AIRLINE SERVICES AGREEMENT
THIS AIRLINE SERVICES AGREEMENT (the "Agreement") is made
effective as of the 1st day of July, 1997 by and between MESABA
AVIATION, INC., a Minnesota corporation ("Mesaba"), MESABA
HOLDINGS, INC., a Minnesota corporation ("Holdings"), and
NORTHWEST AIRLINES, INC., a Minnesota corporation ("Northwest").
WITNESSETH:
WHEREAS, Mesaba and Northwest desire to make certain
arrangements between them (including aircraft lease arrangements)
which will enable Mesaba to provide connecting commercial
turboprop air transportation services to and from Minneapolis/St.
Xxxx, Minnesota and Detroit, Michigan;
WHEREAS, Holdings, Mesaba and Northwest are each willing to
perform in the manner and upon the conditions and terms
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Northwest, Mesaba and Holdings do
hereby agree as follows:
ARTICLE I
DEFINITIONS
Section I.1 Definitions. For all purposes of this
Agreement, except as otherwise expressly provided or unless the
context otherwise requires:
Note: The level 3 paragraph numbering has been conformed to the
original document for Section 1.1. It does not and should not
correspond to the level three paragraph numbering in the rest of
the document. That is, in the rest of the document, level 3 is
(a), (b), etc. In Section 1.1, it is and should remain (1), (2),
etc.
(1) the terms as defined in this Article have the
meanings assigned to them in this Article and include the
plural as well as the singular;
(2) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with
generally accepted accounting principles; and
(3) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a
whole and not to any particular Article, Section or other
subdivision.
Affiliate means any entity or person directly or indirectly
controlling, controlled by, or under direct or indirect common
control with, Northwest or Holdings, as the case may be. For
purpose of this definition, "control" when used with respect to
either Northwest or Holdings means the power to direct the
management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract
or otherwise, and the terms "controlling" and "controlled" have
meanings correlative to the foregoing. For purposes of this
Agreement, in no event shall Northwest be deemed to be an
Affiliate of either Mesaba or Holdings nor shall either Mesaba or
Holdings be deemed to be an Affiliate of Northwest.
Air Cargo means air freight, United States mail and small
package services appropriate for the Aircraft.
Air Cargo Handling Services means the Air Cargo handling
services to be performed pursuant to Section 4.10.
Aircraft means (i) the thirteen (13) Saab 340A and seventeen
(17) Saab 340B+ turboprop aircraft in Mesaba's fleet as of the
Effective Date, (ii) the additional nineteen (19) Saab 340A and
twenty-three (23) Saab 340B+ turboprop aircraft which are the
subject of the Term Sheet when, as and if such aircraft are added
to Mesaba's fleet pursuant to Sections 3.2 and 3.3, (iii) all
additional Saab 340 Series aircraft when, as and if such aircraft
are added to Mesaba's fleet pursuant to Sections 3.2 and 3.3,
(iv) the twenty-five (25) Dash 8 turboprop aircraft and the four
(4) Saab 340B turboprop aircraft in Mesaba's fleet as of the
Effective Date, and (v) the aircraft which are subject to the Wet
Lease Agreement.
Annual Operating Plan shall have the meaning ascribed to
such term in Section 2.12.
ASM means an Available Seat Mile, i.e. one aircraft seat
scheduled to be flown one statute mile on a Scheduled Flight.
ASM/Passenger Payment means the payment to be made pursuant
to Section 5.2(b).
ASM/Passenger Report means the payment to be made pursuant
to Section 5.2(a).
Baggage Handling Services means the baggage handling
services to be performed pursuant to Section 4.9.
[*]
[*]
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Charter Flights means charter flights using the Aircraft,
which charter flights, operational arrangements and the
compensation to be received by Mesaba in respect thereof are
mutually agreed to by Mesaba and Northwest from time to time.
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
Complementary Service Cities means those Service Cities
which Northwest serves or may subsequently serve to and from one
or both of the Hub Cities during the term of this Agreement and
which Mesaba also serves (or may serve) to and from one or both
of the Hub Cities.
Default means the occurrence of an event set forth in
Article X, and the expiration of any cure period provided therein
without cure or other remedial action having occurred, permitting
termination of this Agreement.
Designator means "NW" or such other designator code as
Northwest may specify to identify Northwest's own flights.
Direct Costs means Northwest's or Mesaba's, as applicable,
actual costs for goods and services without any surcharge for
administrative or general overhead expense.
DOT means the United States Department of Transportation or
any successor to its functions with respect to the regulation of
air transportation.
DOT Certification means any and all certifications and
approvals by the DOT, the FAA and other regulatory agencies
required for Mesaba to operate the Aircraft and to perform
pursuant to the terms of this Agreement and all Governmental
Regulations.
Effective Date means the date specified in Section 10.1 of
this Agreement.
Existing Saab 340B+ Subleases shall have the meaning
ascribed to such term in Section 3.3.
FAA means the Federal Aviation Administration.
[*]
GAAP means generally accepted accounting practice and
principles at the time prevailing for companies engaged in
businesses similar to that of Mesaba, consistently applied.
Governmental Regulations means the rules and regulations
prescribed by any local, state or federal unit of government
having authority and jurisdiction to regulate the business and
affairs of an air carrier having DOT Certification, including
without limitation, the DOT and the FAA.
Hub Cities means Minneapolis/St. Xxxx, Minnesota ("MSP") and
Detroit, Michigan ("DTW").
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
Identification means the trade name (including "Northwest
Airlink" or any similar or other name), trademarks, service
marks, graphics, logo, distinctive color schemes and other
identification selected by Northwest in its sole discretion for
the Regional Airline Services to be provided by Mesaba, whether
or not such identification is copyrightable or otherwise
protected or protectable under federal law.
[*]
[*]
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Northwest Nominee means an individual designated to serve as
a director of Holdings and Mesaba by Northwest (1) who is either
an officer or director of Northwest or an individual of
recognized standing and reputation in the airline industry and
(2) with respect to whom Holdings would not be required to make
any disclosures in its proxy statements of matters required to be
disclosed pursuant to Item 401(f)(2) through (6) of Regulation
S-K of the Rules and Regulations of the Securities and Exchange
Commission.
Northwest Tickets shall have the meaning ascribed to such
term in Section 4.8(a).
[*]
Performance Period means each six (6) month period ending on
a June 30 or December 31 occurring during the term of this
Agreement.
PPI means Producer Price Index for finished goods published
by the United States Department of Labor, Bureau of Labor
Statistics, and any comparable successor index.
Primary Service Cities means those Service Cities to which
Mesaba provides service, but which are not served by Northwest.
[*]
Regional Airline Services means the provisioning by Mesaba
to Northwest of Scheduled Flights using the Aircraft in
accordance with this Agreement and includes Scheduled Flights
operated by Express Airlines I, Inc. pursuant to the Wet Lease
Agreement.
Regional Jet Services Agreement means the Regional Jet
Services Agreement dated as of October 25, 1996 among Holdings,
Mesaba and Northwest.
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
Scheduled Flights means revenue passenger flights (other
than charters) which, regardless of frequency, are held out to
the public and published in the customary and applicable schedule
distribution systems, such as the OAG, or published by Northwest
in its own system timetables.
Service Cities means those cities identified from time to
time by Northwest to which Mesaba shall provide Regional Airline
Services.
Stock Purchase Warrant shall have the meaning ascribed to
such term in Section 12.16.
Subleases means the sub-subleases, subleases and/or leases
to be entered into pursuant to Section 3.3 and the Existing Saab
340B+ Subleases.
Subsidiary means a corporation more than 50% of the
outstanding equity interest of which is owned, directly or
indirectly, by Mesaba or by one or more other Subsidiaries, or by
Mesaba and one or more other Subsidiaries, which equity interest
entitles the owner(s) thereof to direct the policies and
operations of such corporation.
Support Agreements shall have the meaning ascribed to such
term in Section 3.6.
Term Sheet means the Term Sheet Proposal for the Acquisition
of Saab 340 Aircraft by Mesaba Aviation, Inc, signed by Mesaba,
Fairbrook Leasing, Inc., and Saab Aircraft of America, Inc. on
March 7, 1996.
Termination Date means the date on which this Agreement
terminates whether by its term or as a result of a Default.
Ticketing Services means the ticketing services to be
performed pursuant to Section 4.8.
Wet Lease Agreement means the Aircraft Wet Lease Agreement
dated as of June 3, 1997 between Express Airlines I, Inc. and
Mesaba.
ARTICLE II
PROVISION OF REGIONAL AIRLINE SERVICES
Section II.1 Operation of Scheduled Flights. Subject to
the terms and conditions of this Agreement, Mesaba shall use the
Aircraft to operate Scheduled Flights between the Hub Cities and
such Service Cities as shall be designated by Northwest from time
to time in its sole discretion. All schedules and aircraft
routing for such Scheduled Flights and all utilization of the
Aircraft shall be determined by Northwest from time to time, in
its sole discretion, subject to the reasonable operating
constraints of Mesaba taking into consideration reasonable
maintenance, crew training and Aircraft rotation requirements.
Block times shall be mutually agreed to by Mesaba and Northwest
and set in conformity with standard industry practices and
Aircraft type.
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
Section II.2 Use of Designator, Identification and Related
Matters. Mesaba shall operate the Scheduled Flights provided
under this Agreement using the Designator. The Scheduled Flights
shall be identified by Mesaba solely with flight numbers assigned
by Northwest. Mesaba shall use the Identification determined by
Northwest from time to time, in its sole discretion, for the
Aircraft, and for all facilities, equipment, uniforms and printed
materials used in connection with the Regional Airline Services;
provided, however, all Mesaba uniforms (as opposed to the use of
the Identification thereon) shall be determined by Mesaba
provided that such uniforms shall at all times be consistent with
Mesaba's existing uniform standards. Northwest shall have
exclusive control over the use and display of the Designator and
Identification. Any use of the Identification by Mesaba not
specifically approved by this Agreement shall be subject to the
prior written approval of Northwest.
Section II.3 Use of Other Designators. Mesaba shall not
use on the Aircraft its own airline designator (except as
otherwise required by Governmental Regulations) or the airline
designator, logo, or any other identifying feature of another
foreign or United States airline, without the express prior
written consent of Northwest, or unless Northwest directs Mesaba
to use such other designator, logo, or identifying feature.
Section II.4 Personnel and Dispatch Control. Mesaba shall
be responsible for providing all crews (flight and cabin) to
operate the Scheduled Flights and for all aspects (personnel and
other) of dispatch control.
Section II.5 Inventory Management. Northwest shall have
complete control over all inventory management functions for all
Scheduled Flights operated pursuant to this Agreement, including,
without limitation, overbooking levels, discount seat levels and
allocation of seats among the various fare buckets. In
performing Mesaba's inventory management, Northwest shall conform
with its own procedures and standards, taking into account the
type of Aircraft operated by Mesaba.
Section II.6 Passenger Fares. Northwest shall be the sole
authority for filing tariffs for Scheduled Flights operated
pursuant to this Agreement and Northwest shall establish all
passenger fares for Scheduled Flights operated pursuant to this
Agreement. All charges for filing of fares or tariffs for
Scheduled Flights operated pursuant to this Agreement shall be
paid by Northwest.
Section II.7 DOT Certification. Mesaba has and shall
maintain DOT Certification and all other permits, licenses,
certificates and insurance required by governmental authorities
and Article IX hereof to enable Mesaba to perform the services
required by this Agreement.
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
Section II.8 Compliance With Governmental Regulations.
All flight operations, dispatch operations and flights and all
other operations undertaken by Mesaba pursuant to this Agreement
shall be conducted and operated by Mesaba in strict compliance
with all Governmental Regulations, including, without limitation,
those relating to airport security, the use and transportation of
hazardous materials, crew qualifications, crew training and
hours. All Aircraft shall be operated and maintained by Mesaba
in strict compliance with all Governmental Regulations, Mesaba's
own operations manuals and maintenance manuals and procedures,
and all applicable equipment manufacturer's instructions. At all
times, Mesaba shall operate with the highest standards of care.
Section II.9 Quality of Service. Northwest procedures,
performance standards and means of measurement thereof concerning
the provision of air passenger and air cargo services shall be
applicable to all services provided by Mesaba under this
Agreement and Mesaba shall achieve the same quality of airline
service provided by Northwest, subject to limitations imposed by
the type of Aircraft used by Mesaba, its route network and the
availability of equipment and facilities at certain Service
Cities. Mesaba shall maintain adequate staffing levels to ensure
the same level of customer service and operational efficiency
that Northwest achieves; Mesaba shall cooperate with Northwest in
any way necessary or desirable to provide such comparable level
of customer service in connection with the operation of Regional
Airline Services; and Mesaba shall maintain new hire and
recurrent training programs for all job descriptions.
Section II.10 Service Standards. Without limiting Section
2.9, Mesaba shall achieve the following specific performance
standards.
(a) Minimum Completion Factor. Mesaba shall achieve
not less than [*] completion factor for all Scheduled
Flights which are scheduled to be operated by Mesaba during
each Performance Period. [*].
(b) Minimum On-Time Reliability. Mesaba shall achieve
[*] on-time arrival factor for all Scheduled Flights which
are scheduled to be operated by Mesaba during each
Performance Period. [*]
(c) Mishandled Luggage Factor. The number of
incidences of mishandled luggage by Mesaba shall not exceed
[*] per 1,000 enplaned revenue passengers during any
Performance Period. [*].
(d) Customer Complaints Factor. The number of
customer complaints received by Northwest in respect of
Regional Airline Services shall not exceed [*] per 1,000
enplaned revenue passengers during any Performance Period.
(e) Operational Oversales Factor. The number of
denied boardings by Mesaba due to operational oversales in
respect of Regional Airline Services shall not exceed [*]
per 1,000 enplaned revenue passengers during any Performance
Period. [*].
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
Section II.11 Passenger Amenities. [*].
Section II.12 Annual Operating Plan. At least 90 days
prior to January 1 of each year during the term of this
Agreement, Mesaba and Northwest shall confer and prepare an
operating plan for the succeeding calendar year, which plan shall
include (i) Northwest's determination with respect to the
schedule and routing for all Scheduled Flights for such year,
(ii) Northwest's designation of the Service Cities to which
Mesaba shall operate Regional Airline Services, (iii) Northwest's
schedule of specific dates for the commencement of service to new
Service Cities, if any, (iv) Northwest's determination of the
number of Aircraft to be added to or removed from Mesaba's fleet
(subject to Section 3.2), and (v) such other matters as Northwest
and Mesaba shall determine (as amended in accordance with this
Section 2.12, the "Annual Operating Plan"). Northwest and Mesaba
shall meet and confer on a quarterly basis (or more frequently if
requested by either Northwest or Mesaba) to review the
implementation of the Annual Operating Plan and to discuss any
changes to the Annual Operating Plan. In the event Northwest
elects to alter the Annual Operating Plan during the course of a
year, Northwest shall provide at least 60 days prior notice to
Mesaba. Notwithstanding the foregoing provisions of Section
2.12, Northwest agrees that it shall promptly notify Mesaba of
any determination by Northwest to increase or decrease Mesaba's
fleet size but in no event shall Northwest provide Mesaba less
than 60 days prior notice.
Section II.13 Inflight Supplies. Northwest shall furnish
Mesaba, at [*] and at Mesaba's request, adequate supplies of its
customary inflight supplies including, but not limited to, the
Northwest inflight magazine, cups, napkins and sugar in a form
similar or identical to that used by Northwest.
Section II.14 Exclusivity. Except for the rights of
Express Airlines I, Inc. during the term of the Wet Lease
Agreement, Mesaba shall have the exclusive right to use the
Identification and Designator for Scheduled Flights which (i)
originate or terminate at either of the Hub Cities and (ii) use
turboprop aircraft.
ARTICLE III
AIRCRAFT
Section III.1 Use of the Aircraft and Fleet Composition.
Mesaba agrees (a) that the Aircraft may be used only to provide
and/or support Charter Flights or the Regional Airline Services
contemplated by this Agreement, (b) that the Aircraft may not be
used by Mesaba for any other purpose without the prior written
consent of Northwest, and (c) that neither Mesaba (except as
contemplated by the Regional Jet Services Agreement) nor any of
its Subsidiaries shall acquire or lease any aircraft other than
the Aircraft.
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
Section III.2 Fleet Size and Related Matters.
(a) Determination of Fleet Size. Northwest and Mesaba
agree that all Saab 340 Series aircraft which are the
subject of the Term Sheet shall be acquired when, as and if
determined by Northwest (subject to contractual requirements
arising from the Term Sheet as such requirements may exist
from time to time) and that a Sublease shall be entered into
with respect to each such aircraft as contemplated by
Section 3.3. Northwest, in its sole discretion, shall have
the right to require additional Saab 340 Series aircraft to
be added to Mesaba's fleet beyond the number contemplated by
the Term Sheet and to require the removal of Aircraft from
Mesaba's fleet; provided, however, [*]. A Sublease shall be
entered into with respect to each such additional aircraft
as contemplated by Section 3.3. Mesaba shall determine the
appropriate level of spare Aircraft to be included in
Mesaba's fleet from time to time; provided, however, in no
event shall the number of spare Aircraft in Mesaba's fleet
exceed [*] of the total number of Aircraft then in Mesaba's
fleet.
(b) Induction and Termination Costs. All one-time
expenses which are associated with inducting Aircraft shall
be paid [*]. If Northwest determines to reduce the number
of Aircraft in Mesaba's fleet, Northwest agrees to terminate
the Sublease with respect to any excess Aircraft as of the
date of removal from Mesaba's fleet; the determination of
the number of excess Aircraft shall take into account
Northwest's determination of the number of scheduled
Aircraft and Mesaba's determination of the number of spare
Aircraft, and Aircraft not scheduled due to normal
reoccurring seasonal adjustments and maintenance
requirements shall not constitute excess Aircraft. All
return costs and expenses associated with the return of
excess Aircraft shall be paid by [*].
Section III.3 Sublease of the Aircraft. As of the
Effective Date, Mesaba and Northwest (and/or a Northwest
Affiliate) have entered into subleases with respect to the
seventeen (17) Saab 340B+ aircraft, each with [*] (the "Existing
Saab 340B+ Subleases"). Mesaba and Northwest agree to enter into
(or, as to Northwest, Northwest agrees to cause such Northwest
Affiliate as Northwest may designate to enter into) a Sublease
with respect to (a) the thirteen (13) Saab 340A aircraft in
Mesaba's fleet as of the Effective Date, (b) the additional Saab
340A and Saab 340B+ aircraft which are the subject of the Term
Sheet when and as delivery of each such aircraft is made and (c)
each other Saab 340 Series aircraft (other than the four (4) Saab
340B turboprop aircraft in Mesaba's fleet as of the Effective
Date) when, if and as delivery of each such aircraft is made.
Section III.4 Terms of the Subleases. Each Sublease shall
have the following terms:
(a) with respect to Saab 340B+ and 340B Aircraft, the
term of each Sublease shall be for a period ending on the
Termination Date; and with respect to Saab 340A Aircraft,
the term of each Sublease shall be for a period ending on
the earlier of the Termination Date or the date which
corresponds [*] subject to the Sublease; provided, however,
no Sublease shall be for a term longer than the term of the
applicable head lease;
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
(b) with respect to Saab 340A Aircraft, the rent shall
not exceed [*] per month; and with respect to Saab 340B and
340B+ Aircraft, the rent shall not exceed [*] per month;
(c) the other terms of the Sublease shall be
substantially the same as the terms of the applicable head
lease; provided, however, (i) unless Northwest agrees
otherwise, each Sublease shall not contain any buyout
rights, renewal options, purchase options or other similar
rights or options provided for in the head lease, (ii) in
determining whether certain terms (such as those relating to
self-insurance requirements and past due charges, for
example) are substantially similar, the relative
creditworthiness of Northwest and Mesaba shall be
considered, and (iii) any events of default and/or
termination rights shall be the same as those set forth in
the Existing Saab 340B+ Subleases.
(d) the Sublease shall contain such other terms as
Northwest shall request of Mesaba to conform provisions of
the Sublease to the head lease and any ancillary documents
actually entered into by Northwest or its Affiliate in
connection with such Aircraft.
Section III.5 Aircraft Maintenance, Servicing and Cleaning.
Mesaba shall be responsible for all aspects of the maintenance,
servicing and cleaning of the Aircraft (except for cleaning in
Complementary Service Cities pursuant to the ground handling
services agreement contemplated by Section 4.6).
Section III.6 Related Transfer Arrangements. All leases
and subleases of ground support equipment, tooling and spare
parts inventory agreements and vendor and/or maintenance
agreements with respect to the Aircraft (collectively "Support
Agreements") entered into by Mesaba after the Effective Date
shall be assignable to Northwest without the consent of the other
party to such Support Agreement on a termination of this
Agreement. Mesaba shall assign all such Support Agreements to
Northwest on a termination of this Agreement and shall use its
best efforts to obtain the consent of the other party to any such
Support Agreements in effect as of the Effective Date and,
subject to obtaining such consents, if necessary, shall assign
such Support Agreements to Northwest on a termination of this
Agreement. On a termination of this Agreement, Mesaba shall sell
to Northwest, and Northwest shall purchase from Mesaba, all
ground support equipment, tooling and spare parts inventory then
owned by Mesaba for an amount equal to [*].
Section III.7 Fuel. Northwest shall provide to Mesaba the
following administrative services: (i) Northwest's negotiation of
fuel supply, fuel storage and into-plane service contracts for
the Aircraft, (ii) payment of all into-plane and fuel invoices in
respect of the Aircraft, (iii) monthly reconciliations with
respect to fuel usage, inventory and purchases, and (iv) monthly
reports with respect to fuel usage by station, Aircraft type and
Aircraft. Mesaba shall pay to Northwest each month during the
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
term of this Agreement [*] multiplied by the number of gallons of
aircraft fuel used by Mesaba during such month. Northwest shall
xxxx Mesaba on a monthly basis and payment shall be made in
accordance with Section 5.7. Mesaba shall have the right to
audit on a semi-annual basis the determination of the number of
gallons of aircraft fuel used and shall report any disputes to
Northwest. Any dispute not reported to Northwest in writing
within thirty (30) days of the conclusion of such audit shall be
deemed waived.
Section III.8 Deicing and Glycol. Mesaba shall provide, at
its sole expense, all deicing services for its Aircraft at the
Hub Cities and the Primary Service Cities and Northwest shall
provide, at its sole expense, all deicing services at
Complementary Service Cities. Northwest and Mesaba shall
negotiate a separate agreement whereby Northwest will provide
glycol and back-up deicing services at the Hub Cities to Mesaba
and Mesaba shall reimburse Northwest on a monthly basis in
accordance with Section 5.7 for the Direct Cost of glycol used
and deicing services provided. If the amount of glycol used
cannot be calculated, then such invoices shall reflect estimates
based on average glycol use by Aircraft type and number of
applications.
ARTICLE IV
ANCILLARY ARRANGEMENTS
Section IV.1 Coordination with Mesaba.
(a) Schedules and Timetables. Northwest shall file
and maintain schedules with all applicable schedule
distribution systems for all Scheduled Flights, and such
schedules shall be filed and maintained by Northwest
together with the schedules for its flights. Northwest
shall include and list all Scheduled Flights providing
Regional Airline Services in the schedule publication
program of Northwest. Northwest shall, at its expense,
furnish to Mesaba, an adequate supply of current printed
Northwest timetables and contracts of carriage consistent
with Governmental Regulations and Northwest's timetable
publication program in Northwest's format and colors for use
by Mesaba. Northwest shall include Scheduled Flights
operated by Mesaba in all appropriate flight information
systems on which Northwest flights are listed.
(b) Travel Privileges. Northwest and Mesaba shall
enter into a separate agreement with respect to travel
privileges which each shall make available to the employees
and directors of the other. The terms of such travel
privileges shall be substantially as set forth on Exhibit B
attached hereto.
(c) U.S. Weather Bureau Information. Upon request of
Mesaba or its flight crews, Northwest shall at its sole cost
furnish Mesaba such U.S. Weather Bureau information or data
as may be available to Northwest; provided, however, that
neither Northwest nor its employees will be responsible or
liable for the accuracy thereof. So long as Northwest shall
maintain its communications link with the National Weather
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
Service, Northwest shall provide the necessary
communications to permit Mesaba to continue providing
weather data to the National Weather Service. Northwest
shall provide any available National Weather Service data
through computer link-up to Mesaba.
Section IV.2 Functions Provided by Mesaba. At Primary
Service Cities, Mesaba shall employ its own ground support
equipment and personnel or a contract agent to perform the
following functions: (a) all gate check-in activities, (b)
passenger enplaning/deplaning, (c) aircraft loading/unloading,
and (d) passenger ticketing. At Complementary Service Cities and
the Hub Cities, Mesaba shall use only its own personnel and
equipment (or, subject to the execution of the agreement
contemplated by Section 4.6, Northwest's personnel and equipment)
to perform the functions described in this Section 4.2, except
for (i) passenger ticketing at Complementary Service Cities and
Hub Cities and (ii) airside busing, sky cap and wheel chair
services at the Hub Cities, [*].
Section IV.3 Facilities.
(a) Hub Cities. Exhibits C and D hereto set forth the
facilities to be provided by Northwest to Mesaba at the Hub
Cities. Northwest shall xxxx to Mesaba and Mesaba agrees to
pay to Northwest as rentals the amounts calculated in
accordance with the formulas contained in Exhibits C and D.
In the event Mesaba requires additional facilities at either
of the Hub Cities caused by the expansion of Regional
Airline Services, Northwest shall supply such necessary,
additional facilities at no charge to Mesaba. Northwest and
Mesaba agree that Northwest may relocate Mesaba to
comparable facilities contiguous to Northwest leased
premises, ramp, gate and office space, provided that (i)
Northwest pays to Mesaba relocation expenses and unamortized
improvements expenses, and (ii) the rental costs payable by
Mesaba do not exceed the amounts calculated in accordance
with the formulas contained in Exhibits C and D; provided,
however, relocation expenses and unamortized improvement
expenses associated with Mesaba's move to the new Midfield
Terminal at DTW and its relocation within the Green
Concourse at MSP shall be borne [*].
(b) Service Cities. At Complementary Service Cities,
Northwest shall provide Mesaba with adequate facilities and
the parties will endeavor, subject to the legal requirements
of the lessors at such cities, to enter into agreements
whereby Mesaba will sublet such facilities from Northwest.
The rentals and/or the formulas for determining rentals for
subleases existing as of the Effective Date shall [*] and
the rentals and/or related formulas for future subleases
shall be mutually agreed to by Mesaba and Northwest.
Northwest shall cooperate with Mesaba's efforts to become a
signatory carrier at such airports. At Primary Service
Cities, Mesaba shall be solely responsible for all of its
facilities requirements; provided, however, if Northwest
leases facilities at a Primary Service City, Mesaba shall
sublease such facilities from Northwest provided (i) the
rentals with respect to such space do not exceed [*], and
(ii) the sublease of such facilities does not cause Mesaba
to cease to be a signatory carrier at such Primary Service
City.
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
(c) Passenger Facility Charges. Northwest shall be
responsible for the payment of all passenger facility
charges, if any, at all Service Cities and the Hub Cities.
(d) Landing Fees. Mesaba shall be responsible for
landing fees at all airports to which it provides Regional
Airline Services pursuant to this Agreement.
(e) Signage. Subject to Governmental Regulations,
Mesaba shall display at all ticketing and check-in locations
such signage or other forms of advertisement to identify and
promote Northwest's service as Northwest may specify. All
signage utilizing the Identification shall be provided by
Northwest at its expense and shall be the property of
Northwest.
Section IV.4 Data Communications. Mesaba shall pay to
Northwest monthly an amount not to exceed Northwest's Direct Cost
for telephone data circuit lines to all Service Cities.
Northwest shall provide at Primary Service Cities and Hub Cities,
at its sole expense, to Mesaba the use of computer reservation
terminals, printers and modems, including hardware, software and
maintenance support for such equipment.
Section IV.5 Security. As of the Effective Date,
Northwest has provided for Mesaba's use the security equipment in
place at all existing Primary Service Cities and the Hub Cities.
Northwest agrees to provide, at Northwest's sole expense, for
Mesaba's use at all new Primary Service Cities the same type of
security equipment. Any additional security equipment required
due to future Governmental Regulations shall be provided by
Mesaba at its sole expense, except at the Hub Cities at which
Northwest shall provide any such additional security equipment at
its expense. Mesaba agrees to pay: (i) at Primary Service Cities
all or its allocated share of all maintenance expenses associated
with all security equipment and to pay all or its allocated share
of all personnel expenses (including overtime) associated with
the operation of the equipment and all airport security related
functions, including, without limitation, passenger screening and
activities related to security directives imposed by Governmental
Regulations; (ii) at Complementary Service Cities its allocated
share of all such maintenance and personnel expenses (including
overtime); and (iii) at the Hub Cities, all of such maintenance
and personnel expenses (including overtime) associated with the
security equipment and passenger screening at the regional
terminals.
Section IV.6 Ground Handling Agreement. Subject to the
execution of a separate ground handling services agreement,
Northwest agrees to provide ground handling services specified in
Section 4.2 to Mesaba at all Complementary Service Cities at the
rate of [*]. Such rates shall be adjusted each April 1 by
increasing such rates by the percent increase, if any, in the
PPI, which increase occurred during the immediately preceding
twelve month period; but in no event shall an annual adjustment
result in an increase of more than [*]. Mesaba shall at its sole
expense provide to Northwest any specialized equipment necessary
to handle the Aircraft.
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
Section IV.7 Reservation Services. During the term of this
Agreement, Northwest personnel shall handle, at its sole expense,
reservations for all passenger air transportation on Scheduled
Flights operated pursuant to this Agreement. Reservations shall
be handled in the same manner and subject to the same standards
utilized by Northwest for its own reservations. All reservations
shall be made in the name of Northwest unless otherwise required
by Governmental Regulations.
Section IV.8 Ticketing Services and Ticketing Procedures.
(a) Ticketing Services. At all of its ticketing
locations, Northwest shall, [*], sell, issue and exchange
tickets for passenger air transportation on all Scheduled
Flights to be operated pursuant to this Agreement utilizing
Northwest ticket stock and all related accounting forms
printed with the Northwest logo, name and format ("Northwest
Tickets"); and at all of its ticketing locations, Mesaba
shall sell, issue and exchange Northwest Tickets for
passenger air transportation on all Scheduled Flights to be
operated pursuant to this Agreement and to be provided by
and over the routes of Northwest (collectively, "Ticketing
Services"). Tickets may also be issued by air carriers and
other agencies other than Northwest for travel to be
performed by Mesaba.
(b) Ticketing Procedures. The procedures followed and
standards applied by Northwest in performing the Ticketing
Services shall conform in all respects to Northwest's own
procedures and standards. Mesaba employees performing
Ticketing Services shall adhere to Northwest's procedures
and standards.
(c) Frequent Flyer Program. Mesaba agrees to accept
Northwest frequent flyer tickets. All travel under the
frequent flyer program solely on Mesaba shall entitle a
passenger to such credit as shall be equivalent to the
credit offered on Northwest for comparable mileage segments.
(d) Supplies. Northwest shall, [*], provide an
adequate supply of ticket office forms and specialized
supplies (such as baggage tags but excluding normal office
supplies such as paper, stationery, envelopes, memo pads and
the like) identified with Northwest's logo for use by
Mesaba.
(e) Ticketing Costs. All travel agency commissions
attributable to Scheduled Flights shall be [*]. [*] shall
pay all computer reservation system fees and net ticket or
fees attributable to passengers on Scheduled Flights. [*].
Section IV.9 Baggage Handling Services. "Baggage Handling
Services" shall consist of the following:
(a) At all Complementary and Hub Cities, Mesaba and
Northwest shall exchange and transfer baggage in accordance
with procedures to be mutually agreed upon and generally
utilized by the parties.
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
(b) The procedures utilized in performing such Baggage
Handling Services shall conform in all respects to
Northwest's own standards and procedures as adapted to
Mesaba's Aircraft and operations.
(c) For purposes of claims, Mesaba will be treated as
if it were a party to standard industry ticketing and
baggage agreements with Northwest and other air carriers.
Mesaba will make available at the request of any passenger
excess valuation insurance, if any, offered by Northwest to
the extent such insurance covers Mesaba's flights and
Northwest's flights.
Section IV.10 Air Cargo Handling Services. "Air Cargo
Handling Services" shall consist of the following:
(a) At each location at which Northwest operates
Ticketing Services, Northwest shall [*] accept Air Cargo for
and on behalf of Mesaba for shipment on flights to be
operated by and over the routes of Mesaba or Northwest.
Northwest shall issue air waybills for Mesaba covering Air
Cargo and shall prepare a "transfer manifest" for each
Mesaba flight on which there shall be an Air Cargo shipment
which transfer manifest shall set forth all Air Cargo to be
carried on the flight.
(b) Mesaba shall provide Air Cargo handling services
to Northwest at Mesaba's ticketing locations for and on
behalf of Northwest for flights to be operated by and over
the routes of Mesaba and Northwest in accordance with
Northwest's procedures and standards.
(c) For Air Cargo carried on both a Mesaba flight and
Northwest flight, Mesaba and Northwest shall charge rates in
accordance with Northwest's applicable rates and tariffs;
such revenues shall be [*]. Mesaba, in its discretion may
establish charges for Air Cargo service in markets where the
Air Cargo is carried solely on Mesaba and revenues from such
Air Cargo shall be retained by Mesaba.
(d) For purposes of claims, Mesaba will be treated as
if it were a party to standard industry ticketing and
baggage agreements with Northwest and other air carriers.
(e) Northwest shall, at its sole expense, supply
Mesaba with all necessary Air Cargo forms and supplies in an
agreed upon form with the Northwest logo and name.
Northwest and Mesaba shall utilize such forms when accepting
Air Cargo for transport on Mesaba's flights.
Section IV.11 Marketing Position. Mesaba shall employ one
incremental full-time marketing support person whose primary
function will be to maximize passenger revenue for Regional
Airline Services (the "Sales Manager"). The Sales Manager must
successfully complete the Northwest sales training course. The
duties for the Sales Manager shall include, but not to be limited
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
to, attending press release functions, city promotional
activities, coordinating travel agency functions, working
directly with the Northwest sales force to coordinate effective
Regional Airline Services marketing and sales plans and providing
monthly sales reports to Northwest. Mesaba shall provide the
Sales Manager with adequate office space and equipment,
administrative support and staff to perform these functions.
[*].
Section IV.12 Use of Comat. Northwest and Mesaba shall
each provide to the other, at no cost to the other and on a non-
discriminatory basis, access to its respective Comat system for
the movement and acquisition of priority aircraft maintenance
parts and other company material. Northwest's failure to deliver
timely a maintenance component via COMAT shall not be considered
a Northwest caused delay for purposes of calculating the on-time
performance and completion factors. All access shall be
consistent with Northwest's and Mesaba's respective published
Comat procedures and policies, as amended from time to time.
ARTICLE V
REVENUES; PAYMENTS; SETOFF
Section V.1 Revenues. Mesaba acknowledges and agrees
that all revenues resulting from the sale and issuance of
passenger tickets associated with the operation of the Aircraft
and all other sources of revenue associated with the operation of
the Aircraft are the sole property of Northwest, except revenue
in respect of (a) beverage services and nonrevenue pass travel
which shall be the property of Mesaba and (b) Air Cargo Handling
Services which shall be divided in accordance with Section
4.10(c). Northwest hereby appoints Mesaba as its agent, and
Mesaba hereby agrees to act as Northwest's agent, at all Mesaba
ticketing locations in connection with the sale and issuance of
all passenger tickets and airway bills by Mesaba and with the
same duties owed to Northwest in that capacity as is customary in
the industry between airlines. Mesaba agrees to observe all
Northwest procedures and standards applicable to the issuance of
tickets, to the collection and remittance of the proceeds of such
sales. Nothing in this Section 5.1 shall be deemed to alter or
conflict with the provisions of Section 9.1 hereof.
Section V.2 ASM/Passenger Payment to Mesaba.
(a) ASM/Passenger Reports. Mesaba shall provide to
Northwest periodic reports with respect to the number of
actual, completed ASMs and enplaned revenue passengers (each
in respect of Regional Airline Services) in accordance with
the following schedule in each calendar month during the
term of this Agreement:
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
DAY OF MONTH REPORT DUE PERIOD COVERED BY REPORT
22 1ST - 15TH OF MONTH
7 COMPLETE PREVIOUS MONTH
(b) Payment Schedule. Northwest shall remit to Mesaba
by wire transfer of immediately available funds by the close
of business on the 26th day of each calendar month (or the
next banking day if the 26th is a bank holiday), as a
provisional payment, Mesaba's ASM/Passenger Payment for the
period covered by the ASM/Passenger Report furnished by
Mesaba on the 22nd day of the month. Northwest shall remit
to Mesaba by wire transfer of immediately available funds by
the close of business on the 11th day of each month (or the
next banking day if the 11th is a bank holiday), as a final
payment, Mesaba's ASM/Passenger Payment for the preceding
month, less the amount of the provisional payment made on
the 26th day of the preceding month. For purposes of this
Section 5.2, Mesaba's ASM/Passenger Payment for any period
will be equal to [*]. Adjustments arising from Northwest's
audit of the ASM/Passenger Report may be made within forty-
five (45) days following the end of each month.
(c) Destination By Other Means. If Mesaba transports
a revenue passenger to his or her destination by another
means (bus, train, taxi, etc.) due to a flight cancellation,
Northwest shall reimburse Mesaba for [*]. Mesaba shall
include such reimbursement request in its ASM/Passenger
Report pursuant to Section 5.2(a) and payment of the
reimbursement amount shall be included with the next wire
transfer in accordance with Section 5.2(b). Mesaba shall
use its best efforts to minimize the transportation of
passengers by other means and the costs associated
therewith.
Section V.3 ASM and [*]. [*].
Section V.4 Weather Related Adjustment. [*].
Section V.5 Incentives and Penalties. Mesaba shall be
subject to certain performance incentives and penalties described
in Sections 5.5(a), 5.5(b), 5.5(c), 5.5(d), 5.5(e), 5.5(f),
5.5(g) and 5.5(i) ("Performance Criteria") which shall be added
to or deducted from the ASM/Passenger Payment. If Mesaba exceeds
any operational criterion an incentive payment shall be made by
Northwest. If Mesaba does not achieve the performance criterion,
then a penalty shall be charged against amounts owing to Mesaba.
Any incentive payment or penalty charge incurred by meeting or
failing to meet Performance Criteria shall be made in the wire
transfer due on the 26th day of the second month following the
end of the Performance Period in question pursuant to Section
5.2(b).
(a) Completion Factor. If Mesaba's completion factor
(calculated in accordance with Section 2.10(a)) is less than
[*] for a Performance Period, Northwest shall receive from
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
Mesaba [*] during the applicable Performance Period. If
Mesaba's completion factor is greater than [*] for a
Performance Period, Northwest shall pay to Mesaba [*] during
the applicable Performance Period, and if Mesaba's
completion factor is greater than [*] for such Performance
Period, Northwest shall also pay to Mesaba an additional [*]
during such Performance Period.
(b) On-Time Factor If Mesaba's on-time factor
(calculated in accordance with Section 2.10(b)) is less than
[*] for a Performance Period, Northwest shall receive from
Mesaba [*] during the applicable Performance Period. If
Mesaba's on-time factor is greater than [*] for a
Performance Period, Northwest shall pay to Mesaba [*] during
the applicable Performance Period, and if Mesaba's on-time
factor is greater than [*] for such Performance Period,
Northwest shall also pay to Mesaba an additional [*] during
such Performance Period.
(c) Mishandled Luggage Factor. If Mesaba's incidences
of mishandled luggage (calculated in accordance with Section
2.10(c)) is greater than [*] per 1,000 enplaned revenue
passengers for a Performance Period, Northwest shall receive
from Mesaba [*] during the applicable Performance Period.
If Mesaba's incidences of mishandled luggage is less than
[*] per 1,000 enplaned revenue passengers for a Performance
Period, Northwest shall pay to Mesaba [*] during the
applicable Performance Period, and if Mesaba's incidences of
mishandled luggage is less than [*] per 1,000 passengers for
such Performance Period, Northwest shall also pay to Mesaba
additional [*] during such Performance Period.
(d) Customer Complaints Factor. If Mesaba's number of
customer complaints (calculated in accordance with Section
2.10(d)) is greater than [*] per 1,000 enplaned revenue
passengers for a Performance Period, Northwest shall receive
from Mesaba [*] during the applicable Performance Period.
If Mesaba's number of customer complaints is less than [*]
per 1,000 enplaned revenue passengers, and if Mesaba's
number of customer complaints is less than [*] per 1,000
enplaned revenue passengers for such Performance Period,
Northwest shall also pay to Mesaba an additional [*] during
such Performance Period.
(e) Operational Oversales Factor. If the number of
denied boardings by Mesaba due to operational oversales
(calculated in accordance with Section 2.10(e)) is greater
than [*] per 1,000 enplaned revenue passengers for a
Performance Period, Northwest shall receive from Mesaba [*]
during the applicable Performance Period. If the number of
denied boardings by Mesaba due to operational oversales is
less than [*] per 1,000 enplaned revenue passengers for a
Performance Period, Northwest shall pay to Mesaba [*] for
such Performance Period.
(f) Average Denied Boarding Compensation Factor. If
Mesaba's average denied boarding compensation is greater
than [*] for a Performance Period, Northwest shall receive
from Mesaba [*] during the applicable Performance Period.
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
If Mesaba's average denied boarding compensation is less
than [*], Northwest shall pay to Mesaba [*] for such
Performance Period. [*]
(g) Involuntary Denied Boarding Factor. If the number
of involuntary denied boardings by Mesaba is greater than
[*] per 1,000 enplaned revenue passengers for [*] or if
thereafter the number of involuntary denied boardings by
Mesaba is greater than [*] per 1,000 enplaned revenue
passengers for any [*], Northwest shall receive from Mesaba
[*] during the applicable Performance Period. If the number
of involuntary denied boardings by Mesaba is less then [*]
per 1,000 enplaned revenue passengers for a Performance
Period, Northwest shall pay to Mesaba [*] for such
Performance Period.
(h) Reconciliation of Performance Standards. For each
Performance Period, (i) Mesaba shall prepare a
reconciliation of its actual performance to the targeted
performance with respect to its completion factor and its on-
time factor and (ii) Northwest shall prepare a
reconciliation of Mesaba's actual performance to targeted
performance with respect to Mesaba's incidences of
mishandled luggage, its number of customer complaints, its
number of denied boardings due to operational oversales, its
average denied boarding compensation factor and its number
of involuntary denied boardings. Such reconciliations will
be completed and delivered to the other within thirty (30)
days after the end of each Performance Period. Northwest
and Mesaba will have the right to audit the reconciliation
prepared by the other and shall report any discrepancies to
the other. Any discrepancy not reported in writing within
sixty (60) days of the end of any Performance Period shall
be deemed waived. The payment of any discrepancy from
Mesaba shall be handled as a disputed amount in accordance
with Section 5.7.
(i) Additional Performance Criteria. During the term
of this Agreement, Northwest may propose other performance
criteria for Mesaba's operations pursuant to this Agreement.
The parties agree that they will meet upon the introduction
of such additional performance goals for Northwest's
operations, to develop similar performance targets for
Mesaba, taking into account the differences in operations
between the two companies, and shall use their best
commercially reasonable efforts to develop a system of
incentives and penalties for Mesaba's performance with
respect thereto in a manner consistent with the performance
standards agreed to herein.
Section V.6 Annual Payments with Respect to [*].
(a) Calculation of [*]. Not later than ninety (90)
days following the end of each fiscal year of Mesaba ending
during the term of this Agreement, Mesaba shall calculate
and deliver to Northwest its [*].
(b) [*] If the [*] for such fiscal year is less than
the applicable [*], Northwest shall receive from Mesaba an
amount determined as follows:
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
[*]
(c) [*] If the [*] is greater than [*], Northwest
shall receive from Mesaba an amount determined as follows:
[*]
(d) Audit of [*] Northwest shall have the right to
audit the calculation of [*] and shall report any disputes
to Mesaba. Any dispute not reported to Mesaba in writing
within thirty (30) days of the receipt of the [*] by
Northwest shall be deemed waived. The payment in respect of
any dispute shall be handled as a disputed amount in
accordance with Section 5.7.
(e) Calculations with Respect to Fiscal 1998. For the
fiscal year ending March 31, 1998, [*] shall be calculated
with respect to the twelve month period ending March 31,
1998 (which shall include the three month period immediately
preceding the Effective Date), and for purposes of such
calculations a [*] shall be calculated for such three month
period (i) in accordance with Section 5.3(c) as if Section
5.3(c) were in effect during such period and (ii) assuming
[*] for such purposes equals [*].
Section V.7 Billing. Northwest shall xxxx Mesaba on a
monthly basis in respect of amounts owed to Northwest by Mesaba
under this Agreement. If such billed items are not paid by
Mesaba to Northwest or disputed by Mesaba within thirty (30) days
of the statement date, Northwest may offset the aggregate amount
of undisputed items against the next scheduled wire transfer
pursuant to Section 5.2(b). Disputed amounts must be paid by
Mesaba to Northwest when the dispute is resolved, provided that
Northwest may set off such amount against the next scheduled wire
transfer pursuant to Section 5.2(b) if the formerly disputed
amount is not paid within seven (7) days of resolution.
Northwest may also offset against the next scheduled wire
transfer pursuant to Section 5.2(b) the amount of any rent
payment under any Sublease with respect to which Mesaba shall
have defaulted and shall have failed to cure before the
expiration of any applicable grace period.
Section V.8 Credit Card Chargebacks.
(a) Mesaba shall be billed for credit card chargebacks
resulting from Mesaba's noncompliance with Northwest's
credit card acceptance procedures. Northwest shall apply
the same chargeback procedures and standards to Mesaba as
applied to Northwest by Northwest's credit card contractors.
Northwest shall furnish Mesaba with copies of all agreements
with its credit card contractors.
(b) With respect to all credit card charge forms
returned to Mesaba by Northwest, Northwest will furnish
Mesaba with a complete written explanation of the reason
therefor accompanied by relevant documentation received from
the credit card issuer or credit card holder.
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
(c) Upon receipt of a chargeback, Mesaba shall have a
reasonable period of time, but not to exceed 60 days, to
review the validity of the chargeback notice. If the
chargeback is valid (within the scope of the circumstances
for the chargeback), Mesaba shall remit to Northwest a gross
amount equal to such credit card charge form. If, in
Mesaba's good faith opinion, the chargeback is not valid,
Mesaba will so notify Northwest and provide Northwest with a
complete written explanation of the transaction together
with any necessary supporting documentation within the 60-
day period.
(d) All revisions to Northwest's credit card
procedures must be in writing and must be submitted to
Mesaba at least 30 days in advance of the effective date of
such procedures or such shorter notification period as
Northwest may utilize in notifying its own personnel. All
warning notices must be current and stored in Northwest
computerized reservation credit card credit check system and
accessible to Mesaba on the transaction date.
ARTICLE VI
REPORTING OBLIGATIONS, AUDITING AND INSPECTIONS
Section VI.1 Reporting Obligations.
(a) Certain Notices to Northwest. Mesaba shall give
prompt written notice to Northwest of (a) any litigation
involving an uninsured claim of more than $1,000,000 against
Mesaba, (b) any proceeding before any governmental agency
which, if adversely determined, would materially and
adversely affect Mesaba's financial condition, affairs,
operations or prospects, (c) any other matter which would
materially and adversely affect the financial condition,
affairs, operations or prospects of Mesaba or its ability to
perform its obligations under this Agreement, and (d) any
proposed capital expenditures in excess of $1,000,000.
Mesaba shall also report to Northwest not later than the
last day of each month its completion factor and on-time
factor for the prior month.
(b) Financial and Reporting Covenants. Mesaba shall
provide to Northwest promptly following the filing or
providing thereof copies of all financial statement,
reports, notices and proxy statements filed with or provided
to the Securities and Exchange Commission by Mesaba. Mesaba
shall also promptly provide to Northwest notice of and
adequate information regarding any material weaknesses or
reportable conditions noted in any management letters
received by Mesaba from its independent auditors and
Mesaba's responses thereto.
(c) Certain Notices to Mesaba. Northwest shall report
to Mesaba not later than the last day of each month the
number of incidences of mishandled luggage, the number of
customer complaints, the number of denied boardings due to
operational oversales, the average amount of denied boarding
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
compensation for Scheduled Flights, the [*] and the number
of involuntary denied boardings during the prior month.
Northwest shall give prompt written notice to Mesaba of any
litigation or proceeding before any governmental agency or
any other matter, including Governmental Regulations, which,
if adversely determined, would materially adversely affect
Northwest's ability to perform its obligations under this
Agreement.
Section VI.2 Audits.
(a) Compliance Audits. Upon the reasonable prior
written request by Northwest made not more frequently than
once every twelve (12) months, Mesaba shall make available
its books and the books of Holdings and all other direct and
indirect subsidiaries of Holdings, and records for its
operations with respect to this Agreement available for
inspection by Northwest. Northwest shall also be entitled to
make copies and notes of such information as it deems
necessary and to discuss such records and the finances and
accounts of Mesaba with its Chief Financial Officer or other
employee or agent of Mesaba knowledgeable about such
records.
(b) Inventory Audits. At the end of each fiscal year
during the term of this Agreement, Mesaba and Northwest
shall conduct an annual inventory audit of all spare parts,
tooling and ground support equipment owned by Northwest and
leased to Mesaba or owned by Northwest and supplied to
Mesaba. Such audit shall tabulate the quantity and type of
all spare parts and ground support equipment including
recognition of spare parts and ground support equipment
which were scrapped in the preceding year. Such audit, when
completed and agreed to by both parties, shall be final.
Section VI.3 Inspections. Northwest shall be entitled to
conduct on-site observations of Mesaba's in-flight service,
flight, maintenance, technical operations, gate-check in service,
ground operations, Aircraft cleaning and any and all other
services and operations performed under this Agreement to monitor
Mesaba's operations in the same manner as similar functions are
evaluated at Northwest. The purpose of such inspections shall be
to determine Mesaba's compliance with applicable Governmental
Regulations, state and local laws, equipment manufacturer's
instructions and the standards established by this Agreement.
Mesaba's operation will be evaluated according to the same
standard as Northwest taking into account the differences in size
and operational capabilities between the two airlines. Such
inspections may be announced or unannounced, but under no
circumstances shall they interfere with the operation of Mesaba's
business. Northwest shall report the findings of any such
inspection to Mesaba in writing. Mesaba shall provide a timely
written response detailing a plan of corrective action to remedy
any deficiencies noted in an inspection. If any deficiency comes
to the attention of Mesaba through audits or any other means,
Mesaba shall take immediate corrective action.
Section VI.4 Confidentiality. Each of Northwest and
Mesaba agrees that, except as otherwise required by Governmental
Regulations or any other applicable law, it shall not disclose to
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
others and shall keep confidential the terms of this Agreement
and any confidential, non-public information concerning the other
that it obtains as a result of or pursuant to this Agreement.
ARTICLE VII
NORTHWEST IDENTIFICATION
Section VII.1 Use of Identification. Northwest shall
establish and maintain an Identification for its program of
affiliation with Mesaba for Regional Airline Services and Mesaba
is granted the right to use such Identification pursuant to
Section 2.2 and this Article VII. From time to time, Northwest
may change the Identification applicable to the program,
including program designation and trademark. Northwest shall
have complete discretion to change the Identification applicable
to the program. Such substitute Identification shall be used by
Mesaba in lieu of any prior name to identify Mesaba's association
with the program. If Northwest changes the Identification,
Mesaba shall, as soon as practicable make such changes as are
requested by Northwest to utilize the new name of the program and
Northwest shall be liable for the reasonable expenses incurred by
Mesaba in making such changes.
Section VII.2 Ownership of the Identification. Mesaba
hereby acknowledges Northwest's ownership of the names
"Northwest" and "Northwest Airlink" and all related
Identification and further acknowledges the validity of the
Identification. Mesaba agrees that it will not do anything which
in any way infringes or abridges Northwest's rights in the
Identification or directly or indirectly challenges the validity
of the Identification.
Section VII.3 Nonexclusive License. To the extent that
Mesaba is licensed to use the Identification in accordance with
this Agreement, Mesaba will use such Identification only in a
manner permitted by Northwest or in conjunction with the services
specifically contemplated by this Agreement. Nothing in this
Agreement shall be construed to abridge Northwest's right to use
and/or to license the Identification, and Northwest hereby
reserves the right to the continued use of all the
Identification, to license such other uses of the Identification
and to enter into such agreements with other carriers providing
for arrangements similar to those with Mesaba as Northwest may
desire. No term or provision of this Agreement shall be
construed to preclude the use of the trademark "Northwest
Airlink" or other xxxx as a trademark of an affiliation program
with Northwest or the use of any other Northwest Identification
by other individuals or corporations not covered by this
Agreement.
Section VII.4 Revocation of License Upon Termination of
Agreement. Should this Agreement be canceled or otherwise
terminated for any reason, all right to use the Identification
provided Mesaba hereby shall immediately revert to Northwest and,
except as otherwise permitted under the Regional Jet Services
Agreement or any successor thereto, shall not thereafter be used
by Mesaba in connection with any operations of Mesaba. Mesaba
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
shall, in such event, promptly, but in any event within ninety
(90) days (one hundred twenty (120) days with respect to any
distinctive color scheme), take such action as may be necessary
to change its facilities, equipment, uniforms and supplies to
avoid any customer confusion or the appearance that Mesaba is
continuing to have an operating relationship with Northwest.
Section VII.5 Alteration or Amendment of License. At any
time during the life of the Agreement, Northwest may alter or
amend the license to use the Identification granted under this
Agreement so long as Mesaba's rights hereunder are not
diminished, and may, subject to Section 7.1, require Mesaba to
use new or different Northwest Identification.
ARTICLE VIII
TAXES AND FEES
Section VIII.1 Taxes and Fees. Mesaba shall be liable for
and shall pay to Northwest the amount of any taxes, license fees,
assessments, and other charges, together with any interest and
penalties thereon, in any manner levied, assessed, or imposed
upon Northwest by any federal, state, or local taxing or airport
authority, but excluding any amount due with respect to income or
similar taxes, as a result of or attributable to its performance
of services to and for Mesaba pursuant to this Agreement.
Notwithstanding the foregoing, Mesaba may, in good faith, protest
or otherwise contest judicially or administratively in its name
or in Northwest's name, at its expense, the validity or
applicability of any such additional or increased taxes,
licenses, license fees, assessments, and other charges and such
payments to Northwest shall not be due until such protest is
decided with finality or if early payment is required, at the
time such payment is actually made.
Section VIII.2 Ticket Tax. All taxes imposed upon the
transportation of persons by air under Internal Revenue Code
Section 4261, as of the Effective Date or as subsequently
amended, shall be for Northwest's account.
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
ARTICLE IX
LIABILITY, INDEMNIFICATION AND INSURANCE
Section IX.1 Independent Contractor.
(a) Except for the limited purpose described in
Section 5.1 hereof, Mesaba shall act as an independent
contractor. The employees, agents and/or independent
contractors of Mesaba engaged in performing any of the
services Mesaba is obligated to perform pursuant to this
Agreement shall be employees, agents and independent
contractors of Mesaba for all purposes and under no
circumstances shall employees, agents or independent
contractors of Mesaba be deemed to be employees, agents or
independent contractors of Northwest. Except for the
limited purpose described in Section 5.1 hereof, in its
performance of obligations under this Agreement, Mesaba
shall act, for all purposes, as an independent contractor
and not as an agent for Northwest. Northwest shall have no
supervisory power or control over any employees, agents or
independent contractors engaged by Mesaba in connection with
Mesaba's performance of its obligations hereunder, and all
complaints or requested changes in procedure shall, in all
events, be transmitted by Northwest to a designated
representative of Mesaba. Nothing contained in this
Agreement is intended to limit or condition Mesaba's control
over its operation or the conduct of its business as an air
carrier, and Mesaba assumes all risks of financial losses
which may result from the operation of the air services to
be provided by Mesaba hereunder.
(b) Northwest shall act as an independent contractor.
The employees, agents and/or independent contractors of
Northwest engaged in performing any of the services
Northwest is to perform pursuant to this Agreement shall be
employees, agents and independent contractors of Northwest
for all purposes and under no circumstances shall employees,
agents and independent contractors of Northwest be deemed to
be employees, agents or independent contractors of Mesaba.
In performing its obligations under this Agreement,
Northwest shall act, for all purposes, as an independent
contractor and not as an agent for Mesaba. Mesaba shall
have no supervisory power or control over any employees,
agents or independent contractors engaged by Northwest in
connection with the performance of its obligations
hereunder, and all complaints or requested changes in
procedure shall, in all events, be transmitted by Mesaba to
a designated representative of Northwest. Nothing contained
in this Agreement is intended to limit or condition
Northwest's control over its operation or the conduct of its
business as an air carrier.
Section IX.2 Indemnification. Each party assumes full
responsibility for any and all liability to its own officers,
employees or agents on account of injury or death resulting from
or sustained in the performance of their respective services
under this Agreement. Each party shall indemnify, defend,
protect, save and hold harmless the other party, its officers,
employees, and agents from and against any and all liabilities,
claims, demands, suits, judgments, damages and losses (including
the costs, fees and expenses in connection therewith and incident
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
thereto) brought against the other party, its officers, employees
or agents by or on behalf of any other person, by reason of
damage to or destruction of property of any such person, or
injury to or death of such person, caused by or arising out of
any act or omission by the indemnifying party occurring while
this Agreement is in effect. Notwithstanding the foregoing,
neither party shall be liable for indemnifying the other for
claims of third parties if caused by the gross negligence or
wilful misconduct of the other. Each party shall give the other
party prompt and timely notice if it has actual knowledge of any
claim made or suit instituted against the other party which in
any way results in indemnification hereunder, and the other party
shall have the right to compromise or participate in the defense
of such claim or suit to the extent of its own interest. The
obligations of Mesaba and Northwest under the indemnity and
insurance provisions contained herein shall remain in effect and
shall survive without limitation the termination of this
Agreement with respect to any occurrence or claims arising during
the term of or in connection with this Agreement.
Section IX.3 Insurance.
(a) Mesaba agrees, at its sole expense, to maintain in
full force and effect the following insurance coverages with
respect to Regional Airline Services:
(1) Workers' compensation and occupational
disease insurance, subject to the laws of the states wherein
this Agreement is being performed. Such coverage shall
include employers liability insurance up to a limit of at
least [*].
(2) Comprehensive airline and property damage
liability insurance with limits of not less than [*]
combined single limit per occurrence, including, but not
limited to, aircraft liability, passenger legal liability,
premises and property damage liability, hangar keepers
liability and baggage and cargo liability. Such insurance
shall include endorsements for personal injury and
contractual liability.
(3) All risk hull insurance on the Aircraft.
(b) Prior to the commencement of Regional Airline
Services under this Agreement, Certificates of Insurance
shall be delivered to Northwest evidencing compliance with
the insurance terms of this Agreement. All of the above
insurance shall be written through a company or companies
reasonably satisfactory to Northwest, and the Certificates
of Insurance shall be of a type that unconditionally
obligates the insurer to notify Northwest in writing at
least thirty (30) days in advance of the effective date in
the event of any material change in or cancellation of such
insurance. The policies of insurance required by paragraphs
(2) and (3) of Section 9.3(a) shall provide coverage for
events which occur during the policy period, are continuing
in nature and not on a claims made basis, and shall include
endorsements that provide:
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
(1) That the Underwriters acknowledge that the
indemnification and hold harmless provisions of this
Agreement are insured under Mesaba's blanket contractual
liability coverage.
(2) That Northwest, its officers, agents and
employees are named as an additional insureds thereunder.
(3) That the insurance is primary with respect to
the matters within such coverage, irrespective of any
insurance carried by Northwest.
(4) That as respects the interest of Northwest,
the insurance shall not be invalidated by any breach of
warranty by Mesaba.
(5) That provide a severability of interest/cross
liability endorsement.
(6) That the insurer shall waive its subrogation
rights against Northwest, its officers, agents and
employees.
(7) That any waiver of rights of subrogation
against other parties by Mesaba will not affect the coverage
provided with respect to Northwest.
ARTICLE X
TERM; TERMINATION
Section X.1 Term. This Agreement shall commence on and
shall be effective as of July 1, 1997 (the "Effective Date") and,
unless earlier terminated as provided herein, shall continue
until June 30, 2007.
Section X.2 Termination by Either Party.
(a) In the event that either Mesaba or Northwest (i)
makes a general assignment for the benefit of creditors or
becomes insolvent, (ii) files a voluntary petition in
bankruptcy, (iii) petitions for or acquiesces in the
appointment of any receiver, trustee or similar officer to
liquidate or conserve its business or any substantial part
of its assets, (iv) commences under the laws of any
competent jurisdiction any proceeding involving its
insolvency, bankruptcy, reorganization, readjustment of
debt, dissolution, liquidation or any other similar
proceeding for the relief of financially distressed debtors,
(v) becomes the object of any proceeding or action of the
type described in (iii) or (iv) above and such proceeding or
action remains undismissed or unstayed for a period of at
least thirty (30) days, or (vi) is divested of a substantial
part of its assets for a period of at least thirty (30)
days, then the other party may by written notice terminate
this Agreement immediately.
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
(b) Except as otherwise provided in Section 10.3, in
the event of a breach of a nonmonetary provision of this
Agreement by either party remaining uncured for more than
thirty (30) days after receipt of written notification of
such default by the nondefaulting party, or in the case of a
breach requiring more than thirty (30) days notice to cure,
the defaulting party does not begin and pursue with due
diligence a method of cure within thirty (30) days after
receipt of written notification specifying in reasonable
detail the nature of such default from the nondefaulting
party, then the nondefaulting party may terminate this
Agreement at its sole option.
(c) In the event of a breach of a monetary provision
of this Agreement by either party and such default remaining
uncured for more than ten (10) days after receipt of written
notification specifying in reasonable detail the nature of
such default from the nondefaulting party, then the
nondefaulting party may terminate this Agreement at its sole
option.
Section X.3 Termination by Northwest. Notwithstanding
the provisions of Section 10.2(b), Northwest shall have the right
to terminate this Agreement immediately and at its sole option
if:
(a) Mesaba shall default in the payment of any rental
payment due under any Sublease and such default shall
continue for more than the period of grace, if any,
specified therein and shall not have been waived.
(b) Mesaba shall default with respect to any other
terms of any Sublease, such default shall continue for more
than the period of grace, if any, specified therein and such
default shall constitute an "event of default" thereunder.
(c) Mesaba shall fail to comply with the provisions of
Section 9.3 and, as a result thereof, the insurance required
thereunder is not in effect.
(d) More than [*] of the Aircraft are not operated for
more than [*] consecutive days or [*] of the Aircraft are
not operated for more than [*] consecutive days, in either
case other than as a result of a FAA order which grounds a
specific Aircraft type of all air carriers.
(e) Mesaba's DOT Certification is for any reason
suspended or revoked or otherwise not in full force and
effect so as to permit Mesaba to perform the Regional
Airline Services required under this Agreement.
(f) The person elected to replace Xxxxx X. Xxxxxxx as
Chief Executive Officer of Mesaba and Holdings and any
successor Chief Executive Officer of Mesaba and Holdings
shall not be reasonably acceptable to Northwest.
(g) The Board of Directors of Mesaba and Holdings
shall fail to nominate and recommend for election by the
stockholders of Mesaba and Holdings a sufficient number of
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
Northwest Nominees so that if each such Northwest Nominee
were elected there would be three (3) directors designated
by Northwest then serving on the Boards of Directors of
Holdings and Mesaba, or the Boards of Directors of Mesaba
and Holdings shall fail to elect a Northwest Nominee to fill
a vacancy created by the death, resignation or removal of
another director previously designated by Northwest.
(h) Holdings shall have failed to deliver to Northwest
the Stock Purchase Warrant on or before October 31, 1997 or
shall not have a sufficient number of authorized shares
available for reservation with respect to the number of
shares to be purchased on exercise of the Stock Purchase
Warrant taking into account all other prior reservations of
common stock by Holdings.
Section X.4 Early Termination. Notwithstanding any other
provision of this Agreement, each of Northwest and Mesaba shall
have the right to terminate this Agreement and the Subleases
without cause upon three hundred sixty-five (365) days' prior
written notice to the other; provided such notice may not be
given prior to July 1, 2000.
Section X.5 Change in Control. Notwithstanding any other
provision of this Agreement, Northwest shall have the right to
terminate this Agreement immediately and at its sole option upon
the occurrence of any one or more of the following:
(a) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (the "Exchange Act") (a
"Person")) (other than Northwest) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (i) the then
outstanding shares of common stock of Holdings (the
"Outstanding Holdings Common Stock") or (ii) the combined
voting power of the then outstanding voting securities of
Holdings entitled to vote generally in the election of
directors (the "Outstanding Holdings Voting Securities");
provided, however, the term "Person" as used in this Section
10.5(a) shall not include Northwest, any Northwest assignee
or transferee, or Xxxx X. Xxxxxx and his family or any
affiliate of Xxxx X. Xxxxxx which beneficially owns directly
or indirectly shares of Holdings common stock as of the date
hereof;
(b) Approval by the Board of Directors of Mesaba or
Holdings of a reorganization, merger or consolidation (a
"Business Combination"), in each case, unless, following
such Business Combination, all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Holdings Common Stock and
Outstanding Holdings Voting Securities immediately prior to
such Business Combination beneficially own, directly or
indirectly, more than 75% of, respectively, the then
outstanding shares of common stock and the combined voting
power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may
be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation
which as a result of such transaction owns Holdings or
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
Mesaba through one or more subsidiaries) in substantially
the same proportions as their ownership immediately prior to
such Business Combination of the Outstanding Holdings Stock
and Outstanding Holdings Voting Securities, as the case may
be; or
(c) Approval by the Board of Directors of Mesaba or
Holdings of (i) a complete liquidation or dissolution, or
(ii) the sale or other disposition of all or substantially
all of the assets of Mesaba or Holdings, other than to a
corporation with respect to which following such sale or
other disposition, more than 75% of, respectively, the then
outstanding shares of common stock of such corporation and
the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Holdings Common Stock and
Outstanding Holdings Voting Securities immediately prior to
such sale or other disposition in substantially the same
proportion as their ownership immediately prior to such sale
or other disposition of the Outstanding Holdings Common
Stock and Outstanding Holdings Voting Securities, as the
case may be.
ARTICLE XI
WET LEASE AGREEMENT
Section XI.1 Acknowledgment of Wet Lease Agreement.
Northwest acknowledges (i) that certain of the Aircraft are
subject to the Wet Lease Agreement, (ii) that certain of the
Scheduled Flights to be operated pursuant to this Agreement will
be operated pursuant to the terms of the Wet Lease Agreement, and
(iii) that to the extent this Agreement imposes obligations on
Mesaba with respect to the use of the Identification, the use of
other airline designators, the provision of personnel and
dispatch control, aircraft maintenance and insurance such
obligations shall be deemed to be satisfied by compliance with
and enforcement of the terms of the Wet Lease Agreement
notwithstanding any express terms in this Agreement otherwise,
and Mesaba's compliance with and enforcement of the terms of the
Wet Lease Agreement to provide Scheduled Flights for Regional
Airline Services will not result in a Default under this
Agreement. Mesaba acknowledges that Section 3.7 shall not apply
to any Aircraft which are subject to the Wet Lease Agreement.
Section XI.2 [*].
Section XI.3 Performance Standards. During the term of
the Wet Lease Agreement, the performance standards set forth in
Section 2.10 shall be determined solely with reference to
Scheduled Flights operated by Mesaba which shall exclude
Scheduled Flights operated by Express Airlines I, Inc. pursuant
to the Wet Lease Agreement.
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
Section XI.4 Calculation of Incentives and Penalties.
During the term of the Wet Lease Agreement, the incentives and
penalties payable pursuant to Section 5.5 shall be calculated
based on the number of enplaned revenue passengers on Scheduled
Flights operated by Express Airlines I, Inc. pursuant to the Wet
Lease Agreement, during the applicable Performance Period.
ARTICLE XII
MISCELLANEOUS
Section XII.1 Limitation on Performance. The obligation of
either Northwest or Mesaba to perform under the terms of this
Agreement shall be limited or modified by, and neither carrier
shall be deemed to be in default hereunder as a result of any of
the following causes:
(a) Acts of God or the public enemy, civil war,
insurrections or riots; fires, floods, explosions,
embargoes, earthquakes or serious accidents, epidemics, or
quarantine restrictions; any act of government, governmental
priorities, allocations, orders or Governmental Regulations
affecting materials or facilities, inability after due and
timely diligence to procure materials, accessories,
equipment or parts; or due to any other cause to the extent
it is beyond that carrier's practical control or not
occasioned by that carrier's fault or negligence.
(b) Cessation, slow-down or interruption of work, or
any other labor disturbance involving Northwest.
Section XII.2 Mutual Cooperation. Northwest and Mesaba
shall use their best efforts to cooperate with each other in
performing their respective obligations under this Agreement.
Section XII.3 Representations and Warranties. Except as
expressly set forth herein, neither Northwest, Holdings nor
Mesaba shall make any representations or warranties, expressed or
implied, under or in connection with this Agreement.
Section XII.4 Assignment. This Agreement may not be
assigned by any party without the prior written consent of the
other parties.
Section XII.5 Governing Law. This Agreement shall be
governed in accordance with the laws of the State of Minnesota.
Section XII.6 Interline and Other Agreements. Northwest
agrees, to the extent it has the right to do so, to permit Mesaba
to avail itself of all its rights, privileges and amenities
pursuant to its interline agreements and all industry trade or
other agreements between Northwest and any other air carriers.
Northwest shall take all action and execute such documents as may
be necessary to enable Mesaba to avail itself of the maximum
benefits afforded by such agreements.
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
Section XII.7 Notices. All notices given hereunder shall
be given in writing and shall be delivered in person or deposited
in the United States mail, certified or registered mail, return
receipt requested, with adequate postage prepaid, or given by
express courier, telex, facsimile, or other expedient written
means, addressed as follows:
If to Northwest: Northwest Airlines, Inc.
Department A6100
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attn: Vice President - Market Planning
Facsimile No: (000) 000-0000
With copies to: Xxxxxxxxx Xxxxxxxx, Xxx.
Xxxxxxxxxx X0000
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attn: Senior Vice President,
General Counsel and Secretary
Facsimile No: (000) 000-0000
Northwest Airlines, Inc.
Department A6030
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, XX 00000-0000
Attn: Director of Airlink Planning
Facsimile No: (000) 000-0000
If to Mesaba or Mesaba Aviation, Inc.
Holdings: 0000 00xx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: President
Facsimile No: (000) 000-0000
With a copy to: Mesaba Aviation, Inc.
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Vice President-Administration
and General Counsel
Facsimile No: (000) 000-0000
or to such other address as the respective parties hereto shall
designate by notice in writing to the other party. Notices shall
be deemed received and given on the date of delivery or the date
of refusal of delivery as shown by the return receipt.
Section XII.8 Parties. Except as provided to the contrary
herein, this Agreement, and the rights and obligations created
hereunder, shall be binding upon and inure to the benefit of the
respective parties hereto and their respective successors and
permitted assigns.
Section XII.9 Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an
original but all of which shall constitute one agreement.
Section XII.10 Severability. If any term of this Agreement
shall be judicially determined to be illegal, invalid or
unenforceable at law or in equity, it shall be deemed to be void
and of no force and effect to the extent necessary to bring such
term within the provisions of any such applicable law or laws,
and such terms as so modified and the balance of the terms of
this Agreement shall remain enforceable.
Section XII.11 Captions, Section Headings and Table of
Contents. Captions, section headings and the Table of Contents
used herein are for convenience only and are not a part of this
Agreement and shall not be used in construing it.
Section XII.12 Availability of Equitable Remedies;
Procedures.
(a) In the event of a breach by either party of any
provision of this Agreement, the nonbreaching party may give
notice thereof to the breaching party, which notice shall
specify in reasonable detail the nature of the breach and
shall demand that the breaching party either cure the breach
or refrain from conduct constituting the breach (herein the
"conduct"), as may be applicable. If (i) the breaching
party has not cured the breach or refrained from the
conduct, as may be applicable, within ten (10) days
following receipt of the notice from the nonbreaching party,
or (ii) the breaching party does not begin within ten (10)
days following receipt of the notice to pursue with
reasonable diligence a method of cure or begin to take steps
toward ceasing the conduct where the breach or conduct is
such that it requires more than ten (10) days to cure or to
cease, as may be applicable, then the nonbreaching party may
seek to compel performance by the breaching party in
accordance with the provisions of paragraph (b) below. If,
upon receiving a notice contemplated by this paragraph (a),
a breaching party believes that a breach has not occurred or
that the conduct specified in the notice does not constitute
a breach of the provisions of this Agreement, but the
breaching party nonetheless cures the alleged breach or
refrains from the conduct within ten (10) days following
receipt of such notice, such party may thereafter proceed in
accordance with the provisions of paragraph (b) below to
seek a determination of whether a breach occurred or whether
the specified conduct constituted a breach of the provisions
of this Agreement.
(b) Because a breach of the provisions of this
Agreement could not adequately be compensated by money
damages, any party shall be entitled, following notification
in accordance with the provisions of paragraph (a) above, to
an injunction restraining such breach or threatened breach
and to specific performance of any provision of this
Agreement and, in either case, no bond or other security
shall be required in connection therewith, and the parties
hereby consent to the issuance of such injunction and to the
ordering of specific performance. Further, in the event any
party refrains from the conduct of any activity alleged in a
notice received pursuant to paragraph (a) above to
constitute a breach of the provisions of this Agreement,
such party may thereafter proceed promptly to bring an
action in the District Court, County of Hennepin, State of
Minnesota, for an expedited judicial determination as to
whether the conduct specified constitutes a breach of the
provisions of this Agreement and, upon a determination that
the conduct does not constitute a breach, such party may
promptly thereafter recommence such conduct.
Section XII.13 Exhibits. The Exhibits attached hereto are
intended to be an integral part of this Agreement and are
incorporated into the Agreement by reference for all purposes.
Section XII.14 Integration and Entire Agreement. This
Agreement (including the Exhibits) and the Subleases and the
ancillary documents entered into in connection therewith are
intended by the parties as a complete statement of the entire
agreement and understanding of the parties with respect to the
subject matter hereof and all matters between the parties related
to the subject matter herein and therein set forth. This
Agreement may only be amended or modified by a written agreement
between Mesaba and Holdings, on the one hand, and Northwest, on
the other, which specifically references this Agreement and
expressly provides for such amendment. This Agreement is
entirely separate from and unrelated to the Regional Jet Services
Agreement.
Section XII.15 Relationship of Parties. Nothing in this
Agreement shall be interpreted or construed as establishing
between the parties a partnership, joint venture or other similar
arrangement.
Section XII.16 Stock Purchase Warrant. Holdings agrees to
deliver to Northwest not later than the close of business on
October 31, 1997 an executed stock purchase warrant in the form
attached hereto as Exhibit F (the "Stock Purchase Warrant").
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date and year first above written.
MESABA AVIATION, INC. NORTHWEST AIRLINES, INC.
By:/s/Xxxxx X. Xxxxxxx By:/s/J. Xxxxxxx Xxxxxxx
-------------------------- ----------------------
Name: Xxxxx X. Xxxxxxx Name: J. Xxxxxxx Xxxxxxx
Title: President and Chief Title: Senior Vice President
Executive Officer Market Planning and Systems
MESABA HOLDINGS, INC.
By:/s/Xxxxx X. Xxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
EXHIBIT A
[*]
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
EXHIBIT B - PASS POLICY
[*]
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
EXHIBIT C
AIRPORT FACILITIES - MSP
The attached diagrams define the exclusive space for use by
Mesaba at MSP. Rental rates chargeable to Mesaba for the defined
space shall be [*]. Utility expense chargeable to Mesaba for the
defined space shall be [*]. All other space utilized by Mesaba
at MSP will be billed directly by the MAC in accordance with
current practice and paid for [*].
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
EXHIBIT D
AIRPORT FACILITIES - DTW
The attached diagrams define the exclusive space for use by
Mesaba at DTW. Rental rates chargeable to Mesaba for the defined
space shall be [*]. Utility expense chargeable to Mesaba for the
defined space shall be [*].
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
EXHIBIT E - SAMPLE CALCULATIONS
[*]
[*] Confidential material omitted and filed separately with the Securities
and Exchange Commision pursuant for a request for confidential treatment
EXHIBIT F
FORM OF STOCK PURCHASE WARRANT
[Definitive Warrant Agreement filed separately by Registrant.]
