordinary course of Debtor's business from or in
connection with the sale of tickets for air travel, and delivery of cargo,
including, without limitation, sales directly made by Debtor or through
interline ticket sales, and sales and accounts arising from travel agents, cargo
shippers, and the Airline Reporting Corporation, and those arising through a
clearinghouse arrangement, interline arrangement, other type of intermediary
arrangement, or otherwise, but excluding any accounts held in bank accounts of
Debtor arising from credit card receivables.
(b) Account No. 1822932701 maintained by Debtor with Bank One, Texas,
National Association, and all funds, instruments, investments, documents,
chattel paper, general intangibles, and certificates maintained therein or
related thereto.
(c) Account No. 910-2-786978 maintained at The Chase Manhattan Bank,
N.A., and all funds, instruments, investments, documents, chattel paper, general
intangibles, and certificates maintained therein or related thereto.
(d) A temporary concourse building located on the real property
described in EXHIBIT A attached hereto.
(e) all general intangibles, rights and claims relating to and
interests in all or any of the foregoing, and proceeds of all or any of the
foregoing, including any accounts held in bank accounts of Debtor arising from
credit card receivables.
It is expressly contemplated that additional property may from time to time be
pledged, assigned or granted to Secured Party as additional security for the
Obligations, and the term "Collateral" as used herein shall be deemed for all
purposes hereof to include all such additional property, together with all other
property of the types described above related thereto.
ARTICLE 2
DEFINITIONS
Section 2.1 TERMS DEFINED ABOVE. As used in this Agreement, the terms
defined above shall have the meanings respectively assigned to them.
Section 2.2 CERTAIN DEFINITIONS. As used in this Agreement, the
following terms shall have the following meanings, unless the context otherwise
requires:
"ACCOUNT DEBTOR" means any person or entity liable (whether directly
or indirectly, primarily or secondarily) for the payment or performance of
any obligations included in the
<PAGE>
Collateral, whether as an account debtor (as defined in the Code), obligor
on an instrument, issuer of documents or securities, guarantor or
otherwise.
"AGREEMENT" means this Security Agreement, as the same may from time
to time be amended or supplemented.
"CODE" means the Uniform Commercial Code as presently in effect in the
State of Texas, Business and Commerce Code, Chapters 1 through 9. Unless
otherwise indicated by the context herein, all uncapitalized terms which
are defined in the Code shall have their respective meanings as used in
Chapter 9 of the Code.
"EVENT OF DEFAULT" means a default under any of the Loan Documents
after the expiration of any applicable cure period (if any), a demand made
for payment of the Note, or both.
"FIXTURES" means all fixtures (as such term is defined in the Code) at
any time included in the Collateral.
"HIGHEST LAWFUL RATE" means the maximum rate of nonusurious interest
allowed from time to time by applicable law.
"OBLIGATIONS" means all present and future liabilities, obligations,
covenants, duties and indebtedness of Debtor to Secured Party under the
Reimbursement Agreement, the Registration Rights Agreement, and any other
agreement evidencing or securing the obligations under such agreements, and
any and all renewals, extensions for any period, rearrangements or
enlargements of the foregoing (collectively, the "OTHER DOCUMENTS"). The
Obligations shall also include all interest, charges, expenses, attorneys'
or other fees and any other sums payable to or incurred by Secured Party in
connection with the execution, administration or enforcement of Secured
Party's rights and remedies under the Other Documents.
"OBLIGOR" means any person or entity, other than Debtor, liable
(whether directly or indirectly, primarily or secondarily) for the payment
or performance of any of the Obligations whether as maker, co-maker,
endorser, guarantor, accommodation party, general partner or otherwise.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
In order to induce Secured Party to accept this Agreement, Debtor
represents and warrants to Secured Party (which representations and warranties
will survive the creation and payment of the Obligations) that:
<PAGE>
Section 3.1 OWNERSHIP OF COLLATERAL; ENCUMBRANCES; VALID AND BINDING
AGREEMENT. Debtor is the legal and beneficial owner of the Collateral free and
clear of any adverse claim, lien, security interest, option or other charge or
encumbrance except for the security interest created by this Agreement, and
Debtor has full right, power and authority to assign and grant a security
interest in the Collateral to Secured Party. This Agreement constitutes a
legal, valid and binding obligation of Debtor enforceable against Debtor in
accordance with its terms. The execution, delivery and performance of this
Agreement will not violate the terms of any contract, agreement, law,
regulation, order, injunction, judgment, decree or writ to which Debtor is
subject and does not require the consent or approval of any other person or
entity. However, Secured Party acknowledges that Debtor has granted a prior
security interest in and to the Collateral to the Bank (the "SENIOR SECURITY
INTEREST"), which security interest is senior to the security interest granted
hereunder, and Secured Party consents thereto.
Section 3.2 NO REQUIRED CONSENT. No authorization, consent, approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body (other than the filing of financing statements) is required for
(a) the due execution, delivery and performance by Debtor of this Agreement,
(b) the grant by Debtor of the security interest granted by this Agreement,
(c) the perfection of such security interest or (d) the exercise by Secured
Party of its rights and remedies under this Agreement.
Section 3.3 SECURITY INTEREST. The grant of the security interest in
the Collateral pursuant to this Agreement creates a valid security interest in
the Collateral, enforceable against Debtor and all third parties and securing
payment of the Obligations.
Section 3.4 NO FILINGS BY THIRD PARTIES. No financing statement or
other public notice or recording covering the Collateral is on file in any
public office (other than any financing statement or other public notice or
recording naming Secured Party as the secured party therein), and Debtor will
not execute any such financing statement or other public notice or recording so
long as any of the Obligations are outstanding. However, Secured Party hereby
acknowledges that the Bank has filed a financing statement in respect of the
Collateral, and Secured Party consents thereto.
Section 3.5 LOCATION OF DEBTOR. Debtor's chief executive office and
Debtor's records concerning the Collateral are located at the address or
location set forth in the opening paragraph hereof.
Section 3.6 FINANCIAL STATEMENTS; COLLATERAL.
(a) All financial statements of Debtor provided by Debtor to Secured
Party in connection with this Agreement or the Obligations fairly present, in
conformity with generally accepted accounting principles, Debtor's financial
position and results of operations as of the dates and for the periods stated
therein (on a consolidated basis where so indicated).
(b) All statements or other information provided by Debtor to Secured
Party describing or with respect to the Collateral is or (in the case of
subsequently furnished information)
<PAGE>
will be when provided correct and complete in all material respects. The
delivery at any time by Debtor to Secured Party of additional Collateral or of
additional descriptions of Collateral shall constitute a representation and
warranty by Debtor to Secured Party hereunder that the representations and
warranties of this Article 3 are correct insofar as they would pertain to such
Collateral or the descriptions thereof.
Section 3.7 ACCOUNTS.
(a) To Debtor's knowledge, each account described in Section 1.2
represents the genuine, valid and legally enforceable indebtedness of an Account
Debtor arising from the sale, lease or rendition by Debtor of goods or services
and is not and will not be subject to contra accounts, set-offs, defenses,
counterclaims, allowances or adjustments (other than discounts for prompt
payment shown on the invoice), or objections or complaints by the Account Debtor
concerning its liability on the Account, other than the settlement adjustments
made pursuant to the Agreement Relating to Settlement of Interline Accounts
through Airlines Clearing House, Inc., dated as of February 1, 1948, between
Airlines Clearing House, Inc. and its several stockholders (Rev. October 1,
1986), as amended, and all rules and regulations applicable thereto (the "ACH
DOCUMENTS").
(b) Debtor has no knowledge of any bankruptcy, insolvency or other
action affecting creditors' rights with respect to any Account Debtor.
ARTICLE 4
COVENANTS AND AGREEMENTS
Debtor will at all times comply with the covenants and agreements contained
in this Article 4, from the date hereof and for so long as any part of the
Obligations are outstanding.
Section 4.1 CHANGE IN LOCATION OF COLLATERAL OR DEBTOR. Debtor will
notify Secured Party on or before the date of any change in location of the
Collateral. Debtor will not, without Secured Party's prior written consent,
change the location of the Collateral to any state, county or other jurisdiction
in which Secured Party has not already filed a financing statement or taken
other necessary steps to perfect its security interests in the Collateral or to
maintain such perfection. Debtor will give Secured Party 30 days' prior written
notice of (a) the opening or closing of any place of Debtor's business or (b)
any change in the location of Debtor's chief executive office or address.
Section 4.2 CHANGE IN DEBTOR'S NAME OR CORPORATE STRUCTURE. Debtor will
not change its name, identity or corporate structure (including, without
limitation, any merger, consolidation or sale of substantially all of its
assets) without notifying Secured Party of such change in writing at least 30
days prior to the effective date of such change.
Section 4.3 DOCUMENTS; COLLATERAL IN POSSESSION OF THIRD PARTIES. If
certificates of title or other documents evidencing ownership or possession of
the Collateral are issued or
<PAGE>
outstanding, Debtor will cause the interest of Secured Party to be properly
noted thereon and will, forthwith upon receipt, deliver same to Secured Party.
Section 4.4 DELIVERY OF LETTERS OF CREDIT AND INSTRUMENTS. If any
Collateral becomes evidenced by a promissory note, trade acceptance or any other
instrument for the payment of money (other than checks or drafts in payment of
Collateral collected by Debtor in the ordinary course of business prior to
notification by Secured Party under Section 5.8), Debtor will immediately
deliver such instrument to Secured Party appropriately endorsed and, regardless
of the form of presentment, demand, notice of dishonor, protest and notice of
protest with respect thereto, Debtor will remain liable thereon until such
instrument is paid in full.
Section 4.5 MAINTENANCE OF EXISTENCE. Debtor will maintain Debtor's
corporate existence and remain in good standing and qualified to do business in
all jurisdictions pursuant to the laws of which it is so required.
Section 4.6 SALE, DISPOSITION OR ENCUMBRANCE OF COLLATERAL. Except with
Secured Party's prior written consent and except for the Senior Security
Interest, Debtor will not in any way encumber any of the Collateral (or permit
or suffer any of the Collateral to be encumbered) or sell, assign, lend, rent,
lease or otherwise dispose of or transfer any of the Collateral to or in favor
of any person or entity other than Secured Party.
Section 4.7 PROCEEDS OF COLLATERAL. Except as permitted by Sections 4.4
and 4.13, Debtor will deliver to Secured Party promptly upon receipt all
proceeds delivered to Debtor from the sale or disposition of any Collateral. If
chattel paper, documents or instruments are received as proceeds, which are
required to be delivered to Secured Party, they will be, immediately upon
receipt, properly endorsed or assigned and delivered to Secured Party as
Collateral. This Section 4.7 shall not be construed to permit sales or
dispositions of Collateral except as may be elsewhere expressly permitted by
this Agreement.
Section 4.8 PAYMENT OF TAXES AND LIENS. Debtor will pay prior to
delinquency all taxes, charges, liens and assessments against the Collateral.
Section 4.9 RECORDS AND INFORMATION. Debtor shall keep accurate and
complete records of the Collateral (including proceeds).
Section 4.10 REIMBURSEMENT OF EXPENSES. Debtor will pay to Secured Party
all advances, charges, costs and expenses (including, without limitation, all
costs and expenses of retaking, holding, preparing for sale and selling,
collecting or otherwise realizing upon the Collateral if an Event of Default
occurs and all attorneys' fees, legal expenses and court costs) incurred by
Secured Party in connection with the exercise of Secured Party's rights and
remedies hereunder. Debtor hereby assumes all liability for the Collateral, the
security interests created hereunder and any use, possession, maintenance,
management, enforcement or collection of any or all of the Collateral. Debtor
agrees to indemnify and hold Secured Party harmless from and against and
covenants to defend Secured Party against any and all losses, damages, claims,
costs, penalties, liabilities and
<PAGE>
expenses, including, without limitation, court costs and attorneys' fees,
incurred because of, incident to, or with respect to the Collateral (including,
without limitation, any use, possession, maintenance or management thereof, or
any injuries to or deaths of persons or damage to property). All amounts for
which Debtor is liable pursuant to this Section 4.10 shall be due and payable by
Debtor to Secured Party upon demand. If Debtor fails to make such payment upon
demand (or if demand is not made due to an injunction or stay arising from
bankruptcy or other proceedings) and Secured Party pays such amount, the same
shall be due and payable by Debtor to Secured Party, plus interest thereon from
the date of Secured Party's demand (or from the date of Secured Party's payment
if demand is not made due to such proceedings) at the Highest Lawful Rate.
Section 4.11 FURTHER ASSURANCES. Upon the request of Secured Party,
Debtor shall (at Debtor's expense) execute and deliver all such assignments,
certificates, financing statements or other documents and give further
assurances and do all other acts and things as Secured Party may reasonably
request to perfect Secured Party's interest in the Collateral or to protect,
enforce or otherwise effect Secured Party's rights and remedies hereunder.
Section 4.12 INSURANCE. Debtor shall maintain, with financially sound
and reputable insurers, insurance satisfactory in all respects to Secured Party
covering all insurable risks with respect to the Collateral, including standard
extended coverage, in an amount at least equal to the value of the Collateral.
Policies evidencing any such insurance shall contain a standard mortgagee's
endorsement providing for payment of any loss to Secured Party, and such
policies shall further provide for 30 days' minimum written cancellation notice
to Secured Party. Debtor shall furnish evidence satisfactory to Secured Party
of compliance with these insurance provisions.
Section 4.13 ACCOUNTS. Except in the ordinary course of business
consistent with past practices, Debtor will not modify, extend, or substitute
any contract, the terms of which shall at any time give rise to an Account
without the prior written consent of Secured Party. Additionally, Debtor shall
not adjust, settle, discount or compromise any of the Accounts without the prior
written consent of Secured Party or as otherwise specified in the ACH Documents.
Section 4.14 CONDITION OF COLLATERAL. Debtor will maintain all the
Collateral in good condition, repair and working order. Debtor will not misuse,
abuse, waste, destroy or endanger the Collateral or allow it to deteriorate,
except for ordinary wear and tear from its intended use. Debtor will repair,
replace or otherwise improve the Collateral as may be necessary. Debtor will
not use any Collateral in violation of any law, statute, ordinance, regulation
or administrative order, or suffer it to be so used.
Section 4.15 COLLATERAL ATTACHED TO OTHER PROPERTY. In the event that
the Collateral is to be attached or affixed to any real property, Debtor hereby
agrees that this Agreement may be filed for record in any appropriate real
estate records as a financing statement which is a fixture filing. In
connection therewith, Debtor will take whatever action is required by Section
4.11. If Debtor is not the record owner of such real property, Debtor will
provide Secured Party with any additional security agreements or financing
statements necessary for the perfection of Secured Party's security interest in
the Collateral.
<PAGE>
ARTICLE 5
RIGHTS, DUTIES AND POWERS OF SECURED PARTY
The following rights, duties and powers of Secured Party are applicable
irrespective of whether an Event of Default occurs and is continuing:
Section 5.1 NON-JUDICIAL ENFORCEMENT. Secured Party may enforce its
rights hereunder without prior judicial process or judicial hearing, and to the
extent permitted by law Debtor expressly waives any and all legal rights which
might otherwise require Secured Party to enforce its rights by judicial process.
Section 5.2 DISCHARGE ENCUMBRANCES. Secured Party may, at its option,
discharge any taxes, liens, security interests or other encumbrances at any time
levied or placed on the Collateral, may pay for insurance on the Collateral and
may pay for the maintenance and preservation of the Collateral. Debtor agrees
to reimburse Secured Party upon demand for any payment so made, plus interest
thereon from the date of Secured Party's demand at the Highest Lawful Rate.
Section 5.3 ATTORNEY-IN-FACT. From and after an Event of Default,
Debtor hereby irrevocably appoints Secured Party as Debtor's attorney-in-fact,
with full authority in the place and stead of Debtor and in the name of Debtor
or otherwise, from time to time in Secured Party's discretion, but at Debtor's
cost and expense and without notice to Debtor to:
(a) obtain, adjust, sell and cancel any insurance with respect to the
Collateral and endorse any draft drawn by insurers of the Collateral, and
Secured Party may apply any proceeds or unearned premiums of such insurance to
the Obligations (whether or not due);
(b) take any action and to execute any assignment, certificate,
financing statement, notification, document or instrument which Secured Party
may deem necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation, to receive, endorse and collect all instruments
made payable to Debtor representing any payment or other distribution in respect
of the Collateral or any part thereof and to give full discharge for the same;
and
(c) receive, change the address for delivery, open and dispose of
mail addressed to Debtor, and to execute, assign and endorse negotiable and
other instruments for the payment of money, documents of title or other
evidences of payment, shipment or storage for any form of Collateral on behalf
of and in the name of Debtor.
Section 5.4 TRANSFER OF COLLATERAL. Secured Party may transfer any or
all of the Obligations, and upon any such transfer Secured Party may transfer
its interest in any or all of the Collateral and shall be fully discharged
thereafter from all liability therefor. Any transferee of the Collateral shall
be vested with all rights, powers and remedies of Secured Party hereunder.
<PAGE>
Section 5.5 CUMULATIVE AND OTHER RIGHTS. The rights, powers and
remedies of Secured Party hereunder are in addition to all rights, powers and
remedies given by law or in equity. The exercise by Secured Party of any one or
more of the rights, powers and remedies herein shall not be construed as a
waiver of any other rights, powers and remedies, including, without limitation,
any other rights of set-off.
Section 5.6 DISCLAIMER OF CERTAIN DUTIES.
(a) The powers conferred upon Secured Party by this Agreement are to
protect its interest in the Collateral and shall not impose any duty upon
Secured Party to exercise any such powers. Debtor hereby agrees that Secured
Party shall not be liable for, nor shall the indebtedness evidenced by the
Obligations be diminished by, Secured Party's delay or failure to collect upon,
foreclose, sell, take possession of or otherwise obtain value for the
Collateral.
(b) Secured Party shall be under no duty whatsoever to make or give
any presentment, notice of dishonor, protest, demand for performance, notice of
non-performance, notice of intent to accelerate, notice of acceleration, or
other notice or demand in connection with any Collateral or the Obligations, or
to take any steps necessary to preserve any rights against any Obligor, Account
Debtor or other person or entity. Debtor waives any right of marshaling in
respect of any and all Collateral, and waives any right to require Secured Party
to proceed against any Obligor, Account Debtor or other person or entity,
exhaust any Collateral or enforce any other remedy which Secured Party now has
or may hereafter have against any Obligor or other person or entity.
Section 5.7 MODIFICATION OF OBLIGATIONS; OTHER SECURITY. Debtor waives
(a) any and all notice of acceptance, creation, modification, rearrangement,
renewal or extension for any period of any instrument executed by any Obligor in
connection with the Obligations and (b) any defense of any Obligor by reason of
disability, lack of authorization, cessation of the liability of any Obligor or
for any other reason. Debtor authorizes Secured Party, without notice or demand
and without any reservation of rights against Debtor and without affecting
Debtor's liability hereunder or on the Obligations, from time to time to (1)
take and hold other property, other than the Collateral, as security for the
Obligations, and exchange, enforce, waive and release any or all of the
Collateral, (2) apply the Collateral in the manner permitted by this Agreement
and (3) renew, extend for any period, accelerate, amend or modify, supplement,
enforce, compromise, settle, waive or release the obligations of any Obligor or
any instrument or agreement of such other person or entity with respect to any
or all of the Obligations or Collateral.
Section 5.8 ACCOUNT DEBTORS. Secured Party may notify or require Debtor
to notify Account Debtors that the Accounts have been assigned to Secured Party
and direct such Account Debtors to make payments on the Accounts directly to
Secured Party. To the extent Secured Party does not so elect, Debtor shall
continue to collect the Accounts. Secured Party or its designee shall also have
the right, in its own name or in the name of Debtor, to do any of the following:
(a) to demand, collect, receipt for, settle, compromise any amounts due, give
acquittances for, prosecute or defend any action which may be in relation to any
monies due or to become due by
<PAGE>
virtue of, the Accounts; (b) to sell, transfer or assign or otherwise deal in
the Accounts or the proceeds thereof or the related goods, as fully and
effectively as if Secured Party were the absolute owner thereof; (c) to extend
the time of payment of any of the Accounts, to grant waivers and make any
allowance or other adjustment with reference thereto; (d) to endorse the name of
Debtor on notes, checks or other evidences of payments on Collateral that may
come into possession of Secured Party; (e) to take control of cash and other
proceeds of any Collateral; (f) to sign the name of Debtor on any invoice or
bill of lading relating to any Collateral, or any drafts against Account Debtors
or other persons making payment with respect to Collateral; (g) to send a
request for verification of Accounts to any Account Debtor; and (h) to do all
other acts and things necessary to carry out the intent of this Agreement. In
the event that Secured Party exercises its right to settle or adjust any
disputes or claims with Account Debtors on behalf of Debtor for an amount less
than the original Account in dispute, Secured Party shall not be obligated to
credit the Obligations in an amount in excess of the amount that Secured Party
receives as payment on such disputed Account. Any exercise by Secured Party of
its rights in and to the Accounts shall, as may be applicable, be a full and
complete release, discharge and acquittance of the Account Debtor with respect
to such Account, and Debtor shall take any action as may be required by Secured
Party in connection therewith. No Account Debtor shall ever be bound to make
inquiry as to the termination of this Agreement or the rights of Secured Party
to act hereunder, but shall be fully protected by Debtor in making payment
directly to Secured Party.
Section 5.9 PROCEEDS. If so requested by Debtor, any payments received
by Secured Party on the Accounts or as proceeds of other Collateral shall upon
final collection by Secured Party be credited towards payment of the
Obligations. In the absence of such request from Debtor, and until so
requested, Secured Party may at Secured Party's option either (a) hold such
collected payments as cash Collateral (and Secured Party may at any time place a
hold or freeze on all or a part of any deposit account of Debtor containing
deposits of such payments up to the amount of such deposits) or (b) credit such
collected payments towards payment of the Obligations whether such Obligations
are due or not.
ARTICLE 6
EVENTS OF DEFAULT
Section 6.1 REMEDIES. Upon the occurrence and during the continuance of
any Event of Default, Secured Party may take any or all of the following actions
without notice (except where expressly required below) or demand to Debtor:
(a) Declare all or part of the indebtedness pursuant to the
Obligations immediately due and payable and enforce payment of the same by
Debtor or any Obligor.
(b) Take possession of the Collateral, or at Secured Party's request
Debtor shall, at Debtor's cost, assemble the Collateral and make it available at
a location to be specified by Secured Party which is reasonably convenient to
Debtor and Secured Party. Secured Party may, at its option, render any
equipment unusable that may be included in the Collateral, or, at Secured
<PAGE>
Party's request, Debtor will render it unusable. In any event, Debtor shall
bear the risk of accidental loss or damage to or diminution in value of the
Collateral, and Secured Party shall have no liability whatsoever for failure to
obtain or maintain insurance, nor to determine whether any insurance ever in
force is adequate as to amount or as to risk insured.
(c) Sell or lease, in one or more sales or leases and in one or more
parcels, or otherwise dispose of any or all of the Collateral in its then
condition or in any other commercially reasonable manner as Secured Party may
elect, in a public or private transaction, at any location as deemed reasonable
by Secured Party (including, without limitation, Debtor's premises), either for
cash or credit or for future delivery at such price as Secured Party may deem
fair, and (unless prohibited by the Code, as adopted in any applicable
jurisdiction) Secured Party may be the purchaser of any or all Collateral so
sold and may apply upon the purchase price therefor any Obligations secured
hereby. Any such sale or transfer by Secured Party either to itself or to any
other person or entity shall be absolutely free from any claim of right by
Debtor, including any equity or right of redemption, stay or appraisal which
Debtor has or may have under any rule of law, regulation or statute now existing
or hereafter adopted. Upon any such sale or transfer, Secured Party shall have
the right to deliver, assign and transfer to the purchaser or transferee thereof
the Collateral so sold or transferred. It shall not be necessary that the
Collateral or any part thereof be present at the location of any such sale or
transfer. Secured Party may, at its discretion, provide for a public sale, and
any such public sale shall be held at such time or times within ordinary
business hours and at such place or places as Secured Party may fix in the
notice of such sale. Secured Party shall not be obligated to make any sale
pursuant to any such notice. Secured Party may, without notice or publication,
adjourn any public or private sale by announcement at any time and place fixed
for such sale, and such sale may be made at any time or place to which the same
may be so adjourned. In the event any sale or transfer hereunder is not
completed or is defective in the opinion of Secured Party, such sale or transfer
shall not exhaust the rights of Secured Party hereunder, and Secured Party shall
have the right to cause one or more subsequent sales or transfers to be made
hereunder. In the event that any of the Collateral is sold or transferred on
credit, or to be held by Secured Party for future delivery to a purchaser or
transferee, the Collateral so sold or transferred may be retained by Secured
Party until the purchase price or other consideration is paid by the purchaser
or transferee thereof, but in the event that such purchaser or transferee fails
to pay for the Collateral so sold or transferred or to take delivery thereof,
Secured Party shall incur no liability in connection therewith. If only part of
the Collateral is sold or transferred such that the Obligations remain
outstanding (in whole or in part), Secured Party's rights and remedies hereunder
shall not be exhausted, waived or modified, and Secured Party is specifically
empowered to make one or more successive sales or transfers until all the
Collateral shall be sold or transferred and all the Obligations are paid. In
the event that Secured Party elects not to sell the Collateral, Secured Party
retains its rights to lease or otherwise dispose of or utilize the Collateral or
any part or parts thereof in any manner authorized or permitted by law or in
equity, and to apply the proceeds of the same towards payment of the
Obligations. Each and every method of disposition of the Collateral described
in this Section 6.1(c) or in Section 6.1(f) shall constitute disposition in a
commercially reasonable manner.
(d) Take possession of all books and records of Debtor pertaining to
the Collateral. Secured Party shall have the authority to enter upon any real
property or improvements
<PAGE>
thereon in order to obtain any such books or records, or any Collateral located
thereon, and remove the same therefrom without liability.
(e) Apply proceeds of the disposition of the Collateral to the
Obligations in any manner elected by Secured Party and permitted by the Code or
otherwise permitted by law or in equity. Such application may include, without
limitation, the reasonable expenses of retaking, holding, preparing for sale or
other disposition, and the reasonable attorneys' fees and legal expenses
incurred by Secured Party.
(f) Appoint any person or entity as agent to perform any act or acts
necessary or incident to any sale or transfer by Secured Party of the
Collateral. Additionally, any sale or transfer hereunder may be conducted by an
auctioneer or any officer or agent of Secured Party.
(g) Apply and set-off (1) any deposits of Debtor now or hereafter
held by Secured Party; (2) all claims of Debtor against Secured Party, now or
hereafter existing; (3) any other property, rights or interests of Debtor which
come into the possession or custody or under the control of Secured Party; and
(4) the proceeds of any of the foregoing as if the same were included in the
Collateral. Secured Party agrees to notify Debtor promptly after any such
set-off or application; provided, however, the failure of Secured Party to give
any notice shall not affect the validity of such set-off or application.
(h) Exercise all other rights and remedies permitted by law or in
equity.
Section 6.2 LIABILITY FOR DEFICIENCY. If any sale or other disposition
of Collateral by Secured Party or any other action of Secured Party hereunder
results in reduction of the Obligations, such action will not release Debtor
from its liability to Secured Party for any unpaid Obligations, including costs,
charges and expenses incurred in the liquidation of Collateral, together with
interest thereon, and the same shall be immediately due and payable to Secured
Party at Secured Party's address set forth in the opening paragraph hereof.
Section 6.3 REASONABLE NOTICE. If any applicable provision of any law
requires Secured Party to give reasonable notice of any sale or disposition or
other action, Debtor hereby agrees that five days' prior written notice shall
constitute reasonable notice thereof. Such notice, in the case of public sale,
shall state the time and place fixed for such sale and, in the case of private
sale, the time after which such sale is to be made.
ARTICLE 7
MISCELLANEOUS PROVISIONS
Section 7.1 NOTICES. Any notice required or permitted to be given under
or in connection with this Agreement shall be in writing and shall be mailed by
first class or express mail, postage prepaid, or sent by telex, telegram,
telecopy or other similar form of rapid written transmission or personally
delivered to the receiving party. All such communications shall be
<PAGE>
mailed, sent or delivered at the address respectively indicated in the opening
paragraph hereof or at such other address as either party may have furnished the
other party in writing. Any communication so addressed and mailed shall be
deemed to be given when so mailed, any notice so sent by rapid written
transmission shall be deemed to be given when receipt of such transmission is
acknowledged by the receiving operator or equipment, and any communication so
delivered in person shall be deemed to be given when receipted for or actually
received by Debtor or Secured Party, as the case may be.
Section 7.2 AMENDMENTS AND WAIVERS. Secured Party's acceptance of
partial or delinquent payments or any forbearance, failure or delay by Secured
Party in exercising any right, power or remedy hereunder shall not be deemed a
waiver of any obligation of Debtor or any Obligor, or of any right, power or
remedy of Secured Party; and no partial exercise of any right, power or remedy
shall preclude any other or further exercise thereof. Secured Party may remedy
any Event of Default hereunder or in connection with the Obligations without
waiving the Event of Default so remedied. Debtor hereby agrees that if Secured
Party agrees to a waiver of any provision hereunder, or an exchange of or
release of the Collateral, or the addition or release of any Obligor or other
person or entity, any such action shall not constitute a waiver of any of
Secured Party's other rights or of Debtor's obligations hereunder. This
Agreement may be amended only by an instrument in writing executed jointly by
Debtor and Secured Party and may be supplemented only by documents delivered or
to be delivered in accordance with the express terms hereof.
Section 7.3 COPY AS FINANCING STATEMENT. A photocopy or other
reproduction of this Agreement or any financing statement covering the
Collateral is sufficient as a financing statement, and the same may be filed
with any appropriate filing authority for the purpose of perfecting Secured
Party's security interest in the Collateral.
Section 7.4 POSSESSION OF COLLATERAL. Secured Party shall be deemed to
have possession of any Collateral in transit to it or set apart for it (or, in
either case, any of its agents, affiliates or correspondents).
Section 7.5 REDELIVERY OF COLLATERAL. If any sale or transfer of
Collateral by Secured Party results in full satisfaction of the Obligations, and
after such sale or transfer and discharge there remains a surplus of proceeds,
Secured Party will deliver to Debtor such excess proceeds in a commercially
reasonable time; provided, however, that Secured Party shall not be liable for
any interest, cost or expense in connection with any delay in delivering such
proceeds to Debtor.
Section 7.6 GOVERNING LAW; JURISDICTION. This Agreement and the
security interest granted hereby shall be construed in accordance with and
governed by the laws of the State of Texas (except to the extent that the laws
of any other jurisdiction govern the perfection and priority of the security
interests granted hereby). Debtor consents to and submits to in personam
jurisdiction and venue in the state district and county courts of the county
wherein Secured Party's offices are located at the address specified in the
opening paragraph hereof, and in the Federal District Courts of the district
wherein such offices of Secured Party are located. This submission to
<PAGE>
jurisdiction is nonexclusive and does not preclude Secured Party from obtaining
jurisdiction over Debtor or the Collateral in any court otherwise having
jurisdiction.
Section 7.7 CONTINUING SECURITY AGREEMENT.
(a) This Agreement shall constitute a continuing security agreement,
and all representations and warranties, covenants and agreements shall, as
applicable, apply to all future as well as existing transactions. Provisions of
this Agreement, unless by their terms exclusive, shall be in addition to other
agreements between the parties.
(b) Except as may be expressly applicable pursuant to Section 9.505
of the Code, no action taken or omission to act by Secured Party hereunder,
including, without limitation, any action taken or inaction pursuant to Section
6.1, shall be deemed to constitute a retention of the Collateral in satisfaction
of the Obligations or otherwise to be in full satisfaction of the Obligations,
and the Obligations shall remain in full force and effect, until Secured Party
shall have applied payments (including, without limitation, collections from
Collateral) towards the Obligations in the full amount then outstanding or until
such subsequent time as is hereinafter provided in Section 7.7(c).
(c) To the extent that any payments on the Obligations or proceeds of
the Collateral are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver or other person or entity under any bankruptcy law, common
law or equitable cause, then to such extent the Obligations so satisfied shall
be revived and continue as if such payment or proceeds had not been received by
Secured Party, and Secured Party's security interests, rights, powers and
remedies hereunder shall continue in full force and effect. In such event, this
Agreement shall be automatically reinstated if it shall theretofore have been
terminated pursuant to Section 7.8.
(d) In the event that the Obligations are structured such that there
are times when no Indebtedness is owing thereunder, this Agreement shall remain
valid and in full force and effect as to all subsequent indebtedness included in
the Obligations, provided Secured Party has not in the interim period executed a
written release or termination statement or returned possession of or reassigned
the Collateral to Debtor.
Section 7.8 TERMINATION. The grant of a security interest hereunder and
all of Secured Party's rights, powers and remedies in connection therewith shall
remain in full force and effect until Secured Party has retransferred and
delivered all Collateral in its possession to Debtor, and executed a written
release or termination statement and reassigned to Debtor without recourse or
warranty any remaining Collateral and all rights conveyed hereby. Upon the
complete payment of the Obligations and the compliance by Debtor with all
covenants and agreements hereof, Secured Party, at the written request and
expense of Debtor, will release, reassign and transfer the Collateral to Debtor
and declare this Agreement to be of no further force or effect. Notwithstanding
the foregoing, the reimbursement and indemnification provisions of Section 4.10
and the provisions of Section 7.7(c) shall survive the termination of this
Agreement.
<PAGE>
Section 7.9 COUNTERPARTS, EFFECTIVENESS. This Agreement may be executed
in two or more counterparts. Each counterpart is deemed an original, but all
such counterparts taken together constitute one and the same instrument. This
Agreement becomes effective upon the execution hereof by Debtor and delivery of
the same to Secured Party, and it is not necessary for Secured Party to execute
any acceptance hereof or otherwise signify or express its acceptance hereof.
Section 7.10 LOCKBOX. Notwithstanding anything contained herein to the
contrary, Debtor shall cause the accounts referenced in the Deposit and
Disbursement Agreement of even date herewith between the Bank, HPC, and Debtor
(the "DEPOSIT AND DISBURSEMENT AGREEMENT") to be deposited in the lockbox
account set forth in the Deposit and Disbursement Agreement. All such accounts
referenced in the Deposit and Disbursement Agreement and the funds deposited in
the lockbox account thereunder shall be disbursed as provided therein. As to
all other accounts referenced herein which are not subject to the Deposit and
Disbursement Agreement, Debtor may use such accounts and the proceeds thereof in
its ordinary course of business until such time as an Event of Default occurs.
<PAGE>
SIGNATURE PAGE TO SECURITY AGREEMENT
DATED SEPTEMBER 12, 1997, EXECUTED FOR
THE BENEFIT OF HUNT PETROLEUM CORPORATION AND GFI COMPANY
DEBTOR: WESTERN PACIFIC AIRLINES, INC.
By: /s/George E. Leonard
----------------------------------------------
Name: George E. Leonard
--------------------------------------------
Title: Vice President/CFO
-------------------------------------------
<PAGE>
EXHIBIT A
A PORTION OF LOT 1, COLORADO SPRINGS AIRPORT AND INDUSTRIAL PARK FILING NO.
1 IN THE CITY OF COLORADO SPRINGS, EL PASO COUNTY, COLORADO, ACCORDING TO
THE SUBDIVISION PLAT THEREOF, RECORDED IN PLAT BOOK G-5 AT PAGE 67 OF THE
RECORDS OF THE EL PASO COUNTY CLERK AND RECORDER: SAID PORTION BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT FROM WHICH THE SOUTHWEST CORNER OF SECTION 32,
TOWNSHIP 14 SOUTH, RANGE 65 WEST OF THE 6TH PRINCIPAL MERIDIAN BEARS
S07DEG.27'59"W A DISTANCE OF 6214.70 FEET, SAID SOUTHWEST CORNER BEING AN
ANGLE POINT IN THE SOUTHERLY LINE OF SAID LOT 1, COLORADO SPRINGS, AIRPORT
AND INDUSTRIAL PARK FILING NO. 1 AND BEING MONUMENTED BY A 3-1/4 INCH
ALUMINUM CAP LS 16411; THENCE N45DEG.26'31"W A DISTANCE OF 40.67 FEET;
THENCE N44DEG.33'29"E A DISTANCE OF 240.38 FEET; THENCE N00DEG.26'31"W A
DISTANCE OF 288.39 FEET; THENCE N89DEG.33'29"E A DISTANCE OF 40.67 FEET;
THENCE S00DEG.26'31"E A DISTANCE OF 385.33 FEET; THENCE S89DEG.33'29"W A
DISTANCE OF 7.84 FEET; THENCE S00DEG.26'31"E A DISTANCE OF 20.67 FEET;
THENCE S89DEG.33'29"W A DISTANCE OF 85.00 FEET; THENCE N45DEG.26'31"W A
DISTANCE OF 5.60 FEET; THENCE S44DEG.33'29"W A DISTANCE OF 120.33 FEET TO
THE POINT OF BEGINNING. THE DESCRIBED PORTION CONTAINING 27,088 SQUARE
FEET, MORE OR LESS.
BEARINGS USED IN THIS DESCRIPTION ARE BASED ON THE RECORDED SUBDIVISION
PLAT.
A-1
<PAGE>
Exhibit 4.7
PLEDGE AGREEMENT
This Pledge Agreement (this "AGREEMENT") is entered into as of
September 12, 1997, between WESTERN PACIFIC AIRLINES, INC., whose address for
notice is 2864 South Circle Drive, Suite 1100, Colorado Springs, Colorado, 80906
("BORROWER"), and BANK ONE, TEXAS, NATIONAL ASSOCIATION, whose address for
notice is 1717 Main Street, Third Floor, Dallas, Texas, 75201 ("LENDER").
1. Borrower hereby pledges and assigns to Lender, and grants to Lender a
security interest in, all of its rights (including, without limitation, rights
of withdrawal), titles, and interests in and to (a) Account No. 910-2-786978
(the "ACCOUNT") maintained at The Chase Manhattan Bank, N.A. (the "CLEARING
BANK"), (b) all instruments (including, without limitation, commercial paper and
certificates of deposit), securities (certificated and uncertificated),
documents, money, general intangibles and other investments held in or relating
to the Account, (1) whether now owned or hereafter acquired, (2) whether now or
hereafter on deposit or held therein, and (3) whether acquired in the name of
Debtor, in the name of Clearing Bank, as agent, custodian, or nominee of Debtor,
or otherwise, and (c) all general intangibles, rights and claims relating to,
interests in, and proceeds of all or any of the foregoing, whether now existing
or hereafter arising (collectively, the "COLLATERAL").
2. The pledge and security interest herein granted are given to secure
payment of the indebtedness evidenced by the promissory note dated September 10,
1997, executed by Borrower payable to the order of Lender in the principal
amount of $10,000,000 (the "NOTE"), and the performance of all obligations of
Borrower arising under the Note, all documents now or hereafter executed to
evidence or secure the indebtedness evidenced by the Note and all modifications,
substitutions for, and renewals or extensions of the foregoing (collectively
with this Pledge Agreement, the "LOAN DOCUMENTS"), and all interest, charges,
expenses, and attorneys' or other fees and any other costs incurred by Lender in
connection with the execution, administration or enforcement of Lender's rights
and remedies hereunder, or under any other Loan Document.
The obligations referenced in Sections 2.(a) are collectively called the
"OBLIGATIONS".
3. (a) Borrower represents and warrants that (1) the Collateral is duly
and validly pledged to Lender in accordance with law, (2) Borrower has good
title to the Collateral, free and clear of all claims, mortgages, pledges,
liens, encumbrances and security interests of every nature whatsoever, and
(3) no consent or approval of any person, entity or governmental or regulatory
authority, was or is necessary to the validity of this pledge.
(b) Borrower shall faithfully preserve and protect Lender's security
interest in the Collateral and the proceeds thereof and shall do all such acts
and things and execute and deliver all such documents and instruments, including
without limitation further pledges, security agreements,
1
<PAGE>
notices, assignments, financing statements and continuation statements, as
Lender may request from time to time to preserve, protect and perfect such
security interest.
(c) Borrower shall not permit the Collateral or any dividends,
distributions or interest therefrom or thereon to be subject to any liens,
security interests and adverse claims other than Lender's security interest.
Borrower shall defend Lender's right, title, lien and security interest in and
to the Collateral against the claims and demands of all persons whomsoever.
Notwithstanding the foregoing, Borrower may pledge its interest in the
Collateral to Hunt Petroleum Corporation and GFI Company, provided that such
parties' interests therein are subordinate to Lender's in all respects.
4. Lender may cause all or any of the Collateral to be transferred to or
registered in its name or the name of its nominee. Lender may, for and in the
name of Borrower, and is hereby irrevocably authorized to, execute endorsements,
assignments or other instruments of conveyance or transfer with respect to
Collateral and give such instructions to Clearing Bank, any issuer of the
Collateral, and any other person or entity with regard to the Collateral as it
shall deem appropriate in connection herewith. Borrower hereby irrevocably
appoints Lender as Borrower's attorney-in-fact for the purposes of carrying out
the provisions of this Agreement and the Loan Documents and taking any action
and executing any instrument which it may deem necessary or advisable to
accomplish the purposes hereof or thereof; such appointment is coupled with an
interest and is irrevocable. Lender shall not be obligated to inform Borrower
of any changes in the Collateral or rights relating thereto, or to sell or
otherwise dispose of the Collateral, and Lender's failure to take any such
action shall not be deemed a failure to exercise reasonable care of the
Collateral, even if the value of the Collateral has declined or is declining.
5. If the Obligations are not paid or performed when due, whether by
acceleration or otherwise, or any default occurs under the Loan Documents,
Lender may, without notice to Borrower and in addition to all other rights and
remedies it may have, (a) instruct Clearing Bank to distribute the Collateral
and any of the proceeds thereof and all funds on deposit in the Account to
Lender, and (b) apply such funds to the payment and performance of the
Obligations, all at such times, in such order, and in such amounts as Lender in
its discretion determines. Borrower shall not be credited with any proceeds of
sale of any Collateral until cash payment thereof has actually been received by
Lender. No demand, advertisement or notice shall be required in connection with
any sale or other disposition of the Collateral, unless notice of the event in
question cannot be effectively waived before a default, in which case,
five-days' prior written notice thereof shall be reasonable notice. Lender
shall not be obligated to make any sale of Collateral if it shall determine not
to do so, regardless of the fact that notice of sale may have been given.
6. The remedies provided herein are not exclusive, but are cumulative and
in addition to all other remedies in favor of Lender existing at law or in
equity. No delay on the part of Lender or of any holder of the Obligations in
exercising any of its options, powers or rights, or partial or single exercise
thereof, shall constitute a waiver thereof.
2
<PAGE>
7. The lien and security interest imposed hereby shall remain in effect
until they are released by Lender. Upon payment and performance in full of the
Obligations, Lender shall release and assign the Collateral to Borrower. The
assignment by Lender to Borrower of the Collateral shall be without
representation or warranty of any nature and without recourse.
8. Any notice to Borrower may be given by facsimile transmission, by
certified mail, return receipt requested, or by delivery to Borrower at the
address specified above, or at such other address as Borrower may hereafter
designate in writing and given in like manner to Lender.
9. If Borrower comprises more than one person, each such person shall be
jointly and severally liable hereunder.
10. Borrower shall defend, indemnify and hold harmless Lender against all
losses, damages, liabilities, and expenses (including reasonable attorneys' fees
and expenses) suffered by it in connection with the pledge made hereby; in
addition, Borrower shall pay all expenses (including reasonable attorneys' fees
and expenses) incurred in connection with the enforcement or attempted
enforcement and/or perfection by Lender of the security interest granted hereby.
11. Any waiver, consent or approval of any kind or character on the part
of Lender of any default under this Agreement or any such waiver of any
provision or condition of this Agreement must be in writing and shall be
effective only to the extent specifically set forth in such writing. This
Agreement and the rights and obligations of Lender and Borrower hereunder shall
be construed in accordance with and governed by Texas law, and shall bind and
inure to the benefit of Borrower and Lender and their respective heirs, legal
representatives, successors and assigns and all subsequent holders of the
Obligations.
12. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and all of which taken together shall
constitute but one and the same instrument.
13. This Agreement is in addition to and not in limitation of any other
agreement between the parties. If any conflict exists between the provisions of
this Agreement and those of any other such agreement, the provisions of this
Agreement shall prevail.
Executed as of the date first written above.
WESTERN PACIFIC AIRLINES, INC.
By: /s/George E. Leonard
------------------------------------------
Name: George E. Leonard
----------------------------------------
Title: Vice President/CFO
---------------------------------------
3
<PAGE>
BANK ONE, TEXAS, NATIONAL ASSOCIATION
By: /s/ Reed V. Thompson
-----------------------------------------
Name: Reed V. Thompson
----------------------------------------
Title: Vice President
---------------------------------------
SUBORDINATION
The undersigned hereby subordinate all of their respective rights, titles,
and interests in and to the Collateral to the pledge and security interest
herein granted in favor of Lender.
HUNT PETROLEUM CORPORATION
By: /s/ Ivan Irwin
------------------------------------------
Name: Ivan Irwin, Jr.
----------------------------------------
Title: Executive Vice President
---------------------------------------
GFI COMPANY
By: /s/Edward Gaylord II
-----------------------------------------
Name: Edward Gaylord II
---------------------------------------
Title:
--------------------------------------
4
<PAGE>
Exhibit 4.8
PLEDGE AGREEMENT
This Pledge Agreement (this "AGREEMENT") is entered into as of
September 12, 1997, between WESTERN PACIFIC AIRLINES, INC., whose address for
notice is 2864 South Circle Drive, Suite 1100, Colorado Springs, Colorado, 80906
("BORROWER"), and HUNT PETROLEUM CORPORATION, whose address for notice is 1601
Elm Street, Suite 3400, Dallas, Texas, 75201 and GFI COMPANY, whose address for
notice is 3753 Howard Hughes Parkway, Suite 200, Las Vegas, Nevada, 89015
(collectively, ("SECURED PARTY").
1. Borrower hereby pledges and assigns to Secured Party, and grants to
Secured Party a security interest in, all of its rights (including, without
limitation, rights of withdrawal), titles, and interests in and to (a) Account
No. 910-2-786978 (the "ACCOUNT") maintained at The Chase Manhattan Bank, N.A.
(the "CLEARING BANK"), (b) all instruments (including, without limitation,
commercial paper and certificates of deposit), securities (certificated and
uncertificated), documents, money, general intangibles and other investments
held in or relating to the Account, (1) whether now owned or hereafter acquired,
(2) whether now or hereafter on deposit or held therein, and (3) whether
acquired in the name of Debtor, in the name of Clearing Bank, as agent,
custodian, or nominee of Debtor, or otherwise, and (c) all general intangibles,
rights and claims relating to, interests in, and proceeds of all or any of the
foregoing, whether now existing or hereafter arising (collectively, the
"COLLATERAL").
2. The pledge and security interest herein granted are given to secure
payment of the indebtedness evidenced by the promissory note dated September 10,
1997, executed by Borrower payable to the order of Secured Party in the
principal amount of $10,000,000 (the "NOTE"), and the performance of all
obligations of Borrower arising under the Note, all documents now or hereafter
executed to evidence or secure the indebtedness evidenced by the Note and all
modifications, substitutions for, and renewals or extensions of the foregoing
(collectively with this Pledge Agreement, the "LOAN DOCUMENTS"), and all
interest, charges, expenses, and attorneys' or other fees and any other costs
incurred by Secured Party in connection with the execution, administration or
enforcement of Secured Party's rights and remedies hereunder, or under any other
Loan Document.
The obligations referenced in Sections 2.(a) are collectively called the
"OBLIGATIONS".
3. (a) Borrower represents and warrants that (1) the Collateral is duly
and validly pledged to Secured Party in accordance with law, (2) Borrower has
good title to the Collateral, free and clear of all claims, mortgages, pledges,
liens, encumbrances and security interests of every nature whatsoever, and
(3) no consent or approval of any person, entity or governmental or regulatory
authority, was or is necessary to the validity of this pledge.
(b) Borrower shall faithfully preserve and protect Secured Party's
security interest in the Collateral and the proceeds thereof and shall do all
such acts and things and execute and
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deliver all such documents and instruments, including without limitation further
pledges, security agreements, notices, assignments, financing statements and
continuation statements, as Secured Party may request from time to time to
preserve, protect and perfect such security interest.
(c) Borrower shall not permit the Collateral or any dividends,
distributions or interest therefrom or thereon to be subject to any liens,
security interests and adverse claims other than Secured Party's security
interest. Borrower shall defend Secured Party's right, title, lien and security
interest in and to the Collateral against the claims and demands of all persons
whomsoever. Notwithstanding the foregoing, Borrower may pledge its interest in
the Collateral to Hunt Petroleum Corporation and GFI Company, provided that such
parties' interests therein are subordinate to Secured Party's in all respects.
4. Secured Party may cause all or any of the Collateral to be transferred
to or registered in its name or the name of its nominee. Secured Party may, for
and in the name of Borrower, and is hereby irrevocably authorized to, execute
endorsements, assignments or other instruments of conveyance or transfer with
respect to Collateral and give such instructions to Clearing Bank, any issuer of
the Collateral, and any other person or entity with regard to the Collateral as
it shall deem appropriate in connection herewith. Borrower hereby irrevocably
appoints Secured Party as Borrower's attorney-in-fact for the purposes of
carrying out the provisions of this Agreement and the Loan Documents and taking
any action and executing any instrument which it may deem necessary or advisable
to accomplish the purposes hereof or thereof; such appointment is coupled with
an interest and is irrevocable. Secured Party shall not be obligated to inform
Borrower of any changes in the Collateral or rights relating thereto, or to sell
or otherwise dispose of the Collateral, and Secured Party's failure to take any
such action shall not be deemed a failure to exercise reasonable care of the
Collateral, even if the value of the Collateral has declined or is declining.
5. If the Obligations are not paid or performed when due, whether by
acceleration or otherwise, or any default occurs under the Loan Documents,
Secured Party may, without notice to Borrower and in addition to all other
rights and remedies it may have, (a) instruct Clearing Bank to distribute the
Collateral and any of the proceeds thereof and all funds on deposit in the
Account to Secured Party, and (b) apply such funds to the payment and
performance of the Obligations, all at such times, in such order, and in such
amounts as Secured Party in its discretion determines. Borrower shall not be
credited with any proceeds of sale of any Collateral until cash payment thereof
has actually been received by Secured Party. No demand, advertisement or notice
shall be required in connection with any sale or other disposition of the
Collateral, unless notice of the event in question cannot be effectively waived
before a default, in which case, five-days' prior written notice thereof shall
be reasonable notice. Secured Party shall not be obligated to make any sale of
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale may have been given.
6. The remedies provided herein are not exclusive, but are cumulative and
in addition to all other remedies in favor of Secured Party existing at law or
in equity. No delay on the part of
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Secured Party or of any holder of the Obligations in exercising any of its
options, powers or rights, or partial or single exercise thereof, shall
constitute a waiver thereof.
7. The lien and security interest imposed hereby shall remain in effect
until they are released by Secured Party. Upon payment and performance in full
of the Obligations, Secured Party shall release and assign the Collateral to
Borrower. The assignment by Secured Party to Borrower of the Collateral shall
be without representation or warranty of any nature and without recourse.
8. Any notice to Borrower may be given by facsimile transmission, by
certified mail, return receipt requested, or by delivery to Borrower at the
address specified above, or at such other address as Borrower may hereafter
designate in writing and given in like manner to Secured Party.
9. If Borrower comprises more than one person, each such person shall be
jointly and severally liable hereunder.
10. Borrower shall defend, indemnify and hold harmless Secured Party
against all losses, damages, liabilities, and expenses (including reasonable
attorneys' fees and expenses) suffered by it in connection with the pledge made
hereby; in addition, Borrower shall pay all expenses (including reasonable
attorneys' fees and expenses) incurred in connection with the enforcement or
attempted enforcement and/or perfection by Secured Party of the security
interest granted hereby.
11. Any waiver, consent or approval of any kind or character on the part
of Secured Party of any default under this Agreement or any such waiver of any
provision or condition of this Agreement must be in writing and shall be
effective only to the extent specifically set forth in such writing. This
Agreement and the rights and obligations of Secured Party and Borrower hereunder
shall be construed in accordance with and governed by Texas law, and shall bind
and inure to the benefit of Borrower and Secured Party and their respective
heirs, legal representatives, successors and assigns and all subsequent holders
of the Obligations.
12. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and all of which taken together shall
constitute but one and the same instrument.
13. This Agreement is in addition to and not in limitation of any other
agreement between the parties. If any conflict exists between the provisions of
this Agreement and those of any other such agreement, the provisions of this
Agreement shall prevail.
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Executed as of the date first written above.
WESTERN PACIFIC AIRLINES, INC.
By: /s/George E. Leonard
-------------------------------------
Name: George E. Leonard
-----------------------------------
Title: Vice President/CFO
----------------------------------
HUNT PETROLEUM CORPORATION
By: /s/Ivan Irwin
-------------------------------------
Name: Ivan Irwin Jr.
-----------------------------------
Title: Executive Vice President
----------------------------------
GFI COMPANY
By: /s/Edward Gaylord II
-------------------------------------
Name: Edward Gaylord II
-----------------------------------
Title:
----------------------------------
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Exhibit 4.9
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), is made as of September
11, 1997, by and among WESTERN PACIFIC AIRLINES, INC., a Delaware corporation
(the "Company"), and each of HUNT PETROLEUM OF TEXAS, INC., a Delaware
corporation ("Hunt"), and GFI COMPANY, a Nevada corporation ("GFI"). Each of
Hunt and GFI are sometimes referred to herein as an "Investor" and collectively
as the "Investors"
R E C I T A L S:
WHEREAS, Hunt is the wholly-owned subsidiary of Hunt Petroleum Corporation,
a Delaware corporation ("HPC");
WHEREAS, Bank One Texas, N.A. (the "Bank") is prepared to extend a line of
credit to and loan the Company an amount equal to Ten Million Dollars
($10,000,000.00) pursuant to that certain Promissory Note (the "Note");
WHEREAS, as a condition precedent to the Bank's loan to the Company
pursuant to the Note, the Bank requires that HPC enter into an agreement (the
"Guaranty") whereby HPC unconditionally guarantees all of Company's obligations
under the Note;
WHEREAS, as a condition precedent to HPC's entering into the Guaranty, GFI
has entered into an agreement to contribute to HPC fifty percent (50%) of all
liabilities and obligations that may become payable under the Guaranty (the
"Contribution Agreement");
WHEREAS, in order to induce the HPC to enter into the Guaranty and GFI to
enter into the Contribution Agreement, the Company has agreed to indemnify and
reimburse HPC and GFI for all costs, expenses or other liabilities incurred by
such parties as set forth in that certain Reimbursement Agreement, dated as of
the date hereof, by and among the Company, HPC and GFI; and
WHEREAS, as further consideration to HPC and GFI for their entering into
and continued compliance with the terms of the Guaranty, the Company has agreed
to provide to each of the Investors certain registration rights under the
Securities Act of 1933, as amended, and the rules and regulations thereunder, or
any similar successor statute (collectively, the "Securities Act"), and
applicable state securities laws, all upon the terms and conditions stated
herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each of the
Investors hereby agree as follows:
1. DEFINITIONS.
(a) As used in this Agreement, the following terms shall have the
following meanings:
<PAGE>
(i) "Affiliate" means a Person that, directly or indirectly, through
one or more intermediaries, controls, or is controlled by, or is under common
control with, a specified Person.
(ii) "Common Stock," means the Common Stock of the Company, par value
$0.001 per share, and any shares of capital stock issued or issuable as a
dividend on or in exchange for or otherwise with respect to the Common Stock.
(iii) "Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, limited liability company, joint
venture, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
(iv) "register," "registered," and "registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
continuous basis ("Rule 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the United States Securities and Exchange
Commission (the "Commission").
(v) "Purchase Period" means the period of time beginning on the date
hereof and ending on September 11, 2002.
(vi) "Registrable Securities" means (i) all shares of Common Stock
currently owned by an Investor and all shares of Common Stock issuable to such
Investor or which such Investor has the right to acquire upon conversion or
exercise of any warrants, options, stock purchase rights or other convertible
securities as of the date the applicable Registration Request (as defined in
Section 2(a)(i) below), and (ii) all shares of Common Stock purchased by such
Investor during the Purchase Period from the Company or an Affiliate of the
Company or any "joint filer" of such Investor for purposes of Section 13(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"); PROVIDED,
however, that Registrable Securities shall not include any shares of Common
Stock, whether owned by the Investor or issuable to such Investor upon
conversion or exercise of any warrants, options, stock purchase rights or other
convertible securities, that are otherwise subject to a registration obligation
on the part of the Company.
(vii) "Registration Statement" means a registration statement of the
Company under the Securities Act.
2. AGREEMENT TO REGISTER SHARES.
(a) In consideration of each of HPC's entering into and continued
compliance with the terms of the Guaranty and GFI's entering into and continued
compliance with the terms of the Contribution Agreement, the Company agrees and
covenants as follows:
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(i) the Company will, as soon as practicable any in any event
within 120 days following the receipt of a written request from an Investor
(each a "Registration Request"), file a Registration Statement with the
Commission to register under the Securities Act such Investor's resales of
the Registrable Securities included in the Registration Request; PROVIDED,
however, that each Investor shall have the right to make a Registration
Request only if the aggregate dollar value of the shares to be registered,
measured by the closing price of the Company's Common Stock as quoted on
the Nasdaq National Market (and as reported by The Wall Street Journal or,
if not reported thereby, by another authoritative source) on the trading
day immediately preceding the Registration Request, exceeds $ 1,000,000.00.
(ii) the Company will use its reasonable best efforts to cause
the Registration Statement to become effective as soon as practicable and
in any event within 180 days after the date of the Company's receipt of the
Registration Request; and
(iii) the Company will use its reasonable best efforts to keep the
Registration Statement effective pursuant to Rule 415 at all times until
the earlier of (A) the date on which all of the Registrable Securities have
been sold and (B) the date on which the Registrable Securities (in the
opinion of counsel to the Company in substance reasonably acceptable to the
Investor) may be sold without volume limitations in a public transaction
pursuant to an available exemption from the requirements of registration
under the Securities Act (the "Registration Period").
(b) Each of the Investors will cooperate with the Company in connection
with a registration of the Registrable Shares and will furnish (i) such
information as may be reasonably required by the Company or by the Commission in
connection therewith and (ii) such representations, undertakings and agreements
as may be reasonably required by the Commission in connection therewith.
(c) If any offering pursuant to a Registration Statement involves an
underwritten offering, the Investors who hold a majority in interest of the
Registrable Securities subject to such underwritten offering, shall have the
right to select one legal counsel and an investment banker or bankers and
manager or managers to administer the offering, which investment banker or
bankers or manager or managers shall be reasonably satisfactory to the Company.
3. ADDITIONAL OBLIGATIONS OF THE COMPANY RELATING TO THE REGISTRABLE
SECURITIES. In connection with the registration of the Registrable Securities,
the Company will have the following obligations:
(a) The Company will prepare and file with the Commission such
amendments (including post-effective amendments) and supplements to each
Registration Statement and the prospectus used in connection with such
Registration Statement as may be necessary to keep the Registration Statement
effective at all times during the Registration Period, and, during such
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<PAGE>
period, comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities of the Company covered by such
Registration Statement until such time as all of such Registrable Securities
have been disposed of in accordance with the intended methods of disposition by
the seller or sellers thereof as set forth in such Registration Statement.
(b) The Company shall furnish to each Investor (i) promptly after the
same is prepared and publicly distributed, filed with the Commission, or
received by the Company, one copy of each Registration Statement and any
amendment thereto, each preliminary prospectus and prospectus and each amendment
or supplement thereto, and, in the case of the Registration Statement referred
to in Section 2(a) above, each letter written by or on behalf of the Company to
the Commission or the staff of the Commission, and each item of correspondence
from the Commission or the staff of the Commission, in each case relating to
such Registration Statement (other than any portion of any thereof which
contains information for which the Company has sought confidential treatment),
and (ii) such number of copies of a prospectus, including a preliminary
prospectus, and all amendments and supplements thereto and such other documents
as such Investor may reasonably request in order to facilitate the disposition
of the Registrable Securities owned by such Investor.
(c) The Company will use its reasonable best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, and, if such an order is issued, to obtain the
withdrawal of such order at the earliest possible moment and to notify each
Investor of the issuance of such order and the resolution thereof.
(d) The Company shall use reasonable efforts to (i) register and
qualify the Registrable Securities covered by each Registration Statement under
such other securities or "blue sky" laws of such jurisdictions in the United
States as the Investors who hold a majority in interest of the Registrable
Securities being offered reasonably request, (ii) prepare and file in those
jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof, (iii) take such other actions as may be
necessary to maintain such registrations and qualifications in effect, and (iv)
take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; PROVIDED, HOWEVER, that
the Company shall not be required in connection therewith or as a condition
thereto to (a) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify, (b) subject itself to general taxation in any
such jurisdiction, (c) file a general consent to service of process in any such
jurisdiction, (d) provide any undertakings that cause the Company undue expense
or burden, or (e) make any change in its charter or bylaws, which in each case
the Board of Directors of the Company determines to be contrary to the best
interests of the Company and its stockholders.
(e) In the event Investors who hold a majority-in-interest of the
Registrable Securities included in a Registration Request select underwriters
for the offering, the Company shall in good faith endeavor to negotiate to enter
into and perform its obligations under an
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underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
underwriters of such offering.
(f) As promptly as practicable after becoming aware of such event, the
Company shall notify each Investor of the happening of any event, of which the
Company has knowledge, as a result of which the prospectus included in a
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and use its best
efforts promptly to prepare a supplement or amendment to such Registration
Statement to correct such untrue statement or omission, and deliver such number
of copies of such supplement or amendment to each Investor as such Investor may
reasonably request.
(g) The Company shall permit a single firm of counsel designated by the
Investors to review each Registration Statement and all amendments and
supplements thereto and documents incorporated by reference therein (as well as
all requests for acceleration of effectiveness thereof) a reasonable period of
time prior to their filing with the Commission, and not file any document in a
form to which such counsel reasonably objects.
(h) At the request of any Investor, the Company shall furnish, on the
date that Registrable Securities are delivered to an underwriter, if any, for
sale in connection with a Registration Statement or, if such securities are not
being sold by an underwriter, on the date of effectiveness thereof, a letter,
dated such date, from the Company's independent certified public accountants in
form and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and the Investors.
(i) The Company shall make available for inspection by (i) any
Investor, (ii) any underwriter participating in any disposition pursuant to a
Registration Statement, (iii) one firm of attorneys and one firm of accountants
or other agents retained by the Investors and (iv) one firm of attorneys
retained by all such underwriters (collectively, the "Inspectors") all pertinent
financial and other records, and pertinent corporate documents and properties of
the Company (collectively, the "Records"), as shall be reasonably deemed
necessary by each Inspector to enable each Inspector to exercise its due
diligence responsibility, and cause the Company's officers, directors and
employees to supply all information which any Inspector may reasonably request
for purposes of such due diligence; PROVIDED, HOWEVER, that each Inspector shall
hold in confidence and shall not make any disclosure (except to an Investor) of
any Record or other information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so notified, unless
(a) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (b) the release of such
Records is ordered pursuant to a subpoena or other order from a court or
government body of competent jurisdiction, or (c) the information in such
Records has been made generally available to the public other than by disclosure
in violation of this or any other agreement. The Company shall not be required
to disclose any confidential
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information in such Records to any Inspector until and unless such Inspector
shall have entered into confidentiality agreements (in form and substance
satisfactory to the Company) with the Company with respect thereto,
substantially in the form of this Section 3(i). Each Investor agrees that it
shall, upon learning that disclosure of such Records is sought in or by a court
or governmental body of competent jurisdiction or through other means, give
prompt notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, the Records deemed confidential. Nothing herein shall be deemed to limit
the Investor's ability to sell Registrable Securities in a manner which is
otherwise consistent with applicable laws and regulations.
(j) The Company shall hold in confidence and not make any disclosure of
information concerning an Investor provided to the Company unless (i) disclosure
of such information is necessary to comply with federal or state securities
laws, (ii) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other order from a court
or governmental body of competent jurisdiction, or (iv) such information has
been made generally available to the public other than by disclosure in
violation of this or any other agreement. The Company agrees that it shall,
upon learning that disclosure of such information concerning an Investor is
sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt notice to such Investor prior to making such
disclosure, and allow the Investor, at its expense, to undertake appropriate
action to prevent disclosure of, or to obtain a protective order for, such
information.
(k) The Company shall use its best efforts either to (i) cause all the
Registrable Securities covered by each Registration Statement to be listed on
each national securities exchange on which securities of the same class or
series issued by the Company are then listed, if any, if the listing of such
Registrable Securities is then permitted under the rules of such exchange, or
(ii) secure the designation and quotation, of all the Registrable Securities
covered by such Registration Statement on the Nasdaq-NMS or, if not eligible for
the Nasdaq-NMS on the Nasdaq SmallCap and, without limiting the generality of
the foregoing, to arrange for at least two market makers to register with the
National Association of Securities Dealers, Inc. ("NASD") as such with respect
to such Registrable Securities.
(l) The Company shall provide a transfer agent and registrar, which may
be a single entity, for the Registrable Securities not later than the effective
date of each Registration Statement.
(m) The Company shall cooperate with the Investors who hold Registrable
Securities being offered and the managing underwriter or underwriters, if any,
to facilitate the timely preparation and delivery of certificates (not bearing
any restrictive legends) representing Registrable Securities to be offered
pursuant to the applicable Registration Statement and enable such certificates
to be in such denominations or amounts, as the case may be, as the
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managing underwriter or underwriters, if any, or the Investors may reasonably
request and registered in such names as the managing underwriter or
underwriters, if any, or the Investors may request.
(n) The Company shall take all other reasonable actions necessary to
expedite and facilitate disposition by the Investors of Registrable Securities
pursuant to the applicable Registration Statement.
4. OBLIGATIONS OF THE INVESTORS.
In connection with the registration of the Registrable Securities, the
Investors shall have the following obligations:
(a) It shall be a condition precedent to the obligations of the Company
to complete the registration pursuant to this Agreement with respect to the
Registrable Securities of a particular Investor that such Investor shall furnish
to the Company such information regarding itself, the Registrable Securities
held by it and the intended method of disposition of the Registrable Securities
held by it as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request. At least three (3) business
days prior to the first anticipated filing date of a Registration Statement, the
Company shall notify each Investor of the information the Company requires from
each such Investor.
(b) Each Investor agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of any
Registration Statement hereunder.
(c) No Investor may participate in any underwritten registration
hereunder unless such Investor (i) agrees to sell such Investor's Registrable
Securities on the basis provided in any underwriting arrangements in usual and
customary form entered into by the Company, (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements, and (iii) agrees to pay its pro rata share of all underwriting
discounts and commissions and any expenses in excess of those payable by the
Company pursuant to Section 6 below.
5. INDEMNIFICATION
(a) Upon the registration of the Registrable Shares under the
Securities Act pursuant to this Agreement, the Company will indemnify and hold
harmless (i) each Investor and the directors, officers, partners, employees,
agents and each person who controls any Investor within
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the meaning of the Securities Act or the Exchange Act, if any, or (ii) any
Affiliate of the foregoing (collectively, the "Indemnified Persons"), against
any losses, claims, damages or liabilities, joint or several, to which any
Indemnified Person may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in or incorporated by reference into
such Registration Statement or preliminary prospectus (if used prior to the
effective date of such Registration Statement) or final or summary prospectus
contained therein (if used during the period the Company is required to keep
such Registration Statement effective), or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements made therein not misleading, and will promptly reimburse each
Indemnified Person for any legal or any other expenses reasonably incurred by it
(from time to time as such expenses are incurred) in connection with
investigating or defending any such action or claim (excluding any amounts paid
in settlement of any litigation, commenced or threatened, if such settlement is
effected without the prior written consent of the Company, which shall not be
unreasonably withheld); provided, however, that the Company will not be liable
to a particular Indemnified Person in any such case to the extent that any such
loss, claim, damage, liability or expense arises out of or is based upon (i) an
untrue statement or omission or alleged omission made in the applicable
Registration Statement, any preliminary prospectus or the final or summary
prospectus or any amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by that Indemnified
Person; or (ii) any act or action of that Indemnified Person other than as a
selling shareholder under such Registration Statement.
(b) Upon the registration of the Registrable Shares under the
Securities Act pursuant to this Agreement, each Investor shall indemnify and
hold harmless the Company, each of the Company's directors, officers, employees
and agents, and each other person, if any, who controls the Company under the
meaning of the Exchange Act, against any losses, claims, damages or liabilities,
joint or several, to which the Company or any such director, officer, or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of, or are based upon, any untrue statement or alleged untrue
statement of any material fact contained in such Registration Statement or
preliminary prospectus or final or summary prospectus contained therein, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements made therein not misleading, and
will promptly reimburse the Company, each such director, officer and controlling
person for any legal or other expenses reasonably incurred (from time to time as
such expenses are incurred) by them in connection with investigating or
defending any such action or claim (excluding any amounts paid in settlement of
any litigation, commenced or threatened, if such settlement is effected without
the prior written consent of Investors, which shall not be unreasonably
withheld); but in all such cases only if, and to the extent that, any such loss,
claim, damage, liability or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission therein
made in
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reliance upon and in conformity with written information furnished to the
Company by such Investor or such Investor's Affiliates specifically for use in
the preparation thereof.
(c) Promptly after receipt by a party entitled to indemnification
hereunder of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
hereunder, notify the indemnifying party in writing of the commencement thereof.
In case any such action is brought against the indemnified party and it shall so
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate in and, to the extent that it so chooses,
to assume the defense thereof with counsel reasonably satisfactory to such
indemnified party, and, after notice from the indemnifying party that it so
chooses, such indemnifying party shall not be liable for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof; provided, however, that if the indemnifying party fails to take
reasonable steps necessary to diligently defend such claim within twenty (20)
days after receiving notice from the indemnified party that the indemnified
party believes the indemnifying party has failed to take such steps, the
indemnified party may assume its own defense and the indemnifying party shall be
liable for any expenses therefor. The indemnity agreements in this Section
shall be in addition to any liabilities which the indemnifying parties may have
pursuant to law or contract.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section is for
any reason held to be unenforceable although applicable in accordance with its
terms, the Company and the Investors shall contribute to the losses, claims,
damages, liabilities and expenses for which such indemnification or
reimbursement is held unavailable in such proportion as is appropriate to
reflect the relative benefits to, and relative faults of, the Company, on the
one hand, and the Investors, on the other hand, in connection with the
transactions to which such indemnification or reimbursement relates. As among
themselves, the holders of the Registrable Shares shall contribute to amounts
payable by other selling holders, if any, in such manner as shall give effect,
to the extent permitted by law, to the provisions of this Section. No Person
guilty of "fraudulent misrepresentation" (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
6. EXPENSES; NO OBLIGATION FOR UNDERWRITTEN OFFERING.
All reasonable expenses, other than underwriting discounts and commissions,
incurred in connection with registrations, filings or qualifications pursuant to
Sections 2 and 3, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, the fees and disbursements of
counsel for the Company and the Investors, shall be borne by the Company.
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7. REPORTING OBLIGATIONS. With a view to making available to the
Investors the benefits of Rule 144 promulgated under the Securities Act or any
other similar rule or regulation of the Commission that may at any time permit
the investors to sell securities of the Company to the public without
registration ("Rule 144"), the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144; and
(b) file with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act so long as the Company remains subject to such requirements and the
filing of such reports and other documents as required for the applicable
provisions of Rule 144.
8. WAIVER, MODIFICATION IN WRITING. No failure or delay on the part
of the Company or an Investor in exercising any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. The remedies provided for
herein are cumulative and are not exclusive of any remedies that may be
available to the Company or the Investors at law or in equity. The provisions
of this Agreement, including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given without the written consent of the
Company, on the one hand, and, on the other hand, each of the Investors. Any
amendment, supplement or modification of or to any provision of this Agreement,
or any waiver of any provision of this Agreement, shall be effective only in the
specific instance and for the specific purpose for which made or given. Except
where notice is specifically required by this Agreement, no notice to or demand
on any party hereto in any case shall entitle the other party to any other or
further notice or demand in similar or other circumstances.
9. COMMUNICATIONS. All notices and demands provided for hereunder
shall be in writing, and shall be given by registered or certified mail, return
receipt requested, telex, telegram, telecopy, courier service of personal
delivery, and addressed to the relevant party or parties at the following
address:
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(i) if to the Company:
Western Pacific Airlines, Inc.
2864 Circle Drive
Suite 1100
Colorado Springs, Colorado 80906
Telecopier No.: (719) 527-7259
Telephone No.: (719) 527-7421
Attention: Chief Executive Officer
with a copy to:
D'Ancona & Pflaum
30 North LaSalle Street
Suite 2900
Chicago, Illinois 60602
Telecopier No.: (312) 580-0923
Telephone No.: (312) 580-2000
Attention: Allan J. Reich, Esq.
(ii) if to Hunt:
Hunt Petroleum of Texas, Inc.
c/o Hunt Petroleum Corporation
1601 Elm, 50th Floor
Dallas, Texas 75201
Telecopier No.: (214) 922-1060
Telephone No.: (214) 922-1000
Attention: Mr. Brett Ringle
with a copy to:
Vinson & Elkins
3700 Trammell Crow Center
2001 Ross Avenue
Dallas, TX 75201-2975
Telecopier No.: (214) 220-7716
Telephone No.: (214) 220-7700
Attention: Derek McClain, Esq.
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(iii) if to GFI:
GFI Company
Hughes Center
3753 Howard Hughes Parkway, Suite 200
Las Vegas, Nevada 89109
Telecopier No.: (702) 892-3950
Telephone No.: (702) 892-3746
Attention: Mr. David C. Story
with a copy to:
Haynes & Boone
901 Main Street
3100 Nations Bank Plaza
Dallas, TX 75202
Telecopier No.: (214) 200-0588
Telephone No.: (214) 651-5088
Attention: Wilson Chu, Esq.
or to such other address as a Investor or the Company, as the case may be, may
designate in writing to the other parties hereto, which notice shall be deemed
given when received.
10. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute one and the same agreement.
11. BINDING EFFECT; ASSIGNMENT. The rights and obligations of the
parties under this Agreement may not be assigned to any other Person; provided,
however, that the Company may assign its rights hereunder to any successor
entity to the Company, whether pursuant to a sale of substantially all of the
Company's assets, or the merger or consolidation of the Company, that agrees to
be bound by the terms and conditions hereof or is so bound by operation by law.
Except as expressly provided in this Agreement, this Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement, and their respective successors and permitted
assigns. This Agreement shall be binding upon the Company and the Purchasers,
and their respective successors and permitted assigns.
12. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER THE LAWS OF THE STATE OF DELAWARE, AND FOR ALL PURPOSES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.
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13. EXPENSES. Each of the parties hereto shall pay its own respective
costs and expenses incurred in connection with the negotiation, execution and
performance of this Agreement.
14. 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 provision in any other
jurisdiction.
15. HEADINGS. The Article and Section headings used or contained in
this Agreement are for convenience of reference only and shall not affect the
construction of this Agreement.
16. INTEGRATION. This Agreement (including the exhibits hereto)
constitutes the entire agreement among the parties with respect to the
registration of the Registrable Securities and there are no promises or
undertakings with respect thereto relative to the subject matter hereof not
expressly set forth or referred to herein.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its duly authorized officer as of the date first written above.
WESTERN PACIFIC AIRLINES, INC.
By: /S/GEORGE E. LEONARD
---------------------------------------------
Name: GEORGE E. LEONARD
-------------------------------------------
Title: VICE PRESIDENT/CFO
------------------------------------------
HUNT PETROLEUM OF TEXAS, INC.
By: /S/IVAN IRWIN
---------------------------------------------
Name: IVAN IRWIN JR.
-------------------------------------------
Title: EXECUTIVE VICE PRESIDENT
------------------------------------------
GFI COMPANY
By: /S/EDWARD GAYLORD II
---------------------------------------------
Name: EDWARD GAYLORD II
-------------------------------------------
Title:
-------------------------------------------
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