Exhibit 10.12

Execution Copy

CONFIDENTIAL TREATMENT REQUESTED.  CONFIDENTIAL PORTIONS OF

THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY

FILED WITH THE COMMISSION

USED BEECHCRAFT 1900D AIRLINER PURCHASE AGREEMENT

On this 12th day of March, 2007, this Agreement (this “Agreement”) is made and
entered into by and between Champlain Enterprises, Inc. d/b/a CommutAir, a
corporation organized under the laws of the State of New York with an address at
518 Rugar Street, Plattsburgh, NY 12901 (“Seller”) and Big Sky Transportation
Co. d/b/a Big Sky Airlines, a corporation organized under the laws of Montana
with an address at 1601 Aviation Place, Billings, MT  59105 (“Buyer”).

RECITALS

A. Seller is the owner of twelve (12) used Beechcraft Model 1900D Airliner
aircraft, each together with two Pratt & Whitney PT 6A-67D engines, two Hartzell
HC-E4A-3J propellers, avionics, parts, components, and equipment installed
thereon and all records, logs, manuals, books, and other documents relating
thereto.

B. Seller intends to sell, and Buyer intends to purchase, pursuant to the terms
set forth in this Agreement, the eight (8) used Beechcraft Model 1900D Airliner
aircraft, together with the engines, propellers, avionics, parts, components,
and equipment installed thereon listed on Schedule A attached to and
incorporated into this Agreement, and all records, logs, manuals, books, and
other documents relating to such aircraft (collectively referred to as the
“Aircraft”).

C. Seller intends to grant to Buyer a right of first refusal to purchase the
four (4) used Beechcraft Model 1900D Airliner aircraft, together with the
engines, propellers, avionics, parts, components, and equipment installed
thereon listed on Schedule B attached to and incorporated into this Agreement,
and all records, logs, manuals, books, and other documents relating thereto
(collectively referred to as the “Optioned Aircraft”).

NOW, THEREFORE, for and in consideration of the mutual promises, covenants and
agreements set forth herein, the receipt and sufficiency of which are hereby
acknowledged, Seller and Buyer agree as follows:

ARTICLE 1: ACQUISITION AND PURCHASE OF THE AIRCRAFT

1.1                                 Aircraft. Subject to the terms and
conditions set forth in this Agreement, Seller agrees to sell to Buyer, and
Buyer agrees to purchase from Seller, the Aircraft.

ARTICLE 2: PURCHASE PRICE

2.1                                 Purchase Price. Buyer agrees to pay Seller
the purchase price for each Aircraft in the amount of *** Dollars ($***), in sum
total for all Aircraft in the amount of *** Dollars ($***) (hereafter the
“Purchase Price”).

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*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

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The Purchase Price shall be paid as follows:

(i)                                     Upon the execution of this Agreement,
Buyer shall pay to Seller $*** by wire transfer into an account identified by
Seller (the “Downpayment”). The Downpayment shall be a nonrefundable payment,
subject to Seller’s performance under Section 3.3(c) of this Agreement, which
may be used by Seller in the operation of its business.  Seller shall apply the
Downpayment to the Purchase Price as set forth below.

(ii)                                  The remaining *** Dollars ($***) shall be
paid in the following manner. On or before the delivery date of each of the
eight Aircraft, as such delivery dates are set forth in Schedule C, (i) Buyer
shall pay to Robert M. Peregrin, Esq., Dougherty, Fowler, Peregrin, Haught and
Jensen, 204 North Robinson, Suite 900, Oklahoma City, Oklahoma  73120 (the
“Escrow Agent”) $***, (ii) Buyer shall deliver to the Escrow Agent Buyer’s
Deliverables as defined in Section 3.4 of this Agreement relating to each
specified Aircraft; (iii) Seller shall apply $*** of the Downpayment to the
Purchase Price of the subject Aircraft; and (iv) and Seller shall deliver to the
Escrow Agent Seller’s Deliverables as defined in Section 3.3 of this Agreement
relating to each specified Aircraft. Prior to taking possession of each Aircraft
on the delivery dates set forth in Schedule C, the Escrow Agent shall (a)
deliver to Buyer a lien and title report satisfactory to Buyer, (b) pay to
Seller $*** for each Aircraft ready for delivery to Buyer, (c) record the United
States Federal Aviation Administration (the “FAA”) bill of sale for such
specified Aircraft, (d) deliver to Buyer Seller’s long form bill of sale
relating to such specified Aircraft, (e) deliver to Seller the Final Acceptance
and Delivery and New York State tax exemption certificate as set forth in
Section 3.4.  On the occurrence of Closing relating to each Aircraft, with
respect to such Aircraft, the Escrow Agent shall register the Buyer’s interests
in the relevant Aircraft as a “Contract of Sale” pursuant to the Protocol to the
Convention on International Interests in Mobile Equipment on Matters Specific to
Aircraft Equipment and the regulations of the International Registry of Mobile
Assets.

(iii)                             Each party shall also do and perform such
other and further acts and execute and deliver any and all such other and
further instruments as may be required to enable the Escrow Agent to register
the Buyer’s interests in the relevant Aircraft as a “Contract of Sale” pursuant
to the Protocol to the Convention on International Interests in Mobile Equipment
on Matters Specific to Aircraft Equipment and the regulations of  the
International Registry of Mobile Assets.

2.2                                 Escrow Costs. Buyer and Seller shall pay
fifty percent (50%) of all fees, costs, and expenses of the Escrow Agent.

2.3                                 Taxes, Fees and Liens. Buyer agrees to pay,
in addition to the Purchase Price, any and all taxes (including sales, use and
property taxes), filing fees, transfer fees, excises, tariffs, duties or similar
fees and charges which may be levied or assessed upon the Aircraft or this
transaction by any regulatory, licensing or taxing authority, except for any
income tax which Seller may incur as a result of the transactions contemplated
by this Agreement. Buyer also agrees to pay any fees of any type as a result of
Buyer’s activities.

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*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

 

2

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ARTICLE 3: DELIVERY AND CLOSING

3.1                                 Closing. The closing of each of the Aircraft
shall occur on the dates listed in Schedule C attached to and incorporated into
this Agreement (“Closing Dates”). The Closing shall proceed through an escrow
agreement in the form attached as Exhibit A.

3.2                                 Condition of Aircraft. Upon the delivery of
each Aircraft to Buyer, (i) each Aircraft shall be delivered in airworthy
condition pursuant to FAA Part 121 and in compliance with all airworthiness
directives and mandatory service bulletins; (ii) all installed equipment and all
log book discrepancies shall be cleared; (iii) there will be at least 2,000
hours left before the next structural inspection is due; and (iv) all records,
logs, manuals, books, and other documents relating thereto shall be current and
in compliance with FAA regulations (collectively, the “Delivery Conditions”). If
an Aircraft is delivered with less than 2,000 hours left before the next
structural inspection, Buyer shall be entitled to a credit against the Purchase
Price equal to an amount calculated as follows:

 

(2,000 - hours left before structural inspection) x $***

 

2,000

 

3.3                                 Delivery of Aircraft. Each Aircraft shall be
offered for acceptance and delivery at the specified Closing Dates set forth in
Schedule C in accordance with the following procedure:

(A)                              The parties acknowledge that Seller currently
uses and will continue to use each of the Aircraft in the operation of its
business. Possession of the Aircraft shall at all times remain with Seller until
delivery of the Aircraft to Buyer on the Closing Dates.  On and following the
date that this Agreement is fully executed and delivered by the parties hereto,
Buyer shall be entitled, at its sole cost and expense, to have a representative
present to observe any inspection of the Aircraft that is conducted pursuant to
Seller’s existing maintenance and inspection program.

(B)                                The Aircraft shall be delivered to Buyer on
the respective Closing Dates set forth on Schedule C in Plattsburgh, New York.
On such dates, Buyer shall execute the Certificate of Final Acceptance and
Delivery in the form attached hereto as Exhibit B provided the Delivery
Conditions are satisfied.

(C)                                Title and risk of loss or damage to the
Aircraft shall pass to Buyer upon delivery of the Aircraft to the Buyer. If an
Aircraft is lost or materially damaged prior to its delivery to Buyer, the
Seller shall refund to Buyer the pro rata portion of the Downpayment allocable
to such Aircraft and this Agreement shall terminate with respect to such
Aircraft.

3.4                                 Seller’s Closing Deliverables. Seller shall
deliver to the Escrow Agent the following items (“Seller’s Closing
Deliverables”):

(A)                              An original fully executed Long Form Bill of
Sale for the Aircraft in the form of

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*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

3

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Exhibit C attached; and

(B)                                An original FAA Form Bill of Sale.

In addition, Seller shall make the Aircraft available to Buyer for its
inspection, which inspection, at Buyer’s sole expense, shall include a records
check, engine borescope, and test flight.  Buyer will have the opportunity to
have a representative present during the inspection.

3.5                                 Buyer’s Closing Deliverables. Buyer shall
deliver to the Escrow Agent the following items:

(A)                              A fully executed Certificate of Final
Acceptance and Delivery in the form of Exhibit B attached hereto;

(B)                                An executed New York sales tax exemption
certificate; and

(C)                                Such other documents as may be reasonably
required by Seller to consummate the transactions contemplated in this
Agreement.

(D)                               $*** for each Aircraft.

ARTICLE 4: “AS IS”CONDITION AND SELLER’S DISCLAIMERS

4.1                                 Warranty of Title. Seller represents and
warrants to Buyer that at the time of delivery to Buyer, (i) Seller shall have
legal title to the Aircraft, and (ii) the Aircraft shall be transferred to Buyer
free and clear of any liens, claims, charges or encumbrances.

4.2                                 “As Is” Condition. BUYER UNDERSTANDS AND
AGREES THAT THE AIRCRAFT IS A USED AIRCRAFT AND THAT BUYER IS PURCHASING THE
AIRCRAFT IN AN “AS IS, WHERE IS, AND WITH ALL FAULTS” CONDITION, SUBJECT ONLY TO
THE WARRANTY SPECIFIED ABOVE IN SECTION 4.1. Notwithstanding the foregoing, to
the extent that any parts or components installed on or in the Aircraft on the
Closing Date are subject to any warranty issued by any manufacturer or
remanufacturer thereof, Seller will undertake reasonable steps (not including or
involving the payment of any amount of money) to transfer to Buyer the
contractual right to enforce any such warranty, to the extent same may be
transferable.

4.3                                 Disclaimer of Warranty. Buyer understands
and agrees to each of the following disclosures, disclaimers, waivers,
acknowledgements and undertakings with respect to the Aircraft:

(A)                              Seller is not the manufacturer of the Aircraft,
or of any part or component installed in or on the Aircraft;

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*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

4

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(B)                                the original manufacturer’s warranty on the
Aircraft, including its engines, propellers, and avionics equipment, has
expired. Notwithstanding the foregoing, to the extent that any parts or
components installed on or in the Aircraft on the Closing Date are subject to
any warranty issued by any manufacturer or remanufacturer thereof, Seller will
undertake reasonable steps (not including or involving the payment of any amount
of money) to transfer to Buyer the contractual right to enforce any such
warranty, to the extent same may be transferable.;

(C)                                SELLER MAKES NO WARRANTIES WHATSOEVER, EITHER
EXPRESS OR IMPLIED, RELATING TO THE AIRCRAFT OR THE PRE-CLOSING MAINTENANCE;

(D)                               BUYER WAIVES ALL EXPRESS OR IMPLIED WARRANTIES
RELATING TO THE AIRCRAFT, WHETHER OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR OTHERWISE AND ACKNOWLEDGES AND AGREES THAT NO SUCH WARRANTIES APPLY
TO THE AIRCRAFT OR ANY OTHER PROPERTY BEING TRANSFERRED UNDER THIS AGREEMENT;

(E)                                 EXCEPT AS PROVIDED IN SECTIONS 4.2 AND
4.3(B) OF THIS AGREEMENT WITH RESPECT TO CERTAIN MANUFACTURERS’ WARRANTIES,
BUYER WAIVES ALL EXPRESS OR IMPLIED WARRANTIES RELATING TO THE PRE-CLOSING
MAINTENANCE (INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY CONCERNING THE QUALITY
OF THE WORKMANSHIP OR SERVICES PERFORMED WITH RESPECT TO THE PRE-CLOSING
MAINTENANCE, OR ANY WARRANTY RELATING TO NEW, USED OR RECONDITIONED PARTS OR
COMPONENTS INSTALLED IN OR ON THE AIRCRAFT IN CONNECTION WITH THE PRE-CLOSING
MAINTENANCE) WHETHER OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
OTHERWISE AND ACKNOWLEDGES AND AGREES THAT NO SUCH WARRANTIES APPLY TO THE
PRECLOSING MAINTENANCE OR ANY OTHER SERVICES BEING PERFORMED OR PROPERTY BEING
TRANSFERRED UNDER THIS AGREEMENT;

(F)                                 Buyer shall have all risks as to the quality
and performance of the Aircraft;

(G)                                Buyer assumes all costs and risks for any
liens, encumbrances, charges and debts on the Aircraft arising by or through
Buyer or its representatives or as the result of their use, operation,
maintenance, repair or possession of the Aircraft; and

(H)                                     SELLER SHALL NOT BE LIABLE FOR ANY
DEFECTS, EITHER LATENT OR PATENT, IN THE AIRCRAFT NOR FOR ANY GENERAL,
CONSEQUENTIAL OR INCIDENTAL DAMAGES, INCLUDING, WITHOUT LIMITATION, ANY DAMAGES
FOR LOSS OF USE, LOSS OF PROFITS, DIMINUTION OF MARKET VALUE, OR ANY
INTERRUPTION IN BUYER’S BUSINESS RESULTING FROM ITS INABILITY TO USE THE
AIRCRAFT FOR ANY REASON WHATSOEVER. SELLER SHALL NOT BE LIABLE FOR ANY DAMAGES

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*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

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CLAIMED BY BUYER OR ANY OTHER PERSON OR ENTITY UPON THE THEORIES OF NEGLIGENCE
OR STRICT LIABILITY IN TORT.

4.4                                       Acknowledgement and Disclaimer. Buyer
acknowledges and agrees that, in purchasing and accepting the Aircraft, (i)
Buyer has relied solely upon its own inspection and evaluation of the Aircraft,
(ii) Seller is making no representations or warranties as to the value,
condition, airworthiness, design, operation or fitness for use of the Aircraft
to Buyer, and (iii) Seller is disclaiming, and Seller does hereby disclaim, any
such representation or warranty.

ARTICLE 5: DEFAULT AND TERMINATION

5.1                                 In the event all conditions of this
Agreement are satisfied and the performance of this Agreement is tendered by a
party but the sale is not consummated through default on the part of the other
party on the Closing Date, the non-defaulting party may exercise any remedy
available to it at law or in equity. The remedies stated herein are cumulative
and not exclusive.  Notwithstanding anything to the contrary contained in this
Section 5.1, neither party shall be entitled to consequential and/or incidental
damages.

ARTICLE 6: RIGHT OF FIRST REFUSAL

6.1                                 Seller shall not dispose of the Optioned
Aircraft without first complying with the provisions of this Section. If Seller
receives a written bona fide offer to purchase one or more of the Optioned
Aircraft (a “Bona Fide Offer”), Seller shall provide Buyer with a copy of such
Bona Fide Offer and a written notice of Seller’s intent to accept such offer
(“Seller’s Notice”). Buyer shall notify Seller in writing, within 72 hours of
its receipt of Seller’s Notice, of Buyer’s intention to purchase such Aircraft,
or its decision not to purchase such Aircraft. ***. The Closing shall take place
30 days after the date of the Bona Fide Offer. If, on the other hand, Buyer
decides not to purchase the Optioned Aircraft, all of Buyer’s right to purchase
such Optioned Aircraft shall terminate and Seller shall have the right to sell
such Optioned Aircraft to the third party purchaser free and clear of all of
Buyer’s right, title, and interest in the Optioned Aircraft.  In such event,
Seller shall consummate the sale of the Optioned Aircraft to the third party
purchaser within 60 days of receipt of the Bona Fide Offer, and any sale to a
third party purchaser after such date shall require Seller to again provide
Buyer with Seller’s Notice and follow the provisions of this Section 6.1.  At
any time, if Buyer fails to respond to Seller’s Notice within 72 hours of
Buyer’s receipt of Seller’s Notice, such failure shall be treated as Buyer’s
decision not to purchase the Optioned Aircraft.

ARTICLE 7: SUPPORT AGREEMENT

7.1                                 Prior to the delivery of the first Aircraft,
the parties agree to execute a separate agreement which will provide the
following support:

(A)                              Spare Parts Package – Seller agrees to sell and
Buyer agrees to buy not less than $*** and up to $*** (the “Parts Purchase
Price”) of serviceable Beech 1900 parts specified by Buyer at delivery of the
first Aircraft.  Buyer shall pay to Seller ninety percent (90%) of the Parts

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*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

6

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Purchase Price at delivery and the balance in thirty days.

(B)                                Ground Equipment – Seller will offer for sale
certain ground equipment items which have become excess to its needs such as tow
bars, etc. at fair market value.

(C)                                Delivery Support – Seller will provide
reasonable pre-delivery assistance to Buyer at Seller’s Maintenance Facility
prior to each closing. Such assistance will include but not be limited to short
term storage, towing, use of jacks, test equipment, access to records, and
reasonable labor assistance in order to allow Buyer to conduct proper evaluation
of each aircraft.

(D)                               Tools – The following will be made available
in support of Buyer’s operations.

i.                                          Seller will make available for sale
to Buyer selected tools appropriate to the BE1900 at CommutAir’s cost plus
freight.

ii.                                       In addition,
“CommutAir-designed”tooling will also be offered to Buyer at a reasonable cost
plus freight.

(E)                                 Emergency Equipment – Seller will provide
all currently installed emergency equipment required for FAR 121 operations.

(F)                                 Maintenance and Inspection Program Manuals. 
Seller will provide to Buyer a complete copy of Seller’s Maintenance and
Inspection Program Manuals.

ARTICLE 8: MISCELLANEOUS

8.1                                 Governing Law and Forum Choice. This
Agreement was made and entered into in the State of New York, and the law
governing this transaction shall be that of the State of New York as it may from
time to time exist (without giving effect to its conflict of law principles).
The law of the State of New York shall apply to any and all matters arising from
or related to this Agreement and transaction. The parties agree that any legal
proceeding based upon the provisions of this Agreement or breach thereof shall
be brought exclusively in either the United States District Court for the
Northern District of New York at Syracuse, New York, or in the New York Supreme
Court, Onondaga County in Syracuse, New York to the exclusion of all other
courts and tribunals. The parties hereby consent and agree to be subject to the
jurisdiction of the aforesaid courts in such proceedings.

8.2                                 Amendments. The parties may mutually agree
to amend or modify the terms and conditions of this Agreement. It is expressly
agreed, however, that no amendment or modification to this Agreement shall be
binding upon either party unless it is reduced to writing and duly executed by
both parties in the same manner as the original execution of this Agreement.

8.3                                 Brokerage. Neither Seller nor Buyer have
dealt with, or are obligated to make payment to, any finder, broker, dealer or
agent in connection with the transactions contemplated by this

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*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

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Agreement or the negotiations leading to the execution and delivery of this
Agreement.

8.4                                 Entire Agreement; Counterparts. This
Agreement contains the entire agreement of the parties and supersedes and merges
any and all prior agreements between the parties, written or oral, with respect
to the transactions hereby contemplated. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be as effective
as delivery of a manually executed counterpart of this Agreement.

8.5                                 Assignment to Designee of Buyer. Subject to
the conditions set forth below, Buyer may assign to a designee of Buyer its
rights to acquire the Aircraft pursuant to this Agreement, provided, however (i)
no such assignment shall be deemed effective without the prior written consent
of Seller, (ii) notwithstanding such assignment, Buyer shall remain liable for
all of Buyer’s duties and obligations pursuant to the terms of this Agreement,
and (iii) Buyer shall be responsible solely for all costs and expenses
associated with, or arising from, such assignment.

8.6                                 Mutual Representations. Each party to this
Agreement represents and warrants to the other as follows: (i) it is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) it has the power and authority to execute
and deliver this Agreement and all other documents associated with the
transactions contemplated in this Agreement (the “Transaction Documents”), and
to perform pursuant to the terms thereof, (iii) all requisite action on its part
(including action by its officers, directors or shareholders) necessary for the
authorization of the Transaction Documents and the performance of its
obligations under the Transaction Documents has been taken, (iv) the undersigned
officer or officers of such party have all requisite power and authority to
execute and deliver the Transaction Documents on behalf of such party, (v) the
Transaction Documents, when executed and delivered, will constitute valid and
binding obligations enforceable against it in accordance with their terms.

8.7                                 Patriot Act. Buyer certifies that it has not
been designated, nor is it or shall it be owned or controlled, by a “suspected
terrorist” as defined in Executive Order 13224. The Buyer hereby acknowledges
that Seller has informed Buyer that it seeks to comply with all applicable laws
concerning money laundering and related activities. In furtherance of those
efforts, the Buyer hereby represents, warrants and covenants that: (i) none of
the cash or property that Buyer or any party providing financing to Buyer will
pay or will contribute to Seller has been or shall be derived from, or related
to, any activity that is deemed criminal under United States law; and (ii) no
contribution or payment by Buyer or any party providing financing to Buyer to
Seller shall cause Seller to be in violation of the United States Bank Secrecy
Act, the United States International Money Laundering Control Act of 1986 or the
United States International Money Laundering Abatement and Anti-Terrorist
Financing Act of 2001. The Buyer shall promptly notify Seller if any of these
representations, warranties and covenants ceases to be true.

8.8                               Notices. All notices, requests, demands,
amendments, modifications or other communications under this Agreement shall be
in writing. Notice shall be sufficient for all such purposes if personally
delivered, delivered by courier with receipt of delivery, facsimile

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*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

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transmitted with written confirmation of receipt by recipient, or e-mailed with
verifiable and unmodifiable proof of content and time and date of sending by
sender and delivery to recipient. Notice is effective on delivery. Any notice
given by facsimile transmission or e-mail shall be deemed received on the next
business day if it is received after 5:00 p.m. (recipient’s time) or on a
non-business day.  All notices, requests, demands, amendments, modifications, or
other communications under this Agreement shall be sent to the addresses listed
below:

If to Seller:

Champlain Enterprises, Inc.

Attn:  Joel Raymond, Vice President

518 Rugar Street

Plattsburgh, New York 12901

Facsimile:  (518) 562-8030

E-mail:  jraymond@commutair.com

With a copy to:

Joseph Zagraniczny, Esq.

Bond, Schoeneck & King, PLLC

One Lincoln Center

Syracuse, New York  13202-1355

Facsimile:  (315) 218-8100

E-mail: zagranj@bsk.com

If to Buyer:

Big Sky Transportation Co.

Attn:  Fred deLeeuw, President

1601 Aviation Place

Billings, MT  59105

Facsimile:  (406) 247-3972

E-mail:  fred.deleeuw@bigskyair.com

With a copy to:

MAIR Holdings, Inc.

Attn:  General Counsel

150 South 5th Street

Suite 1360

Minneapolis, MN  55402

Facsimile:  (612) 333-0590

Any party may change its address or facsimile number or e-mail address by giving
the other party notice of the change in any manner permitted by this Agreement.

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*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

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8.9  Counterparts.  This Agreement may be executed in any number of counterparts
and any party hereto may execute any such counterpart, each of which when
executed and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same instrument. 
The execution of this Agreement by any party hereto will not become effective
until counterparts hereof have been executed by all of the parties hereto.  In
order to facilitate execution of this Agreement, fax signatures and pdf
signatures shall be deemed to be original signatures.

IN WITNESS OF the mutual promises, covenants and agreements set forth herein,
the parties have caused their duly authorized officers to execute this Agreement
on the date first written above.

CHAMPLAIN ENTERPRISES, INC.

 

By:

/s/ Joel Raymond

 

 

Name:

Joel Raymond

 

Title:

Vice President, Marketing

 

 

 

BIG SKY TRANSPORTATION CO.

 

By:

/s/ Fred deLeeuw

 

 

Name:

Fred deLeeuw

 

Title:

President

 

 

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*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

10

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Schedule A

Serial #

 

Registration #

 

Engine #

UE-405

 

N856CA

 

PS0387  PS0385

UE-396

 

N838CA

 

PS0458  PS0407

UE-401

 

N840CA

 

PS0409  PS0406

UE-399

 

N854CA

 

PS0390  PS0434

UE-400

 

N835CA

 

PS0415  PS0416

UE397

 

N837CA

 

PS0408  PS0391

UE-403

 

N857CA

 

PS0395  PS0394

UE-402

 

N842CA

 

PS0402  PS0403

 

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*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

A-1

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Schedule B

Serial #

 

Registration #

 

Engine #

 

Option #

UE-406

 

N832CA

 

PS0386  PS0393

 

1

UE-407

 

N836CA

 

PS0399  PS0398

 

2

UE-408

 

N858CA

 

PS0396  PS0397

 

3

UE-410

 

N844CA

 

PS0405  PS0404

 

4

 

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*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

B-1

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Schedule C

Delivery and Closing Date

Aircraft

 

Delivery Date
as soon as possible, but in no event later
than

1

 

April 17, 2007*

2

 

July 2, 2007

3

 

August 6, 2007

4

 

September 3, 2007

5

 

October 1, 2007

6

 

November 5, 2007

7

 

December 3, 2007

8

 

January 1, 2008

 

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* Assumes Seller is fully released of *** by April 1, 2007.   Seller shall have
no obligation to deliver the first Aircraft to Buyer until Seller is released of
***.  Such release has no effect upon the delivery dates of the other seven
Aircraft.

*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

C-1

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Exhibit A

ESCROW AGREEMENT

This Escrow Agreement (this “Agreement”) is made and entered into as of the     
day of March, 2007 by and among CHAMPLAIN ENTERPRISES, INC. d/b/a CommutAir, a
corporation organized under the laws of the State of New York with an address at
518 Rugar Street, Plattsburgh, New York 12901 (“Seller”), BIG SKY TRANSPORTATION
CO. d/b/a Big Sky Airlines, a corporation organized under the laws of the State
of Montana, with an address at 1601 Aviation Place, Billings Montana 59105
(“Buyer”) and DAUGHERTY, FOWLER, PEREGRIN, HAUGHT & JENSON, 204 North Robinson
Avenue, Suite 900, Oklahoma City, Oklahoma 73102 (“Escrow Agent”).

RECITALS

A.                                 Seller is the owner of eight (8) used
Beechcraft Model 1900D Airliner aircraft, each together with two Pratt & Whitney
PT6A-67D engines, two Hartzell HC-E4A-3J propellers, avionics, parts,
components, and equipment installed thereon listed on Schedule A attached to and
incorporated into this Agreement (collectively referred to as the “Aircraft”).

B.                                   On or about March 8, 2007, Seller and Buyer
executed a used Beechcraft 1900D Airliner Purchase Agreement, dated as of March
8, 2007 (the “Purchase Agreement”) under which Seller agreed to sell to Buyer
and Buyer agreed to buy from Seller the Aircraft on the closing dates listed on
Schedule B attached to and incorporated into this Agreement (the “Closing
Dates”).  While the Closing Date with respect to the first Aircraft is subject
to Seller obtaining ***, the Closing Dates of the other seven aircraft are not
contingent upon Seller ***.

C.                                   The purpose of this Agreement is to set
forth the terms and conditions under which the Escrow Agent is to hold and
disburse the Purchase Proceeds, as that term is defined in Section 2 of this
Purchase Agreement.

AGREEMENT

NOW, THEREFORE, for and in consideration of the mutual promises, covenants, and
agreements set forth herein, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

1.                                       Purchase Price.  Pursuant to the
Purchase Agreement, Buyer agrees to pay Seller the purchase price for each
aircraft in the amount of $***, in sum total for all of the Aircraft in the
amount of $*** (hereafter referred to as the “Purchase Price”).

(a)                                  Downpayment. Seller hereby acknowledges
receipt of $*** (the “Downpayment”).

(b)                                 Remaining Purchase Price.  Prior to the
Closing of each of the eight Aircraft,  Buyer shall pay to the Escrow Agent
$***.

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*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

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2.                                       Seller’s Closing Deliverables.  Subject
to the satisfaction of the conditions in the Purchase Agreement, on or before
each Closing Date, Seller shall deliver to the Escrow Agent the following items
(“Seller’s Closing Deliverables”):

(i)                                     original fully executed long form Bill
of Sale for the specific Aircraft being conveyed;

(ii)                                  an original FAA Form Bill of Sale for the
specific Aircraft being conveyed;

(iii)                               an original executed release of the security
interest from Laurus Master Fund, Ltd. which is a lien on the specific Aircraft
being conveyed.

The items listed in Section 2(ii) and (iii) shall be hereafter referred to as
the “FAA Documents.”

3.                                       Buyer’s Closing Deliverables.   On or
before each Closing Date, Buyer shall deliver the following items to the Escrow
Agent:

(i)                                     $*** for each Aircraft being conveyed
(the “Escrow Funds”);

(ii)                                  an original executed Certificate of Final
Acceptance and Delivery as set forth in the Purchase Agreement;

(iii)                               an original executed New York State Sales
Tax Exemption Certificate;

(iv)                              such other documents as may be reasonably
required by Seller to consummate the transactions contemplated in the Purchase
Agreement.

3.                                       FAA Filing.  Upon oral notice on a
closing call from Buyer and Seller that all conditions precedent to the closing
of the transactions contemplated by the Agreement have been satisfied
(collectively, the “Closing Notice”), the Escrow Agent shall direct the Escrow
Agent Bank to disburse the Escrow Funds as set forth in paragraph 4.  Upon
receipt of a federal reference number from the Escrow Agent Bank, the Escrow
Agent shall date and file with the FAA the FAA Closing Documents together with
an appropriate transmittal letter and its check to the FAA for the required
filing fee.

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*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

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The Escrow Agent Bank and its wiring instructions are as follows:

Wells Fargo Bank

299 South Main Street, 12th Floor

Salt Lake City, UT

ABA: 121-000-248

Account No.: ***

Acct. Name: Corporate Trust Services

RE: DFPHJ Funding Account

Reference File No.:                    ; N          

4.                                       Disbursement of Escrow Funds.  Upon
receipt of the Closing Notice and confirmation that the Aircraft records at the
FAA are free and clear of liens and encumbrances of record as set forth in the
Escrow Agent’s draft of opinion, assuming that the same occurs during normal
banking hours, the Escrow Agent shall direct on that same day the Escrow Agent
Bank to disburse by wire transfer the Escrow Funds together with all interest
earned thereon as follows:

(a)                                  the amount of *** U.S. Dollars ($***U.S.)
for each Aircraft to be conveyed on the Closing Date to:

Wire Instructions:

Mellon Bank

Pittsburgh, PA

ABA #043000261

Credit Merrill Lynch

Acct. No. ***

Further Credit – Champlain Enterprises, Inc.

Account No. ***

It is understood by the parties hereto that if the Closing Notice occurs after
3:00 p.m., EST on a banking business day, the Escrow Funds may not, because of
the close of the Federal wire for that day, be forwarded until the next banking
business day.  In that event, the FAA Closing Documents will not be filed until
the next day upon the receipt of a reference number from the Escrow Agent Bank.

The Escrow Agent shall forward to the Buyer:

(i)                                     the original executed long form Bill of
Sale.

(ii)                                  copies of all other Seller’s Deliverables
and Buyer’s Deliverables.

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*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

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The Escrow Agent shall forward to the Seller:

(i)                                     original executed Certificate of Final
Acceptance and Delivery.

(ii)                                  copies of all other Seller’s Deliverables
and Buyer’s Deliverables.

5.                                       Termination of Escrow for Specific
Aircraft.  In the event that Seller has delivered to the Escrow Agent Seller’s
Deliverables, and the Aircraft satisfies the delivery conditions set forth in
Section 3.2 of the Purchase Agreement and the Buyer thereafter fails to
consummate the transactions contemplated by the Purchase Agreement, and such
failure by Buyer continues through the Closing Date, as the Closing Date may be
extended by mutual agreement by both parties in writing, within three business
days following the Closing Date, Seller shall execute a notice to the Buyer and
Escrow Agent under which Seller will notify Buyer of its default under the
Purchase Agreement and direct the Escrow Agent to return Seller’s Deliverables
to Seller.  Seller shall reserve all of its rights against Buyer under the
Purchase Agreement in the event of Buyer’s default.

6.                                       Limitation of Escrow Agent’s
Liability.  The Escrow Agent shall not be liable for any action taken or omitted
to be taken by it while acting in good faith and in the exercise of its best
judgment, under this Escrow Agreement or any instrument executed pursuant
hereto, or in connection herewith or therewith, except for its own willful,
criminal misconduct or gross negligence, nor be responsible for the
effectiveness, enforceability, validity or due execution of this Escrow
Agreement or any instrument executed pursuant hereto including, without
limitation, the Escrow Documents, as to the parties to this Escrow Agreement and
any third parties.  The Escrow Agent shall be entitled to rely upon advice of
counsel concerning legal matters and upon any notice, consent, certificate,
statement or writing which it believes to be genuine and to have been presented
by a proper person.  In the event of any disagreement between any of the parties
to this Escrow Agreement, or between them or any of them and any other person,
resulting in divergent or adverse claims or demands being made in connection
with the subject matter of this Escrow Agreement, or in the event the Escrow
Agent, in good faith, is in doubt as to what action should be taken hereunder,
the Escrow Agent may, at its option, refuse to comply with any claims or demands
on it, or refuse to take any other action hereunder so long as such disagreement
continues or such doubt exists, and in any such event, the Escrow Agent shall
not be or become liable in any way or to any person for its good faith failure
or refusal to act, the Escrow Agent shall be entitled to continue to so refrain
from acting until (i) the rights of the parties shall have been fully and
finally adjudicated by a court of competent jurisdiction or (ii) all differences
shall have been adjusted and all doubt resolved by agreement among all of the
interested persons and the Escrow Agent shall be notified thereof in writing
signed by all such persons.  Further, in the event of any such dispute or
controversy, the Escrow Agent may, if, in its sole discretion, it deems
appropriate, institute a declaratory judgment or other appropriate legal action
in any court of competent jurisdiction to determine the rights of the parties
involved.  Should action be instituted, or should the Escrow Agent become
involved in litigation in any manner whatsoever on account of this Escrow
Agreement or the FAA Closing Documents or the Escrow Funds, Seller and Buyer,
jointly and severally, hereby bind and obligate themselves, their heirs,
personal representatives, successors and assigns to pay Escrow Agent the

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*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

 

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reasonable attorneys’ fees incurred by Escrow Agent to retain legal counsel, as
well as any other disbursements, expenses, losses, costs or damages in
connection with or resulting from such litigation, except such as may have been
caused by the gross negligence or misconduct of the Escrow Agent.  The rights of
the Escrow Agent under this Section 7 are cumulative of all other rights which
it may have by law or otherwise.

7.                                       Governing Law.  This Escrow Agreement
is to be governed by and construed under the laws of the State of Oklahoma.

8.                                       Invalidity.  In the event that any one
or more of the provisions of this Escrow Agreement shall for any reason be held
to be invalid, illegal or unenforceable, the remaining provisions of this Escrow
Agreement shall be unimpaired and the invalid, illegal or unenforceable
provision shall be deleted.

9.                                       Notices.  All notices required to be
given hereunder shall be deemed adequately given if (i) delivered by hand;
(ii) sent by reliable overnight delivery services; (iii) transmitted by
facsimile; or (iv) transmitted by e-mail, at its address, facsimile number or
e-mail address set forth below, or such other address, facsimile number or
e-mail address as such addressee may have designated in writing:

To Seller:

 

Champlain Enterprises, Inc.

 

 

518 Rugar Street

 

 

Plattsburgh, New York 12901

 

 

Attention: Joel Raymond

 

 

Telephone: 518.562.2700 (Ext. 185)

 

 

Facsimile Number: 518.562.8030

 

 

E-mail Address: jraymond@commutair.com

 

 

 

 

 

With copy to: Bond, Schoeneck & King PLLC

 

 

One Lincoln Center

 

 

Syracuse, New York 13202

 

 

Attention: Joseph Zagraniczny, Esq.

 

 

Telephone: 315.218.8000

 

 

Facsimile: 315.218.8100

 

 

E-mail Address: jzagranj@bsk.com

 

 

 

To Buyer:

 

Big Sky Transportation Co.

 

 

Attn: Fred deLeeuw

 

 

Billings Logan International Airport

 

 

1601 Aviation Place

 

 

Billings, Montana 59105

 

 

Facsimile: 406.247.3972

 

 

 

To Escrow Agent:

 

Daugherty, Fowler, Peregrin, Haught & Jenson

 

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*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

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Attention: Robert M. Peregrin, Esq.

 

204 North Robinson Avenue, Suite 900

 

Oklahoma City, OK 73102

 

Facsimile: 405.232.0865

 

Notices given hereunder shall be deemed to have been received (i) in the case of
delivery by hand, upon delivery to the receptionist at the recipient’s address
set forth herein; (ii) in the case of overnight delivery service, on the next
Business Day following delivery to such service; (iii) in the case of facsimile
transmissions, upon confirmation by the sender’s facsimile machine that such
facsimile has been successfully transmitted; and (iv) in the case of e-mail, on
the Business Day such e-mail is sent.

10.                                 Binding Agreement.  This Escrow Agreement
shall be binding upon and shall inure to the benefit of the parties hereto,
their representatives, successors and assigns.

11.                                 Amendments.  The provisions of this Escrow
Agreement may be modified or amended only by an instrument or instruments in
writing signed by all parties hereto.

12.                                 Counterparts.  This Escrow Agreement may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument, and any of the parties hereto may
execute this Escrow Agreement by signing any such counterpart.

13.                                 Integration.  This Escrow Agreement shall
constitute the entire agreement among the parties hereto regarding the subject
matter hereof, superseding all previous proposals, agreements and other written
and oral communications, except as may be provided in any agreement hereafter
executed by the parties specifically referring to this Section and providing
that such document is to be integrated with this Escrow Agreement.

14.                                 Titles.  Titles to the Sections and
Subsections contained in this Escrow Agreement are for convenience only and
shall not be deemed to modify the provisions hereof.

15.                                 Fees and Costs of Escrow Agent.  Seller and
Buyer shall share equally the fees and costs of the Escrow Agent.

16.                                 Compliance with Directions of  Buyer and
Seller.  Escrow Agent agrees to comply with the instructions of  Buyer and
Seller with respect to the closing of each Aircraft.

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*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement to be
duly executed and delivered by their officers or representatives thereunder duly
authorized as of the day and year first above written.

 

 

CHAMPLAIN ENTERPRISES, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

BIG SKY TRANSPORTATION CO. d/b/a Big Sky

 

Airlines

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

DAUGHERTY, FOWLER, PEREGRIN, HAUGHT &
JENSON

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

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*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

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Schedule A

Serial #

 

Registration #

 

Engine #

UE-405

 

N856CA

 

PSO387  PS0385

UE-396

 

N838CA

 

PSO458  PS0407

UE-401

 

N840CA

 

PSO409  PS0406

UE-399

 

N854CA

 

PSO390  PS0434

UE-400

 

N835CA

 

PSO415  PS0416

UE-397

 

N837CA

 

PSO408  PS0391

UE-403

 

N857CA

 

PSO395  PS0394

UE-402

 

N842CA

 

PSO402  PS0403

 

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*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

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Schedule B

Delivery and Closing Date

Aircraft

 

Delivery Date
as soon as possible, but in no event later
than

1

 

April 17, 2007*

2

 

July 2, 2007

3

 

August 6, 2007

4

 

September 3, 2007

5

 

October 1, 2007

6

 

November 5, 2007

7

 

December 3, 2007

8

 

January 1, 2008

 

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[* Assumes Seller is fully released of *** by April 1, 2007. ]  Seller shall
have no obligation to deliver the first Aircraft to Buyer until Seller is
released of ***.  Such release has no effect upon the delivery dates of the
other eight Aircraft.

*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

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Exhibit B

Form of Certificate of Final Acceptance and Delivery

Pursuant to the Used Beechcraft 1900D Airliner Purchase Agreement between
Champlain Enterprises, Inc. (“Seller”) and Big Sky Transportation Co. d/b/a Big
Sky Airlines (“Buyer”), dated March    , 2007 (“Purchase Agreement”), the
undersigned, who is Buyer’s duly authorized representative, hereby certifies
that the Aircraft described below meets the delivery requirements set forth in
the Purchase Agreement and is hereby accepted and delivered:

Manufacturer: Raytheon Aircraft Company Model: Beechcraft 1900D Airliner
Manufacturer’s Serial

No.: UE-405 Registration No.:                  Engine Make: Pratt & Whitney
PT6A-67D

Engine Serial Numbers: PCE-        and PCE-         Propeller Make: Hartzell
HC-E4A-3J

Propeller Serial Numbers: HJ-      HJ-     

BIG-SKY TRANSPORTATION CO. d/b/a
BIG SKY AIRLINES

 

 

 

 

 

By:

 

Name:

 

Title:

 

 

 

Date of Issue:

 

 

 

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*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

B-1

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Exhibit C

FORM OF BILL OF SALE

Know all men by these present that Champlain Enterprises, Inc. (“Seller”), in
consideration of the sum of One Dollar ($1.00) U.S., receipt of which is hereby
acknowledged, does hereby grant, bargain, sell and assign to Big Sky
Transportation Co. (“Buyer”) the following described Aircraft and installed
engines (the “Aircraft”):

Manufacturer:

 

Raytheon Aircraft Company

 

 

 

Model:

 

Beechcraft 1900D Airliner

 

 

 

Manufacturer’s Serial No.:

 

UE-405

 

 

 

Registration No.:

 

N856CA

 

 

 

Engine Make:

 

Pratt & Whitney PT6A-67D

 

 

 

Engine Serial Numbers:

 

PCE-PS      and PCE-PS     

 

 

 

Propeller Make:

 

Hartzell HC-E4A-3J

 

 

 

Propeller Serial
Numbers:

 

HJ-      HJ-     

 

Together with all equipment, components and accessories installed thereon or
used in connection therewith. To have and to hold said Aircraft unto Buyer, its
successors and assigns, for its and their own use forever.

Seller hereby represents and warrants to Buyer that at the time of delivery of
the Aircraft to Buyer, (i) Seller shall have legal title to the Aircraft, and
(ii) the Aircraft shall be transferred to Buyer free and clear of any liens,
claims, charges or encumbrances. This Bill of Sale is made and delivered
pursuant to the provisions of that certain Used Beechcraft 1900D Airliner
Purchase Agreement between Seller and Buyer dated March     , 2007.

IN WITNESS WHEREOF, Seller has caused this instrument to be executed and
delivered this     day of              , 2007.

CHAMPLAIN ENTERPRISES, INC.

By: Name: Title:

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*** Denotes portions omitted pursuant to a request for confidentiality under
Rule 24b-2 of the Securities Exchange Act of 1934. A copy of this agreement with
the omitted information intact has been filed separately with the Securities and
Exchange Commission.

C-1

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