**Exhibit10.21**

** **

** **

**STOCKPURCHASE AND REORGANIZATION AGREEMENT**

**dated asof January 22, 2007**

**between**

**NorthwestAirlines, Inc.**

**and**

**MesabaAviation, Inc.**

 

 

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TABLE OF CONTENTS
| ** ** | ** ** | ** **                                        | ** ** | Page   |
|------------|------------|---------------------------------------------------|------------|--------|
|       |       |                                              |       |   |
| ARTICLE I  |       | CANCELLATION AND PURCHASE AND SALE OF SHARES      |       | 2      |
|       |       |                                              |       |   |
| 1.1        |       | Cancellation and Purchase and Sale                |       | 2      |
|       |       |                                              |       |   |
| 1.2        |       | Closing                                           |       | 3      |
|       |       |                                              |       |   |
| 1.3        |       | Deliveries at the Closing                         |       | 4      |
|       |       |                                              |       |   |
| 1.4        |       | Plan of Reorganization                            |       | 5      |
|       |       |                                              |       |   |
| 1.5        |       | Assets and Liabilities                            |       | 5      |
|       |       |                                              |       |   |
| 1.6        |       | Timing and Interpretation                         |       | 5      |
|       |       |                                              |       |   |
| 1.7        |       | Buyer Claim                                       |       | 5      |
|       |       |                                              |       |   |
| ARTICLE II |       | REPRESENTATIONS AND WARRANTIES OF THE COMPANY     |       | 5      |
|       |       |                                              |       |   |
| 2.1        |       | Organization and Good Standing                    |       | 5      |
|       |       |                                              |       |   |
| 2.2        |       | Capitalization                                    |       | 6      |
|       |       |                                              |       |   |
| 2.3        |       | Authority, Approvals, Enforceability and Consents |       | 6      |
|       |       |                                              |       |   |
| 2.4        |       | Financial Statements                              |       | 7      |
|       |       |                                              |       |   |
| 2.5        |       | Absence of Undisclosed Liabilities                |       | 9      |
|       |       |                                              |       |   |
| 2.6        |       | Absence of Certain Changes                        |       | 9      |
|       |       |                                              |       |   |
| 2.7        |       | Taxes                                             |       | 11     |
|       |       |                                              |       |   |
| 2.8        |       | Legal Matters                                     |       | 12     |
|       |       |                                              |       |   |
| 2.9        |       | Real Property                                     |       | 12     |
|       |       |                                              |       |   |
| 2.10       |       | Aircraft                                          |       | 13     |
|       |       |                                              |       |   |
| 2.11       |       | Intellectual Property                             |       | 13     |
|       |       |                                              |       |   |
| 2.12       |       | Insurance                                         |       | 14     |
|       |       |                                              |       |   |
| 2.13       |       | Company Agreements                                |       | 15     |
|       |       |                                              |       |   |
| 2.14       |       | Labor Relations                                   |       | 16     |

 

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| 2.15        |   | Employee Benefit  Plans                                       |   | 17     |
|-------------|--------|---------------------------------------------------------------|--------|--------|
|        |   |                                                          |   |   |
| 2.16        |   | Environmental Matters                                         |   | 19     |
|        |   |                                                          |   |   |
| 2.17        |   | Title; Condition of Assets                                    |   | 19     |
|        |   |                                                          |   |   |
| 2.18        |   | Suppliers                                                     |   | 19     |
|        |   |                                                          |   |   |
| 2.19        |   | U.S. Citizen; Air Carrier                                     |   | 20     |
|        |   |                                                          |   |   |
| 2.20        |   | Brokers                                                       |   | 20     |
|        |   |                                                          |   |   |
| ARTICLE III |   | REPRESENTATIONS AND WARRANTIES OF BUYER                       |   | 20     |
|        |   |                                                          |   |   |
| 3.1         |   | Organization and Good Standing                                |   | 20     |
|        |   |                                                          |   |   |
| 3.2         |   | Authority, Approvals, Enforceability and Consents             |   | 20     |
|        |   |                                                          |   |   |
| 3.3         |   | Financial Capability                                          |   | 21     |
|        |   |                                                          |   |   |
| 3.4         |   | Brokers                                                       |   | 21     |
|        |   |                                                          |   |   |
| 3.5         |   | Buyer Committee                                               |   | 21     |
|        |   |                                                          |   |   |
| ARTICLE IV  |   | COVENANTS                                                     |   | 21     |
|        |   |                                                          |   |   |
| 4.1         |   | Access                                                        |   | 21     |
|        |   |                                                          |   |   |
| 4.2         |   | Announcements                                                 |   | 22     |
|        |   |                                                          |   |   |
| 4.3         |   | Conduct of Business of the Company Prior to the  Closing      |   | 22     |
|        |   |                                                          |   |   |
| 4.4         |   | Further Assurances                                            |   | 24     |
|        |   |                                                          |   |   |
| 4.5         |   | Additional Agreements; Notification of Certain  Matters       |   | 25     |
|        |   |                                                          |   |   |
| 4.6         |   | Bankruptcy Proceedings                                        |   | 26     |
|        |   |                                                          |   |   |
| 4.7         |   | Acquisition Proposals                                         |   | 28     |
|        |   |                                                          |   |   |
| 4.8         |   | Key Employees                                                 |   | 30     |
|        |   |                                                          |   |   |
| 4.9         |   | State Property Taxes                                          |   | 30     |
|        |   |                                                          |   |   |
| 4.10        |   | Cure Amounts                                                  |   | 31     |
|        |   |                                                          |   |   |
| ARTICLE V   |   | CONDITIONS TO THE OBLIGATIONS OF BUYER TO EFFECT THE  CLOSING |   | 31     |
|        |   |                                                          |   |   |
| 5.1         |   | Representations and  Warranties; Agreements; Covenants        |   | 31     |

 

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| 5.2          |   | HSR                                                                 |   | 31     |
|--------------|--------|---------------------------------------------------------------------|--------|--------|
|         |   |                                                                |   |   |
| 5.3          |   | DOT and FAA; Authorizations; Permits; Consents                      |   | 32     |
|         |   |                                                                |   |   |
| 5.4          |   | Injunction; Litigation; Legislation                                 |   | 32     |
|         |   |                                                                |   |   |
| 5.5          |   | Key Employees                                                       |   | 32     |
|         |   |                                                                |   |   |
| 5.6          |   | Bankruptcy                                                          |   | 32     |
|         |   |                                                                |   |   |
| 5.7          |   | Delivery of Transaction Documents                                   |   | 32     |
|         |   |                                                                |   |   |
| 5.8          |   | Parent                                                              |   | 32     |
|         |   |                                                                |   |   |
| ARTICLE VI   |   | CONDITIONS TO THE OBLIGATIONS OF THE COMPANY TO  EFFECT THE CLOSING |   | 33     |
|         |   |                                                                |   |   |
| 6.1          |   | Representations and Warranties; Agreements;  Covenants              |   | 33     |
|         |   |                                                                |   |   |
| 6.2          |   | HSR Act; DOT and FAA                                                |   | 33     |
|         |   |                                                                |   |   |
| 6.3          |   | Injunction                                                          |   | 33     |
|         |   |                                                                |   |   |
| 6.4          |   | Bankruptcy                                                          |   | 33     |
|         |   |                                                                |   |   |
| 6.5          |   | Delivery of Transaction Documents                                   |   | 33     |
|         |   |                                                                |   |   |
| ARTICLE VII  |   | TERMINATION                                                         |   | 33     |
|         |   |                                                                |   |   |
| 7.1          |   | Termination.                                                        |   | 33     |
|         |   |                                                                |   |   |
| 7.2          |   | Effect of Termination.                                              |   | 35     |
|         |   |                                                                |   |   |
| ARTICLE VIII |   | MISCELLANEOUS                                                       |   | 35     |
|         |   |                                                                |   |   |
| 8.1          |   | Expenses                                                            |   | 35     |
|         |   |                                                                |   |   |
| 8.2          |   | Survival                                                            |   | 36     |
|         |   |                                                                |   |   |
| 8.3          |   | Certain Interpretative Matters                                      |   | 36     |
|         |   |                                                                |   |   |
| 8.4          |   | Notices                                                             |   | 36     |
|         |   |                                                                |   |   |
| 8.5          |   | Assignment                                                          |   | 38     |
|         |   |                                                                |   |   |
| 8.6          |   | Entire Agreement                                                    |   | 38     |
|         |   |                                                                |   |   |
| 8.7          |   | Modifications, Amendments and Waivers                               |   | 38     |
|         |   |                                                                |   |   |
| 8.8          |   | Counterparts                                                        |   | 39     |

 

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| 8.9    |   | Governing Law                       |   | 39     |
|--------|--------|-------------------------------------|--------|--------|
|   |   |                                |   |   |
| 8.10   |   | Severability                        |   | 39     |
|   |   |                                |   |   |
| 8.11   |   | Submission to Jurisdiction; Waivers |   | 39     |
|   |   |                                |   |   |
| 8.12   |   | Specific Performance                |   | 40     |
|   |   |                                |   |   |
| 8.13   |   | No Presumption                      |   | 40     |
|   |   |                                |   |   |
| 8.14   |   | No Third Party Beneficiary          |   | 40     |
|   |   |                                |   |   |
| 8.15   |   | Representations.                    |   | 41     |

 

Exhibit A                CertainDefined Terms

Exhibit B                Form ofPlan

Exhibit C                Form of Buyer Approval Order

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STOCK PURCHASE AND REORGANIZATION AGREEMENT

This Stock Purchase and Reorganization Agreement,dated as of January 22, 2007 (this **“Agreement”**),is between Northwest Airlines, Inc., a Minnesota corporation (**“Buyer”**) and Mesaba Aviation, Inc., aMinnesota corporation (the **“Company”**).  Capitalized terms used but not defined hereinhave the meanings assigned to them on Exhibit A.

WHEREAS, MAIR Holdings, Inc., a Minnesota corporation(**“Parent”**) is the sole owner ofthe Company’s issued and outstanding shares (the **“Shares”**) of common stock, par value $0.01 per share (the **“Common Stock”**).

WHEREAS, the Company filed on October 13, 2005 (the “**Company Petition Date**”), a voluntarypetition (the “**Company Case**”) forrelief under chapter 11 of Title 11 of the United States Code, 11 U.S.C.Sections 101 et seq. (the “**Bankruptcy Code**”)in the United States Bankruptcy Court for the District of Minnesota (the “**Company Bankruptcy Court**”);

WHEREAS, on September 14, 2005, Buyer and certain ofits Affiliates filed a voluntary petition (the “**Buyer Case**”) for relief under chapter 11 of the BankruptcyCode in the United States Bankruptcy Court for the Southern District of NewYork (the “**Buyer Bankruptcy Court**”);

WHEREAS, the Company intends to seek the entry of anorder of the Company Bankruptcy Court (the “**CompanyConfirmation Order**”) to approve the restructuring of the Companypursuant to a plan of reorganization, substantially in the form attached heretoas Exhibit B (the “**Plan**”,and such restructured Company, **“ReorganizedCompany”**), including the approval of this Agreement and theauthorization of the Company to consummate the transactions contemplated herebyand thereby, and Buyer intends to seek the entry of an order of the BuyerBankruptcy Court to approve this Agreement, the Allowed Claim and theauthorization of Buyer to consummate the transactions contemplated hereby (the “**Buyer Approval Order**”);

WHEREAS, the Official Committee of Unsecured Creditorsof the Company (the “**Company Committee**”)has agreed to submit a letter of support with respect to the Plan to be mailedto all creditors of the Company along with the Disclosure Statement andballots; and

WHEREAS, pursuant to the Plan, the Company desires tosell to Buyer new shares of common stock representing 100 percent of the ownershipinterests of the Reorganized Company and to cancel the Shares.

NOW, THEREFORE, in consideration of the premises andthe mutual representations, warranties, covenants and agreements containedherein, and for other good and valuable consideration, the receipt andsufficiency of which is hereby acknowledged, the parties, intending to belegally bound, agree as follows:

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# ARTICLE I

# CANCELLATION ANDPURCHASE AND SALE OF SHARES

## 1.1           Cancellationand Purchase and Sale.

### (a)           Uponthe terms and subject to the conditions set forth in this Agreement, at orprior to the Closing and pursuant to the Plan (i) all Company Equity shall,without any action on the part of the holder thereof, cease to be outstanding,shall be cancelled and retired and shall cease to exist and (ii) ReorganizedCompany shall issue and sell to Buyer and Buyer shall purchase from ReorganizedCompany 1,000 duly and validly authorized and issued, fully paid andnonassessable shares (the “**New Shares**”) ofcommon stock, par value $.01 per share (the **“New CommonStock”**) of Reorganized Company, free and clear of all Liens.  The transactions referred to in the foregoingclause (i) are herein referred to as the “**Equity Cancellation**”and the transactions referred to in the foregoing clause (ii) are herein referredto as the “**New Shares Issuance**”.  The Equity Cancellation and the New SharesIssuance are herein collectively referred to as the “**Cancellationand Issuance**”.

### (b)           Asconsideration for the New Shares, Buyer agrees that, upon the consummation ofthe Closing, the Company Bankruptcy Estate shall have a final, non-appealableorder, including the waiver of Bankruptcy Code Section 502(j) reconsiderationrights, granting the Company an allowed general unsecured claim in the BuyerCase in an amount equal to $145 million plus interest on such amount from andafter the petition date of Buyer’s Case (the “**BuyerPetition Date**”) to the extent that other general unsecured creditorsof Buyer receive interest from and after the Buyer Petition Date pursuant toBuyer’s plan of reorganization (the **“Allowed Claim”**).  The parties acknowledge and agree that theAllowed Claim will not be effective unless and until the Closing has beenconsummated.  The Allowed Claim will beclassified as a general unsecured claim in the plan of reorganization submittedto the Buyer Bankruptcy Court and supported by Buyer in the Buyer Case and willreceive the same treatment in such plan of reorganization as the other generalunsecured claims against Buyer. Notwithstanding anything in this Agreement to the contrary, the partiesunderstand and agree that unless and until the Plan becomes effective, theClosing is consummated and the transactions contemplated hereby have beenconsummated, nothing in this Agreement or any other Transaction Document shallhave, or shall be deemed to have, created an allowed claim in the Buyer Case orconstitute an admission by Buyer, the Company or any of their Affiliates as tothe amount, if any, of the Company’s claim against the Buyer Bankruptcy Estate,nor of Buyer’s claim against the Company Bankruptcy Estate.  The parties agree that from the date of thisAgreement until the Closing, the Company shall have the right to enter into aforward Contract with a Third Party to sell the Allowed Claim (the **“Forward Contract”**, and the aggregate consideration inexchange for the Allowed Claim, valued as of the date of the Forward Contract,provided for in the Forward Contract is herein referred to as the **“Forward Price”**), provided that the settlement of any suchForward Contract shall be contingent on the consummation of the Closing.

### (c)           Fromthe date of this Agreement until the entry of the Company Confirmation Order,Buyer and the Company agree that Buyer, in its sole discretion, shall have theright to revise Schedule A-1 and Schedule A-4 to (i) designateany Company Agreement that

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### is not an Assumed Contact or a Rejected Contract as either an AssumedContract or a Rejected Contract; it being agreed that any Company Agreementthat is not so designated shall be deemed to be a Rejected Contract and (ii)designate any Company Agreement that was as of the date of this Agreement setforth on Schedule A-1 or Schedule A-4, as applicable, as (A) anAssumed Contract as a Rejected Contract and (B) a Rejected Contract as anAssumed Contract, provided that if the aggregate unsecured claim amountattributable to rejection damages with respect to any additional RejectedContracts under clause (ii)(A) minus the aggregate unsecured claim amountattributable to rejection damages with respect to any additional AssumedContracts under clauses (i) and (ii)(B) exceeds $1 million (the “**Rejection Excess**”), then Buyer will pay, simultaneous withthe consummation of the Closing, to the Company Bankruptcy Estate an amount incash equal to such Rejection Excess.

### (d)           Solelyto the extent that the Company’s aggregate Cash (without giving effect to anyproceeds received in connection with a Forward Contract) were not sufficient tosatisfy the post Company Petition Date amounts set forth on Schedule 1.1(d)that are due and payable at the time of the effectiveness of the Plan (any suchaggregate Cash deficiency amount, the **“Deficiency”**),then, simultaneous with the consummation of the Closing, Buyer shall pay to theCompany Bankruptcy Estate the lesser of the Deficiency or the Cap, providedthat Buyer shall under no circumstance be obligated to pay an amount that is inexcess of the Cap.

### (e)           Eachof the parties understands and agrees that unless the Closing is consummated,nothing contained in this Agreement shall constitute an admission by Buyer, theCompany or any of their Affiliates as to the amount, if any, of the Company’sclaim against the Buyer Bankruptcy Estate on account of rejection of thatcertain Airline Services Agreement between Buyer and the Company (the “**ASA**”) or otherwise, nor of Buyer’s claim against the CompanyBankruptcy Estate.  In the event thatthis Agreement is terminated and the transactions contemplated hereby are notconsummated, Buyer expressly reserves the right to assert that the rejectiondamages claim of the Company from rejection of the ASA or otherwise is anamount that is lower than the Allowed Claim plus the Cap, including zero, andthe Company expressly reserves the right to assert that the rejection damagesclaim of the Company from rejection of the ASA or otherwise is an amount higherthan the Allowed Claim plus the Cap.  Further, in the event that the transactions contemplated hereby are notconsummated, the Company expressly reserves the right to assert that the claimof Buyer is an amount lower than the Buyer Claim, including zero, and Buyerexpressly reserves the right to assert that the claim of Buyer is an amounthigher than the Buyer Claim.  Inaddition, neither Buyer nor the Company makes any representation as to the valueto be distributed with respect to allowed unsecured claims in the Buyer Case orthe Company Case, respectively. Except with respect to the Buyer Claim and theAllowed Claim and with respect to any matter arising out of this Agreement orany Transaction Document, upon consummation of the Closing, each of Buyer, theBuyer Bankruptcy Estate and the Company Bankruptcy Estate agrees that it has noClaims arising from the beginning of the world until the Closing Date againstthe other Person or the other Person’s Affiliates and that such Person shallnot assert any such Claim against the other Person or the other Person’sAffiliates.

## 1.2           Closing.  Subject to Section 1.4, on the terms andsubject to the conditions set forth in this Agreement, the closing of thetransactions contemplated by this Agreement (the **“Closing”**)shall take place:  (a) at the offices ofHughes Hubbard & Reed LLP, One Battery

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## Park Plaza, New York, New York, at 10:00 a.m., local time, on the thirdBusiness Day after the day on which the last to be satisfied or waived of theconditions to the Closing set forth in this Agreement (other than thoseconditions that by their terms are to be satisfied at the Closing, but subjectto the satisfaction or waiver of those conditions) are satisfied or waived; or(b) at such other time, on such other date and at such other place as may bemutually agreed upon by the parties.  Thedate on which the Closing is to occur is herein referred to as the **“Closing Date.”**

## 1.3           Deliveriesat the Closing.  In addition to theother requirements set forth herein, at the Closing:

### (a)           ReorganizedCompany shall deliver to Buyer:

#### (i)            one or morecertificates representing the New Shares, and any other documents that arenecessary to issue and transfer to Buyer good, valid and marketable title toall the New Shares free and clear of all Liens;

#### (ii)           if requested by Buyer,instruments evidencing the resignation, effective as of the Closing, of thedirectors of Reorganized Company;

#### (iii)          the certificate calledfor by Section 5.1;

#### (iv)          certificates fromappropriate government officials certifying as to the good standing ofReorganized Company in its jurisdiction of organization and in eachjurisdiction in which Reorganized Company is qualified to conduct business as aforeign corporation; and

#### (v)           all other instrumentsand documents reasonably requested by Buyer;

### (b)           Buyershall deliver to

#### (i)            the Company, thecertificate called for by Section 6.1;

#### (ii)           the Company BankruptcyEstate, the amount, if any, payable by Buyer pursuant to Section 1.1(c), inimmediately available funds, to an account designated by the Company in writingto Buyer at least three Business Days prior to the Closing;

#### (iii)          the Company BankruptcyEstate, the amount, if any, payable by Buyer pursuant to Section 1.1(d), inimmediately available funds, to an account designated by the Company in writingto Buyer at least three Business Days prior to the Closing;

#### (iv)          the Company BankruptcyEstate, a certificate of Buyer executed by an officer of Buyer stating that (a)the Buyer Approval Order has been entered by the Buyer Bankruptcy Court, is aFinal Order and is in full force and effect and (b) all conditions set forth inthe Buyer Approval Order have been satisfied; and

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#### (v)           all other instrumentsand documents reasonably requested by the Company.

## 1.4           Planof Reorganization.  The Cancellationand Issuance shall be effected pursuant to a Plan confirmed by the CompanyBankruptcy Court. The Closing Date shall occur as provided in Section 1.2.

## 1.5           Assetsand Liabilities.  Pursuant to thePlan, on the effective date of the Plan and at the consummation of the Closing:

### (a)           (i)Reorganized Company shall own the Company Assets, free and clear of all Liensand (ii) the Company Bankruptcy Estate shall own the Excluded Assets; and

### (b)           theonly Liabilities of Reorganized Company shall be the Assumed Liabilities, andall other Liabilities of the Company, including the Excluded Liabilities, shallbe solely the obligation and Liability of the Company Bankruptcy Estate.

## 1.6           Timingand Interpretation.  The partiesunderstand and agree that any reference to the Company shall, with respect toany matter determined as of the Closing, be deemed to be a reference toReorganized Company as if it were the successor to the Company.

## 1.7           Buyer Claim.  Aspart of the consideration for the transactions contemplated by this Agreement,the Company agrees that the Buyer Bankruptcy Estate shall have a final,non-appealable order, including the waiver of Bankruptcy Code Section 502(j)reconsideration rights, granting Buyer an allowed general unsecured claim inthe Company Case in an amount equal to $7,300,000 plus interest on such amountfrom and after the Company Petition Date to the extent that other generalunsecured creditors of the Company receive interest from and after the CompanyPetition Date pursuant to the Plan (the “**Buyer Claim**”).  The parties acknowledge and agree that theBuyer Claim will not be effective unless and until the Closing has beenconsummated.

# ARTICLE II

# REPRESENTATIONSAND WARRANTIESOF THE COMPANY

The Company hereby represents and warrants to Buyer asfollows:

## 2.1           Organizationand Good Standing.  The Company is acorporation duly organized, validly existing and in good standing under thelaws of the State of Minnesota and has the requisite corporate power andauthority to own, lease and operate the properties used in its business and tocarry on its business as currently conducted and currently contemplated to beconducted.  The Company is duly qualifiedto do business and is in good standing as a foreign corporation in the statesand jurisdictions set forth on Schedule 2.1 and in each otherjurisdiction where qualification as a foreign corporation is required.  Prior to the date of this Agreement, theCompany has delivered to Buyer complete and correct copies of the articles ofincorporation, bylaws and other organizational documents of the Company, eachas presently in effect.

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## 2.2           Capitalization.

### (a)           Theauthorized capital stock of the Company consists of 10,000 shares of CommonStock.  As of the date of this Agreementand immediately prior to the Equity Cancellation, there are 500 shares ofCommon Stock issued and outstanding, all of which are owned by Parent.  As of the Cancellation and Issuance, the NewShares shall constitute all the issued and outstanding shares of New CommonStock of Reorganized Company.  As of theCancellation and Issuance, the New Shares shall have been duly and validlyauthorized and issued, shall be fully paid and nonassessable with no personalliability attaching to the ownership thereof and shall not have been issued inviolation of any preemptive right or of any federal or state securitieslaw.  Except for the New Shares Issuance,there is no security, option, warrant, right, call, subscription, agreement, commitmentor understanding of any nature whatsoever, fixed or contingent, that directlyor indirectly (i) calls for the issuance, redemption, sale, pledge orother disposition of any shares of capital stock of the Company or anysecurities convertible into, or other rights to acquire, any shares of capitalstock of the Company, (ii) obligates the Company to grant, offer or enterinto any of the foregoing or (iii) relates to the voting or control ofsuch capital stock, securities or rights. There is no “phantom stock,” stock appreciation rights or other similarrights the value of which is related to or based upon the price or value of anyclass or series of capital stock of the Company.  No Person is entitled to any preemptive orsimilar rights to subscribe for shares of capital stock of the Company.  The Company has not granted to any Person theright to demand or request that the Company effect a registration under theSecurities Act of any securities held by such Person or to include anysecurities of such Person in any such registration by the Company.

### (b)           TheCompany (i) does not own and is not bound by any Contract or other obligationto acquire or sell, any equity securities of or ownership interest in anyPerson or any direct or indirect equity or ownership interest in any otherbusiness and (ii) is not bound by any joint venture Contract or any Contract orother obligation to provide funds to, or make any investment in, any Person.

## 2.3           Authority,Approvals, Enforceability and Consents.

### (a)           TheCompany has the corporate power and authority to enter into this Agreement andthe other Transaction Documents to be executed and delivered by it and, subjectto entry of the Company Confirmation Order, to perform its obligationshereunder and thereunder.

### (b)           Theexecution, delivery and performance by the Company of this Agreement and theother Transaction Documents to be executed and delivered by it and theconsummation by the Company of the transactions contemplated hereby and therebyhave been duly authorized and approved by the Board of Directors of the Companyand, subject to entry of the Company Confirmation Order, no other corporateproceedings or other approvals on the part of the Company are necessary toauthorize, approve and perform its obligations under this Agreement and theother Transaction Documents to be executed and delivered by it and thetransactions contemplated hereby and thereby.

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### (c)           ThisAgreement has been, and the other Transaction Documents to be executed anddelivered by the Company at the Closing will, at the Closing, have been, dulyexecuted and delivered by the Company and, subject to entry of the CompanyConfirmation Order, constitutes (or will constitute at the Closing, asapplicable) the legal, valid and binding obligations of the Company enforceableagainst the Company in accordance with their respective terms, subject to thediscretion of the Company Bankruptcy Court for so long as the CompanyBankruptcy Court retains jurisdiction over the Company Case.

### (d)           Theexecution, delivery and performance by the Company of this Agreement and theother Transaction Documents to be executed and delivered by the Company and theconsummation of the transactions contemplated hereby and thereby do not andwill not:

#### (i)            contravene anyprovision of the articles of incorporation or bylaws (or comparableorganizational documents) of the Company;

#### (ii)           subject to entry of theCompany Confirmation Order, after notice or lapse of time or both, result in amaterial violation, material conflict with, or material breach of any provisionof, constitute a material default under, result in or permit the materialmodification, revocation, cancellation, termination or acceleration of, anyContract to which the Company is a party or by which any of its properties or assetsare bound or otherwise subject or, require any consent or waiver of any partyto any such Contract;

#### (iii)          result in the creationor imposition of any Lien upon, or any Person obtaining any right to acquire orother interest in, any properties, assets or rights of the Company;

#### (iv)          to the Company’sKnowledge, violate or conflict with any Law applicable to the Company or itsbusiness or properties; or

#### (v)           except for the CompanyConfirmation Order and any authorization, consent, order, permit, approval, notice,filing, registration or qualification (i) required under the HSR Act, (ii)with, from or to the Federal Aviation Administration (the “**FAA”**)and (iii) with, from or to the United States Department of Transportation (the “**DOT**”), require any authorization, consent, order, permit orapproval of, or notice to, or filing, registration or qualification with, anyGovernment Authority.

## 2.4           FinancialStatements.

### (a)           Schedule2.4 sets forth a true, correct and complete copy of:

#### (i)            the audited balancesheet of the Company as of March 31, 2005 and March 31, 2006, and the relatedaudited statements of operations, stockholders equity and cash flows for thefiscal years ended on such dates, together with the notes thereto, in each caseexamined by and accompanied by the report of Deloitte & Touche LLP,independent certified public accountants, and

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#### (ii)           the unaudited balancesheet of the Company as of September 30, 2006, and the unaudited statements ofoperations, stockholders equity and cash flows for the 6-month period ended onsuch date, together with the notes thereto;

(all the foregoingfinancial statements, including the notes thereto being referred to hereincollectively as the **“Company FinancialStatements”**).  The CompanyFinancial Statements are in accordance with the books and records of theCompany and fairly present the financial position, results of operations,stockholders equity and cash flows of the Company as of the dates and for theperiods indicated, in each case in conformity with GAAP consistently appliedduring such periods, and the unaudited financial statements included in theCompany Financial Statements include all adjustments, except for normalrecurring year end accruals, which are not, individually or in the aggregate,material, and the unaudited financial statements included in the CompanyFinancial Statements do not include footnotes. The books and accounts of the Company are complete and correct and fullyand accurately reflect the transactions of the Company in all materialrespects.

### (b)           Themanagement of the Company has:  (i)designed disclosure controls and procedures to ensure that material informationrelating to the Company is made known to the management of the Company byothers within the Company; and (ii) disclosed, based on its most recentevaluation, to the Parent’s outside auditors and the Board of Directors of theCompany (or its audit committee, if any) (A) any significant deficiencies inthe design or operation of internal controls which could adversely affect theCompany’s ability to record, process, summarize and report financial data andhave identified for the Parent’s outside auditors any material weaknesses ininternal controls and (B) any fraud, whether or not material, that involvesmanagement or other employees who have a significant role in the Company’sinternal controls.  A summary of any ofthose disclosures made by management to the Parent’s auditors and the Board ofDirectors of the Company (or its audit committee, if any) has been furnished toBuyer prior to the date of this Agreement. The Company maintains a system of internal accounting controlssufficient to provide reasonable assurance that (i) transactions are executedin accordance with management’s general or specific authorizations, (ii)transactions are recorded as necessary to permit preparation of financialstatements in conformity with GAAP and to maintain asset accountability, (iii)access to assets is permitted only in accordance with management’s general orspecific authorization and (iv) the recorded accountability for assets iscompared with the existing assets at reasonable intervals and appropriateaction is taken with respect to any differences.  To the Company’s Knowledge, Parent’s auditorsand the Company’s chief executive officer and chief financial officer would beable to give the certifications and attestations contemplated by the rules andregulations adopted pursuant to Section 404 of the Sarbanes Oxley Act of 2002,insofar as they relate to the Company only, without qualification, when nextdue.

### (c)           SinceDecember 31, 2003, none of the Company or any director, officer, employee,auditor, accountant or representative of the Company has received, and theCompany has no Knowledge of, any complaint, allegation, assertion or claim,whether written or oral, regarding the accounting or auditing practices,procedures, methodologies or methods of the Company with respect to the CompanyFinancial Statements or the internal accounting controls of the Company.  No attorney representing the Company hasreported evidence of a violation of securities laws, breach of fiduciary dutyor similar violation by the Company or any of its

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### respective officers, directors, employees or agents to the Board ofDirectors of the Company or any committee thereof or to any director or officerof the Company.

### (d)           Tothe Knowledge of the Company, no employee of the Company has provided or isproviding information to any law enforcement agency regarding the commission orpossible commission of any crime or the violation or possible violation of anyLaw.

### (e)           TheCompany has not engaged in any “off-balance sheet arrangement” (as defined inItem 303(a)(4)(ii) of Regulation S-K promulgated under the Securities ExchangeAct of 1934, as amended).

## 2.5           Absenceof Undisclosed Liabilities.  As ofthe date of this Agreement and immediately prior to the Cancellation andIssuance, the Company has no Liability and there is no existing condition,situation or set of circumstances which is reasonably expected to result insuch a Liability, except for (a) Liabilities expressly set forth on Schedule2.5, (b) Liabilities reflected or reserved against in the balance sheet asof March 31, 2006 (the **“Balance Sheet Date”**)included in the Company Financial Statements (the **“CompanyBalance Sheet”**), and (c) current Liabilities incurred in theOrdinary Course after the Balance Sheet Date which have not had, or would notreasonably be expected to have, a Material Adverse Effect.  As of the Closing, Reorganized Company shallhave no Liability and there shall not be any existing condition, situation orset of circumstances which is reasonably expected to result in such aLiability, except for the Assumed Liabilities.

## 2.6           Absenceof Certain Changes.  Since theBalance Sheet Date, the Company has conducted its business only in the OrdinaryCourse and:

### (a)           exceptas set forth on Schedule 2.6 and the effects in existence as of the datehereof resulting from the Company Bankruptcy Case, there has been no:

#### (i)            development, change,event or occurrence that has had, or would reasonably be expected to have, aMaterial Adverse Effect;

#### (ii)           physical damage,destruction or loss in an amount exceeding $250,000  in the aggregate affecting the assets of theCompany that is not covered by insurance or has not been remedied within 30days;

### (b)           exceptas set forth on Schedule 2.6, the Company has not, directly orindirectly:

#### (i)            amended or otherwisechanged its articles of incorporation, bylaws or comparable organizationaldocuments;

#### (ii)           (A) issued, granted orsold any shares of its capital stock, (B) issued, granted or sold anysecurity, option, warrant, call, subscription or other right of any kind, fixedor contingent, that directly or indirectly calls for the issuance, sale, pledgeor other disposition of any of its shares of capital stock, or (C) enteredinto any agreement, commitment or understanding calling for any transactionreferred to in clause (A) or (B) of this paragraph (ii);

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#### (iii)          declared, set aside orpaid any dividend or other distribution (whether in Cash, stock, property orany combination thereof) in respect of any shares of its capital stock, orpurchased, redeemed or otherwise acquired, any shares of its capital stock;

#### (iv)          made any capitalexpenditures or appropriations or commitments with respect thereto, except tothe extent of the total dollar amounts and, to the extent indicated therein, atthe times set forth in the Company’s 2006 or 2007 capital expenditure budgetthat have been furnished to Buyer prior to the date of this Agreement;

#### (v)           created, incurred orassumed any indebtedness for money borrowed or obligations in respect ofcapital leases;

#### (vi)          paid, discharged orsatisfied Liabilities which involve payments or commitments to make payments,other than Liabilities incurred in the Ordinary Course;

#### (vii)         assumed, endorsed,guaranteed or otherwise become liable or responsible for (whether directly,contingently or otherwise) any indebtedness for money borrowed or any otherobligation of any other Person;

#### (viii)        entered into anytransaction involving total payments to or by the Company of, or involving theacquisition or disposition by the Company of property, assets or rights havinga value of, more than $250,000 in the aggregate;

#### (ix)           approved or put intoeffect any increase in compensation or benefits payable to any of the employeesof the Company, made any bonus payment to any of the employees of the Company,entered into or adopted a new Benefit Plan, or amended any Benefit Plan toincrease the amount of compensation or benefits payable thereunder;

#### (x)            changed the accountingmethods, principles or practices employed by the Company, except as required byGAAP;

#### (xi)           subjected to any Lien(other than Permitted Liens) any assets of the Company;

#### (xii)          changed or modified anyof the following:  (A) billing andcollection policies, procedures and practices with respect to accountsreceivable or unbilled charges; (B) policies, procedures and practices withrespect to the provision of discounts, rebates or allowances; or(C) payment policies, procedures and practices with respect to accountspayable;

#### (xiii)         settled any Tax audit orother proceeding, made or changed any Tax election, Tax accounting method orpractice or filed any amended Tax Return; or

#### (xiv)        authorized any of, orcommitted or agreed to take, whether in writing or otherwise, any of theforegoing actions.

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## 2.7           Taxes.  Except as set forth on Schedule 2.7,

### (a)           TheCompany and any consolidated, combined or unitary group of which the Company isor was a member, have timely filed all Tax Returns which are required to befiled by them and all Taxes that are due with respect to the periods covered bysuch Tax Returns (whether or not shown as due on any Tax Return) have beentimely paid.  All such Tax Returns aretrue, correct and complete in all material respects.  The Company has provided Buyer with access tocomplete and accurate copies of all such Tax Returns for which the statute oflimitations remains open.  All Taxes ofthe Company attributable to periods or portions thereof ending on or before theBalance Sheet Date were paid prior to the date of the Company Balance Sheet orhave been included in a liability accrual for Taxes on the Company BalanceSheet.  Since the Balance Sheet Date, theCompany has not incurred any Taxes other than Taxes incurred in the OrdinaryCourse consistent in type and amount (relative to the results of operations ofthe Company and taking into account changes in Tax rates and other changes inapplicable Tax law) with past practice.

### (b)           TheCompany has been included in the consolidated federal income Tax Return filedby Parent and, where permitted, in combined, consolidated, or unitary TaxReturns with Parent for state Tax purposes. Following the Closing Date, the Company shall not have any Liabilitywith respect to any such Tax Returns.

### (c)           TheCompany has duly withheld, collected and timely paid all Taxes that it wasrequired to withhold, collect and pay relating to amounts paid or owing to anyemployee, independent contractor, creditor, stockholder or other Person and hascomplied with all information reporting requirements with respect to suchamounts.

### (d)           Noaudit or other proceeding by any taxing authority is pending or threatened inwriting with respect to any Taxes due from the Company, or with respect to anyTax Return filed or required to be filed by or relating to the Company.  No assessment or deficiency for any Tax isproposed nor, to the Knowledge of the Company, is threatened against theCompany.

### (e)           Tothe Company’s Knowledge, no claim has been made by any taxing authority in ajurisdiction where the Company does not file Tax Returns that the Company is ormay be subject to Tax or required to file a Tax Return in suchjurisdiction.  There are no outstandingwaivers or consents that have been given by the Company regarding theapplication of the statute of limitations with respect to any Taxes or TaxReturns.  There are no Liens on any ofthe assets of the Company that arose in connection with any failure to payTaxes, other than for Taxes that are not yet due and payable.

### (f)            TheCompany has not requested or received a Tax ruling, private letter ruling,technical advice memorandum, competent authority relief or similar agreement orentered into a closing agreement or contract with any taxing authority that, ineach case, remains outstanding or effective. The Company is not subject to a Tax sharing, allocation, indemnificationor similar agreement.

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### (g)           TheCompany is not participating and has not participated in a reportable or listedtransaction within the meaning of Treas. Reg. Section 1.6011-4 or Section6707A(c) of the Code.

### (h)           TheCompany has not been the “distributing corporation” or a “controlledcorporation” (within the meaning of Section 355 of the Code) with respect to atransaction described in Section 355 of the Code within the two-year periodending on the date of this Agreement.

## 2.8           LegalMatters.

### (a)           Exceptas set forth on Schedule 2.8(a) hereto, (i) there is no claim,action, suit, litigation, investigation, inquiry, review, demand, request forinformation or proceeding (collectively, **“Claims”**)pending against, or, to the Knowledge of the Company, threatened against oraffecting, the Company or any of its properties or rights, at law or in equity,before or by any court, arbitrator, panel, commission or other GovernmentAuthority and (ii) the Company is not operating under, or subject to, anyjudgment, decree, writ, injunction, ruling, award, stipulation, determinationor order (collectively, **“Judgments”**) ofany Government Authority.

### (b)           Thebusiness of the Company has been and is being conducted in all materialrespects in compliance with all applicable Laws, operating certificates, commoncarrier obligations, airworthiness directives, federal aviation regulations,and all applicable rules, regulations, directives and policies of anyGovernment Authority.

### (c)           TheCompany has, and is in all material respects in compliance with, all Permitsrequired, issued or granted by all applicable Laws and all applicable rules,regulations, directions or policies of any Government Authorities.  Schedule 2.8(c) lists all materialPermits owned or held by the Company. The Company owns or hold all Permits material to the conduct of itsbusiness.  No event has occurred and iscontinuing which permits, or after notice or lapse of time or both wouldpermit, any modification, revocation, non-renewal or termination of any Permitheld by the Company.  The Company has notreceived any written notice asserting any noncompliance with any Permit.

## 2.9           RealProperty.

### (a)           TheCompany does not own any Real Property.

### (b)           Schedule2.9(b)-1 lists all Real Property Leases. The Real Property described on Schedule 2.9(b)-1 is referred toas the **“Leased Real Property.”**  Copies of all written (and summaries of alloral) Real Property Leases have been provided to Buyer prior to the date ofthis Agreement.  Subject to assumptionunder bankruptcy law, (i) each of the Real Property Leases is in full force andeffect, and (ii) the Company has the right to conduct business in each LeasedReal Property for the remaining term of the applicable Real PropertyLease.  The Leased Real Properties andtheir condition are adequate for the uses for which they are used by theCompany.  All options to renew, rights offirst offer and rights of first refusal with regard to the Real PropertyLeases, exercisable prior to the Closing have been properly exercised.  Prior to the date of this Agreement, theCompany has delivered to Buyer copies of all subleases with respect to any RealProperty Lease (collectively, the **“Subleases”**)entered into by the Company

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### (all of which are listed on Schedule 2.9(b)-2).  All Subleases are in full force and effect,and all necessary consents with respect thereto have been obtained.

## 2.10         Aircraft.

### (a)           Schedule2.10(a) sets forth a true and complete list of all aircraft owned or leasedby the Company (such aircraft, together with their engines, and any parts,components, instruments, appurtenances, accessories, furnishings and otherequipment attached or relating to such aircraft or engines are collectivelyreferred to herein as the “**Aircraft**”),including the type and aircraft number of each such Aircraft and the date theCompany placed such Aircraft in service or proposes to place such Aircraft inservice.  The Company has a validownership or leasehold interest in each of the Aircraft, and the owned Aircraftare owned by the Company free and clear of all Liens, except as set forth on Schedule2.10(a).  All Aircraft owned orleased by the Company are in airworthy condition and are being maintainedaccording to applicable FAA regulatory standards and the FAA-approvedmaintenance program of the Company.  TheCompany has implemented maintenance schedules with respect to their respectiveAircraft that, if complied with, would result in the satisfaction of allmaterial requirements under all applicable airworthiness directives and federalaviation regulations required to be complied with in accordance with theFAA-approved maintenance program of the Company, and the Company is incompliance with such maintenance schedules in all material respects and has noreason to believe that it will not satisfy any component of such maintenanceschedules on or prior to the dates specified in such maintenanceschedules.  All deferred maintenanceitems and temporary repairs with respect to each Aircraft have been or will bemade in accordance with FAA, manufacturer’s and the Company’s maintenanceprograms.

### (b)           Schedule2.10(b) sets forth a true and complete list containing all Contractspursuant to which the Company may purchase or lease aircraft, including themanufacturer and model of all aircraft subject to each Contract. The Companyhas provided to Buyer true and complete copies of all Contracts listed on Schedule2.10(b) prior to the date of this Agreement.  No Aircraft is subleased to or otherwise inthe possession of another Person other than the Company.

### (c)           EachAircraft has a validly issued, current individual aircraft FAA certificate ofairworthiness with respect to such Aircraft which satisfies all requirementsfor the effectiveness of such FAA certificate of airworthiness.  Each Aircraft is properly registered on theFAA aircraft registry.  Each Aircraft’sstructure, systems and components are functioning in accordance with itsintended use as set forth in FAA-approved documentation, including anyapplicable manuals, technical standard orders or parts manufacturing approvalcertificates.

## 2.11         Intellectual Property.

### (a)           Schedules2.11(a)-1 to 4 set forth an accurate and complete list of (1) allDomain Names of which the Company is the registrant or of which a third partyis the registrant for the benefit of the Company (collectively, the **“Company Registered Domain Names”**); (2) all registered Marks andpending applications for registration of Marks owned by the Company(collectively, the **“Company Registered Marks”**); (3) all Patents owned by theCompany (collectively, the **“Company Patents”**); and (4) all registeredCopyrights and all

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### pending applications for registration of Copyrights by the Company(collectively, the **“Company RegisteredCopyrights”**and, together with the Company Registered Domain Names, theCompany Registered Marks and the Company Patents, the **“Company Registered IP”**). To the Company’s Knowledge, the conduct of the business of theCompany as currently conducted, does not infringe upon or misappropriate orviolate the Intellectual Property rights or the confidential and proprietaryinformation, including Trade Secrets, of any third party.  The Company Registered IP has not been thesubject of a judicial finding or opinion, nor has any written notice or claimchallenging the ownership, validity, registrability, enforceability, use orlicensed right to use any Intellectual Property been received by theCompany.  No claim or notice has beenasserted against the Company in writing or, to the Knowledge of the Company,orally, that the conduct of the business of the Company as currently conductedinfringes in any material respect upon or misappropriates the IntellectualProperty rights or the confidential and proprietary information, includingTrade Secrets, of any third party, in each case, except with respect to claimsor notices that have been fully resolved. The Company has timely paid all filing, examination, issuance, postregistration and maintenance fees, annuities and the like associated with orrequired with respect to any of the Company Registered IP, and all documents,recordations and certificates necessary to be filed by the Company to maintainthe effectiveness of the Company Registered IP have been filed with therelevant patent, copyright, trademark or other authorities in the United Statesor foreign jurisdictions, as the case may be, so that no item required to belisted in Schedule 2.11(a)-1 to 4, has lapsed, expired or been abandonedor canceled other than in the Ordinary Course. The Company has used reasonable best efforts to protect its rights andthe secrecy of its confidential information and Trade Secrets, including byrequiring that all employees, consultants and independent contractors who areinvolved in the creation of Intellectual Property for the Company enter intonon-disclosure and invention assignment agreements.  The Company owns all right, title andinterest in and to the Company Registered IP, or have a valid license to use(if required), each other item of Intellectual Property currently used by theCompany in its business and is entitled to use any such Company Registered IPor other Intellectual Property used in the operation of its business ascurrently conducted to the extent such use is material to such business, freeand clear of all Liens other than Permitted Liens.  There are no claims asserted or threatened bythe Company that a third Person infringes, misappropriates or otherwiseviolates any of the Company Registered IP.

### (b)           TheCompany Registered IP and the other Intellectual Property owned by the Company,together with the rights granted to the Company under the Inbound IP Agreementsand under any “shrink-wrap” or “click-wrap” license agreements relating tosoftware desktop applications, are sufficient for the continued conduct of thebusiness of the Company after the Closing Date in the same manner as suchbusiness were conducted prior to the Closing Date in all material respects, andneither the execution of this Agreement nor the consummation of any transactioncontemplated hereby will adversely affect any of the rights of the Company withrespect to the Intellectual Property owned by the Company or IntellectualProperty licensed by the Company pursuant to the Inbound IP Agreements.

## 2.12         Insurance.  Schedule 2.12 lists each insurancepolicy maintained by, at the expense of or for the benefit of, the Company withrespect to its properties and assets. Prior to the date of this Agreement, the Company has furnished to Buyertrue and complete copies of all such policies. All such insurance policies are in full force and effect and the Companyis not in

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## default with respect to its obligations under any such insurancepolicy.  The Company has not received anywritten notice regarding any actual or possible (a) cancellation orinvalidation of any insurance policy, (b) refusal of any coverage or rejectionof any material claim under any insurance policy or (c) material adjustment inthe amount of premiums payable with respect to any insurance policy.

## 2.13         CompanyAgreements.

### (a)           Schedule2.13(a) lists as of the date of this Agreement (i) each CompanyAgreement that is material to the business, assets, Liabilities, results ofoperation, operations, financial condition or EBITDA of the Company, and(ii) without regard to materiality, each of the following:

#### (i)            any mortgage,indenture, note, installment obligation or other instrument, agreement orarrangement for or relating to any borrowing of money by the Company;

#### (ii)           any guaranty, direct orindirect, primary or secondary, by the Company of any obligation for borrowingsor otherwise, excluding endorsements made for collection in the OrdinaryCourse;

#### (iii)          any Company Agreementmade other than in the Ordinary Course;

#### (iv)          any Company Agreementproviding for the grant of any preferential rights to purchase or lease anymaterial assets of the Company or any assets related to any RJ-85 aircraft;

#### (v)           any Company Agreementproviding for any obligation to register any shares of the capital stock orother securities of the Company with the Securities and Exchange Commission orotherwise relating to such stock or other securities;

#### (vi)          any Company Agreementproviding for any obligation to make payments, contingent or otherwise, arisingout of the prior acquisition of the business, assets or stock of other Persons;

#### (vii)         any Company Agreementthat is a collective bargaining agreement with any labor union;

#### (viii)        any Company Agreementproviding for any lease or similar arrangement for the use by the Company ofpersonal property involving payments of in excess of $20,000 per annum;

#### (ix)           any Company Agreementto which any Insider is a party;

#### (x)            any Company Agreementwith a term in excess of one year or providing for aggregate payments in excessof $15,000 or $100,000 for all such Company Agreements that are not otherwiselisted on Schedule 2.13(a);

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#### (xi)           any Company Agreement thatcontains a non-competition provision relating to the business of the Company orany of its Affiliates or any other Contract restricting the right of theCompany or any of its Affiliates to conduct business at any time, in any manneror at any place in the world, or the expansion thereof to other geographicalareas or lines of business, or that grants the other party or any third Person “mostfavored nation” status;

#### (xii)          any Company Agreementthat is a partnership, joint venture or similar agreement;

#### (xiii)         any Company Agreementthat is generating or is expected to generate revenue to the Company; and

#### (xiv)        any Company Agreementrelating to the acquisition or disposition of any material portion of itsbusiness.

### (b)           Copiesof all written Company Agreements referred to on Schedule 2.13(a) havebeen delivered to Buyer prior to the date of this Agreement, and the Companyhas provided Buyer with accurate and complete written summaries of all suchCompany Agreements that are unwritten.

### (c)           Exceptfor matters that would be resolved by the Company Confirmation Order, (i) allof the Company Agreements (except for any Rejected Contracts) are in full forceand effect and are valid and binding on and enforceable against the Company inaccordance with their terms and, to the Knowledge of the Company, on andagainst the other parties thereto (with respect to such other parties and as toenforceability only, subject to applicable bankruptcy, insolvency, fraudulentconveyance, reorganization, moratorium and similar laws affecting creditors’rights and remedies generally and general principles of equity, includingprinciples of commercial reasonableness, good faith and fair dealing(regardless of whether enforcement is sought in a proceeding at law or inequity)), (ii) neither the Company nor, to the Knowledge of the Company, anyother party to any Company Agreement (except for any Rejected Contracts), is inmaterial breach of, or material default under, any such Company Agreement(except for any Rejected Contracts) and no event has occurred that, with thegiving of notice or the lapse of time or both, would constitute a materialbreach of, or material default under, any such Company Agreement (except forany Rejected Contracts) and (iii) there are no unresolved disputes under anyCompany Agreement (except for any Rejected Contracts).  The Company has not waived any material rightunder any Company Agreement (except for any Rejected Contracts).  Except with respect to the Company Case, theCompany has not given to or received from any other Person, at any time sinceDecember 31, 2004, any notice or other written communication regarding anyactual, alleged, possible or potential violation or breach of, or defaultunder, any Company Agreement (except for any Rejected Contracts).

## 2.14         LaborRelations.

### (a)           Schedule 2.14(a)lists as of the date of this Agreement all employees of the Company, includingfor each such employee (i) his or her name; (ii) his or her job title; (iii)his or her status as a full-time or part-time employee; (iv) his or her basesalary or wage rate; (v) his

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### or her bonus entitlement; and (vi) whether or not each suchemployee is actively at work and, if not, the reason that such employee is notactively at work.

### (b)           Schedule2.14(b) lists as of the date of this Agreement all individuals who performservices for the Company as an independent contractor or a leased employee, theservices they perform, their rate of compensation and any bonus entitlement.

### (c)           Except as set forth in Schedule2.14(c), (i) no employees of the Company are covered by a collectivebargaining agreement; (ii) no employees of the Company are, or within the lastthree years have been, represented by a union or other labor organization,association or bargaining agent; and (iii) to the Knowledge of the Company, noemployee organizing efforts are now being conducted or pending with respect toemployees of the Company.  Except as setforth in Section 2.14(c), within the last three years, there has been nostrike, work stoppage, work slowdown or other material labor dispute withrespect to employees of the Company, nor, to the Knowledge of the Company, isany such action threatened.  The Companyis not involved in nor, to the Knowledge of the Company, threatened with, anylabor dispute, arbitration, lawsuit or administrative proceeding relating tolabor matters involving the employees of the Company.

### (d)           TheCompany has paid or made provision for the payment of all salaries and accruedwages and has complied in all material respects with all applicable Lawsrelating to the employment of labor, including those relating to wages, hours,collective bargaining and the payment and withholding of Taxes, and havewithheld and paid to the appropriate Government Authority, or are holding forpayment not yet due to such Government Authority, all amounts required by Lawor agreement to be withheld from the wages or salaries of the employees of theCompany.

### (e)           Exceptas set forth in Schedule 2.14(e), there are no claims or disputespending or, to the Knowledge of the Company, threatened by any current orformer employee of the Company in relation to his or her employment with, ortermination of employment from, the Company.

## 2.15         EmployeeBenefit Plans.

### (a)           Schedule2.15(a) lists (i) all “employee benefit plans” within the meaning ofSection 3(3) of the Employee Retirement Income Security Act of 1974, as amended(**“ERISA”**), (ii) all other employeebenefit plans, arrangements and policies, including all stock option, stockpurchase, stock award, stock appreciation, phantom stock, deferredcompensation, pension, retirement, savings, profit sharing, incentive, bonus,health, life insurance, cafeteria, flexible spending, dependent care, fringebenefit, vacation pay, holiday pay, disability, sick pay, unemployment, severance,employee loan, educational assistance or other similar plans, arrangements andpolicies, and (iii) all employment, consulting, retention, severance orchange-in-control agreements, in each case, that is sponsored or maintained bythe Company or to which the Company is a party, contributes or is required tocontribute, on behalf of current or former employees, consultants or directorsof the Company or their respective beneficiaries or dependents, whether or notwritten (**“Benefit Plans”**).  The Company has not communicated to presentor former employees of the Company or formally adopted or authorized anyadditional

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### Benefit Plan or any change in or termination of any existing BenefitPlan.  Except for rights under COBRA, noBenefit Plan covers employees other than employees of the Company.  The Company has delivered to Buyer completeand correct copies of each Benefit Plan, or written summaries of any unwrittenBenefit Plan, any employee handbook applicable to employees of the Company,and, with respect to each Benefit Plan, the current summary plan description,all related trust agreements and insurance contracts, the latest IRSdetermination letter, the last three annual financial statements, and the lastthree annual reports on IRS Form 5500 (including all required schedules andaccountant’s opinions).

### (b)           Exceptas set forth in Schedule 2.15(b), each Benefit Plan is and has beenoperated and administered in all material respects in accordance with (i) itsterms and (ii) all applicable Laws.  EachBenefit Plan intended to be tax-qualified under Section 401(a) of the InternalRevenue Code of 1986, as amended (the **“Code”**), hasreceived a favorable determination letter from the IRS as to its tax-qualifiedstatus under the Code and nothing has occurred since the date of such favorabledetermination letter which would adversely affect the qualified status of suchplan.  All material contributions andpremium payments required to have been paid under or with respect to any BenefitPlan have been timely paid.  No BenefitPlan provides health, life insurance or other welfare benefits to retirees orother terminated employees of the Company, other than continuation coveragerequired by Section 4980B of the Code or Sections 601-608 of ERISA.  No Benefit Plan is a multiemployer planwithin the meaning of 4001(a)(3) of ERISA, and the Company does not have anyLiability with respect to any such plan. No Benefit Plan is a “defined benefit plan”, within the meaning ofSection 3(35) of ERISA or a plan subject to Section 412 of the Code, and theCompany does not have any Liability with respect to any such plan.  To the Company’s Knowledge, no event hasoccurred and no condition exists with respect to any Benefit Plan which couldsubject any Benefit Plan or the Company, directly or indirectly (through anindemnification agreement or otherwise), to a liability for a breach offiduciary duty, a “prohibited transaction,” within the meaning of Section 406of ERISA or Section 4975 of the Code, or a tax, penalty or fine under ERISA orthe Code.  No actions, suits or claims(other than routine claims for benefits in the Ordinary Course) are pendingwith respect to any Benefit Plan or, to the Knowledge of the Company,threatened, and the Company has no Knowledge of any facts which could give riseto any such actions, suits or claims (other than routine claims for benefits inthe Ordinary Course).  No Benefit Plan iscurrently under governmental investigation or audit and, to the Knowledge ofthe Company, no such investigation or audit is contemplated or underconsideration.  To the Company’sKnowledge, no event has occurred and no condition exists with respect to anyemployee benefit plan or arrangement currently or previously maintained orcontributed to by any entity required to be aggregated with the Company underSection 414(b), (c), (m), or (o) of the Code which could subject the Company toliability, including liability under Section 412, 4971 or 4980B of the Code orTitle IV of ERISA.

### (c)           Neitherthe execution of this Agreement nor the consummation of the transactionscontemplated by this Agreement, will (i) increase the amount of benefitsotherwise payable under any Benefit Plan, (ii) result in the acceleration ofthe time of payment, exercisability, funding or vesting of any such benefits,or (iii) result in any payment (whether severance pay or otherwise) becomingdue to, or with respect to, any current or former employee or director of theCompany.  No payment or series ofpayments that would constitute an “excess parachute payment” (within themeaning of Section 280G of the Code) has been made or will be

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### made by the Company, directly or indirectly, to any employee inconnection with the execution of this Agreement or as a result of theconsummation of the transactions contemplated hereby.  Each “nonqualified deferred compensation plan”(as defined in Section 409A of the Code) that is subject to Section 409A of theCode has at all times been operated in compliance with the requirements ofSection 409A of the Code and applicable regulations and other guidancepromulgated thereunder.  Substantiallyadequate and complete records have been and are maintained with respect to eachBenefit Plan and are in the custody of the Company or a third party serviceprovider retained by the Company.

## 2.16         EnvironmentalMatters.  The Company has compliedwith, and the Company and the real property owned, used or leased by it, are incompliance with, the provisions of all applicable Environmental Laws in allmaterial respects.  The Company has notreceived any written notice and is not otherwise aware of any existing claim orthe basis for any claim by any Government Authority or any Third Party that theCompany or the condition of the real property owned, used or leased by it hasviolated or is subject to liability pursuant to any Environmental Law which hasor would reasonably be expected to have a Material Adverse Effect.  There are no facts, events or conditions withrespect to the past or present operation of the business of the Company or anyEnvironmental Conditions at any of the real properties owned, used or leased bythe Company which could reasonably be expected to interfere with or preventcontinued compliance with, or could reasonably be expected to give rise to anyClaim under, Environmental Laws, which has or would reasonably be expected tohave a Material Adverse Effect.  TheCompany is not subject to any material Liability under any EnvironmentalLaw.  There are no underground storagetanks on or under any of the real property owned or leased by the Company.  The Company has delivered to Buyer, prior tothe date of this Agreement, true and complete copies of any environmentalreports, studies or surveys prepared by or for the Company or any of its Representatives.

## 2.17         Title;Condition of Assets.

### (a)           TheCompany has good and marketable title to or valid leasehold or licenseinterests in all of the assets and properties that it purports to own, lease orlicense (including those assets reflected on the Company Financial Statementsand all of their Intellectual Property), free and clear of any Liens other thanany Permitted Lien.  Such assets andproperties (i) constitute all of the assets and properties which are owned,used or held for use in the conduct by the Company of its business as it is currentlyconducted and (ii) are suitable for the purposes for which they are currentlyused and currently proposed to be used. Except as provided in Schedule 2.17(a) with respect to sharedinsurance, no Insider has any right in or to any of the assets and propertieswhich are owned, used or held for use in the conduct by the Company of itsbusiness as they are currently conducted.

### (b)           Thetangible personal property of the Company is in good working condition andrepair, reasonable wear and tear and loss due to normal operations excepted.

## 2.18         Suppliers.  Schedule 2.18 lists the Company’s top20 suppliers (by volume of purchases from such suppliers), for the fiscal yearended March 31, 2006 and the 6-month period ended September 30, 2006.  Except as set forth in Schedule 2.18,the Company has not received any notice from any of the suppliers on Schedule2.18 to the effect that, and the Company has no

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## reason to believe that, any such supplier will stop, materiallydecrease the rate of, or materially change the terms with respect to, supplyingmaterials, products or services to the Company.

## 2.19         U.S.Citizen; Air Carrier.  The Company isa “citizen of the United States” as defined in the Federal Aviation Act and isan “air carrier” within the meaning of the Federal Aviation Act operating undercertificates issued pursuant to the Federal Aviation Act (49 U.S.C. §§41101-41112).

## 2.20         Brokers.  Neither the Company nor its directors,officers or employees, has employed any broker or finder or has incurred orwill incur any broker’s, finder’s or similar fees, commissions or expenses, ineach case, in connection with the transactions contemplated by this Agreementor any other Transaction Document.

# ARTICLE III

# REPRESENTATIONSAND WARRANTIESOF BUYER

Buyer hereby represents and warrants as follows:

## 3.1           Organization and Good Standing.  Buyer is a corporation duly organized,validly existing and in good standing under the laws of the State of Minnesota.

## 3.2           Authority, Approvals, Enforceability andConsents.

### (a)           Buyer has the corporate power and authorityto enter into this Agreement and the other Transaction Documents to be executedand delivered by Buyer and, subject to entry of the Buyer Approval Order, toperform its obligations hereunder and thereunder.

### (b)           The execution, delivery and performance byBuyer of this Agreement and the other Transaction Documents to be executed anddelivered by Buyer and the consummation by Buyer of the transactionscontemplated hereby and thereby have been duly authorized and approved by theBoard of Directors of Buyer and, subject to entry of the Buyer Approval Order,no other corporate proceedings on the part of Buyer are necessary to authorize,approve and perform its obligations under this Agreement and the otherTransaction Documents to be executed and delivered by Buyer and thetransactions contemplated hereby and thereby.

### (c)           This Agreement has been and the otherTransaction Documents to be executed and delivered by Buyer at the Closingwill, at the Closing, have been duly executed and delivered by Buyer, and,subject to entry of the Buyer Approval Order, constitutes (or will constituteat the Closing, as applicable) the legal, valid and binding obligations ofBuyer enforceable against Buyer in accordance with their respective terms, subjectto the discretion of the Buyer Bankruptcy Court for so long as the BuyerBankruptcy Court retains jurisdiction over the Buyer Case.

### (d)           The execution, delivery and performance byBuyer of this Agreement and the other Transaction Documents to be executed anddelivered by it and the consummation by Buyer of the transactions contemplatedhereby and thereby do not and will not:

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#### (i)            contraveneany provisions of the certificate of incorporation or bylaws of Buyer;

#### (ii)           afternotice or lapse of time or both, result in a material violation, materialconflict with, or material breach of any provision of, constitute a materialdefault under, result in or permit the material modification, revocation,cancellation, termination or acceleration of, any Contract to which Buyer is aparty or by which any of its properties or assets are bound or otherwisesubject or require any consent or waiver of any party to any such Contract;

#### (iii)          subjectto entry of the Buyer Approval Order, to the actual knowledge of the Senior VicePresident of Finance of Buyer and the Vice President – Law of Buyer, violate orconflict with any Law applicable to Buyer or its business or its properties; or

#### (iv)          exceptfor the Buyer Approval Order and any authorization, consent, order, permit, approval,notice, filing, registration or qualification (i) required under the HSR Act,(ii) with, from or to the FAA and (iii) with, from or to the DOT, require anyauthorization, consent, order, permit or approval of, or notice to, or filing,registration or qualification with, any Government Authority.

## 3.3           Financial Capability.  Buyer, at the Closing, will have sufficientfunds available to pay any amounts due to the Company Bankruptcy Estate underSections 1.1(c) and 1.1(d).

## 3.4           Brokers.  Neither Buyer nor its directors, officer oremployees, has employed any broker or finder or has incurred or will incur anybroker’s, finder’s or similar fees, commissions or expenses, in each case, inconnection with the transactions contemplated by this Agreement or any otherTransaction Document that would be payable by the Company or its Affiliates(other than Buyer or its Affiliates).

## 3.5           Buyer Committee.  As of the date of this Agreement, Buyer hascommunicated the material terms of this Agreement, the Allowed Claim and thetransactions contemplated hereby to the Committee of Unsecured Creditors (the “**Buyer Committee**”) inthe Buyer Case and, to the actual knowledge of the Chief Financial Officer ofBuyer and the Senior Vice President of Finance of Buyer, which are the Buyer’sprimary officers involved in discussions with the Buyer Committee, neitherBuyer nor its Representatives has received any indication from the BuyerCommittee that it will object to this Agreement, the Allowed Claim or thetransactions contemplated hereby.

# ARTICLE IV

# COVENANTS

## 4.1           Access.  Between the date hereof and the Closing, theCompany will, during normal business hours and upon reasonable advance notice,(i) provide, to Buyer and its Representatives, full access to any and allpremises, properties, files, books, records, documents, and other informationof the Company (including any Tax Returns filed by the Company and anyconsolidated, combined or unitary income Tax Returns which include the Company)and will

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## cause their officers and employees to furnishto Buyer and its Representatives any and all financial, technical and operatingdata and other information pertaining to the businesses and properties of theCompany, (ii) make available for inspection and copying (at Buyer’sexpense) by Buyer and its Representatives true and complete copies of anydocuments relating to the foregoing and (iii) make available to Buyer and itsRepresentatives the Company’s management personnel and will cause suchpersonnel to cooperate with Buyer and its Representatives and to provideassistance as requested by Buyer and its Representatives in connection with thetransactions contemplated by this Agreement. Following the Closing, the Company will, during normal business hoursand upon reasonable advance notice, solely in connection with the enforcementof the terms of this Agreement and the Plan, the claims allowance process andthe transactions contemplated by the Plan, without interfering with the conductof the business of the Company, and at the Company Bankruptcy Estate’s expense,(i) provide, to the Company Bankruptcy Estate and its Representatives, fullaccess to any and all files, books, records, documents, and other informationof the Company (including any Tax Returns filed by the Company and anyconsolidated, combined or unitary income Tax Returns which include theCompany), in each case, for periods prior to the Closing, (ii) make availablefor inspection and copying by the Company Bankruptcy Estate and itsRepresentatives true and complete copies of the foregoing, and (iii) makeavailable, for limited and inconsequential periods of time (individually and inthe aggregate), to the Company Bankruptcy Estate and its Representatives theCompany’s management personnel for the purpose of answering questions of theCompany Bankruptcy Estate and its Representatives in connection with the claimsallowance process and the transactions contemplated by the Plan; provided thatprior to the Company being obligated to granting such access, inspection andcopying rights, the Company Bankruptcy Estate and its Representatives shallhave agreed in writing with the Company to keep confidential any informationprovided to the Company Bankruptcy Estate or its Representatives pursuant tothis Section as if such information were “Evaluation Material” as such term isdefined in the Confidentiality Agreement. Between the date hereof and the Closing, on a weekly basis, the Companyshall cause its Vice President of Finance to meet with Representatives of Buyer(the “**Weekly Meeting**”).  At each Weekly Meeting, the Company’s ChiefFinancial Officer shall present to the Buyer’s Representatives, in writing, allof the Company’s reasonably expected uses of its Cash for the weekly periodimmediately following such Weekly Meeting, it being understood and agreed thatsuch expected uses shall be consistent with the terms of this Agreement.

## 4.2           Announcements.  Between the date hereof and the Closing, theCompany covenants that it will not issue any press release or otherwise makeany public statement with respect to the transactions contemplated herebywithout the prior written consent of Buyer, except as and to the extent thatthe Company determines in good faith that it is so obligated by Laws, in whichcase the Company shall give notice in advance of the Company’s intent to issuesuch press release or make such public announcement to Buyer, and Buyer and theCompany shall use reasonable best efforts to cause a mutually agreeable releaseor announcement to be issued.

## 4.3           Conduct of Business of the Company Priorto the Closing.  During the periodfrom the date of this Agreement to the Closing, the Company shall:  (w) operate its business only in the OrdinaryCourse and in compliance with all Laws; (x) use its commercially reasonableefforts to preserve its business organization intact; (y) use its commerciallyreasonable efforts to

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## keep available to itself the present servicesof its employees; and (z) use its commercially reasonable efforts to preservefor itself the goodwill of its suppliers, distributors and others with whombusiness relationships exist.  Withoutlimitation of the foregoing, except and to the extent (A) as otherwiseexpressly permitted by this Agreement, (B) as Buyer may approve in writing (suchapproval not to be unreasonably withheld), (C) as set forth in Schedule 4.3or (D) required to comply with any applicable Law, the Company shall not,directly or indirectly:

### (a)           amend or otherwise change its certificate ofincorporation or bylaws;

### (b)           merge or consolidate with any other Person,acquire any operation or business from any other Person, or restructure,reorganize or completely or partially liquidate;

### (c)           except for the New Shares Issuance, (i)issue, grant or sell any shares of its capital stock, (ii) issue, grant orsell any security, option, warrant, call, subscription or other right of anykind, fixed or contingent, that directly or indirectly calls for the issuance,sale, pledge or other disposition of any shares of its capital stock,(iii) enter into any agreement, commitment or understanding calling forany transaction referred to in clause (i) or (ii) of this paragraph (b), or(iv) make any other changes in its equity capital structure;

### (d)           declare, set aside or pay any dividend orother distribution in respect of any shares of its capital stock, or except forthe Equity Cancellation, cancel, reclassify, split, combine, subdivide,purchase, redeem or otherwise acquire, any shares of its capital stock orsecurities convertible or exchangeable into or exercisable for any shares ofits capital stock;

### (e)           use any of its Cash except to satisfyadministrative claims and obligations that are, and to the extent, specificallyset forth on Schedule 1.1(d);

### (f)            create, incur, repay, prepay or assume anyindebtedness for money borrowed or obligations in respect of capital leases;

### (g)           assume, endorse, guarantee or otherwisebecome liable or responsible for (whether directly, contingently or otherwise)any indebtedness for money borrowed or any other obligation of any otherPerson;

### (h)           (i) approve or put into effect any increasein compensation or benefits payable to any of its employees, make any bonuspayment to any of its employees or amend any Benefit Plan to increase theamount of compensation or benefits payable thereunder; or (ii) enter into oradopt any new Benefit Plan;

### (i)            change the accounting methods, principlesor practices employed by the Company, except as required by GAAP;

### (j)            terminate, amend, modify, waive any rightsor exercise an extension or renewal option under any Company Agreement on Schedule2.13(a) or that would have had to be disclosed on Schedule 2.13(a)had it been entered into prior to the date of this Agreement;

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### (k)           enter into any Contract containing a “non-compete”,“non-solicitation”, “most favored nation”, “exclusivity” or similar provisionthat would restrict the Company or Buyer or any of its Affiliates after theClosing;

### (l)            enter into any Contract that would have hadto be disclosed on Schedule 2.13(a) had it been entered into prior tothe date of this Agreement (it being understood and agreed by the parties thatentry into any such Contract by the Company shall also require the priorwritten consent of legal or financial advisors of the Company Committee, suchconsent not to be unreasonably withheld) or assume pursuant to the BankruptcyCode any Company Agreement;

### (m)          mortgage, pledge or subject to any Lien(other than Permitted Liens) any of its assets except to the extent suchmortgage, pledge or Lien would be released, removed and/or satisfied under theterms of the Company Confirmation Order;

### (n)           change or modify any of the following:  (i) billing and collection policies,procedures and practices with respect to accounts receivable or unbilledcharges; (ii) policies, procedures and practices with respect to the provisionof discounts, rebates or allowances; or (iii) payment policies, proceduresand practices with respect to accounts payable;

### (o)           sell, assign, lease, license, mortgage,pledge, surrender, encumber, divest, cancel, abandon, transfer or allow tolapse or expire or otherwise dispose of any material assets (other than any ofthe foregoing actions which are in the Ordinary Course and are not in theaggregate material);

### (p)           enter into a transaction with an Insider ormake any payment to, or receive any payment from, an Insider (other thanpayroll obligations earned in the Ordinary Course);

### (q)           except for unsecured creditors’ Claims,settle, waive or release any Claims or rights other than in the OrdinaryCourse;

### (r)            settle any Tax audit or other proceeding,make or change any Tax accounting method or practice or Tax election or fileany amended Tax Return; or

### (s)           authorize any of, or commit or agree totake, whether in writing or otherwise, any of the foregoing actions.

## 4.4           Further Assurances.  Each party hereto covenants from the date ofthis Agreement to the Closing (and subject to the other terms and conditions ofthis Agreement):

### (a)           to cooperate with the other parties and totake such actions as may be necessary, in each case, as promptly as possible in(i) determining whether notices, declarations, registrations and filingsare required to be made with or consents required to be obtained from any ThirdParty or Government Authority in connection with the consummation of thetransactions contemplated by this Agreement and the other Transaction Documentsand in making or causing to be made any such notices, declarations,registrations and filings promptly (including any authorization, consent,order, permit, approval, notice, filing, registration or qualification (A)required under the HSR Act, (B) with, from or to the FAA and (C) with, from

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### or to the DOT, which in the case of clause(A) will be made within ten days of the date of this Agreement and with respectto clauses (B) and (C) will be made promptly following the date of thisAgreement); (ii) seeking to terminate any waiting periods under the HSR Act assoon as practicable; (iii) obtaining, in a timely manner, any such consents;and (iv) furnishing the other party and to the other party’s counsel allsuch information as may be reasonably required in order to effectuate theforegoing actions;

### (b)           to keep the other party hereto informed inall material respects of any material communications received by such partyfrom, or given by such party to, any Government Authority with respect to thetransactions contemplated by this Agreement and to consult with the other partyhereto in advance of any meeting or conference with any Government Authoritywith respect to the transactions contemplated by this Agreement;

### (c)           to use reasonable best efforts and cooperatewith the other parties hereto to obtain all consents required from ThirdParties, whose consent or approval is required pursuant to any CompanyAgreement or otherwise to consummate the transactions contemplated by thisAgreement and the other Transaction Documents; provided, however,that Buyer will have no obligation to give any guarantee or other considerationof any nature in connection with any such required consents or to consent toany change in the terms of any Assumed Contract; and

### (d)           without limiting the specific obligations ofany party under any covenant or agreement under this Agreement, to usereasonable best efforts to take all action and do all things necessary in orderto promptly consummate the transactions contemplated hereby and the otherTransaction Documents, including satisfaction, but not waiver, of theconditions precedent set forth in Articles V and VI.  Notwithstanding anything to the contrarycontained in this Agreement, nothing in this Agreement will require or obligateBuyer or any of its Affiliates to (and in no event shall any representation,warranty or covenant of Buyer contained in this Agreement be breached or deemedbreached as a result of the failure of Buyer to take any of the followingactions) (i) agree to or otherwise become subject to any limitations on (A) theright of Buyer effectively to control or operate its and its Affiliates’business (including the business of the Company) or assets (including the assetsof the Company), (B) the right of Buyer to acquire the New Shares, (C) theright of Buyer to exercise full rights of ownership of its business (includingthe business of the Company) or assets (including the assets of the Company),or (D) its, the Company’s or their respective Affiliates’ DOT or FAAcertificates, (ii) agree or be required to sell or otherwise dispose of, hold(through the establishment of a trust or otherwise), or divest itself of all orany portion of the business, assets or operations of Buyer or any of itsAffiliates or the business of the Company or any of the assets of the Companyor (iii) otherwise take any steps to avoid or eliminate any impediment that maybe asserted under any Law governing competition, monopolies or restrictivetrade practices.

## 4.5           Additional Agreements; Notification ofCertain Matters.

### (a)           Between the date hereof and the Closing, theCompany will confer on a regular and frequent basis with one or more designatedRepresentatives of Buyer to report operational matters relating to the Companyand to report the general status of ongoing operations of the Company.  Without limiting the foregoing, the Companywill give prompt notice in writing to Buyer of: (i) any information that indicates that any of its representations

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### and warranties contained in this Agreementwas not true and correct in all material respects (without giving effect to anylimitation as to “materiality” or “Material Adverse Effect” or another similarmateriality qualification set forth therein) as of the date of this Agreementor will not be true and correct in all material respects (without giving effectto any limitation as to “materiality” or “Material Adverse Effect” or anothersimilar materiality qualification set forth therein) as of the Closing,(ii) any event that has, or would reasonably be expected to have, aMaterial Adverse Effect, (iii) the occurrence of any event or the existence ofany circumstance which will result, or is reasonably likely to result, in thefailure to satisfy a condition specified in Article V hereof, (iv) anynotice or other communication from any third Person alleging that the consentof such third Person is or may be required in connection with the transactionscontemplated by this Agreement, (v) any notice of, or other communicationrelating to, any default under or breach of, or event which, with notice orlapse of time or both, would become a default under or breach of, any CompanyAgreement, (vi) any emergency or other change in the Ordinary Course or inthe operation of the properties of the Company, and (vii) any complaints,investigations or hearings (or communications indicating that the same may becontemplated) by or of any Government Authority or adjudicatory proceedingsinvolving any property of the Company, and, in the case of any eventcontemplated by clauses (i) through (vii) will keep Buyer fully informed ofsuch event and permit Buyer and its Representatives access to all materialsprepared in connection therewith.

### (b)           If any Claim against the Company shall havebeen instituted before any arbitrator, court or other Government Authority torestrain or prohibit, or to obtain damages in respect of, the consummation ofthe transactions contemplated hereby or by the other Transaction Documents,then the Company shall (i) in good faith defend against any such Claim, (ii)promptly provide Buyer and its counsel with copies of all documents in itspossession relating to such Claim, (iii) prior to filing or providing anydocument to, or having discussions with, a Third Party relating to such Claim,provide Buyer with a reasonable opportunity to review, comment on and approvesuch documents and allow Buyer to participate in any such discussions, and (iv)not settle any such Claim or waive or release any rights with respect to suchclaim without Buyer’s prior written consent.

### (c)           Buyer shall promptly notify the Company andthe Company Committee if it receives any firm indication from the BuyerCommittee that the Buyer Committee objects to any provision of this Agreement,the Allowed Claim or the transactions contemplated hereby.

## 4.6           Bankruptcy Proceedings.

### (a)           As soon as reasonably practicable after thedate hereof (but not later than January 22, 2007 with respect to the Plan andJanuary 23, 2007 with respect to the Disclosure Statement), the Company shallfile with the Company Bankruptcy Court (i) a Disclosure Statement with respectto the Plan meeting the requirements of Section 1125(b) of the Bankruptcy Code(the **“Disclosure Statement”**), and (ii) thePlan (it being understood and agreed that, prior to or after the foregoingfilings have been made, upon Buyer’s request, the Company shall, within threeBusiness Days following such request, file a motion with the Company BankruptcyCourt binding the Company to all the provisions of this Agreement relating tothe Termination Fee).  The Company shalltake all reasonably necessary actions in order to obtain approval of theDisclosure Statement and confirmation of the Plan as reasonably

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### expeditiously as possible.  The Plan, any and all exhibits andattachments to the Plan, the Disclosure Statement, and the orders approving thesame (including the Company Confirmation Order) shall be reasonably acceptable,in form and substance, to Buyer, shall be consistent with the transactionscontemplated hereunder, and shall not be filed until consented to byBuyer.  The Company shall provide Buyerand its counsel with copies of all motions, applications, supporting papers andnotices prepared by the Company relating to the approval of the DisclosureStatement and the Plan prior to the filing of such documents and shall provideBuyer with a reasonable opportunity to review, comment on and approve suchdocuments.  The parties shall consultwith each other prior to taking any action in or with respect to the CompanyCase or the Buyer Case that is reasonably likely to have a material effect onthe transactions contemplated hereunder. Buyer shall provide the Company with all information concerning Buyerand its Affiliates as is required or reasonably advisable to be included in theDisclosure Statement.  Without limitingany other provision of this Agreement, the Company Confirmation Order shallfind and provide, among other things, that (i) the Company Assets shall betransferred to Reorganized Company consistent with this Agreement, (ii) theonly Liabilities assumed by Reorganized Company shall be the AssumedLiabilities as provided in this Agreement, (iii) none of Reorganized Company,Buyer or their Affiliates is acquiring or assuming the Excluded Assets,Excluded Liabilities or any other Person’s Liabilities, (iv) all AssumedContracts shall be assumed by and assigned to Reorganized Company pursuant toSection 365 of the Bankruptcy Code and all Cure Amounts in respect thereofshall be the responsibility of the Company Bankruptcy Estate, and Buyer shallhave no obligation to pay, or have any Liability for, such Cure Amounts, (v)the Cancellation and Issuance shall be effected, (vi) Buyer be granted theBuyer Claim, (vii) Buyer has acted in good faith within the meaning of Section363(m) of the Bankruptcy Code and, as such, is entitled to the protectionsafforded thereby, (viii) the Allowed Claim and the Forward Contract shall beapproved and (ix) this Agreement was negotiated, proposed and entered into bythe parties without collusion, in good faith and from arm’s length bargainingpositions.  The Company shall file,within two weeks following the filing of the Disclosure Statement, a motionrequesting that the Company Bankruptcy Court establish an Administrative ClaimBar Date and a Cure Claim Bar Date that conform with Sections 1.2, 1.46 and1.48 of the Plan.  Prior to the EffectiveDate (as defined in the Plan) of the Plan, the parties hereby agree to complywith Sections 1.43, 1.113, 6.5, 6.5.1 and 6.5.2 of the Plan.

### (b)           Buyer shall, as soon as reasonablypracticable after the date hereof, but not later than 15 days hereafter, filewith the Buyer Bankruptcy Court a motion to approve the transactionscontemplated hereunder, including the Allowed Claim.  The proposed Buyer Approval Order to besubmitted with the motion shall be substantially in the form attached hereto asExhibit C.

### (c)           Each of the parties shall use reasonablebest efforts, and cooperate, assist and consult with each other, as promptly aspracticable, to secure approval of the Disclosure Statement, confirmation ofthe Plan and approval of the transactions contemplated by the Plan and thisAgreement from the Company Bankruptcy Court and the Buyer Bankruptcy Court, asapplicable.  Neither the Plan nor theDisclosure Statement nor any other material document relating to thetransactions contemplated hereby shall be amended, modified, supplemented,withdrawn or revoked without the consent of Buyer; provided, however, that suchconsent shall not be unreasonably withheld. The parties hereto acknowledge and agree that it would not beunreasonable for Buyer to decline to consent to any Plan modification whichwould require the

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### payment of any additional consideration byBuyer under the Plan or which would reduce or impair the Company Assets orincrease the Assumed Liabilities.  If theCompany Confirmation Order, the Buyer Approval Order or any other orders of theCompany Bankruptcy Court or Buyer Bankruptcy Court relating to this Agreement,the Disclosure Statement, the solicitation of acceptances of the Plan orconfirmation of the Plan shall be appealed by any Person (or a petition forcertiorari or motion for reconsideration, amendment, clarification,modification, vacation, stay, rehearing or reargument shall be filed withrespect to any such order), Buyer and the Company will cooperate in taking suchsteps to prosecute diligently such appeal, petition or motion, each of Buyerand the Company shall use reasonable best efforts to obtain an expeditedresolution of any such appeal, petition or motion.

### (d)           Upon consummation of the Closing, Buyershall fully support the Allowed Claim and shall not file any motion or seek anyhearing challenging such Allowed Claim or recovery thereunder.  From the date of this Agreement until theearlier of the termination of this Agreement in accordance with Article VII andthe consummation of the Closing, Buyer shall use its commercially reasonableefforts to obtain the support of the Buyer Committee for the Agreement, theAllowed Claim and the transactions contemplated hereby.

## 4.7           Acquisition Proposals.

### (a)           Until this Agreement has been terminated inaccordance with Section 7.1(a)(viii) (and the payments, if any, required to bemade in connection with such termination pursuant to Section 7.2(b) have beenmade), the Company shall not, and shall cause its Representatives, not to,directly or indirectly, (1) encourage (including by way of furnishing ordisclosing information), solicit, initiate, make or facilitate the making of,or take any other action to facilitate any inquiries or the making of anyproposal that constitutes or may reasonably be expected to lead to, anyAcquisition Proposal, (2) participate in any way in discussions or negotiationswith, or furnish or disclose any information to, any Person (other than Buyeror any of its Representatives) in connection with any Acquisition Proposal, (3)approve or recommend, or propose to approve or recommend or publicly announceit is considering approving or recommending, any Acquisition Proposal or (4)enter into any agreement, letter of intent, agreement-in-principle, acquisitionagreement or other instrument contemplating or otherwise relating to anyAcquisition Proposal.  Notwithstandingthe foregoing, at any time prior to the entry of the Company ConfirmationOrder, the Company and its Representatives may:

#### (i)            participatein discussions or negotiations with, or furnish or disclose nonpublicinformation to, any Person in response to an unsolicited, bona fide and writtenAcquisition Proposal that is submitted to the Company by such Person after thedate of this Agreement and prior to the entry of the Company Confirmation Orderif and so long as (A) none of the Company or any of the Representatives of theCompany has solicited such Acquisition Proposal or otherwise violated any ofthe provisions of this Section 4.7, (B) the Board of Directors of the Companydetermines in good faith that (I) such Person is reasonably capable ofconsummating a Superior Proposal taking into account the legal, financial,regulatory, bankruptcy and other aspects of such Acquisition Proposal and (II)such Acquisition Proposal constitutes or is reasonably likely to constitute aSuperior Proposal, (C) the Board of Directors of the Company determines in goodfaith, after consultation with its outside legal counsel, that failing to takesuch action

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#### wouldconstitute a breach of its fiduciary duties under applicable Law, (D) at leastthree Business Days prior to participating in discussions or negotiations with,or furnishing or disclosing any nonpublic information to, such Person, theCompany provides Buyer with written notice of the identity of such Person andof the Company’s intention to participate in discussions or negotiations with,or to furnish or disclose nonpublic information to, such Person, (E) prior toparticipating in discussions or negotiations with, or furnishing or disclosingany nonpublic information to, such Person, the Company receives from suchPerson an executed confidentiality agreement containing terms no lessrestrictive upon such Person, in any respect, than the terms applicable toBuyer under the Confidentiality Agreement, which confidentiality agreementshall not provide such Person with any exclusive right to negotiate with theCompany or have the effect of prohibiting the Company from satisfying itsobligations under this Agreement, and (F) at least one Business Day prior tofurnishing or disclosing any nonpublic information to such Person, the Companyfurnishes such information to Buyer (to the extent such information has notbeen previously delivered or made available by the Company to Buyer); and

#### (ii)           approve or recommend,or enter into, a definitive agreement with respect to an unsolicited, bona fideand written Acquisition Proposal that is submitted to the Company after thedate of this Agreement and prior to the entry of the Company Confirmation Orderif and so long as (A) none of the Company or any of the Representatives of theCompany has solicited such Acquisition Proposal or otherwise violated any ofthe provisions of this Section 4.7, (B) the Company provides Buyer with writtennotice indicating that the Company, acting in good faith, believes that theAcquisition Proposal is reasonably likely to constitute a Superior Proposaland, therefore, plans to conduct a meeting of the Board of Directors of theCompany for the purpose of considering whether the Acquisition Proposalconstitutes a Superior Proposal, which notice shall be delivered to Buyer atleast three Business Days prior to the date of such meeting of the Board ofDirectors of the Company, (C) during the three Business Day period after theCompany provides Buyer with the written notice described in clause (B) above,the Company shall cause its financial and legal advisors to negotiate in goodfaith with Buyer (to the extent Buyer wishes to negotiate) in an effort to makesuch adjustments to the terms and conditions of this Agreement such that theAcquisition Proposal would not constitute a Superior Proposal and, therefore,the Company would be required to proceed with the transactions contemplatedhereby on such adjusted terms, (D) notwithstanding the negotiations andadjustments pursuant to clause (C) above but after taking into account theresults of such negotiations and adjustments, the Board of Directors of theCompany makes the determination necessary for such Acquisition Proposal toconstitute a Superior Proposal, (E) notwithstanding the negotiations andadjustments pursuant to clause (C) above but after taking into account theresults of such negotiations and adjustments, the Board of Directors of the Companydetermines in good faith, after consultation with its outside legal counsel,that failing to approve or recommend or enter into a definitive agreement withrespect to such Acquisition Proposal would constitute a breach of its fiduciaryduties under applicable Law and (F) not later than the earlier of the approvalor recommendation of, or the execution and delivery of a definitive agreementwith respect to, any such Superior Proposal, the Company (I) terminates thisAgreement pursuant to Section 7.1(a)(viii) and (II) makes the payment of theTermination Fee required to be made pursuant to Section 7.2(b).

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### (b)           Inaddition to the obligations of the Company set forth in Section 4.7(a), within24 hours of the receipt thereof, the Company shall provide Buyer with writtennotice of (i) any request for information, any Acquisition Proposal or anyinquiry, proposal, discussions or negotiations with respect to any AcquisitionProposal, (ii) the material terms and conditions of such request, AcquisitionProposal, inquiry, proposal, discussions or negotiations and (iii) the identityof the Person making any such Acquisition Proposal or such request, inquiry orproposal or with whom such discussions or negotiations are taking place, andthe Company shall promptly provide Buyer with copies of any written materialsreceived by the Company in connection with any of the foregoing.  The Company shall keep Buyer fully informedof the status and general progress (including amendments or proposed amendmentsto any material terms) of any such request or Acquisition Proposal and keepBuyer fully informed as to the details of any information requested of orprovided by the Company and as to the details of all discussions ornegotiations.  Without limiting theCompany’s obligations under Section 4.7(a), the Company shall provide Buyerwith notice at least three Business Days prior to (or such lesser notice as isprovided to the members of the Board of Directors of the Company) any meetingof the Board of Directors of the Company at which the Board of Directors isreasonably expected to discuss or consider any Acquisition Proposal.

### (c)           TheCompany shall, and shall cause and instruct its Representatives to, immediatelycease all discussions or negotiations, if any, with any Person other than Buyerthat may be ongoing as of the date of this Agreement with respect to anyAcquisition Proposal.  The Company shallimmediately request each Person who has heretofore executed a confidentialityagreement in connection with its consideration of acquiring the Company or anyportion thereof to return all nonpublic information heretofore furnished tosuch Person by or on behalf of the Company. Any violation of this Section 4.7 by the Company’s Representatives shallbe deemed to be a breach of this Agreement by the Company, whether or not suchRepresentative is authorized to act and whether or not such Representative ispurporting to act on behalf of the Company. The parties acknowledge and agree that for purposes of this Section 4.7,Parent shall be deemed to not be a Representative of the Company.

## 4.8           KeyEmployees.  The Company shall use itsbest efforts to keep available the services of each of the Key Employees byoffering to continue to employ them until Closing, provided that:  (a) from the date of this Agreement throughthe Closing, the Company shall pay and provide to each such employee thecompensation and benefits provided by the Company to such employee as of thedate of this Agreement and (b) on or prior to March 1, 2007, and subject to anycustomary conditions of Buyer for employment of management personnel, Buyershall provide to each of the Key Employees (with a copy to the Company) awritten offer of continued employment by the Company (each, a “**Continued Offer of Employment**”) that will include an annualbase salary no less than the annual base salary paid to such employee by theCompany on the day prior to commencement of the Company Case, such employmentto become effective upon consummation of the Closing.

## 4.9           State Property Taxes. If, following the consummation of the Closing, the Company’s positionwith respect to state property taxes for periods (or portions thereof)following the Company Petition Date is challenged by a Government Authority(the “**Challenger**”) and, prior to the Closing, the Companyhad paid such taxes consistent with Schedule 1.1(d), then Buyer shallassume the defense of such challenge, and if such challenge is

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## successful, then Buyer shall pay anyadditional amounts finally adjudicated to be owed to the Challenger withrespect to such post Company Petition Date taxes.

## 4.10         Cure Amounts.  Notwithstanding any other provisions of thisAgreement to the contrary, upon receipt by the Company of a written notice fromBuyer with respect to the following matters, (a) the Company shall be permittedto use up to $4.5 million of its Cash to pay, upon consummation of the Closing,for Cure Amounts and (b) effective as of immediately prior to the consummationof the Closing, Schedule 1.1(d) shall be automatically and without anyfurther action be amended to include such Cure Amounts which shall not exceed$4.5 million.  Any Cure Amount proposedby the Company to be paid in connection with the schedule referred to inSection 1.113 of the Plan shall require Buyer’s prior written approval.

# ARTICLE V

# CONDITIONS TO THEOBLIGATIONSOF BUYER TO EFFECT THE CLOSING

The obligations of Buyer required to be performed byit at the Closing shall be subject to the satisfaction, at or prior to theClosing, of each of the following conditions, each of which may be waived inwhole or in part by Buyer as provided herein except as otherwise required byapplicable Law:

## 5.1           Representations and Warranties;Agreements; Covenants.  Each of therepresentations and warranties of the Company contained in Sections 2.1, 2.2,2.3, 2.5, 2.6(a)(i) and 2.20 of this Agreement that are qualified as tomateriality or by reference to Material Adverse Effect or another similarmateriality qualification shall be true and correct as of the date of thisAgreement and as of the Closing, as if made at and as of such time (except tothe extent expressly made as of an earlier date, in which case as of suchdate), and such representations and warranties of the Company that are not soqualified shall be true and correct in all material respects as of the date ofthis Agreement and as of the Closing, as if made at and as of such time (exceptto the extent expressly made as of an earlier date, in which case as of suchdate).  All the other representations andwarranties of the Company contained in this Agreement shall be true and correctin all respects as of the date of this Agreement and as of the Closing, as ifmade at and as of such time (except to the extent expressly made as of anearlier date, in which case as of such date), except where the failure of suchrepresentations and warranties to be so true and correct (without giving effectto any limitation as to “materiality” or “Material Adverse Effect” or anothersimilar materiality qualification set forth therein) does not have, and wouldnot reasonably be expected to have a Material Adverse Effect.  Each of the obligations of the Companyrequired by this Agreement to be performed by it at or prior to the Closingshall have been duly performed and complied with by it in all material respectsas of the Closing.  At the Closing, Buyershall have received a certificate, dated the Closing Date and duly executed bythe chief executive officer and the chief financial officer of the Company onbehalf of the Company, to the effect that the conditions set forth in the twopreceding sentences have been satisfied.

## 5.2           HSR. All filings required to be made under the HSR Act in connection with thetransactions contemplated hereby shall have been made and all applicablewaiting periods with

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## respect to each such filing, including anyextensions thereof, shall have expired or been terminated.

## 5.3           DOT and FAA; Authorizations; Permits;Consents.  (a) All approvals andauthorizations required to be obtained from the DOT and FAA in connection withthe transactions contemplated hereby shall have been obtained, (b) all notices,declarations, reports, waivers, filings, consents, registrations, approvals,permits or authorizations required to be obtained from any other GovernmentAuthority in connection with the transactions contemplated hereby shall havebeen obtained, (c) all Permits required by the Company to operate its businessin the manner operated prior to the Closing shall be in full force and effectand (d) all consents and approvals required to be obtained in connection withthe transactions contemplated hereby under any licenses and Contracts shallhave been obtained.

## 5.4           Injunction; Litigation; Legislation.  (a) No party hereto or any of theirAffiliates shall be subject to any order or injunction (whether preliminary orpermanent) restraining or prohibiting the consummation of the transactionscontemplated hereby or by the other Transaction Documents, (b) no Claimshall have been instituted before any arbitrator, court or other Government Authorityto restrain or prohibit, or to obtain damages in respect of, the consummationof the transactions contemplated hereby or by the other Transaction Documents,(c) there shall not be any pending or threatened Claim by any Personrelating to the Company or the transactions contemplated hereby which couldreasonably be expected to limit or materially adversely affect Buyer’s abilityeffectively to exercise full rights of ownership of the New Shares or tooperate the business of the Company and (d) no action shall have beentaken, or no statute, rule, regulation or order shall have been promulgated orenacted by any Government Authority, which would prevent or make illegal theconsummation of the transactions contemplated hereby.

## 5.5           Key Employees.  Each Key Employee shall, to the extent thathe or she received a Continued Offer of Employment, have accepted his or herContinued Offer of Employment and shall not have revoked or terminated suchacceptance or his or her employment with the Company.

## 5.6           Bankruptcy.  Each of the Company Confirmation Order andthe Buyer Approval Order shall have been entered by the Company BankruptcyCourt and the Buyer Bankruptcy Court, respectively, shall be a Final Order andshall be in full force and effect, and the Plan shall be effective inaccordance with its terms.  Allconditions precedent to consummation of the Plan shall have been satisfied inall material respects or waived in accordance with the terms of the Plan.

## 5.7           Delivery of Transaction Documents.  Buyer shall have received each of thedocuments listed in Section 1.3(a).

## 5.8           Parent.  Parent shall have irrevocably (a) consentedto the transactions contemplated by this Agreement, (b) voted in favor of thePlan and (c) withdrawn any of its claims against Buyer and/or its Affiliatesunder the Buyer Case.

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# ARTICLE VI

# CONDITIONS TO THE OBLIGATIONS OF THECOMPANY TO EFFECT THE CLOSING

The obligations of the Company required to beperformed by it at the Closing shall be subject to the satisfaction, at orprior to the Closing, of each of the following conditions, each of which may bewaived in whole or in part by the Company as provided herein except asotherwise required by applicable Law:

## 6.1           Representations and Warranties;Agreements; Covenants.  Each of therepresentations and warranties of Buyer contained in this Agreement shall betrue and correct in all material respects as of the date of this Agreement andas of the Closing, as if made at and as of such time (except to the extentexpressly made as of an earlier date, in which case as of such date).  Each of the obligations of Buyer required bythis Agreement to be performed by it at or prior to the Closing shall have beenduly performed and complied with by it in all material respects as of theClosing.  At the Closing, the Companyshall have received a certificate, dated the Closing Date and duly executed byan authorized officer of Buyer on behalf of Buyer, to the effect that theconditions set forth in the two preceding sentences have been satisfied.

## 6.2           HSR Act; DOT and FAA.  All filings required to be made under the HSRAct in connection with the transactions contemplated hereby shall have beenmade and all applicable waiting periods with respect to each such filing(including any extensions thereof) shall have expired or been terminated.  All approvals and authorizations required tobe obtained from the DOT and FAA in connection with the transactionscontemplated hereby shall have been obtained.

## 6.3           Injunction.  No party hereto or any of their Affiliatesshall be subject to any order or injunction (whether preliminary or permanent)restraining or prohibiting the consummation of the transactions contemplatedhereby or by the other Transaction Documents.

## 6.4           Bankruptcy.  Each of the Company Confirmation Order andthe Buyer Approval Order shall have been entered by the Company BankruptcyCourt and the Buyer Bankruptcy Court, respectively, shall be a Final Order andshall be in full force and effect, and the Plan shall be effective inaccordance with its terms.  Allconditions precedent to consummation of the Plan shall have been satisfied inall material respects or waived in accordance with the terms of the Plan.

## 6.5           Delivery of Transaction Documents.  The Company shall have received each of thedocuments listed inSection 1.3(b).

# ARTICLE VII

# TERMINATION

## 7.1           Termination.

### (a)           This Agreement may be terminated at any timeprior to the Closing:

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#### (i)            bymutual consent of Buyer and the Company;

#### (ii)           byBuyer or the Company, if the Closing shall not have taken place on or prior toApril 30, 2007 (the **“Termination Date”**);provided, however, that the right to terminate this Agreementunder this Section 7.1(a)(ii) shall not be available to a party if such party’sfailure to perform any covenant or obligation under this Agreement or breach ofa representation or warranty contained in this Agreement has been the cause ofor resulted in the failure of the Closing to occur on or before such date;provided, further, that if any notice, declaration, report, waiver, filing,consent, registration, approval, permit or authorization required to be madewith or obtained from any Government Authority in connection with thetransactions contemplated hereby shall not have been obtained by theTermination Date and all other conditions in Article V have been satisfied,waived or are capable of being satisfied, then Buyer shall have the right, inits sole discretion, to extend the Termination Date to May 30, 2007;

#### (iii)          byBuyer or the Company if any court of competent jurisdiction shall have issuedan order, decree or ruling or taken any other action restraining, enjoining orotherwise prohibiting the transactions contemplated by this Agreement or anyother Transaction Document, and such order, decree, ruling or other actionshall have become final and nonappealable;

#### (iv)          byBuyer, if there has been any violation or breach by the Company of anyrepresentation, warranty, covenant or obligation of or by the Company containedin this Agreement that has rendered the satisfaction of any condition to theobligations of Buyer impossible and such violation or breach has not beenwaived by Buyer;

#### (v)           bythe Company, if there has been a violation or breach by Buyer of anyrepresentation, warranty, covenant or obligation of or by Buyer contained inthis Agreement that has rendered the satisfaction of any condition to theobligations of the Company impossible and such violation or breach has not beenwaived by the Company;

#### (vi)          byBuyer if (A) the Plan has not been filed by the Company with the CompanyBankruptcy Court on or prior to January 22, 2007 or (B) the DisclosureStatement has not been filed by the Company with the Company Bankruptcy Courton or prior to January 23, 2007;

#### (vii)         bythe Company if the Buyer Approval Order has not been entered by the BuyerBankruptcy Court on or prior to March 8, 2007; or

#### (viii)        bythe Company, if the Board of Directors of the Company shall have approved orrecommended, or the Company shall have executed or entered into a definitiveagreement with respect to, a Superior Proposal in compliance with Section4.7(a)(ii); provided, however, that such termination under this Section7.1(a)(viii) shall not be effective until the Company has made the paymentrequired by Section 7.2(b).

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### (b)           If Buyer or the Company shall terminate thisAgreement pursuant to the provisions hereof, such termination shall be effectedby notice to the other party specifying the provision hereof pursuant to whichsuch termination is made.

## 7.2           Effect of Termination.

### (a)           In the event of the termination andabandonment hereof prior to the Closing pursuant to the provisions of thisArticle VII, this Agreement shall become void and have no effect, and, exceptas provided in Section 7.2(c), each party shall pay all of its own expensesincurred in connection herewith, without any liability on the part of any partyor its directors, officers or shareholders; provided, however,that if this Agreement is terminated and abandoned because either party hasdefaulted under or breached this Agreement, other than due to a non-willfulbreach of any representation or warranty by the Company or Buyer, asapplicable, then the party so electing to terminate this Agreement shall beentitled to pursue, exercise and enforce any and all other remedies, rights,powers and privileges available to it at law or in equity against the otherparty with respect to such breach or default.

### (b)           If the Company terminates this Agreementpursuant to Section 7.1(a)(viii), then the Company shall pay to Buyer, in cash,a termination fee equal to 3% of the Reference Amount (the “**Termination Fee**”). The Company shall satisfy its obligation under the preceding sentence bythe wire transfer of immediately available funds to an account that Buyerdesignates not later than the date of such termination.

### (c)           The Company acknowledges that the agreementscontained in Section 7.2(b) are an integral part of the transactionscontemplated hereby and that, without these agreements, Buyer would not enterinto this Agreement.  Accordingly, if theCompany fails to pay the amount payable under Section 7.2(b), then the Companyshall pay to Buyer all costs and expenses (including reasonable attorneys’ feesand expenses) incurred by Buyer and its Affiliates in connection with thecollection of such overdue amounts and the enforcement by Buyer of its rightsunder Section 7.2(b), together with interest on such overdue amounts at a rateper annum equal to the “prime rate” (as announced by JPMorgan Chase & Co.or any successor thereto) in effect on the date on which such payment wasrequired to be made.

# ARTICLE VIII

# MISCELLANEOUS

## 8.1           Expenses.  Except as provided in Section 7.2(c), each ofthe parties hereto shall pay its own fees and expenses (including the fees ofany attorneys, accountants, investment bankers or others engaged by such party)in connection with this Agreement and the other Transaction Documents and thetransactions contemplated hereby and thereby whether or not the transactionscontemplated hereby are consummated, it being understood and agreed that allsuch fees and expenses of the Company shall first be paid by the Company out ofits Cash (without giving effect to any proceeds received in connection with aForward Contract), then out of any amount to be paid by Buyer to the CompanyBankruptcy Estate pursuant to Section 1.1(d) and finally out of the CompanyBankruptcy Estate.  Buyer will pay allrequired filing fees under the HSR Act in connection with the transactionscontemplated by this Agreement.

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## 8.2           Survival.  None of the representations and warrantiescontained in this Agreement or in any document delivered pursuant hereto shallsurvive the consummation of the Closing. It is understood and agreed that the covenants and agreements of theparties shall survive the consummation of the Closing.

## 8.3           Certain Interpretative Matters.  The captions of Articles and Sections of thisAgreement are for convenience only and shall not control or affect the meaningor construction of any of the provisions of this Agreement.  As used herein, (a) words in thesingular shall be held to include the plural and vice versa and words of onegender shall be held to include the other gender as the context requires,(b) the terms “hereof,” “herein,” “hereby,” and “herewith” and words ofsimilar import shall, unless otherwise stated, be construed to refer to thisAgreement as a whole (including all of the Schedules and Exhibits) and not toany particular provision of this Agreement, (c) Article, Section, paragraph,Exhibit and Schedule references are to the Articles, Sections, paragraphs,Exhibits, and Schedules to this Agreement unless otherwise specified, and (d)unless the context otherwise requires, the word “or” is not exclusive.  Whenever the words “included”, “includes” or “including”are used in this Agreement, they shall be deemed to be followed by the words “withoutlimitation”.  The parties intend thateach representation, warranty and covenant herein shall have independentsignificance.  If any party has breachedany representation, warranty or covenant contained herein, the fact that thereexists another representation, warranty or covenant relating to the samesubject matter (regardless of the relative levels of specificity) which theparty has not breached shall not detract from or mitigate the fact that theparty is in breach of the first representation, warranty or covenant, as thecase may be.

## 8.4           Notices.  All notices or other communications requiredor permitted hereunder shall be given in writing and given by certified orregistered mail, return receipt requested, nationally recognized overnightdelivery service, such as Federal Express, facsimile or e-mail (or liketransmission) with confirmation of transmission by the transmitting equipmentor personal delivery against receipt to the party to whom it is given, in eachcase, at such party’s address, facsimile number or e-mail address setforth below or such other address, facsimile number or e-mail address assuch party may hereafter specify by notice to the other parties hereto given inaccordance herewith.  Any such notice orother communication shall be deemed to have been given as of the date sopersonally delivered or transmitted by facsimile (or, if delivered ortransmitted after normal business hours, on the next Business Day) or e-mail orlike transmission, on the next Business Day when sent by overnight deliveryservices or five days after the date so mailed if by certified or registeredmail:

If to the Company:

Mesaba Aviation, Inc.1000 Blue Gentian RoadSuite 200Eagan, MN 55121Fax No.:  (651) 367-5360E-mail Address:  john.spanjers@mesaba.comAttention:  John G. Spanjers, Presidentand Chief Operating Officer

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with copies to each of:

Ravich Meyer Kirkman McGrath & Nauman, P.A.4545 IDS Center, 80 So. 8th StreetMinneapolis, MN 55402Fax No.:  (612) 332-8302E-mail Address:  mlmeyer@ravichmeyer.comAttention:  Michael L. Meyer

Official Committee ofUnsecured Creditors of Mesaba Aviation, Inc.c/o BAE Systems Regional Aircraft13850 McLearen RoadHerndon, VA 20171E-mail Address: hamish.davidson@baesystems.comAttention:  Hamish Davidson

Squire, Sanders & Dempsey L.L.P. Two Renaissance Square40 North Central Avenue, Suite 2700Phoenix, Arizona 85004Fax No.: (602) 253-8129E-mail Address:  chansen@ssd.comAttention:  Craig D. Hansen

Haynes and Boone, LLP1221 McKinney Street, Suite 2100Houston, Texas 77010Fax (713) 236 5408E-Mail address: kattnerk@haynesboone.comAttention:  Kenric D. Kattner

If to Buyer:

Northwest Airlines, Inc.2700 Lone Oak ParkwayEagan, MN 55121Fax No.:  (612) 726-3416E-mail Address:  dave.davis@nwa.comAttention: David Davis, Senior Vice President – Finance

with copies to each of:

Northwest Airlines, Inc.2700 Lone Oak ParkwayEagan, MN 55121

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Fax No.:  (612) 726-7123E-mail Address:  michael.miller@nwa.comAttention:  Michael L. Miller, VicePresident – Law and Secretary

Hughes Hubbard & ReedLLPOne Battery Park PlazaNew York, NY 10004Fax No.:  (212) 422-4726E-mail Address: lefkowit@hugheshubbard.comAttention:  Kenneth A. Lefkowitz

## 8.5           Assignment.  This Agreement and all of the provisionshereof shall be binding upon and inure to the benefit of the parties hereto andtheir respective successors and permitted assigns; provided, however,that neither this Agreement nor any of the rights, interests or obligationshereunder may be assigned by any of the parties hereto without the priorwritten consent of the other party (except that Buyer may assign, without theconsent of the Company, (a) all of its rights and obligations under thisAgreement and any other Transaction Document to any Affiliate of Buyer, any ofwhom may enforce its rights and remedies in connection with any suchassignment, including the right to acquire the New Shares, it being agreed thatno such assignment shall relieve Buyer of its obligations hereunder and (b) allof its rights and obligations under Section 1.7 to Parent).  Any purported assignment or delegation inviolation of this Agreement shall be null and void abinitio.

## 8.6           Entire Agreement.  This Agreement and the other TransactionDocuments (including the Schedules and Exhibits hereto and thereto) embodiesthe entire agreement and understanding of the parties with respect to thetransactions contemplated hereby and merges in, supersedes and cancels allprior written or oral commitments, arrangements or understandings with respectthereto, including the Summary of Terms, dated December 20, 2006 between theCompany and Buyer.  There are norestrictions, agreements, promises, warranties, covenants or undertakings withrespect to the transactions contemplated hereby other than those expressly setforth in this Agreement and the other Transaction Documents.

## 8.7           Modifications, Amendments and Waivers.  This Agreement may not be modified or amendedexcept by an instrument or instruments in writing signed by each partyhereto.  In addition, the parties agreethat any modification or amendment of any of Schedule 1.1(d), ScheduleA-2, and Schedule A-3, shall require the prior written consent oflegal or financial advisors of the Company Committee.  Any party hereto may, only by an instrumentin writing, waive compliance by any other party hereto with any term orprovision hereof on the part of such other party hereto to be performed orcomplied with.  No failure or delay ofany party in exercising any right or remedy hereunder shall operate as a waiverthereof, nor will any single or partial exercise of any right or power, or anyabandonment or discontinuance of steps to enforce such right or power, precludeany other or further exercise thereof or the exercise of any other right orpower.  The waiver by any party hereto ofa breach of any term or provision hereof shall not be construed as a waiver ofany subsequent breach.  The rights andremedies of the parties hereunder are cumulative and are not exclusive of anyrights or remedies that they would otherwise have hereunder.

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## 8.8           Counterparts.  This Agreement may be executed in one or morecounterparts, all of which shall be considered one and the same agreement andeach of which shall be deemed an original, and will become effective when one ormore counterparts have been signed by a party and delivered to the otherparty.  Copies of executed counterpartstransmitted by telecopy, telefax or other electronic transmission service shallbe considered original executed counterparts for purposes of this Section 8.8,provided that receipt of copies of such counterparts is confirmed.

## 8.9           Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY THE LAWSOF THE STATE OF MINNESOTA THAT APPLY TO CONTRACTS MADE AND PERFORMED ENTIRELYIN SUCH STATE.

## 8.10         Severability.  To the fullest extent that they mayeffectively do so under applicable Law, the parties hereto hereby waive anyprovision of Law which renders any provision of this Agreement invalid, illegalor unenforceable in any respect.  Suchparties further agree that any provision of this Agreement which,notwithstanding the preceding sentence, is rendered or held invalid, illegal orunenforceable in any respect in any jurisdiction shall be ineffective, but suchineffectiveness shall be limited as follows: (a) if such provision is rendered or held invalid, illegal orunenforceable in such jurisdiction only as to a particular Person or Persons orunder any particular circumstance or circumstances, such provision shall beineffective, but only in such jurisdiction and only with respect to suchparticular Person or Persons or under such particular circumstance orcircumstances, as the case may be; (b) without limitation of clause (a), suchprovision shall in any event be ineffective only as to such jurisdiction andonly to the extent of such invalidity, illegality or unenforceability, and suchinvalidity, illegality or unenforceability in such jurisdiction shall notrender invalid, illegal or unenforceable such provision in any otherjurisdiction; and (c) without limitation of clause (a) or (b), suchineffectiveness shall not render invalid, illegal or unenforceable thisAgreement or any of the remaining provisions hereof.

## 8.11         Submission to Jurisdiction; Waivers.  Each party to this Agreement herebyirrevocably and unconditionally:

### (a)           (i) agrees that any suit, action orproceeding instituted against it by any other party with respect to thisAgreement or any other Transaction Document may be instituted, and that anysuit, action or proceeding by it against any other party with respect to thisAgreement or any other Transaction Document shall be instituted, only in any ofthe following: (A) the Company Bankruptcy Court, so long as the Company Caseremains open, (B) the Buyer Bankruptcy Court, so long as the Buyer Case remainsopen and (C) after the completion of the Company Case or the Buyer Case, thestate courts of Minnesota (and appellate courts from any of the foregoing) asthe party instituting such suit, action or proceeding may in its solediscretion elect, except that any matter with respect to the Plan or itsimplementation must be instituted in the Company Bankruptcy Court, (ii)consents and submits, for itself and its property, to the jurisdiction of suchcourts for the purpose of any such suit, action or proceeding institutedagainst it by the other and (iii) agrees that a final judgment in any suchsuit, action or proceeding shall be conclusive and may be enforced in otherjurisdictions by suit on the judgment or in any other manner provided by Law;

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### (b)           agrees that service of all writs, processand summonses in any suit, action or proceeding pursuant to Section 8.11(a) maybe effected by the mailing of copies thereof by registered or certified mail,postage prepaid, to the Company or Buyer, as the case may be, at the addressesfor notices pursuant to Section 8.4 hereof (with copies to such other Personsas specified therein); provided, however, that nothing containedin this Section 8.11 shall affect the right of the Company or Buyer or, as thecase may be, to serve process in any other manner permitted by Law;

### (c)           (i) waives any objection which it may now orhereafter have to the laying of venue of any suit, action or proceeding arisingout of or relating to this Agreement or any other Transaction Document broughtin any court specified in Section 8.11(a), (ii) waives any claim that any suchsuit, action or proceeding brought in any such court has been brought in aninconvenient forum and (iii) agrees not to plead or claim either of theforegoing;

### (d)           WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BYJURY OF ANY DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHERTRANSACTION DOCUMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE AJUDGE SITTING WITHOUT A JURY; and

### (e)           to the extent it has or hereafter mayacquire any immunity from jurisdiction of any court or from any legal process(whether through service or notice, attachment prior to judgment, attachment inaid of execution, execution or otherwise) with respect to itself, or itsproperty, hereby irrevocably waives such immunity in respect of its obligationswith respect to this Agreement and the other Transaction Documents.

## 8.12         Specific Performance.  Each of the parties hereto acknowledges thatBuyer would not have an adequate remedy at law for money damages in the eventthat any of the covenants or agreements of the Company set forth in thisAgreement were not performed in accordance with their terms and therefore, theCompany agrees that Buyer shall be entitled to specific performance, injunctiveand other equitable relief in addition to any other remedy to which it may beentitled at law or in equity (without the necessity of proving the inadequacyas a remedy of money damages or the posting of a bond).

## 8.13         No Presumption.  With regard to each and every term andcondition of this Agreement and the other Transaction Documents, the partieshereto understand and agree that the same have or has been mutually negotiated,prepared and drafted, and if at any time the parties hereto desire or are requiredto interpret or construe any such term or condition or any agreement orinstrument subject hereto, no consideration shall be given to the issue ofwhich party hereto actually prepared, drafted or requested any term orcondition of this Agreement or any agreement or instrument subject hereto.

## 8.14         No Third Party Beneficiary.  This Agreement is for the sole benefit of theparties hereto and their respective successors and permitted assigns andnothing herein, express or implied, is intended to or shall confer upon anyother Person any legal or equitable right, benefit or remedy of any naturewhatsoever under or by reason of this Agreement.

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## 8.15         Representations.

### (a)           Notwithstanding anything contained in thisAgreement to the contrary, Buyer acknowledges and agrees that the Company isnot making any representations or warranties whatsoever, express or implied,beyond those expressly given by the Company in this Agreement.  Except as expressly set forth in this Agreement,Buyer further acknowledges and agrees that neither the Company nor any of itsRepresentatives has made any representation or warranty, express or implied, asto the accuracy or completeness of any information regarding the Company, itsbusiness or the transactions contemplated by this Agreement provided by theCompany or its Representatives to Buyer or its Representatives, and none of theCompany nor any of its Representatives will have or be subject to any liabilityto Buyer or its Representatives resulting from the distribution to Buyer or itsRepresentatives, or Buyer’s use, of any such information, including anyconfidential memoranda distributed on behalf of the Company relating to itsbusiness or other publication or information provided to Buyer or itsRepresentatives, or any other document or information in any form provided bythe Company or its Representatives to Buyer or its Representatives inconnection with the sale of the New Shares and the transactions contemplatedhereby.

### (b)           Notwithstanding anything contained in thisAgreement to the contrary, the Company acknowledges and agrees that Buyer isnot making any representations or warranties whatsoever, express or implied,beyond those expressly given by Buyer in this Agreement.  Except as expressly set forth in thisAgreement, the Company further acknowledges and agrees that neither Buyer norany of its Representatives has made any representation or warranty, express orimplied, as to the accuracy or completeness of any information regarding Buyer,its business or the transactions contemplated by this Agreement provided byBuyer or its Representatives to the Company or its Representatives, and none ofBuyer nor any of its Representatives will have or be subject to any liabilityto the Company or its Representatives resulting from the distribution to theCompany or its Representatives, or the Company’s use, of any such information,or any other document or information in any form provided by Buyer or itsRepresentatives to the Company or its Representatives in connection with thetransactions contemplated hereby.

[The next page is thesignature page]

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The parties heretohave caused this Agreement to be executed as of the date first written above.
|        | Northwest Airlines, Inc. |
|--------|--------------------------|
|   |                     |   |
|   |                     |   |
|   | By:                      | /s/ David M. Davis |   |
|   |                     | Name: David M. Davis |
|   |                     | Title: Senior Vice President, Finance and |
|   |                     | Controller |
|   |                     |   |
|   |                     |   |
|   | Mesaba Aviation, Inc.    |
|   |                     |   |
|   |                     |   |
|   | By:                      | /s/ John G. Spanjers |   |
|   |                     | Name: John G. Spanjers |
|   |                     | Title: President and Chief Operating Officer |
|        |                          |  |  |  |

 

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EXHIBIT A

CERTAIN DEFINEDTERMS

1.             Forpurposes of the Agreement to which this Exhibit A is attached, the followingterms shall have the respective meanings specified below.

**“Affiliate”** means, with respect toany Person, any other Person that directly, or through one or moreintermediaries, controls or is controlled by or is under common control withsuch first Person.

“**Acquisition Proposal**”means any proposal or offer from any Person other than Buyer or any of itsSubsidiaries relating to:  (i) any director indirect sale of assets of the Company, (ii) any merger, reorganization,consolidation, share exchange or issuance, recapitalization, businesscombination, liquidation, dissolution or similar transaction involving theCompany or (iii) any public announcement of a proposal, plan or intention to doany of the foregoing or any agreement to engage in any of the foregoing.

**“Associate”** means, with respect toany Person:  (a) any corporation,partnership, joint venture or other entity of which such Person is an officeror partner or is, directly or indirectly, through one or more intermediaries,the beneficial owner of 10% or more of: (i) any class or type of equity securities or other profitsinterest; or (ii) the combined voting power of interests ordinarily entitledto vote for management or otherwise; and (b) any trust or other estate inwhich such Person has a substantial beneficial interest or as to which suchPerson serves as trustee or in a similar fiduciary capacity.

**“Assumed Contract”** means each of theContracts set forth on Schedule A-1, as such schedule may be amendedpursuant to this Agreement.

“**Assumed Liabilities**”means (1) trade payables and accrued operating expenses, but only includingamounts owed for goods delivered or services rendered to the Company after theCompany Petition Date in the Ordinary Course and liabilities for CommittedCapital Projects to the extent set forth on Schedule A-2 but only to theextent related to Capital Project Expenditures not yet incurred and in no eventexceeding the amounts set forth on Schedule 1.1(d), that, in each case,remain unpaid as of the Closing, are in the categories listed on ScheduleA-2 and do not exceed the applicable amounts set forth with respect to eachsuch category on Schedule A-2, it being understood and agreed that in noevent shall such trade payable, accrued operating expense or Committed CapitalProjects include any amounts owed for goods or services contracted for prior tothe Company Petition Date, (2) accrued payroll for wages and salaries andaccrued employee benefits specified on Schedule A-3 of employees of theCompany, in each case, earned but not yet paid after the Company Petition Dateand since the Company’s last regular payday, the present estimate of the amountof which for a full pay period and, if applicable, any stub period, is setforth on Schedule A-3 (provided that Assumed Liabilities shall notinclude any amount in excess of the pro-rata portion of such present estimatefrom the Company’s last

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regular payday until the consummation of the Closingexcept for accruals related to the categories of Accrued Vacation Pay, BonusAccrual, Health/Dental Insurance, and Workers Compensation Insurance, whichsuch categories may contain accruals beyond the pro-rata portion of such presentestimate from the Company’s last regular payday until the consummation of theClosing but not more than listed as the maximum amount as set forth on ScheduleA-3), (3) Liabilities arising after the consummation of the Closing andrelating to events or circumstances occurring after the consummation of theClosing under the Assumed Contracts and (4) Liabilities for post CompanyPetition Date state property taxes accrued but not yet payable (but only to theextent specifically set forth on Schedule A-2) or to the extent providedunder Section 4.9.

**“Business Day”** means a day otherthan Saturday, Sunday or any other day which commercial banks in New York, NewYork are authorized or required by Law to close.

**“Buyer Bankruptcy Estate”** means theestate created by the commencement of the Buyer Case.

**“Cap”** means $10 million.

**“Cash”** means all cash, cashequivalents and long-term investments of a Person.

“**Cobra**” means Section4980B of the Code and part 6 of subtitle B of Title I of ERISA.

**“Company Agreements”** means allContracts to which the Company is a party or by which the Company or any of itsproperty may be bound or affected.

“**Company Assets**” means allof the assets, properties, privileges, claims and rights owned, used or heldfor use by the Company on the date of this Agreement or acquired thereafter(other than the Excluded Assets), whether such assets, properties, privileges,claims and rights are real, personal or mixed, tangible or intangible, whereverlocated, whether or not any of such assets, properties, privileges, claims andrights have any value for accounting purposes or are carried or reflected on orspecifically referred to in any financial statements, including all of thefollowing assets, properties, privileges, claims and rights owned, used or heldfor use by the Company (except to the extent, if any, the following is anExcluded Asset): (1) all Cash; (2) all billed and unbilled accounts receivableand all notes receivable, prepaid expenses, deposits, credits, deferredcharges, advance payments, security deposits and other similar assets; (3) alltangible assets, including property, plant, Aircraft, cars, trucks and othertransportation equipment, parts inventory, other flight equipment, groundequipment, tools and other maintenance equipment, machinery, furniture, tenantimprovements and office equipment, furnishings and fixtures, machinery andequipment under order or construction; (4) all Intellectual Property and otherintangible assets; (5) all Permits, including all DOT, FAA and operating certificates;(6) all Assumed Contracts; (7) all books, records, ledgers, files, documents,correspondence, memoranda, forms, lists, copies of documents evidencingIntellectual Property, advertising and promotional materials, studies, reports,sales and purchase correspondence, books of account and records relating to theemployees, photographs, quality control records and procedures, equipmentmaintenance records, manuals and warranty information, in each case, whether inhard copy, electronic or magnetic format; (8) all rights or

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choses in action arising out of occurrences before orafter the Closing, including Third Party warranties and guarantees and allrelated claims, credits, rights of recovery and set-off and other similarcontractual rights, but excluding any claims that the Company may have againstParent; and (9) all rights to insurance and condemnation proceeds relating toany damage, destruction, taking or other impairment of the Company Assets.

“**Company Bankruptcy Estate**”means the estate created by the commencement of the Company Case.

“**Company Equity**” means anyand all (i) Shares, (ii) securities, options, warrants, rights, calls,subscriptions, agreements, commitments or understandings of any naturewhatsoever, fixed or contingent, that directly or indirectly (A) call for theissuance, redemption, sale, pledge or other disposition of any shares ofcapital stock of the Company or any securities convertible into, or otherrights to acquire, any shares of capital stock of the Company, (B) obligate theCompany to grant, offer or enter into any of the foregoing or (C) relate to thevoting or control of such capital stock, securities or rights, and (iii) “phantomstock,” stock appreciation rights or other similar rights the value of which isrelated to or based upon the price or value of any class or series of capitalstock of the Company.

“**Confidentiality Agreement**”means the Confidentiality Agreement, dated as November 10, 2006, between Buyerand the Company.

** “Contract”** means any mortgage, indenture, note,agreement, contract, lease, permit, license, franchise, obligation, instrumentor other commitment, arrangement, undertaking or understanding of any kind,whether written or oral, binding or nonbinding.

**“Copyrights”**means all copyrights and registrationsand applications therefor and all other rights corresponding thereto, and maskworks and registrations and applications therefor.

**“Cure Amounts”** means the monetaryamounts, as determined by the Company Bankruptcy Court, if any, necessary tocure all defaults, if any, and to pay all actual or pecuniary losses that haveresulted from such defaults under the Assumed Contracts as and to the extentrequired under Section 365(b) of the Bankruptcy Code.

**“Domain Names”**means allInternet addresses and domain names.

**“Environmental Condition”**means thepresence in the environment (which shall include natural resources, flora andfauna, soil, surface water, ground water, and present or potential drinkingwater supply, subsurface strata or ambient air inside and outside of buildings)of any Hazardous Material or the exposure of any persons to HazardousMaterials.

**“Environmental Laws”** means all Lawsrelating to (a) emissions, discharges, releases or threatened releases of anyHazardous Material into the environment (including ambient air, surface water,ground water, land surface or subsurface strata), (b) the manufacture,processing, distribution, use, generation, treatment, storage, disposal,transport or handling of any Hazardous Material, (c) liability for personal injuryor property damage arising out of the manufacture, processing, distribution,use, generation, treatment, storage, disposal, transport, handling, emission,discharge, release, threatened release or presence of Hazardous Materials onreal

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property owned, leased or used by the Company and (d)reclamation or restoration of real property.

**“Excluded Assets”**means (1) theAllowed Claim, (2) any Company Agreement that is not an Assumed Contract, (3)any cause of action that the Company Bankruptcy Estate may have against Parent,(4) any claims, credits, rights of recovery and set-off of the Company arisingprior to the Company Petition Date, relating to valid, enforceable andunobjectionable claims of creditors arising prior to the Company Petition Dateand timely filed in the Company Case that are, in each case, set forth on ScheduleA-5, in each case, solely to the extent of the amount of such creditor’sclaim and to the extent approved by Buyer in writing (it being understood andagreed that if any such creditor’s claim is determined to be less than theamount set forth with respect thereto on Schedule A-5, such shortfallshall be deemed a Company Asset and shall promptly following such determinationbe transferred to the Reorganized Company), (5) the amounts, if any payable byBuyer to the Company Bankruptcy Estate pursuant to Sections 1.1(c) and 1.1(d),and (6) the rights of the Company under this Agreement or any other TransactionDocument.

“**Excluded Liabilities**”means all Liabilities of the Company (other than the Assumed Liabilities),including (a) any Liability relating to an Assumed Contract that (i) isrequired to have been discharged on or prior to the Closing, including any CureAmounts, or (ii) relates or arises out of a breach or default by the Company onor prior to the Closing (including any event occurring at or prior to theClosing that with the lapse of time or the giving of notice, or both, wouldbecome a breach or default), (b) any Liability relating to a Rejected Contract,(c) any Liability for refunds, (d) any Liability for Taxes, including any jointand several legal Liability and any Liability under any tax sharing agreementas a result of being included in a consolidated, combined or unitary group, butexcluding, solely to the extent provided under Section 4.9, any Liabilities forpost Company Petition Date state property taxes, and except as specifically setforth on Schedule 1.1(d), (e) except to the extent expressly assumedpursuant to clauses (2) and (3) of the definition of Assumed Liabilities, anyLiability arising (whether arising before or after the Closing) under or withrespect to any employee benefit plan or any other compensation or employeebenefit plan, policy or arrangement maintained, contributed to, or entered intoat any time by, Company or with respect to the employment of any employee,agent or independent contractor by the Company, including any Liability arisingunder or with respect to workers compensation, unemployment insurance premiumsor any claims arising under any federal, state or local tax withholding,employment, labor or discrimination laws, (f) any Liability to the extent theexistence of which constitutes a breach of any covenant, representation orwarranty of the Company contained in or made pursuant to this Agreement(provided that Buyer acknowledges and agrees that it shall not assert a claimafter the consummation of the Closing against the Company Bankruptcy Estate forany such Liability), (g) unless expressly included in Assumed Liabilities, anyLiability based upon or with respect to the operation of the Company or itsbusiness, or the operation or use of the Company’s assets, in each case, priorto the Closing arising by operation of law under any common law or statutorydoctrine (including successor liability or de facto merger) and any otherLiability arising out of or relating to events or conditions occurring at orprior to the Closing, (h) any Liability based upon, arising under or withrespect to the Excluded Assets, whether before, at or after the Closing, (i)any severance Liability with respect to any pre-Closing periods to employees ofthe Company and (j) any Liabilities of the Company under this Agreement or anyother Transaction Document.

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“**Final Order**” means anorder or judgment of the Company Bankruptcy Court or the Buyer BankruptcyCourt, as applicable, or other court of competent jurisdiction with respect tothe subject matter, (i) which has not been reversed, stayed, modified, amended,enjoined, set aside, annulled or suspended, (ii) with respect to which norequest for a stay, motion or application for reconsideration or rehearing,notice of appeal or certiorari is filed within the deadline provided byapplicable statute or regulation or as to which any appeal that has been takenor any petition for certiorari that has been or may be filed has been resolvedby the highest court to which the order or judgment was appealed or from whichcertiorari was sought and (iii) as to which the deadlines for filing suchrequest, motion, petition application, appeal or notice referred to in clause(ii) above have expired.

**“GAAP”** means generally acceptedaccounting principles in the United States as in effect from time to time.

**“Government Authority”** means anyforeign, United States or international, federal, state or local (or anysubdivision thereof), agency, authority, bureau, commission, department orsimilar body or instrumentality thereof, or any governmental court or tribunal,including the FAA and the DOT.

**“Hazardous Materials”** means allpollutants, contaminants, chemicals, wastes, and any other carcinogenic,ignitable, corrosive, reactive, flammable, explosive, toxic radioactive orotherwise hazardous substances or materials (whether solids, liquids or gases)that are regulated by or the subject of Environmental Laws, includingpetroleum, petroleum products, crude oil or any fraction thereof, ureaformaldehyde, PCBs, pesticides, herbicides, asbestos, slag, acids, metals,solvents, and wastewater.

** “HSR Act”**means the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976,as amended, and rules and regulations promulgated thereunder.

**“Inbound IP Agreements”** means anagreement granting to the Company any rights in Intellectual Property owned bya third party that is used by the Company in the conduct of its business, ascurrently conducted, excluding any “shrink-wrap” or “click-wrap” licenseagreements relating to Software desktop applications.

**“Insider”** means Parent, any directoror officer of the Company or Parent, and any Affiliate, Associate or Relativeof any of the foregoing Persons.

**“Intellectual Property”** means allintellectual property rights arising under the laws of any jurisdiction inwhich the Company currently is conducting business with respect to, arisingfrom or associated with the following: (i) Domain Names; (ii) Marks; (iii) Patents;(iv) Copyrights; (v) Trade Secrets; and (vi) all moral rights,rights of publicity and other intellectual property and proprietary rights of asimilar nature.

**“Key Employees”**means the key employeesof the Company to be identified by Buyer to the Company in writing on or priorto March 1, 2007.

**“Knowledge”** means the actualknowledge of each of the officers of the Company.

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**“Law”** or **“Laws”** means all statutes, codes, ordinances, decrees, rules,regulations, standards, municipal by-laws, judicial or arbitral oradministrative or ministerial or departmental or regulatory judgments, orders,injunctions, decisions, rulings or awards, policies or other requirement of anyGovernment Authority, or any provisions or interpretations of the foregoing,including general principles of common and civil law and equity, binding on oraffecting the Person referred to in the context in which such word is used.

**“Liability”** means any liability,obligation, debt, claim, charge, demand, assessment, settlement, judgment, lossand damage of any kind or nature, whether known or unknown, fixed, accrued,absolute or contingent, liquidated or unliquidated, legal or contractual,matured or unmatured, disputed or undisputed, secured or unsecured, joint orseveral, due or to become due, vested or unvested, or determined ordeterminable.

**“Lien”** means any lien, charge,claim, pledge, security interest, conditional sale agreement or other titleretention agreement, lease, mortgage, security agreement, right of firstrefusal, option, restriction, obligation, tenancy, license, covenant,right-of-way, easement or other encumbrance (including the filing of, oragreement to give, any financing statement under the UCC or any other Law of anyjurisdiction).

**“Marks”** means all trade names,trademarks and service marks (registered and unregistered), trade dress,industrial designs, brand names, brand marks, service names, logos, emblems,signs or insignia, and similar rights and applications to register any of theforegoing, and all goodwill associated therewith throughout the world.

**“Material Adverse Effect”** means anycircumstance, state of facts or matters, change, event, occurrence, action oromission that, individually or in the aggregate, has or could have or result ina material adverse effect on (i) the business, assets, Liabilities,results of operation, operations, financial condition or EBITDA of the Company,or (ii) the ability of the Company to perform its obligations under thisAgreement or any other Transaction Document; provided, however, that MaterialAdverse Effect shall not be deemed to include effects to the extent resultingfrom (1) changes, after the date of this Agreement, in laws, rules orregulations of general applicability or interpretations thereof by courts orGovernment Authorities, (2) changes, after the date of this Agreement, ingeneral or regional economic or market conditions affecting airlines generallyexcept to the extent that any such changes in general or regional economic ormarket conditions have a disproportionate adverse effect on the Company, or (3)public disclosure of the transactions contemplated hereby.

**“Ordinary Course”**means, with respect to an actiontaken by or omitted by a Person:

(a)           suchaction or omission is consistent with the past practices of such Person and istaken or not taken, as applicable, in the ordinary course of the normalday-to-day operations of such Person;

(b)           suchaction or omission is not required to be authorized by the board of directors(or similar governing body) or equity holders of such Person (or by any Personor group of Persons exercising similar authority) and is not required to bespecifically authorized by the parent company (if any) of such Person;

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(c)           suchaction or omission is not required to be specifically authorized by abankruptcy court;

(d)           suchaction or omission is similar in nature and magnitude to actions or omissionscustomarily taken or not taken, as applicable, without any authorization by theboard of directors (or similar governing body) or equity holders of such Person(or by any Person or group of Persons exercising similar authority), in theordinary course of the normal day-to-day operations of other Persons that arein the same line of business as such Person; and

(e)           consistentwith the representations and warranties in Section 2.8(b).

**“Patents”**means all patents, patent applications (including anydivisionals, continuations, continuations-in-part, renewals, reexaminations,extensions, and reissues) and rights in respect of utility models or industrialdesigns.

**“Permit”** means any franchise,approval, permit, consent, qualification, certification, authorization,license, order, registration, exemption, certificate, variance or other similarpermit, right or authorization required, issued or granted by any GovernmentAuthority and all pending applications therefor.

**“Permitted Liens”**means all:

(a)           liens forTaxes, assessments and other governmental charges which are not due and payableand which may thereafter be paid without penalty;

(b)           the titleand other interests of a lessor under a capital or operating lease or of alicensor under a license or royalty agreement;

(c)           suchminor imperfections in title as do not detract in any material respect from thevalue or utility of the subject property in the operation of the business thatuses such property.

**“Person”** means any individual,corporation, partnership, joint venture, trust, unincorporated organization,limited liability company, estate, association, joint stock company, companyother form of business or legal entity or Governmental Authority.

**“Real Properties”** means all realproperties and interests in real properties (including any leasehold interests,licenses, options or reversionary interests), together with all fixtures,fittings, buildings, structures and other improvements erected thereon, andeasements, rights of way, water lines, rights of use, licenses, hereditaments,tenements, privileges and other appurtenances thereto (such as appurtenantrights in and to public streets).

**“Real Property Leases”** means allleases, subleases, licenses, right to use or occupy and other occupancyagreements, and all amendments, modification or supplements thereto or renewalsthereof, relating to Real Properties and to which the Company is a party orpursuant to which the Company uses or occupies any Real Property.

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**“Reference Amount”** means the lesserof (a) the sum of the Allowed Claim plus the Cap and (b) the sum of the ForwardPrice, if any, plus the portion of the Allowed Claim that was not subject tothe Forward Contract, if any, plus the Cap.

**“Rejected Contract”** means each ofthe Contracts set forth on Schedule A-4, as such schedule may be amendedpursuant to this Agreement.

**“Relative”** of a Person means suchPerson’s spouse, such Person’s parents, sisters, brothers, children and thespouses of the foregoing, and any member of the immediate household of suchPerson.

**“Representatives”** of any Personmean such Person’s directors, officers, employees, Affiliates, agents, counsel,accountants, financial advisors, consultants, and other representatives.

**“Securities Act”** means theSecurities Act of 1933, as amended, and the rules and regulations promulgatedthereunder by the Securities and Exchange Commission from time to time.

**“Subsidiary”** as it relates to anyPerson, means any Person more than 50% of the outstanding Voting Securities ofwhich are owned or controlled, directly or indirectly, by such Person.

“**Superior Proposal**” meansan unsolicited, bona fide, written, fully-financed proposal made by any Personother than Buyer or any of its Subsidiaries to acquire all of the capital stockof the Company (or any successor thereto) or to acquire all or substantiallyall of the assets of the Company on terms and conditions that the Board ofDirectors of the Company determines in good faith, after consultation with anationally recognized financial advisor and taking into account all of theterms and conditions of such proposal (including all legal, financial,regulatory, bankruptcy and other aspects of such proposal, the form ofconsideration and the risks associated with the form of consideration, anyexpense reimbursement provisions, any termination fees and the conditionsassociated with such proposal), is more favorable, by more than $5 million, tothe Company’s creditors and Parent from a financial point of view than theReference Amount and is reasonably likely to be timely consummated.

**“Tax” or “Taxes”**means all federal,state, local or foreign taxes, charges, fees, levies, or other assessments,including all net income, gross income, sales and use, ad valorem, transfer,gains, profits, excise, franchise, real and personal property, gross receipts,single business, unincorporated business, value added, capital stock,production, business and occupation, disability, FICA, employment, payroll,license, estimated, stamp, custom duties, environmental, severance orwithholding taxes, or any other tax, governmental fee or other like assessmentor charge of any kind whatsoever, imposed by any Government Authority,including any interest and penalties (civil or criminal) on or additions to anysuch taxes, whether disputed or not, and shall include any transferee liabilityin respect of taxes, and any Liability in respect of taxes imposed by contract,tax sharing agreement, tax indemnity agreement or any similar agreement.

**“Tax Return”** means a return, report,estimate, claim for refund or other information, form or statement relating to,or required to be filed or supplied in connection with, any Taxes,

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including, where permitted or required, combined orconsolidated returns for a group of entities and including any amendmentthereof and any schedule or attachment thereto.

**“Third Party”** means any Person otherthan the Company, Buyer and any Subsidiary of Buyer.

**“Trade Secrets”**means all know-how, discoveries,trade secrets, methods, processes, technical data, specifications, research anddevelopment information, technology, data bases, and other proprietary orconfidential information, including customer lists, in each case that deriveseconomic value from not being generally known to other Persons who can obtaineconomic value from its disclosure, but excluding any Copyrights or Patentsthat cover or protect any of the foregoing.

**“Transaction Document”** means theAgreement and the other agreements, instruments, certificates and documentscontemplated hereby and thereby, including each exhibit and schedule hereto andthereto.

**“UCC”** means the Uniform CommercialCode, as amended, and any successor thereto.

**“Voting Securities”** means any classor classes of stock of a Person pursuant to which the holders thereof have thegeneral power under ordinary circumstances to vote with respect to the electionof the Board of Directors (or similar body), irrespective of whether or not, atthe time, stock of any other class or classes shall have, or might have, votingpower by reason of the happening of any contingency.

2.             Thefollowing terms are defined on the Sections indicated below.
| **Term**                   | ** ** | **Section** |
|----------------------------|------------|-------------|
| Agreement                  |       | Preamble    |
| Aircraft                   |       | 2.10(a)     |
| Allowed Claim              |       | 1.1(b)      |
| Balance Sheet  Date        |       | 2.5         |
| Bankruptcy Code            |       | Recitals    |
| Benefit Plans              |       | 2.15(a)     |
| Buyer                      |       | Preamble    |
| Buyer Approval  Order      |       | Recitals    |
| Buyer Bankruptcy  Court    |       | Recitals    |
| Buyer Case                 |       | Recitals    |
| Buyer Claim                |       | 1.7         |
| Buyer Committee            |       | 3.5         |
| Buyer Debtor               |       | Recitals    |
| Buyer Debtors              |       | Recitals    |
| Buyer Petition Date        |       | 1.1(b)      |
| Cancellation and  Issuance |       | 1.1(a)      |
| Challenger                 |       | 4.9         |
| Claims                     |       | 2.8(a)      |

 

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| Closing                          |   | 1.2        |
|----------------------------------|--------|------------|
| Closing Date                     |   | 1.2        |
| Code                             |   | 2.15(b)    |
| Common Stock                     |   | Recitals   |
| Company                          |   | Preamble   |
| Company Balance  Sheet           |   | 2.5        |
| Company  Bankruptcy Court        |   | Recitals   |
| Company Case                     |   | Recitals   |
| Company  Committee               |   | Recitals   |
| Company  Confirmation Order      |   | Recitals   |
| Company  Financial Statements    |   | 2.4(a)     |
| Company Patents                  |   | 2.11(a)    |
| Company Petition  Date           |   | Recitals   |
| Company  Registered Copyrights   |   | 2.11(a)    |
| Company  Registered Domain Names |   | 2.11(a)    |
| Company  Registered IP           |   | 2.11(a)    |
| Company  Registered Marks        |   | 2.11(a)    |
| Continued Offer  of Employment   |   | 4.8        |
| Deficiency                       |   | 1.1(d)     |
| Disclosure  Statement            |   | 4.6(a)     |
| DOT                              |   | 2.3(d)(v)  |
| Equity  Cancellation             |   | 1.1(a)     |
| ERISA                            |   | 2.15(a)    |
| FAA                              |   | 2.3(d)(v)  |
| Forward Contract                 |   | 1.1(b)     |
| Forward Price                    |   | 1.1(b)     |
| Judgments                        |   | 2.8(a)     |
| Leased Real  Property            |   | 2.9(b)     |
| New Common Stock                 |   | 1.1(a)     |
| New Shares                       |   | 1.1(a)     |
| New Shares  Issuance             |   | 1.1(a)     |
| Parent                           |   | Recitals   |
| Plan                             |   | Recitals   |
| Rejection Excess                 |   | 1.1(c)     |
| Reorganized  Company             |   | Recitals   |
| Shares                           |   | Recitals   |
| Subleases                        |   | 2.9(b)     |
| Termination Date                 |   | 7.1(a)(ii) |
| Termination Fee                  |   | 7.2(b)     |
| Weekly Meeting                   |   | 4.1        |

 

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EXHIBIT B

FORM OF PLAN

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**EXHIBIT C**

FORM OF BUYER APPROVAL ORDER

**UNITEDSTATES BANKRUPTCY COURT**

**SOUTHERNDISTRICT OF NEW YORK**
|                                            |         | x      | ** ** | ** **                  |
|--------------------------------------------|--------------|--------|------------|-----------------------------|
| ** **                                 |         |   | ** ** | ** **                  |
| **In re:**                                 |         | x      | ** ** | **Chapter 11**              |
| ** **                                 |         |   | ** ** | ** **                  |
| **NORTHWEST AIRLINES CORPORATION, etal.,** |         |   |       | **Case No. 05-17930 (ALG)** |
| ** **                                 |         |   |       | ** **                  |
|                                       | **Debtors.** |   |       |                        | **Jointly Administered** |
|                                            |              |        |            |                             |  |

 

**ORDERPURSUANT TO SECTION 363**

**OFTHE BANKRUPTCY CODE AND BANKRUPTCY**

**RULE 9019 APPROVING SETTLEMENT AND COMPROMISEBETWEENNORTHWEST AIRLINES, INC. AND MESABA AVIATION, INC. ANDAUTHORIZING NORTHWEST AIRLINES, INC. TO ENTER INTO STOCKPURCHASE AND REORGANIZATION AGREEMENT**

Upon consideration of the motion (the “Motion”)(1) ofNorthwest Airlines, Inc., as debtor and debtor in possession (“Northwest”),seeking entry of an order pursuant to section 363 of title 11, United StatesCode, (the “Bankruptcy Code”) and Rule 9019 of the Federal Rules of BankruptcyProcedure (the “Bankruptcy Rules”) approving a settlement and compromisebetween Northwest and Mesaba Aviation, Inc. (“Mesaba”) and authorizingNorthwest to enter into and perform the Stock Purchase and ReorganizationAgreement (the “Agreement”); and due notice of the Motion having been providedas set forth in the affidavit of service filed by Northwest, and no other orfurther notice of the Motion need be provided; and the Court having determinedthat the relief sought in the Motion is in the best interests of Northwest, itsestate and

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(1) Capitalized terms notdefined herein shall have the meaning ascribed to them in the Motion.

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all parties ininterest; and upon the Motion; and all of the proceedings had before the Court;and after due deliberation and sufficient cause appearing therefor, it ishereby

ORDERED that the Motion is granted.  To the extent any objections to the Motionhave not been withdrawn or resolved, they are hereby overruled; and it isfurther

ORDERED that the Agreement is approved, and Northwestis authorized to enter into and perform such Agreement, and to execute anddeliver (without the need for further Court order) such other documents, agreementsand instruments as shall be necessary and appropriate to implement theAgreement, consistent with the terms thereof; and it is further

ORDERED that subject to (i) a plan of reorganizationbecoming effective in Mesaba’s bankruptcy case that implements the terms of theAgreement, and (ii) Closing (as defined in the Agreement) of the transactionscontemplated by the Agreement, Mesaba is granted an allowed general unsecuredclaim in Northwest’s bankruptcy case in an amount equal to $145 million, plusinterest on such amount from and after the petition date of Northwest’sbankruptcy case (the “Northwest Petition Date”) to the extent that othergeneral unsecured creditors of Northwest receive interest from and after theNorthwest Petition Date pursuant to Northwest’s plan of reorganization (the “MesabaAllowed Claim”); and it is further

ORDERED that the Mesaba Allowed Claim is not subjectto reconsideration pursuant to Rule 3008 of the Bankruptcy Rules or section502(j) of the Bankruptcy Code; and it is further

ORDERED that the Court shall retain jurisdiction withrespect to any matters, claims, rights or disputes arising from or related tothe implementation of this Order; and it is further

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ORDERED that notwithstanding the possibleapplicability of Bankruptcy Rules 6004, 7062, 9014, any other provision of theBankruptcy Rules, Bankruptcy Code or otherwise, this Order shall take effectimmediately upon signature by this Court; and it is further

ORDERED that the requirement under Rule 9013-1(b) ofthe Local Bankruptcy Rules for the Southern District of New York for the filingof a memorandum of law is waived.
| Dated: |   | New York, New York                                                                                                                    |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                  |
|   |   |                      ,  2007 |
|   |   |                                                                                                                                  |   |
|   |   |                                                                                                                                  | UNITED STATES BANKRUPTCY JUDGE |
|        |        |                                                                                                                                       |  |  |

 

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