REIMBURSEMENT AGREEMENT


    This REIMBURSEMENT AGREEMENT dated as of December 31,
1996, is made by and between VANGUARD AIRLINES, INC.,
a Delaware corporation having its principal place of
business at 30 N.W. Rome Circle, Mezzanine Level,
Kansas City International Airport, Kansas City, Mo.,
64153 ("Corporation"), in favor of HAMBRECHT & QUIST
CALIFORNIA, a wholly owned subsidiary of Hambrecht &
Quist Group ("Lender").

RECITALS

(A)Corporation has requested that Lender arrange for
the initial issuance of a letter of credit to be
issued in favor of Boatmen's POS Merchant Services
Co., L.L.C. for the account of the Corporation in
the aggregate amount of Four Million Dollars
($4,000,000) ( the "Letter of Credit").


(B)Corporation intends to switch credit card
processors from Boatmen's POS, as hereinafter
defined, to Michigan National Bank.  Corporation
intends to request Lender to arrange for the
issuance of a letter of credit in favor Michigan
National Bank up to the aggregate amount of Four
Million Dollars ($4,000,000) (collectively with the
"Letter of Credit" referred to in Rectal A above,
the "Letters of Credit") upon the reduction and/or
cancellation of the initial Letter of Credit,
referred to in Recital A above, to be issued in
favor of Boatmen's POS.
 
    (C)Lender is willing to arrange for the issuance of
the Letters of Credit, but only upon the condition,
among others, that Corporation shall have executed
and delivered to Lender this Reimbursement
Agreement.

AGREEMENT

    NOW, THEREFORE, in order to induce Lender to cause
the issuance of the Letters of Credit and for other
good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, and
intending to be legally bound, the parties hereto
represent, warrant, covenant and agree as follows:

<PAGE>
ARTICLE I

DEFINITIONS

SECTION 0.1 DEFINITIONS.  Unless otherwise defined
herein the following terms shall have the following
meanings (such meanings being equally applicable to
both the singular and plural forms of the terms
defined):

"ACT OF BANKRUPCY" shall mean the Corporation shall
commence a voluntary case or other proceeding in
seeking liquidation, reorganization, arrangement,
readjustment of its debts or for any other relief
under the federal bankruptcy laws, including the
Federal Bankruptcy Code, as amended, or under any
other insolvency act or law, state or federal, now
or hereafter existing, or shall take any other
action indicating its consent to, approval of, or
acquiescence in, any such petition or proceedings;
the Corporation shall apply for, or consent to or
acquiesce in, the appointment of a receiver,
liquidator, custodian, sequestrator, or a trustee
for all or a substantial part of its property; the
Corporation shall make an assignment for the benefit
of its creditors; the Corporation shall be unable,
or shall admit in writing its inability, to pay its
debts when due; or a petition in bankruptcy shall be
filed against the Corporation, as a debtor, under
any applicable bankruptcy, insolvency or similar law
as now or hereafter in effect which shall not be
discharged by a court of competent jurisdiction
within sixty (60) days of the date of such filing.


"AGREEMENT" shall mean this Reimbursement Agreement
together with all duly authorized and executed
amendments thereto.

"APPLICATIONS" shall mean that certain Applications
and Agreements for the Standby Letters of Credit
dated as of January 2, 1997 by and between Issuing
Bank and Lender in connection with the Letters of
Credit to be issued to Boatmen's POS and MNB.

"BOATMEN'S MERCHANT AGREEMENT" means that certain
Merchant Agreement between KBC Card Services (a
division of Bank IV, Kansas) and Vanguard as amended
by the Addendum to KBC Card Services Merchant
Agreement between KBC Card Services and Vanguard
effective as of November 18, 1994 and the
Modification and Pledge Agreement by and between
Vanguard, Boatmen's National Bank, successor by
merger as of October 18, 1996, to Bank IV Kansas,
N.A., and Boatmen's POS Merchant Services Co.,
L.L.C. effective as of January 1, 1997 and attached
as EXHIBIT E hereto, as the same may from time to
time be amended, modified, supplemented or restated.
<PAGE>
"BOATMEN'S POS" shall mean Boatmen's POS Merchant
Services Co., L.L.C., a limited liability company,
whose address is 100 N. Broadway, St. Louis,
Missouri, 63166.
 
"BRIDGE LOANS" shall mean those certain demand notes
executed and delivered by Corporation to Lender as
of December 5, 1996 and December 6, 1996. 

"BUSINESS DAY" shall mean any day other than (i) a
Saturday or Sunday, (ii) a day on which banking
institutions in the States of California, Michigan
or Missouri are authorized or required by law or
executive order not to be open for the conduct of
their commercial banking business, or (iii) a day on
which the federal reserve bank for the federal
reserve district in which Boatmen's POS or MNB is
located is closed.

"COLLATERAL" shall have the meaning assigned to such
term in SECTION 2 of the Security Agreement.
         
"DATE OF DELIVERY" shall mean January 2, 1997 or any
other date agreed upon by the Corporation and Lender
as the date upon which a Letter of Credit shall be
issued to Boatmen's POS and MNB.

"DEFAULT RATE" shall mean a rate per annum equal to
five (5) percentage points above the interest rate
applicable immediately prior to the occurrence of
the Event of Default.

"DRAWING" shall mean a drawing under the Letters of
Credit in accordance with their terms.

"EVENT OF DEFAULT" shall have the meaning set forth
inSECTION 7.1 hereof.

"INTEREST RATE" shall mean ten percent (10%) per
annum.

"ISSUING BANK" shall mean Bank of America National
Trust and Savings Association acting through its
Chicago branch, or any surviving, resulting or
transferee entity.

"LETTERS OF CREDIT" shall mean the Letters of Credit
arranged by Lender and issued by Issuing Bank
pursuant to the Applications on the Date of
Delivery, as the same may from time to time be
amended, modified, supplemented or restated, and
shall include any substitute Letter of Credit 
<PAGE>
issued pursuant to Lender's obligations hereunder
including without limitations any replacement
Letters of Credit in connection with the switch of
credit card processors.

"MAXIMUM CREDIT" initially shall mean, as of any
date of calculation, the aggregate maximum amount
available to be drawn under the Letters of Credit. 
Initially, the Maximum Credit shall be $4,000,000.

"MNB" shall mean Michigan National Bank, a national
banking association with its principal office
located at or any surviving, resulting or transferee
entity.

"MNB MERCHANT AGREEMENT" shall mean any Merchant
Agreement between Vanguard and MNB that may be
entered into with respect to credit card processing,
as the same may from time to time be amended,
modified, supplemented or restated.

"PERSON" shall mean  any individual, sole
proprietorship, partnership, limited liability
company, joint venture, trust, unincorporated
organization, association, corporation, institution,
public benefit corporation, firm, joint stock
corporation, estate, entity or governmental agency.

"REIMBURSEMENT LOAN NOTE" shall mean the note
evidencing the Reimbursement Loans, substantially in
the form attached hereto as EXHIBIT A.

"REIMBURSEMENT LOANS" shall mean the reimbursement
loans described in SECTION 2.8 hereof.

"SECURITY AGREEMENT" shall mean that certain
Security Agreement dated as of December 31, 1996
made by Corporation in favor of Lender.

"TERMINATION DATE" shall mean the date determined in
the manner provided in SECTION 2.7 hereof.

"TRANSACTION DOCUMENTS" means, collectively, this
Agreement, the Security Agreement, the Reimbursement
Loan Note, and any other agreement entered into
between Corporation and Lender, and any certificate
or instrument executed by Lender, in connection with
said agreements and note, as the same may from time
to time be amended, modified, supplemented or
restated.

"VANGUARD" means Vanguard Airlines, Inc.
<PAGE>
SECTION 1.2  CONSTRUCTION.  In this Agreement,
unless the context otherwise requires:

(a) Articles and Sections referred to by number
shall mean the corresponding Articles and Sections
of this Agreement.

(b) The terms "hereby," "hereof," "hereto,"
"herein," "hereunder," and any similar terms, as
used in this Agreement refer to this Agreement, and
the term "hereafter" shall mean after, and the term
"heretofore" shall mean before the date of execution
of this Agreement.

(c) Words of the masculine gender shall be deemed
and construed to include correlative words of the
feminine and neuter genders.  Words importing the
singular number shall include the plural number and
vice versa, and words importing persons shall
include corporations and associations, including
public bodies, as well as natural persons.

ARTICLE II

LETTER OF CREDIT

SECTION 2.1   Amount and Terms of Letter of Credit.  At the
request of Corporation, Lender agrees, on the terms
and subject to the conditions set forth in this
Agreement, including without limitation the
conditions set forth in ARTICLE III hereof, to on or
before the applicable Date of Delivery cause the (i)
issuance of a Letter of Credit by Issuing Bank, in
favor of Boatmen's POS and/or (ii) issuance of a
Letter of Credit by Issuing Bank, in favor of MNB,
for the account of Corporation, to secure, and to
provide a source of payment of the obligations of
the Company under the Boatmen's Merchant Agreement
and MNB Merchant Agreement, respectively.  The
Letters of Credit will be issued in an initial
aggregate amount equal to the Maximum Credit.  The
Letters of Credit shall be issued in favor of
Boatmen's POS and MNB for the account of the
Corporation substantially in the form of EXHIBIT B
and EXHIBIT C attached hereto.

SECTION 2.2
DRAWINGS AND REINSTATEMENT.

(a) Drawings under the Letters of Credit are
intended to be made by Boatmen's POS and MNB for the
account of the Corporation and to be honored by
Issuing Bank, all pursuant to the provisions, on the
terms and 

<PAGE>
subject to the conditions set forth in the
applicable Letter of Credit.  The honoring of any
Drawing shall automatically reduce by like amount
the Maximum Credit.  No Drawing under the Letters of
Credit shall be honored in an amount exceeding the
Maximum Credit.

(b) The Maximum Credit, or any lesser amount, may be
reinstated by Lender at its sole option, provided
Lender has been reimbursed by Corporation any such
amounts to be reinstated.

SECTION 2.3
FEES AND OTHER PAYMENT.

(a)  The Corporation hereby agrees to pay to or
reimburse Lender:

(i) On or before a Date of Delivery, the origination
fees paid to Issuing Bank 

(ii) On or before a Date of Delivery, an amount
equal to all costs and expenses (including
attorneys' fees and expenses) incurred by Lender in
connection with the preparation and negotiation of
this Agreement, the Reimbursement Loan Note, the
other Transaction Documents and the closing of the
transactions contemplated hereby.

(iii)  On demand from time to time from Lender, any
fees or other amounts (not otherwise reimbursed by
Corporation to Lender pursuant toSECTION 2.4 hereof)
required to be paid by Lender to the Issuing Bank in
connection with the Letters of Credit, including,
without limitation, a one percent (1%) per annum
fee, payable quarterly by Lender to Issuing Bank;

(iv)  On demand from time to time by Lender, an
amount equal to all costs and expenses (including
attorneys' fees and expenses) (not otherwise
reimbursed by Corporation to Lender pursuant to
SECTION 2.4 hereof) incurred by Lender relative to a
Drawing under a Letter of Credit.

(v) On demand from time to time by Lender, an amount
equal to all costs and expenses (including
attorneys' fees and expenses) incurred by Lender
relative to the Letters of Credit (not otherwise
reimbursed by Corporation to Lender pursuant to this
SECTION 2.3 or SECTION 2.4) or each Reimbursement
Loan or the enforcement or preservation of any
rights of Lender under this Agreement, the other
Transaction Documents, each Reimbursement Loan or
the Reimbursement Loan Note, or in connection with
the exercise or waiver of any of Lender's
discretionary rights under this Agreement, the
Reimbursement Loan Note or under the other
Transaction Documents;

<PAGE>        
(vi)  On demand from time to time by Lender,
interest, at the Default Rate, on any and all
amounts unpaid by the Corporation when due under
this Agreement or the Reimbursement Loan Note, but
in no event shall such rates exceed the maximum rate
of nonusurious interest allowed from time to time by
law, as is now or, to the extent allowable by law,
as hereinafter may be in effect, to be paid by the
Corporation;

         Each such payment or reimbursement shall be deemed
to be earned in full the date on which such amount
is due and payable by the Corporation.

(b)  The Corporation agrees to pay, on demand from
time to time by the Lender, all reasonable costs and
expenses incurred by the Lender, in connection with
(i) any transfer or amendment of the Letter of
Credit or amendment of this Agreement, (ii) any
review by the Lender of the documents necessary for
Lender to honor a Drawing under the Letter of
Credit, or relative to the Lender's curing of any
event of default by Borrower under any of the
Transaction Documents, (iii) the exercise,
enforcement or preservation of any rights of Lender
under this Agreement, (iv) any action or proceeding
relating to a court order, injunction, or other
process or decree restraining or seeking to restrain
Lender from paying any amount under the Letter of
Credit, and (v) the waiver or amendment of any of
the Lender's rights under any of the Transaction
Documents; PROVIDED, HOWEVER, that no payment shall
be required under this SECTION 2.3(B) in respect of
any cost or expense Lender has incurred because of
its gross negligence or willful misconduct if so
determined by a court of competent jurisdiction.

Section 2.4   REIMBURSEMENT. The Corporation agrees 
to pay to or reimburse Lender in full for any and 
all Drawings made under the Letter of Credit on the date 
any Drawing is made.  Any amount drawn under a Letter of
Credit shall be, to the extent permitted by and in
accordance with SECTION 2.8 HEREOF, automatically
converted into a Reimbursement Loan. A Reimbursement
Loan, when made, will satisfy the reimbursement
obligation of the Corporation to Lender in the
principal amount of such Reimbursement Loan.

SECTION 2.5   SECURITY.  The obligations of the 
Corporation under this Agreement, including, without 
limitation, the Corporation's obligations to make 
payments under Sections 2.3 and 2.4 hereof, are 
secured by the Collateral identified and described 
as security therefore in the Security Agreement.

<PAGE>

SECTION 2.6   PLACE OF PAYMENT. All payments to be made 
by the Corporation to the Lender hereunder shall be made 
in lawful currency of the United States of America and
in immediately available funds by wire to the following 
account:
        
              Hambrecht and Quist Group
              c/o Citibank, F.S.B.
              260 California Street
              San Francisco, CA  94111
              ABA:  321171184
              Account #:  601022205
              Account Name:  H&Q Management Corporation

or at such other address as Lender may specify from
time to time by notice to the Corporation.

SECTION 2.7
TERMINATION OF AGREEMENT.  This Agreement (except
for the obligations of the Corporation set forth in
SECTION 2.3(B) and 9.4) shall terminate at such time
as the Letters of Credit shall have expired and when
all amounts due and payable to Lender hereunder
shall be paid in full (the "Termination Date").

SECTION 2.8
REIMBURSEMENT LOANS.

(a) Lender agrees, upon the terms, subject to the
conditions and relying upon the representations and
warranties set forth in this Agreement and the other
Transaction Documents, that, unless an Event of
Default shall have occurred and be continuing a
Drawing under a Letter of Credit that is not repaid
in full by the Corporation on the date thereof shall
automatically be converted into a Reimbursement
Loan.  On and as of the date of the making of each
Reimbursement Loan: the Corporation shall be deemed
to have (A) remade, ratified and confirmed all
representations and warranties of the Corporation
contained in SECTION 5.1 of this Agreement, and (B)
certified compliance with all covenants contained in
ARTICLE VI hereof.

(b) The principal amount of the Reimbursement Loans
shall not exceed the Maximum Credit available under
the Letters of Credit on such date. All the
Reimbursement Loans shall be evidenced by a single
Reimbursement Loan Note substantially in the form of
EXHIBIT A hereto with appropriate insertions, duly
executed and delivered by the Corporation to Lender,
dated by 
<PAGE>
Lender on the attached schedule the date of each
Drawing under a Letter of Credit that gives rise to
a Reimbursement Loan, and payable to Lender or its
assigns in an amount equal to the amount drawn on
the Letter of Credit that is not reimbursed as
provided in the first sentence of SECTION 2.4 of
this Agreement.

The principal amount of each Reimbursement Loan,
together with any unpaid and accrued interest
thereon, shall be due and payable on the later of
(a) the first anniversary of such Reimbursement Loan
or (b) such time as the Letter of Credit shall have
expired.

(c) The Reimbursement Loans shall bear interest at
the Interest Rate.  Such interest shall be
calculated on the basis of a 365 or 366 day year and
actual number of days elapsed.  Lender shall, and is
hereby authorized by the Corporation to, date the
schedule attached to the Reimbursement Loan Note the
date of any Drawing under a Letter of Credit that is
not reimbursed as provided in the first sentence of
SECTION 2.4 of this Agreement and insert the amount
(or the portion thereof not so reimbursed, as the
case may be), and endorse on such schedule an
appropriate notation evidencing the date and amount
of each repayment and any other information provided
for on such schedule;PROVIDED, HOWEVER, that the
failure of Lender to insert any such date or amount
or set forth such repayments and other information
on such schedule shall not in any manner affect the
obligation of the Corporation to repay the related
Reimbursement Loans in accordance with the terms of
this Agreement.

(d) Lender agrees that the Corporation may prepay a
Reimbursement Loan in whole or in part without
premium or penalty at any time.

ARTICLE III

CONDITIONS PRECEDENT TO ISSUANCE
OF LETTER OF CREDIT

SECTION 3.1
Documents To Be Received. Lender's obligations to
cause the issuance of the Letters of Credit as set
forth in SECTION 2.1 hereof are subject to the
conditions precedent that, on or prior to the Date
of Delivery, Lender shall receive the following
documents, all in form and substance satisfactory to
Lender:

(a) executed counterparts of the this Agreement, the
Security Agreement and the Reimbursement Loan Note,
which shall be duly executed and dated by the 
<PAGE>
Corporation (except for the schedule attached
thereto, which shall be undated and blank as to
amount);

(b) a certificate of the appropriate officer(s) of
the Corporation certifying (i) that the statements
contained in SECTIONS 3.2(A) and 5.1 are true and
correct, (ii) the name and true signatures of the
officers of the Corporation authorized to sign this
Agreement and the other documents to be delivered by
the Corporation hereunder and (iii) as to such other
matters as Lender shall determine, in substantially
the form attached hereto as EXHIBIT D;

(c) all filings, notices and recordings necessary to
perfect the security interest granted Lender
pursuant to the Security Agreement shall have been
delivered to Lender;

(d) the Warrant duly executed and delivered by
Corporation in the form attached hereto as EXHIBIT
E;

(e) the Notification of Assignment duly executed and
delivered by Corporation and acknowledged, consented
and agreed to by Boatmen's POS in the form attached
as Exhibit A to the Security Agreement;
    
(f) a copy of a fairness opinion delivered to the
Corporation from an established provider of
financial services (unaffiliated with Lender) that
the terms of the provision of such letter of credit
are fair tot he Corporation from a financial point
of view;

(g) such other documents, certificates, instruments,
approvals or filings as Lender may reasonably deem
necessary or appropriate.

SECTION 3.2   OTHER CONDITIONS PRECEDENT. The Lender's 
obligation to cause the issuance of the Letters of 
Credit as set forth in Section 2.1 hereof shall be 
subject to the additional conditions precedent that:

(a) the following statements shall be true and
correct on a Date of Delivery and Lender shall have
received a certificate signed by a duly authorized
officer of the Corporation, dated the Date of
Delivery to the following effect and to such other
effects as the Lender may request, substantially in
the form attached hereto as EXHIBIT D:

(i) the representations and warranties of the
Corporation set forth in SECTION 


<PAGE>
5.1 hereof and in the other Transaction Documents
are true and correct as of the Date of Delivery as
though made on and as of such date;

(ii) no event has occurred and is continuing, or
would result directly or indirectly from the
issuance of the Letters of Credit, which constitutes
an Event of Default hereunder or which would
constitute such an Event of Default, but for the
requirement that notice be given or time elapse, or
both; and

(ii) no "event of default" (however defined or
designated) has occurred under any of the
Transaction Documents, and no event has occurred and
is continuing which would constitute such an event
of default, but for the requirement that notice be
given or time elapse, or both.

(b)  On or before the Date of Delivery, the
Corporation shall have duly adopted a resolution
authorizing the execution, delivery and performance
by the Corporation of the Transaction Documents to
which it is a party, and on and after the Date of
Delivery such resolution shall continue to be in
full force and effect.


ARTICLE IV

OBLIGATIONS OF THE CORPORATION

SECTION 4.1
    OBLIGATIONS OF THE CORPOATION.

(a) The obligations of the Corporation under this
Agreement shall be absolute, unconditional and
irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement, under
all circumstances whatsoever, including without
limitation the following circumstances:

(i) any lack of validity or enforceability of any of
the Transaction Documents (other than this
Agreement) or any other agreement or instrument
contemplated thereby or related thereto;

(ii) any amendment or waiver of or any consent to
departure from all or any of the documents
contemplated hereby;

(iii) the existence of any claim, setoff, defense or
other rights which the Corporation may have at any
time against any beneficiary or any transferee of a
Letter of Credit (or any persons or entities for
whom such beneficiary may 
<PAGE>
be acting), the Lender or any other Person, whether
in connection with the Transaction or any unrelated
transaction;

(iv) any breach of contract or other dispute between
the Corporation and any beneficiary of the Letters
of Credit (or any persons or entities for whom any
such beneficiary may be acting), Lender, Issuing
Bank, Bank or any other Person;

(v) any statement or any other document presented
under the Transaction Documents proving to be
forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or
inaccurate in any respect whatsoever;

(vi) payment by the Issuing Bank under the Letters
of Credit against presentation of a sight draft or
certificate which does not comply with the terms of
the Letter of Credit, provided that such payment
shall not have constituted an act of gross
negligence or willful misconduct by Lender as
determined by a court of competent jurisdiction; or

(vii) any delay, extension of time, renewal,
compromise or other indulgence or modification
granted or agreed to by Lender, with or without
notice to or approval by the Corporation, as the
case may be, in respect of any of the Corporation's
indebtedness to Lender under this Agreement.

(b) Lender shall not be deemed to have waived or
released any of its rights or remedies (whether
specified in or arising under this Agreement or
otherwise available to it by law or agreement)
unless it signs a written waiver or release. Delay
or failure to act on the Lender's part shall not
constitute a waiver of or otherwise preclude
enforcement of any of its rights and remedies. All
of Lender's rights and remedies shall be cumulative
and may be exercised singularly or concurrently. 
Lender need not resort to any particular right or
remedy before exercising or enforcing any other, and
Lender's resort to any right or remedy shall not
preclude the exercise or enforcement of each other
right and remedy.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

SECTION 5.1
    Representations and Warranties of the Corporation.
The Corporation 

<PAGE>

represents and warrants as follows:

(a) ORGANIZATION AND POWERS. The Corporation is a
corporation, duly organized and validly existing
under the laws of the State of Delaware and is
authorized to transact business and exercise its
power under the applicable laws of any state in
which the conduct of its business or its ownership
of property requires that it be so qualified except
where failure to do so would not have a material
adverse effect on the ability of the Corporation to
conduct its business as currently conducted or as
proposed or contemplated to be conducted.

(b)  AUTHORIZATION AND ABSENCE OF CONFLICTS. The
execution, delivery and performance of the
Transaction Documents (i) have been duly authorized
by all necessary action on the part of the
Corporation, (ii) do not and will not conflict with,
or result in a violation of, any provision of law,
or any order, writ, rule or regulation of any court
or governmental agency or instrumentality binding
upon or applicable to the Corporation and (iii) do
not and will not conflict with, result in a
violation of, or constitute a default under, any
resolution, material  agreement or instrument to
which the Corporation is a party or by which the
Corporation or any of its property is bound.

(c) BINDING OBLIGATION. Each of the Transaction
Documents will be a valid and binding obligation of
the Corporation enforceable in accordance with its
terms.

(d) GOVERNMENTAL APPROVAL AND CONSENT. No consent,
approval, permit, authorization or order of, or
registration or filing with, any court or
governmental agency, authority or other
instrumentality not already obtained, given or made
is required on the part of the Corporation for the
execution, delivery and performance by the
Corporation of any of the Transaction Documents.

(e) ABSENCE OF LITIGATION. There is no action, suit,
proceeding, inquiry or investigation, at law or in
equity, before or by any court, arbitrator,
governmental or other board, body or official,
pending or, to the best knowledge of the
Corporation, threatened against or affecting the
Corporation, questioning the validity of any
proceeding taken or to be taken by the Corporation
in connection with the execution, delivery and
performance by the Corporation of the Transaction
Documents or seeking to prohibit, restrain or enjoin
the execution, delivery or performance by the
Corporation of any of the foregoing, nor, to the
best knowledge of the Corporation, is there any
basis therefor, wherein an unfavorable decision,
ruling or finding would (i) adversely affect the
validity or enforceability of, or the authority or
ability of 
<PAGE>
the Corporation to perform its obligations under the
Transaction Documents or (ii) have a material
adverse effect on the ability of the Corporation to
conduct its business as currently conducted or as
proposed or contemplated to be conducted.

(f) NO DEFAULTS BY THE CORPORATION. Other than as
set forth on the Schedule of Exceptions attached
hereto (the "Schedule"), the Corporation is not in
default in the performance, observance or
fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument
to which the Corporation is a party or by which the
Corporation or any of its property is bound, except
for such defaults as would not have a material
adverse effect on the ability of the Corporation to
conduct its business as currently conducted or as
proposed or contemplated to be conducted.

(g)  INCORPORATION OF REPRESENTATIONS. The
Corporation hereby makes to the Lender the same
representations and warranties as are made by the
Corporation and set forth in any other Transaction
Documents, which representations and warranties, as
well as the defined terms contained therein (or in
such defined terms), are hereby incorporated by
reference with the same effect as if each and every
such representation and warranty and defined term
were set forth herein in its entirety. No amendment
to such representations and warranties or defined
terms made pursuant thereto shall be effective to
amend such representations and warranties and
defined terms as incorporated by reference herein
without the consent of Lender.

(h) COMPLIANCE WITH LAWS. The Corporation is in
material compliance with all provisions of
applicable law.

ARTICLE VI

Covenants Of The CORPORATION

SECTION 6.1
AFFIRMITIVE COVENANTS. So long as the Termination
Date has not occurred or so long as any amount is
due and owing to Lender hereunder, the Corporation
will, unless Lender otherwise shall consent in
writing:

(a)  DELIVERY OF INFORMATION, REPORTS AND OPINIONS.
Furnish to Lender the following: (i) as soon as
possible and in any event within two (2) Business
Days after the occurrence of (A) each Event of
Default or any event or condition that, with the
passage of time or the giving of notice or both,
would constitute an Event of Default, under this
Agreement, and (B) 

<PAGE>
each "event of default" (however defined or
designated) or any event or condition that, with the
passage of time or the giving of notice or both,
would constitute an "event of default" under any
Transaction Document, a statement of an officer of
the Corporation setting forth details thereof and
the action which the Corporation proposes to take
with respect thereto; (ii) audited financial
statements, if any, of the Corporation within ten
(10) days after the Corporation's receipt of the
same from the respective accountants; (iii) a copy
of the annual budget, if any, for the Corporation
within ten (10) days after the adoption of such
budget; and (iv) as promptly as practicable, written
notice to the Lender of all proceedings before any
court or governmental authority which, if adversely
determined, would materially and adversely affect
the ability of the Corporation to pay when due the
principal of or any interest on the Reimbursement
Loan Note.

(b) PAYMENT OF INDEBTNESS. Other than as set forth
on the Schedule, duly and punctually pay or cause to
be paid all principal and interest on the
indebtedness of the Corporation legally due and
owing to third parties, comply with and perform all
conditions, terms and obligations of the notes or
bonds evidencing such indebtedness and the security
agreements, deeds of trust and mortgages securing
such indebtedness, and upon being notified of a
default or having made a determination not to pay an
indebtedness when due, promptly inform Lender of any
such default, or anticipated default, under any such
note, bond, security agreement, deed of trust or
mortgage, and forward to the Lender a copy of any
notice of default or notice of an event that might
result in default under any such note, bond,
security agreement, deed of trust or mortgage;

(c) ACCESS TO RECORDS AND AUDITS.  Upon reasonable
notice to Corporation (unless an Event of Default
has occurred and is continuing, in which case no
notice is necessary) Corporation shall permit Lender
to at all times have full and free access during
normal business hours to all the books and records
and correspondence of Corporation, and Lender or any
agents or representatives of Lender may examine the
same, take extracts therefrom and make photocopies
thereof, and Corporation agrees to render to Lender,
at Corporation's cost and expense, such clerical and
other assistance as may be reasonably requested with
regard thereto; and cause MNB or Boatmen's POS to
permit Lender to have all rights of the Corporation
to audit, copy or make extracts of the records of
MNB or Boatmen's POS as are specified under the
Boatmen's Merchant Agreement and the MNB Merchant
Agreement, respectively.
(d) RELATED COVENANTS. Fully and faithfully perform
each of the covenants and agreements required of it
pursuant to the provisions of the Transaction
Documents;
<PAGE>
(e) FURTHER ACTION. At any and all times, insofar as
it may be authorized to do so by law, pass, make,
do, execute, acknowledge and deliver all and every
such further resolutions, acts, deeds, conveyances,
assignments, recordings, filings, transfers and
assurances as may be necessary or reasonably
desirable for the better assuring, conveying,
granting, assigning and confirming the amounts due
hereunder and under the Reimbursement Loan Note, or
intended so to be, or which the Corporation may
hereafter become bound to pledge or assign thereto;

(f) COMPLIANCE WITH LAWS. Comply in all material
respects with all applicable (A) laws (including,
rules, regulations, writs, decrees and orders of all
Federal, state, local or foreign courts or
governmental agencies, authorities,
instrumentalities or regulatory bodies and (B)
rules, regulations and requirements necessary to
maintain its operating and business licenses,
authorizations and permits; and

(g) INCORPORATION OF COVENANTS. The Corporation
hereby makes to Lender the same covenants as are
made by the Corporation and set forth in any other
Transaction Document, which covenants, as well as
the defined terms contained therein (or in such
defined terms), are hereby incorporated by reference
with the same effect as if each and every such
covenant and defined term were set forth herein in
its entirety.  No amendment to such covenants or
defined terms made pursuant thereto shall be
effective to amend such covenants and defined terms
as incorporated by reference herein without the
consent of the Lender.

(h) In event that Vanguard transfers any of its
credit card processing functions from Boatmen's POS
to MNB and obtains a Letter of Credit for the
benefit of MNB, Vanguard hereby agrees to obtain
from MNB a Notification of Assignment duly executed
and delivered by Vanguard and acknowledged,
consented and agreed to by MNB in substantially the
form attached as Exhibit A to the Security
Agreement.

SECTION 6.2   NEGATIVE COVENANTS. So long as the Termination 
Date has not occurred or any amount remains due and owing
to Lender hereunder, unless the Lender otherwise
shall consent in writing, the Corporation agrees not
to issue any indebtedness which would be secured
(whether on a senior, parity or junior lien basis)
by any pledge of or security interest in the
Collateral.


<PAGE>
ARTICLE VII

EVENTS OF DEFAULT

SECTION 7.2
EVENTS OF DEFAULT. The occurrence of any of the
following events shall be an "Event of Default"
hereunder unless waived by Lender pursuant to
SECTION 9.1 hereof:

(a)  the Corporation shall fail to pay when due any
amount specified under the terms of this Agreement,
including, without limitation, amounts due under the
Reimbursement Loan Note;

(b) any representation or warranty made by the
Corporation pursuant to SECTION 5.1 hereof or under
the Security Agreement or any certification made by
the Corporation hereunder shall prove to have been
incorrect in any material respect when made;

(c) the Corporation shall fail to perform or observe
any other term, covenant or agreement contained in
this Agreement (other than those specifically
referenced in SECTION 7.1(A) and (B) above) and such
failure shall remain unremedied for thirty (30) days
after written notice thereof shall have been given
to the Corporation, by Lender;

(d) an "event of default" (however defined or
designated) under any Transaction Document shall
have occurred and be continuing;

(e) an event of default under any indebtedness of
the Corporation from time to time outstanding or
under any agreement to which Borrower is a party
with a third party or parties resulting in a right
by such third party or parties, whether or not
exercised, to accelerate the maturity of any
indebtedness in an amount in excess of Five Hundred
Thousand Dollars ($500,000) or that could materially
and adversely affect the ability of the Corporation
to pay when due the principal of or any interest on
the Reimbursement Loan Note.

(f) any material provision of this Agreement or the
other Transaction Documents shall at any time for
any reason cease to be valid and binding on the
Corporation, or shall be declared to be null and
void, or the validity or enforceability thereof
shall be contested by the Corporation or any
governmental agency or authority, and the happening
of the events heretofore set forth in this
SUBSECTION (F)shall materially and adversely affect
Lender's rights under this Agreement or under any
other Transaction Document, or the Corporation shall
deny that it has any or further liability or
obligation under this Agreement or any other
Transaction Document;
<PAGE>
(g) Lender shall fail to have a valid and
enforceable perfected first priority security
interest under the Security Agreement, subject only
to the Permitted Liens;

(h) The occurrence of (or with the giving of notice,
lapse of time, determination of materiality or the
fulfillment of any other applicable condition or any
combination of the foregoing, might constitute) a
default by Borrower under, or the termination of,
the Credit Card Agreement; or

(i)  an Act of Bankruptcy.

ARTICLE VIII

RIGHTS AND REMEDIES

SECTION 8.1

RIGHTS AND REMEDIES.

(a) DEFAULTS UNDER THIS AGREEMENT. Upon the
occurrence of an Event of Default hereunder, or at
any time thereafter while such default continues,
Lender, in its sole discretion, may do any one or
more of the following:

(i) send notice of such Event of Default to the
Corporation;

(ii) declare the Reimbursement Loan Note, if
outstanding, and any and all amounts due and owing
under this Agreement or under the other Transaction
Documents, to be immediately due and payable;

(iii) terminate the Letter of Credit; and

(iv) exercise any rights and remedies available to
it by law or under this Agreement, the Security
Agreement, any other Transaction Document or any
other agreement, document or instrument contemplated
hereby.

(b) DEFAULTS UNDER THE MERCHANT AGREEMENT. Lender
may cure an event of default under the Boatmen's
Merchant Agreement or the MNB Merchant Agreement;
provided, however, that nothing contained herein
shall obligate Lender to cure any such event of
default.
<PAGE>

ARTICLE IX

MISCELLANEOUS

SECTION 9.1
    MODIFICATION OF AGREEMENT. No modification or waiver
of any provision of this Agreement, and no consent
to any departure by the Corporation therefrom, shall
be effective unless the same shall be in writing and
signed by Lender and the Corporation and no
modification or waiver of any provision of the
Letter of Credit, and no consent to any departure by
the Corporation, Boatmen's POS or MNB therefrom,
shall in any event be effective unless the same
shall be in writing and signed by Lender. Any such
waiver or consent shall be effective only in the
specific instance and for the purpose for which
given. No notice to or demand on the Corporation in
any case shall entitle the Corporation to or any
other or further notice or demand in the same,
similar or other circumstances.

SECTION 9.2
    WAIVER OF RIGHTS BY LENDER; REMEDIES. No course of
dealing or failure or delay on the part of Lender in
exercising any right, power or privilege hereunder
or under the Letters of Credit shall operate as a
waiver hereof or thereof, nor shall a single or
partial exercise thereof preclude any other or
further exercise or the exercise of any other right,
power or privilege. The rights of Lender under this
Agreement are cumulative and not exclusive of any
rights or remedies which Lender would otherwise
have.

SECTION 9.3
    NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing and
shall be deemed effectively given:  (i) upon
personal delivery to the party to be notified; (ii)
upon receipt at the address specified below after
having been sent by certified or registered mail,
return receipt requested, postage prepaid; or (iii)
one (1) day after deposit with a nationally
recognized overnight courier, specifying next day
delivery, with written verification of receipt.  All
communications shall be sent to the party to be
notified at the address set forth below: 


<PAGE>
    If to the Corporation:

              Vanguard Airlines, Inc.
              30 N.W. Rome Circle-Mezzanine Level
              Kansas City International Airport
              Kansas City, MO 64153
              Attention: Brian Gillman, Vice President 
                 and General Counsel                   
              Fax:  (816) 243-2118

    
    If to Lender:

              Hambrecht & Quist California
              c/o Hambrecht & Quist LLC
              One Bush Street
              San Francisco, CA 94104
              Attention: David Golden
              Fax:(415) 339-4325

or, in any such case, at such other address or
addresses as shall have been furnished in writing by
such party to the others.

SECTION 9.4
INDEMNIFICATION. In addition to other amounts
payable by the Corporation under this Agreement, the
Corporation hereby agrees to the fullest extent
permitted by applicable law, to protect, defend,
indemnify and hold harmless Lender, its assignees,
the Issuing Bank, and their respective directors,
officers, employees, agents, counsel, successors and
assigns from and against any and all claims,
demands, judgments, damages, actions, injuries,
losses, liabilities, penalties, costs, charges and
expenses whatsoever which such Person may (or which
may be claimed against such Person whatsoever),
including, without limitation, the fees and expenses
of counsel for such Person by reason of or in
connection with: (a) the issuance of the Letters of
Credit; (b) any breach by Corporation of any
representation, warranty, covenant, term or
condition in, or the occurrence of any default under
this Agreement, the Reimbursement Loan Note or the
other Transaction Documents, including all
reasonable fees or expenses resulting from the
settlement or defense of any claims or liabilities
arising as a result of any such breach or
default;PROVIDED, HOWEVER, that the Corporation
shall not be required to indemnify any such Person
for any claims, demands, damages, losses,
liabilities, costs, charges and expenses to the
extent, but only to the 
<PAGE>
extent, caused by (i) the gross negligence of
Lender, as determined by a court of competent
jurisdiction, in determining whether a sight draft
or certificate presented under the Letters of Credit
complied with the terms of the Letters of Credit;
(ii) Lender's willful failure, as determined by a
court of competent jurisdiction, to cause payment
under the Letters of Credit after the presentation
to it by Lender of a sight draft and all required
certificates strictly complying with the terms and
conditions of the Letter of Credit. The
indemnification obligations in this SECTION 9.4
shall survive the expiration of this Agreement or
the Letters of Credit.

SECTION 9.5
LIABILITY OF LENDER. The Corporation assumes all
risks of the acts or omissions of Boatmen's POS or
MNB and any transferee of the Letters of Credit with
respect to its use of the Letters of Credit or the
proceeds thereof; PROVIDED, HOWEVER, this assumption
is not intended to, and shall not, preclude the
Corporation from pursuing such rights and remedies
as it may have against Boatmen's POS or MNB at law
or under the Boatmen's Merchant Agreement or MNB
Merchant Agreement or any other agreement. Neither
the Lender nor any Person participating in the
Letters of Credit or the Reimbursement Loan Note
shall be liable or responsible for: (a) the use
which may be made of the Letters of Credit or the
proceeds thereof or for any acts or omissions of
Boatmen's or MNB and any transferee of the Letters
of Credit in connection therewith; (b) the validity,
sufficiency or genuineness of documents presented
under the Letters of Credit, or of any
endorsement(s) thereon, even if such documents
should in fact prove to be in any or all respects
invalid, insufficient, fraudulent or forged;
PROVIDED, HOWEVER, (a) and (b) to the contrary
notwithstanding, the Corporation shall have a claim
against the Lender, and the Lender shall be liable
to the Corporation, to the extent, but only to the
extent, of any direct, as opposed to consequential,
damages suffered by the Corporation which the
Corporation proves, as determined by a court of
competent jurisdiction, were caused by (i) Lender's
gross negligence or (ii) Lender's willful act that
prevents payment under the Letters of Credit after
the presentation to Issuing Bank by Boatmen's POS or
MNB (or a successor under the  Boatmen's Merchant
Agreement or MNB Merchant Agreement to whom the
Letters of Credit has been transferred in accordance
with its terms) of a sight draft and all required
certificates strictly complying with the terms and
conditions of the Letters of Credit.  In furtherance
and not in limitation of the foregoing, the Lender
may accept documents that appear on their face to be
in order, without responsibility for further
investigation, regardless of any notice or
information to the contrary; PROVIDED, HOWEVER, that
if Lender shall receive timely written notification
from each of Boatmen's POS or MNB or the Corporation
and that sufficiently identifies (in the reasonable
opinion of Lender) documents that 
<PAGE>
thereafter may be presented to Issuing Bank or
Lender which are not to be honored, Lender agrees to
use its best efforts to avoid honoring such
documents thereafter. Lender assumes no
responsibility for any failure or delay in the
transmission to Boatmen's POS or MNB of funds drawn
under the Letters of Credit through the federal
funds wire system.

SECTION 9.6
PARTICIPATIONS. Lender may participate to other
Persons and institutions of the Lender's choosing
all or any portion of its obligations under the
Letter of Credit and the obligations of the
Corporation under the Reimbursement Loan Note.  No
such participation shall relieve the Lender of its
obligations hereunder nor shall it cause an increase
in Corporation's obligations under this Agreement,
including under SECTION 2.3(B) above.

SECTION 9.7   SATISFACTION REQUIREMENT. If any agreement,
certificate or other writing, or any action taken or
to be taken, is by the terms of this Agreement
required to be satisfactory to the Lender, the
determination of such satisfaction shall be made by
Lender in its sole and exclusive judgment exercised
in good faith.

SECTION 9.8
GOVERNING LAW.  In all respects, including all
matters of construction, validity and performance,
this Agreement, the Reimbursement Loan Note and the
other Transaction Documents, and any obligations
arising hereunder or thereunder, shall be governed
by, and construed and enforced in accordance with,
the laws of the State of California applicable to
contracts made and performed in such state, without
regard to the principles thereof regarding conflict
of laws.

SECTION 9.9   
WAIVER OF JURY TRIAL. The Corporation hereby waives
trial by jury in any litigation in any court with
respect to, in connection with, or arising out of
this Agreement, the Reimbursement Loan Note, the
other Transaction Documents or any instrument or
document delivered pursuant to this Agreement, the
Reimbursement Loan Note or the other Transaction
Documents, or the validity, protection,
interpretation, collection or enforcement thereof,
or any other claim or dispute howsoever arising,
between the Corporation, on the one hand, and
Lender, on the other hand.

SECTION 9.10
JURISDICTION: SERVICE OF PROCESS. The Corporation
hereby irrevocably consents to the jurisdiction of
the Courts of the State of California, 

<PAGE>
County of San Francisco and of any Federal Court
located in the county of San Francisco California, 
and agree that venue in each of such Courts is proper 
in connection with any action or proceeding arising 
out of or relating to this Agreement, the other 
Transaction Documents, or any document or instrument 
delivered pursuant to this Agreement or the other 
Transaction Documents. Nothing herein shall affect 
the right of Lender to serve process in any other 
manner permitted by law or to commence legal 
proceedings or otherwise proceed against the 
Corporation in any other jurisdiction.

SECTION 9.11
SURVIVAL OF AGREEMENT.  All covenants, agreements,
representations and warranties made in this
Agreement shall survive the issuance of the Letters
of Credit by Issuing Bank and shall continue in full
force and effect so long as the Letters of Credit
shall be unexpired or any sums drawn or due
hereunder or under the Reimbursement Loan Note shall
be outstanding and unpaid, regardless of any
investigation made by any Person and so long as any
amount payable hereunder remains unpaid.  Whenever
in this Agreement Lender is referred to, such
reference shall be deemed to include the successors
and assigns of Lender, and all covenants, promises
and agreements by or on behalf of the Corporation
which are contained in this Agreement shall inure to
the benefit of the successors and assigns of Lender
and such other Persons as are indemnified herein,
subject to such limitations as are set forth in
SECTION 9.6 above regarding participations.  The
rights and duties of the Corporation,  however, may
not be assigned or transferred, except as
specifically provided in this Agreement or with the
prior written consent of the Lender, and all
obligations of the Corporation shall continue in
full force and effect notwithstanding any assignment
by the Corporation of any of their respective rights
or obligations under any of the Transaction
Documents or the Reimbursement Loan Note or any
entering into, or consent by the Corporation
supplement or amendment to any of the Transaction
Documents.

SECTION 9.12
SEVERABILITY.  Any provision of this Security
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, and any such prohibition or
unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in
any other jurisdiction.

SECTION 9.13
HEADINGS.  The various headings in this Agreement
are inserted for convenience only and shall not
affect the meaning or interpretation of this
agreement or any provisions hereof.
<PAGE>
SECTION 9.14  COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which when so
delivered shall be deemed an original, but all such
counterparts shall constitute but one and the same
instrument.  Each such agreement shall become
effective upon the execution of a counterpart hereof
or thereof by each of the parties hereto and
telephonic notification thereof has been received by
Corporation and Lender.

IN WITNESS WHEREOF, each of the parties hereto has
caused this Agreement to be executed and delivered
by its duly authorized officer on the date first set
forth above.


CORPORATION:                          VANGUARD AIRLINES,
   INC.


   By:                                               

        Printed Name:

        Title: 


ATTEST:



Name: Brian Gillman

Title: Vice President, General
  Counsel and Secretary
        HAMBRECHT & QUIST
        CALIFORNIA, a wholly
        owned subsidiary of
        Hambrecht & Quist
        Group


        By:

        Printed Name:

        Title:

PAGE
<PAGE>
                SCHEDULE OF EXCEPTIONS




1.  Contract and Agreement between Advertising
Agency and National Client, between Vanguard
Airlines, Inc. and Valentine Radford, Inc.

2.  Aircraft Parts and Engine Lease Agreements
between Aviation Sales Company and Vanguard
Airlines, Inc.

3.  Aircraft Lease Agreements between Aloha Airlines
and Vanguard Airlines, Inc.

4.  Service Agreement between Greenwich Air
Services, Inc. and Vanguard Airlines, Inc. for JT8D
Engines

5.  The Company has utilized current liabilities as
an additional source of cash by delaying payments to
certain of its creditors and attached hereto as
Annex A is a list of Vanguard's vendors with
balances in excess of $25,000 as of January 9, 1997.











<PAGE>








                      EXHIBIT A

FORM OF
REIMBURSEMENT LOAN NOTE


$4,000,000                            SAN FRANCISCO,
              CALIFORNIA
              DECEMBER 31, 1996

FOR VALUE RECEIVED, VANGUARD AIRLINES, INC., a
Delaware corporation (the "Corporation") hereby
unconditionally promises to pay to the order of
HAMBRECHT & QUIST CALIFORNIA, a wholly owned
subsidiary of Hambrecht & Quist Group, or their
assigns, in lawful money of the United States of
America and in immediately available funds, the sum
of Four Million Dollars ($4,000,000) or so much
thereof as from time to time may be advanced
hereunder pursuant to Section 2.8 of that certain
Reimbursement Agreement, dated as of December 31,
1996, by and among the Corporation and Lender, as
amended from time to time (the "Agreement"), in
connection with drawings under either the (i)
certain Letter of Credit No.  3002741 dated January
2, 1997, issued by the BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION in favor of BOATMEN'S
MERCHANT PROCESSING CO., L.L.C., (including any
amendment thereof or substitute therefor or
replacement thereof) or (ii) that certain Letter of
Credit No. 3002835 dated January 2, 1997 issued by
the BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION in favor of MICHIGAN NATIONAL BANK
(including any amendment thereof or substitute
therefor or replacement thereof) (collectively, the
"Letters of Credit") in accordance with the terms
and conditions set forth in the Agreement.  Borrower
shall also pay interest (calculated on the basis of
a 365 or 366 day year and actual number of days
elapsed) on such sum or the portion thereof from
time to time outstanding hereunder, monthly, at the
rates and in accordance with the terms and
conditions set forth in the Agreement.

This Reimbursement Loan Note is issued under and is
subject to the terms and conditions of the
Agreement. All definitions, terms, conditions,
rights and provisions set forth in the Agreement,
are hereby incorporated herein in their entirety.

Annexed hereto and made a part hereof is a schedule
(the "Loan and Repayment Schedule") on which shall
be shown all advances by Lender pursuant to the
Agreement (each such advance, a "Reimbursement
Loan") and all repayments of principal made to
Lender hereunder.  The Corporation hereby appoints
Lender as its agent to endorse the date and the
amount of each 
<PAGE>
such Reimbursement Loan or principal repayment made
hereunder.  Such endorsement shall constitute prima
facie evidence of the accuracy of the information
endorsed; provided, however, that failure to make
any such endorsement (or any errors in notation)
shall not affect in any manner the obligations of
Corporation with respect to the amounts payment
hereunder.

 This Reimbursement Loan Note is subject to
acceleration upon the occurrence of certain events
as provided in the Agreement.  The Corporation shall
have the right to prepay this Reimbursement Loan
Note in whole or in part, without penalty or
premium, at any time.

All payments or prepayments of principal of and
interest on this Reimbursement Loan Note shall be
payable to the Account of Lender as specified in
Section 2.6 of the Agreement.

All payments and prepayments hereon shall be applied
FIRST, to costs and expenses and other amounts due
and owing to Lender under the Agreement; SECOND, to
accrued interest then payable; and THIRD to
principal of the Reimbursement Loans in
chronological order of funding of the Reimbursement
Loans and within each Reimbursement Loan in inverse
chronological order of principal amortization.

The full amount of this Reimbursement Loan Note is
secured by the Collateral identified and described
as security therefor in that certain Security
Agreement executed and delivered by Corporation as
of December 31, 1996.  Corporation shall not,
directly or indirectly, suffer or permit to be
created or to remain, and shall promptly discharge,
any lien on or in the Collateral, or in any portion
thereof, except as permitted pursuant to the
Security Agreement.  In addition, Corporation shall
not suffer any other matter whereby an interest of
Lender under the Security Agreement in the
collateral or in any lien pursuant to the Security
Agreement or any part of the foregoing might by
impaired, except as permitted pursuant to such
Security Agreement.

The Corporation hereby waives presentment, demand,
protest, notice of protest or other notice of
dishonor of any kind or of non-payment of this
Reimbursement Loan Note, and promises to pay all
reasonable costs of collection when incurred,
including, without limitation, reasonable attorneys'
fees, costs and other expenses.

The right to plead any and all statutes of
limitations as a defense to any demands hereunder is
hereby waived to the full extent permitted by law.



<PAGE>
 No extension of the time for the payment of this
Reimbursement Loan Note 
or any installment hereof made by agreement with any
Person now or hereafter liable for the payment of
this Reimbursement Loan Note shall operate to
release or discharge the original liability under
this Reimbursement Loan Note, either in whole or in
part, of the Corporation.             

This Reimbursement Loan Note is to be construed
according to the laws of the State of California,
without regard to principles of conflict of laws.

The provisions of this Note shall inure to the
benefit of and be binding on any successor to Lender
and shall extend to any holder hereof.

CORPORATION:                          VANGUARD AIRLINES,            INC.

              By:

              Printed Name:

              Title:

                           






















PAGE
<PAGE>
                     EXHIBIT D
                          
                      FORM OF
    CERTIFICATE RELATING TO ACCURACY OF CERTAIN
 CORPORATION REPRESENTATIONS CONTAINED IN, AND THE
    AUTHORIZATION TO EXECUTE, CERTAIN DOCUMENTS

   We, the undersigned, Do Hereby Certify to
Hambrecht & Quist California, a wholly owned
subsidiary of Hambrecht & Quist Group (the "Lender")
that:

1.  We are the duly qualified and acting Vice
President, and Secretary, respectively, of Vanguard
Airlines, Inc. (the "Corporation").

2.  The statements contained in Sections 3.2 and 5.1
of the Reimbursement Agreement (the "Agreement"),
dated as of December 31, 1996 by and among the
Corporation and the Lender are true and correct as of
the date hereof.

3.  The names and true signatures of the officers of
the Corporation authorized to sign the Agreement, and
the other documents to be delivered by the Corporation
under the Agreement, are as follows:

Name               Signature                    Title

John Tague    
Chairman of the Board,                               President and CEO

William A. Garrett 
Vice President

Brian S. Gillman 
Vice President and Secretary

4.  All conditions precedent to the issuance of the
Letter of Credit have been satisfied by the
Corporation.

5.  No Event of Default has occurred and is
continuing, or no event which would result directly or
indirectly from the execution and delivery of the
Agreement by the Corporation or the issuance of the
Letter of Credit which constitutes an Event of Default
or which would constitute such an Event of Default but
for the requirement that notice be given or time
elapse, or both.

6.  All capitalized terms not otherwise defined shall
have the meaning ascribed thereto in the Agreement.
<PAGE>


IN WITNESS WHEREOF, we have hereunto set our hands and
the seal of the Corporation on December 31, 1996.

                   VANGUARD AIRLINES, INC.


                   By:

                   Printed Name: William A.Garrett
                   Title:  Vice President
                          

                   By:

                   Printed Name: Brian S. Gillman

                   Title:  Secretary

























<PAGE>