Exhibit 10.19
FIFTH AMENDMENT
This Fifth Amendment is entered and made as of this 17th day of
October, 2002 (the "Amendment") as an amendment to the Service Agreement dated
as of November 11, 1997, by and between US Airways, Inc. ("US Airways") and Mesa
Airlines, Inc. as amended ("MesaJet" or "Mesa") (the "Agreement").
WITNESSETH:
WHEREAS, US Airways and Mesa have entered into the Agreement; and
WHEREAS, US Airways and Mesa have entered into the First Amendment to
the Agreement dated as of November, 24, 1999 (the "First Amendment"); and
WHEREAS, US Airways and Mesa have entered into the Second Amendment to
the Agreement dated as of October 6, 2000 (the "Second Amendment"); and
WHEREAS, Mesa has entered into a Consent Agreement dated as of October
6, 2000; and
WHEREAS, US Airways and Mesa have entered into the Third Amendment to
the Agreement dated as of October 17th, 2002 (the "Third Amendment"); and
WHEREAS, US Airways and Mesa have entered into the Fourth Amendment to
the Agreement dated as of October 17th, 2002 (the "Fourth Amendment"); and
WHEREAS, US Airways and Mesa desire to amend certain provisions of the
Agreement;
NOW THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which is acknowledged, and intending to be legally bound, US
Airways and Mesa hereby agree as follows:
1) The following Section 2.1(b) is hereby added to the Agreement: SECTION
2.1(B)
MesaJet will deploy * aircraft, or other similar aircraft subject to
mutual agreement of the parties, under the Agreement (hereinafter
referred to as
the "Additional Aircraft"), at financing terms and return conditions
reasonably acceptable to US Airways and in compliance with the
applicable provisions * protocol as ratified by US Airways ALPA on
August 8, 2002, based on the delivery schedule attached hereto as
Exhibit 2.1(b):
2) Section 5.1 is amended by adding before the word "pursuant" in the
forth line of the first paragraph "and Additional Aircraft."
3) Section 5.2(p) "Aircraft Ownership Cost Per Month" is amended by adding
the following paragraph to the Section:
The Aircraft Ownership variable for the Additional Aircraft shall be
the actual monthly lease costs for said aircraft. However, if prior to
the execution of the documentation procuring Additional Aircraft, US
Airways is able to arrange for Mesa to receive more favorable financial
terms from the aircraft owner or lessor for the Additional Aircraft at
Mesa, the more favorable financial terms will replace those
contemplated in Section 5.2 of the Agreement (as amended by the Third
Amendment) for the Additional Aircraft.
4) Section 5.4(b) "Annual Wages Per Crew - Pilot" is amended by adding the
following sentence to the Section:
The Annual Wages Per Crew - Pilot variable will be updated to reflect
the impact of actual pilot seniority and related pay scales related to
the Additional Aircraft.
5) Section 5.4(f) "Annual Wages Per FA" is amended by adding the following
sentence to the Section:
The Annual Wages Per FA variable will be updated to reflect the impact
of actual flight attendant seniority and related pay scales related to
the Additional Aircraft.
6) Section 5.4(i) "Maintenance Per Block Hour" is amended by adding the
following sentence to the Section:
The Maintenance Per Block Hour variable will be adjusted to reflect
actual third party maintenance block hour costs related to the
Additional Aircraft, subject to mutual agreement of the parties, such
agreement not to be unreasonably withheld by either party.
7) Section 5.4(q) "Mesa Profit as a Percent of Total" is amended by adding
the following sentence to the Section:
The Mesa Profit as a Percent Total variable for the Additional Aircraft
shall be *.
8) Section 5.12, "Reimbursable Expenses" is amended by adding the
following sentence to the Section:
For the invoiced amount related to the Additional Aircraft, U.S.
Airways agrees to pay an administrative fee equal to *.
9) The following Section 5.17 is hereby added to the Agreement:
SECTION 5.17 - START-UP CREDIT
Commencing upon the first business day of the calendar month following
the later of: (x) the completion of Audit as defined in the Fourth
Amendment to the Agreement; or (y) US Airways' emergence from Chapter
11 (the "Payment Start Date"), US Airways shall pay to Mesa (or, in the
event money is owed to US Airways, Mesa shall pay to US Airways) the
"Startup Credit" payment, which shall be calculated as the sum of: (z)
* to be paid by US Airways to Mesa; and (w) the Audit Amount (as
defined in the Fourth Amendment to the Agreement, and which could
result in a payment to either party), which Startup Credit payment
shall be made in twelve (12) equal monthly installments.
10) The following Section 7.6 is hereby added to the Agreement:
SECTION 7.6 - TERM AND TERMINATION OF ADDITIONAL AIRCRAFT
(a) This Agreement with respect to the Additional Aircraft is
effective as of the date and year first written above, and Services
provided hereunder will continue, without interruption until the tenth
(10th) anniversary of the date the first Additional Aircraft is added
to Mesa's fleet pursuant to Section 2.1(b) of the Agreement (as amended
by this Fifth Amendment), unless it is terminated on an earlier date
pursuant to the provisions in Article 7 of the Agreement or as
described in (b) as follows. US Airways, at its sole option, may extend
the Agreement with respect to the Additional Aircraft by two (2) years
upon written notification to MesaJet at any time up to twelve (12)
months before the 10th anniversary of the date the first Additional
Aircraft is added to Mesa's fleet pursuant to Section 2.1(b) of the
Agreement (as amended by this Fifth Amendment). To accomplish an
orderly termination of this Agreement with respect to the Additional
Aircraft, the Parties agree that any termination of this Agreement with
respect to the Additional Aircraft shall be on an aircraft-by-aircraft
basis with no more than * Additional Aircraft terminated hereunder and
returned to MesaJet each month and, to the extent necessary, the
Parties agree to extend the term of this Agreement (but in no event
longer than * with respect to
the Additional Aircraft to accommodate the orderly termination of the
Services under this Agreement with respect to the Additional Aircraft.
(b) US Airways shall have the right, commencing at the *
anniversary of the date the first Additional Aircraft is added
to Mesa's fleet pursuant to Section 2.1(b) of the Agreement,
to terminate this Agreement with respect to the Additional
Aircraft in the event in US Airways' sole discretion subject
to its good faith determination that *, at any time upon three
hundred sixty five (365) days' prior written notice to Mesa.
Termination of this Agreement with respect to the Additional
Aircraft will not relieve either party from any obligation or
liability accrued hereunder prior to the time of termination.
To accomplish an orderly termination of this Agreement with
respect to the Additional Aircraft, the parties agree that any
such termination shall be on an aircraft-by-aircraft basis
with no more than * Additional Aircraft terminated hereunder
each month and, to the extent necessary, the parties agree to
extend the term of this Agreement (but in no event longer than
*) with respect to the Additional Aircraft to accommodate the
orderly termination of the Services pursuant to this Agreement
with respect to the Additional Aircraft. In the event of such
early termination, at Mesa's option, US Airways shall assume
payment of Mesa's lease payments for such terminated
Additional Aircraft and upon such assumption, may elect to
operate such aircraft or to cause such aircraft to be operated
by another party, such election to be made at US Airways'
discretion, until the expiration of the lease of such
terminated Additional Aircraft to Mesa (but in no event longer
than the term reviewed by US Airways at the time such aircraft
were first placed into the Service in accordance with Section
2.1(b); or other term, provided that in the event Mesa
undertakes to amend the term or other conditions of the leases
of any of the Additional Aircraft subsequent to such aircraft
entering the Service, such amendments shall have been approved
in writing by US Airways prior to their execution) and shall
assume the responsibility to satisfy all return condition
obligations pursuant to the lease of such terminated
Additional Aircraft to Mesa (but in no event more than the
obligations reviewed by US Airways at the time such aircraft
were first placed into the Service in accordance with Section
2.1(b); or other obligations, provided that in the event Mesa
undertakes to amend the return obligations of the leases of
any of the Additional Aircraft subsequent to such aircraft
entering the Service, such amendments shall have been approved
in writing by US Airways prior to their execution).
11) Article 12 "Option for Additional Aircraft" is hereby deleted in its
entirety.
Except as reflected above, the Agreement remains unchanged in all other
respects. Upon its execution, this Fifth Amendment, together with the Agreement,
will be the complete
and binding understanding of the Parties with respect to the terms and
conditions of the Agreement, as amended by the terms set forth herein.
Subject to mutual agreement, Mesa and US Airways agree to enter into a
restatement of the terms and conditions of the Service Agreement, as amended, in
order to substitute Mesa Air Group, Inc. as the signatory party to the
Agreement.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by
their duly authorized representatives as of the day and year first above
written.
MESA AIRLINES, INC. US AIRWAYS, INC.
/S/ Xxxxxxx Xxxx /S/ N. Xxxxx Xxxxx
By: Xxxxxxx Xxxx By: N. Xxxxx Xxxxx
Title: President Title: Sr. Vice President
Corporate Development
EXHIBIT A
Date * *
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