Document:

Exhibit 10.7

 

Execution Draft

 

SPECIAL FACILITIES LEASE

 

between

 

CHARTER COUNTY OF WAYNE,

STATE OF MICHIGAN

 

and

 

MESABA AVIATION, INC.

 

pertaining to facilities at

DETROIT METROPOLITAN WAYNE COUNTY AIRPORT

 

 

Dated as of June 1, 1990

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I DEFINITIONS AND EXHIBITS

  	
   

  
	
  1.1

  	
  Definitions

  	
   

  
	
  1.2

  	
  Exhibits

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II THE LEASE AND SPECIAL FACILITIES
  CHARGES

  	
   

  
	
  2.1

  	
  Description

  	
   

  
	
  2.2

  	
  Term

  	
   

  
	
  2.3

  	
  Permitted Uses and Purposes

  	
   

  
	
  2.4

  	
  Special Facilities Charges

  	
   

  
	
  2.5

  	
  Manner of Payment and Amount of Special Facilities Charges

  	
   

  
	
  2.6

  	
  Notice of Current Expenses

  	
   

  
	
  2.7

  	
  Prepayment

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III FINANCING THE FACILITIES

  	
   

  
	
  3.1

  	
  Issuance of Series 1990 Bonds

  	
   

  
	
  3.2

  	
  Series 1990 Bond Details

  	
   

  
	
  3.3

  	
  Insufficiency of Series 1990 Bond Proceeds

  	
   

  
	
  3.4

  	
  Additional
  Bonds

  	
   

  
	
  3.5

  	
  Use of Surplus Bond Proceeds

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV CONSTRUCTION OF FACILITIES;
  APPLICATION OF BOND PROCEEDS

  	
   

  
	
  4.1

  	
  Mesaba Obligation to Construct Facilities

  	
   

  
	
  4.2

  	
  Consulting Engineer; Duties

  	
   

  
	
  4.3

  	
  Mesaba Contracting and Construction Responsibilities

  	
   

  
	
  4.4

  	
  Design and Construction Procedures; Construction Contracts and
  Sub-Contracts

  	
   

  
	
  4.5

  	
  Submission and Approval of Plans and Contracts; Construction
  Inspection

  	
   

  
	
  4.6

  	
  Disbursements from Construction Fund

  	
   

  
	
  4.7

  	
  County Rights to Stop or Alter Construction

  	
   

  
	
  4.8

  	
  Completion of Construction

  	
   

  
	
  4.9

  	
  Building Permits and Performance Bond

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V MAINTENANCE, REPAIR AND OPERATION

  	
   

  
	
  5.1

  	
  Maintenance

  	
   

  
	
  5.2

  	
  Common
  Access Avenues

  	
   

  
	
  5.3

  	
  Utility
  Services

  	
   

  
	
  5.4

  	
  Insurance

  	
   

  
	
  5.5

  	
  Taxes

  	
   

  
	
  5.6

  	
  Right of Ingress and Egress

  	
   

  
	
  5.7

  	
  County Access to Facilities

  	
   

  
	
  5.8

  	
  Conduct of Operations of the Facilities

  	
   

  

 

i

 

	
  ARTICLE VI DAMAGE OR CONDEMNATION OF
  FACILITIES

  	
   

  
	
  6.1

  	
  Repair and Replacement after Damage or Destruction

  	
   

  
	
  6.2

  	
  Election to Prepay Special Facilities Charges

  	
   

  
	
  6.3

  	
  Condemnation

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII MESABA REPRESENTATIONS,
  WARRANTIES AND COVENANTS

  	
   

  
	
  7.1

  	
  Mesaba’s Representations

  	
   

  
	
  7.2

  	
  Compliance
  with Laws

  	
   

  
	
  7.3

  	
  Mesaba Maintenance of Existence

  	
   

  
	
  7.4

  	
  General Limitations with Respect to Non-Impairment of Tax-Exempt
  Status of the Bonds

  	
   

  
	
  7.5

  	
  County Fees and Expenses

  	
   

  
	
  7.6

  	
  Trustee Fees and Expenses

  	
   

  
	
  7.7

  	
  Mesaba’s Obligations Unconditional

  	
   

  
	
  7.8

  	
  Mesaba Bound by Ordinance

  	
   

  
	
  7.9

  	
  Investments; Arbitrage Covenant

  	
   

  
	
  7.10

  	
  Non-Discrimination

  	
   

  
	
  7.11

  	
  Letter of Credit; Alternate Letter of Credit

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII COUNTY FINDINGS AND
  REPRESENTATIONS

  	
   

  
	
  8.1

  	
  County Findings and Representations

  	
   

  
	
  8.2

  	
  County Authority to Issue Bonds

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX DEFAULT

  	
   

  
	
  9.1

  	
  Events
  of Default

  	
   

  
	
  9.2

  	
  Waiver
  of Default

  	
   

  
	
  9.3

  	
  County Performance of Mesaba’s Obligations

  	
   

  
	
  9.4

  	
  Remedies upon Event of Default

  	
   

  
	
  9.5

  	
  Payment of Attorneys’ Fees and Other Expenses

  	
   

  
	
  9.6

  	
  No
  Remedy Exclusive

  	
   

  
	
  9.7

  	
  Limitation
  on Waivers

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X INDEMNIFICATION

  	
   

  
	
  10.1

  	
  Indemnification of Trustee

  	
   

  
	
  10.2

  	
  Indemnification of County

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI ACTIONS AFFECTING TITLE AND
  POSSESSION

  	
   

  
	
  11.1

  	
  Quiet
  Enjoyment

  	
   

  
	
  11.2

  	
  Title to Equipment and Improvements

  	
   

  
	
  11.3

  	
  Surrender of Possession

  	
   

  
	
  11.4

  	
  Mineral Rights

  	
   

  

 

ii

 

	
  ARTICLE XII ASSIGNMENT AND SUBLETTING; RIGHTS
  OF LEASEHOLD MORTGAGEE

  	
   

  
	
  12.1

  	
  Sale Assignment Transfer, or Sublease

  	
   

  
	
  12.2

  	
  Rights
  of Mortgagee

  	
   

  
	
  12.3

  	
  Simultaneous Assignment and Subletting of Related Airport Facilities

  	
   

  
	
  12.4

  	
  Sublessee, Etc., Bound by Ordinance

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII GROUND LEASE

  	
   

  
	
  13.1

  	
  Relationship of the Lease to Ground Lease

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV MISCELLANEOUS PROVISIONS

  	
   

  
	
  14.1

  	
  Notices

  	
   

  
	
  14.2

  	
  Paragraph
  Headings

  	
   

  
	
  14.3

  	
  Severability

  	
   

  
	
  14.4

  	
  Binding Effect

  	
   

  
	
  14.5

  	
  Lease to United States of America

  	
   

  
	
  14.6

  	
  Amendment

  	
   

  
	
  14.7

  	
  Governing Law

  	
   

  
	
  14.8

  	
  Cancellation by Mesaba

  	
   

  
	
  14.9

  	
  Cancellation by County

  	
   

  
	
  14.10

  	
  Rights After Bonds Paid

  	
   

  

 

	
  EXHIBITS

  	
   

  
	
  Exhibit A

  	
  Description
  of the Facilities

  
	
  Exhibit B

  	
  Requisition
  Certificate

  
	
  Exhibit C

  	
  Completion
  Certificate

  

 

iii

 

MESABA AVIATION, INC.

SPECIAL FACILITIES LEASE

 

THIS LEASE,
made and entered into as of June 1, 1990, by and between the CHARTER COUNTY OF
WAYNE, MICHIGAN, a public body corporate, with principal offices at 600
Randolph Street, Detroit, Michigan 48226 and MESABA AVIATION, INC., a
corporation organized and existing under the laws of the State of Minnesota
with principal offices located at 7501 26th Avenue South, Minneapolis,
Minnesota 55450.

 

WITNESSETH:

 

WHEREAS, the
County owns and operates the Detroit Metropolitan Wayne County Airport, located
in the City of Romulus, County of Wayne, State of Michigan and has the power to
lease premises and facilities and to grant rights and privileges with respect
thereto, pursuant to the provisions of Act 327, Public Acts of Michigan, 1945,
as amended; and

 

WHEREAS,
Mesaba is engaged in the business of transporting persons, property, cargo and
mail by aircraft; and

 

WHEREAS,
Mesaba desires to lease and to obtain rights and privileges with respect to
certain facilities at the Airport (as defined herein, the “Facilities”) upon
the terms and conditions hereinafter provided; and

 

WHEREAS,
because of the necessity that the Facilities be designed, acquired, constructed
and installed in a manner which will suit Mesaba’s needs, Mesaba will undertake
the design, acquisition, construction and installation of the Facilities on
behalf of the County; and

 

WHEREAS, the
County proposes to finance the acquisition, construction and installation of
the Facilities by the issuance of bonds to be paid solely from the Net
Revenues, as defined in the Ordinance (hereinafter defined), to be derived by
the County under the Lease (hereinafter defined) or from any successor,
amendatory or replacement contracts to the Lease; and

 

WHEREAS, the
County and Mesaba have entered or will simultaneously enter into a separate
ground lease for the use of Airport ground space for the location of the
Facilities;

 

NOW,
THEREFORE, for and in consideration of the premises and of the mutual covenants
and agreements herein contained, the parties agree as follows:

 

ARTICLE I

DEFINITIONS AND EXHIBITS

 

1.1           Definitions.

 

Whenever used
in the Lease, except when otherwise indicated by the context, the following
terms shall have the following meanings:

 

“Act 94” means
Act 94, Public Acts of Michigan, 1933, as amended.

 

1

 

“Act 327” or “Aeronautics
Code” means Act 327, Public Acts of Michigan, 1945, as amended.

 

“Act of
Bankruptcy” means the filing of a petition in bankruptcy under the United
States Bankruptcy Code or the commencement of a proceeding under any other
applicable law now or hereafter in effect by or against Mesaba or any successor
to or assignee of the Lease.

 

“Additional
Bonds” means any bonds of equal standing issued under the authority of the
Ordinance in addition to the Series 1990 Bonds.

 

“Airport”
means the Detroit Metropolitan Wayne County Airport and all aeronautical
facilities owned and operated by the County in connection therewith, including
all real property now or hereafter owned by the County, the terminal buildings,
airport facilities and all other improvements and equipment now or hereafter
located, constructed, installed or situated thereon.

 

“Alternate
Letter of Credit” means an irrevocable letter of credit delivered to, and
accepted by, the Trustee pursuant to the Ordinance. An Alternate Letter of
Credit shall be issued by a commercial bank organized and doing business in the
United States or a branch or agency of a foreign commercial bank located in the
United States and subject to regulation by state or federal banking regulatory
authorities the senior debt of which is rated by a national rating agency in
the same or better category as the senior debt of the issuer of the then
effective Letter of Credit, or, in the alternative, of the outstanding
obligations then rated on the basis of a letter of credit issued by such
issuer, and shall be in substantially the form of the original Letter of
Credit. On or before the date of the delivery of any Alternate Letter of Credit
to the Trustee, as a condition to the acceptance of such Alternate Letter of
Credit by the Trustee, the Obligor shall furnish to the Trustee (i) written
evidence that the issuer of such Alternate Letter of Credit is a commercial
bank organized and doing business in the United States or a branch or agency of
a foreign commercial bank located and doing business in the United States and
subject to regulation by state or federal banking regulatory authorities, (ii)
an opinion of Bond Counsel stating that the delivery of such Alternate Letter
of Credit to the Trustee is authorized under this Lease and complies with the
terms hereof and that the delivery of such Alternate Letter of Credit does not
adversely affect the exclusion from gross income for Federal income tax
purposes for the interest on the Bonds, and (iii) an opinion of counsel
satisfactory to the Trustee in form satisfactory to the Trustee to the effect
that the Alternate Letter of Credit is the valid and binding obligation of the
bank (or, in the case of a branch or agency of a foreign commercial bank, the branch
or agency) issuing the same, enforceable in accordance with its terms. In the
case of an Alternate Letter of Credit issued by a branch or agency of a foreign
commercial bank there shall also be delivered an opinion of counsel
satisfactory to the Trustee and licensed to practice law in the jurisdiction in
which the head office of such bank is located in form satisfactory to the
Trustee, to the effect (i) that the Alternate Letter of Credit is the valid and
binding obligation of such bank enforceable in accordance with its terms in the
courts of the jurisdiction in which the head office of such bank is located,
(ii) that such bank has consented to jurisdiction in the United States, (iii)
that such branch or agency is subject to banking regulations of the United
States or any state thereof, and (iv) that a judgment upon the Alternate Letter
of Credit obtained in the United States against such branch or agency would be
enforceable against such bank in the courts of the jurisdiction in which the
head office of such bank is located without relitigation of the merits.

 

2

 

“Authorized
Representative” means the representative of Mesaba, duly authorized by proper
action of Mesaba, as evidenced by a signed certificate of its Secretary, to act
on behalf of Mesaba.

 

“Bank” means
Norwest Bank Minnesota, National Association, or any provider of an Alternate
Letter of Credit.

 

“Best Efforts”
means that the County shall use all commercially reasonable efforts, calculated
to reach any potential user of any vacated portion of the Facilities, which is
willing to relet such Facilities and become a party to and assume the Mesaba
obligations under the Lease, the Airport Agreement and/or Ground Lease with
respect to such Facilities.

 

“Bond Counsel”
means Miller, Canfield, Paddock and Stone, attorneys of Detroit, Michigan,
Lewis, White & Clay, A Professional Corporation, attorneys of Detroit,
Michigan, or any nationally recognized bond counsel acceptable to the Trustee
and the County.

 

“Bond Fund”
refers to the Bond and Interest Redemption Fund created pursuant to Section
5.2B of the Ordinance.

 

“Bond Payment
Date” means any of the dates specified in the Ordinance for payment of
interest, or interest and principal, on the Bonds, which dates occur
semiannually on June 1 and December 1 of each year, commencing December 1,
1990.

 

“Bonds” means
the Series 1990 Bonds and any Additional Bonds issued pursuant to the
Ordinance.

 

“Code” means
the Internal Revenue Code of 1986, as amended, and the regulations, rulings and
court decisions thereunder.

 

“Completion
Certificate” means the certificate referred to in Section 4.8 hereof,
substantially in the form attached hereto as Exhibit C.

 

“Completion
Date” means the date upon which the Completion Certificate is delivered to the
Trustee.

 

“Construction
Fund” shall have the meaning assigned to such term in the Ordinance.

 

“Consulting
Engineer” means Albert Kahn Associates, Inc., Architects & Engineers,
Detroit, Michigan.

 

“County” means
the Charter County of Wayne, State of Michigan.

 

“County
Approval” means approval by the Assistant County Executive for Airports and
Major County Construction or his designee.

 

“Current
Expenses” shall have the meaning assigned to such term in Section 2.6.

 

“Default” and “Event
of Default” means those defaults and events of default, respectively, specified
and defined in Article IX.

 

“Disbursing
Agreement” means the Disbursing Agreement dated as of June 1, 1990, among
Mesaba, the Bank, the Trustee and Commonwealth Land Title Insurance Company or
an agent thereof.

 

“Effective
Date” means the date of delivery of the Series 1990 Bonds at which time the
Lease term begins, if not earlier begun.

 

3

 

“Facilities”
means the design, acquisition, construction and installation of the airport
facilities described in Exhibit A.

 

“Facilities
Costs” shall be deemed to include all costs for the design, acquisition,
construction, installation and financing of the Facilities, including, but not
limited to obligations of the County or Mesaba on behalf of the County incurred
for: (a) materials, machinery, furnishings and equipment and for labor and
contractors, builders and materialmen in connection with the design,
acquisition, construction and installation of the Facilities or any portion
thereof; (b) the cost of contract bonds and of insurance of all kinds that may
be required or necessary during the course of construction of the Facilities or
any portion thereof which is not paid by the contractor or contractors or
otherwise provided for; (c) architectural and engineering expenses for test
borings, surveys, estimates, plans and specifications and preliminary
investigations therefor, and for supervising construction, as well as for the
performance of all other duties required for the proper construction of the
Facilities or any portion thereof; (d) legal, accounting, financial and
printing expenses and fees, compensation and expenses of the County, the Bank,
the Trustee and the Placement Agent, and all other expenses incurred in
connection with the acquisition of the Facilities or any portion thereof and
the issuance of the Bonds; (e) all other costs which the County or Mesaba shall
be required to pay, under the terms of any contract or contracts approved by
the County, for the design, acquisition, construction and installation of the
Facilities or any portion thereof; (f) fees and expenses incurred in connection
with the issuance of the Letter of Credit; (g) the cost of a Title Insurance
Policy and survey of the site of the Facilities; and (h) any sums required to
reimburse the County or Mesaba for advances made by either of them for any of
the above items, or for any other costs incurred and for work done by either of
them which are properly chargeable to the Facilities.

 

“Facilities
Purposes” means the use of the Facilities set forth in Section 2.3 of the
Lease.

 

“Ground Lease”
means the agreement dated as of June 1, 1990, as amended or extended, between
the County and Mesaba by which Mesaba obtains the use of real property upon
which the Facilities shall be constructed at the Airport.

 

“Improvements
to the Facilities” means such additions (including real property), equipment,
improvements, modifications or relocations as the County may approve and which
Mesaba may deem necessary or desirable in, on, or to the Facilities, all of
which shall be included in the Plans and Specifications and shall become part
of the Facilities.

 

“Investment
Income” shall have the meaning assigned to such term in the Ordinance.

 

“Lease” means
this Special Facilities Lease, as amended from time to time.

 

“Letter of
Credit” means a Letter of Credit providing for payment of the Series 1990 Bonds
which Mesaba is obligated to deliver simultaneously with the delivery of Series
1990 Bonds substantially in the form attached to the Reimbursement Agreement.

 

“Mesaba” means
Mesaba Aviation, Inc., a Minnesota corporation, and its successors and assigns.

 

“Net Revenues”
means all revenues of the Facilities, including Special Facilities Charges and
Investment Income, derived from the Facilities under the Lease, or under any
successor contract or agreement, or the Letter of Credit, or from the Bond
proceeds, after payment of Current Expenses.

 

4

 

“Notice of
Intent Resolution” means the resolution adopted by the County Commission on
January 18, 1990, which, inter alia, stated the intent of the County to issue
the Series 1990 Bonds to finance the Facilities.

 

“Operating
Year” means the operating year of the County; i.e., December 1 of each year to
and including December 30 of the following calendar year.

 

“Operation and
Maintenance Fund” shall have the meaning assigned to such term in Section 5.2A
of the Ordinance.

 

“Ordinance”
means Ordinance No. 322 adopted by the County Commission, authorizing issuance
of the Bonds and supplemented in accordance with its terms.

 

“Outstanding
Bonds” or “Bonds outstanding” shall mean all Bonds which have been
authenticated and delivered by the Trustee under the ordinance, except:

 

(a)           Bonds canceled after
purchase in the open market or because of payment at or redemption prior to
maturity;

 

(b)           Bonds deemed paid under
the Ordinance; or

 

(c)           Bonds in lieu of which
other Bonds have been authenticated under this Ordinance.

 

“Placement
Agent” shall have the meaning assigned to such term in the Ordinance.

 

“Plans and
Specifications” means the drawings, plans and technical specifications relating
to the design, installation and construction of the Facilities, as amended from
time to time and prepared in sufficient detail to permit the County to approve
the character, placement and appearance of the Facilities.

 

“Rebate
Account” shall have the meaning assigned to such term in the Ordinance.

 

“Receiving
Fund” shall have the meaning assigned to such term in the Ordinance.

 

“Redemption
Price” means with respect to the Bonds, the principal amount of the Bonds to be
redeemed, plus the applicable premium, if any, payable upon redemption (but
excluding any Conditional Supplemental Premium) as set forth in the BOND FORM
APPENDIX to the Ordinance.

 

“Reimbursement
Agreement” means the Letter of Credit and Reimbursement Agreement dated as of
June 1, 1990, between Mesaba and the Bank.

 

“Requisition
Certificate” means the certificate referred to in Section 4.6, a form of which
is attached as Exhibit B.

 

“Series 1990
Bonds” means the Charter County of Wayne (Michigan) Special Airport Facilities
Revenue Bonds (Mesaba Aviation, Inc. Facilities), Series 1990.

 

“Special
Facilities Charges” means the rental payments to be remitted directly to the
Trustee and to the County pursuant to the Lease which shall be in an amount
sufficient to pay Current Expenses and to ensure sufficient Net Revenues for
timely payment of the principal or Redemption Price and interest on the Bonds,
whether at maturity or redemption as the same become due, and any required
deposits to make up deficiencies in the Reserve Account.

 

5

 

“Title
Insurance Policy” shall be the Title Insurance Policy described in the
Disbursing Agreement.

 

“Trustee”
means the Trustee under the Ordinance, or any successor at any later time
serving under the Ordinance.

 

1.2           Exhibits.
Exhibits to the Lease consist of:

 

A             Description
of the Facilities.

B             Requisition
Certificate.

C             Completion
Certificate.

 

ARTICLE II

THE LEASE AND SPECIAL FACILITIES CHARGES

 

2.1           Description.
The County hereby leases to Mesaba, and Mesaba hereby leases from the County,
the Facilities described in Exhibit A.

 

2.2           Term.  Mesaba shall have use of the Facilities for a
term commencing upon the earliest of: 
(1) the date Mesaba enters upon, with permission of the County, the site
of the Facilities or any portion of them, for the use or construction thereof
or for the installation of any equipment, facilities or improvements thereon or
for any other purpose, or (2) the date the County or any of its agents enters
upon the Facilities or the site of the Facilities, for the purpose of
constructing or installing any part of the Facilities in accordance with a
request from Mesaba, or (3) the Effective Date.

 

The Lease
shall terminate June 1, 2010, unless cancelled earlier in accordance with its
terms; provided, however, that Mesaba shall have the option to renew the Lease
for a term of five (5) years at fair market value determined at the time of
renewal; and provided further that in the event the Ground Lease shall for any
reason terminate before the Bonds have been paid, (i) the Lease shall terminate
simultaneously with the termination of the Ground Lease, (ii) the Bonds shall
be subject to mandatory redemption as provided in the Ordinance, (iii) all
Special Facilities Charges hereunder shall be accelerated and (iv) Mesaba shall
forthwith pay all Special Facilities Charges due. The County shall give 60 days
prior written notice to Mesaba of the termination date of the Lease and of the
Special Facilities Charges for the renewal term. Mesaba shall notify the County
in writing not less than 30 days prior to the termination date of Mesaba’s election
to renew the Lease. In the event Mesaba shall fail to give such notice, the
renewal option shall lapse.

 

2.3           Permitted Uses and
Purposes. The Facilities may be used by Mesaba, subject to the rules and
regulations of the County, in the conduct of its air transportation business
generally, and specifically for aircraft maintenance, storage and employee
training purposes and related activities reasonably necessary to the foregoing;
provided, however, that the foregoing rights and uses granted Mesaba shall not
be construed as authorizing the conduct of a separate business by Mesaba other
than its air transportation business.

 

2.4           Special Facilities
Charges. Mesaba shall pay Special Facilities Charges as rent and
consideration for its lease rights to the Facilities, separate from and in
addition to amounts paid under the Ground Lease. Special Facilities Charges
shall be in an amount sufficient to pay Current Expenses, the principal of,
Redemption Price and interest on the Bonds.

 

6

 

2.5           Manner of Payment
and Amount of Special Facilities Charges. Special Facilities Charges shall
be paid on the 1st day of each month (or the first Business Day thereafter if
the 1st day of the month shall not be a Business Day) commencing July 1, 1990,
by Mesaba in immediately available funds directly to the Trustee for deposit
into the Receiving Fund or, in the case of Current Expenses, directly to the
County. The Trustee shall disburse the Special Facilities Charges from the Receiving
Fund as provided in the Ordinance. Monthly Special Facilities Charges shall be
the total of:

 

(a)           Current Expenses for
such month as scheduled in the County’s notice of Current Expenses pursuant to
Section 2.6;

 

(b)           1/5 of the total amount
of interest on the Bonds coming due on December 1, 1990, with credit for
accrued interest received upon delivery of the Bonds, and any investment
earnings on deposit in the Bond Fund, and, commencing December 1, 1990, 1/6 of
the total amount of interest on the Bonds next coming due, with credit for any
investment earnings on deposit in the Bond Fund;

 

(c)            1/35 of the principal
due by maturity on the Bonds on June 1, 1993, and, commencing June 1, 1993,
1/12 of any principal due by maturity on the Bonds on the next succeeding June
1;

 

(d)           1/6 of any principal
due by Mandatory Sinking Fund Redemption on the Bonds on the next succeeding
June 1 or December 1; and

 

(e)           Less or with credit
against such monthly Special Facilities Charges for moneys then in the
Receiving Fund and creditable for the foregoing purposes, if any.

 

In addition to
the monthly payment of Special Facilities Charges described above, Mesaba shall
pay, as additional Special Facilities Charges and within 30 days from
notification from the Trustee of any call for redemption of Bonds other than a
Mandatory Sinking Fund Redemption, an amount equal to the Redemption Price,
plus Conditional Supplemental Premium, if any, of all Bonds to be called. If on
any Bond Payment Date the balance in the Letter of Credit Account of the Bond
Fund is insufficient to make the required payments of principal, or Redemption
Price and interest on the Bonds, Mesaba shall forthwith pay in immediately
available funds any such deficiency to the Trustee for deposit into the Bond
Fund. Any moneys on deposit (A) in the Bond Fund on any Bond Payment Date in
excess of the amount required (i) for payment of amounts owing the Bank
pursuant to the Reimbursement Agreement, (ii) for payment of principal of,
Redemption Price (if any), plus Conditional Supplemental Premium, if any, and
interest on Bonds matured or called for redemption or (iii) for past-due
interest, or (B) in the Operation and Maintenance Fund for payment of Current
Expenses, shall be held for credit to Mesaba’s Special Facilities Charges next
due.

 

2.6           Notice of Current
Expenses. At the commencement of the Lease and for the remainder of any
Operating Year already commenced and 30 days prior to the commencement of each
subsequent operating Year, the County shall notify Mesaba of estimated Current
Expenses for each month of such remainder of the Operating Year or subsequent
Operating Year. Current Expenses shall include the following and items of a
similar nature:

 

(i)            Expenses of the County
and its accountants in keeping proper books of record and account for all
dealings, transactions, income and disbursements, with respect to the
Facilities and the Bonds; and

 

7

 

(ii)           Maintenance, utilities
and insurance costs incurred by the County respecting the Facilities.

 

During an
Operating Year the County may notify Mesaba that the projected Current Expenses
payments are or were insufficient to meet actual Current Expenses. Within 30
days of receipt of such notice Mesaba shall pay any deficit of Current Expenses
accrued, and subsequent monthly payments of Special Facilities Charges shall be
increased by the amount necessary to meet revised estimated Current Expenses.

 

Within 60 days
following the end of each Operating Year, the County shall submit a statement
of actual Current Expenses incurred during the preceding Operating Year. To the
extent that actual Current Expenses were less than amounts paid as Current
Expenses, the next following monthly payments of Current Expenses shall be
reduced. Mesaba may request details of such estimated or actual Current
Expenses, and in the event of disagreement as to the basis for, or the amounts
of such estimated or actual Current Expenses, such disagreement may be
submitted for arbitration; provided, however, the County’s good faith
determinations (i) that it is responsible for maintenance, insurance, or
utilities, respectively, and (ii) that the cost of such maintenance, insurance,
or utilities, respectively, is not otherwise reimbursed to it and is owing to
it as part of Current Expenses shall be conclusive.

 

2.7           Prepayment.
Mesaba may at any time prepay all or any part of the Special Facilities
Charges. Prepayment of such Special Facilities Charges shall not in any way
alter or suspend any obligations of Mesaba under the Lease except to the extent
the same results in a credit against Special Facilities Charges because of
prepayment and retirement of Bonds in accordance with the Ordinance.

 

ARTICLE III

FINANCING THE FACILITIES

 

3.1           Issuance of Series
1990 Bonds. The County agrees to use its best efforts to procure or cause
to be procured financing to cover the cost of the design, acquisition,
construction and installation of the Facilities, by the issuance of the Series
1990 Bonds, secured by the Net Revenues. Mesaba unconditionally agrees to pay
the Special Facilities Charges at the times and in the manner set forth in
Article II, and agrees further at all times to cause to be maintained the
Letter of Credit in support of Mesaba’s payment obligations with respect to the
Series 1990 Bonds. It is understood that payment of the Bonds will in no event
be an obligation of the County, and will in no event involve the credit or
general funds of the County or the Airport or the taxing power of the County.
If for any reason the Ground Lease is not executed and delivered by the County
or the Series 1990 Bonds are not authorized and issued by the County, then this
Lease shall be void and of no effect.

 

3.2           Series
1990 Bond Details. The principal amount of the Series 1990 Bonds shall be
$3,630,000 which amount, together with additional moneys contributed by Mesaba,
Mesaba and its architects and engineers estimate to be sufficient to pay the
cost of the Facilities, including bond issuance costs, debt service reserves,
and other incidental costs permitted by law. The Bonds will mature over a
period of 15 years with serial and term maturities within the limitations
specified in Act 94, the first of which shall become due by maturity or
Mandatory Sinking Fund

 

8

 

Redemption not later than June 1, 1993, and shall bear interest at such
rate or rates as shall be specified in the Ordinance.

 

3.3           Insufficiency of
Series 1990 Bond Proceeds. The County makes no warranty, either express or
implied, and offers no assurances that the proceeds derived from the sale of
the Series 1990 Bonds will be sufficient to pay the entire Facilities Costs,
and the County shall not be liable to Mesaba if for any reason the Facilities
are not completed. In the event moneys in the Construction Fund are
insufficient to pay the entire Facilities Costs, Mesaba shall complete the
Facilities and pay Facilities Costs in excess of the amount available in the
Construction Fund. Mesaba shall not, by reason of the payment of any portion of
Facilities Costs, be entitled to any reimbursement from the County, the Trustee
or any holders of the Bonds in respect thereof or to any diminution or
abatement of Special Facilities Charges. If the Facilities are not completed,
Mesaba shall nevertheless be unconditionally obligated to pay the total Special
Facilities Charges required to be paid pursuant to Article II of the Lease and
shall be responsible for all other obligations imposed by the terms hereof upon
Mesaba, it being the intention that all risk of failure to complete the
Facilities or any of them shall be assumed by Mesaba and not by the County or
by the Bondholders.

 

3.4           Additional
Bonds.  Notwithstanding anything
contained in this Section or elsewhere in the Lease the County may but shall
not be obligated to issue such Additional Bonds or series of Bonds as may be
necessary to pay any one or more of the following costs: (a) for completing the
Facilities; (b) for constructing or acquiring Improvements to the Facilities;
(c) for funding reserves; (d) for refunding of all or any part of the Series
1990 Bonds; and (e) for payment of the costs of issuance and sale of the
Additional Bonds and capitalized interest for such period and other costs
reasonably related to the financing as shall be agreed upon by Mesaba and the
County; provided, however, that the County and the Trustee shall be furnished
with an opinion of Bond Counsel that the issuance of Additional Bonds and the
expenditure of proceeds from the sale thereof is permitted by Act No. 94 and
the Ordinance and will not impair the exclusion of interest on the Series 1990
Bonds from gross income for federal income tax purposes. Prior to the issuance
of any Additional Bonds, their terms, the purchase price to be paid therefor
and the manner in which the proceeds are to be disbursed, shall be approved in
writing by the Bank (if the Letter of Credit or Alternate Letter of Credit is
then in effect), the County and Mesaba, and Mesaba and the County shall have
entered into an amendment to the Lease, if necessary, to provide for Special
Facilities Charges in an amount at least sufficient to pay Current Expenses and
the principal of, redemption price (if any) and interest on the Additional
Bonds when due.

 

Nothing
contained in this Article or the Lease shall be construed in such way as to
prevent similar financing of additional capital improvements and facilities
which may be constructed in the future at the Airport for lease to and use by
Mesaba, but the Special Facilities Charges shall not be pledged as security for
any bonds or obligations (other than Additional Bonds) issued for such purpose.

 

3.5           Use of Surplus Bond
Proceeds. As soon as practicable and in any event within 60 days from the
date of delivery of the Completion Certificate, any balance remaining in the
Construction Fund described in the Ordinance (other than the amounts retained
by the Trustee for payment of any Facilities Costs not then due and payable,
any amounts deemed necessary by the Trustee to pay costs of any litigation arising
from construction of the Facilities, or amounts being contested by Mesaba),
herein called “Surplus Bond Proceeds,” shall be deposited in the

 

9

 

Bond Fund, or applied as set forth below for Improvements to the
Facilities, as Mesaba shall in writing direct the Trustee with the written
consent of the Bank, and Mesaba shall simultaneously advise the County of such
direction to the Trustee.

 

If Mesaba
shall elect to use Surplus Bond Proceeds to acquire Improvements to the
Facilities, such Surplus Bond Proceeds shall remain in the Construction Fund
and be disbursed to pay the cost of acquiring, constructing and installing such
Improvements to the Facilities in the same manner as payments from the
Construction Fund; provided that (i) the use of Surplus Bond Proceeds for the
Improvements to the Facility shall be approved by the County, the Michigan
Department of Treasury to the extent such approval may be required, and Bond
Counsel; (ii) such Surplus Bond Improvements to the Facilities shall consist of
airport facilities as permitted by the Code and the Aeronautics Code; and (iii)
Mesaba shall diligently proceed to acquire, construct and install such
Improvements to the Facilities and expend therefor all Surplus Bond Proceeds
within three years from the date of issuance of the Bonds from which such
Surplus Bond Proceeds are derived. To the extent that the Surplus Bond Proceeds
exceed the cost of acquiring, installing and constructing such Improvements to
the Facilities, or in the event Mesaba elects not to, or is unable to, use the
Surplus Bond Proceeds to acquire such Improvements to the Facilities, the
Surplus Bond Proceeds and the investment income thereon shall be applied, to
the extent thereof, (i) to the principal payments next coming due on the Bonds
or, (ii) at Mesaba s option, exercised by direction given to the Trustee in
writing, and if otherwise permitted under the terms of the Bonds, to redeem in
accordance with the optional redemption provisions set forth in the BOND FORM
APPENDIX attached to the Ordinance at the earliest possible time such portion
of the Bonds which, together with the applicable redemption premium, equals the
amount of the Surplus Bond Proceeds and the investment income thereon.

 

In no event
shall Surplus Bond Proceeds or the investment income thereon be used to pay
interest on the Bonds.

 

ARTICLE IV

CONSTRUCTION OF FACILITIES;

APPLICATION OF BOND PROCEEDS

 

4.1           Mesaba Obligation to
Construct Facilities. Mesaba shall construct or cause to be constructed the
Facilities, using to the extent sufficient therefor the net proceeds derived
from the issuance and sale of the Bonds, other moneys in the Construction Fund
and additional funds provided by Mesaba. Mesaba shall promptly complete the Facilities
substantially in accordance with the Plans and Specifications.

 

4.2           Consulting Engineer;
Duties. The Consulting Engineer shall develop the Plans and Specifications,
obtain County Approval thereof, and supervise the construction of the
Facilities in accordance with the Plans and Specifications and the design and
contracting procedures specified in Section 4.4. The Consulting Engineer shall
approve all Requisition Certificates submitted to the Trustee and shall, by
such approval, certify that the representations made therein are accurate.

 

4.3           Mesaba Contracting
and Construction Responsibilities. Mesaba shall promptly undertake, at its
sole cost and expense but on behalf of the County, the acquisition,
construction and installation of the Facilities in accordance with the Plans
and Specifications and the design

 

10

 

and construction procedures set forth in Section 4.4. Mesaba shall
negotiate and award construction contracts subject to County approval, and
shall supervise, manage and be responsible for the acquisition, construction
and installation of the Facilities through completion.

 

4.4           Design and
Construction Procedures; Construction Contracts and Sub-Contracts. The
design and construction of the Facilities will be in accordance with procedures
and standards established or approved by the County for projects of similar
scope at the Airport. Each contract package shall be completed or caused to be
completed by Mesaba to a level of detail satisfactory to the County.
Construction contracts and sub-contracts shall include provisions (i) requiring
the contractor or sub-contractor to observe the same non-discriminatory policy
and affirmative action practices agreed upon by Mesaba under Section 7.10 of
the Lease, (ii) providing that the contractor agrees to have no right to place
a lien upon any property, real or personal, of the County or the Airport and
covenants to place no such lien, and further agrees that nothing in any such
contract could impose any obligation, liability or duty upon the County or the
Airport, and (iii) requiring that each contractor include in its subcontract
provisions such as those required under subparagraphs (i) and (ii).

 

4.5           Submission and
Approval of Plans and Contracts; Construction Inspection. Mesaba shall not
enter into any construction contracts until Plans and Specifications therefor
have been submitted and received County Approval and shall not proceed with
construction until contracts and sub-contracts therefor have been submitted and
received County Approval and until a construction permit is issued by the
County and until any other required building or construction permit has been
issued. The County shall approve or disapprove Plans and Specification or
construction contracts within 21 days of submission by Mesaba.

 

Mesaba shall
be permitted to alter, modify or expand the Facilities in such manner and to
such degree as necessary to satisfy Mesaba’s requirements provided such work
does not interfere with the County’s proposed Airport expansion plans and
provided that prior to commencement of any such work, Mesaba shall submit plans
and specifications and contracts for County Approval and permits in the same
fashion as prescribed for the initial construction.

 

Mesaba shall
submit to the County periodically upon request updated construction contracts
and sub-contracts, together with the anticipated dates of completion of each
such contract or sub-contract, in such detail as the County may reasonably
require.

 

The County
shall have the right to inspect the construction of the Facilities to insure
that the elements which comprise the Facilities are constructed and installed
in conformity with approved Plans and Specifications and all amendments
thereto. Mesaba agrees that, subject to reasonable security and safety
regulations and reasonable notice, the County and the Trustee, or their agents,
shall have the right to enter the Facilities and to examine all records and
reports prepared with respect to the Facilities.

 

4.6           Disbursements from
Construction Fund. The Trustee is authorized under the Ordinance to make
disbursements from the Construction Fund to pay Facilities Costs in accordance
with the terms and provisions of the Disbursing Agreement upon receipt of a
Requisition Certificate signed by an Authorized Representative of Mesaba,
approved by the Consulting Engineer and the Bank, with a copy to the County,
substantially similar to the form appended as Exhibit B.

 

11

 

Upon a
Mandatory Redemption of the Bonds by reason of failure of Mesaba to provide and
cause to remain in effect the Letter of Credit, the County shall require that
funds in the Construction Fund be transferred to the Bond Fund to be used as
provided in the Ordinance.

 

4.7           County Rights to
Stop or Alter Construction. If construction or installation of the
Facilities is not proceeding or has not been completed in substantial
accordance with the Plans and Specifications as approved by the County, or if
any variations adversely affect the County’s operation of the Airport, or
materially fail to conform to the County’s requirements for Airport facilities,
the County may suspend construction and, by written notice to Mesaba with a
copy to the Bank, demand that Mesaba make appropriate changes in the
construction or installation, and Mesaba shall forthwith undertake the changes
requested; provided, however, that if Mesaba shall have failed to commence and
make material progress in implementing the changes requested within 60 days of the
date of such demand, the County shall have the right to enter upon the premises
involved and effect such changes, charging Mesaba the costs and expenses
thereof. Mesaba agrees hereby to pay all such charges upon demand.

 

4.8           Completion of
Construction. When the Facilities, or any portion of them subject to the
same construction contract package, have been substantially completed and are
ready for occupancy by Mesaba, Mesaba shall deliver to the County a complete
set of as-built construction drawings. When all Facilities have been
substantially completed and are ready for occupancy by Mesaba, Mesaba shall
deliver the Completion Certificate executed by an Authorized Representative of
Mesaba and approved by the Consulting Engineer, together with any other certificate
or permit which may be required by the County or any federal, state or local
government or agency as a condition to the occupancy of the Facilities. Title
to all components of the Facilities, including all alterations, modifications
and enlargements thereto, acquired, constructed or installed by Mesaba shall
vest in the County.

 

4.9           Building Permits and
Performance Bond. Mesaba shall, at its sole cost and expense, procure or
cause to be procured, prior to and subsequent to construction as applicable,
any and all necessary building permits, other permits, licenses and other
authorizations required for the lawful and proper construction, use, occupancy,
operation and management of the Facilities.

 

Prior to
construction of any portion of the Facilities, Mesaba shall obtain or cause to
be obtained one of the following alternatives: (i) a performance bond and a
labor and material payment bond, naming the County and the Bank as co-payees,
issued by a surety company acceptable to the County, each of which shall be in
a penal sum equal to the amount of any general contract or of any subcontract
greater than $5,000 or (ii) a letter of credit or similar performance guaranty
satisfactory to the County.

 

ARTICLE V

MAINTENANCE, REPAIR AND OPERATION

 

Section 5.1             Maintenance.
Mesaba shall keep and maintain the Facilities in good condition and repair,
reasonable wear and tear excepted. Mesaba further shall keep the Facilities in
a sanitary and sightly condition, and shall provide all necessary janitor
services and maintenance with respect thereto. In the event Mesaba, in the
County’s judgment, fails to so maintain the Facilities, the County may
undertake such maintenance, and any County expenses and costs for providing
maintenance to the Facilities shall be reimbursed as part of the Special

 

12

 

Facilities Charges paid by Mesaba. Such expenses or costs shall be
determined by the County and paid by Mesaba in the manner set forth in Section
2.6.

 

5.2           Common
Access Avenues. The County shall keep the avenues of ingress and egress to
and from the Facilities, including common taxiways, roadways, walkways and
loading areas as free from obstruction as may be reasonably necessary for the
safe, convenient and proper use of the Facilities by Mesaba; provided, however,
that the County may from time to time close, temporarily or permanently, one or
more such avenues of ingress and egress for purposes of repair, reconstruction
or to permit new construction and, so long as the County shall have provided
reasonably equivalent alternate means of ingress and egress, Mesaba shall have
no claim as a result of such closure.

 

5.3           Utility
Services. Mesaba shall bring or cause to be brought to the Facilities by
arrangement with appropriate utility companies or suppliers, adequate
electricity, gas, water, sewerage and telephone facilities for Mesaba’s use and
shall be responsible for all necessary evacuation, construction, and all mains,
pipes, conduits, cables, wiring, sewers and other equipment required to so
provide such services in a manner adequate to supply Mesaba’s reasonable needs
therefor under conditions from time to time prevailing, and Mesaba, without
expense to the County, shall have the right to make connections thereto and
therewith. Without limiting the generality of the foregoing, in providing water
facilities Mesaba shall provide pipes and mains adequate in size and quality to
supply water in sufficient quantity for such sprinkler systems as have been or
may be required to be installed in the Facilities.

 

5.4           Insurance.
(a) Hazard Insurance. Mesaba will continuously insure the Facilities against
such risks as are customarily insured against by airports or airlines for
property of similar size and character, including, but not limited to loss or
damage by fire, with standard extended coverage, vandalism and malicious
mischief endorsements. Such insurance for loss or damage to the Facilities
shall be at all times in an amount equal to the full insurable value of the
Facilities. Such insurance policies shall name Mesaba and the Bank so long as
the Bank has an interest in the Facilities, and thereafter the County and the
Trustee, as insureds as their interests may appear; provided, however, that all
claims on such insurance may be adjusted by Mesaba only with the insurers,
subject to approval of the County, and all insurance proceeds for loss or
damage to the Facilities shall be payable to the Bank, so long as the Bank has
an interest in the Facilities, and thereafter to the Trustee.

 

(b)           Public
Liability Insurance. During the term of the Lease, Mesaba will continuously
carry public liability insurance with reference to the Facilities, in the
minimum amount of $2,000,000 for bodily injury or death per occurrence and in
the minimum amount of $2,000,000 for property damage per occurrence. The County
and Trustee shall be named additional insureds under such public liability
insurance policies.

 

(c)           Builder’s
Risk Insurance. During the term of construction of the Facilities, Mesaba will
continuously carry or cause to be carried builder’s risk insurance to the
extent of the full insurable value of the Facilities (including items of labor
and materials connected therewith whether in or adjacent to the structures
insured; materials in place, or to be used as part of the permanent
construction, including surplus materials, shanties, protective fences, bridges
or temporary structures; miscellaneous materials and supplies incident to the
work; and such scaffolding, stages, towers, forms and equipment as are not
owned or rented by the contractor,

 

13

 

the cost of which is included
in the Facilities Cost) against loss or damage by fire, with standard extended
coverage, vandalism and malicious mischief endorsements.

 

(d)           County
Reimbursement. Any expenses or costs incurred by the County in providing
insurance to the Facilities, which expenses or costs are not otherwise
reimbursed to the County by Mesaba shall be reimbursed as part of Special
Facilities Charges paid by Mesaba. Such expenses or costs shall be determined
by the County and paid by Mesaba in the manner set forth in Section 2.6 hereof.

 

(e)           Certificates
of Insurance. All insurance policies required under this Section shall be with
insurance companies qualified under the laws of the State of Michigan to assume
the risks undertaken and may be written with deductible amounts, co-insurance
features and exceptions and exclusions comparable to those in similar policies
carried by other airport operators or airlines engaged in activities similar in
size, character and other respects to those in which Mesaba and the County are
engaged, provided that public liability insurance policies shall be written
with a deductible clause not in excess of $100,000. Mesaba and the County shall
deposit with the Trustee, and Mesaba shall deposit with the County, a
certificate or certificates of the respective insurers in form satisfactory to
the Trustee attesting the fact that the required insurance is in force and
effect. Mesaba shall, upon request of the County, the Bank or the Trustee,
furnish copies to the County, the Bank and the Trustee of binders evidencing
the insurance required hereunder. Such insurance policies shall contain a
provision that they are noncancelable by the insurer except upon 30 days prior
written notice to Mesaba, the Trustee and the County. At least 30 days prior to
the expiration or cancellation of any such policy, Mesaba will furnish or cause
to be furnished to the Trustee and the County, as applicable, satisfactory
evidence that such policy has been renewed or replaced by another policy of a
type generally available by other airports or that such insurance is not
commercially available. In lieu of the separate insurance policies above
provided, such insurance may be in the form of a blanket insurance policy or
policies which cover not only the Facilities, but other properties owned or
leased by Mesaba, which policies may contain other named insureds and
comparable deductible amounts, co-insurance features and exceptions and
exclusions, to those outlined above.

 

5.5           Taxes.
During the term of the Lease, Mesaba agrees to pay:

 

(a)           All personal property
taxes and assessments and all license fees applicable to its activities, or
other charges which are legally levied or assessed on personal property which
is part of or situated on the Facilities;

 

(b)           Any tax or assessment
determined to be properly payable by Mesaba under Act 189 of the Public Acts of
1953, as amended (or similar or successor statute), for the lease or use of the
Facilities; and

 

(c)           All sales or use taxes
and assessments, license fees or other charges of any nature, without
exception, legally levied or assessed arising out of the activities conducted
on or the occupancy of the Facilities.

 

Mesaba shall pursue, at its
expense and with due diligence, any exception taken by it to any of the
aforementioned taxes or assessments, and the County shall in no event bear
responsibility for such taxes or assessments.

 

5.6           Right of Ingress and
Egress. Subject to the reasonable rules and regulations promulgated by the
County, Mesaba shall have the right and privilege of ingress to and egress

 

14

 

from the Facilities for its employees, agents, passengers, guests,
patrons and invitees, its or their suppliers of materials and furnishers of
service, its or their aircraft, equipment, vehicles, machinery and other
property, and except as herein otherwise specifically provided, no charges,
fees or tolls of any nature, direct or indirect, shall be imposed by the County
upon Mesaba, its employees, agents, passengers, guests, patrons and invitees,
its or their suppliers of materials and furnishers of service, for such right
of ingress and egress, or for the privilege of purchasing, selling or using any
materials or services purchased or otherwise obtained by Mesaba, or
transporting, loading, unloading or handling persons, property, cargo, or mail
in connection with Mesaba’s business or exercising any right or privilege granted
by the County hereunder. The provisions of this Section 5.6 are not intended to
change any of the charges, landing fees, fees and tolls presently assessed by
the County for such rights of ingress and egress, if any.

 

5.7           County Access to
Facilities. The County may enter upon the Facilities, or any portion of
them, although leased exclusively to Mesaba hereunder, at any time for any
purpose necessary, incidental to or connected with the performance in the
County’s reasonable discretion of its obligations hereunder, in the exercise of
its governmental functions, or in the event of any emergency.

 

5.8           Conduct of
Operations of the Facilities. In its use of the Facilities, Mesaba hereby
obligates itself to the following requirements and regulations:

 

(a)           Mesaba shall not
consent to any unlawful use of the Facilities, nor permit any such unlawful use
thereof.

 

(b)           All Mesaba employees
shall have, as required, proper and effective federal and state certificates or
licenses covering their individual and particular functions.

 

(c)           All local, federal and
state ordinances and laws will be observed, including the rules and regulations
of the federal and state aeronautical authorities and all local governing
authorities, including those of the County.

 

(d)           The operations of
Mesaba, its employees, invitees and those doing business with it, and the
manner in which the goods, services and facilities are supplied to the
Facilities, shall be conducted in an orderly and proper manner and according to
the standards established by the County and so as not to annoy, disturb or be
offensive to others at the Airport. The County shall have the right to complain
to Mesaba as to the demeanor, conduct and appearance of Mesaba’s employees,
invitees, and those doing business with it, whereupon Mesaba will take all
steps necessary to remove the cause of the complaint and bring its operations
and services into compliance with such standards.

 

(e)           All rules and
regulations of the State Fire Marshall shall be complied with by Mesaba in the
conduct of its operations at the Airport.

 

(f)            Unless there shall be
County approval, Mesaba shall not use or permit to be used all or any part of
the Facilities for the sale to its employees or to the public of any beverages,
food, candy, gum, ice cream or ice products, tobacco or tobacco products,
periodicals, books, drugs, toys, games, souvenirs, jewelry, novelties,
clothing, flowers, sporting or photographic goods or toilet articles, or other
like merchandise, or for furnishing for a consideration, theatre tickets, shoe
shines, pressing and cleaning (except of its employees’ uniforms), developing
and printing of photographs and films, checked baggage services, or for the
display of advertising of third parties, or for the installation

 

15

 

of any
coin-operated machines or devices; except sales to employees on a non-profit
basis in areas from which the general public is barred, which shall be
permitted.

 

(g)           In the event that
Mesaba fails to perform, for a period of 30 days after written notice from the
County to do so, any obligation required by this Article to be performed by
Mesaba at Mesaba’s cost, the County may, but shall not be obligated to, enter
upon the premises involved and perform such obligation of Mesaba, charging
Mesaba the reasonable cost and expense thereof, and Mesaba agrees to pay the
County such charge in addition to the Special Facilities Charges; provided,
however, that if Mesaba’s failure to perform any such obligation adversely
affects, or endangers the health or safety of the public or of employees of the
County, and if the County so states in its notice to Mesaba, the County may,
but shall not be obligated to, perform such obligation of Mesaba at any time
after giving such notice and without awaiting the expiration of 30 days, and
charge to Mesaba, and Mesaba shall pay, as aforesaid, the reasonable cost and
expense of such performance. If the County shall perform any of Mesaba’s
obligations under the Lease in accordance with the provisions of this section,
the County shall not be liable to Mesaba for any loss of revenue to Mesaba
resulting from such performance.

 

ARTICLE VI

DAMAGE OR CONDEMNATION OF FACILITIES

 

6.1           Repair and
Replacement after Damage or Destruction. Notwithstanding the provisions as
to maintenance, repair and operation of the Facilities by Mesaba, if the
Facilities shall be partially damaged or totally destroyed by fire, the
elements, the public enemy or other casualty covered by fire and extended
coverage insurance, the Facilities damaged or destroyed shall be repaired or
replaced with due diligence by Mesaba; provided, however, that in making such
repair or replacement, Mesaba may make changes in the Plans and Specifications
of the portion of the Facilities to be repaired or replaced, so long as the
condition, character and value of the Facilities after such repair or
replacement has been made is the same or greater than the value of the
Facilities as they existed immediately prior to the damage and, provided,
further, that any change from the original Plans and Specifications shall be
subject to County approval, in the same manner in which the original Plans and
Specifications were submitted and considered for approval.

 

In the making
of the repair and replacement herein contemplated, the proceeds of insurance
covering the Facilities shall be paid to the Bank, so long as the Bank has an
interest in the Facilities, and thereafter to the Trustee, and made available
to Mesaba; however, Mesaba’s obligation to repair or restore shall not be
limited to the amount of such proceeds made available to it, and if the
proceeds of such insurance are insufficient to repair or replace the
Facilities, Mesaba shall nevertheless make such repair or replacement and shall
pay any deficiency in insurance proceeds. If the proceeds of insurance are in
excess of the amount necessary to repair or replace the damaged Facilities, the
excess shall be applied to the redemption of Bonds.

 

Following any
damage or destruction to the Facilities or any portion of them and before any
permitted redemption of the Bonds, Mesaba’s obligation to pay Special
Facilities Charges shall continue unabated.

 

16

 

6.2           Election to Prepay
Special Facilities Charges. As an alternative to repairing or replacing the
Facilities damaged or destroyed and required to be repaired or replaced by
Mesaba, Mesaba may, within 90 days of any damage or destruction, notify the
Trustee and the County in writing of its election to prepay the Special Facilities
Charges as provided in the BOND FORM APPENDIX attached to the Ordinance under
the heading Extraordinary Optional Redemption. Such election to prepay all or
any part of the Special Facilities Charges is subject to County approval, which
shall not be unreasonably withheld, releasing Mesaba from its obligation to
repair or replace the Facilities.

 

6.3           Condemnation.
Upon the acquisition by condemnation or the exercise of the power of eminent
domain under any federal or state statute by the United States, the State of
Michigan, or any federal or state agency or any other person vested with such
power, of a temporary or permanent interest in all or any part of the Airport,
including without limitation, the Facilities, there shall be no diminution or
postponement of the Special Facilities Charges; however any net proceeds
received from the settlement of, or award made in, any condemnation or eminent
domain proceedings shall be paid to the Bank, so long as the Bank has an
interest in the Facilities, and thereafter to the Trustee, (i) to be applied
for partial redemption of the Bonds and thereby may result in a reduction of
Special Facilities Charges or (ii) if there has been a draw on the Letter of
Credit or Alternate Letter of Credit to fund an Extraordinary Optional
Redemption of the Series 1990 Bonds, to the Bank to the extent of such draw.

 

The County and
Mesaba each shall have the right to appear and file a claim for damages, to the
extent of each’s respective interest, in the condemnation or eminent domain
proceeding, to participate in any and all hearings, trials and appeals therein;
provided, however that all costs and expenses for such proceedings shall be
paid by Mesaba. The County and Mesaba shall cooperate with the other in the
conduct and defense of any condemnation or eminent domain proceeding, and
neither the County nor Mesaba shall settle any such proceeding without the
consent of the other. This section shall not be construed to limit the County’s
power of eminent domain.

 

ARTICLE VII

MESABA REPRESENTATIONS, WARRANTIES AND
COVENANTS

 

7.1           Mesaba’s
Representations. Mesaba makes the following representations and warranties
as of the effective date hereof for the benefit and reliance of the County and
the Trustee:

 

(a)           Mesaba is a corporation
duly organized, existing and in good standing under the laws of the State of
Minnesota and is duly qualified to do business and is in good standing in the
State of Michigan and in every state in which its business requires
qualification in such state.

 

(b)           The execution and
delivery of the Lease, the Ground Lease, the consummation of the transactions
contemplated thereby and the fulfillment of and compliance with the terms and
conditions of the Lease and the Ground Lease are within its corporate powers,
have been duly authorized and are not in contravention of law or the terms of
its Articles of Incorporation or Bylaws and will not violate any provision of
law, any order of any court or other agency of government, or any court order,
indenture, agreement or other instrument or restriction to which Mesaba is now
a party or by which it or any of its properties or assets is bound, or be in
conflict with, result in a breach of or

 

17

 

constitute a
default (with due notice or the passage of time or both) under any such
indenture, agreement, or other instrument or restriction.

 

(c)           The Lease and the
Ground Lease are valid and binding obligations of Mesaba enforceable in
accordance with their terms.

 

(d)           No binding contracts or
commitments payable from the Construction Fund were entered into by Mesaba
relative to the acquisition, design, construction, furnishing and equipping of
the Facilities prior to the date of the Notice of Intent Resolution.

 

(e)           Mesaba intends to
occupy the Facilities or cause the Facilities to be occupied and to operate
them or cause them to be operated at all times during the term of the Lease for
Facilities Purposes and does not know of any reason why the Facilities will not
be so used by it in the absence of supervening circumstances not now
anticipated by it or beyond its control.

 

(f)            The Facilities will be
constructed in such manner as to conform with all applicable zoning, planning,
building and other regulations of governmental authorities having jurisdiction
of the Facilities, all necessary utilities are or will be available to the
Facilities, and Mesaba has obtained or will obtain all requisite zoning,
planning, building, environmental and other permits necessary for the operation
of the Facilities for Facilities Purposes, and additional permits necessary for
the use of the Facilities are expected to be obtained upon application at the
appropriate times.

 

(g)           The Facilities are
located entirely within the jurisdictional. or territorial boundaries of the
County.

 

(h)           No litigation or
governmental proceeding is pending or, to the knowledge of Mesaba, threatened
against Mesaba which could have a material adverse effect on its financial
condition or business, or its power to borrow money or pay the Special
Facilities Charges.

 

(i)            All of Mesaba’s
representations, covenants and warranties contained in Mesaba’s Non-Arbitrage
and Tax Compliance Certificate dated the date of delivery of the Series 1990
Bonds, are true, accurate and complete, and said Non-Arbitrage and Tax
Compliance Certificate is incorporated herein by reference as if its provisions
were set forth in full. Mesaba covenants to take no action (or refrain from
taking any action) which would cause a breach of any of the provisions of said
Non-Arbitrage and Tax Compliance Certificate.

 

7.2           Compliance
with Laws. Mesaba shall, at no expense to the County, promptly comply or
cause compliance with all legal requirements of duly constituted public
authorities which may be applicable to the Facilities or to the repair and
alteration thereof, or to the use or manner of use of the Facilities.
Notwithstanding the foregoing, Mesaba may exercise its rights to contest the
legality of any such legal requirement as applied to the Facilities. The
foregoing shall not constitute a waiver by the County of any civil or criminal
remedies otherwise available to the County against Mesaba.

 

7.3           Mesaba Maintenance
of Existence. Mesaba agrees that throughout the term of this Lease it shall
maintain its corporate existence and shall not merge or consolidate with any
other corporation and shall not transfer or convey all or substantially all of
its property, assets and licenses, except as otherwise provided in the
Reimbursement Agreement.

 

18

 

Mesaba
warrants (i) that it is and throughout the term hereof it will continue to be
qualified to do business in the State of Michigan, and (ii) that if it elects
to consolidate with, merge into or transfer all or substantially all of its assets
to another corporation in accordance with this Section, and such other
corporation is not organized under the laws of the State of Michigan, Mesaba,
as a condition of such consolidation, merger or transfer of assets, shall cause
such other corporation to qualify to do business as a foreign corporation in
the State of Michigan and to remain so qualified continuously during the term
hereof.

 

7.4           General Limitations
with Respect to Non-Impairment of Tax-Exempt Status of the Bonds.
Notwithstanding any other provisions of this Lease or any rights of Mesaba
under the Ground Lease, Mesaba shall not take or permit to be taken by its
agents or assigns any action which, or fail to take any reasonable action the
omission of which, would

 

(i)                                     impair
the exclusion of interest on the Bonds from gross income for Federal income tax
purposes; or

 

(ii)           affect the validity of
the Bonds under Act 94 or Act 327; or

 

(iii)          materially
alter the scope, character, value, operation or utility of the Facilities.

 

The County or the Trustee, upon
notification of action to be taken by Mesaba or prior to taking any action
requested by Mesaba under the Lease, may require, at the expense of Mesaba, an
opinion of Bond Counsel or the Consulting Engineer in writing with respect to
compliance with the foregoing general limitations.

 

7.5           County
Fees and Expenses. Mesaba shall pay all issuance costs and other
out-of-pocket costs and expenses of the County incidental to the performance of
its obligations under the Ordinance and the Lease and with respect to its
authorization, sale and delivery of the Bonds, including bond counsel fees, or
other fees and expenses incurred by the County in enforcing the provisions of
the Lease or the Ordinance.

 

7.6           Trustee
Fees and Expenses. Mesaba shall pay reasonable compensation to the Trustee
for its services as Trustee in connection with the Bonds, the duties and
services of the Trustee being set out in the Ordinance, and Mesaba will pay the
Trustee, in addition, all reasonable counsel fees, taxes and other expenses
necessarily incurred in performing its duties. Mesaba shall also pay reasonable
compensation to any alternate paying agent or agents for the Bonds. All such
payments shall be made as statements are rendered by the Trustee and shall be
paid directly by Mesaba, except to the extent expenses of the Trustee incurred
in connection with the issuance of the Bonds are paid from proceeds of sale of
the Bonds.

 

7.7           Mesaba’s Obligations
Unconditional. The obligation of Mesaba to pay Special Facilities Charges and
to perform its other agreements and obligations hereunder shall be absolute and
unconditional and shall not be subject to any diminution by right of set-off,
counterclaim, recoupment or otherwise. During the term hereof, Mesaba (i) shall
not suspend or discontinue its payment of Special Facilities Charges, (ii)
shall perform and observe all of its other obligations contained herein, in the
Ground Lease and (iii) except as explicitly permitted herein, shall not
terminate the Lease or the Ground Lease, respectively, for any cause including,
without limiting the generality of the foregoing, defect in title to all or any
part of the Facilities, failure to complete all or any part of the Facilities,
any acts or circumstances that may constitute failure of consideration,
eviction or constructive eviction, destruction or damage to or condemnation of
all or any part of the Facilities, commercial frustration of purpose, any
change

 

19

 

in the tax or other law by the United States of America or the State of
Michigan or any political subdivision of either, or any failure of the County
to perform and observe any obligation or condition arising out of or connected
with the Lease.

 

7.8           Mesaba
Bound by Ordinance. The Ordinance has been submitted to Mesaba for
examination, and Mesaba, by execution of the Lease, acknowledges that the
Special Facilities Charges are intended to produce Net Revenues sufficient to
pay principal of, Redemption Price and interest on the Bonds. Mesaba consents
to the pledge by the County to the Trustee of the Net Revenues and certain
funds and accounts specified in the Ordinance as security for the Bonds. Mesaba
acknowledges and agrees that it has participated in the drafting of the
Ordinance, that it has approved the Ordinance, that it is bound by and shall
have the rights set forth by the terms and conditions thereof and covenants and
agrees to perform all obligations required of it pursuant to the terms of the
Ordinance. The County acknowledges and agrees to follow Mesaba’s directions
with respect to Bond redemptions and other matters as provided in, and in
accordance with the terms and conditions of, the Ordinance.

 

7.9           Investments;
Arbitrage Covenant. Moneys held as part of the Bond Fund or the Construction
Fund shall be invested, reinvested or applied by the Trustee in accordance with
and subject to the conditions in the Ordinance. To the extent the County or
Mesaba have control of such funds, Mesaba and the County shall make no use of
funds deemed to be proceeds of the Bonds (“Bond proceeds”), or any funds which
may be deemed to be Bond proceeds pursuant to Section 148 of the Code and the
applicable regulations thereunder, which could cause the Bonds to be “arbitrage
bonds” within the meaning of such Section and such regulations, and the County
and Mesaba shall comply with the requirements of such Section and such
regulations throughout the term of the Bonds. Mesaba shall execute and be bound
by the terms of a Non-Arbitrage and Tax Compliance Certificate in form and
substance satisfactory to Bond Counsel to be delivered as a condition of the
closing on the Bonds.

 

7.10         Non-Discrimination.
Mesaba, for itself, its personal representatives, successors in interest, and
assigns, covenants that (1) no person, on the grounds of race, creed, color,
national origin, or sex, shall be excluded from participation in, denied the
benefits of, or be otherwise subjected to discrimination in the use of the
Facilities; (2) that in the construction of the Facilities and the furnishing
of services on the Facilities, no person, on the grounds of race, creed, color,
national origin, or sex, shall be excluded from participation in, denied the
benefits of, or otherwise be subjected to discrimination; (3) that Mesaba shall
use the Facilities in compliance with all other requirements imposed by or
pursuant to Title 49, Code of Federal Regulations, Department of
Transportation, Subtitle A, Office of the Secretary, Part 21,
Non-Discrimination in Federally-Assisted Programs of the Department of
Transportation-Effectuation of Title VI of the Civil Rights Act of 1964, and as
said Regulations may be amended.

 

Mesaba
covenants that it will undertake and maintain an affirmative action program, as
required by 14 CFR, Part 152, Subpart E, to insure that no person shall, on the
grounds of race, creed, color, sex or national origin, be excluded from
participating in any employment activities covered in 14 CFR, Part 152, Subpart
E. Mesaba assures that no person shall be excluded on these grounds from
participating in, or receiving the services or benefits of any such program or
activity.

 

Mesaba
covenants that it will require, as part of any contract for construction or
installation of the Facilities, whether as a prime contract or a subcontract,
and as part of any lease

 

20

 

or agreement for any rights,
privileges, services or materials with respect to the Facilities, entered by
Mesaba, that any other party to such contract, lease or agreement undertakes
affirmative action programs, as required by 14 CFR, Part 152, Subpart E.

 

In accordance
with 1976 Public Act of Michigan No. 453, the parties hereto covenant not to
discriminate against an employee or applicant for employment with respect to
hire, tenure, terms, conditions, or privileges of employment, or a matter
directly or indirectly related to employment because of race, color, religion,
national origin, age, sex, height, weight, or marital status, and to require a
similar covenant on the part of any sublessee hereunder and any subcontractor
employed in the performance of the lease.

 

The parties
hereto also agree to carry out and be subject to the provisions the County’s
non-discrimination and affirmative action programs for Wayne County contracts,
a copy of which has been provided to Mesaba and which is made a part hereof.

 

7.11         Letter of Credit;
Alternate Letter of Credit. Mesaba shall cause the Letter of Credit to be
delivered to the Trustee on or before the Effective Date. The Letter of Credit
shall (a) be in an amount not less than the principal amount of the Bonds
outstanding from time to time, plus an amount equal to any premium (excluding
the Conditional Supplemental Premium) which may be payable upon prior
redemption of the Bonds, plus 195 days’ interest on such outstanding Bonds; (b)
provide for payment within one (1) Business Day in immediately available funds
to the Trustee upon receipt of the Trustee’s request, in accordance with the
terms of the Letter of Credit, for payment of principal, premium, if any
(excluding the Conditional Supplemental Premium), and interest on the Bonds
then coming due and payable pursuant to the Ordinance; (c) provide for multiple
drawings and (d) provide an expiration date no earlier than the earliest of (i)
the date on which the Bank honors the last drawing available to be made
thereunder, (ii) payment of all amounts available for drawing under the Letter
of Credit, (iii) the date on which the Bonds are discharged, redeemed or paid
in full; (iv) the date on which the Bank is notified in writing by the Trustee
that an Alternate Letter of Credit has been substituted for the Letter of
Credit and has become effective; (v) the 30th day following the earlier of (A)
the date on which any Interest Drawing (as defined in the Letter of Credit) is
deemed not reinstated, or (B) the Trustee’s actual receipt of notice from the
Bank that an Event of Default has occurred under the Reimbursement Agreement
and directing the Trustee to redeem the Bonds; and (vi) June 1, 1995, or if not
a Business Day, the first Business Day thereafter. Mesaba may, at any time,
provide an Alternate Letter of Credit. The Trustee shall be required to give
written notice of acceptance of the Alternate Letter of Credit to all holders
of Bonds and to the Bank within thirty (30) days following the acceptance of
the Alternate Letter of Credit. After acceptance of the Alternate Letter of
Credit the original Letter of Credit shall be returned to its issuer.

 

ARTICLE VIII

COUNTY FINDINGS AND REPRESENTATIONS

 

8.1           County Findings and
Representations. The County has found that the Facilities and the financing
thereof through issuance of the Bonds will promote the public purposes of Act
327 and Act 94.

 

8.2           County Authority to
Issue Bonds. Based upon the advice of Bond Counsel, the County has the
necessary power under Act 327 and Act 94, and has duly taken all action on its
part required to authorize, execute and deliver the Lease, and the Ground Lease
and to issue the

 

21

 

Bonds and that the execution and performance by the County of the
Lease, and the Ground Lease will not violate or conflict with any instrument by
which the County or its properties are bound.

 

ARTICLE IX

DEFAULT

 

9.1           Events
of Default. The term “Event of Default” shall mean, whenever used in the
Lease, any one or more of the following events:

 

(a)           Failure by Mesaba to
pay any Special Facilities Charges in the amounts and at the times provided in
the Lease, but, with respect to that portion representing payments of principal
of or premium (excluding Conditional Supplemental Premium) on the Series 1990
Bonds, whether by maturity or prior redemption, or interest on the Series 1990
Bonds, if and only if the Bank has, after demand under the Letter of Credit,
failed to pay the amount of such Special Facilities Charges as and when due;

 

(b)           Failure by Mesaba to
observe and perform any other obligations in this Lease on its part to be
observed or performed for a period of 30 days after written notice specifying
such failure and requesting that it be remedied, given to Mesaba by the County,
the Bank or the Trustee; provided, however, that if such Default shall be such
that it cannot be corrected within such period, it shall not constitute an
Event of Default if the Default is correctable without material adverse effect
on the Facilities and if corrective action is instituted by Mesaba within such
period and is diligently pursued until the Default is corrected.

 

(c)           Any representation or
warranty made by Mesaba in any document delivered by Mesaba to the initial
purchasers, the Trustee, the Bank or the County in connection with the
issuance, sale and delivery of the Bonds is untrue in any material adverse
respect.

 

(d)           The occurrence of an
Event of Default under the Ordinance.

 

(e)           The occurrence of an
Act of Bankruptcy;

 

(f)            If Mesaba shall be
prevented for a period of 30 days (after exhausting or abandoning all appeals)
by any action of any governmental authority, board, agency or officer having
jurisdiction from conducting air transportation at the Airport unless it is so
prevented from conducting air transportation by reason of the United States or
any agency thereof acting directly or indirectly, taking possession of and
operating, in whole or in substantial part, the Facilities, or the operation of
Mesaba’s aircraft to and from the Airport; or

 

(g)           The occurrence of an
Event of Default under the Ground Lease between Mesaba and the County.

 

9.2           Waiver
of Default. No waiver of default by the County of any of the terms,
covenants or conditions hereof to be performed, kept and observed by Mesaba
shall be construed to be or act as a waiver of any subsequent default of any of
the terms, covenants and conditions herein contained to be performed, kept and
observed by Mesaba. The acceptance of Special Facilities Charges by the Trustee
for the account of County for any period or periods after a default of any of
the terms, covenants and conditions herein contained to be performed, kept and

 

22

 

observed by Mesaba, shall not be deemed a waiver of any right on the
part of the County to exercise any remedy available to it after the occurrence
of an Event of Default.

 

9.3           County Performance
of Mesaba’s Obligations. In the event that Mesaba fails to perform, for a
period of 30 days after written notice from County to do so, any of its
nonpecuniary obligations or covenants required under this Lease, the County
may, but shall not be obligated to, enter upon the premises involved and perform
such obligation of Mesaba, charging Mesaba the reasonable cost and expense
thereof and Mesaba agrees to pay the County such charge in addition to any
other amounts payable to the County hereunder; provided, however, that if
Mesaba’s failure to perform any such obligation adversely affects, or endangers
the health or safety of the public or of employees of the County, and if the
County so states in its notice to Mesaba, the County may, but shall not be
obligated to, perform such obligation of Mesaba at any time after the giving of
such notice and without awaiting the expiration of said 30 day period, and
charge to Mesaba, and Mesaba shall pay, the reasonable cost and expense of such
performance. If the County shall perform any of Mesaba’s obligations in accordance
with the provisions of this section, the County shall not be liable to Mesaba
for any loss or damage to or claim against Mesaba resulting from such
performance.

 

9.4           Remedies upon Event
of Default. Whenever any Event of Default shall have occurred and be
continuing, and subject to the Bank’s right to cure as Mortgagee under Section
12.2(a) of this Lease the County may take any one or more of the following
remedial steps:

 

(a)           To the extent of any
insufficiency of any drawings under the Letter of Credit or in the event the
Bank shall have wrongfully dishonored a draft on the Letter of Credit or in the
event the Letter of Credit is for any reason unavailable, to institute any
actions or proceedings at law or in equity for the collection of Special Facilities
Charges or other sums due and unpaid under the Lease, to prosecute any such
action or proceeding to judgment or final decree, and to enforce any such
judgment or final decree and collect in the manner provided by law any moneys
adjudged or decreed to be payable;

 

(b)           Re-enter and take
possession of all or any part of the Facilities without terminating the Lease
and use its Best Efforts to sublease the Facilities or any part of the
Facilities for the account of Mesaba, holding Mesaba liable for the difference
between the amounts payable by such sublessee and the Special Facilities
Charges and other amounts payable by Mesaba hereunder including, but not
limited to, all costs and expenses incurred by the County in re-entering,
taking possession, maintaining and subleasing the Facilities or any portion of
them;

 

(c)           Terminate the Lease,
exclude Mesaba from possession of the Facilities or any portion of them and use
its Beat Efforts to lease or assign the Facilities or any portion of them to
another for the account of Mesaba, holding Mesaba liable for all Special
Facilities Charges due up to the effective date of such termination;

 

(d)           Have access to and
inspect, examine and make copies of the books and records and any and all
accounts, data and income tax and other tax returns of Mesaba only, however,
insofar as they relate to the Facilities or the Event of Default and the
remedying thereof;

 

(e)           As the County deems
necessary from time to time, (but shall not be required to) remodel, improve
and repair the Facilities in order to better sublease or relet

 

23

 

the Facilities
or any portion of them, and all costs and expenses thereof shall become a debt
due by Mesaba to the County.

 

The County may
employ attorneys, consultants and agents, including the Trustee, in exercising
its Best Efforts. In exercising its Best Efforts, the County shall endeavor to
keep the Facilities fully leased and to provide Net Revenues sufficient for
payment of the Bonds.

 

In exercising
any of its remedies hereunder, the County shall make every reasonable attempt
to cooperate with the Trustee.

 

9.5           Payment of Attorneys’
Fees and Other Expenses.  In the
event Mesaba should default under any of the provisions of the Lease and the
County or the Trustee or both should employ attorneys, consultants or agents or
incur other expenses for the collection of Special Facilities Charges or for
the enforcement of performance or observance of any obligation or agreement
under the Lease, Mesaba shall upon demand therefor, pay to the County or the
Trustee or both, as the case may be, the reasonable fees of such attorneys,
consultants and agents and such other reasonable expenses so incurred.

 

9.6           No
Remedy Exclusive. No remedy conferred upon or reserved to the County under
the Lease is intended to be exclusive of any other available remedy or
remedies, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given under the Lease or now or hereafter
existing at law or in equity or by statute.

 

9.7           Limitation
on Waivers. No delay or omission to exercise any right or power occurring
upon any default or Event of Default shall impair any such right or power or
shall be construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient. In order
to entitle the County to exercise any remedy reserved to it in this Article IX,
it shall not be necessary to give any notice other than such notice as may be herein
expressly required under the Lease.

 

The County
shall have no power to waive or release Mesaba from any Event of Default or the
performance or observance of any obligation or condition of Mesaba under the
Lease without prior written consent of the Trustee and the Bank, but shall do
so if requested by the Trustee, provided that such action will not, in the
opinion of Bond Counsel, result in any financial liability of the County or of
the Airport.

 

ARTICLE X

INDEMNIFICATION

 

10.1         Indemnification of
Trustee. Mesaba shall indemnify and hold harmless the Trustee against any
loss, liability or expense incurred without negligence or bad faith on the part
of the Trustee, its employees, agents or representatives, arising out of or in
connection with the acceptance and performance of its duties as Trustee under
the Ordinance, including the costs and expenses of defense against any such
claim of liability.

 

10.2         Indemnification of
County. Mesaba shall indemnify and hold the County, its officials,
employees, agents or representatives, harmless of, from and against, any and
all claims, damages, demands, expenses, liabilities and taxes (of any character
or nature whatsoever regardless of by whom imposed), and losses of every
conceivable kind, character and nature whatsoever (including, but not limited
to, claims for loss or damage to any property or injury to or death of any
person) asserted by or on behalf of any person, firm, corporation or
governmental

 

24

 

authority arising out of, resulting from, or in any way connected with
(i) the Facilities, or the condition, occupancy, use, possession, conduct or
management of, or any work done in or about, the Facilities, or from the
planning, design, acquisition or construction of the Facilities or any part
thereof, or from the leasing or subletting of any part thereof, (ii) any act or
failure to act, other than willful misconduct, by any other person, firm,
corporation or governmental authority in connection with the offering, sale or
delivery of the Bonds and (iii) any act or failure to act, other than willful
misconduct, or any covenant, undertaking, warranty or representation, by the
County in connection with, or in the performance of, any obligation related to
the issuance, sale and delivery of the Bonds or under the Lease or the
Ordinance. Mesaba also covenants and agrees, at its expense to pay and to
indemnify and save the County, its officials, employees, agents or
representatives, harmless of, from and against, all costs, reasonable counsel
fees, expenses and liabilities incurred in any action or proceeding brought by
reason of any such claim or demand. In the event that any action or proceeding
is brought against the County by reason of any such claim or demand, Mesaba upon
notice from the County, covenants to resist and defend such action or
proceeding on behalf of the County.

 

Mesaba also
covenants and agrees, at its expense, to pay, and to indemnify the County and
the Trustee from and against, all costs, expenses and charges, including
reasonable fees of attorneys, consultants and agents, lawfully incurred in
obtaining possession of the Facilities upon an Event of Default by Mesaba, or
in enforcing any covenant or agreement of Mesaba contained in the Lease.

 

ARTICLE XI

ACTIONS AFFECTING TITLE AND POSSESSION

 

11.1         Quiet
Enjoyment. The County agrees that, on payment of the Special Facilities
Charges and performance of the covenants and agreements under the Lease, Mesaba
shall peaceably have and enjoy the Facilities, subject to public use of the
public area and use by parties authorized by the County of common area.

 

11.2         Title to Equipment and
Improvements. Except as provided below, title to any equipment,
improvements, and facilities, and any additions thereto, irrespective of
whether the same would otherwise become a fixture under Michigan law (including
without limitation all buildings, hangars, structures, storage tanks, pipes,
pumps, wires, poles, machinery and air conditioning equipment,) constructed or
installed by Mesaba upon or as a part of the Facilities or upon other Airport
property, shall become and remain the property of the County.

 

Mesaba may
from time to time and in its sole discretion and at its own expense install
additional equipment in the Facilities. All equipment so installed (other than
that which is a substitution or replacement of the personal property encumbered
by the Ordinance) by Mesaba shall remain the sole property of Mesaba (or any
third party from whom it may be leased or who shall have provided such
equipment under agreement with Mesaba reserving title to such third party) and
neither the County nor the Trustee shall have an interest in such equipment.
Such equipment may be removed or modified at any time. In the event such
removal or modification causes damage to the Facilities, Mesaba shall restore
or repair such damage at its sole expense. If equipment is ever installed in
the Facilities by Mesaba or a third party which cannot be readily distinguished
from equipment then comprising part of the Facilities by reference to Exhibit A
hereto and the Plans and Specifications then in such event such items of
equipment shall be and remain identified as such by tags or other symbols
affixed thereto or otherwise clearly associated

 

25

 

therewith, and any such items
of equipment not so identified shall be presumed to be part of the Facilities,
but such presumption shall not be conclusive.

 

11.3         Surrender of
Possession. Upon the expiration or earlier termination of the Lease or any
renewal hereof, Mesaba shall forthwith surrender possession of the Facilities
in as good condition as when acquired or constructed, reasonable wear and tear,
damage by flood, fire, earthquake, other casualty, acts of God or the public
enemy, excepted.

 

11.4         Mineral
Rights. All water, gas, oil and mineral rights in and under the soil are
expressly reserved to the County.

 

ARTICLE XII

ASSIGNMENT AND SUBLETTING;

RIGHTS OF LEASEHOLD MORTGAGEE

 

12.1         Sale Assignment
Transfer, or Sublease. Mesaba shall not sell, assign, or transfer this
Lease, or sublet the Facilities or any part thereof without the prior written
consent of the County; provided, however, such consent shall not be withheld
for any assignee of Mesaba under the Ground Lease and consent will not be
withheld if the purchaser, assignee, transferee or sublessee be the parent or a
subsidiary of Mesaba or closely allied to Mesaba by merger, consolidation or
amalgamation. Mesaba shall have the right, without County approval, to mortgage
and assign all of its rights under this Lease to a lending institution (the “Mortgagee”)
as security for the financing necessary to carry out the construction of the
Facilities (herein the “Leasehold Mortgage”) and provided further, that in such
case Mesaba, as seller, assignor, transferor or sublessor, shall continue to be
guarantor for the good and faithful performance of all terms, conditions and
covenants contained herein; and the Mortgagee shall have the right to sell
Mesaba’s leasehold interest in, to and under this Lease to a purchaser at a
foreclosure sale of Mesaba’s interest under this Lease pursuant to the
Leasehold Mortgage; and Mesaba shall have the right to assign Mesaba’s rights
under this Lease to the Mortgagee in lieu of such foreclosure; and Mesaba or
the Mortgagee shall have the right to assign Mesaba’s rights under this Lease
to a third party in connection with or in lieu of a foreclosure. Upon
acquisition by the Mortgagee of Mesaba’s interests under this Lease by
foreclosure or deed in lieu of foreclosure, and upon acquisition by a purchaser
from the Mortgagee of Mesaba’s interests in this Lease, the County agrees to
recognize the Mortgagee or such purchaser, as the case may be, as the lessee
under this Lease. Mortgagee and/or such purchaser, as successor to Mesaba’s
interest in this Lease, shall not be personally liable for any of the
obligations of Mesaba under this Lease accruing prior to the date of such party
becoming the lessee hereunder. In any event, the Mortgagee or any such purchaser
shall use the Facilities solely for airport transportation purposes.

 

12.2         Rights
of Mortgagee. Mesaba may encumber as collateral or security its leasehold
estate in, to and under this Lease by mortgage or conditional assignment of
this Lease as security, providing the same shall provide for payment of the
indebtedness thereby secured not later than the date of expiration of the
primary term of this Lease. In such event, the Mortgagee may deliver to the
County written notice showing the amount of the obligation secured by such
Leasehold Mortgage, the date of the maturity of the indebtedness thereby
secured, and the name and post office address of such Mortgagee. The Bank shall
not be required to give the County notice as the County hereby approves the Bank
as Mortgagee and the terms and conditions of the mortgage and assignment of
rents executed by Mesaba to the Bank to secure Mesaba’s reimbursement
obligations with respect to the Letter of Credit. In the event notice shall be
given,

 

26

 

then and thereafter, the County shall serve on such Mortgagee by
certified mail, at the address given or any address thereafter given, a copy of
every notice served by the County upon Mesaba in the event or nonperformance or
default of any term, condition or covenant hereof. During the existence of such
Leasehold Mortgage, the following rights and benefits under this Lease shall
inure to, and be enforceable by, any such Mortgagee, provided, however, the
following rights shall not be enforceable in the event of wrongful dishonor by
the Bank of a draw upon the Letter of Credit or Alternate Letter of Credit:

 

(a)                                  Right
to Cure. In the event of nonperformance or default of any term, condition
or covenant of this Lease to be kept and performed by Mesaba during the
existence of any such Leasehold Mortgage, the Mortgagee shall have the right,
within thirty (30) days after the expiration of the time limit prescribed in
the County’s nonperformance or default notice to Mesaba, to perform and comply
with all the terms, conditions and covenants of this Lease to be kept and
performed by Mesaba, and to make all payments required of Mesaba by this Lease
and by so doing to cure and remove any such nonperformance or default as if the
same had been done and performed by Mesaba. If the nature of the nonperformance
or default is such that it cannot be cured within thirty (30) days after the
expiration of the time limit prescribed in the nonperformance or default notice
to Mesaba, the Mortgagee shall be deemed to have cured such nonperformance or
default if the Mortgagee has commenced performance and thereafter diligently
prosecutes same to completion, or diligently pursues foreclosure proceedings or
the obtaining of a deed in lieu of foreclosure with respect to Mesaba’s
interest in the Facilities. The County will permit the Mortgagee to enter upon
the Facilities and will accept performance by the Mortgagee of any covenant,
agreement or obligation of Mesaba with the same effect as though performed by
Mesaba in order to permit any specific default to be cured by the Mortgagee and
will not exercise any remedies specified in Section 9.4 of this Lease until the
period for cure made available by the County to the Mortgagee hereunder shall
have expired without cure having been effected by the Mortgagee.

 

(b)                                 Rights
on Termination of Mesaba’s Interest. If Mesaba’s interests under this Lease
shall be terminated as a result of the rejection or disaffirmance of this Lease
pursuant to bankruptcy law or other law affecting creditor’s rights, or if this
Lease shall be terminated on account of a default which is not capable of being
cured by the Mortgagee, the County hereby irrevocably agrees to permit the
assumption by the Mortgagee, or any party designated by the Mortgagee, of
Mesaba’s interest under this Lease, for the remainder of the term of this
Lease, effective as of the date of such rejection, disaffirmance, or
termination, with the same force and effect and as if Mesaba’s interests under
this Lease had not been terminated, provided that the Mortgagee or such
designee shall provide for use of the Facilities solely for airport
transportation purposes. In order for such an assumption to be effective, the
Mortgagee must so indicate in writing to the County within 60 days after the
effective date of such rejection, disaffirmance, or termination, as the case
may be, and the Mortgagee shall

 

27

 

have cured all
defaults under this Lease which can be cured by the payment of money and shall
have paid to the County all rent, fees and other charges which would, at the
time of such assumption, be due and payable by Mesaba under this Lease but for
such rejection, disaffirmance or termination. If the Mortgagee (or its
designee) elects to assume this Lease under this paragraph (b) then, as of the
date of such assumption, the lien of the Leasehold Mortgage shall attach to the
interests of the lessee under this Lease if the lessee is someone other than
the Mortgagee. The attaching of the lien of the Leasehold Mortgage to the
interests of the lessee under this Lease shall be without loss of priority, so
that the Mortgagee at all times has a first lien on the interests in question.
The provisions of this paragraph (b) shall survive the rejection, disaffirmance
or termination of the Ground Lease or this Lease and shall continue in full
effect thereafter inasmuch as this provision is entered into for the benefit of
the Mortgagee, may be relied upon by the Mortgagee and constitutes a separate
and independent contract made by the County for the benefit of the Mortgagee as
third party beneficiary. From the effective date of such rejection,
disaffirmance, or termination of this Lease to the date of the assumption of
this Lease, the Mortgagee may use and enjoy the benefits of this Lease without
hindrance by the County so long as the Mortgagee shall continue to make all
payments due and owing under this Lease.

 

(c)                                Consent
of Mortgagee. No amendment, voluntary surrender or termination or modification
of this Lease shall be valid or binding unless consented to in writing by the
Mortgagee. The Mortgagee shall be a third party beneficiary of all provisions
of this Lease providing rights to the Mortgagee and such provisions shall be
deemed to have been entered into for the benefit of the Mortgagee and shall be
enforceable by the Mortgagee.

 

12.3         Simultaneous
Assignment and Subletting of Related Airport Facilities. Mesaba may not
sublet or assign any rights under the Lease, unless all related rights and
facilities which are leased to Mesaba under the Lease, or any Ground Lease, and
which comprise elements of the same Facility or portion thereof or are
necessary to the efficient and economic use of the rights or facilities being
sublet or assigned are sublet or assigned simultaneously to the same sublessee
or assignee, and unless such sublessee or assignee assumes in writing all
obligations of Mesaba under the Lease or under the Ground Lease, as
appropriate, relating to such rights and facilities.

 

12.4         Sublessee, Etc., Bound
by Ordinance.,. Any purchaser, assignee, transferee or sublessee of Mesaba’s
rights and obligations hereunder shall be subject to and bound by the
Ordinance.

 

ARTICLE XIII

GROUND LEASE

 

13.1         Relationship of the
Lease to Ground Lease. The County and Mesaba agree, between themselves and
for the benefit of the holders of the Bonds, that Ground Lease shall contain or
recognize the following terms and conditions:

 

28

 

(a)           The ground space covered
by such Ground Lease shall be adequate for the needs of Mesaba in operating the
Facilities located on such ground space, and shall also take account of the
needs of any successor lessee.

 

(b)           The essential purpose
of the Ground Lease shall be to define the ground space for the Facilities and
the ground rents therefor. The terms and conditions of any Ground Lease shall
not duplicate the terms and provisions of the Lease, but in event of such
duplication, the terms and provisions of the Lease shall control and supersede
any conflicting provisions of the Ground Lease.

 

(c)           Under the Ground Lease
Mesaba shall pay the customary ground rents and related administration,
operation and maintenance costs customarily assumed by a lessee of a special
facility, and shall receive no credit therefor which would subsidize the
capital or operating or maintenance costs of any Facilities.

 

ARTICLE XIV

MISCELLANEOUS PROVISIONS

 

14.1         Notices.
Notices shall be sufficient if sent by registered or certified mail, postage
prepaid, to the County addressed to the Wayne County Director of the Airport,
Detroit Metropolitan Wayne County Airport, L.C. Smith Terminal, Mezzanine
Level, Romulus, Michigan 48242; to Mesaba addressed to Mesaba Aviation, Inc.,
7501 26th Avenue South, Minneapolis, Minnesota 55450, Attention! President, and
to the Bank addressed to Norwest Bank Minnesota, National Association, Norwest
Center, Sixth and Marquette Avenue, Minneapolis, Minnesota 55479-0134,
Attention: Vice President, Industrial Products Division, or to such other
respective addressees as the parties may designate to each other in writing.
The Bank and the Trustee shall receive copies of all notices given by any party
to any other party.

 

14.2         Paragraph
Headings. The paragraph headings contained herein are for convenience in
reference and are not intended to define or limit the scope of any provision of
the Lease.

 

14.3         Severability.
In the event any covenant, condition or provision under the Lease is held to be
invalid by any court of competent jurisdiction, the invalidity of any such
covenant, condition or provision shall in no way affect any other covenant,
condition or provision herein contained; provided that the invalidity of any
such covenant, condition or provision does not materially prejudice either the
County or Mesaba in its respective rights and obligations contained in the
valid covenants, conditions or provisions of the Lease.

 

14.4         Binding
Effect. All the covenants, stipulations and agreements in the Lease shall
extend to and bind the legal representatives, successors and assigns of the
respective parties hereto.

 

14.5         Lease to United States
of America. During time of war or national emergency the County shall have
the right to lease the landing area or any part thereof to the United States
for military or naval use, and, if any such lease is executed, the provisions
of this instrument insofar as they are inconsistent with the provisions of the
lease to the United States, shall be suspended.

 

It is agreed
that the Lease shall be subordinate to the provisions of any existing or future
agreement between the County and the United States, relative to the operation
or maintenance of

 

29

 

the Airport, the execution of
which has been or may be required as a condition precedent to the expenditure
of Federal funds for the development of the Airport.

 

14.6         Amendment.
The Assistant County Executive for Airports and Major County Construction is
authorized to approve and execute such amendments to this Lease which, on the
advice of counsel, are necessary or advisable and not materially adverse to the
County, provided the Lease may not be amended without the written consent of
the Trustee, and no amendment to the Lease shall be binding upon either party
hereto until such amendment is reduced to writing and executed by both parties
hereto.

 

14.7         Governing
Law. The Lease shall be governed in all respects, whether as to validity,
construction, performance or otherwise, by the laws of the State of Michigan.

 

14.8         Cancellation
by Mesaba. Mesaba may, so long as it is not in default in any payments to
the County hereunder, cancel the Lease by giving the County 30 days’ advance
written notice, upon or after the happening of any one of the following events:

 

(a)           Issuance by any court
of competent jurisdiction of an injunction in any way substantially preventing
or restraining the use of the Airport or any part thereof necessary for Mesaba’s
operations, and the remaining in force of such injunction for a period of at
least 30 days after Mesaba has exhausted or abandoned all appeals;

 

(b)           The inability of
Mesaba, due to circumstances beyond its control, to use, for a period in excess
of 90 days, the Airport or to exercise any rights and privileges granted to
Mesaba hereunder and necessary to its operations because of any law or
ordinance, or because of any order, rule, regulation or other action or any
non-action of the United States Department of Transportation or any other
governmental authority, or, because of earthquake, other casualty (excepting
fire) or because of acts of God or the public enemy;

 

and provided that no such
cancellation shall be effective until payment by Mesaba of Special Facilities
Charges in an amount sufficient to pay the County the remaining principal of,
Redemption Price and interest on the Bonds through maturity or redemption of
the Bonds together with all fees and expenses reasonably necessary to
accomplish any such redemption.

 

14.9         Cancellation
by County. Solely at the discretion and option of the County, under the
conditions listed herein, the County may cancel the Lease upon six months’
written notice to Mesaba, provided that; (i) the cancellation is part of the
closing of the entire Airport; to air traffic and (ii) no airline may operate
at the Airport after the closing;( and (iii) the County shall deposit with the
Trustee sums obtained from Mesaba sufficient to pay remaining principal of,
Redemption Price and interest on the Bonds to and including the next date for
which the Bonds are subject to optional redemption or until maturity. The
foregoing shall not be construed as a County covenant to continue operation of
the Airport or preclude the County from closing the Airport in more or less
than six months in the exercise of any governmental powers without making any
such payment.

 

14.10       Rights
After Bonds Paid. When the Series 1990 Bonds have been fully paid and
Mesaba has satisfied the reimbursement obligations to the Bank or any
subsequent Mortgagee, then the Bank or subsequent Mortgagee shall, upon demand
of the County, execute and file such documents as may be necessary in the
County’s discretion to evidence the extinguishment of the Bank’s or the
Mortgagee’s rights or interests in the Facilities, and thereafter all
requirements

 

30

 

respecting notice to or consent from the Bank, subsequent Mortgagee or
Trustee shall be of no force and effect and the Special Facilities Charges
shall be paid directly to the County.

 

 

IN WITNESS
WHEREOF, the parties have caused this Lease to be executed as of the day and
year first above written.

 

 

	
   

  	
   

  	
   

  	
   

  	
  CHARTER
  COUNTY OF WAYNE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  /s/ Edward
  H. McNamara

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  MESABA
  AVIATION, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  /s/ Robert
  D. Swenson

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Its
  President

  
							

 

31Exhibit 10.8

 

GROUND LEASE

CONSTRUCTION OF AIRPLANE HANGAR
AND RAMP

MESABA AVIATION, INC.

 

THIS LEASE AGREEMENT, made and entered into
this 18th day of May, 1990, by and between the County of Wayne, a Michigan
Charter County, by and through its Chief Executive Officer, with principal
offices located at 600 Randolph Street, Detroit, Michigan 48226, hereinafter
referred to as the “LESSOR”; and Mesaba Aviation, Inc., a Minnesota
corporation, with principal offices located at 7501 26th Avenue South,
Minneapolis, Minnesota 55450, hereinafter referred to as the “LESSEE”;

 

WITNESSETH:

 

WHEREAS, LESSOR pursuant to the provisions of
the Aeronautics Code of the State of Michigan, owns and operates the Detroit
Metropolitan Wayne County Airport, located in the City of Romulus, County of
Wayne, Michigan, hereinafter referred to as the “AIRPORT”; and

 

WHEREAS, LESSOR has the authority to lease
land at the Airport and to grant rights and privileges with respect thereto;
and

 

WHEREAS, LESSEE desires to lease certain land
at the AIRPORT to construct an airplane hangar together with ramp and necessary
facilities, upon the terms and conditions hereinafter provided; and

 

WHEREAS, LESSOR has financed the facilities
to be constructed on the land leased hereunder, as well as certain facilities,
by issuing $3,630,000 Special Airport Facilities Revenue Bonds Series 1990;
and

 

 

WHEREAS, the lease of the facilities to be
constructed thereon is the subject of a Special Facilities Lease entered into
simultaneously with the execution of this Lease.

 

NOW, THEREFORE, in consideration of the
premises and mutual undertakings of the parties hereto, it is agreed as
follows:

 

1.                                       PREMISES

 

LESSOR, for and in consideration of the rents
specified herein and the stipulations and covenants herein given on the part of
LESSEE, by these presents does grant, demise and lease unto LESSEE for LESSEE’s
exclusive use, and LESSEE does hereby hire and take from LESSOR the following
land for the construction of an airplane hangar, ramp and related facilities,
located at the Airport as delineated on Exhibit A.

 

Part of the Northwest 1/4 of the
Northeast 1/4 and part of Northeast 1/4 of the Northwest 1/4 of Section 26,
Town 3 South, Range 9 East, Romulus Township, Wayne County, Michigan.

 

More fully described as commencing at the
North 1/4 corner of said Section 26; thence south 28 40’ 10” West 33.12
feet to the point of beginning; thence South 28 40’ 10” West 764.99 feet;
thence North 61 19’ 50” West 710.00 feet; thence North 28 40’ 10” East 345.00
feet; thence North 87 15’ 55” East 276.31 feet parallel with the North line of
said section 26 to the point of beginning; and subject to a 25 foot wide
utility easement along the western lease line of such Premises. Containing
approximately 394,000 square feet.

 

2.                                       USE OF PREMISES

 

A.                                   LESSEE shall have
the right, subject to the terms, conditions and covenants set forth in this
Lease to construct an airplane hangar, ramp and related facilities on the
Premises

 

2

 

and use the Premises for any and all purposes in connection with the
operation by LESSEE of its air transportation business, and for no other
purpose.

 

The ramp and connection to the taxiway to be
constructed is normally the obligation of the LESSOR; however, since the LESSOR
is not presently in a financial condition to provide the financing for the ramp
and connector, the LESSEE may construct the ramp pursuant to a County permit
and be reimbursed its direct engineering and construction not to exceed
$550,000 plus cost of financing through rent credits, pro rata, in equal
monthly payments over the five year period following completion of
construction. The rent credits shall apply against leasehold obligations
hereunder, and all landing fees or activity fees due the COUNTY from LESSEE’s
use of the Airport.

 

Cost of construction shall include surveys,
soil borings or testing, preliminary engineering, design engineering,
construction, engineering and inspection, as well as the actual contract cost
of construction.

 

3.                                       TERM

 

The lease term for the Premises shall
commence upon the date the LESSEE enters upon, with permission of LESSOR, the
site for commencement of construction of the facilities contemplated in the
Special Facilities Lease and shall terminate at the date set for the
termination of the Special Facilities Lease unless terminated earlier as
provided herein. The date of commencement of this Lease shall be confirmed in
writing between the parties. This Lease shall be extended for an additional
five (5) year period if the Special Facilities Lease is extended for an
additional five (5) year period.

 

3

 

The rental rates for such extension period
for the building, ramp, parking area and unimproved areas shall be comparable to
those rates in effect at the time of such extension for similar premises on the
Airport.

 

4.                                       RENTAL AND
SECURITY DEPOSIT

 

1.                                       Rental: As
consideration for LESSEE’s preferential use of the ramp and connection to the
taxiway, LESSEE shall pay LESSOR an annual rental based upon the following
schedule:

 

	
   

  	
   

  	
  Rental Rate

  	
   

  
	
  Year

  	
   

  	
  Per Sq. Foot

  	
   

  
	
  1990

  	
   

  	
  $

  	
  .05

  	
   

  
	
  1991

  	
   

  	
  $

  	
  .10

  	
   

  
	
  1992

  	
   

  	
  $

  	
  .15

  	
   

  
	
  1993

  	
   

  	
  $

  	
  .20

  	
   

  
	
  1994

  	
   

  	
  $

  	
  .25

  	
   

  
	
  1995 & thereafter

  	
   

  	
  $

  	
  .30

  	
   

  

 

The rental rate shall be subject to
adjustment on January 1, 1996 and on January 1st each year thereafter
during the term of this lease in accordance with the increase in the index of
hourly earnings as described hereafter using November 1, 1995 as the base.
The annual ramp rental for the first year beginning 1990 shall be one thousand
eight hundred forty five Dollars ($1,845.00) payable in equal monthly
installments of one hundred fifty three dollars and seventy five cents
($153.75).

 

2.                                       As consideration
for LESSEE’s exclusive use of the balance of the Premises, LESSEE shall pay
LESSOR an annual rental of seventy one thousand

 

4

 

four hundred twenty dollars and no cents
($71,420.00) payable in equal monthly installments of five thousand nine
hundred fifty one dollars and sixty-seven cents ($5,951.67) which rental is
based upon an initial rate of twenty cents ($.20) per square foot per year and
the total number of square feet of the Premises. The annual rental shall be
subject to adjustment on January 1, 1991 and January 1 each year
thereafter during the term hereof in accordance with the following:

 

On January 1, 1991, the aforesaid rental
rate of twenty cents ($.20) per square foot per year shall be increased or
decreased, as the case may be, by a percentage which shall be the same as the
percentage increase or decrease during the period commencing November 1,
1990, in the Index of Average Hourly Earnings Excluding Overtime, of Production
Workers on Manufacturing Payrolls, as published by the Bureau of Labor
Statistics of the United States Department of Commerce (or if this index is no
longer published, then the most nearly comparable published index of such
hourly earnings). The amount calculated shall be rounded off to the nearest
one-half cent to determine the adjusted rental rate per square foot which shall
be the basis for computing the annual rental for the year commencing January 1,
1991. On January 1, 1992, and on the same date each year thereafter during
the Term hereof, the rental rate per square foot shall be adjusted and the
annual rental for the ensuing year increased or decreased, as the case may be,
in the same manner as set forth above, based on the percentage increase or
decrease in the aforesaid index of hourly earnings during the immediately
preceding twelve (12) month period ending October 31.

 

5

 

5.                                       CONSTRUCTION
OF FIXED IMPROVEMENTS

 

LESSEE shall construct upon the Premises a
Hangar and related facilities for use in the LESSEE’s air transportation
business, and a ramp immediately adjacent to the Premises provided that the
cost of constructing the fixed improvements shall not be less than three
million dollars ($3,000,000.00).

 

6.                                       MAINTENANCE
OF PREMISES

 

LESSEE shall keep and maintain the Premises,
including appropriate landscaping, in a sanitary and sightly condition. In the
event LESSEE fails to perform any obligation required by this section within
thirty (30) days after written notice from LESSOR so to do, LESSOR may enter
upon the Premises and perform such obligation, and charge LESSEE the reasonable
cost and expense thereof. LESSEE shall pay LESSOR such charge in addition to
any other amounts payable by LESSEE pursuant to this lease.

 

LESSEE agrees to remove, or cause the removal
of, at its own expense, from the Premises, all waste, garbage and rubbish; and
agrees not to deposit same on any part of the Airport, except that LESSEE may
deposit same temporarily within the Premises in connection with collection or
removal thereof.

 

7.                                       QUIET
ENJOYMENT

 

LESSOR covenants and agrees that, at and
until the granting and delivery of this Lease, it is well seized of the
Premises and has good title thereto, free and clear of all liens and
encumbrances having priority over this Lease; and that LESSOR has the right and
authority to lease the same as herein set forth. LESSOR further covenants that
all things have happened and been done to make its granting of said Lease
effective; and, except as otherwise specifically provided in this Lease, LESSOR
warrants to LESSEE peaceful possession and quiet enjoyment

 

6

 

of the Premises during the term hereof, except for aircraft noise
generated in the normal use of the Airport, upon performance of LESSEE’s
covenants herein.

 

8.                                       INDEMNIFICATION

 

LESSEE agrees to defend, indemnify and hold
LESSOR harmless from any and all claims or against all liability for injuries
to persons or damage to property arising out of LESSEE’s use and/or occupancy
of the Premises or fixed improvements thereon; provided, however, that LESSEE
shall not be liable for any injury, damage or loss caused by the sole
negligence of LESSOR or by the joint and/or several negligence of LESSOR and
any persons other than LESSEE; provided further, that each of the parties shall
give to the other party prompt and timely notice of any claim made or suit
instituted which in any way directly or indirectly, contingently or otherwise,
affects or might affect either party.

 

9.                                       SALE,
ASSIGNMENT, TRANSFER, OR SUBLEASE

 

LESSEE shall not sell, assign, or transfer
this lease, or sublet the Premises or any part thereof without the prior
written consent of LESSOR; provided, however, such consent shall not be
withheld for any assignee of LESSEE under the Special Facility Lease and
consent will not be withheld if the purchaser, assignee, transferee or
sublessee be a parent or subsidiary of LESSEE or closely allied to LESSEE by
merger, consolidation or amalgamation; and LESSEE shall have the right to
mortgage and assign all of its rights under this lease to a lending institution
(the “Mortgagee”) as security for the financing necessary to carry out the
construction of the facilities hereinabove described (herein the “Leasehold
Mortgage”) and provided further, that in such case LESSEE, as seller, assignor,
transferor or sublessor, shall continue to be guarantor for the good and
faithful performance of all terms, conditions and covenants contained herein;
and the Mortgagee shall have the right to sell LESSEE’s leasehold interest to a
purchaser at a foreclosure

 

7

 

sale of LESSEE’s interest under this lease pursuant to the Leasehold
Mortgage; and the LESSEE shall have the right to assign LESSEE’s rights under
this lease to the Mortgagee in lieu of such foreclosure; and the LESSEE or the
Mortgagee shall have the right to assign LESSEE’s rights under this lease to a
third party in connection with or in lieu of a foreclosure; upon acquisition by
the Mortgagee of LESSEE’s interests under this lease by foreclosure or deed in
lieu of foreclosure, and upon acquisition by a purchaser from the Mortgagee of
LESSEE’s interests in this lease, LESSOR agrees to recognize the Mortgagee or
such purchaser, as the case may be, as the LESSEE under this lease. Mortgagee
and/or such purchaser, as successor to LESSEE’s interest in this lease, shall
not be personally liable for any of the obligations of LESSEE under this lease
accruing prior to the date of becoming the LESSEE. In any event, the Mortgagee
or any such purchaser shall use the Premises solely for airport transportation
purposes.

 

10.                                 ENCUMBRANCES

 

LESSEE, upon prior written approval of the
LESSOR may encumber as collateral or security its leasehold estate and Fixed
Improvements by mortgage or conditional assignment of this lease as security,
providing the same shall provide for payment of the indebtedness thereby
secured not later than the date of expiration of the primary term of this
lease. In such event, the Mortgagee may deliver to LESSOR written notice
showing the amount of the obligation secured by such Leasehold Mortgage, the
date of the maturity of the indebtedness thereby secured, and the name and post
office address of such Mortgagee. In the event such notice shall be given, then
and thereafter, the LESSOR shall serve on such Mortgagee by certified mail, at
the address given or any address thereafter given, a copy of every notice
served by LESSOR upon LESSEE in the event of nonperformance or default of any
term, condition or covenant hereof, during the

 

8

 

existence of such Leasehold Mortgage and the following rights and
benefits under this lease shall inure to, and be enforceable by such Mortgagee:

 

A.                                   Right
to Cure: In the event of nonperformance or default of any term, condition
or covenant hereof to be kept and performed by LESSEE during the existence of
any such Leasehold Mortgage, the Mortgagee shall have the right, within thirty
(30) days after the expiration of the time limit prescribed in the
nonperformance or default notice to LESSEE, to perform and comply with all the
terms, conditions and covenants of this lease to be kept and performed by
LESSEE, and to make all payments required of LESSEE by this lease and by so
doing thus cure and remove any such nonperformance or default as if the same
had been done and performed by LESSEE. If the nature of the nonperformance or
default is such that it cannot be cured within thirty (30) days after the
expiration of the time limit prescribed in the nonperformance or default notice
to LESSEE, the Mortgagee shall be deemed to have cured such nonperformance or
default if it has commenced performance and thereafter diligently prosecutes
same to completion, or diligently pursues foreclosure proceedings or the
obtaining of a deed in lieu of foreclosure with respect to LESSEE’s interest in
the Premises. The LESSOR will permit the Mortgagee to enter upon the Premises
and will accept performance by the Mortgagee of any covenant, agreement or
obligation of LESSEE with the same effect as though performed by LESSEE in
order to permit any specific default to be cured by the Mortgagee.

 

9

 

B.                                     Rights on
Termination of LESSEE’s Interest.

 

If LESSEE’s interests under this lease shall
be terminated as a result of the rejection or disaffirmance of this lease
pursuant to bankruptcy law or other law affecting creditor’s rights, or if this
lease shall be terminated on account of a default which is not capable of being
cured by the Mortgagee, LESSOR hereby irrevocably agrees to permit the
assumption by the Mortgagee, or any party designated by the Mortgagee, of
LESSEE’s interest under this Lease, for the remainder of the term of this
lease, effective as of the date of such rejection, disaffirmance, or termination,
with the same force and effect and as if this Lease had not terminated as to
LESSEE, provided that the Mortgagee or such designee shall provide for use of
the Premises solely for airport transportation purposes. In order for such an
assumption to be effective, the Mortgagee must so indicate in writing to LESSOR
within 60 days after the effective date of such rejection, disaffirmance, or
termination, as the case may be, and the Mortgagee shall have cured all
defaults under this lease which can be cured by the payment of money and shall
have paid to LESSOR all rent, fees and other charges which would, at the time
of such assumption, be due and payable by LESSEE under this lease but for such
rejection, disaffirmance or termination. If the Mortgagee (or its designee)
elects to assume the lease under this paragraph B then, as of the date of such
assumption, the lien of the Leasehold Mortgage shall attach to the interests of
the lessee under this lease if the lessee is someone other than the Mortgagee.
The attaching of the lien of the Leasehold Mortgage to the interests of the
lessee under this lease shall be without loss of priority, so that the
Mortgagee at all times has a

 

10

 

first lien on the interests in question. The
provisions of this paragraph B shall survive the rejection, disaffirmance or
termination of the Special Facilities Lease or this lease and shall continue in
full effect thereafter inasmuch as this provision is entered into for the
benefit of the Mortgagee, may be relied upon by the Mortgagee and constitutes a
separate and independent contract made by LESSOR for the benefit of the
Mortgagee as third party beneficiary. From the effective date of such
rejection, disaffirmance, or termination of this lease to the date of the
assumption of this lease, the Mortgagee may use and enjoy the benefits of this
lease without hindrance by LESSOR so long as the Mortgagee shall continue to
make all payments due and owing under this lease.

 

C.                                     Consent
of Mortgagee. No amendment, voluntary surrender or modification of this
lease shall be valid or binding unless consented to in writing by the
Mortgagee. The Mortgagee shall be a third party beneficiary of all provisions
of this lease providing rights to the Mortgagee and such provisions shall be
deemed to have been entered into for the benefit of the Mortgagee and shall be
enforceable by the Mortgagee.

 

11.                                 CANCELLATION BY
LESSOR

 

LESSOR shall have the right to cancel this
Lease upon thirty (30) days’ advance written notice to LESSEE, except under Subsection A,
hereof, in which case the notice shall be seven (7) days, at any time
after the occurrence of any one or more of the following events of default:

 

A.                                   Nonpayment of
rentals or other sums due LESSOR and failure of LESSEE to remedy the default
within ten (10) calendar days after the date of registered mailing of
written notice from LESSOR of the existence of such nonpayment.

 

11

 

B.                                     Breach of any
covenant or provision of this Lease by LESSEE, except as provided in Subsection A
above, and failure of LESSEE to remedy such breach within thirty (30) calendar
days from the date of registered mailing to LESSEE of written notice from
LESSOR of the existence of such breach, or, if the breach is of such character
as to require more than thirty (30) days to remedy, then failure of LESSEE
within said thirty (30) day period to commence and thereafter proceed
diligently to remedy such breach.

 

C.                                     Institution of
voluntary bankruptcy by LESSEE or the appointment of a trustee in involuntary
bankruptcy by a court of competent jurisdiction.

 

D.                                    Assignment by
LESSEE for benefit or creditors.

 

E.                                      The occurrence of
an Event of Default under the Special Facilities Lease and acceleration of the
Special Airport Facilities Revenue Bonds described in that Lease; provided, however,
that the curing of such Event of Default under the Special Facilities Lease
shall constitute a curing of the Event of Default described in this paragraph
11E.

 

F.                                      Cancellation,
expiration, or termination of the Special Facilities Lease, between the LESSOR
and LESSEE without extension or renewal according to its terms.

 

12.                                 CANCELLATION BY
LESSEE

 

LESSEE shall have the right upon thirty (30)
days’ advance written notice to LESSOR to cancel this Lease at any time after
the occurrence of one or more of the following events of default:

 

A.                                   Issuance by any
court of competent jurisdiction of any injunction substantially restricting the
use of the Airport for airport purposes and the remaining in force of said
injunction, whether permanent or temporary, for a period of ninety (90) days.

 

12

 

B.                                     Breach by LESSOR
of any covenant or provision of this Lease and failure of LESSOR to remedy such
breach within thirty (30) calendar days from the date of registered mailing to
LESSOR of written notice from LESSEE of the existence of such breach, or, if
the breach is of such a character as to require more than thirty (30) days to
remedy, then failure of LESSOR within said thirty (30) day period to commence
and thereafter proceed diligently to remedy such breach.

 

C.                                     The assumption by
the United States Government or any authorized agency thereof, or any other
governmental agency, of the operation, control or use of the Airport facilities
or any substantial part, or parts thereof in a manner as substantially to
restrict LESSEE’s operations for a period of ninety (90) days or more.

 

13.                                 WAIVER OF DEFAULT

 

No waiver by the parties hereto of any default
or breach or any term, condition, or covenant of this Lease shall be deemed to
be a waiver of any subsequent default or breach of the same or any other term,
condition, or covenant contained herein.

 

14.                                 FEDERAL GOVERNMENT
AGREEMENT

 

This Lease shall be subordinate to the terms,
conditions, and covenants of any existing or future agreements between LESSOR
and the United States of America relative to the operation and maintenance of
the Airport, the execution of which has been or may be required as a condition
precedent to the expenditure of federal funds for the development of the
Airport.

 

15.                                 NATIONAL EMERGENCY

 

All terms, conditions, and covenants of this
Lease shall be subordinate to the rights of the United States of America to
lease or otherwise assume control over the Airport or any part thereof during
time of war or national emergency for military or naval use, and any terms,

 

13

 

conditions, and covenants of this Lease inconsistent with the terms,
conditions, and covenants of such agreement with the United States of America
shall be suspended thereby.

 

16.                                 AIRPORT DEVELOPMENT

 

LESSOR reserves the right to further develop
and improve the Airport, including, without limiting the generality hereof, its
landing areas, regardless of the desires or view of LESSEE in this regard and
without interference or hindrance by LESSEE, and free from any liability to
LESSEE for interference with its activities or liability for loss of business
indirectly occurring to LESSEE as a result of such development or improvement.
Any direct interference with LESSEE’s use of the Premises will be a breach of Section 7
hereof.

 

17.                                 COMPLIANCE WITH
LAWS, RULES AND REGULATIONS

 

LESSEE shall comply with any and all rules and
regulations adopted by LESSOR with respect to use of the Airport. It shall also
comply with all applicable federal and state laws and regulations. LESSEE
shall, at its own expense, obtain any and all lawfully required governmental
licenses and permits and pay all assessed service charges necessary for such
use.

 

Pursuant to LESSOR’s authority under the
Michigan Aeronautics Code to grant and regulate the Airport, the terms and
conditions of this Lease and the Airport Rules and Regulations shall take
precedence over, and shall govern the parties hereto to the exclusion of, any
local governmental law or ordinance in conflict therewith.

 

18.                                 TAXES

 

LESSEE shall pay all taxes, if any, lawfully
imposed upon LESSEE’s interests in the Premises, the improvements located
thereon, and the conduct of LESSEE’s operations on the premises leased
hereunder at the Airport; provided, however, LESSEE shall not be deemed to be

 

14

 

in default of its obligation under this section for failure to pay
taxes pending the outcome of any legal proceeding instituted to determine the
validity of such taxes.

 

19.                                 PROTECTION OF
AERIAL APPROACHES

 

LESSOR reserves the right to take any action
it considers necessary to protect the aerial approaches of the Airport against
obstruction, together with the right to prevent LESSEE from erecting or
permitting to be erected, any building or other structure on the Airport which,
in the opinion of LESSOR, would limit the usefulness of the Airport or
constitute a hazard to aircraft.

 

20.                                 COVENANTS AGAINST
DISCRIMINATION

 

A.                                   Covenant
Pursuant to Requirements of the Department of Transportation: LESSEE for
itself, its personal representatives, successors in interest, and assigns, as a
part of the consideration hereof, does hereby covenant and agree as a covenant
running with the land that (1) no person on the grounds of race, color, or
national origin shall be excluded from participation in, denied the benefits
of, or be otherwise subjected to discrimination in the use of said facilities, (2) that
in the construction of any improvements on, over or under such land and in the
furnishing of services thereon, no person on the grounds of race, color, or
national origin shall be excluded from participation in, denied the benefits
of, or otherwise be subjected to discrimination, (3) that LESSEE shall use
the premises in compliance with all other requirements imposed by or pursuant
to Title 49, Code of Federal Regulations, Department of Transportation,
Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in
Federally-assisted Programs of the Department of Transportation - Effectuation
of Title VI of the Civil Rights Act of 1964, and as said Regulations may be
amended.

 

15

 

In the event of breach of any of the above
nondiscrimination covenants, LESSOR shall have the right to terminate the lease
and to reenter and repossess said land and the facilities thereon, and hold the
same as if said lease had never been made or issued.

 

B.                                     Employment:
In accordance with 1976 Public Act of Michigan No. 453, the parties hereto
covenant not to discriminate against an employee or applicant for employment
with respect to hire, tenure, terms, conditions, or privileges of employment,
or a matter directly or indirectly related to employment because of race,
color, religion, national origin, age, sex, height, weight, or marital status,
and to require a similar covenant on the part of any sublessee hereunder and
any subcontractor employed in the performance of this lease.

 

21.                                 SIGNS

 

LESSEE shall not place any signs, posters, or
advertising devices whatsoever on, within, or about the Airport, or the
Premises, or improvements therein, without the prior written approval of the
Director of Airports.

 

22.                                 SECTION HEADINGS

 

Section headings contained herein are
for convenience and reference, and are not intended to define or limit the
scope of any provision of this Lease.

 

23.                                 SURRENDER OF
POSSESSION

 

Upon the expiration or earlier termination or
cancellation of this Lease, subject to the rights of the Mortgagee under Section 10
hereof, LESSEE shall forthwith surrender possession of the Premises and all
fixed improvements situated therein in good condition, normal wear and tear
excepted.

 

16

 

24.                                 CHOICE OF LAW AND
FORUM

 

This Lease shall be construed and enforced
according to the laws of the State of Michigan. Any action in regard hereto or
arising out of the terms and conditions hereof shall be instituted and litigated
in the courts of the State of Michigan and in no other. In accordance herewith,
the parties hereto submit to the jurisdiction of the courts of the State of
Michigan.

 

25.                                 INVALID PROVISION

 

In the event that any term, condition or
covenant herein contained is held to be invalid by any court of competent
jurisdiction, the same shall be deemed to be severed, but this Lease shall
remain in force and effect provided that the invalidity of such term, condition
or covenant does not materially prejudice either LESSOR or LESSEE in their
respective rights and obligations contained in any valid term, condition or
covenant of this Lease.

 

26.                                 NOTICES

 

All notices, communications, statements or
payments required by this Lease shall be sent to the following addresses (or
such other addresses as the party receiving notice may designate by written
notice to the other party):

 

A.                                   DETROIT METROPOLITAN
WAYNE COUNTY AIRPORT (LESSOR)

L.C. Smith
Terminal, Mezzanine

Detroit, MI
48242

ATTN:  Director of Airports

 

B.                                     MESABA AVIATION,
INC.

7501 26th
Avenue South

Minneapolis, MN 55450

ATTN: 
President

 

17

 

Parties hereto shall give written notice of
any change of address.

 

27.                                 ISSUANCE OF BONDS

 

If for any reason the Special Facilities
Lease is not executed and delivered by the Lessor, or the above-referenced
Bonds are not authorized and issued by the Lessor, then this Lease shall be
void and of no effect.

 

IN WITNESS WHEREOF, The parties hereto have
caused this lease to be executed on their behalf by their respective duly
authorized officers, their corporate seals to be hereunto affixed and attested
by their proper corporate officers, all as of the day and year first above
written.

 

	
   

  	
  COUNTY OF WAYNE

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
  CHIEF EXECUTIVE OFFICER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Edward H. McNamara

  	
   

  
	
   

  	
   

  	
  Edward H. McNamara

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  COUNTY COMMISSION

  
	
   

  	
   

  	
   

  
	
   

  	
  Approved and Execution Authorized by
  Resolution

  
	
   

  	
   

  
	
   

  	
  dated:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MESABA AVIATION, INC.

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
  By

  	
   

  	
  /s/ Robert D. Swenson

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
    Its
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
  /s/ Kenneth P. Bronson

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
    Its Vice President, Finance

  
										

 

18

 

CERTIFICATION

 

	
  I, Lawrence E. McCabe, Vice President,
  Corporate and Government Affairs for Mesaba Aviation, Inc., do hereby
  certify that

  
	
  (office and/or title)

  

Robert D. Swenson and Kenneth P. Bronson, the aforesaid signatory(ies)
to this agreement hold the office(s) of President,

Vice President, Finance, respectively, in Mesaba Aviation, Inc. and is/are
fully empowered by its Articles, Bylaws, Rules and Regulations, Resolution
of the Board of Directors, or other lawful action (delete whichever is not
applicable) to execute and bind Mesaba Aviation, Inc. as a party to the
above agreement.

 

IN TESTIMONY WHEREOF, I have hereunto set my
hand at Detroit, MI, this 17th day of May A.D., 1990.

 

 

	
   

  	
  /s/ Lawrence E. McCabe

  	
   

  
	
   

  	
  Signature

  	
   

  
	
   

  	
   

  

 

NOTE:            An
individual signing the agreement should not sign this certificate.

 

19

 

ADDENDUM 1

 

NON-DISCRIMINATION, AFFIRMATIVE
ACTION

 

As part of the consideration for entering
into and carrying out the terms of this contract, the contracting party agrees
to the following programs:

 

Non-Discrimination:

 

The contracting party in accordance with 1976
PA 453 and the Fair Employment Practices Resolution of the Wayne County Board
of Commissioners of April 14, 1970, will not discriminate against any
employee or applicant for employment because of race, religion, color, national
origin, age or sex, and shall require similar covenants on the part of any
party it contracts with in connection with or arising out of this contract.

 

Affirmative
Action:

 

I.                                         The
contracting party shall take affirmative action that the Non-Discrimination
program shall apply to employment, selection for training (including
apprenticeship), upgrading, demotion or transfer, recruitment or recruiting
advertising, lay-off or termination, rates of pay or other forms of
compensation.

 

The contracting party will, in all
solicitations or advertisements for employees placed by or on behalf of the
contracting party, state that all qualified applicants will receive
consideration for employment without regard to race, religion, color, national
origin, age, or sex.

 

The contracting party will send to each labor
union or representative of workers with which the contracting party has a
collective bargaining agreement or other contract or understanding, a notice
advising the said labor union or worker’s representative of the contracting
party’s commitments under this contract.

 

The contracting party will comply with all
published rules, regulations, directives, and orders of the Michigan Civil
Rights Commission and of the Wayne County Office of Human Relations relevant to
Section 4, Act No. 251, Public Acts of 1955, as amended, and to the
Wayne County Fair Employment Practices resolution attached hereto and made a
part hereof.

 

The contracting party will furnish and file
compliance reports within such time and upon such forms as provided by the
Wayne County Office of Human Relations. Said forms may also elicit information
as to the practices, policies, programs, and employment statistics of each
subcontractor as well as the contracting party, and the contracting party

 

1

 

will permit access to his books, records, and
accounts by the Wayne County Office of Human Relations and/or its agent, for
purposes of investigation to ascertain compliance with this contract and with
rules, regulations, and orders of the Michigan Civil Rights Commission and of
the Wayne County Office of Human Relations relevant to Section 4, Act No. 251,
Public Acts of 1955, as amended, and the attached Wayne County Fair Employment
Practices Resolution.

 

The contracting party will include, or
incorporate by reference, the provisions as set forth herein in every
subcontract or purchase order unless exempted by the rules, regulations or
orders of the Wayne County Office of Human Relations and will provide in every
subcontract or purchase order that said provisions will be binding upon each
subcontractor or seller and agrees to provide a listing of subcontractors to
the Wayne County Office of Human Relations and only contract with contractors
or vendors who are in compliance or have an affirmative action program approved
by the Wayne County Office of Human Relations.

 

The contracting party will, when recruiting,
recruit in the minority group community for employees.

 

The contracting party will issue a statement
of policy regarding equal employment opportunity and its communication to all
personnel involved in recruitment, hiring, training, assignment, and promotion.

 

The contracting party and each contractor
must present evidence of being in compliance with the above equal employment
opportunity provisions as certified by the Wayne County Office of Human
Relations. Prime contractors and subcontractors will only be considered
eligible to do business with the County if they have been approved as being in
compliance or as having an approved affirmative action program. Any contractor
not having such approvals should procure such approvals from the Wayne County
Office of Human Relations, 600 Randolph, Fifth Floor, Detroit, Michigan
48226.  It shall be the responsibility of
the contracting party to contract only with subcontractors that are so
approved.

 

II.                                     The
Wayne County Office of Human Relations, through its Contract Compliance Program
and authorized representatives, shall investigate the employment practices of
any Wayne County contractor or subcontractor to determine whether or not the
contractual undertakings in regard to ensuring equal employment opportunities
and affirmative action have been carried out in accordance with the procedures
herein set forth.

 

The Wayne County Office of Human Relations
shall receive and investigate or cause to be investigated complaints by
employees or prospective employees of any County contractor or subcontractor
which

 

2

 

allege actions contrary to the contractual
undertakings of the contractor or subcontractor.

 

The Office of Human Relations shall use its
best efforts, directly and through the contracting departments, other
interested Federal, State, and local agencies, contractors, and all other
available instrumentalities, to cause any labor union engaged in work under
County contracts or any agency referring workers or providing or supervising
apprenticeship or training for or in the course of such work to cooperate in
the implementation of the purposes of the equal employment and affirmative
action provisions of the County contract. The Wayne County Office of Human
Relations shall, in appropriate cases, notify the United States Equal
Employment Opportunity Commission, the United States Department of Justice,
Michigan Civil Rights Commission, Attorney General or other appropriate Federal
agencies, whenever it has reason to believe that the practices of any such
labor organization or agency violates Title VI or Title VII of the Civil Rights
Act of 1964, Act No. 251, Public Acts of 1955 as amended, or the Fair
Employment Practices Resolution of the County of Wayne and such other relevant
legislation as hereafter may be enacted by the Congress of the United States of
America, the State of Michigan, or the County of Wayne.

 

The Wayne County Office of Human Relations
may hold such hearings, public or private, as it may deem advisable for
compliance, enforcement or educational purposes. Prior to the holding of said
hearings, a statement of charges shall be made available to the contractor or
subcontractor being charged, ten days prior to any scheduled hearing.

 

III                                    Sanctions
and Penalties - Where the Wayne County Office of Human Relations finds that a
contractor or subcontractor has failed to comply with the equal employment
opportunity and affirmative action provisions of its contract, the Office of
Human Relations may:

 

(a)                                  Publish,
or cause to be published, the names of contractors or unions which it has
concluded have complied or have failed to comply with the provisions of said
contract.

 

(b)                                 Recommend
to the Prosecutor’s Office that appropriate redress be sought for breach of
contract.

 

(c)                                  Recommend
that the Contracting Department cancel, terminate, suspend, or cause to be
cancelled, terminated, or suspended, any contract, or any portion or portions
thereof, for failure of the contractor or subcontractor to comply with the
nondiscrimination provisions of the contract. The Division of Human Relations
may recommend that a contract be conditioned upon implementation of

 

3

 

a program for
future compliance approved by the Office of Human Relations.

 

(d)                                 Recommend
that any Contracting Department refrain from entering into further contracts,
or extensions or other modifications of existing contracts, with any
noncomplying contractor, until such contractor has satisfied the Office of
Human Relations that such contractor has established and will carry out
personnel and employment policies in compliance with the provisions of its
contract.

 

IV.           Whenever
a Contracting Department cancels or terminates a contract, or whenever a
contractor has been disqualified from further County contracts because of
noncompliance with the contract provisions with regard to affirmative action to
provide equal employment opportunity, the Office of Human Relations shall
promptly notify the Chief Executive Officer and the Wayne County
Commission.  Upon a decision by the
Office of Human Relations, said parties of Interest may have the right to
appeal to the Chief Executive Officer and the Wayne County Commission.

 

4

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