WARRANT
To Purchase Common Stock
of
Mesaba Holdings, Inc.
This warrant, dated as of October 25, 1996, 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"),
615,000 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 Regional Jet Services Agreement dated as of
October 25, 1996 between Northwest, the Company and Mesaba
Aviation, Inc. (the "Jetlink Agreement").
This Warrant is subject to the following provisions, terms,
and conditions:
1. The exercise price is $10.875 per share, subject to
adjustment as hereinafter provided (the "Exercise Price").
2. This Warrant shall become exercisable in installments
cumulatively with respect to 1/12th of the Common Shares, as
adjusted (initially 51,250 shares), on each date on which an
Initial Aircraft enters scheduled passenger service under the
Jetlink Agreement. As used herein, Initial Aircraft means the
first 12 aircraft to enter service under the Jetlink Agreement.
This Warrant will expire at 5:00 p.m. Minneapolis time, on
October 25, 2006, 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:
(i) 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;
(ii) 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;
(iii) 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
(iv) 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
Jetlink Agreement, if the Jetlink 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 Jetlink Agreement,
if the Jetlink Agreement is terminated as the result of such
notice.
13. 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 25th day of October,
1996.
MESABA HOLDINGS, INC.
By /s/ 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 identifica
tion 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.)