**Exhibit 10.26**

 

**[CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OFTHIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELYFILED WITH THE COMMISSION]**

 

**AMENDMENTTOREGIONAL JET SERVICES AGREEMENT**

 

AMENDMENT TO REGIONAL JET SERVICES AGREEMENT (this “Amendment”) datedas of April 15, 2005 by and among MAIR Holdings, Inc., a Minnesotacorporation (“MAIR”), Mesaba Aviation, Inc., a Minnesota corporation (“Mesaba”),and Northwest Airlines, Inc., a Minnesota corporation (“Northwest”).

 

**WITNESSETH:**

 

WHEREAS, Mesaba, MAIR and Northwest have entered into the Regional Jet ServicesAgreement dated as of the 25th day of October, 1996 (as amended to date, the “Agreement”);and

 

WHEREAS, Mesaba, MAIR and Northwest desire to amend the Agreement withrespect to on-time incentives, decommissioned aircraft and audit timing and requests.

 

NOW, THEREFORE, in consideration of the premises and other good andvaluable consideration, the receipt and sufficiency of which are herebyacknowledged, MAIR, Mesaba and Northwest do hereby agree as follows:

 

1.                                       Amendmentto Section 2.06.  Section 2.06of the Agreement is amended effective retroactively as of July 1, 2003 toread in its entirety as follows:

 

“Section 2.06  Minimum On-Time Reliability.  Mesaba shall achieve a *** percent (***%)on-time arrival factor (“On-Time Factor”) for all Scheduled Flights operated byMesaba during each Performance Period. An arrival will be considered on-time if it arrives not later than ***after its published, scheduled arrival time. All Scheduled Flights that arrive *** later than their published,scheduled arrival time will not be considered on-time, regardless of the reasonfor the delay.  All Scheduled Flightswill be included in this calculation, except for those Scheduled Flights operatedon days when Northwest and Mesaba mutually agree that Mesaba’s on-timeperformance was significantly degraded by Northwest’s implementation of anIrregular Operating Procedures Program. Upon mutual agreement between Northwest’s Vice President of SystemOperations Control and Mesaba, all Scheduled Flights operated on days with suchextraordinary events will be excluded from the calculation of Mesaba’s On-TimeFactor.  If Northwest and Mesaba areunable to reach agreement on the exclusion of certain days, then all ScheduledFlights operated on such days will be included in the calculation of Mesaba’sOn-Time Factor.”

 

2.                                       Amendmentto Section 4.03(b).  Section 4.03(b)of the Agreement is amended effective retroactively as of July 1, 2003 toread in its entirety as follows:

 

“(b)                           On-TimeFactor.  If Mesaba’s On-Time Factor(calculated in accordance with Section 2.06) is less than ***% for aPerformance Period, Northwest shall receive from Mesaba

 

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$*** per enplaned revenue passenger duringthe applicable Performance Period.  IfMesaba’s On-Time Factor is equal to or greater than ***% for a PerformancePeriod, Northwest shall pay to Mesaba $*** per enplaned revenue passengerduring the applicable Performance Period. The parties acknowledge and agree that the foregoing performance levelsare based on Northwest’s internal on-time goal of ***%.  In the event Northwest’s on-time goal changesfrom ***%, the on-time performance levels that determine minimum reliability(in Section 2.06), and penalty and bonus levels (in this Section 4.03(b))will be modified to correspond to the change made by Northwest.  Northwest and Mesaba will meet and confer onall components of on-time metrics on an as-needed basis.”

 

3.                                       Amendmentto Section 6.04.  Section 6.04of the Agreement is amended effective retroactively as of January 1, 2005 byadding the following sentence to the end of the section:

 

“If any Aircraft covered hereby is to be permanently decommissioned, soldto a third party, returned to a lessor or delivered to a subsequent lessor,prior to surrendering possession of the Aircraft, Mesaba shall first havepainted over the areas of the outside of the Aircraft that would indicateaffiliation with Northwest, which shall include the entire vertical stabilizerof the Aircraft and any areas of the wings or fuselage that would have anyNorthwest Identification, trade names, service marks, and/or trademarks, suchas “NWA,” “Northwest Airlines,” “Northwest Airlink,” etc.”

 

4.                                       Amendmentto Section 5.01.  As acorporation subject to the Sarbanes-Oxley Act of 2002, MAIR and itssubsidiaries are required to implement and maintain a system of internalcontrol over financial reporting (“ICFR”), which will be audited by MAIR’sindependent registered public accounting firm. As part of its ICFR program, MAIR and its subsidiaries are testing andrefining a variety of financial controls intended to prevent or detect, on atimely basis, the occurrence of material misstatements of its financialstatements.  In order to allow MAIR toreport revenues and expenses with respect to the Agreement on a timely basis, Section 5.01of the Agreement is amended effective March 1, 2005 to read in itsentirety as follows:

 

“Section 5.01  Audits.  Upon the reasonable prior written request byNorthwest,  Mesaba shall make its booksand records with respect to this Agreement for the preceding twelve (12) monthsavailable for audit.  Northwest shallalso be entitled to make copies and notes of such information as it deemsnecessary and to discuss such records and the finances and accounts of Mesabawith its Chief Financial Officer or other employee or agent of Mesabaknowledgeable about such records.  Northwestshall give not less than fifteen (15) days written notice to Mesaba of itsintention to audit Mesaba’s books and records, including a request list of thebooks and records that are to be made available.  Northwest shall have ninety (90) days tocomplete the audit of such books and records. If the audit has not been completed within the time period described above,Northwest forever waives its audit rights for the relevant period.  Northwest and Mesaba agree that all paymentsor reimbursements from one party to the other resulting from any auditconducted under this Agreement shall relate only to services, goods or paymentsto be performed, provided, or made during the period under audit.  For the avoidance of doubt andnotwithstanding the foregoing, nothing in this Section 5.01 shall precludeNorthwest from bringing a breach of contract claim against Mesaba with respectto matters discovered in an audit or otherwise (even if such matter(s) relatesto a period previously audited or no longer subject to audit).”

 

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5.                                       Miscellaneous.  All capitalized terms used herein and nototherwise defined shall have the respective meanings provided such terms in theAgreement.  This Amendment may beexecuted in any number of counterparts and by the different parties hereto onseparate counterparts, each of which counterpart when executed and deliveredshall be original, and all of which shall together constitute one and the sameinstrument.  This Amendment and therights and obligations of the parties hereunder shall be construed in accordancewith and governed by the law of the State of Minnesota.  From and after the date hereof, allreferences in the Agreement to the Agreement shall be deemed to be referencesto the Agreement as amended hereby.

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment asof the date and year first set forth above.

 
|   | MAIR  HOLDINGS, INC.      |
|--------|---------------------------|
|   |                      |
|   |                      |
|   | By:                       |   /s/  Paul F. Foley |   |
|   |                      | Paul F.  Foley |
|   |                      | President  and Chief Executive Officer |
|   |                      |
|   |                      |
|   | MESABA  AVIATION, INC.    |
|   |                      |
|   |                      |
|   | By:                       |   /s/  John G. Spanjers |   |
|   |                      | John G.  Spanjers |
|   |                      | President  and Chief Operating Officer |
|   |                      |
|   |                      |
|   | NORTHWEST  AIRLINES, INC. |
|   |                      |
|   |                      |
|   | By:                       |   /s/  J. Timothy Griffin |   |
|   |                      | J. Timothy  Griffin |
|   |                      | Executive  Vice President,  Marketing |

 

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