Exhibit 4.2


 


THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER EITHER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT
BE SOLD, TRANSFERRED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE DISTRIBUTED FOR
VALUE UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
SUCH LAWS COVERING SUCH SECURITIES, OR THE COMPANY RECEIVES AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT,
OFFER, PLEDGE OR OTHER DISTRIBUTION FOR VALUE IS EXEMPT FROM THE REGISTRATION
AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND SUCH LAWS.


 


AMENDED AND RESTATED WARRANT


to Purchase 4,112,500 Shares of Common Stock


of


MAIR Holdings, Inc.


 


This
Amended and Restated Warrant (the “Warrant”), dated as of August 29,
2005, certifies that for value received, Northwest Airlines, Inc., a
Minnesota corporation (“Northwest”), or its permitted assigns, is entitled to
subscribe for and purchase from MAIR Holdings, Inc., a Minnesota corporation
(the “Company”), at any time after the date hereof up to and including 5:00 p.m.
Minneapolis, Minnesota time on August 28, 2015 (the “Expiration Date”),
4,112,500 fully paid and nonassessable shares (subject to adjustment as herein
provided) of the Common Stock of the Company at the price of $8.74 per share
(the “Exercise Price”).  Contemporaneous
with the issuance of this Warrant, Northwest shall present to the Company for
cancellation the existing Stock Purchase Warrants issued by the Company to
Northwest on each of October 25, 1996, June 4, 1997, April 1,
1998 and June 2, 1998, all exercisable for an aggregate of 4,151,922
shares of the Company’s Common Stock.


 


The shares which may be
acquired upon exercise of this Warrant (as adjusted in accordance with the
terms hereof and together with such other securities receivable in accordance
with the terms hereof) are referred to herein as the “Warrant Shares.”  As used herein, the term “Holder” means
Northwest or any party who acquires all or a part of this Warrant as a
registered transferee of Northwest.  As
used herein, the term “Common Stock” means and includes the Company’s presently
authorized common stock, par value $0.01 per share.


 


This Warrant has been
issued to Northwest in consideration of that certain Airline Services
Agreement, dated August 29, 2005, between Northwest and Mesaba Aviation, Inc.
(“Mesaba”) (the “ASA “) and in consideration of that certain Agreement, dated August 29,
2005, between Northwest and the Company. 
This Warrant is subject to the following provisions, terms, and
conditions:


 


1.                                       Exercise and Issuance of the Warrant Shares.  The rights represented by this Warrant may be
exercised by the Holder hereof, in whole or in part (but not as to a fractional
share of Common Stock), by written notice of exercise (in the form attached
hereto) delivered to the Company at the principal office of the Company prior to
the Expiration Date and accompanied by or preceded by the surrender of this
Warrant and a check in payment of the


 





















 


Warrant Exercise Price for such shares.  The Company agrees that the shares so
purchased shall be deemed to be issued as of the close of business on the date
on which this Warrant shall have been surrendered and payment made for such
shares as aforesaid.  Certificates for
the Warrant Shares so purchased shall be delivered to the Holder as soon as
practicable after the purchase rights represented by this Warrant shall have
been so exercised, but in no event longer than three (3) business days,
and, unless this Warrant has expired, a new Warrant representing the right to
purchase the number of Warrant Share, if any, with respect to which this
Warrant shall not then have been exercised shall also be delivered to the
Holder within such time.  This Warrant
may not be exercised in part for the purchase of any number of Warrant Shares
less than 50,000, unless such number represents the total number of Warrant
Shares then remaining subject to purchase pursuant to this Warrant.


 


2.                                       Exchange and Replacement.  Subject to Section 6 hereof, this
Warrant is exchangeable upon the surrender hereof by the Holder to the Company
at its office for new Warrants of like tenor and date representing in the
aggregate the right to purchase the number of Warrant Shares purchasable
hereunder, each of such new Warrants to represent the right to purchase such
number of Warrant Shares (not to exceed the aggregate total number purchasable
hereunder) as shall be designated by the Holder at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction, or mutilation of this Warrant, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
will make and deliver a new Warrant of like tenor, in lieu of this
Warrant.  This Warrant shall be promptly
canceled by the Company upon the surrender hereof in connection with any
exchange or replacement.


 


3.                                       Vesting.  This Warrant shall become exercisable in
installments in accordance with the following schedule:  60% of the Warrant Shares upon delivery to
Mesaba, pursuant to the ASA, of the 15th CRJ-200 or CRJ-440
aircraft, and an additional 4% of the Warrant Shares on each of the ten dates
on which an additional CRJ-200 or CRJ-440 aircraft is delivered to Mesaba
pursuant to the ASA.  This Warrant will
expire on the Expiration Date unless terminated earlier pursuant to the terms
hereof.


 


4.                                       Covenants of the Company.  The Company covenants and agrees that all Warrant
Shares issued upon the exercise of the purchase rights represented by this
Warrant will, upon issuance, be validly issued, fully paid, nonassessable, and
free from all taxes, liens and charges with respect to the issuance
thereof.  The Company further covenants
and agrees that until the expiration of this Warrant it will at all times have
authorized and reserved for the purpose of issue or transfer upon exercise of
the purchase rights evidenced by this Warrant a sufficient number of shares of
its Common Stock to provide for the exercise of the purchase rights represented
by this Warrant.


 


5.                                       Securities Regulations.  The Company shall not be required to deliver
any certificate for the Warrant Shares upon exercise of this Warrant except in
accordance with exemptions from the applicable securities registration
requirements or registrations under applicable securities laws.  The Holder shall also provide the Company
with written representations from the Holder and the proposed transferee
satisfactory to the Company regarding the transfer or, at the election of the
Company, an opinion of counsel reasonably


 


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satisfactory to the Company to the effect that the
proposed transfer of this Warrant or disposition of shares may be effected
without registration or qualification (under any Federal or State law) of this
Warrant or the Warrant Shares.  Upon
receipt by the Company of such written notice and either such representations
or opinion, such Holder shall be entitled to transfer this Warrant, or to
exercise this Warrant in accordance with its terms and dispose of the Warrant
Shares, all in accordance with the notice delivered by such Holder to the
Company, provided that an appropriate legend, if any, respecting the aforesaid
restrictions on transfer and disposition may be endorsed on this Warrant or the
certificates for the Warrant Shares.  The
Company acknowledges that the Warrant Shares are subject to registration by the
Company pursuant to that certain Registration Rights Agreement dated as of August 29,
2005 between the Company and Northwest. 
The Holder agrees to execute such documents and make such
representations, warranties, and agreements as may be required solely to comply
with the exemption relied upon by the Company, or the registration made, for
the issuance of the Warrant Shares.


 


6.                                       Transfer of Warrant.  This Warrant shall not be transferable or
assignable by Northwest and may be exercised only by Northwest; provided, however,
that Northwest may transfer or assign this Warrant to any affiliate (as such
term is defined in Rule 405 promulgated under the Securities Act of 1933,
as amended) of Northwest and any successor corporation (or other entity)
resulting from its merger, consolidation, or other reorganization or the sale
of all or substantially all of its assets.


 


7.                                       Adjustments to Warrant Shares.  In case the Company shall declare a stock
dividend or other distribution upon its common stock payable in common stock of
the Company, then the total maximum number of Warrant Shares issuable upon the
exercise of this Warrant shall be increased by an amount equal to the number of
shares of common stock which would have been issued to the Holder as a result
of the issuance of such dividend or other distribution if, immediately prior to
the record date relating to such dividend or other distribution, the Holder had
exercised its purchase rights under this Warrant with respect to the total
number of Warrant Shares then remaining subject to purchase.  The Exercise Price in effect immediately
prior to such dividend or other distribution shall be proportionately reduced.


 


8.                                       Adjustment to Exercise Price.  In case the Company shall at any time
subdivide or split its outstanding shares of common stock into a greater number
of shares, the Exercise Price in effect immediately prior to such subdivision
or split shall be proportionately reduced, and conversely, in case the
outstanding shares of common stock of the Company shall be combined into a
smaller number of shares, the Exercise Price in effect immediately prior to
such combination shall be proportionately increased.  Upon each adjustment of the Exercise Price
pursuant to this Section 8, the Holder shall thereafter be entitled to
purchase, at the then applicable Exercise Price, the number of shares obtained
by multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of shares purchasable pursuant hereto immediately
prior to such adjustment and dividing the product thereof by the applicable
Exercise Price resulting from such adjustment.


 


9.                                       Reorganization or Reclassification.  If any capital reorganization or
reclassification of the capital stock of the Company or consolidation or merger
of the Company with another corporation, or the sale of all or substantially
all of its assets to another corporation shall be effected in such a way that
holders of shares of Common Stock of the Company shall be


 


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entitled to receive stock, securities or assets with
respect to or in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provision shall be made whereby the Holder shall thereafter have the
right to receive upon the basis and upon the terms and conditions specified in
this Warrant, such shares of stock, securities or assets as may be issued or
payable with respect to or in exchange for a number of outstanding shares of Common
Stock of the Company equal to the number of Warrant Shares immediately
theretofore receivable upon the exercise of this Warrant had such
reorganization, reclassification, consolidation, merger or sale not taken
place, and in any such case appropriate provision shall be made with respect to
the rights and interests of the Holder to the end that the provisions hereof
(including without limitation provision for adjustments of the then applicable
Exercise Price and of the number of shares or other kinds of securities or
other property receivable upon the exercise of this Warrant) shall thereafter
be applicable, as nearly as may be, in relation to any shares of stock,
securities or assets thereafter receivable upon the exercise of this Warrant.  The Company shall not effect any such
consolidation, merger or sale, unless, prior to the consummation thereof, the
surviving corporation (if other than the Company) resulting from such
consolidation or merger or the corporation purchasing such assets shall assume
by written instrument executed and mailed to the Holder at the last address of
the Holder appearing on the books of the Company, the obligation to deliver to the
Holder such shares of stock, securities or assets as, in accordance with the
foregoing provisions, the Holder may be entitled to receive.


 


10.                                 Notice of Adjustments.  Upon any adjustment of the Exercise Price or
the number of Warrant Shares or other kinds of securities or other property
receivable upon exercise of this Warrant, then and in each case the Company
shall give written notice thereof, by nationally recognized overnight courier
service to the Holder at the address set forth below or such other address
specified by Holder pursuant to Section 12 hereof, which notice shall
state the then applicable Exercise Price resulting from such adjustment, the
increase or decrease, if any, in the number of Warrant Shares or other kinds of
securities or other property receivable upon exercise of this Warrant and set
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based.


 


11.                                 Notice of Certain Events.  In case any time:


 


(i)                                     the
Company shall pay or make any stock dividend or other distribution payable in
stock upon its Common Stock or make any distribution (other than regular cash
dividends) to the holders of its Common Stock;


 


(ii)                                  the
Company shall offer for subscription pro rata to the holders of its Common Stock
any additional shares of stock of any class or other rights;


 


(iii)                               there
shall be any capital reorganization, reclassification of the capital stock of
the Company, or consolidation or merger of the corporation with, or sale of all
or substantially all of its assets to, another corporation; or


 


(iv)                              there
shall be a voluntary or involuntary dissolution, liquidation or winding up of
the Company;


 


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then, in any one or more
of said cases, at least 21 days prior to the applicable date specified below,
the Company shall give written notice, by nationally recognized overnight
courier service, addressed to the Holder at the address specified by Holder
pursuant to Section 12 below, of the date on which (aa) the books of the
Company shall close or a record shall be taken for such stock dividend,
distribution or subscription rights, or (bb) such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up shall take place, as the case may be.  Such notice shall also specify the date as of
which the holders of Common Stock of record shall participate in such dividend,
distribution or subscription rights, or shall be entitled to exchange their
shares of Common Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up, as the case may be. 
Failure to give such notice or any defect therein shall not affect the
legality or validity of any such proceeding or transaction and shall not affect
the right of the holder to participate in any said dividend, distribution,
subscription or exchange.


 


12.                                 Notices.  All notices or other communications required
or permitted to be given under this Warrant shall be in writing and shall be
deemed to have been duly given and received when delivered personally or one
business day after being sent by a nationally recognized overnight courier
service to the parties at their respective addresses stated below.  All such notices or other communications
shall be delivered as follows:


 


	
   

  	
  if to Northwest:

  	
   

  	
  Northwest Airlines, Inc.

  
	
   

  	
   

  	
   

  	
  2700 Lone Oak Parkway

  
	
   

  	
   

  	
   

  	
  Dept. A4400

  
	
   

  	
   

  	
   

  	
  Eagan, MN 55121

  
	
   

  	
   

  	
   

  	
  Attention:  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Northwest Airlines, Inc.

  
	
   

  	
   

  	
   

  	
  2700 Loan Oak Parkway

  
	
   

  	
   

  	
   

  	
  Dept. A6110

  
	
   

  	
   

  	
   

  	
  Eagan, MN 55121

  
	
   

  	
   

  	
   

  	
  Attention:  Vice President Network Planning

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  	
  Northwest Airlines, Inc.

  
	
   

  	
   

  	
   

  	
  2700 Lone Oak Parkway

  
	
   

  	
   

  	
   

  	
  Dept. A1180

  
	
   

  	
   

  	
   

  	
  Eagan, MN 55121

  
	
   

  	
   

  	
   

  	
  Attention:  General Counsel

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  if to the Company:

  	
   

  	
  MAIR Holdings, Inc.

  
	
   

  	
   

  	
   

  	
  150 South Fifth Street,
  Suite 1360

  
	
   

  	
   

  	
   

  	
  Minneapolis, MN 55402

  
	
   

  	
   

  	
   

  	
  Attention:  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  	
  MAIR Holdings, Inc.

  
	
   

  	
   

  	
   

  	
  150 South Fifth Street,
  Suite 1360

  
	
   

  	
   

  	
   

  	
  Minneapolis, MN 55402

  
	
   

  	
   

  	
   

  	
  Attention:  Chief Financial Officer

  



 


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13.                                 Transfers.  Any permitted transfer of this Warrant may be
effected by delivery to the principal office of the Company of a notice in the
form attached hereto specifying the party to whom the Warrant has been
transferred, and the surrender of this Warrant properly endorsed.  Northwest and each permitted transferee
consents and agrees that Northwest may be treated by the Company and all other
persons dealing with this Warrant as the absolute owner hereof for any purpose and
as the person entitled to exercise the rights represented by this Warrant, or
to the transfer hereof on the books of the Company, in the absence of any
actual written notice to the contrary.


 


14.                                 No Voting Rights.  This Warrant shall not entitle the Holder to
any voting rights or other rights as a shareholder of the Company.


 


15.                                 Fractional Shares.  Fractional shares shall not be issued upon
the exercise of this Warrant.


 


16.                                 Early Termination.  Notwithstanding any other provisions set
forth in this Warrant to the contrary, the rights of Northwest granted in this
Warrant shall terminate (i) immediately upon
the termination of the ASA, if the ASA is terminated by Northwest (provided,
that if Northwest terminates the ASA pursuant to Section 10.02, Sections
10.03(a)-(i) or Section 10.03(k), this Warrant shall terminate only
with respect to any Warrant Shares that have not yet vested pursuant to Section 3
hereof) or (ii) 30 days after Northwest’s
receipt of notice from Mesaba of Mesaba’s termination of the ASA, if the ASA is
terminated as the result of such notice.


 


17.                                 Amendments.  Neither this Warrant nor any term hereof may
be changed, waived, discharged or terminated orally but only by an instrument
in writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.


 


IN
WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officer as of the day and year first above
written.


 


 


	
   

  	
  MAIR
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Paul F.
  Foley

  	
   

  
	
   

  	
  Paul F. Foley

  	
   

  
	
   

  	
  Chief Executive
  Officer

  	
   

  



 


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NOTICE OF EXERCISE OF WARRANT


 


(To be executed by the registered holder


if such holder desires to exercise the Warrant.)


 


TO:                            MAIR
Holdings, Inc.


 


The undersigned hereby irrevocably elects to exercise the attached
Warrant to purchase for cash                             
of the shares issuable upon the exercise of such Warrant, and requests that certificates
for such shares (together with a new Warrant to purchase the number of shares,
if any, with respect to which this Warrant is not exercised) shall be issued in
the name of:


 


	
   

  	
   

  
	
   

  	
  (Print Name)

  
	
   

  	
   

  
	
  Please insert social security or other tax

  	
   

  
	
  Identification number of registered

  	
   

  
	
  Holder of certificate:

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  Signature*

  
					



 










* The signature on the
Notice of Exercise of Warrant must correspond to the name as written upon the
face of the Warrant in every particular without alteration or enlargement or
any change whatsoever.  When signing on
behalf of a corporation, partnership, trust or other entity, please indicate
your position(s) and title(s) with such entity.


 





















 


FORM OF ASSIGNMENT


 


(To be executed by the registered holder


if such holder desires to transfer the Warrant.)


 


FOR VALUE RECEIVED, the
undersigned hereby sells, assigns and transfers unto                                                           
the right to purchase all or a portion of the securities of MAIR Holdings, Inc.
to which the within Warrant relates (as specified below) and appoints                                                   ,
attorney, to transfer said right on the books of MAIR Holdings, Inc. with
full power of substitution in the premises.


 


 


	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address: