**Exhibit 2.1**

**UNITEDSTATES BANKRUPTCY COURT**

**DISTRICTOF MINNESOTA**

**THIRD DIVISION**
| **IN RE:**                |                  |
|---------------------------|-----------------------|
| ** **                | **Chapter 11**        |
| **MESABA AVIATION, INC.** | **Bky. No. 05-39258** |
| **DBA MESABA AIRLINES,**  | ** **            |
| ** **                |                  |
| **DEBTOR.**               |                  |

 

 

**PLAN OF REORGANIZATION OF DEBTOR**

**UNDER CHAPTER 11 OF THE BANKRUPTCY CODE**

**DATEDJANUARY 22, 2007**
| ** ** | **MICHAEL L. MEYER, ESQ.**     |
|------------|--------------------------------|
| ** ** | **RAVICH MEYER KIRKMAN**       |
| ** ** | **McGRATH & NAUMAN,**      |
| ** ** | **A PROFESSIONAL ASSOCIATION** |
| ** ** | **4545 IDS CENTER**            |
| ** ** | **80 SOUTH EIGHTH STREET**     |
| ** ** | **MINNEAPOLIS, MN 55402**      |
| ** ** | **TELEPHONE: (612) 332-8511**  |
| ** ** | ** **                     |
| ** ** | **ATTORNEYS FOR DEBTOR**       |

 

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Mesaba Aviation, Inc.,dba Mesaba Airlines, debtor and debtor-in-possession in the above-captionedChapter 11 case (“Debtor”), proposes the following plan of reorganization (the “Plan”)for the resolution of the Debtor’s outstanding Claims and EquityInterests.  All attachments to the Planare incorporated in the Plan by reference, and are an integral part of the Planas though fully set forth herein.  Allcreditors and other parties-in-interest should refer to the DisclosureStatement for a discussion of the Debtor’s history, business, properties,results of operations, events leading up to the contemplated restructuring,financial projections for future operations, and for a summary and analysis ofthe Plan and certain related matters.

*All holders of Claims against, and Equity Interestsin, the Debtor are encouraged to read the Plan, the Disclosure Statement andthe related solicitation materials in their entirety before voting to accept orreject the Plan.*

Subject to the restrictionson modifications set forth in Section 1127 of the Bankruptcy Code andBankruptcy Rule 3019, and those restrictions on modifications set forth inSection 13.1 of this Plan, the Debtor expressly reserves the right to alter,amend, or modify the Plan one or more times before its substantialconsummation.

**SECTION 1**

**DEFINITIONS AND RULES OF INTERPRETATION**

For purposes of thePlan, (i) any reference in the Plan to an existing document or exhibit filed orto be filed means that document or exhibit as it may have been or may beamended, supplemented, or otherwise modified; (ii) unless otherwise specified,all references in the Plan to sections, articles, and exhibits are referencesto sections, articles, or exhibits of the Plan; (iii) the words “herein,” “hereof,”“hereto,” “hereunder,” and other words of similar import refer to the Plan inits entirety and not to any particular portion of the Plan; (iv) captions andheadings contained in the Plan are inserted for convenience and reference only,and are not intended to be part of or to affect the interpretation of the Plan;(v) wherever appropriate from the context, each term stated in either thesingular or the plural includes the singular and the plural, and pronounsstated in the masculine, feminine, or neuter gender shall include themasculine, feminine, and neuter gender; and (vi) the rules of constructionoutlined in Bankruptcy Code section 102 and in the Bankruptcy Rules apply tothe Plan.

As used in this Plan,the following terms have the meanings specified below:

**1.1****         ****AdministrativeClaim**.  A Claim, causeof action, right, or other liability, or the portion thereof, that is allowableunder Section 503(b) of the Bankruptcy Code and entitled to priority underSection 507(a)(1) of the Bankruptcy Code, including, without limitation: (a)fees payable under 28 U.S.C. § 1930; (b) actual and necessary costs andexpenses incurred after the Petition Date and in the ordinary course of theDebtor’s business, *except*Preserved Ordinary Course Administrative Expense Claims; (c) all Claims forProfessional Fees; (d) Cure Claims; (e) the EIP and (f) the Claim ReplacementBonus.

**1.2****         ****AdministrativeClaim Bar Date**.  Thedeadline for the filing of Administrative Claims (*except* Claims for Professional Fees, Cure Claims, PreservedOrdinary Course Administrative Claims, and any other Administrative Claimsspecifically Allowed under the Plan), which shall be 30 days after theEffective Date.

**1.3****         ****AdministrativeExpense Reserve.**** **The segregated bank account in the name of ReorganizedDebtor to be established by the Debtor in accordance with Section 5.5.6 of thePlan.

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**1.4****         ****Affiliate**.  Any Person within the definition set forth inSection 101(2) of the Bankruptcy Code.

**1.5****         ****AllowanceDate.**** **With respect to(a) a Disputed Claim, the date on which such Disputed Claim becomes an AllowedClaim by Final Order; (b) a Claim Allowed by Final Order, the date on whichsuch Claim becomes an Allowed Claim under the Final Order; and (c) any otherClaim, the date on which such Claim becomes an Allowed Claim in accordance withthe Plan.

**1.6****         ****AllowedClaim or Allowed Equity Interest**.  With respect to any Claim against, or EquityInterest in, the Debtor: (a) proof of which, requests for payment of which, orapplication for allowance of which, was filed or deemed filed on or before theBar Date, Administrative Claim Bar Date, Rejection Damage Claim Bar Date or theProfessional Fee Bar Date, as applicable, for filing proofs of claim or equityinterest or requests for payment for Claims of such type against the Debtor or,in the case of a Cure Claim, failure to file a Proof of Cure Claim by the CureClaim Bar Date; (b) if no proof of claim or equity interest is filed, which hasbeen or is ever listed by the Debtor in the Schedules as liquidated in amount andnot disputed or contingent; or (c) a Claim or Equity Interest that is allowedpursuant to the terms of the Plan and, in the case of (a), (b) or (c), a Claimor Equity Interest as to which no objection to its allowance has beeninterposed within the applicable period of limitation fixed by the Plan, theBankruptcy Code, the Bankruptcy Rules, or the Bankruptcy Court. If a Claimbecomes Allowed by virtue of an Order of the Bankruptcy Court, it shall bedeemed Allowed upon the order becoming a Final Order.  For purposes of determining the amount of anAllowed Claim (other than a Claim specifically allowed under the Plan), thereshall be deducted therefrom an amount equal to the amount of any claim or debtthat the Debtor may hold against the Creditor under 11 U.S.C. §553.

**1.7****         ****Allowed[...] Claim**.  An AllowedClaim in the particular Class or category specified.

**1.8****         ****Allowed****Class 5****EquityInterest**.  The AllowedEquity Interest in Class 5 of this Plan.

**1.9****         ****Available Cash**.  Trust Cash less (i) any Trust Cash held in TrustReserves and (ii) Trust Cash that is Cash Collateral.

**1.10****       ****Avoidance Actions**.  All statutory causes of actionpreserved for the Estate under Sections 506, 510, 542, 543, 544, 545, 547, 548,549, 550, 551 and 553 of the Bankruptcy Code.

**1.11****       ****Ballot**.  The form of ballot or ballots distributedwith the Disclosure Statement to holders of Claims entitled to vote on the Planon which an acceptance or rejection of the Plan is to be indicated.

**1.12****       ****Bankruptcy Code**.  Title 11 of the United StatesCode, 11 U.S.C. §§ 101-1330, as amended from time to time prior to October 17,2005 and as applicable to the Chapter 11 Case.

**1.13****       ****Bankruptcy Court**.  The United States District Courtfor the District of Minnesota having jurisdiction over the Chapter 11 Case or,in the event that court ceases to exercise jurisdiction over the BankruptcyCase, such court that may have jurisdiction over the reorganization of theDebtor under chapter 11 of the Bankruptcy Code.

**1.14****       ****Bankruptcy Rules**.  Collectively, the Federal Rules ofBankruptcy Procedure as promulgated under 28 U.S.C. § 2075 and any Local Rulesof the Bankruptcy Court, as applicable to the Chapter 11 Case.

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**1.15****       ****Bar Date**.  The date or dates fixed by the BankruptcyCourt by which Persons asserting a Claim against the Debtor (*except*Administrative Claims, PreservedOrdinary Course Administrative Claims, Cure Claims, Claims for ProfessionalFees, Rejection Damage Claims and those Claims specifically Allowed under thePlan) must file a proof of claim or be forever barred from asserting a Claimagainst the Debtor or any property comprising the Estate, from voting on thePlan, and sharing in Distributions under the Plan.  The Bar Date for non-governmental Claims wasFebruary 28, 2006, and the Bar Date for Claims of governmental units was April11, 2006.

**1.16****       ****Beneficial Interests**.  The beneficial interests in the Trust Assetsthat shall be allocated to the Beneficiaries pursuant to Article 7 of the TrustAgreement.

**1.17****       ****Beneficiary**.  A Person holding a Beneficial Interest underthe Trust.

**1.18****       ****Business Day**.  Any day other than a Saturday,Sunday, or legal holiday, as defined in Bankruptcy Rule 9006(a).

**1.19****       ****Buyer**.  Northwest Airlines, Inc., a Minnesotacorporation, or its assignee.

**1.20****       ****Cash**.  Legal tender of the United States of Americaand equivalents thereof, including readily marketable direct obligations of theUnited States of America, certificates of deposit issued by a federally insuredbank,  money market accounts of federallyinsured banks, currency, checks drawn on a bank insured by the Federal DepositInsurance Corporation, certified checks, money orders, negotiable instruments,letters of credit, and wire transfers of immediately available funds.

**1.21****       ****Cash Collateral**.  Has the meaning prescribed in 11U.S.C. § 363(a).

**1.22****       ****Chapter 11 Activities**.  Is definedin Section 10.5.

**1.23****       ****Chapter 11 Case**.  The case under chapter 11 of theBankruptcy Code in which Debtor is Debtor and Debtor-in-Possession, pendingbefore the Bankruptcy Court, bearing bankruptcy case number 05-39258.

**1.24****       ****Claim**.  A claim against a Person or its property asdefined in Section 101(5) of the Bankruptcy Code, including, withoutlimitation: (a) any right to payment, whether or not such right is reduced tojudgment, liquidated, unliquidated, fixed, contingent, mature, unmatured,disputed, undisputed, legal, equitable, secured, or unsecured arising at anytime before the Effective Date and (b) any right to an equitable remedy forbreach of performance if such breach gives rise to a right to payment, whetheror not such right to an equitable remedy is reduced to judgment, fixed,contingent, matured, unmatured, disputed, undisputed, secured, or unsecured.

**1.25****       ****Claim Replacement Bonus**.  Debtor’sbonus plan in the aggregate sum of not more than $911,210 for Debtor’s managementpersonnel (other than officers) payable to such employees remaining on Debtor’spayroll on the Effective Date.

**1.26****       ****Class**.  A category of holders of Claims or EquityInterests which are substantially similar in nature to the Claims or Equity Interestsof other holders placed in such category, as designated in Section 3 of thePlan.

**1.27****       ****Class 4 Beneficial Interest**.  AnyBeneficial Interest to be allocated to holders of General Unsecured Claimspursuant to the Trust Agreement.

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**1.28****       ****Class 5 Beneficial Interest**.  TheBeneficial Interest to be allocated to MAIR on account of its Allowed Class5 Equity Interest pursuant to the TrustAgreement.

**1.29****       ****Closing**.  The closing of the transactions contemplatedunder Section 5 of the Plan.

**1.30****       ****Closing Date**.  The date on which the Closing is concluded.

**1.31****       ****Closing Item**.  The (collectively, “Closing Items” and eachindividually a “Closing Item Category”): (i) Claim Replacement Bonus in themaximum amount of $911,210, (ii) Exit Incentive Plan in the maximum amount of$1,088,790, (iii) unpaid Administrative Claims related to rejected executorycontracts or unexpired leases in the maximum amount of $25,000, (iv)Professional Fees in the maximum amount of $900,000, (v) Professional Feesrelated to incentive compensation for the Committee’s financial advisors in themaximum amount of $3,000,000, (vi) DIP termination fee in the maximum amount of$360,000 and (vii) Cure Amounts in the maximum amount of $4,500,000 if and onlyif Buyer provides to the Debtor the notice specified in section 4.10 of theStock Purchase Agreement.

**1.32****       ****Closing ItemEstimate**.  The estimate of theClosing Items, as defined in Section 5.5.6 of the Plan.

**1.33****       ****Collateral**.  Any property or interest inproperty of the Estate subject to a Lien to secure the payment or performanceof a Claim, to the extent such Lien is not subject to avoidance under theBankruptcy Code, disallowance under Section 506 of the Bankruptcy Code, or thatis otherwise invalid or unenforceable under the Bankruptcy Code or applicablestate law.

**1.34****       ****Committee**.  The Official Committee of UnsecuredCreditors, appointed by the United States Trustee in the Chapter 11 Case inaccordance with Section 1102(a)(1) of the Bankruptcy Code, as may bereconstituted from time to time.

**1.35****       ****Confirmation Date**.  The date on which the BankruptcyCourt enters the Confirmation Order on the docket of the Chapter 11 Case withinthe meaning of Bankruptcy Rules 5003 and 9021.

**1.36****       ****Confirmation Hearing**.  The hearingor hearings held by the Bankruptcy Court to consider confirmation of the Planunder Section 1129 of the Bankruptcy Code, as such hearing may be adjournedfrom time to time.

**1.37****       ****Confirmation Order**.  The order of the Bankruptcy Courtconfirming the Plan in accordance with the Bankruptcy Code.

**1.38****       ****Contingent Claim****.  Any Claim (a) that was listed by the Debtorin the Schedules as unliquidated or contingent and for which no proof of claimwas filed in the Chapter 11 Case or (b) for which a proof of claim has beenfiled with the Bankruptcy Court that: (i) was not filed in a sum certain, orthat has not accrued and is dependent on a future event that has not occurredand may never occur, and (ii) has not been Allowed on or before the EffectiveDate, or such other date as the Bankruptcy Court may establish.**

**1.39****       ****ContractualDefault Rate.****  The interest rate applicable to any AllowedClass 4 Claim as provided in any Contractual Default Rate Documentation or, inthe event of an objection or dispute regarding the Contractual Default Rateapplicable to a particular Class 4 Claim, in a Final Order resolving suchdispute.**

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**1.40****       ****ContractualDefault Rate Bar Date****.  The date that is five (5) days before theConfirmation Hearing, or such other date that may be established by theBankruptcy Court.**

**1.41****       ****Contractual DefaultRate Documentation****.  Documentation, including, but not limited to,any contract between the Debtor and any holder of an Allowed Class 4 Claim,establishing a rate of interest to be applied to balances owing under suchcontract or agreement in the event of the Debtor’s default thereunder.**

**1.42****       ****Creditor****.  Any Person within the definition in Section101(10) of the Bankruptcy Code.**

**1.43****       ****Cure****.   The payment of Cash, or such other propertyas may be agreed on by the parties (including, before the Effective Date, theDebtor with the consent of Buyer and, after the Effective Date, the ReorganizedDebtor) or ordered by the Bankruptcy Court, in an amount required to curedefaults necessary to assume or assume and assign an executory contract orunexpired lease of nonresidential real property, in accordance with Section365(b) of the Bankruptcy Code as determined by the Bankruptcy Court or pursuantto an agreement between the Debtor, with the consent of Buyer, or theReorganized Debtor after the Effective Date, as the case may be, and the otherparty or parties to the subject contract.**

**1.44****       ****Cure Amount****.  The amount necessary to accomplish any Cure.**

**1.45****       ****Cure Claim****.  A Claim for any Cure Amount.**

**1.46****       ****Cure Claim BarDate****.  The dateestablished by a Final Order of the Bankruptcy Court by which any Proof of CureClaim must be filed before the Bankruptcy Court and served upon on the Debtor,the Committee, MAIR, and the Buyer.**

**1.47****       ****Cure ClaimObjection****.  An objection to a Cure Claim filed by theDebtor, the Committee, MAIR, the Liquidating Trustee or the Buyer.**

**1.48****       ****Cure ClaimObjection Deadline****.  The date that is thirty (30) days after theEffective Date.**

**1.49****       ****D&O Policy****.  Any directors and officers liabilityinsurance policy or any errors and omissions policy applicable to directors andofficers of Debtor.**

**1.50****       ****Debt Instrument****.  A debenture, bond, promissory note, note orother instrument or document evidencing any payment obligation of the Debtor.**

**1.51****       ****Debtor****.  Is defined in the Preamble.**

**1.52****       ****Debtor’s Cash.****  All of the Cash of the Debtor on theEffective Date , including the Letters of Credit.**

**1.53****       ****DIP Facility****.  The debtor-in-possession financing facilitybetween Debtor and Marathon Structured Finance Fund, L.P. approved by theBankruptcy Court pursuant to the DIP Financing Order.**

**1.54****       ****DIP FinancingOrder****.  The order of theBankruptcy Court approving and authorizing the terms of the DIP Facility.**

**1.55****       ****DIP Lender****.  Marathon Structured Finance Fund, L.P.**

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**1.56****       ****DisclosureStatement****.  The written disclosure statement relating tothe Plan including, without limitation, all exhibits and schedules to suchdisclosure statement, in the form approved by the Bankruptcy Court underSection 1125 of the Bankruptcy Code and Bankruptcy Rule 3017.**

**1.57****       ****Disputed Claim****.  Any Claim: (a) that is listed in theSchedules as unliquidated, disputed, or contingent, irrespective of the amountscheduled; (b) for which a proof of claim has not been filed or deemed to havebeen filed under applicable law; (c) as to which the Debtor or any other party-in-interesthas interposed a timely objection or request for estimation, or has sought toequitably subordinate or otherwise limit recovery in accordance with theBankruptcy Code and the Bankruptcy Rules, or which is otherwise disputed by theDebtor or any other party-in-interest in accordance with applicable law, suchobjection, request for estimation, action to limit recovery or dispute has notbeen withdrawn or determined by a Final Order; (d) that is a Contingent Claim;and (e) with respect to an Administrative Claim, as to which an objection hasbeen or is filed in accordance with the Plan, the Bankruptcy Code, or theBankruptcy Rules, which objection has not been withdrawn or determined by aFinal Order.  For the purposes of thePlan, a Claim is a Disputed Claim prior to any objection to the extent that (i)the amount of a Claim specified in a proof of claim or proof of interestexceeds the amount of any corresponding Claim scheduled by the Debtor in theSchedules or (ii) no corresponding Claim has been scheduled by the Debtor inthe Schedules.**

**1.58****       ****Disputed [...]Claim****.  A Disputed Claimin the particular Class or category specified.**

**1.59****       ****Distribution****.  A distribution of Available Cash or non-Cashconsideration to the Beneficiaries under the Trust Agreement.**

**1.60****       ****Distribution Date****. The dateor dates on which the Liquidating Trustee makes a Distribution to the holdersof Allowed Priority Unsecured Tax Claims, Class 1 Claims, Class 2 Claims, orClass 3 Claims or the holders of Beneficial Interests in the Trust.**

**1.61****       ****DistributionRecord Date****.  The Effective Date.**

**1.62****       ****Effective Date****.  The later of: (a) the first Business Dayfollowing the tenth day (as calculated under Bankruptcy Rule 9006(a)) after theConfirmation Date and on which no stay of the Confirmation Order is in effectand (b) the Business Day on which all of the conditions to effectiveness setforth in the Plan have been satisfied or waived as provided in the Plan.**

**1.63****       ****EIP****.  Debtor’s Exit Incentive Plan in the aggregatesum of not more than $1,088,790 (subject to the limitations set forth inSection 2.11 of the Plan), which is a bonus plan payable to Debtor’s fiveexecutive officers who remain employed by Debtor on the Effective Date.**

**1.64****       ****EIP Balance****.  Is defined in Section 2.11 of the Plan.**

**1.65****       ****Equity Interest****.  Any issued, unissued, authorized oroutstanding capital stock, and any other equity security (as defined in 11U.S.C. § 101(16)) in the Debtor and any and all (i) shares, (ii) securities,options, warrants, rights, calls, subscriptions, agreements, commitments orunderstandings of any nature whatsoever, fixed or contingent, that directly orindirectly (A) call for the issuance, redemption, sale, pledge or otherdisposition of any shares of capital stock of the Debtor or any securities convertibleinto, or other rights to acquire, any shares of capital stock of the Debtor,(B) obligate the Debtor to grant, offer or enter into any of the foregoing or(C) relate to the voting or control of such capital stock, securities orrights, and (iii) “phantom stock,” stock appreciation rights or other similar**

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**rights the value of which is related to or based upon the price orvalue of any class or series of capital stock of the Debtor.**

**1.66****       ****Equity RelatedClaim****.  Any Claim arisingfrom the rescission of a purchase or sale of an Equity Interest, or for damagesarising from the purchase or sale of an Equity Interest, or any Claim by anyPerson that asserts equitable or contractual rights of reimbursement,contribution, or indemnification arising from such Claim, including any Claimthat has been or may be asserted against the Debtor and their officers and/ordirectors asserting violations of federal securities laws including, withoutlimitation, actions under Sections 11 and 15 of the Securities Act and Sections10(b) and 20 of the Exchange Act, and Rule 10b-5 promulgated under the ExchangeAct by the SEC, and any applicable non-federal law.**

**1.67****       ****Estate****.  The bankruptcy estate of the Debtor and allEstate Property comprising the bankruptcy estate within the meaning of 11U.S.C. § 541.**

**1.68****       ****Estate Cash****.  All amounts (i) received on account of theMesaba Allowed Claim, whether through sale, assignment, distribution orotherwise and (ii) payable by Northwest Airlines, Inc., under Section 1.1(c) ofthe Stock Purchase Agreement (if any).**

**1.69****       ****Estate Property.****  All right, title, and interest in and to anyand all property of every kind or nature owned by the Debtor or comprising itsEstate on the Effective Date, except any Excluded Asset.**

**1.70****       ****Exchange Act**.  The Securities Exchange Act of1934, as amended, and the regulations promulgated under that act.

**1.71****       ****Excluded Asset.**  The property and assets defined as “ExcludedAssets” under the Stock Purchase Agreement.

**1.72****       ****Final Distribution Date**.  TheDistribution Date on which the Liquidating Trustee distributes the remainingproceeds of the Trust Assets pursuant to the Trust Agreement.

**1.73****       ****Final Order**.  An order or judgment: (a) as towhich the time to appeal, petition for certiorari, or move for reargument orrehearing has expired; (b) as to which any right to appeal, petition forcertiorari, reargue, or request a rehearing has been waived in writing in formand substance satisfactory to the Debtor or Reorganized Debtor and Buyer; or(c) in the event an appeal, writ of certiorari, or motion for reargument orrehearing has been filed, such judgment or order has not been reversed,modified, stayed, or amended; *provided,however,* that the possibility that a motion under Rule 59 or Rule 60of the Federal Rules of Civil Procedure, or any analogous rule under theBankruptcy Rules, may be filed with respect to such order does not prevent suchorder from being a Final Order.

**1.74****       ****ForwardContract**.  Shall have thedefinition contained in Section 1.1(b) of the Stock Purchase Agreement.

**1.75****       ****GAAP**.  Means generally accepted accountingprinciples set forth in the opinions and pronouncements of the AccountingPrinciples Board of the American Institute of Certified Public Accountants andstatements and pronouncements of the Financial Accounting Standards Board (orin such other statements by such other entity as approved by a significantsegment of the accounting profession which are in effect in the United States).

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**1.76****       ****General Unsecured Claim**.  AnyUnsecured Claim, including any Unsecured Deficiency Claim, if any, that is nota: (a) Secured Claim; (b) Administrative Claim; (c) Preserved Ordinary CourseAdministrative Claim; (d) Priority Unsecured Tax Claim; (e) Priority Claim.

**1.77****       ****Initial Distribution Date**.  The date onwhich initial Distributions are made to holders of Allowed Priority UnsecuredTax Claims, Class 1 Claims, Class 2 Claims, Class 3 Claims or holders ofBeneficial Interests in accordance with the Trust Agreement.

**1.78****       ****IRS**.  The United States Internal Revenue Service.

**1.79****       ****Letters of Credit.** The following letters of credit:  (a) the letter of credit issued by WellsFargo Bank NA for the benefit of the City of St. Louis, MO in the amount of$50,000; (b) the letter of credit issued by Wells Fargo Bank NA for the benefitof AIG Aviation in the amount of $3.5 million; (c) the letter of credit issuedby Wells Fargo Bank NA for the benefit of Wells Fargo Commercial Card in theamount of $50,000; (d) the letter of credit issued by Wells Fargo Bank NA forthe benefit of Western Surety Company in the amount of $50,000; (e) the letterof credit issued by Wells Fargo Bank NA for the benefit of Western SuretyCompany in the amount of $100,000; (f) the letter of credit issued by LaSalleBank NA for the benefit of LaSalle Commercial Credit in the amount of $50,000; and(g) any replacements to the foregoing obtained by Debtor before the EffectiveDate.

**1.80****       ****Lien**.  A lien, security interest, or other interestor encumbrance as defined in Section 101(37) of the Bankruptcy Code assertedagainst any Estate Property, except a lien that has been avoided in accordancewith Sections 544, 545, 546, 547, 548, or 549 of the Bankruptcy Code orapplicable law.

**1.81****       ****Liquidating Trustee**.  The Person (and any successor)appointed to serve as the liquidating trustee under the Trust Agreement.

**1.82****       ****Litigation Claims**.  Those claims and counterclaimsasserted by MAIR and the Committee inthat certain adversary proceeding in the Chapter 11 Case entitled *MAIR Holdings, Inc. v. Mesaba Aviation, Inc. dbaMesaba Airlines and the Official Committee of Unsecured Creditors of MesabaAviation, Inc.* Adv. P. No. 06-03431.

**1.83****       ****MAIR**.  MAIR Holdings, Inc., a Minnesota corporation.

**1.84****       **MAIR Claim. The Claims, asserted in the proof of claim filed by MAIR against theEstate on February 27, 2006 in the amount of $55,226,187.00.

**1.85****       ****MaximumBuyer Funding**.  Is defined inSection 5.5.6 of the Plan.

**1.86****       ****MesabaAllowed Claim**.   The Allowed General Unsecured Claim to be granted tothe Debtor in the NWA Bankruptcy Case under the terms of the form oforder attached to the Stock Purchase Agreement as Exhibit B.

**1.87****       ****Miscellaneous Secured Claim**.  Any SecuredClaim that is not a Secured Tax Claim or a Secured Claim held by the DIPLender.

**1.88****       ****MiscellaneousSecured Claim Schedule**.  Theschedule of Miscellaneous Secured Claims to be filed pursuant to Section 3.2.3of the Plan, as may be amended or modified from time to time prior to theDisclosure Hearing, which schedule shall be filed as a Plan Document.

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**1.89****       ****New Common Stock**.  The 1000 shares of common stock,$0.01 par value per share, in the Reorganized Debtor to be issued to Buyerunder the Plan and to be authorized under the articles of incorporation to befiled with the Minnesota Secretary of State as of the Effective Date, as furtherdescribed in Section 5.1.3 of the Plan.

**1.90****       ****NWA Bankruptcy Case**.  The chapter 11 case filed byNorthwest Airlines, Inc., and its affiliated debtors in the United StatesBankruptcy Court for the Southern District of New York, bearing bankruptcy caseno. 05-17930 (ALG).

**1.91****       ****NWA Claim**.  The claim filed by Northwest Airlines, Inc.against the Estate on  February 28, 2006in the amount of $10,704,410.

**1.92****       ****Oversight Committee**.  The Oversight Committee as may beappointed and reconstituted, from time to time, under the Trust Agreement.

**1.93****       ****Person**.  Any individual, natural person, corporation,partnership (limited, general, or otherwise), joint venture, association,joint-stock company, trust, unincorporated association or organization,governmental agency or associated political subdivision, and any other legalentity.

**1.94****       ****Petition Date**.  October 13, 2005.

**1.95****       ****Plan**.  This Plan of Reorganization of Debtor underChapter 11 of the Bankruptcy Code dated January 22, 2007, as it may be amended,supplemented or modified from time to time, including all its annexed exhibitsand schedules.

**1.96****       ****Plan Documents**.  The Miscellaneous Secured ClaimSchedule, Priority Unsecured Tax Claim Schedule, Secured Tax Claim Schedule,and any other documents or schedules designated by the Debtor in connectionwith the Plan.

**1.97****       ****Preserved Ordinary Course Administrative Claim**. Administrative Claims to the extent that such Claims constitute AssumedLiabilities under the terms of the Stock Purchase Agreement.

**1.98****       ****Priority Claim**.  Any Unsecured Claim (or portion ofsuch Claim) entitled to priority under Sections 507(a)(2-7) and 507(a)(9) ofthe Bankruptcy Code.

**1.99****       ****Priority/Secured Claim Reserve.**** **The reserve of Trust Cash to be established by theLiquidating Trustee pursuant to the Trust Agreement for the payment of AllowedPriority Unsecured Tax Claims, Class 1 Claims, Class 2 Claims and Class 3Claims.

**1.100****     ****Priority Unsecured Tax Claim**.  AnyUnsecured Claim (or portion of such Claim) of a governmental unit entitled topriority under Section 507(a)(8) of the Bankruptcy Code.

**1.101      PriorityUnsecured Tax Claim Schedule****.  Theschedule of Priority Unsecured Tax Claims to be filed pursuant to 2.6 of thePlan, as may be amended or modified from time to time prior to the DisclosureHearing, which schedule shall be filed as a Plan Document.**

**1.102****     ****Professionals**.  Those Persons (a) employed inaccordance with an order of the Bankruptcy Court under Sections 327 or 1103 ofthe Bankruptcy Code and to be compensated for services under Sections 327, 328,329, 330, and 331 of the Bankruptcy Code or (b) for which compensation andreimbursement has been Allowed by the Bankruptcy Court under Section 503(b) ofthe Bankruptcy Code.

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**1.103****     ****Professional Fee Bar Date**.  The date bywhich all applications for payment of Professional Fees, must be filed with theBankruptcy Court in accordance with Section 2.4 of the Plan.

**1.104****     ****Professional Fees**.  The Administrative Claims ofProfessionals for compensation and reimbursement of expenses submitted inaccordance with Sections 328, 330, 331, or 503(b) of the Bankruptcy Code.

**1.105****      Proof of CureClaim**.  Documentary evidence establishing the rightof any party to an assumed executory contract or unexpired lease to receive aCure Amount other than the Cure Amount related to such contract set forth onthe Schedule of Assumed Executory Contracts and Unexpired Leases.

**1.106****     ****Pro Rata**.  As to a holder of a particular Claim, theratio that the amount of such Claim held by such Creditor bears to theaggregate amount of all Claims in the particular Class or category of Claims towhich such holder’s Claim has been designated under the Plan.  Such ratio shall be calculated as if allClaims in the particular Class or category asserted against the Debtor areAllowed Claims as of the Effective Date, unless otherwise specifically providedfor in the Plan.

**1.107****     ****Reclamation Claims**.  Claims arising pursuant to Section546(c)(2) of the Bankruptcy Code.

**1.108****      Registrar**.  Initiallythe Liquidating Trustee and thereafter any registrar appointed by theLiquidating Trustee pursuant to the terms of the Trust Agreement.

**1.109****      Rejection DamageClaim**.  A Claim arising from the rejection of anexecutory contract or unexpired lease of non-residential real property underSection 365 of the Bankruptcy Code.

**1.110****      Rejection Damage Claim Bar Date**.  Theapplicable date as set forth in Section 6.6 of the Plan.

**1.111****     ****Reorganized Debtor**.  Debtor as reorganized pursuant tothe Plan existing on and after the Effective Date, or any successor to theReorganized Debtor by merger, consolidation, stock purchase or otherwise.

**1.112****      ReservedBeneficial Interest**.  A Beneficial Interest that has been reservedpursuant to the Trust Agreement.

**1.113****      Schedule of Assumed Executory Contracts and UnexpiredLeases. **The schedule of executory contracts and unexpiredleases to be assumed by the Reorganized Debtor containing the Cure Amountsproposed by the Debtor to be paid in connection with the assumption of eachsuch executory contract or unexpired lease. The schedule shall be approved by the Buyer and filed by the Debtor atleast five (5) days prior to the Disclosure Hearing.

**1.114****     ****Schedules**.  The schedules of assets and liabilities, thelist of holders of interests, and the statements of financial affairs filed bythe Debtor in the Chapter 11 Case under Section 521 of the Bankruptcy Code andBankruptcy Rule 1007, as such schedules, lists, and statements may have been ormay be supplemented or amended from time to time.

**1.115****     ****SEC**.   The United States Securities and ExchangeCommission.

**1.116****     ****Secured Claim**.  A Claim for which a Creditorasserts a valid, perfected, and enforceable Lien, not subject to avoidance orsubordination under the Bankruptcy Code or applicable non-bankruptcy 

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law, ora Claim for which a Creditor asserts a setoff under Bankruptcy Code section553, but only to the extent of the value, determined in accordance withBankruptcy Code section 506(a), of the Creditor’s interest in the Debtor’sinterest in Estate Property or to the extent of the amount subject to such setoff,as the case may be, unless a timely election has been made under 11 U.S.C. §1111(b)(2).

**1.117****     ****Secured Tax Claim**.  A Secured Claim for taxes held bya governmental unit, including cities, counties, school districts, and hospitaldistricts, (a) entitled by statute to assess taxes based on the value or use ofreal and personal property and to obtain an encumbrance against such propertyto secure payment of such taxes or (b) entitled to obtain an encumbrance onproperty to secure payment of any tax Claim specified in 11 U.S.C. §507(a)(8).  Secured Tax Claims shall notinclude any such Claims secured by Liens that are avoidable, unperfected,subject to subordination, or otherwise unenforceable.

**1.118      SecuredTax Claim Schedule****.  Theschedule of Secured Tax Claims to be filed pursuant to Section 3.2.2 of thePlan, as may be amended or modified from time to time prior to the DisclosureHearing, which schedule will be filed as a Plan Document.**

**1.119****     ****Securities Act**.  The Securities Act of 1933, asamended, and its applicable regulations.

**1.120****     ****Stock Purchase Agreement**.  The StockPurchase and Reorganization Agreement, dated as of January 21, 2007, as may beamended or modified from time to time, between Mesaba Aviation, Inc. andNorthwest Airlines, Inc., or its assignee.

**1.121****     ****Trust**.  The trust established pursuant to the Planand the Trust Agreement.

**1.122****     ****Trust Agreement**.  The Trust Agreement which shall besubstantially in the form of Appendix A attached hereto.

**1.123****     ****Trust Assets**.  All Estate Cash, all propertycomprising the Excluded Assets (as defined in the Stock Purchase Agreement),and all proceeds of the foregoing (including, without limitation, “proceeds” asdefined in the Uniform Commercial Code).

**1.124****      Trust Cash**.  All Cashreceived and held by the Trust, including Cash Collateral and Cash held in theTrust Reserves.

**1.125****      Trust Cost**.  Anyreasonable cost and expense of the Liquidating Trustee of administering theTrust (including making distributions of holders of Claims and BeneficialInterests), paying taxes on behalf of the Trust, and paying professional feesand expenses incurred by the Liquidating Trustee in connection with theadministration of the Trust.

**1.126****      Trust OperatingReserve**.  The reserve of Trust Cash to be establishedunder the Trust Agreement for the payment of Trust Costs.

**1.127****     ****Trust Reserve**.  Any reserve established andmaintained by the Liquidating Trustee under the Trust Agreement.

**1.128****     ****Unclassified Claims**.  Those claims enumerated in Section2.1 of the Plan.

**1.129****     ****Unsecured Claim**.  A Claim that is not a SecuredClaim.  The term specifically includesany tort Claims or contractual Claims or Claims arising from damage or harm tothe environment and, pursuant to 11 U.S.C. § 506(a), any Unsecured DeficiencyClaim, and any Rejection Damage Claim.

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**1.130****     ****Unsecured Deficiency Claims**.  Any portionof a Claim (a) to the extent the value of the holder’s interest in the EstateProperty securing such Claim is less than the amount of such Claim or (b) tothe extent the amount of a Claim subject to setoff is less than the amount ofthe Claim, each as determined by the Bankruptcy Court under 11 U.S.C. § 506(a).

**1.131****     ****Unsecured Interest Rate**.  Theapplicable federal judgment rate or rates provided by section 1961(a) of title28 of the United States Code as determined pursuant to the Trust Agreement.

**1.132****     ****Voting Record Date**.  The date that the Bankruptcy Courtenters an order on the docket of the Chapter 11 Case approving the DisclosureStatement.

**SECTION 2**

**TREATMENTOF UNCLASSIFIED CLAIMS**

**2.1****         ****Unclassified Claims**.  As provided in Section 1123(a)(1)of the Bankruptcy Code, Administrative Claims, Preserved Ordinary CourseAdministrative Claims, Priority Unsecured Tax Claims, Cure Claims andReclamation Claims against the Debtor are not classified for purposes of votingon, or receiving Distributions under, the Plan. Holders of such Claims are notentitled to vote on the Plan. All such Claims are instead treated separately inaccordance with Section 2 of the Plan and in accordance with the requirementsset forth in Section 1129(a)(9)(A) of the Bankruptcy Code.

**2.2****         ****Administrative Claim Bar Date**.  All requestsfor payment of Administrative Claims (except for Professional Fees, CureClaims, Preserved Ordinary Course Administrative Claims, the EIP, and  the Claim Replacement Bonus) must be filed bythe Administrative Claim Bar Date and served on the Debtor, the Buyer, theCommittee, the Liquidating Trustee and MAIR, or the holders thereof shall beforever barred from asserting such Administrative Claims and shall not beentitled to any Distributions under the Plan.

**2.3****         ****Professional Fee Bar Date**.  All requestsfor payment of Professional Fees arising on or before the conclusion of theClosing, or incurred thereafter but related to the Closing, shall be filed withthe Bankruptcy Court and served on the Debtor, the Buyer, the United StatesTrustee, the Liquidating Trustee, MAIR and the Committee within 30 daysfollowing the Effective Date.  AnyProfessional Fees for which an application or request for payment is not filedwithin that time period shall be deemed discharged and forever barred, andshall not be entitled to any Distribution under the Plan.

**2.4****         ****Payment of Administrative Claims and Professional Fees**.  AllowedAdministrative Claims that are Closing Items shall be paid by the ReorganizedDebtor from the Administrative Expense Reserve within ten (10) days after theAllowance Date to the extent the Allowed Administrative Claim that is a ClosingItem does not exceed the amount reserved in the Administrative Expense Reservefor that particular Closing Item Category and any excess shall be paid by theLiquidating Trustee from Trust Cash. Allowed Administrative Claims that are neither Closing Items (except asto any excess provided for in the preceding sentence) nor Preserved OrdinaryCourse Administrative Claims shall be paid by the Liquidating Trustee fromTrust Cash.  Allowed Professional Fees,shall be paid within ten (10) days after the Allowance Date:  (i) first from the balance of any retainers,if any, held by Professionals until fully exhausted, (ii) then from theAdministrative Expense Reserve to the extent the Allowed Professional Fee doesnot exceed the amount reserved in the Administrative Expense Reserve for theparticular Closing Item Category related to the Allowed Professional Fees and(iii) finally, from Trust Cash to the extent any remainder of the AllowedProfessional Fees exceeds the amount reserved in the Administrative ExpenseReserve for that Closing Item Category. To the extent a Professional holds a retainer balance after 

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satisfaction of its Allowed Professional Fee, such Professional  shall promptly deliver the retainer balanceto the Reorganized Debtor.

**2.5****         ****Preserved Ordinary Course Administrative Claims**.  Each AllowedPreserved Ordinary Course Administrative Claim shall be paid by the ReorganizedDebtor in accordance with either: (a) the terms and conditions under which suchClaim arose or (b) in the ordinary course of Reorganized Debtor’s business.Such payments are to be made by the Reorganized Debtor without further actionby the holder of such Claim.  TheLiquidating Trust will not be liable for any Preserved Ordinary CourseAdministrative Claims.

**2.6****         ****Payment of Allowed Priority Unsecured Tax Claims**.  Any AllowedPriority Unsecured Tax Claim set forth on the Priority Unsecured Tax ClaimSchedule shall be paid in full by the Trust from the Priority/Secured ClaimReserve within ten (10) days from the Allowance Date in accordance with theTrust Agreement.

**2.7****         ****Reclamation Claims**.  All requests for payment of aReclamation Claim must be filed by the Administrative Claim Bar Date and servedon the Debtor, the Committee, the Liquidating Trustee and MAIR, or the holderthereof shall be forever barred from asserting any Reclamation Claims and shallnot be entitled to any Distribution under the Plan on account of suchclaims.  All Allowed Reclamation Claims shall be paid by the Trustfrom Trust Cash within ten (10) days after the Allowance Date.

**2.8****         ****Claims of DIP Lender**.  On or priorto the Effective Date, all the Debtor’s outstanding obligations to the DIPLender pursuant to the DIP Financing Order shall be fully and finally satisfiedin accordance with their terms using the Debtor’s Cash.  On the full payment of such obligations, theLiens securing the DIP Facility shall be released and extinguished.

**2.9****         ****U.S. Trustee Fees**.  All fees owing to the UnitedStates Trustee pursuant to 28 U.S.C. § 1930 shall be paid by the Debtor as suchfees may become due up to and including the Closing Date.  Thereafter, the Trust shall pay as a TrustCost all fees owed under 28 U.S.C. § 1930 by reason of the Trust’sdisbursements until the Chapter 11 Case is closed.

**2.10****       ****Claim Replacement Bonus**.  The Claim Replacement Bonus shall be paidfrom the Administrative Expense Reserve as an Administrative Claim.  To the extent there are insufficient funds inthe Administrative Expense Reserve to pay the Claim Replacement Bonus, suchBonus shall be paid by the Liquidating Trustee from Trust Cash.

**2.11****       ****EIP**.  The amounts due under the EIP shall be paidfrom the Administrative Expense Reserve; provided, however, to the extent theAdministrative Expense Reserve is insufficient to fully satisfy the EIP, theremaining balance of the EIP (the “EIP Balance”) shall be paid by the LiquidatingTrustee from Trust Cash according to the following schedule:

(i)                                     20% of the total EIP Balance upon the Distribution ofTrust Assets to holders of Class 4 General Unsecured Claims satisfying 25% ofeach Class 4 General Unsecured Claim, whether through a single Distribution orseveral Distributions;

(ii)                                  25% of the total EIP Balance upon the Distribution ofTrust Assets to holders of Class 4 General Unsecured Claims satisfying 50% ofeach Class 4 General Unsecured Claim, whether through a single Distribution orseveral Distributions;

(iii)                               30% of the total EIP Balance upon the Distribution ofTrust Assets to holders of Class 4 General 

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Unsecured Claims satisfying 75% ofeach Class 4 General Unsecured Claim, whether through a single Distribution orseveral Distributions; and

(iv)                              The remainder of the total EIP Balance upon theDistribution of Trust Assets to holders of Class 4 General Unsecured Claimssatisfying in full all Class 4 General Unsecured Claims, including applicableinterest.

**SECTION 3**

**CLASSIFICATIONOF CLAIMS AND EQUITY INTERESTS**

**3.1****         ****Summary of Classification**.  Inaccordance with Section 1123(a)(1) of the Bankruptcy Code, all Claims ofCreditors and holders of Equity Interests (except those Claims receivingtreatment as set forth in Section 2) are placed in the Classes described belowfor all purposes, including voting on, confirmation of, and distribution under,the Plan:
| Class 1 |   | Priority Claims               |   | Unimpaired, deemed to accept |
|---------|--------|-------------------------------|--------|------------------------------|
| Class 2 |   | Secured Tax Claims            |   | Unimpaired, deemed to accept |
| Class 3 |   | Miscellaneous  Secured Claims |   | Unimpaired, deemed to accept |
| Class 4 |   | General Unsecured Claims      |   | Impaired,  entitled to vote  |
| Class 5 |   | Equity Interest               |   | Impaired, entitled to vote   |

 

**3.2****         ****Specific Classification.**

**3.2.2****      **Class 1 – Priority Claims.  Class 1consists of all Priority Claims.

**3.2.3****      **Class 2 – Secured Tax Claims.  Class2 consists of all Secured Tax Claims set forth on the Secured Tax ClaimSchedule.  Each holder of a Secured TaxClaim is considered to be in its own separate subclass within Class 2, and eachsuch subclass is deemed to be a separate Class for purposes of the Plan.

**3.2.4****      **Class 3 – Miscellaneous Secured Claims. Class 3 consists of all Miscellaneous Secured Claims set forth on theMiscellaneous Secured Claim Schedule. Each holder of a Miscellaneous Secured Claim is considered to be in itsown separate subclass within Class 3 and each such subclass is deemed to be aseparate Class for purposes of the Plan.

**3.2.5****      **Class 4 – General Unsecured Claims.  Class4 consists of all General Unsecured Claims.

**3.2.6****      **Class 5 – Equity Interests and Equity Related Claims.  Class 5 consists of all Equity Interests,including Equity Interests held by MAIR.

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# **SECTION 4**

**TREATMENT OF CLAIMS AND EQUITYINTERESTS; IMPAIRMENT**

**4.1**                               **Class 1 – Priority Claims**.

**4.1.1****                    ****Impairment and Voting**.  Class 1 isunimpaired by the Plan; consequently, all holders of Allowed Claims in Class 1are deemed to accept the Plan and are not entitled to vote on the Plan.

**4.1.2****                    ****Treatment**.  Each holder of an Allowed PriorityClaim shall be paid bythe Trust from the Priority/Secured Claim Reserve within ten (10) days afterthe Allowance Date.

**4.2**                               **Class 2 – Secured Tax Claims**.

**4.2.1****                    ****Impairment and Voting**.  Class 2 isunimpaired by the Plan; consequently, all holders of Allowed Claims in Class 2are deemed to accept the Plan and are not entitled to vote on the Plan.

**4.2.2****                    ****Determination** of Allowed Secured Tax Claim.  If there is more than one Allowed Secured TaxClaim, each Allowed Secured Tax Claim shall be classified in a separatesubclass.  The Liquidating Trustee mayseek a determination regarding the allowability of any Secured Tax Claim, ifany, pursuant to the Bankruptcy Code, the Bankruptcy Rules and other applicablelaw.  The Liquidating Trustee, at itssole option, may initiate litigation seeking a determination of the amount,extent, validity and priority of any Liens securing any Secured Tax Claim andthe extent to which any Cash Collateral or other Trust Asset is subject to anysuch Lien.

**4.2.3****                    ****Treatment**.  Each Allowed Secured Tax Claimshall be satisfied in full by the payment, in Cash or in kind, from the TrustAssets within ten (10) days after the Allowance Date.  Upon such payment, any and all Liens securingsuch Allowed Secured Tax Claim shall be fully satisfied, released anddischarged.

**4.2.4****                    ****Sale of Collateral**.  TheLiquidating Trustee may sell for Cash any Trust Asset serving as collateral forthe Allowed Secured Tax Claim.  Any saleproceeds remaining after full satisfaction of the Allowed Secured Tax Claimshall remain a Trust Asset and shall be free and clear of all interests, Liens,claims, and encumbrances previously asserted by holder of the Allowed SecuredTax Claim.

**4.2.5****                    ****Other Agreements**.  Notwithstandingsubsections 4.2.3 and 4.2.4 of the Plan, an Allowed Secured Tax Claim may besatisfied by an agreement between the holder of such Claim and the LiquidatingTrustee.  The treatment set forth in anysuch agreement will supersede the provisions of subsection 4.2.3, except thatpayment of such Claim must be made from Trust Assets.

**4.2.6****                    ****Retention of Lien**.  Except asotherwise provided herein, each holder of an Allowed Secured Tax Claim shallretain the Liens on Estate Property constituting an Excluded Asset securingsuch Allowed Secured Tax Claim until such Allowed Secured Tax Claim issatisfied in accordance with the Plan or until such earlier date agreed to bythe holder of the Allowed Secured Tax Claim and the Liquidating Trustee.  With respect to any Liens on Estate Propertynot constituting an Excluded Asset securing an Allowed Secured Tax Claim, suchLiens shall be deemed released on the Effective Date, and the holder of suchAllowed Secured Tax Claim shall receive a replacement Lien on 

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the Trust Cash in an amount equal to the value of the released Lien, asdetermined in accordance with Section 506(a) of the Bankruptcy Code.  Upon satisfaction of an Allowed Secured TaxClaim, whether in Cash or in kind, such Liens shall be deemed automaticallyreleased, and any Trust Asset formerly securing such Allowed Secured Tax Claimshall be free and clear of all interests, Liens, claims and encumbrancessecuring the Allowed Secured Tax Claim.

**4.2.7****                    ****Deficiency Claim**.  If theholder of an Allowed Secured Tax Claim has an Unsecured Deficiency Claim, theUnsecured Deficiency Claim shall be treated under the Plan as a Class 4 GeneralUnsecured Claim or Priority Unsecured Tax Claim, as determined by theBankruptcy Court.

**4.3**                               **Class 3 – Miscellaneous Secured Claims**.

**4.3.1****                    ****Impairment and Voting**.  Class 3 isunimpaired by the Plan, and all holders of Allowed Miscellaneous Secured Claimsare deemed to accept the Plan and are not entitled to vote on the Plan.

**4.3.2****                    ****Determination of Allowed MiscellaneousSecured Claim**.  If there is more than one AllowedMiscellaneous Secured Claim, each Allowed Miscellaneous Secured Claim shall beclassified in a separate subclass.  TheLiquidating Trustee may seek a determination of the allowability of anyMiscellaneous Secured Claim, if any, pursuant to the Bankruptcy Code, theBankruptcy Rules and other applicable law. The Liquidating Trustee, at its sole option, may initiate litigation toseek a determination of the Allowed Miscellaneous Secured Claim of a Class 3 Creditor,if any, and to determine the amount, extent, validity and priority of any Lienssecuring any Allowed Miscellaneous Secured Claim.

**4.3.3****                    ****Treatment**.  Each Allowed Miscellaneous SecuredClaim shall be satisfied by the transfer to the holder of such AllowedMiscellaneous Secured Claim of any Trust Asset that solely constitutes the CashCollateral of such holder within ten (10) days after the Allowance Date.  Any Cash Collateral remaining after fullsatisfaction of such Allowed Miscellaneous Secured Claim shall remain a TrustAsset free and clear of all Liens, claims, interests and encumbrancespreviously asserted by the holder of the Allowed Miscellaneous Secured Claim;provided, however, any such Cash Collateral arising from or related to asecurity deposit posted by the Debtor shall be transferred to the ReorganizedDebtor free and clear of all such Liens, claims, interests andencumbrances.  To the extent such CashCollateral is insufficient to fully satisfy the Allowed Miscellaneous SecuredClaim, the remaining portion of that Claim after application of the CashCollateral shall be satisfied in full at the election of the LiquidatingTrustee by:  (i) the sale of any otherCollateral securing the Allowed Miscellaneous Secured Claim under Section 4.3.4of the Plan, (ii) the transfer of that Collateral to the holder of the AllowedMiscellaneous Secured Claim under Section 4.3.5 of the Plan, or (iii) anagreement reached between the holder of the Allowed Miscellaneous Secured Claimand the Liquidating Trustee under Section 4.3.6 of the Plan.

**4.3.4****                    ****Sale of Collateral**.  TheLiquidating Trustee may sell for Cash any Trust Asset serving as collateral forany Allowed Miscellaneous Secured Claim. Any sale proceeds generated by the sale of Trust Assets serving ascollateral for the Allowed Miscellaneous Secured Claim (net of reasonableliquidating costs, which shall be a surcharge against such collateral pursuantto Section 506(c) of the Bankruptcy Code) shall be paid by the LiquidatingTrustee to the holder of such Claim in satisfaction of that Claim.  Any net sale proceeds remaining aftersatisfaction of the Allowed Miscellaneous Secured Claim shall remain a TrustAsset and shall be free and clear of all interests, Liens, claims andencumbrances previously asserted by the holder of the Allowed MiscellaneousSecured Claim.

**4.3.5****                    ****Transfer of Collateral**.  Except asotherwise provided in this Section 4.3, the Liquidating Trustee may satisfy anyAllowed Miscellaneous Secured Claim by transferring and

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conveying any Trust Asset serving as collateral for such Claim to theholder of the Allowed Miscellaneous Secured Claim to the extent of suchClaim.  Any collateral remaining aftersatisfaction of the Allowed Miscellaneous Secured Claim shall remain a TrustAsset and shall be free and clear of any interests, Liens, claims, andencumbrances previously asserted by the holder of the Allowed MiscellaneousSecured Claim.

**4.3.6****                    ****Other Agreements**.  Notwithstandingsubsections 4.3.4 and 4.3.5, an Allowed Miscellaneous Secured Claim may besatisfied by an agreement between the holder of such Claim and the LiquidatingTrustee.  The treatment set forth in anysuch agreement will supersede the provisions of subsections 4.3.4 and 4.3.5,except that payment of such Claim must be made from Trust Assets.

**4.3.7****                    ****Retention of Lien**.  Except asotherwise provided herein, each holder of an Allowed Miscellaneous SecuredClaim shall retain the Liens on Estate Property constituting an Excluded Assetsecuring such Allowed Miscellaneous Secured Claim until such Allowed SecuredTax Claim is satisfied in accordance with the Plan or until such earlier dateagreed to by the holder of the Allowed Miscellaneous Secured Claim and theLiquidating Trustee.  With respect to anyLiens on Estate Property not constituting an Excluded Asset securing an AllowedMiscellaneous Secured Claim, such Liens shall be deemed released on theEffective Date, and the holder of such Allowed Miscellaneous Secured Claimshall receive a replacement Lien on the Trust Assets in an amount equal to thevalue of the released Lien, as determined in accordance with Section 506(a) ofthe Bankruptcy Code.  On the payment infull of any Allowed Miscellaneous Secured Claim, such Liens shall be deemedautomatically released, and any Trust Asset formerly securing such AllowedMiscellaneous Secured Claim shall be free and clear of all interests, Liens,claims and encumbrances securing the Allowed Miscellaneous Secured Claim.

**4.3.8****                    ****Deficiency Claim**.  If theholder of a Allowed Miscellaneous Secured Claim has a deficiency claim, thedeficiency claim shall be treated under the Plan as a General Unsecured Claim.

**4.4**                               **Class 4 – General Unsecured Claims**.

**4.4.1****                    ****Impairment and Voting**.  Class 4 isimpaired by the Plan, and all holders of Allowed General Unsecured Claims areentitled to vote on the Plan, except as otherwise provided by contract.

**4.4.2****                    ****Treatment**.  Class 4 Allowed General UnsecuredClaims shall be treated in accordance with the terms of the Trust Agreement asfollows:

(i)                                     Class 4 Beneficial Interests in the Trust shall beallocated to holders of Allowed Claims in Class 4 in accordance with the TrustAgreement;

(ii)                                  Interest shall accrue on the unpaid balance ofAllowed Claims in Class 4 at the applicable Unsecured Interest Rate or theapplicable Contractual Default Rate in accordance with the Trust Agreement fromthe later of the Petition Date or, if the Claim is for future damages, the dateto which the present value of such Claim is discounted; and

(iii)                               Holders of Allowed Claims in Class 4 shall receiveDistributions of Available Cash on account of their Class 4 Beneficial Interestin the Trust in accordance with the Trust Agreement.

**4.4.3****                    ****Contractual Default Rate Bar Date**.  Any holderof an Allowed General Unsecured Claim seeking to have a Contractual DefaultRate applied to such holder’s Claim will have delivered to the Debtor allContractual Default Rate Documentation on or before the Contractual Default

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Rate Bar Date.  Any holder of anAllowed General Unsecured Claim that fails to deliver such Contractual DefaultRate Documents to the Debtor on or before the Contractual Default Rate Bar Datewill be deemed to have waived any right to receive interest on such holder’sclaim at a rate other than the Unsecured Interest Rate applicable to such holder’sClaim.

**4.4.4****                    ****Allowance of the NWA Claim**.  On theEffective Date, the NWA Claim shall be Allowed as a General Unsecured Claim inthe aggregate amount of $7.3 million. Northwest Airlines, Inc. shall not be entitled to any Claims against theDebtor or its Estate other than the NWA Claim as Allowed in this Section 4.4.5or Claims arising under the Stock Purchase Agreement.  The Allowed General Unsecured Claim grantedto Northwest Airlines, Inc. in this paragraph shall not be subject toreconsideration or other challenge under Bankruptcy Rule 3008, Bankruptcy Codesection 502(j), or any other applicable law.

**4.4.5****                    ****Abandonment of Avoidance Actions. **Except as otherwise provided in this Plan, on payment in full of allAllowed General Unsecured Claims pursuant to the Plan (including interest atthe applicable interest rate), all Avoidance Actions against any holder of anAllowed General Unsecured Claim shall be deemed abandoned and waived.

**4.5**                               **Class 5 – Equity Interest**.

**4.5.1****                    ****Impairment and Voting**.  Class 5 is impairedby the Plan and the holder of the Allowed Class 5 Equity Interest is entitledto vote on the Plan.

**4.5.2****                    ****Allowance of Equity Interest**.  The EquityInterest held by MAIR shall be an Allowed Class 5 Equity Interest for purposesof treatment under the Plan and the Trust Agreement.

**4.5.3****                     Treatment**.  On the Effective Date, all Equity Interestsshall be canceled and extinguished. Notwithstanding the preceding sentence, the Allowed Class 5 EquityInterest shall be treated in accordance with the terms of the Trust Agreementas follows:

(i)                                     Class 5 Beneficial Interests in the Trust shall beallocated to the holder of the Allowed Class 5 Equity Interest in accordancewith the Trust Agreement; and

(ii)                                  The holder of the Allowed Class 5 Equity Interestshall receive Distributions of Available Cash on account of its Class 5Beneficial Interest in the Trust in accordance with the Trust Agreement.

# **SECTION 5**

**IMPLEMENTATION OF THE PLAN**

**5.1**                               **Stock Purchase by Buyer**.

**5.1.1****                    ****Cancellation of Equity Interests**.  As of the EffectiveDate, all Equity Interests shall be cancelled and terminated, except the NewCommon Stock.  The holders of EquityInterests shall not receive any equity or other interest in the ReorganizedDebtor.

**5.1.2****                    ****Issuance of New Common Stock**.  In exchangefor the Buyer payment provided in Section 1.1(b) of the Stock PurchaseAgreement, Reorganized Debtor shall, on the Effective Date, issue to Buyer theNew Common Stock free and clear of all Liens, Claims, and other Interests.

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**5.1.3****                    ****Certificate of Incorporation and By-Laws**.  As of theEffective Date and without any further action by the stockholders or directorsof Debtor or Reorganized Debtor, Debtor’s Articles of Incorporation and By-Lawsshall be amended and restated, in form and substance acceptable to Buyer, toprovide for, among other things, the authorization of all acts necessary toimplement this Plan including, without limitation, the issuance of the NewCommon Stock.  The officers of theReorganized Debtor are authorized to file such Articles of Incorporation andBy-Laws with the appropriate authorities without shareholder approval or anyother action.  After the Effective Date,Reorganized Debtor may amend and restate its Certificate of Incorporation andBy-Laws as permitted by applicable law.

**5.1.4****                    ****Debtor’s Board of Directors**.  The existingmembers of the Board of Directors of the Debtor immediately prior to theEffective Date shall be deemed terminated without cause as of the EffectiveDate.  Any claim or cause of actionarising from the dismissal of any members of the Board of Directors shall bedeemed waived in consideration for the release and exculpation provided inSections 10.4 and 10.5 of this Plan.

**5.1.5****                    ****The Forward Contract**.  On theEffective Date, any sum held in escrow established under the Forward Contractor funds received in settlement of the Forward Contract shall be disbursed tothe Liquidating Trust to be held as Trust Cash.

**5.2****                              ****Selection of the Liquidating Trustee.**The Committee and MAIR may each nominate a candidateor candidates to serve as Liquidating Trustee under the Trust.  The Committee and MAIR shall file with theBankruptcy Court and serve on the Debtor, the United States Trustee, theCommittee, and MAIR, not later than ten (10) days prior to the ConfirmationHearing, a disclosure identifying the candidate for Liquidating Trustee andsetting forth the terms of the fee arrangement. To the extent the Committee and MAIR cannot agree on the appointment ofa nominee as the Liquidating Trustee, each party may file a disclosure identifyingits candidate for Liquidating Trustee and describing the terms of the feearrangement, and the Bankruptcy Court shall appoint the Liquidating Trustee atthe Confirmation Hearing.  The candidateto serve as Liquidating Trustee shall be approved at the Confirmation Hearing,and, upon execution of the Trust Agreement at Closing, shall thereafterundertake the required duties under the Trust Agreement.

**5.3****                              ****Termination of Committee. **The appointment andoperation of the Committee shall terminate on the Effective Date.  Any dissolution or termination of theappointment and operations of the Committee shall not prejudice the rights ofany agents of the Committee (including their Professionals and Committeemembers) to pursue their separate claims for compensation and reimbursement ofexpenses, including Professional Fees under the provisions of Sections 328,330, 331 and/or 503(b)(3)(F) of the Bankruptcy Code.

**5.4****                              ****The Closing. **A Closing of the transactions required under the Planshall take place on the Closing Date at the location identified in Section 1.2of the Stock Purchase Agreement, or at such other place as identified by theDebtor and Buyer pursuant to notice provided to those parties specified inSection 15.4 of the Plan.

**5.5****                              ****Transactions at Closing. **The following shalloccur at or before the Closing, and shall be effective as of the Closing Date:

**5.5.1****                    ****Closing****of the Stock PurchaseAgreement**.  The Debtor and allother parties to the Stock Purchase Agreement shall consummate all transactionsrequired to occur at the closing under the Stock Purchase Agreement.

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**5.5.2****                    ****Execution and Ratification of the TrustAgreement**.  The Trust Agreement shall be executed by allnecessary parties thereto.  Each holderof a Claim shall be deemed to have ratified and become bound by the terms ofthe **Trust******Agreement.

**5.5.3****                    ****Transfer of Trust Assets**.  Aftercreation of the Administrative Expense Reserve, all property of the Debtor **constituting** the Trust Assets shall be conveyed and transferredby the Debtor to the Trust, free and clear of all interests, claims, Liens, andencumbrances, except as provided in Sections 4.2, 4.3 and 15.3 of the Plan.

**5.5.4****                    ****Execution of Documents**.  On or beforethe Effective Date, the Debtor shall execute and deliver all documents and **perform** all actions reasonably contemplated with respect toimplementation of the Plan.  After theEffective Date, the Liquidating Trustee is authorized to execute any documentsor instruments after the Confirmation Date or at Closing in order to consummatethe Plan.

**5.5.5****                    ****Surrender of Instruments**.  EachClaimant and/or Equity Interest Holder, holding a certificate or instrumentevidencing a Claim against, or Interest in, the Debtor or the Property andwhose Claims or Equity Interests are treated under the Plan, shall surrendersuch certificate or instrument to the Trust, prior to receiving anyDistribution **under** the Plan, unlessthe non-availability of such certificate or instrument is established to thesatisfaction of the Trust.

**5.5.6****                    ****Establishment of Administrative ExpenseReserve**.  At the Closing, the Debtor shall provide agood faith estimate of the aggregate amount of all unpaid Closing Items (the “ClosingItem Estimate”) and shall establish the Administrative Expense Reserve as asegregated interest bearing account for the benefit of the ReorganizedDebtor.  **The** Administrative Expense Reserve shall be initiallyfunded in the amount of the Closing Item Estimate, but not to exceed the totalamount of Closing Items.  The amount ofthe Administrative Expense Reserve shall be funded (a) from Debtor’s Cash and(b), to the extent Debtor’s Cash is insufficient, by the Buyer; provided,however, that the maximum amount to be funded by Buyer shall be $10 million(the “Maximum Buyer Funding”).  If theClosing Item Estimate is inadequate to pay the Closing Items pursuant toSection 2.4 of the Plan, the Reorganized Debtor shall fund the AdministrativeExpense Reserve with Debtor’s Cash, to the extent the Debtor’s Cash as of theClosing exceeds the Closing Item Estimate and Buyer shall fund any remainingdeficiency immediately upon the determination of such deficiency up to theamount of the Maximum Buyer Funding.  TheAdministrative Expense Reserve shall be distributed by the Reorganized Debtorsolely for the satisfaction of the Closing Items.  The Reorganized Debtor shall be the solesignatory on the Administrative Expense Reserve account and the funds ondeposit therein shall be held free and clear of all Liens, claims andinterests.  Upon satisfaction of allClosing Items, the Reorganized Debtor shall notify the Liquidating Trustee thatall Closing Items have been satisfied. Following the satisfaction of all Closing Items, and upon theLiquidating Trustee’s written consent, which consent shall not be unreasonablywithheld or delayed, all funds remaining in the Administrative Expense Reserveshall be released from the Administrative Expense Reserve and revert to theReorganized Debtor.

**5.5.7****                    ****Amendment****of Debtor’s Governance Documents**.  The Debtor’sarticles of incorporation and bylaws (or analogous governance documents) shallbe amended and all necessary action shall be taken to:

(i)                                     prohibit the issuance of nonvoting equity securities,and providing, as to the class(es) of securities possessing voting power, anappropriate distribution of such power among such class(es), including, in thecase of any class of equity securities having a preference over another classof equity securities with respect to dividends, adequate provisions for theelection of directors representing such preferred class in the event of defaultin the payment of such dividends and

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(ii)                                  provide for such provisions, terms, and conditionsnecessary to comply, conform with, and implement the terms, conditions, andrequirements of the Plan.

**5.6**                               **Section 1145 Determination**.  Confirmationof the Plan shall constitute a determination, in accordance with section 1145of the Bankruptcy Code, that except with respect to an entity that is anunderwriter as defined in section 1145(b) of the Bankruptcy Code, Section 5 ofthe Securities Act of 1933 and any State or local law requiring registrationfor offer or sale of a security or registration or licensing of an issuer of,underwriter of, broker or dealer in, a security do not apply to the offer,sale, or issuance under the Plan of the New Common Stock, the Trust Assets, orthe Beneficial Interests in exchange for Claims against, the Debtor.  Nonetheless, if the Liquidating Trusteedetermines that registration and reporting under the Securities Exchange Act of1934 is required, the Liquidating Trustee will take steps to comply with thoserequirements.

**5.7**                               **Settlement and Compromise**.  Pursuant toSection 1123(b)(3) of the Bankruptcy Code, the Plan incorporates the followingcompromises and settlements, and (to the extent necessary) constitutes a motionunder Bankruptcy Rule 9019 to approve such compromises and settlements:

**5.7.1****                    ****The Debtor and Northwest Airlines, Inc**.  All claimsand disputes between Northwest Airlines, Inc. and the Debtor (including the NWAClaim and the claims and causes of action asserted by the Debtor in the NWABankruptcy Case) shall be resolved pursuant to the terms and conditions of theStock Purchase Agreement, which is incorporated herein by reference as if fullyset forth herein and any closing documents delivered pursuant thereto.

**5.7.2****                    ****The Debtor and MAIR**.  Subjectto the limitations set forth in Section 10.4(i) below, the Litigation Claims are compromised and settled as set forth in the Plan.

# **SECTION 6**

**EXECUTORY CONTRACTS AND UNEXPIREDLEASES**

**6.1**                               **Executory Contracts**.  On the Effective Date, allexecutory contracts set forth on the Schedule of Assumed Executory Contractsand Unexpired Leases shall be deemed assumed by Reorganized Debtor, inaccordance with the Stock Purchase Agreement.

**6.2**                               **Unexpired Leases**.  On the Effective Date, allunexpired leases set forth on the Schedule of Assumed Executory Contracts andUnexpired Leases shall be deemed assumed by Reorganized Debtor, in accordancewith the Stock Purchase Agreement.

**6.3**                               **Deemed Rejection**.  All executory contracts andunexpired leases not specified on the Schedule of Assumed Executory Contractsand Unexpired Leases are deemedrejected as of the Effective Date, in accordance with theStock Purchase Agreement.

**6.4**                               **Approval of Assumption or Rejection**.  Entry of theConfirmation Order shall constitute:  (i)the approval, pursuant to Section 365(a) of the Bankruptcy Code, of theassumption of the executory contracts and unexpired leases assumed pursuant tothe Plan or otherwise during the Chapter 11 Case; and (ii) the approval,pursuant to Section 365(a) of the Bankruptcy Code, of the rejection of theexecutory contracts and unexpired leases rejected pursuant to the Plan orotherwise during the Chapter 11 Case. Notwithstanding anything contained herein to the contrary, and subjectto the provisions of the Stock Purchase Agreement, the Debtor shall have theright to add or delete any executory contract or unexpired lease to or from thecontract schedules filed with the Bankruptcy Court pursuant to Sections 6.1 and6.2 of the Plan on or before the Confirmation Date.

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**6.5**                               **Payments Related to the Assumption of Executory Contractsand Unexpired Leases; Cure Claim Procedures**. To the extent a counter-party to an executorycontract or unexpired lease disputes the Cure Amount identified in the Scheduleof Assumed Executory Contracts and Unexpired Leases with respect to itsexecutory contract or unexpired lease, such counter-party must file a Proof ofCure Claim in the Bankruptcy Case on or before the Cure Claim Bar Date andshall serve such Proof of Cure Claim on the Debtor, the Committee, MAIR, andthe Buyer.  To the extent a Proof of CureClaim is not filed by the Cure Claim Bar Date, the Cure Amount specified on theSchedule of Assumed Executory Contracts and Unexpired Leases shall be deemedAllowed for all purposes and any other amounts in excess of such amount shallbe deemed waived and forever barred.

**6.5.1****                     Examination and****Objection to Cure Claims**;Assumption/Revocation.  The Debtor, theLiquidating Trustee, the Committee, the Buyer, and MAIR shall have the right toexamine any Cure Claim filed by any party, and shall have the right to objectto and contest the allowance of any such Cure Claim.  Any objection to a Cure Claim must be filedwith the Bankruptcy Court, and a copy served on the party whose Cure Claim isobjected to, on or before the Cure Claim Objection Deadline.  To the extent the Bankruptcy Court has notdetermined by the Effective Date the amount of any Cure Claim that is subjectto a pending objection, the executory contract or unexpired lease related tosuch Cure Claim shall be deemed assumed by the Debtor effective on theEffective Date; provided, however, the Debtor (with the consent of the Buyer)may revoke an assumption of any such executory contract or unexpired leasewithin ten (10) days after entry of an order by the Bankruptcy Courtadjudicating the objection to the Cure Claim related to such executory contractor lease by filing a notice of such revocation with the Bankruptcy Court andserving a copy on the party or parties whose contract is rejected.  Any executory contract or unexpired leaseidentified in such revocation notice shall be deemed rejected retroactively onthe Effective Date.

**6.5.2****                    ****Treatment of Cure Claims**.  If notice has been given by Buyer as provided inSection 4.10 of the Stock Purchase Agreement, the Reorganized Debtor shall pay,within ten (10) Business Days after the Cure Claim Objection Deadline (but inno event prior to the consummation of the Closing), from the AdministrativeExpense Reserve all Cure Claims  relatedto the executory contracts and unexpired leases assumed pursuant to this Planthat are identified in the Schedule of Assumed Executory Contracts andUnexpired Leases and not subject to a timely filed Proof of Cure Claim orobjection, but only up to a sum not exceeding $4.5 million.  If notice has not been given as provided inSection 4.10 of the Stock Purchase Agreement or the funds held in theAdministrative Expense Reserve are insufficient to satisfy fully all CureClaims (or any portion thereof), then the remaining balance of the Cure Claimsshall be paid by the Liquidating Trustee from Trust Cash.  The Reorganized Debtor or the LiquidatingTrustee, as applicable, shall pay from the Administrative Expense Reserve orthe Trust Cash, as applicable, all Allowed Cure Claims on the later of the datethat is ten (10) Business Days after (a) the Cure Claim Objection Deadline or(b) the date of entry of a Final Order resolving any dispute or approving anagreement among the parties concerning the Cure Claim.

**6.5.3****                    **Non-Admission. Neither the exclusion nor inclusion of any executory contract orunexpired lease by the Debtor on either Schedule A-1 or A-4 to the StockPurchase Agreement, nor anything contained in the Plan, shall constitute anadmission by the Debtor that any such contract or unexpired lease is in fact anexecutory contract or that the Debtor has any liability thereunder.

**6.5.4****                    ****Waiver, Etc**.  Nothing in the Plan shall waive,excuse, limit, diminish, or otherwise alter any of the defenses, claims, causesof action, or other rights of the Debtor under any executory or non-executorycontracts or any unexpired or expired lease, nor shall any provision Planincrease, augment, or add to any of the duties, obligations, responsibilities,or liabilities of the Debtor under any executory or non-executory contract orany unexpired or expired lease.

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**6.6**                               **Rejection Damage Claim Bar Date**.  Except asotherwise provided in this Section, all Rejection Damage Claims shall be filedwith the Bankruptcy Court no later than 30 days after the Effective Date.  Any party whose executory contract orunexpired lease is rejected pursuant to a revocation notice described inSection 6.5 of the Plan may file a Class 4 General Unsecured Claim arising outof such rejection within 30 days after such revocation notice is filed with theBankruptcy Court.  Any Rejection DamageClaim not filed by the applicable deadline shall be forever barred and shallnot be entitled to any Distributions under the Plan.   The Debtor, the Liquidating Trustee, andMAIR shall have the right to object to any Rejection Damage Claim.

**6.7**                               **Indemnification Obligations**.  Anyobligation of Debtor to indemnify, reimburse, or limit the liability of anyPerson, including but not limited to any officer or director of Debtor, or anyagent, professional, financial advisor, or underwriter of any securities issuedby Debtor, relating to any acts or omissions occurring before the PetitionDate, whether arising pursuant to charter, by-laws, contract or applicablestate law, shall be deemed to be, and shall be treated as, an executorycontract and shall be deemed to (i) be rejected, canceled, and dischargedpursuant to the Plan as of the Effective Date and (ii) any and all Claims resultingfrom such obligations are disallowed under Section 502(e) of the BankruptcyCode.  Notwithstanding any of theforegoing, nothing contained in the Plan impacts, impairs or prejudices therights of any Person covered by any applicable D&O Policy with respect tosuch policy or policies.

# **SECTION 7**

**PROVISIONS RELATED TO THE RESOLUTION OF CLAIM OBJECTIONS**

**7.1**                               **Examination of and Objection to Claims**.  From andafter the Effective Date, the Liquidating Trustee, members of the OversightCommittee, and MAIR, each on behalf of the Trust, shall have the exclusiveright to examine and object to any Claims filed in the Chapter 11 Case, andthose parties shall have the right to object to, contest and/or continue toprosecute existing objections to the allowance of any Claims filed with theBankruptcy Court.

**7.2****                              ****Time for Filing Claim Objections**.  Objectionsto Claims must be filed with the Bankruptcy Court and served on the Creditorasserting such Claim before the expiration of 45 days after the Effective Date,otherwise such Claim shall be deemed Allowed in accordance with Section 502 ofthe Bankruptcy Code, unless an extension of such time period is sought by theLiquidating Trustee, members of the Oversight Committee, or MAIR.  No objection may be filed against any Claimthat has been expressly Allowed under the Plan. Neither members of the Oversight Committee nor MAIR may recover the costof filing any objection to any Claim from any Trust Asset.

**7.3**                               **Time for Filing Response to Claims Objections**.  Within 30days after service of an objection, the Creditor whose Claim has been objectedto in accordance with Section  7.2 of thePlan, must file with the Bankruptcy Court and serve on the objecting party, theLiquidating Trustee, MAIR and the parties identified in Section 15.4 of thePlan, a response to such claim objection. Failure to file a response within such time period shall cause theBankruptcy Court to enter a default judgment against the non-respondingCreditor and thereby grant the relief requested in the claim objection.  The Liquidating Trustee, members of theOversight Committee, and MAIR, each on behalf of the Trust, may request theBankruptcy Court to estimate any Claim for purposes of allowance pursuant toSection 502(c) of the Bankruptcy Code.

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# **SECTION 8**

**CONDITIONS PRECEDENT**

**8.1**                               **Conditions To Confirmation**.  Thefollowing are conditions precedent to confirmation of this Plan:

**8.1.1****                    **The Stock Purchase Agreement has not been terminated;

**8.1.2****                    **The Bankruptcy Court shall have entered  a Final Order approving the DisclosureStatement with respect to this Plan;

**8.1.3****                    **The Confirmation Order has been entered in form andsubstance reasonably acceptable to the Debtor, the Committee, MAIR, and Buyer;and

**8.2**                               **Conditions To Effectiveness**.  Thefollowing are conditions precedent to the occurrence of the Effective Date:

**8.2.1****                    **The Confirmation Date has occurred;

**8.2.2****                    **The Confirmation Order is a Final Order, except thatthe Debtor (with the consent of the Buyer) reserves the right to cause theEffective Date to occur notwithstanding the pendency of an appeal of theConfirmation Order, under circumstances that would moot such appeal;

**8.2.3****                    **No request for revocation of the Confirmation Orderunder Section 1144 of the Bankruptcy Code has been made, or, if made, remainspending;

**8.2.4****                    **The execution and delivery of all documents necessaryto implement the transactions contemplated by this Plan, which are in form andsubstance reasonably acceptable to the Debtor, Buyer and the Committee, andMAIR;

**8.2.5****                    **The Trust Assets have been transferred and deliveredto the Trust;

**8.2.6****                    **All conditions to the closing of the Stock PurchaseAgreement are satisfied or waived; and

**8.2.7****                    **The Bankruptcy Court has approved the appointment ofthe Liquidating Trustee and the members of the Oversight Committee.

**8.3**                               **Waiver Of Conditions**.  Subject tothe Stock Purchase Agreement, the conditions to Confirmation and the EffectiveDate may be waived in whole or in part by agreement of the Debtor, MAIR, andthe Committee at any time without notice, an order of the Bankruptcy Court, orany further action other than proceeding to Confirmation and consummation ofthe Plan.

# **SECTION 9**

**NON-ALLOWANCE OF PENALTIES ANDFINES**

Exceptas expressly provided for in the Plan, no Distribution shall be made under thisPlan on account of, and no Allowed Claim shall include, any fine, penalty, orexemplary or punitive damages 

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relating to or arisingfrom any default or breach by the Debtor, and any Claim on account of suchfine, penalty, or exemplary or punitive damages shall be deemed to bedisallowed, whether or not an objection is filed to such Claim.

# **SECTION 10**

**TITLE TO PROPERTY; DISCHARGE;INJUNCTION**

**10.1**                        **Revesting of Assets**.  Subject to the provisions of thisPlan, including, but not limited to, the obligation of the Debtor toirrevocably transfer the Trust Assets to the Liquidating Trust for the benefitof holders of Beneficial Interests, all Estate Property shall vest inReorganized Debtor on the Effective Date. As of the Effective Date, all EstateProperty shall be free and clear of all Liens, Claims, and Equity Interests,except for any Liens related to Cash Collateral securing the Letters of Credit.From and after the Effective Date, Reorganized Debtor may operate its business,and may use, acquire, and dispose of its property free of any restrictions ofthe Bankruptcy Code.

**10.2**                        **Discharge**.  Except as provided in the Plan or theConfirmation Order, the rights afforded under the Plan and the treatment ofClaims and Equity Interests under the Plan are in exchange for and in completesatisfaction, discharge, and release of, all Claims against the Debtor orEstate Property (including the Trust Assets) and termination of all EquityInterests. Except as provided in the Plan or the Confirmation Order, on theEffective Date: (a) the Debtor and Reorganized Debtor shall be discharged fromall Claims or other debts that arose before the Effective Date, and all debtsof the kind specified in Sections 502(g), 502(h) or 502(i) of the BankruptcyCode, whether or not: (i) a proof of claim based on such debt is filed ordeemed filed under Section 501 of the Bankruptcy Code; (ii) a Claim based onsuch debt is Allowed under Section 502 of the Bankruptcy Code; or (iii) theholder of a Claim based on such debt has accepted the Plan; and (b)  all Equity Interests and other rights ofEquity Interests in the Debtor shall be terminated, except for the New CommonStock as expressly provided in the Plan. Except as otherwise provided in the Plan, the Confirmation Order shallbe a judicial determination of discharge of all liabilities of the Debtorarising before the Effective Date. Pursuant to Bankruptcy Code section 524, the discharge granted underthis section shall avoid any judgment against the Debtor at any time obtained(to the extent it relates to a discharged claim), and operates as an injunctionagainst the prosecution of any action against the Debtor, Estate Property, andthe Trust Assets (to the extent such action related to a discharged claim).

**10.3**                        **Injunction**.  Except as provided in the Plan,the Confirmation Order or separate Final Order regarding the MAIR Claim, as ofthe Confirmation Date, all entities that have held, currently hold or may holda Claim or other debt or liability that is discharged or an Equity Interest,Equity Related Claim, or other right of an equity security holder that isterminated under the Plan are permanently enjoined from taking any of thefollowing actions on account of any such discharged Claims, debts, liabilities,or terminated Equity Interests or rights: (a) commencing or continuing in anymanner any action or other proceeding against the Debtor, the Liquidating Trustor Reorganized Debtor (including any officer or director acting as arepresentative of the Debtor or Reorganized Debtor) to the extent that suchaction or proceeding arises from any act or omission of such party inconnection with, relating to, or arising out of the Chapter 11 Case, thenegotiation and execution of the Stock Purchase Agreement, the negotiation andpursuit of Confirmation of the Plan or the consummation of the Plan except forthe Debtor’s or Liquidating Trustee’s acts or omissions constituting grossnegligence or willful misconduct as finally determined by a court of competentjurisdiction; (b) enforcing, attaching, collecting or recovering in any mannerany judgment, award, decree, or order against the Debtor, the LiquidatingTrust, Reorganized Debtor, or their respective property; (c) creating,perfecting, or enforcing any lien or encumbrance against the Debtor, theLiquidating Trust, Reorganized Debtor, or their respective property; (d)asserting a setoff, right of subrogation or recoupment of any kind against anydebt, liability, or 

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obligation due to the Debtor, the Liquidating Trust, Reorganized Debtor, ortheir respective property; and (e) commencing or continuing any action, in anymanner, in any place, that does not comply with or is inconsistent with theprovisions of the Plan or the Bankruptcy Code.

**10.4****                        Releases**.  On the Effective Date, the Debtor (onbehalf of itself and the Estate) shall be deemed to have released:  (i) MAIR and its officers, directors,employees, and professionals from any and all claims, causes of action, andother liabilities of whatever kind or nature arising before the Effective Date,including the Litigation Claims, provided that such release shall not affect orimpair any right of setoff or defense as to the amount of the MAIR Claim and,(ii) the Debtor’s current and prior directors and officers from any claims orcauses of action the Debtor may have against such parties, unless such claimsor causes of action arise out of acts or omissions by such parties constitutingwillful misconduct or gross negligence. Within three (3) Business Days following the Effective Date, the partiesto Adversary Proceeding no. 06-03431 shall submit to the Bankruptcy Court anorder dismissing with prejudice Adversary Proceeding no. 06-03431.

**10.5**                        **Exculpation**.  None of Debtor, ReorganizedDebtor, the Committee, MAIR, Buyer or any of their respective members, officers,directors, employees or professionals have or may incur any liability to anyholder of a Claim or Equity Interest, including the holder of any EquityRelated Claim, or any other Person or party in interest, or any of theirrespective members or former members, agents, employees, representatives,financial advisors, attorneys or affiliates, or any of their successors orassigns, for any act or omission in connection with, relating to or arising outof the Chapter 11 Case, the negotiation and execution of the Stock PurchaseAgreement, the negotiation and pursuit of confirmation of the Plan, theconsummation of the Plan or the administration of the Plan (the “Chapter 11Activities”) *except for*, in thecase of the Debtor and the Liquidating Trust, their acts or omissionsconstituting willful misconduct or gross negligence, as finally determined by acourt of competent jurisdiction, and in all respects are entitled to reasonablyrely upon the advice of counsel with respect to their duties andresponsibilities in connection with the Chapter 11 Activities.  No holder of a Claim, Equity Interest, EquityRelated Claim or any other Person or party in interest, including theirrespective agents, employees, representatives, financial advisors, attorneys oraffiliates, have any right of action against the Debtor, the Liquidating Trust,the Liquidating Trustee, the Oversight Committee, the Committee, MAIR, Buyer orReorganized Debtor or any of their respective officers, directors, employees orprofessionals for any act or omission in connection with the Chapter 11Activities, *except for,*in thecase of the Debtor and the Liquidating Trust, their acts or omissionsconstituting willful misconduct or gross negligence as finally determined by acourt of competent jurisdiction.  Nothingin this section or the Plan shall impair, affect or constitute a waiver,release or exculpation of any claims or controversies related to or arising outof that civil action styled *MAIR Holdings, Inc. andBig Sky Transportation Co. d/b/a Big Sky Airlines v. Airline PilotsAssociation, Intl.* No. 4:06-CV-04108 pending in the United StatesDistrict Court for the Southern District of Texas, Houston Division.

**10.6**                        **Preservation Of Insurance**.  The Debtor’sdischarge and release from Claims as provided in the Plan, except as necessaryto be consistent with this Plan, do not diminish or impair the enforceabilityof any insurance policy that may cover Claims against the Debtor or any otherPerson.

# **SECTION 11**

**EVENTS OF DEFAULT**

**11.1**                        **Events of Default**.  An event of default shall haveoccurred if the Debtor, the Liquidating Trustee or any other Person takes anyaction, fails to take any action, or fails to refrain from taking an actionprevented, required, or otherwise set forth in the Plan or the Trust Agreement.

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**11.2**                        **Remedies of Default**.  Subject toBankruptcy Code section 1112, should an event of default occur by the Debtor,Liquidating Trustee or any other Person, at least one other party-in-interest(including the Debtor) must provide written notice of the default to thedefaulting party and serve copies of the notice to all parties identified inSection 15.4 of the Plan.  If the defaultis not cured within ten (10) days after service of the notice of default, thenotifying party may present an *ex parte*order to the Bankruptcy Court setting a date and time when the defaulting partymust appear before the Bankruptcy Court and show cause why it should not beheld in contempt of the Confirmation Order. If the defaulting party is found to be in default of the Plan, theBankruptcy Court shall:

(i)                                     assess the costs of the Liquidating Trustee or otherparty-in-interest of proceeding on the order to show cause against thedefaulting party, such costs to be the greater of the actual amounts incurredor $10,000; and

(ii)                                  designate a person to appear, sign, and/or accept onbehalf of the defaulting party the documents required under the Plan inaccordance with Federal Rule of Civil Procedure 70, or enter such other ordercompelling compliance with the Plan that may be necessary and that does notmaterially alter the terms of the Plan as confirmed.

# **SECTION 12**

**RETENTION OF JURISDICTION**

**12.1**                        **Jurisdiction**.  Notwithstanding the entry of theConfirmation Order and the occurrence of the Effective Date, the BankruptcyCourt retains such jurisdiction over the Chapter 11 Case after the EffectiveDate as is legally permissible including, without limitation, jurisdiction to:

**12.1.1****             **Allow, disallow, determine, liquidate, classify,estimate, reconsider, value, compromise, settle, adjust, or establish theamount, priority, validity, or secured or unsecured status of any Claim,including the resolution of any request for payment of any Unclassified Claimand the resolution of any and all objections to the allowance or priority ofClaims;

**12.1.2****             **Grant or deny any applications for allowance ofcompensation or reimbursement of expenses arising out of or related to theChapter 11 Case or any Claim or Equity Interest authorized under the BankruptcyCode or the Plan;

**12.1.3****             **Resolve any matters related to the assumption,assumption and assignment, or rejection of any executory contract or unexpiredlease to which the Debtor is a party and to hear, determine and, if necessary,liquidate, any Claims arising from, or cure amounts related to, such assumptionor rejection.

**12.1.4****             **Ensure that Distributions to holders of AllowedClaims and Equity Interests are accomplished in accordance with the Plan;

**12.1.5****             **Decide or resolve any motions, adversary proceedings,contested or litigated matters, and any other matters and grant or deny anyapplications or motions involving the Debtor that may be pending on theEffective Date;

**12.1.6****             **Enter such orders as may be necessary or appropriateto implement, consummate, or enforce the provisions of the Plan and all contracts,instruments, releases, and other agreements or documents created in connectionwith the Plan or the Disclosure Statement, except as otherwise provided in thePlan;

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**12.1.7****             **Resolve any Case, controversies, suits or disputesthat may arise in connection with the consummation, interpretation orenforcement of the Plan or any Person’s obligations incurred in connection withthe Plan;

**12.1.8****             **Modify the Plan before or after the Effective Dateunder Section 1127 of the Bankruptcy Code or modify the Disclosure Statement orany contract, instrument, release, or other agreement or document created inconnection with the Plan or the Disclosure Statement; or remedy any defect oromission or reconcile any inconsistency in any Bankruptcy Court order, thePlan, the Disclosure Statement, or any contract, instrument, release, or otheragreement or document created in connection with the Plan or the DisclosureStatement, in such manner as may be necessary or appropriate to consummate thePlan, to the extent authorized by the Bankruptcy Code, and determine mattersconcerning federal, state, and local taxes in accordance with Sections 346,505, and 1146 of the Bankruptcy Code or other applicable law;

**12.1.9****             **Issue injunctions, enter and implement other orders,or take such other actions as may be necessary or appropriate to restraininterference by any entity with consummation or enforcement of the Plan, exceptas otherwise provided in the Plan;

**12.1.10****      **Enter and implement such orders as are necessary or appropriate if the ConfirmationOrder is for any reason modified, stayed, reversed, revoked, or vacated;

**12.1.11****      **Determine any other matters that may arise in connection with or relate tothe Plan, the Disclosure Statement, the Confirmation Order, the LiquidatingTrust Agreement or any contract, instrument, release, or other agreement ordocument created in connection with the Plan, the Disclosure Statement, theConfirmation Order or the Liquidating Trust Agreement except as otherwiseprovided in the Plan;

**12.1.12****      **Enter an order closing the Chapter 11 Case which provides for retention ofjurisdiction for the Bankruptcy Court for purposes of Section 10.5;

**12.1.13****      **Adjudicate any Avoidance Actions (including those to be initiated andprosecuted by the Liquidating Trust as the Estate’s representative underSection 1123(b)(3)(B) of the Bankruptcy Code), and any other cause of action orclaims of the Debtor;

**12.1.14****      **Resolve any disputes between the Liquidating Trustee and the OversightCommittee or the Liquidating Trustee and any holder of a Beneficial Interest;and

**12.1.15****      **Approve settlements of any Avoidance Actions.

# **SECTION 13**

**AMENDMENT AND WITHDRAWAL OF PLAN**

**13.1**                        **Amendment of the Plan**.  Subject tothe provisions of the Stock Purchase Agreement, at any time before theConfirmation Date, the Debtor may alter, amend, or modify the Plan pursuant toSection 1127(a) of the Bankruptcy Code *provided*that such alteration, amendment, or modification does not materiallyand adversely affect the treatment and rights of the holders of General UnsecuredClaims under this Plan. After the Confirmation Date and before substantialconsummation of the Plan as defined in Section 1101(2) of the Bankruptcy Code,the Debtor may, under Section 1127(b) of the Bankruptcy Code, instituteproceedings in the Bankruptcy Court to remedy any defect or omission orreconcile any

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inconsistencies in the Plan, the Disclosure Statement, or the ConfirmationOrder, and such matters as may be necessary to carry out the purposes andeffects of the Plan so long as such proceedings do not materially and adverselyaffect the treatment of holders of Claims under the Plan; *provided, however*, that prior notice ofsuch proceedings shall be served in accordance with the Bankruptcy Rules orapplicable order of the Bankruptcy Court.

**13.2**                        **Revocation or Withdrawal of the Plan**.  Subject tothe provisions of the Stock Purchase Agreement, the Debtor reserves the rightto revoke or withdraw this Plan at any time before the Confirmation Date. Ifthe Plan is withdrawn or revoked, then the Plan shall be deemed null and voidand nothing contained in the Plan shall be deemed a waiver of any Claims by oragainst the Debtor or any other Person in any further proceedings involving theDebtor or an admission of any sort, and this Plan and any transactioncontemplated by this Plan shall not be admitted into evidence in anyproceeding.

# **SECTION 14**

**ACCEPTANCE OR REJECTION OF THE PLAN**

**14.1**                        **Impaired Classes to Vote**.  Except asprovided by agreement, each holder of a Claim or Equity Interest in an impairedClass shall be entitled to vote separately to accept or reject this Plan unlesssuch**holder is deemed to acceptor reject this Plan.

**14.2****                        Acceptance by Class of Creditors and Holders of Interests**.  An impairedClass of holders of Claims shall have accepted this Plan if this Plan isaccepted by at least two-thirds in dollar amount and more than one-half innumber of the Allowed Claims of such Class that have voted to accept or rejectthis Plan.  An impaired Class of holdersof Equity Interests shall have accepted this Plan if this Plan is accepted byat least two-thirds in amount of the Allowed Equity Interests of such Classthat have voted to accept or reject this Plan. A Class of holders of Claimsshall be deemed to accept this Plan in the event that no holder of a Claimwithin that Class submits a Ballot by the Ballot Date.

**14.3**                        **Cramdown**.  If any impaired Class of Claims orEquity Interests entitled to vote shall not accept this Plan by the requisitestatutory majorities provided in Section 1126(c) of the Bankruptcy Code, theDebtor reserves the right to request that the Bankruptcy Court confirm thisPlan under Section 1129(b) of the Bankruptcy Code.  With respect to impaired Classes of Claimsthat are deemed to reject this Plan, the Debtor shall request the BankruptcyCourt to confirm this Plan under Section 1129(b) of the Bankruptcy Code.

# **SECTION 15**

**MISCELLANEOUS**

**15.1****                       ****Binding Effect**.  The Plan shall be binding on, andshall inure to the benefit of, the Debtor, Reorganized Debtor, the LiquidatingTrust, the Oversight Committee and the holders of all Claims and EquityInterests, including the holders of Equity Related Claims, and their respectivesuccessors and assigns.

**15.2****                       ****Governing Law**.  Except to the extent that theBankruptcy Code or other federal law is applicable, the rights, duties andobligations of the Debtor, Reorganized Debtor, the Liquidating Trust, theOversight Committee and any other Person arising under the Plan shall begoverned by, and construed and enforced in accordance with, the internal laws ofthe State of Minnesota, without giving effect to Minnesota’s choice of lawprovisions.

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**15.3****                       ****Setoffs**.  In addition to credit items which reduce anaccount payable in the ordinary course of determining an account stated (to theextent approved by Buyer in writing), the Debtor or the Liquidating Trusteemay, but are not required to, set off or recoup against any valid, enforceable,and unobjectionable Claim arising before the Petition Date and timely filed inthe Chapter 11 Case, in each case to the extent set forth on Schedule A-5 ofthe Stock Purchase Agreement, in each case, solely to the extent of the amountof such Creditor’s Claim and to the extent approved by Buyer in writing (itbeing understood and agreed that if any such Creditor’s Claim is determined tobe less than the amount set forth with respect thereto on such Schedule A-5,such shortfall shall be deemed property of, and promptly delivered to, theReorganized Debtor) and the payments or other Distributions to be made underthe Plan in respect of such Claim.

**15.4****                       ****Notices**.  Any notice required or permitted to beprovided under the Plan shall be in writing and served by either: (a) certifiedmail, return receipt requested, postage prepaid; (b) hand delivery; (c)reputable overnight courier service, freight prepaid; or (d) by fax; addressedas follows:
| If to Debtor:                      |   | MESABA AVIATION, INC.  DBA MESABA AIRLINESATTENTION: JOHN G. SPANJERS  1000 BLUE GENTIAN ROAD, SUITE 200EAGAN, MN 55121                                                                                                       |
|------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                               |   |                                                                                                                                                                                                                          |
| With a copy to:                    |   | RAVICH MEYER KIRKMAN MCGRATH& NAUMAN, A PROFESSIONAL ASSOCATION  ATTENTION: MICHAEL L. MEYER  4545 IDS CENTER, 80 SOUTH EIGHTH STREET  MINNEAPOLIS, MN 55402                                                              |
|                               |   |                                                                                                                                                                                                                          |
| If to Buyer or Reorganized Debtor: |   | NORTHWEST AIRLINES, INC.ATTENTION: DAVID DAVIS  2700 LONE OAK PARKWAYEAGAN, MN 55121                                                                                                                                          |
|                               |   |                                                                                                                                                                                                                          |
| With a copy to:                    |   | NORTHWEST AIRLINES, INC.ATTENTION: MICHAEL L. MILLER  2700 LONE OAK PARKWAYEAGAN, MN 55121

HUGHES HUBBARD & REED LLPATTENTION: KENNETH A. LEFKOWITZONE BATTERY PARK PLAZANEW YORK, NY 10004                              |
|                               |   |                                                                                                                                                                                                                          |
| If to the Committee:               |   | FOLEY & MANSFIELDATTENTION: THOMAS L. LALLIER250 MARQUETTE AVENUE, SUITE 1200MINNEAPOLIS, MN 55401

SQUIRE SANDERS & DEMPSEY,  L.L.P.  ATTENTION: TIM J. ROBINSON41 SOUTH HIGH STREET, SUITE 1300  COLUMBUS, OH 43215 |

 

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| If to MAIR:                    |   | MAIR HOLDINGS INC.ATTENTION: RUTH TIMM150 SOUTH FIFTH STREET, SUITE 1360MINNEAPOLIS, MN 55402

  |
|--------------------------------|--------|-------------------------------------------------------------------------------------------------------|
| With a copy to:                |   | HAYNES AND BOONE, LLPATTENTION: KENRIC D. KATTNER  1221 MCKINNEY, SUITE 2100  HOUSTON, TX 77010       |
|                           |   |                                                                                                  |   |
| If to the Liquidating Trustee: |   |                                                                                                  |   |
|                           |   |                                                                                                  |   |
|                           |   |                                                                                                  |   |
|                           |   |                                                                                                  |   |

 

**15.5****                       ****Delivery Of Notices**.  If personally delivered, suchcommunication shall be deemed delivered upon actual receipt; if electronicallytransmitted in accordance with this Plan, such communication shall be deemeddelivered by the next noon at point of arrival occurring on a Business Dayfollowing transmission; if sent by overnight courier in accordance with thisPlan, such communication shall be deemed delivered within twenty-four hours ofdeposit with such courier or noon of the first Business Day following suchdeposit, whichever first occurs; and if sent by U.S. Mail in accordance withthis Plan, such communication shall be deemed delivered as of the date ofdelivery indicated on the receipt issued by the relevant postal service; or, ifthe addressee fails or refuses to accept delivery, as of the date of suchfailure or refusal. Any party to this Plan may change its address for thepurposes of this Plan by giving notice of such change in accordance with thissection.

**15.6****                       ****Severability**.  If any provision of this Plan isfound by the Bankruptcy Court to be invalid, illegal or unenforceable, if thisPlan is found by the Bankruptcy Court to be invalid, illegal or unenforceable,or if this Plan cannot be Confirmed under Section 1129 of the Bankruptcy Code,the Bankruptcy Court, at the Debtor’s request, shall retain the power to alterand interpret such term to make it valid or enforceable to the maximum extentpracticable, consistent with the original purpose of the term or provision heldbe invalid, void or unenforceable, and such term or provision shall then beapplicable as altered or interpreted. The Confirmation Order shall constitute ajudicial determination and shall provide that each term and provision of thisPlan, as it may have been altered or interpreted in accordance with theforegone, is valid and enforceable in accordance with its terms.

**15.7****                        Relationship to Trust Agreement**.  The Plan and Trust Agreement shall beinterpreted so as to give effect to the terms of each.  However, any conflict between the terms ofthe Plan and those of the Trust Agreement shall be resolved in favor of thePlan and the Plan shall control the Trust Agreement.

[Signature Page to Follow]

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| MESABA AVIATION, INC. |                        | RAVICH MEYER KIRKMAN MCGRATH            |
|-----------------------|-----------------------------|-----------------------------------------|
| DBA MESABA AIRLINES   |                        | & NAUMAN, A PROFESSIONALASSOCIATION |
|                  |                        |                                    |
| BY:                   | /s/ John G. Spanjers        |                                    |   | BY: | /e Michael L. Meyer (72527) |   |
|                  | John G. Spanjers, President |                                    | Will R. Tansey (032356) |
|                  | and Chief Operating Officer |                                    |   |
|                  |                        |                                    | 4545 IDS CENTER  80 SOUTH EIGHTH STREET  MINNEAPOLIS, MN 55402(612) 332-8511

 

ATTORNEYS FOR DEBTOR |
|                       |                             |                                         |  |  |  |  |

 

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**APPENDIX A**

**LIQUIDATING TRUST AGREEMENT**

[see attached]

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**APPENDIX B**

**STOCK PURCHASE AND RESTRUCTURING AGREEMENT**

[see attached]

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