Exhibit 10.17
Execution Version
AGREEMENT
THIS AGREEMENT
(“ Agreement ”)
dated as of April 18, 2006 between MAIR Holdings, Inc., a Minnesota
corporation (“ MAIR ”), and UMB Bank, N.A. as
trustee for the $14,000,000 Kenton County Airport Board Special
Facilities Revenue Bonds,1999 Series A (Mesaba Aviation, Inc.
Project) (the “ Trustee ”).
WITNESSETH:
WHEREAS , the Trustee is the successor trustee for those
certain $14,000,000 Kenton County Airport Board Special Facilities
Revenue Bonds,1999 Series A (Mesaba Aviation, Inc. Project) (the
“ Bonds ”) and has claims on the Bonds that are
evidenced by various documents (the “ Bond Documents
”) including, without limitation, (i) that certain Trust
Indenture by and between the Kenton County Airport Board and
Norwest Bank Minnesota, National Association, as trustee, dated as
of July 1, 1999 (the “ Indenture ”); and (ii)
that certain Lease Agreement by and Between Kenton County Airport
Board and Mesaba Aviation, Inc. dated as of July 1, 1999 (the
“ Lease Agreement ”); and
WHEREAS , MAIR guarantees obligations of its
wholly-owned subsidiary, Mesaba Aviation, Inc. (“
Mesaba ”) with respect to the Bond Documents pursuant
to that certain Guaranty Agreement dated as of July 1, 1999 (the
“ Guaranty ”), including, without limitation the
full and prompt payment of the principal, premium, if any, and
interest, when and as the same shall become due and payable as
provided in the Indenture and Mesaba’s full and prompt
performance of all obligations under the Lease Agreement, all as
more fully provided for in the Guaranty; and
WHEREAS , MAIR has been making certain payments to the
Trustee since October 13, 2005, the date on which Mesaba filed for
bankruptcy protection under Chapter 11 of the United States
Bankruptcy Code including: $91,927.61 on November 2, 2005,
$91,927.55 on December 6, 2005, $91,927.61 on December 30, 2005,
$91,927.61 on January 31, 2006, $91,927.61 on February 27, 2006 and
$91,927.61 on March 1, 2006; and
WHEREAS , on February 15, 2006, the Trustee declared the
liability of MAIR for all sums owed to the Trustee under the Bond
Documents and Guaranty to be immediately due and payable, demanded
the immediate payment in full in cash of all such sums, and
demanded arrangements for the payment of any other charges due
under the Bond Documents and Guaranty (including the
Trustee’s costs of collection), all as more fully set forth
in that certain demand letter dated February 15, 2006;
and
WHEREAS , the Trustee has agreed to forbear the
acceleration and payment of amounts due under the Bond Documents
and Guaranty in exchange for MAIR delivering a letter of credit for
the benefit of the Trustee and certain other agreements between the
parties, and the parties have agreed to memorialize the terms and
conditions of their agreement,
NOW, THEREFORE
, in consideration of the premises
and of the covenants herein contained, and for other good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as
follows:
1.
Execution and Delivery of Letter of Credit .
Contemporaneously with the execution of this Agreement, MAIR shall
deliver to the Trustee a letter of credit (the “ LOC
”) from a bank acceptable to the Trustee (the “
Issuing Bank ”), effective as of the date of this
Agreement, in form and substance acceptable to the Trustee, that
names the Trustee as beneficiary, and in substantially the form
attached hereto. The LOC shall be in the amount of $13,110,000
representing: (i) the $13,015,000 principal amount of the Bonds as
of the date of this Agreement; (ii) the approximate amount of the
payments for one month
