UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): March 26, 2020

 

 

Mesa Air Group, Inc.

(Exact Name of Registrant as specified in its charter)

 

 

  

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b‑2 of this chapter).

 

Emerging growth company  ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☒

 

 

 

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Item 1.01.  Entry into a Material Definitive Agreement.  

 

On March 26, 2020, Mesa Air Group, Inc. (“Mesa” or the “Company”) and General Electric Company (“GE”), acting through its GE-Aviation business unit, entered into (a) Amended and Restated Letter Agreement No. 13-1 (“Letter Agreement No. 13-1”), which amends and restates Letter Agreement No. 13 entered into by the parties effective December 11, 2019, and (b) Amended and Restated Letter Agreement No. 12-1 (“Letter Agreement No. 12-1” and together with Letter Agreement No. 13-1, the “Amended and Restated Letter Agreements”), which amends and restates Letter Agreement No. 12 entered into by the parties effective October 22, 2019.  The Amended and Restated Letter Agreements each provide that they are effective March 20, 2020.

 

Under Letter Agreement No. 13-1, Mesa has agreed to purchase and take delivery of 20 new spare CF34-8C5 engines.  Delivery of the new spare engines will commence in April 2021, with the final spare engine being delivered in December 2021.  The parties had previously agreed to commence delivery of the new spare engines in August 2020.  The payment terms for the new spare engines were also amended, with payments to now be made in four (4) separate tranches commencing in October and December 2020 and February and March 2021.  

 

Under Letter Agreement No. 12-1, Mesa has agreed to purchase and take delivery of two (2) new spare CF34-8C5 engines by no later than March 31, 2020.  The parties agreed that progress payments previously made by Mesa constitute full payment for these engines.  The Company does not consider this Letter Agreement to be a material definitive agreement, as defined by the rules and regulations of the Securities and Exchange Commission, but has elected to voluntarily file such Letter Agreement along with the filing of Letter Agreement No. 13-1.

 

The foregoing description of the Amended and Restated Letter Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the Amended and Restated Letter Agreements, filed as exhibits to this Current Report on Form 8-K, subject to a request for confidential treatment with respect to certain portions of each such document.

 

 

Item 9.01.     Financial Statements and Exhibits.

 

(d) Exhibits

 

* Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The omitted information is (i) not material and (ii) would likely cause competitive harm to the Company if publicly disclosed. The Company agrees to furnish supplementally an unredacted copy of the exhibit to the Securities and Exchange Commission upon its request.

 

 

 

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

 

EXHIBIT 10.1

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.

[***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

Packey Velleca

Sales Director, GE Aviation

One Neumann Way

Cincinnati, OH 45215

AMENDED AND RESTATED LA13-1

dated March 20, 2020

LETTER AGREEMENT NO. 13

TO GTA No. CF34-0801-055

WHEREAS, General Electric Company, acting through its GE-Aviation business unit (hereinafter individually referred to as “GE”), and Mesa Air Group, Inc. (hereinafter individually referred to as “Airline”) (GE and Airline being hereinafter collectively referred to as the “Parties”) have entered into General Terms Agreement CF34-0801-055 dated November 15, 2002, and all of its subsequent amendments (hereinafter collectively referred to as “GTA”); and

WHEREAS Airline and GE have entered into Letter Agreement No. 13 to the GTA, dated December 11, 2019, (“LA13”); and

WHEREAS Airline and GE desire to amend and restate LA13, and refer to as “LA No. 13- 1” (“Agreement”); and

NOW THEREFORE, in consideration of the mutual covenants herein contained, the Parties agree to all of the following:

LA13-1GE PROPRIETARY INFORMATION

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GE and Customer agree that as of the Effective Date, Customer has not made any progress payments or payments of any kind for New Engines purchased under this LA13-1.

GE and Customer agree that any and all progress payments previously made under LA13 shall be retained by GE and used toward the purchase of engine in LA12-1 in accordance with the terms and conditions in LA12-1, and such payments shall not be considered as progress payment or payment of any kind for any of the New Engines in this LA13-1.

The obligations set forth in this Agreement are in addition to the obligations set forth in the GTA. In the event of conflict between the terms of this Agreement and the terms of the GTA, the terms of this Agreement shall take precedence. Terms which are capitalized but not otherwise defined herein shall have the meaning given to them in Article I of the GTA.

Confidentiality of Information. This Agreement contains information specifically for Airline and GE, and nothing herein contained shall be divulged by Airline or GE to any third person, firm or corporation, without the prior written consent of the other Parties, which consent shall not be unreasonably withheld; except (i) that Airline’s consent shall not be required for disclosure by GE of this Agreements, to an Engine program participant, joint venture participant, engineering service provider or consultant to GE so as to enable GE to perform its obligations under this Agreement or to provide informational data; (ii) to the extent required by Government agencies, by law, or to enforce this Letter Agreement; and (iii) to the extent necessary for disclosure to the Parties’ respective insurers, accountants or other professional advisors who must likewise agree to be bound by the provisions of this paragraph. In the event (i) or (iii) occur, suitable restrictive legends limiting further disclosure shall be applied. In the event this Letter Agreement, or other GE information or data is required to be disclosed or filed by government agencies by law, or by court order, Airline shall notify GE at least thirty (30) days in advance of such disclosure or filing and shall cooperate fully with GE in seeking confidential treatment of sensitive terms of this Agreement.

LA13-1GE PROPRIETARY INFORMATION

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LA13-1GE PROPRIETARY INFORMATION

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ATTACHMENT A

Spare Engine Delivery Schedule

 

 

 

LA13-1GE PROPRIETARY INFORMATION

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ATTACHMENT B

CONDITIONS FOR SPECIAL ALLOWANCES/DELAY/CANCELLATION

For the avoidance of doubt, it is understood that GE shall have no further obligation beyond the Expiration Date to provide any of such Special Allowances which were not provided to Airline, through no fault of GE.

[***]

Any allowance described herein is exclusively for the benefit of Airline and is not assignable without GE’s written consent.

GE shall be entitled, with five (5) days prior written notice, to set off any outstanding obligation and amounts that are due and owing from Airline to GE (and not subject to a good faith dispute) for goods or services (whether or not in connection with this Letter Agreement and/or GTA), against any amount payable by GE to Airline in connection with this Letter Agreement and/or GTA.

Airline recognizes that harm or damage will be sustained by GE if Airline fails to accept delivery of the Spare Engines when duly tendered. Within thirty (30) days of any such cancellation or failure to accept delivery occurs, Airline shall remit to GE a minimum cancellation charge equal to [***] of the Engine price, determined as of the date of scheduled Engine delivery to Airline. Further GE reserves the right to terminate this agreement, in part or in whole, if the PDP Payment is not paid in accordance with the schedule in Exhibit A.

The parties acknowledge such minimum cancellation charge to be a reasonable estimate of the minimum harm or damage to GE in such circumstances. If any such cancellation or failure occurs with less than such twelve (12) months prior written notice, GE shall also retain all remedies in law and equity available to GE for damages in excess of such minimum cancellation charge.

GE shall retain any progress payments or other deposits made to GE for any such Engine. Such progress payments will be applied first to the minimum cancellation charge for such Engine and, in circumstances described in the last sentence of the preceding paragraph, then to any further damages sustained by GE as a result of such cancellation or failure to accept delivery. Progress payments held by GE in respect of any such Engine which are in excess of such

LA13-1

GE PROPRIETARY INFORMATION

 

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amounts will be refunded to Airline, provided Airline is not then in arrears on other amounts owed to GE.

In the event Airline delays the scheduled delivery date of a Spare Engine for a period, or cumulative period, of more than [***], such delay shall be considered a cancellation and the applicable provisions hereof regarding the effect of cancellation shall apply.

Any allowance described herein is predicated on the assumption that no offset or countertrade requirement will be imposed on GE. If such requirement is imposed, then GE reserves the right to reduce the allowance commensurate with the cost to GE of performing such offset or countertrade obligation(s).

LA13-1

GE PROPRIETARY INFORMATION

 

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ATTACHMENT C

 

LA13-1

GE PROPRIETARY INFORMATION

 

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ATTACHMENT D

ESCALATION

 

 

 

 

 

 

 

 

LA13-1

GE PROPRIETARY INFORMATION

 

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Example - determine base price or guarantee rate for 2007 with a base year of 2006:

 

 

Total Escalation5.5%

 

Assume a base price or guarantee rate in 2006 $ of 100.

Calculate 2007 price or guarantee rate= $100 X [1.055] = $105.50.

 

 

 

 

 

 

 

LA13-1

GE PROPRIETARY INFORMATION

 

 

EXHIBIT 10.2

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.

[***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

Packey Velleca

Sales Director, GE Aviation

One Neumann Way

Cincinnati, OH 45215

AMENDED AND RESTATED LA12-1

dated March 20, 2020

LETTER AGREEMENT NO. 12

TO GTA No. CF34-0801-055

WHEREAS, General Electric Company, acting through its GE-Aviation business unit (hereinafter individually referred to as “GE”), and Mesa Air Group, Inc. (hereinafter individually referred to as “Airline”) (GE and Airline being hereinafter collectively referred to as the “Parties”) have entered into General Terms Agreement CF34-0801-055 dated November 15, 2002, and all of its subsequent amendments (hereinafter collectively referred to as “GTA”); and

WHEREAS Airline and GE have entered into Letter Agreement No. 12 to the GTA dated October 22, 2019 for the purchase of (2) CF34-8C5 engines (“LA12”); and

WHEREAS Airline and GE have entered into Letter Agreement No. 13 to the GTA dated December 11, 2019 for the purchase of (20) CF34-8C5 engines (“LA13”); and

WHEREAS Airline and GE desire to amend and restate LA12, and hereafter refer to it as “LA No. 12-1” (“Agreement”); and

NOW THEREFORE, in consideration of the mutual covenants herein contained, the Parties agree to all of the following:

LA12-1 Amended and RestatedGE PROPRIETARY INFORMATIONPage 1 of 7

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The obligations set forth in this Agreement are in addition to the obligations set forth in the GTA. In the event of conflict between the terms of this Agreement and the terms of the GTA, the terms of this Agreement shall take precedence. Terms which are capitalized but not otherwise defined herein shall have the meaning given to them in Article I of the GTA.

Confidentiality of Information. This Agreement contains information specifically for Airline and GE, and nothing herein contained shall be divulged by Airline or GE to any third person, firm or corporation, without the prior written consent of the other Parties, which consent shall not be unreasonably withheld; except (i) that Airline’s consent shall not be required for disclosure by GE of this Agreements, to an Engine program participant, joint venture participant, engineering service provider or consultant to GE so as to enable GE to perform its obligations under this Agreement or to provide informational data; (ii) to the extent required by Government agencies, by law, or to enforce this Letter Agreement; and (iii) to the extent necessary for disclosure to the Parties’ respective insurers, accountants or other professional advisors who must likewise agree to be bound by the provisions of this paragraph. In the event (i) or (iii) occur, suitable restrictive legends limiting further disclosure shall be applied. In the event this Letter Agreement, or other GE information or data is required to be disclosed or filed by government agencies by law, or by court order, Airline shall notify GE at least thirty (30) days in advance of such disclosure or filing and shall cooperate fully with GE in seeking confidential treatment of sensitive terms of this Agreement.

LA12-1 Amended and RestatedGE PROPRIETARY INFORMATIONPage 2 of 7

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LA12-1 Amended and RestatedGE PROPRIETARY INFORMATIONPage 3 of 7

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ATTACHMENT A

Spare Engine Delivery Schedule

 

 

 

LA12-1 Amended and RestatedGE PROPRIETARY INFORMATIONPage 4 of 7

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ATTACHMENT B

CONDITIONS FOR SPECIAL ALLOWANCES/DELAY/CANCELLATION

For the avoidance of doubt, it is understood that GE shall have no further obligation beyond the Expiration Date to provide any of such Special Allowances which were not provided to Airline, through no fault of GE.

[***]    

 

Any allowance described herein is exclusively for the benefit of Airline and is not assignable without GE’s written consent.

GE shall be entitled, with five (5) days prior written notice, to set off any outstanding obligation and amounts that are due and owing from Airline to GE (and not subject to a good faith dispute) for goods or services (whether or not in connection with this Letter Agreement and/or GTA), against any amount payable by GE to Airline in connection with this Letter Agreement and/or GTA

Airline recognizes that harm or damage will be sustained by GE if Airline fails to accept delivery of the Spare Engines when duly tendered. Within thirty (30) days of any such cancellation or failure to accept delivery occurs, Airline shall remit to GE a minimum cancellation charge equal to [***] of the Engine price, determined as of the date of scheduled Engine delivery to Airline. Further GE reserves the right to terminate this agreement, in part or in whole, if the PDP Payment is not paid in accordance with the schedule in Exhibit A

The parties acknowledge such minimum cancellation charge to be a reasonable estimate of the minimum harm or damage to GE in such circumstances. If any such cancellation or failure occurs with less than such twelve (12) months prior written notice, GE shall also retain all remedies in law and equity available to GE for damages in excess of such minimum cancellation charge.

GE shall retain any progress payments or other deposits made to GE for any such Engine. Such progress payments will be applied first to the minimum cancellation charge for such Engine and, in circumstances described in the last sentence of the preceding paragraph, then to any further damages sustained by GE as a result of such cancellation or failure to accept delivery. Progress payments held by GE in respect of any such Engine which are in excess of such

LA12-1 Amended and RestatedGE PROPRIETARY INFORMATIONPage 5 of 7

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amounts will be refunded to Airline, provided Airline is not then in arrears on other amounts owed to GE.

In the event Airline delays the scheduled delivery date of a Spare Engine for a period, or cumulative period, of more than [***], such delay shall be considered a cancellation and the applicable provisions hereof regarding the effect of cancellation shall apply.

Any allowance described herein is predicated on the assumption that no offset or countertrade requirement will be imposed on GE. If such requirement is imposed, then GE reserves the right to reduce the allowance commensurate with the cost to GE of performing such offset or countertrade obligation(s).

 

LA12-1 Amended and RestatedGE PROPRIETARY INFORMATIONPage 6 of 7

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ATTACHMENT C

 

LA12-1 Amended and RestatedGE PROPRIETARY INFORMATIONPage 7 of 7