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EXHIBIT 10.84
[ON LETTERHEAD OF BOMBARDIER INC.]
CONFIDENTIAL
August 15, 1997
Our Ref: B97-7701-RJTL-349L
SETTLEMENT AGREEMENT
This Agreement is entered into this 15th day of August 1997
by and between
Bombardier Inc., represented by its
Regional Aircraft Division
("BRAD")
AND
Mesa Air Group, Inc. ("Mesa")
Whereas BRAD and Mesa have entered into purchase agreement 8-0299 dated March
24, 1995 (the "Purchase Agreement") for the purchase of twenty-five (25) Dash
8-200 aircraft (the "Aircraft"), as same has been amended:
Whereas by letter dated April 23, 1997, Mesa gave notice of its intention to
terminate the purchase of Aircraft numbers 13 through 25;
Whereas the parties desire to resolve and settle any and all dispute pertaining
to the Purchase Agreement;
THEREFORE THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE 1. Mesa hereby withdraws its cancellation notice for Aircraft number 13
to 20 and starting in August of 1997, Mesa will take delivery of aircraft 13
through 20 ("Undelivered Aircraft") at a rate of one aircraft per month. The
Undelivered Aircraft will not have the NVS and the Lightweight Bulkhead
installed.
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ARTICLE 2. Mesa hereby renounces its rights to the retrofit of the NVS and
Lightweight Bulkhead on the aircraft already delivered. In addition, Mesa will
accept the current Watermark restriction in the cargo compartment. Mesa hereby
[ * ] in connection with or relating to said NVS, Lightweight Bulkhead, Cargo
Watermark and other configuration [ * ] in the Aircraft already delivered
provided however that nothing herein contained shall relieve BRAD of its ongoing
obligations with respect to the Warranty and Service Life Policy provisions of
the Agreement for such other configuration [ * ].
ARTICLE 3. Within five (5) business days of the execution of this Agreement,
BRAD will [ * ] due under the Purchase Agreement, totaling as of June 30, 1997,
[ * ], and BRAD will remain current on all such [ * ] in the future.
ARTICLE 4. In accordance with the Purchase Agreement, the Parked Trade-In
Aircraft will be placed on Mesa's (or Westair's certificate as long as Westair
remains under the control and ownership of Mesa Air Group, Inc.) FAA, Part 121
operating certificate. [ * ]. The Parked Trade-In Aircraft will remain on Mesa's
(or Westair's as applicable) operating certificate until notified in writing by
BRAD, in accordance with the provisions of the Purchase Agreement.
ARTICLE 5. The Parked Trade-In Aircraft will be ferried from their current
location in Mena, AK to Mesa's (and/or Westair's) facilities in Fresno, CA.
[ * ].
ARTICLE 6. The Parked Trade-In Aircraft will be stored together in a secure
location at Mesa's (and/or Westair's) facility in Fresno. Access to the Parked
Trade-In Aircraft will be limited to Mesa personnel performing mandatory checks,
or work requested by BRAD. [ * ].
ARTICLE 7. Mesa shall maintain or cause to be maintained the Parked Trade-In
Aircraft in such a condition as to remain in compliance with (i) Mesa's and/or
Westair's maintenance program requirements, and (ii) with the terms and
conditions of the lease covering the respective aircraft. In addition, [ * ].
For the above work Mesa shall be entitled to [ * ]:
a) [ * ] [ * ]
b) [ * ] [ * ]
c) [ * ] [ * ]
[ * ].
ARTICLE 8. [ * ]. Except for the Parked Trade-In Aircraft as of the date of this
Settlement Agreement, [ * ], as the case may be.
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ARTICLE 9. BRAD will [ * ] from Mesa the [ * ] and [ * ] discovered after
October 1996 which are certified with appropriate supporting documentation in
accordance with the terms and conditions specified in Letter Agreement MJR-003
to the Purchase Agreement. Mesa will submit the description of the [ * ] on or
before September 1, 1997. BRAD will not have any [ * ] not on the list as of
September 1, 1997.
ARTICLE 10. Mesa hereby exercises its right under CCO #4, dated August 14, 1996,
as amended by CCO #5 dated December 13, 1996, to cancel aircraft #20 through #25
of the Undelivered Aircraft.
ARTICLE 11. [ * ] (Ref: B96-7701-RL-2764L).
ARTICLE 12. In consideration of this Settlement Agreement, BRAD hereby grants to
Mesa the right to convert the order of Undelivered Aircraft, on a one-for-one
basis, for an equivalent order of CRJ aircraft. Mesa may exercise this
conversion right by exercising two blocks of Option Aircraft totaling eight CRJ
aircraft, for which BRAD has not already committed to take EMB-120 aircraft in
trade, upon the terms of Letter Agreement RJTL-CRJ0351-001 to Purchase Agreement
CRJ-0351 dated January 31, 1997.
ARTICLE 13. If Mesa exercises its conversion right as provided in Article 12
above, the Dash 8 Flexparts inventory will be adjusted to reflect a fleet of 12
Aircraft.
ARTICLE 14. Mesa and BRAD agree that this Settlement Agreement shall be the full
and final settlement of all claims, demands, causes of action which either party
may have as of the date hereof relating to the Aircraft and the Purchase
Agreement or to the subject matters covered herein, including without
limitation:
(1) Any claims of BRAD regarding:
a) The [ * ] of the EMB 120 Serial No. 30, 54, 79, 96
b) The [ * ] of Dash 8-100, Serial Number 282
c) The [ * ] of the seven (7) Dash 8-300 aircraft
d) The [ * ] against serial number 279
e) The [ * ] provided with the Undelivered Aircraft
(2) Any claim of Mesa regarding:
a) With respect to the [ * ] (except for the on-going obligations
of BRAD under the Purchase Agreement such as Warranty);
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b) With respect to the [ * ], including lack of NVS, lightweight
bulkhead and cargo watermarks of the Aircraft already
delivered;
c) The [ * ] of the Aircraft;
d) [ * ].
ARTICLE 15. This Settlement Agreement shall be governed by the laws of
the State of [ * ].
ARTICLE 16. As compensation for the above, [ * ].
In witness whereof the parties hereto have signed this 15th day of August 1997.
Bombardier Inc. Mesa Air Group, Inc.
/s/ Richard Allison Per: /s/ Larry L. Risley
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Richard Allison
Vice-President, Sales - Title: Chairman/CEO
The Americas -----------------------------
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