WARRANT
To Purchase Common Stock
of
Mesaba Holdings, Inc.
This warrant, dated as of October 17, 1997, certifies that for value
received Northwest Airlines, Inc., a Minnesota corporation ("Northwest"), or
permitted assigns, is entitled to purchase from Mesaba Holdings, Inc., a
Minnesota corporation (the "Company"), 880,000 shares (subject to adjustment
as herein provided) of common stock of the Company (herein referred to as
the "Common Shares") at the price determined as provided herein, and in all
respects subject to the terms contained herein.
This Warrant has been issued to Northwest in consideration of that
certain Airline Services Agreement dated as of July 1, 1997 between
Northwest, the Company and Mesaba Aviation, Inc. (the "Airlink Agreement").
This Warrant is subject to the following provisions, terms, and
conditions:
1. The exercise price is $14.125 per share, subject to adjustment as
hereinafter provided (the "Exercise Price").
2. This Warrant shall become exercisable in full on October 17, 1997.
This Warrant will expire at 5:00 p.m. Minneapolis time, on July 1, 2007,
unless terminated earlier pursuant to the terms hereof. Subject to the last
sentence of this Section 2, the rights represented by this Warrant may be
exercised by Northwest, in whole or in part, by written notice of exercise
delivered to the Company accompanied by the surrender of this Warrant
(properly endorsed if required) at the principal office of the Company
together with payment by check payable in Minneapolis Clearing House funds
to the order of the Company of the purchase price for such shares. The
Company agrees that the shares so purchased shall be deemed to be issued as
of the close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares as aforesaid. Certificates for
the Common Shares so purchased shall be delivered to Northwest as soon as
practicable after the purchase rights represented by this Warrant shall have
been so exercised. This Warrant may not be exercised in part for the
purchase of any number of Common Shares less than 50,000, unless such number
represents the total number of Common Shares then remaining subject to
purchase pursuant to this Warrant.
3. The Company covenants and agrees that all Common Shares issued
upon the exercise of the purchase rights represented by this Warrant will,
upon issuance, be validly issued, fully paid, nonassessable, and free from
all taxes, liens and charges with respect to the issue thereof. The Company
further covenants and agrees that until the expiration of this Warrant it
will at all times have authorized and reserved for the purpose of issue or
transfer upon exercise of the purchase rights evidenced by this Warrant a
sufficient number of shares of its common stock to provide for the exercise
of the purchase rights represented by this Warrant.
4. This Warrant shall not be transferable or assignable by Northwest
and may be exercised only by Northwest; provided, however, that Northwest
may transfer or assign this Warrant to any affiliate (as such term is
defined in Rule 405 promulgated under the Securities Act of 1933, as
amended) of Northwest and any successor corporation (or other entity)
resulting from its merger, consolidation, or other reorganization or the
sale of all or substantially all of its assets.
5. In case the Company shall declare a stock dividend or other
distribution upon its common stock payable in common stock of the Company,
then the total maximum number of Common Shares issuable upon the exercise of
this Warrant shall be increased by an amount equal to the number of shares
of common stock which would have been issued to Northwest as a result of the
issuance of such dividend or other distribution if, immediately prior to
the record date relating to such dividend or other distribution, Northwest
had exercised its purchase rights under this Warrant with respect to the
total number of Common Shares then remaining subject to purchase. The
Exercise Price in effect immediately prior to such dividend or other
distribution shall be proportionately reduced.
6. In case the Company shall at any time subdivide or split its
outstanding shares of common stock into a greater number of shares, the
Exercise Price in effect immediately prior to such subdivision or split
shall be proportionately reduced, and conversely, in case the outstanding
shares of common stock of the Company shall be combined into a smaller
number of shares, the Exercise Price in effect immediately prior to such
combination shall be proportionately increased. Upon each adjustment of the
Exercise Price pursuant to this Section 6, Northwest shall thereafter be
entitled to purchase, at the then applicable Exercise Price, the number of
shares obtained by multiplying the Exercise Price in effect immediately
prior to such adjustment by the number of shares purchasable pursuant
hereto immediately prior to such adjustment and dividing the product thereof
by the applicable Exercise Price resulting from such adjustment.
7. If any capital reorganization or reclassification of the capital
stock of the Company or consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets to
another corporation shall be effected in such a way that holders of shares
of common stock of the Company shall be entitled to receive stock,
securities or assets with respect to or in exchange for common stock, then,
as a condition of such reorganization, reclassification, consolidation,
merger or sale, lawful and adequate provision shall be made whereby
Northwest shall thereafter have the right to receive upon the basis and upon
the terms and conditions specified in this Warrant and in lieu of the Common
Shares of the Company immediately theretofore receivable upon the exercise
of this Warrant, such shares of stock, securities or assets as may be issued
or payable with respect to or in exchange for a number of outstanding shares
of common stock of the Company equal to the number of Common Shares
immediately theretofore receivable upon the exercise of this Warrant had
such reorganization, reclassification, consolidation, merger or sale not
taken place, and in any such case appropriate provision shall be made with
respect to the rights and interests of Northwest to the end that the
provisions hereof (including without limitation provision for adjustments of
the then applicable Exercise Price and of the number of shares or other
kinds of securities or other property receivable upon the exercise of this
Warrant) shall thereafter be applicable, as nearly as may be, in relation to
any shares of stock, securities or assets thereafter receivable upon the
exercise of this Warrant. The Company shall not effect any such
consolidation, merger or sale, unless, prior to the consummation thereof,
the surviving corporation (if other than the Company) resulting from such
consolidation or merger or the corporation purchasing such assets shall
assume by written instrument executed and mailed to Northwest at the last
address of Northwest appearing on the books of the Company, the obligation
to deliver to Northwest such shares of stock, securities or assets as, in
accordance with the foregoing provisions, Northwest may be
entitled to receive.
8. Upon any adjustment of the Exercise Price or the number of Common
Shares or other kinds of securities or other property receivable upon
exercise of this Warrant, then and in each case the Company shall give
written notice thereof, by first-class mail, postage prepaid, addressed to
Northwest at the address as shown on the books of the Company, which notice
shall state the then applicable Exercise Price resulting from such
adjustment, and the increase or decrease, if any, in the number of Common
Shares or other kinds of securities or other property receivable upon
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
9. In case any time:
a. the Company shall pay or make any stock dividend
or other distribution payable in stock upon its common stock
or make any distribution (other than regular cash dividends)
to the holders of its common stock;
b. the Company shall offer for subscription pro rata
to the holders of its common stock any additional shares of
stock of any class or other rights;
c. there shall be any capital reorganization,
reclassification of the capital stock of the Company, or
consolidation or merger of the corporation with, or sale of
all or substantially all of its assets to, another
corporation; or
d. there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company;
then, in any one or more of said cases, at least 21 days prior to the
applicable date specified below, the Company shall give written notice, by
first-class mail, postage prepaid, addressed to Northwest at the address as
shown on the books of the Company, of the date on which (aa) the books of
the Company shall close or a record shall be taken for such stock dividend,
distribution or subscription rights, or (bb) such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up shall take place, as the case may be. Such notice shall also
specify the date as of which the holders of common stock of record shall
participate in such dividend, distribution or subscription rights, or shall
be entitled to exchange their shares of common stock for securities or other
property deliverable upon such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, as the
case may be. Failure to give such notice or any defect therein shall not
affect the legality or validity of any such proceeding or transaction and
shall not affect the right of the holder to participate in any said
dividend, distribution, subscription or exchange.
10. Any transfer of this Warrant permitted by Section 4 hereof may be
effected at the principal office of the Company by a duly authorized officer
or attorney of Northwest, upon surrender of this Warrant properly endorsed.
Northwest and each permitted transferee consents and agrees that Northwest
may be treated by the Company and all other persons dealing with this
Warrant as the absolute owner hereof for any purpose and as the person
entitled to exercise the rights represented by this Warrant, or to the
transfer hereof on the books of the Company, in the absence of any actual
written notice to the contrary.
11. This Warrant is exchangeable upon the surrender hereof by
Northwest at the principal office of the Company for new Warrants of like
tenor representing in the aggregate the right to subscribe for and purchase
the number of Common Shares which may be subscribed for and purchased
hereunder.
12. Notwithstanding any other provisions set forth in this Warrant to
the contrary, the rights of Northwest granted in this Warrant shall
terminate (i) immediately upon the termination of the Airlink Agreement, if
the Airlink Agreement is terminated by Northwest or (ii) 30 days after
Northwest's receipt of notice from the Company of the Company's termination
of the Airlink Agreement, if the Airlink Agreement is terminated as the
result of such notice.
Neither this Warrant nor any term hereof may be changed, waived,
discharged or terminated orally but only by an instrument in writing signed
by the party against which enforcement of the change, waiver, discharge or
termination is sought.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer this 17th day of October, 1997.
MESABA HOLDINGS, INC.
By /s/ Xxxxx X. Xxxxxxx
------------------------
Xxxxx X. Xxxxxxx
Its President and Chief Executive
Officer
ELECTION TO PURCHASE
(To be executed by the registered holder
if such holder desires to exercise the Warrant.)
TO: Mesaba Holdings, Inc.
The undersigned hereby irrevocably elects to exercise this
Warrant to the extent of ______________ Common Shares and
requests that certificates for such shares be issued, and any
payment in lieu of fractional shares be made, in the name of:
---------------------------------------------------------------------
(Print name, address and social security or other tax identification
number)
Dated: ______________, _____
___________________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this Warrant.)
FORM OF ASSIGNMENT
(To be executed by the registered holder
if such holder desires to transfer the Warrant.)
FOR VALUE RECEIVED, __________________________________________________
hereby sells, assigns and transfers unto __________________________________
___________________________________________________________________________
(Print name and address of transferee)
this Warrant, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint _________________________________
Attorney, to transfer the within Warrant on the books of the Company, with
full power of substitution.
Dated: _____________, _____
_________________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this
Warrant.)
