Document:

Exhibit
10.21

 

 

STOCK
PURCHASE AND REORGANIZATION AGREEMENT

dated as
of January 22, 2007

between

Northwest
Airlines, Inc.

and

Mesaba
Aviation, Inc.

 

 

 C-1

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

  

 

 i
 

 

	
  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

  

 

 ii
 

 

	
  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

  

 

 iii
 

 

 

	
  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                Certain
Defined Terms

Exhibit B                Form of
Plan

Exhibit C                Form of Buyer Approval Order

 iv

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., a
Minnesota corporation (the “Company”).  Capitalized terms used but not defined herein
have the meanings assigned to them on Exhibit A.

WHEREAS, MAIR Holdings, Inc., a Minnesota corporation
(“Parent”) is the sole owner of
the 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 voluntary
petition (the “Company Case”) for
relief 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 of
its Affiliates filed a voluntary petition (the “Buyer Case”) for relief under chapter 11 of the Bankruptcy
Code in the United States Bankruptcy Court for the Southern District of New
York (the “Buyer Bankruptcy Court”);

WHEREAS, the Company intends to seek the entry of an
order of the Company Bankruptcy Court (the “Company
Confirmation Order”) to approve the restructuring of the Company
pursuant to a plan of reorganization, substantially in the form attached hereto
as Exhibit B (the “Plan”,
and such restructured Company, “Reorganized
Company”), including the approval of this Agreement and the
authorization of the Company to consummate the transactions contemplated hereby
and thereby, and Buyer intends to seek the entry of an order of the Buyer
Bankruptcy Court to approve this Agreement, the Allowed Claim and the
authorization of Buyer to consummate the transactions contemplated hereby (the “Buyer Approval Order”);

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

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

NOW, THEREFORE, in consideration of the premises and
the mutual representations, warranties, covenants and agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties, intending to be
legally bound, agree as follows:

ARTICLE I

CANCELLATION AND
PURCHASE AND SALE OF SHARES

1.1           Cancellation
and Purchase and Sale.

(a)           Upon
the terms and subject to the conditions set forth in this Agreement, at or
prior 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) Reorganized
Company shall issue and sell to Buyer and Buyer shall purchase from Reorganized
Company 1,000 duly and validly authorized and issued, fully paid and
nonassessable shares (the “New Shares”) of
common stock, par value $.01 per share (the “New Common
Stock”) of Reorganized Company, free and clear of all Liens.  The transactions referred to in the foregoing
clause (i) are herein referred to as the “Equity Cancellation”
and the transactions referred to in the foregoing clause (ii) are herein referred
to as the “New Shares Issuance”.  The Equity Cancellation and the New Shares
Issuance are herein collectively referred to as the “Cancellation
and Issuance”.

(b)           As
consideration for the New Shares, Buyer agrees that, upon the consummation of
the Closing, the Company Bankruptcy Estate shall have a final, non-appealable
order, including the waiver of Bankruptcy Code Section 502(j) reconsideration
rights, granting the Company an allowed general unsecured claim in the Buyer
Case in an amount equal to $145 million plus interest on such amount from and
after the petition date of Buyer’s Case (the “Buyer
Petition Date”) to the extent that other general unsecured creditors
of Buyer receive interest from and after the Buyer Petition Date pursuant to
Buyer’s plan of reorganization (the “Allowed Claim”).  The parties acknowledge and agree that the
Allowed Claim will not be effective unless and until the Closing has been
consummated.  The Allowed Claim will be
classified as a general unsecured claim in the plan of reorganization submitted
to the Buyer Bankruptcy Court and supported by Buyer in the Buyer Case and will
receive the same treatment in such plan of reorganization as the other general
unsecured claims against Buyer. 
Notwithstanding anything in this Agreement to the contrary, the parties
understand and agree that unless and until the Plan becomes effective, the
Closing is consummated and the transactions contemplated hereby have been
consummated, nothing in this Agreement or any other Transaction Document shall
have, or shall be deemed to have, created an allowed claim in the Buyer Case or
constitute an admission by Buyer, the Company or any of their Affiliates as to
the 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 this
Agreement until the Closing, the Company shall have the right to enter into a
forward Contract with a Third Party to sell the Allowed Claim (the “Forward Contract”, and the aggregate consideration in
exchange 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 such
Forward Contract shall be contingent on the consummation of the Closing.

(c)           From
the 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 the
right to revise Schedule A-1 and Schedule A-4 to (i) designate
any Company Agreement that

 2
 

is not an Assumed Contact or a Rejected Contract as either an Assumed
Contract or a Rejected Contract; it being agreed that any Company Agreement
that 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 set
forth on Schedule A-1 or Schedule A-4, as applicable, as (A) an
Assumed Contract as a Rejected Contract and (B) a Rejected Contract as an
Assumed Contract, provided that if the aggregate unsecured claim amount
attributable to rejection damages with respect to any additional Rejected
Contracts under clause (ii)(A) minus the aggregate unsecured claim amount
attributable to rejection damages with respect to any additional Assumed
Contracts under clauses (i) and (ii)(B) exceeds $1 million (the “Rejection Excess”), then Buyer will pay, simultaneous with
the consummation of the Closing, to the Company Bankruptcy Estate an amount in
cash equal to such Rejection Excess.

(d)           Solely
to the extent that the Company’s aggregate Cash (without giving effect to any
proceeds received in connection with a Forward Contract) were not sufficient to
satisfy 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 such
aggregate Cash deficiency amount, the “Deficiency”),
then, simultaneous with the consummation of the Closing, Buyer shall pay to the
Company Bankruptcy Estate the lesser of the Deficiency or the Cap, provided
that Buyer shall under no circumstance be obligated to pay an amount that is in
excess of the Cap.

(e)           Each
of the parties understands and agrees that unless the Closing is consummated,
nothing contained in this Agreement shall constitute an admission by Buyer, the
Company or any of their Affiliates as to the amount, if any, of the Company’s
claim against the Buyer Bankruptcy Estate on account of rejection of that
certain Airline Services Agreement between Buyer and the Company (the “ASA”) or otherwise, nor of Buyer’s claim against the Company
Bankruptcy Estate.  In the event that
this Agreement is terminated and the transactions contemplated hereby are not
consummated, Buyer expressly reserves the right to assert that the rejection
damages claim of the Company from rejection of the ASA or otherwise is an
amount that is lower than the Allowed Claim plus the Cap, including zero, and
the Company expressly reserves the right to assert that the rejection damages
claim of the Company from rejection of the ASA or otherwise is an amount higher
than the Allowed Claim plus the Cap.  
Further, in the event that the transactions contemplated hereby are not
consummated, the Company expressly reserves the right to assert that the claim
of Buyer is an amount lower than the Buyer Claim, including zero, and Buyer
expressly reserves the right to assert that the claim of Buyer is an amount
higher than the Buyer Claim.  In
addition, neither Buyer nor the Company makes any representation as to the value
to be distributed with respect to allowed unsecured claims in the Buyer Case or
the Company Case, respectively. Except with respect to the Buyer Claim and the
Allowed Claim and with respect to any matter arising out of this Agreement or
any Transaction Document, upon consummation of the Closing, each of Buyer, the
Buyer Bankruptcy Estate and the Company Bankruptcy Estate agrees that it has no
Claims arising from the beginning of the world until the Closing Date against
the other Person or the other Person’s Affiliates and that such Person shall
not assert any such Claim against the other Person or the other Person’s
Affiliates.

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

 3
 

Park Plaza, New York, New York, at 10:00 a.m., local time, on the third
Business Day after the day on which the last to be satisfied or waived of the
conditions to the Closing set forth in this Agreement (other than those
conditions that by their terms are to be satisfied at the Closing, but subject
to 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 be
mutually agreed upon by the parties.  The
date on which the Closing is to occur is herein referred to as the “Closing Date.”

1.3           Deliveries
at the Closing.  In addition to the
other requirements set forth herein, at the Closing:

(a)           Reorganized
Company shall deliver to Buyer:

(i)            one or more
certificates representing the New Shares, and any other documents that are
necessary to issue and transfer to Buyer good, valid and marketable title to
all the New Shares free and clear of all Liens;

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

(iii)          the certificate called
for by Section 5.1;

(iv)          certificates from
appropriate government officials certifying as to the good standing of
Reorganized Company in its jurisdiction of organization and in each
jurisdiction in which Reorganized Company is qualified to conduct business as a
foreign corporation; and

(v)           all other instruments
and documents reasonably requested by Buyer;

(b)           Buyer
shall deliver to

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

(ii)           the Company Bankruptcy
Estate, the amount, if any, payable by Buyer pursuant to Section 1.1(c), in
immediately available funds, to an account designated by the Company in writing
to Buyer at least three Business Days prior to the Closing;

(iii)          the Company Bankruptcy
Estate, the amount, if any, payable by Buyer pursuant to Section 1.1(d), in
immediately available funds, to an account designated by the Company in writing
to Buyer at least three Business Days prior to the Closing;

(iv)          the Company Bankruptcy
Estate, 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 a
Final Order and is in full force and effect and (b) all conditions set forth in
the Buyer Approval Order have been satisfied; and

 4
 

(v)           all other instruments
and documents reasonably requested by the Company.

1.4           Plan
of Reorganization.  The Cancellation
and Issuance shall be effected pursuant to a Plan confirmed by the Company
Bankruptcy Court. The Closing Date shall occur as provided in Section 1.2.

1.5           Assets
and Liabilities.  Pursuant to the
Plan, 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 Liens
and (ii) the Company Bankruptcy Estate shall own the Excluded Assets; and

(b)           the
only Liabilities of Reorganized Company shall be the Assumed Liabilities, and
all other Liabilities of the Company, including the Excluded Liabilities, shall
be solely the obligation and Liability of the Company Bankruptcy Estate.

1.6           Timing
and Interpretation.  The parties
understand and agree that any reference to the Company shall, with respect to
any matter determined as of the Closing, be deemed to be a reference to
Reorganized Company as if it were the successor to the Company.

1.7           Buyer Claim.  As
part 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 in
the Company Case in an amount equal to $7,300,000 plus interest on such amount
from and after the Company Petition Date to the extent that other general
unsecured creditors of the Company receive interest from and after the Company
Petition Date pursuant to the Plan (the “Buyer Claim”).  The parties acknowledge and agree that the
Buyer Claim will not be effective unless and until the Closing has been
consummated.

ARTICLE II

REPRESENTATIONS
AND WARRANTIES

OF THE COMPANY

The Company hereby represents and warrants to Buyer as
follows:

2.1           Organization
and Good Standing.  The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Minnesota and has the requisite corporate power and
authority to own, lease and operate the properties used in its business and to
carry on its business as currently conducted and currently contemplated to be
conducted.  The Company is duly qualified
to do business and is in good standing as a foreign corporation in the states
and jurisdictions set forth on Schedule 2.1 and in each other
jurisdiction where qualification as a foreign corporation is required.  Prior to the date of this Agreement, the
Company has delivered to Buyer complete and correct copies of the articles of
incorporation, bylaws and other organizational documents of the Company, each
as presently in effect.

 5
 

2.2           Capitalization.

(a)           The
authorized capital stock of the Company consists of 10,000 shares of Common
Stock.  As of the date of this Agreement
and immediately prior to the Equity Cancellation, there are 500 shares of
Common Stock issued and outstanding, all of which are owned by Parent.  As of the Cancellation and Issuance, the New
Shares shall constitute all the issued and outstanding shares of New Common
Stock of Reorganized Company.  As of the
Cancellation and Issuance, the New Shares shall have been duly and validly
authorized and issued, shall be fully paid and nonassessable with no personal
liability attaching to the ownership thereof and shall not have been issued in
violation of any preemptive right or of any federal or state securities
law.  Except for the New Shares Issuance,
there is no security, option, warrant, right, call, subscription, agreement, commitment
or understanding of any nature whatsoever, fixed or contingent, that directly
or indirectly (i) calls for the issuance, redemption, sale, pledge or
other disposition of any shares of capital stock of the Company or any
securities convertible into, or other rights to acquire, any shares of capital
stock of the Company, (ii) obligates the Company to grant, offer or enter
into any of the foregoing or (iii) relates to the voting or control of
such capital stock, securities or rights. 
There is no “phantom stock,” stock appreciation rights or other similar
rights the value of which is related to or based upon the price or value of any
class or series of capital stock of the Company.  No Person is entitled to any preemptive or
similar rights to subscribe for shares of capital stock of the Company.  The Company has not granted to any Person the
right to demand or request that the Company effect a registration under the
Securities Act of any securities held by such Person or to include any
securities of such Person in any such registration by the Company.

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

2.3           Authority,
Approvals, Enforceability and Consents.

(a)           The
Company has the corporate power and authority to enter into this Agreement and
the other Transaction Documents to be executed and delivered by it and, subject
to entry of the Company Confirmation Order, to perform its obligations
hereunder and thereunder.

(b)           The
execution, delivery and performance by the Company of this Agreement and the
other Transaction Documents to be executed and delivered by it and the
consummation by the Company of the transactions contemplated hereby and thereby
have been duly authorized and approved by the Board of Directors of the Company
and, subject to entry of the Company Confirmation Order, no other corporate
proceedings or other approvals on the part of the Company are necessary to
authorize, approve and perform its obligations under this Agreement and the
other Transaction Documents to be executed and delivered by it and the
transactions contemplated hereby and thereby.

 6
 

(c)           This
Agreement has been, and the other Transaction Documents to be executed and
delivered by the Company at the Closing will, at the Closing, have been, duly
executed and delivered by the Company and, subject to entry of the Company
Confirmation Order, constitutes (or will constitute at the Closing, as
applicable) the legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their respective terms, subject to the
discretion of the Company Bankruptcy Court for so long as the Company
Bankruptcy Court retains jurisdiction over the Company Case.

(d)           The
execution, delivery and performance by the Company of this Agreement and the
other Transaction Documents to be executed and delivered by the Company and the
consummation of the transactions contemplated hereby and thereby do not and
will not:

(i)            contravene any
provision of the articles of incorporation or bylaws (or comparable
organizational documents) of the Company;

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

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

(iv)          to the Company’s
Knowledge, violate or conflict with any Law applicable to the Company or its
business or properties; or

(v)           except for the Company
Confirmation 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 or
approval of, or notice to, or filing, registration or qualification with, any
Government Authority.

2.4           Financial
Statements.

(a)           Schedule
2.4 sets forth a true, correct and complete copy of:

(i)            the audited balance
sheet of the Company as of March 31, 2005 and March 31, 2006, and the related
audited statements of operations, stockholders equity and cash flows for the
fiscal years ended on such dates, together with the notes thereto, in each case
examined by and accompanied by the report of Deloitte & Touche LLP,
independent certified public accountants, and

 7
 

(ii)           the unaudited balance
sheet of the Company as of September 30, 2006, and the unaudited statements of
operations, stockholders equity and cash flows for the 6-month period ended on
such date, together with the notes thereto;

(all the foregoing
financial statements, including the notes thereto being referred to herein
collectively as the “Company Financial
Statements”).  The Company
Financial Statements are in accordance with the books and records of the
Company and fairly present the financial position, results of operations,
stockholders equity and cash flows of the Company as of the dates and for the
periods indicated, in each case in conformity with GAAP consistently applied
during such periods, and the unaudited financial statements included in the
Company Financial Statements include all adjustments, except for normal
recurring year end accruals, which are not, individually or in the aggregate,
material, and the unaudited financial statements included in the Company
Financial Statements do not include footnotes. 
The books and accounts of the Company are complete and correct and fully
and accurately reflect the transactions of the Company in all material
respects.

(b)           The
management of the Company has:  (i)
designed disclosure controls and procedures to ensure that material information
relating to the Company is made known to the management of the Company by
others within the Company; and (ii) disclosed, based on its most recent
evaluation, to the Parent’s outside auditors and the Board of Directors of the
Company (or its audit committee, if any) (A) any significant deficiencies in
the design or operation of internal controls which could adversely affect the
Company’s ability to record, process, summarize and report financial data and
have identified for the Parent’s outside auditors any material weaknesses in
internal controls and (B) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company’s
internal controls.  A summary of any of
those disclosures made by management to the Parent’s auditors and the Board of
Directors of the Company (or its audit committee, if any) has been furnished to
Buyer prior to the date of this Agreement. 
The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed
in accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.  To the Company’s Knowledge, Parent’s auditors
and the Company’s chief executive officer and chief financial officer would be
able to give the certifications and attestations contemplated by the rules and
regulations adopted pursuant to Section 404 of the Sarbanes Oxley Act of 2002,
insofar as they relate to the Company only, without qualification, when next
due.

(c)           Since
December 31, 2003, none of the Company or any director, officer, employee,
auditor, accountant or representative of the Company has received, and the
Company 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 Company
Financial Statements or the internal accounting controls of the Company.  No attorney representing the Company has
reported evidence of a violation of securities laws, breach of fiduciary duty
or similar violation by the Company or any of its

 8
 

respective officers, directors, employees or agents to the Board of
Directors of the Company or any committee thereof or to any director or officer
of the Company.

(d)           To
the Knowledge of the Company, no employee of the Company has provided or is
providing information to any law enforcement agency regarding the commission or
possible commission of any crime or the violation or possible violation of any
Law.

(e)           The
Company has not engaged in any “off-balance sheet arrangement” (as defined in
Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Exchange
Act of 1934, as amended).

2.5           Absence
of Undisclosed Liabilities.  As of
the date of this Agreement and immediately prior to the Cancellation and
Issuance, the Company has no Liability and there is no existing condition,
situation or set of circumstances which is reasonably expected to result in
such a Liability, except for (a) Liabilities expressly set forth on Schedule
2.5, (b) Liabilities reflected or reserved against in the balance sheet as
of March 31, 2006 (the “Balance Sheet Date”)
included in the Company Financial Statements (the “Company
Balance Sheet”), and (c) current Liabilities incurred in the
Ordinary Course after the Balance Sheet Date which have not had, or would not
reasonably be expected to have, a Material Adverse Effect.  As of the Closing, Reorganized Company shall
have no Liability and there shall not be any existing condition, situation or
set of circumstances which is reasonably expected to result in such a
Liability, except for the Assumed Liabilities.

2.6           Absence
of Certain Changes.  Since the
Balance Sheet Date, the Company has conducted its business only in the Ordinary
Course and:

(a)           except
as set forth on Schedule 2.6 and the effects in existence as of the date
hereof 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, a
Material Adverse Effect;

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

(b)           except
as set forth on Schedule 2.6, the Company has not, directly or
indirectly:

(i)            amended or otherwise
changed its articles of incorporation, bylaws or comparable organizational
documents;

(ii)           (A) issued, granted or
sold any shares of its capital stock, (B) issued, granted or sold any
security, option, warrant, call, subscription or other right of any kind, fixed
or contingent, that directly or indirectly calls for the issuance, sale, pledge
or other disposition of any of its shares of capital stock, or (C) entered
into any agreement, commitment or understanding calling for any transaction
referred to in clause (A) or (B) of this paragraph (ii);

 9
 

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

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

(v)           created, incurred or
assumed any indebtedness for money borrowed or obligations in respect of
capital leases;

(vi)          paid, discharged or
satisfied 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 other
obligation of any other Person;

(viii)        entered into any
transaction involving total payments to or by the Company of, or involving the
acquisition or disposition by the Company of property, assets or rights having
a value of, more than $250,000 in the aggregate;

(ix)           approved or put into
effect any increase in compensation or benefits payable to any of the employees
of 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 to
increase the amount of compensation or benefits payable thereunder;

(x)            changed the accounting
methods, principles or practices employed by the Company, except as required by
GAAP;

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

(xii)          changed or modified any
of the following:  (A) billing and
collection policies, procedures and practices with respect to accounts
receivable or unbilled charges; (B) policies, procedures and practices with
respect to the provision of discounts, rebates or allowances; or
(C) payment policies, procedures and practices with respect to accounts
payable;

(xiii)         settled any Tax audit or
other proceeding, made or changed any Tax election, Tax accounting method or
practice or filed any amended Tax Return; or

(xiv)        authorized any of, or
committed or agreed to take, whether in writing or otherwise, any of the
foregoing actions.

 10
 

2.7           Taxes.  Except as set forth on Schedule 2.7,

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

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

(c)           The
Company has duly withheld, collected and timely paid all Taxes that it was
required to withhold, collect and pay relating to amounts paid or owing to any
employee, independent contractor, creditor, stockholder or other Person and has
complied with all information reporting requirements with respect to such
amounts.

(d)           No
audit or other proceeding by any taxing authority is pending or threatened in
writing with respect to any Taxes due from the Company, or with respect to any
Tax Return filed or required to be filed by or relating to the Company.  No assessment or deficiency for any Tax is
proposed nor, to the Knowledge of the Company, is threatened against the
Company.

(e)           To
the Company’s Knowledge, no claim has been made by any taxing authority in a
jurisdiction where the Company does not file Tax Returns that the Company is or
may be subject to Tax or required to file a Tax Return in such
jurisdiction.  There are no outstanding
waivers or consents that have been given by the Company regarding the
application of the statute of limitations with respect to any Taxes or Tax
Returns.  There are no Liens on any of
the assets of the Company that arose in connection with any failure to pay
Taxes, other than for Taxes that are not yet due and payable.

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

 11
 

(g)           The
Company is not participating and has not participated in a reportable or listed
transaction within the meaning of Treas. Reg. Section 1.6011-4 or Section
6707A(c) of the Code.

(h)           The
Company has not been the “distributing corporation” or a “controlled
corporation” (within the meaning of Section 355 of the Code) with respect to a
transaction described in Section 355 of the Code within the two-year period
ending on the date of this Agreement.

2.8           Legal
Matters.

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

(b)           The
business of the Company has been and is being conducted in all material
respects in compliance with all applicable Laws, operating certificates, common
carrier obligations, airworthiness directives, federal aviation regulations,
and all applicable rules, regulations, directives and policies of any
Government Authority.

(c)           The
Company has, and is in all material respects in compliance with, all Permits
required, 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 material
Permits owned or held by the Company. 
The Company owns or hold all Permits material to the conduct of its
business.  No event has occurred and is
continuing which permits, or after notice or lapse of time or both would
permit, any modification, revocation, non-renewal or termination of any Permit
held by the Company.  The Company has not
received any written notice asserting any noncompliance with any Permit.

2.9           Real
Property.

(a)           The
Company does not own any Real Property.

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

 12
 

(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)           Schedule
2.10(a) sets forth a true and complete list of all aircraft owned or leased
by the Company (such aircraft, together with their engines, and any parts,
components, instruments, appurtenances, accessories, furnishings and other
equipment attached or relating to such aircraft or engines are collectively
referred to herein as the “Aircraft”),
including the type and aircraft number of each such Aircraft and the date the
Company placed such Aircraft in service or proposes to place such Aircraft in
service.  The Company has a valid
ownership or leasehold interest in each of the Aircraft, and the owned Aircraft
are owned by the Company free and clear of all Liens, except as set forth on Schedule
2.10(a).  All Aircraft owned or
leased by the Company are in airworthy condition and are being maintained
according to applicable FAA regulatory standards and the FAA-approved
maintenance program of the Company.  The
Company has implemented maintenance schedules with respect to their respective
Aircraft that, if complied with, would result in the satisfaction of all
material requirements under all applicable airworthiness directives and federal
aviation regulations required to be complied with in accordance with the
FAA-approved maintenance program of the Company, and the Company is in
compliance with such maintenance schedules in all material respects and has no
reason to believe that it will not satisfy any component of such maintenance
schedules on or prior to the dates specified in such maintenance
schedules.  All deferred maintenance
items and temporary repairs with respect to each Aircraft have been or will be
made in accordance with FAA, manufacturer’s and the Company’s maintenance
programs.

(b)           Schedule
2.10(b) sets forth a true and complete list containing all Contracts
pursuant to which the Company may purchase or lease aircraft, including the
manufacturer and model of all aircraft subject to each Contract. The Company
has provided to Buyer true and complete copies of all Contracts listed on Schedule
2.10(b) prior to the date of this Agreement.  No Aircraft is subleased to or otherwise in
the possession of another Person other than the Company.

(c)           Each
Aircraft has a validly issued, current individual aircraft FAA certificate of
airworthiness with respect to such Aircraft which satisfies all requirements
for the effectiveness of such FAA certificate of airworthiness.  Each Aircraft is properly registered on the
FAA aircraft registry.  Each Aircraft’s
structure, systems and components are functioning in accordance with its
intended use as set forth in FAA-approved documentation, including any
applicable manuals, technical standard orders or parts manufacturing approval
certificates.

2.11         Intellectual Property.

(a)           Schedules
2.11(a)-1 to 4 set forth an accurate and complete list of (1) all
Domain Names of which the Company is the registrant or of which a third party
is the registrant for the benefit of the Company (collectively, the “Company Registered Domain Names”); (2) all registered Marks and
pending applications for registration of Marks owned by the Company
(collectively, the “Company Registered Marks”); (3) all Patents owned by the
Company (collectively, the “Company Patents”); and (4) all registered
Copyrights and all

 13
 

pending applications for registration of Copyrights by the Company
(collectively, the “Company Registered
Copyrights”and, together with the Company Registered Domain Names, the
Company Registered Marks and the Company Patents, the “Company Registered IP”). 
To the Company’s Knowledge, the conduct of the business of the
Company as currently conducted, does not infringe upon or misappropriate or
violate the Intellectual Property rights or the confidential and proprietary
information, including Trade Secrets, of any third party.  The Company Registered IP has not been the
subject of a judicial finding or opinion, nor has any written notice or claim
challenging the ownership, validity, registrability, enforceability, use or
licensed right to use any Intellectual Property been received by the
Company.  No claim or notice has been
asserted against the Company in writing or, to the Knowledge of the Company,
orally, that the conduct of the business of the Company as currently conducted
infringes in any material respect upon or misappropriates the Intellectual
Property rights or the confidential and proprietary information, including
Trade Secrets, of any third party, in each case, except with respect to claims
or notices that have been fully resolved. 
The Company has timely paid all filing, examination, issuance, post
registration and maintenance fees, annuities and the like associated with or
required with respect to any of the Company Registered IP, and all documents,
recordations and certificates necessary to be filed by the Company to maintain
the effectiveness of the Company Registered IP have been filed with the
relevant patent, copyright, trademark or other authorities in the United States
or foreign jurisdictions, as the case may be, so that no item required to be
listed in Schedule 2.11(a)-1 to 4, has lapsed, expired or been abandoned
or canceled other than in the Ordinary Course. 
The Company has used reasonable best efforts to protect its rights and
the secrecy of its confidential information and Trade Secrets, including by
requiring that all employees, consultants and independent contractors who are
involved in the creation of Intellectual Property for the Company enter into
non-disclosure and invention assignment agreements.  The Company owns all right, title and
interest 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 the
Company in its business and is entitled to use any such Company Registered IP
or other Intellectual Property used in the operation of its business as
currently conducted to the extent such use is material to such business, free
and clear of all Liens other than Permitted Liens.  There are no claims asserted or threatened by
the Company that a third Person infringes, misappropriates or otherwise
violates any of the Company Registered IP.

(b)           The
Company Registered IP and the other Intellectual Property owned by the Company,
together with the rights granted to the Company under the Inbound IP Agreements
and under any “shrink-wrap” or “click-wrap” license agreements relating to
software desktop applications, are sufficient for the continued conduct of the
business of the Company after the Closing Date in the same manner as such
business were conducted prior to the Closing Date in all material respects, and
neither the execution of this Agreement nor the consummation of any transaction
contemplated hereby will adversely affect any of the rights of the Company with
respect to the Intellectual Property owned by the Company or Intellectual
Property licensed by the Company pursuant to the Inbound IP Agreements.

2.12         Insurance.  Schedule 2.12 lists each insurance
policy maintained by, at the expense of or for the benefit of, the Company with
respect to its properties and assets. 
Prior to the date of this Agreement, the Company has furnished to Buyer
true and complete copies of all such policies. 
All such insurance policies are in full force and effect and the Company
is not in

 14

default with respect to its obligations under any such insurance
policy.  The Company has not received any
written notice regarding any actual or possible (a) cancellation or
invalidation of any insurance policy, (b) refusal of any coverage or rejection
of any material claim under any insurance policy or (c) material adjustment in
the amount of premiums payable with respect to any insurance policy.

2.13         Company
Agreements.

(a)           Schedule
2.13(a) lists as of the date of this Agreement (i) each Company
Agreement that is material to the business, assets, Liabilities, results of
operation, 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 or
arrangement for or relating to any borrowing of money by the Company;

(ii)           any guaranty, direct or
indirect, primary or secondary, by the Company of any obligation for borrowings
or otherwise, excluding endorsements made for collection in the Ordinary
Course;

(iii)          any Company Agreement
made other than in the Ordinary Course;

(iv)          any Company Agreement
providing for the grant of any preferential rights to purchase or lease any
material assets of the Company or any assets related to any RJ-85 aircraft;

(v)           any Company Agreement
providing for any obligation to register any shares of the capital stock or
other securities of the Company with the Securities and Exchange Commission or
otherwise relating to such stock or other securities;

(vi)          any Company Agreement
providing for any obligation to make payments, contingent or otherwise, arising
out of the prior acquisition of the business, assets or stock of other Persons;

(vii)         any Company Agreement
that is a collective bargaining agreement with any labor union;

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

(ix)           any Company Agreement
to which any Insider is a party;

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

 15
 

(xi)           any Company Agreement that
contains a non-competition provision relating to the business of the Company or
any of its Affiliates or any other Contract restricting the right of the
Company or any of its Affiliates to conduct business at any time, in any manner
or at any place in the world, or the expansion thereof to other geographical
areas or lines of business, or that grants the other party or any third Person “most
favored nation” status;

(xii)          any Company Agreement
that is a partnership, joint venture or similar agreement;

(xiii)         any Company Agreement
that is generating or is expected to generate revenue to the Company; and

(xiv)        any Company Agreement
relating to the acquisition or disposition of any material portion of its
business.

(b)           Copies
of all written Company Agreements referred to on Schedule 2.13(a) have
been delivered to Buyer prior to the date of this Agreement, and the Company
has provided Buyer with accurate and complete written summaries of all such
Company Agreements that are unwritten.

(c)           Except
for matters that would be resolved by the Company Confirmation Order, (i) all
of the Company Agreements (except for any Rejected Contracts) are in full force
and effect and are valid and binding on and enforceable against the Company in
accordance with their terms and, to the Knowledge of the Company, on and
against the other parties thereto (with respect to such other parties and as to
enforceability only, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally and general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in
equity)), (ii) neither the Company nor, to the Knowledge of the Company, any
other party to any Company Agreement (except for any Rejected Contracts), is in
material breach of, or material default under, any such Company Agreement
(except for any Rejected Contracts) and no event has occurred that, with the
giving of notice or the lapse of time or both, would constitute a material
breach of, or material default under, any such Company Agreement (except for
any Rejected Contracts) and (iii) there are no unresolved disputes under any
Company Agreement (except for any Rejected Contracts).  The Company has not waived any material right
under any Company Agreement (except for any Rejected Contracts).  Except with respect to the Company Case, the
Company has not given to or received from any other Person, at any time since
December 31, 2004, any notice or other written communication regarding any
actual, alleged, possible or potential violation or breach of, or default
under, any Company Agreement (except for any Rejected Contracts).

2.14         Labor
Relations.

(a)           Schedule 2.14(a)
lists as of the date of this Agreement all employees of the Company, including
for 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 base
salary or wage rate; (v) his

 16
 

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

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

(c)           Except as set forth in Schedule
2.14(c), (i) no employees of the Company are covered by a collective
bargaining agreement; (ii) no employees of the Company are, or within the last
three years have been, represented by a union or other labor organization,
association or bargaining agent; and (iii) to the Knowledge of the Company, no
employee organizing efforts are now being conducted or pending with respect to
employees of the Company.  Except as set
forth in Section 2.14(c), within the last three years, there has been no
strike, work stoppage, work slowdown or other material labor dispute with
respect to employees of the Company, nor, to the Knowledge of the Company, is
any such action threatened.  The Company
is not involved in nor, to the Knowledge of the Company, threatened with, any
labor dispute, arbitration, lawsuit or administrative proceeding relating to
labor matters involving the employees of the Company.

(d)           The
Company has paid or made provision for the payment of all salaries and accrued
wages and has complied in all material respects with all applicable Laws
relating to the employment of labor, including those relating to wages, hours,
collective bargaining and the payment and withholding of Taxes, and have
withheld and paid to the appropriate Government Authority, or are holding for
payment not yet due to such Government Authority, all amounts required by Law
or agreement to be withheld from the wages or salaries of the employees of the
Company.

(e)           Except
as set forth in Schedule 2.14(e), there are no claims or disputes
pending or, to the Knowledge of the Company, threatened by any current or
former employee of the Company in relation to his or her employment with, or
termination of employment from, the Company.

2.15         Employee
Benefit Plans.

(a)           Schedule
2.15(a) lists (i) all “employee benefit plans” within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), (ii) all other employee
benefit plans, arrangements and policies, including all stock option, stock
purchase, stock award, stock appreciation, phantom stock, deferred
compensation, pension, retirement, savings, profit sharing, incentive, bonus,
health, life insurance, cafeteria, flexible spending, dependent care, fringe
benefit, vacation pay, holiday pay, disability, sick pay, unemployment, severance,
employee loan, educational assistance or other similar plans, arrangements and
policies, and (iii) all employment, consulting, retention, severance or
change-in-control agreements, in each case, that is sponsored or maintained by
the Company or to which the Company is a party, contributes or is required to
contribute, on behalf of current or former employees, consultants or directors
of the Company or their respective beneficiaries or dependents, whether or not
written (“Benefit Plans”).  The Company has not communicated to present
or former employees of the Company or formally adopted or authorized any
additional

 17
 

Benefit Plan or any change in or termination of any existing Benefit
Plan.  Except for rights under COBRA, no
Benefit Plan covers employees other than employees of the Company.  The Company has delivered to Buyer complete
and correct copies of each Benefit Plan, or written summaries of any unwritten
Benefit 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 IRS
determination letter, the last three annual financial statements, and the last
three annual reports on IRS Form 5500 (including all required schedules and
accountant’s opinions).

(b)           Except
as set forth in Schedule 2.15(b), each Benefit Plan is and has been
operated and administered in all material respects in accordance with (i) its
terms and (ii) all applicable Laws.  Each
Benefit Plan intended to be tax-qualified under Section 401(a) of the Internal
Revenue Code of 1986, as amended (the “Code”), has
received a favorable determination letter from the IRS as to its tax-qualified
status under the Code and nothing has occurred since the date of such favorable
determination letter which would adversely affect the qualified status of such
plan.  All material contributions and
premium payments required to have been paid under or with respect to any Benefit
Plan have been timely paid.  No Benefit
Plan provides health, life insurance or other welfare benefits to retirees or
other terminated employees of the Company, other than continuation coverage
required by Section 4980B of the Code or Sections 601-608 of ERISA.  No Benefit Plan is a multiemployer plan
within the meaning of 4001(a)(3) of ERISA, and the Company does not have any
Liability with respect to any such plan. 
No Benefit Plan is a “defined benefit plan”, within the meaning of
Section 3(35) of ERISA or a plan subject to Section 412 of the Code, and the
Company does not have any Liability with respect to any such plan.  To the Company’s Knowledge, no event has
occurred and no condition exists with respect to any Benefit Plan which could
subject any Benefit Plan or the Company, directly or indirectly (through an
indemnification agreement or otherwise), to a liability for a breach of
fiduciary duty, a “prohibited transaction,” within the meaning of Section 406
of ERISA or Section 4975 of the Code, or a tax, penalty or fine under ERISA or
the Code.  No actions, suits or claims
(other than routine claims for benefits in the Ordinary Course) are pending
with 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 rise
to any such actions, suits or claims (other than routine claims for benefits in
the Ordinary Course).  No Benefit Plan is
currently under governmental investigation or audit and, to the Knowledge of
the Company, no such investigation or audit is contemplated or under
consideration.  To the Company’s
Knowledge, no event has occurred and no condition exists with respect to any
employee benefit plan or arrangement currently or previously maintained or
contributed to by any entity required to be aggregated with the Company under
Section 414(b), (c), (m), or (o) of the Code which could subject the Company to
liability, including liability under Section 412, 4971 or 4980B of the Code or
Title IV of ERISA.

(c)           Neither
the execution of this Agreement nor the consummation of the transactions
contemplated by this Agreement, will (i) increase the amount of benefits
otherwise payable under any Benefit Plan, (ii) result in the acceleration of
the time of payment, exercisability, funding or vesting of any such benefits,
or (iii) result in any payment (whether severance pay or otherwise) becoming
due to, or with respect to, any current or former employee or director of the
Company.  No payment or series of
payments that would constitute an “excess parachute payment” (within the
meaning of Section 280G of the Code) has been made or will be

 18
 

made by the Company, directly or indirectly, to any employee in
connection with the execution of this Agreement or as a result of the
consummation 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 the
Code has at all times been operated in compliance with the requirements of
Section 409A of the Code and applicable regulations and other guidance
promulgated thereunder.  Substantially
adequate and complete records have been and are maintained with respect to each
Benefit Plan and are in the custody of the Company or a third party service
provider retained by the Company.

2.16         Environmental
Matters.  The Company has complied
with, and the Company and the real property owned, used or leased by it, are in
compliance with, the provisions of all applicable Environmental Laws in all
material respects.  The Company has not
received any written notice and is not otherwise aware of any existing claim or
the basis for any claim by any Government Authority or any Third Party that the
Company or the condition of the real property owned, used or leased by it has
violated or is subject to liability pursuant to any Environmental Law which has
or would reasonably be expected to have a Material Adverse Effect.  There are no facts, events or conditions with
respect to the past or present operation of the business of the Company or any
Environmental Conditions at any of the real properties owned, used or leased by
the Company which could reasonably be expected to interfere with or prevent
continued compliance with, or could reasonably be expected to give rise to any
Claim under, Environmental Laws, which has or would reasonably be expected to
have a Material Adverse Effect.  The
Company is not subject to any material Liability under any Environmental
Law.  There are no underground storage
tanks on or under any of the real property owned or leased by the Company.  The Company has delivered to Buyer, prior to
the date of this Agreement, true and complete copies of any environmental
reports, studies or surveys prepared by or for the Company or any of its Representatives.

2.17         Title;
Condition of Assets.

(a)           The
Company has good and marketable title to or valid leasehold or license
interests in all of the assets and properties that it purports to own, lease or
license (including those assets reflected on the Company Financial Statements
and all of their Intellectual Property), free and clear of any Liens other than
any Permitted Lien.  Such assets and
properties (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 currently
conducted and (ii) are suitable for the purposes for which they are currently
used and currently proposed to be used. 
Except as provided in Schedule 2.17(a) with respect to shared
insurance, no Insider has any right in or to any of the assets and properties
which are owned, used or held for use in the conduct by the Company of its
business as they are currently conducted.

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

2.18         Suppliers.  Schedule 2.18 lists the Company’s top
20 suppliers (by volume of purchases from such suppliers), for the fiscal year
ended 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 Schedule
2.18 to the effect that, and the Company has no

 19
 

reason to believe that, any such supplier will stop, materially
decrease the rate of, or materially change the terms with respect to, supplying
materials, products or services to the Company.

2.19         U.S.
Citizen; Air Carrier.  The Company is
a “citizen of the United States” as defined in the Federal Aviation Act and is
an “air carrier” within the meaning of the Federal Aviation Act operating under
certificates 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 or
will incur any broker’s, finder’s or similar fees, commissions or expenses, in
each case, in connection with the transactions contemplated by this Agreement
or any other Transaction Document.

ARTICLE III

REPRESENTATIONS
AND WARRANTIES

OF 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 and
Consents.

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

(b)           The execution, delivery and performance by
Buyer of this Agreement and the other Transaction Documents to be executed and
delivered by Buyer and the consummation by Buyer of the transactions
contemplated hereby and thereby have been duly authorized and approved by the
Board 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 other
Transaction Documents to be executed and delivered by Buyer and the
transactions contemplated hereby and thereby.

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

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

 20
 

(i)            contravene
any provisions of the certificate of incorporation or bylaws of Buyer;

(ii)           after
notice or lapse of time or both, result in a material violation, material
conflict with, or material breach of any provision of, constitute a material
default under, result in or permit the material modification, revocation,
cancellation, termination or acceleration of, any Contract to which Buyer is a
party or by which any of its properties or assets are bound or otherwise
subject or require any consent or waiver of any party to any such Contract;

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

(iv)          except
for 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 any
authorization, 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 sufficient
funds available to pay any amounts due to the Company Bankruptcy Estate under
Sections 1.1(c) and 1.1(d).

3.4           Brokers.  Neither Buyer nor its directors, officer or
employees, has employed any broker or finder or has incurred or will incur any
broker’s, finder’s or similar fees, commissions or expenses, in each case, in
connection with the transactions contemplated by this Agreement or any other
Transaction 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 has
communicated the material terms of this Agreement, the Allowed Claim and the
transactions contemplated hereby to the Committee of Unsecured Creditors (the “Buyer Committee”) in
the Buyer Case and, to the actual knowledge of the Chief Financial Officer of
Buyer and the Senior Vice President of Finance of Buyer, which are the Buyer’s
primary officers involved in discussions with the Buyer Committee, neither
Buyer nor its Representatives has received any indication from the Buyer
Committee that it will object to this Agreement, the Allowed Claim or the
transactions contemplated hereby.

ARTICLE IV

COVENANTS

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

 21
 

cause their officers and employees to furnish
to Buyer and its Representatives any and all financial, technical and operating
data and other information pertaining to the businesses and properties of the
Company, (ii) make available for inspection and copying (at Buyer’s
expense) by Buyer and its Representatives true and complete copies of any
documents relating to the foregoing and (iii) make available to Buyer and its
Representatives the Company’s management personnel and will cause such
personnel to cooperate with Buyer and its Representatives and to provide
assistance as requested by Buyer and its Representatives in connection with the
transactions contemplated by this Agreement. 
Following the Closing, the Company will, during normal business hours
and upon reasonable advance notice, solely in connection with the enforcement
of the terms of this Agreement and the Plan, the claims allowance process and
the transactions contemplated by the Plan, without interfering with the conduct
of the business of the Company, and at the Company Bankruptcy Estate’s expense,
(i) provide, to the Company Bankruptcy Estate and its Representatives, full
access to any and all files, books, records, documents, and other information
of the Company (including any Tax Returns filed by the Company and any
consolidated, combined or unitary income Tax Returns which include the
Company), in each case, for periods prior to the Closing, (ii) make available
for inspection and copying by the Company Bankruptcy Estate and its
Representatives true and complete copies of the foregoing, and (iii) make
available, for limited and inconsequential periods of time (individually and in
the aggregate), to the Company Bankruptcy Estate and its Representatives the
Company’s management personnel for the purpose of answering questions of the
Company Bankruptcy Estate and its Representatives in connection with the claims
allowance process and the transactions contemplated by the Plan; provided that
prior to the Company being obligated to granting such access, inspection and
copying rights, the Company Bankruptcy Estate and its Representatives shall
have agreed in writing with the Company to keep confidential any information
provided to the Company Bankruptcy Estate or its Representatives pursuant to
this Section as if such information were “Evaluation Material” as such term is
defined in the Confidentiality Agreement. 
Between the date hereof and the Closing, on a weekly basis, the Company
shall cause its Vice President of Finance to meet with Representatives of Buyer
(the “Weekly Meeting”).  At each Weekly Meeting, the Company’s Chief
Financial Officer shall present to the Buyer’s Representatives, in writing, all
of the Company’s reasonably expected uses of its Cash for the weekly period
immediately following such Weekly Meeting, it being understood and agreed that
such expected uses shall be consistent with the terms of this Agreement.

4.2           Announcements.  Between the date hereof and the Closing, the
Company covenants that it will not issue any press release or otherwise make
any public statement with respect to the transactions contemplated hereby
without the prior written consent of Buyer, except as and to the extent that
the Company determines in good faith that it is so obligated by Laws, in which
case the Company shall give notice in advance of the Company’s intent to issue
such press release or make such public announcement to Buyer, and Buyer and the
Company shall use reasonable best efforts to cause a mutually agreeable release
or announcement to be issued.

4.3           Conduct of Business of the Company Prior
to the Closing.  During the period
from the date of this Agreement to the Closing, the Company shall:  (w) operate its business only in the Ordinary
Course and in compliance with all Laws; (x) use its commercially reasonable
efforts to preserve its business organization intact; (y) use its commercially
reasonable efforts to

 22
 

keep available to itself the present services
of its employees; and (z) use its commercially reasonable efforts to preserve
for itself the goodwill of its suppliers, distributors and others with whom
business relationships exist.  Without
limitation of the foregoing, except and to the extent (A) as otherwise
expressly permitted by this Agreement, (B) as Buyer may approve in writing (such
approval not to be unreasonably withheld), (C) as set forth in Schedule 4.3
or (D) required to comply with any applicable Law, the Company shall not,
directly or indirectly:

(a)           amend or otherwise change its certificate of
incorporation 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 or
sell any security, option, warrant, call, subscription or other right of any
kind, 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 for
any 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 or
other distribution in respect of any shares of its capital stock, or except for
the Equity Cancellation, cancel, reclassify, split, combine, subdivide,
purchase, redeem or otherwise acquire, any shares of its capital stock or
securities convertible or exchangeable into or exercisable for any shares of
its capital stock;

(e)           use any of its Cash except to satisfy
administrative claims and obligations that are, and to the extent, specifically
set forth on Schedule 1.1(d);

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

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

(h)           (i) approve or put into effect any increase
in compensation or benefits payable to any of its employees, make any bonus
payment to any of its employees or amend any Benefit Plan to increase the
amount of compensation or benefits payable thereunder; or (ii) enter into or
adopt any new Benefit Plan;

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

(j)            terminate, amend, modify, waive any rights
or exercise an extension or renewal option under any Company Agreement on Schedule
2.13(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;

 23
 

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

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

(m)          mortgage, pledge or subject to any Lien
(other than Permitted Liens) any of its assets except to the extent such
mortgage, pledge or Lien would be released, removed and/or satisfied under the
terms 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 unbilled
charges; (ii) policies, procedures and practices with respect to the provision
of discounts, rebates or allowances; or (iii) payment policies, procedures
and practices with respect to accounts payable;

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

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

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

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

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

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

(a)           to cooperate with the other parties and to
take such actions as may be necessary, in each case, as promptly as possible in
(i) determining whether notices, declarations, registrations and filings
are required to be made with or consents required to be obtained from any Third
Party or Government Authority in connection with the consummation of the
transactions contemplated by this Agreement and the other Transaction Documents
and 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

 24
 

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 respect
to clauses (B) and (C) will be made promptly following the date of this
Agreement); (ii) seeking to terminate any waiting periods under the HSR Act as
soon as practicable; (iii) obtaining, in a timely manner, any such consents;
and (iv) furnishing the other party and to the other party’s counsel all
such information as may be reasonably required in order to effectuate the
foregoing actions;

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

(c)           to use reasonable best efforts and cooperate
with the other parties hereto to obtain all consents required from Third
Parties, whose consent or approval is required pursuant to any Company
Agreement or otherwise to consummate the transactions contemplated by this
Agreement and the other Transaction Documents; provided, however,
that Buyer will have no obligation to give any guarantee or other consideration
of any nature in connection with any such required consents or to consent to
any change in the terms of any Assumed Contract; and

(d)           without limiting the specific obligations of
any party under any covenant or agreement under this Agreement, to use
reasonable best efforts to take all action and do all things necessary in order
to promptly consummate the transactions contemplated hereby and the other
Transaction Documents, including satisfaction, but not waiver, of the
conditions precedent set forth in Articles V and VI.  Notwithstanding anything to the contrary
contained in this Agreement, nothing in this Agreement will require or obligate
Buyer 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 deemed
breached as a result of the failure of Buyer to take any of the following
actions) (i) agree to or otherwise become subject to any limitations on (A) the
right of Buyer effectively to control or operate its and its Affiliates’
business (including the business of the Company) or assets (including the assets
of the Company), (B) the right of Buyer to acquire the New Shares, (C) the
right of Buyer to exercise full rights of ownership of its business (including
the business of the Company) or assets (including the assets of the Company),
or (D) its, the Company’s or their respective Affiliates’ DOT or FAA
certificates, (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 or
any portion of the business, assets or operations of Buyer or any of its
Affiliates or the business of the Company or any of the assets of the Company
or (iii) otherwise take any steps to avoid or eliminate any impediment that may
be asserted under any Law governing competition, monopolies or restrictive
trade practices.

4.5           Additional Agreements; Notification of
Certain Matters.

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

 25
 

and warranties contained in this Agreement
was not true and correct in all material respects (without giving effect to any
limitation as to “materiality” or “Material Adverse Effect” or another similar
materiality qualification set forth therein) as of the date of this Agreement
or will not be true and correct in all material respects (without giving effect
to any limitation as to “materiality” or “Material Adverse Effect” or another
similar materiality qualification set forth therein) as of the Closing,
(ii) any event that has, or would reasonably be expected to have, a
Material Adverse Effect, (iii) the occurrence of any event or the existence of
any circumstance which will result, or is reasonably likely to result, in the
failure to satisfy a condition specified in Article V hereof, (iv) any
notice or other communication from any third Person alleging that the consent
of such third Person is or may be required in connection with the transactions
contemplated by this Agreement, (v) any notice of, or other communication
relating to, any default under or breach of, or event which, with notice or
lapse of time or both, would become a default under or breach of, any Company
Agreement, (vi) any emergency or other change in the Ordinary Course or in
the operation of the properties of the Company, and (vii) any complaints,
investigations or hearings (or communications indicating that the same may be
contemplated) by or of any Government Authority or adjudicatory proceedings
involving any property of the Company, and, in the case of any event
contemplated by clauses (i) through (vii) will keep Buyer fully informed of
such event and permit Buyer and its Representatives access to all materials
prepared in connection therewith.

(b)           If any Claim against the Company shall have
been instituted before any arbitrator, court or other Government Authority to
restrain or prohibit, or to obtain damages in respect of, the consummation of
the 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 its
possession relating to such Claim, (iii) prior to filing or providing any
document to, or having discussions with, a Third Party relating to such Claim,
provide Buyer with a reasonable opportunity to review, comment on and approve
such 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 such
claim without Buyer’s prior written consent.

(c)           Buyer shall promptly notify the Company and
the Company Committee if it receives any firm indication from the Buyer
Committee 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 the
date hereof (but not later than January 22, 2007 with respect to the Plan and
January 23, 2007 with respect to the Disclosure Statement), the Company shall
file with the Company Bankruptcy Court (i) a Disclosure Statement with respect
to the Plan meeting the requirements of Section 1125(b) of the Bankruptcy Code
(the “Disclosure Statement”), and (ii) the
Plan (it being understood and agreed that, prior to or after the foregoing
filings have been made, upon Buyer’s request, the Company shall, within three
Business Days following such request, file a motion with the Company Bankruptcy
Court binding the Company to all the provisions of this Agreement relating to
the Termination Fee).  The Company shall
take all reasonably necessary actions in order to obtain approval of the
Disclosure Statement and confirmation of the Plan as reasonably

 26
 

expeditiously as possible.  The Plan, any and all exhibits and
attachments to the Plan, the Disclosure Statement, and the orders approving the
same (including the Company Confirmation Order) shall be reasonably acceptable,
in form and substance, to Buyer, shall be consistent with the transactions
contemplated hereunder, and shall not be filed until consented to by
Buyer.  The Company shall provide Buyer
and its counsel with copies of all motions, applications, supporting papers and
notices prepared by the Company relating to the approval of the Disclosure
Statement and the Plan prior to the filing of such documents and shall provide
Buyer with a reasonable opportunity to review, comment on and approve such
documents.  The parties shall consult
with each other prior to taking any action in or with respect to the Company
Case or the Buyer Case that is reasonably likely to have a material effect on
the transactions contemplated hereunder. 
Buyer shall provide the Company with all information concerning Buyer
and its Affiliates as is required or reasonably advisable to be included in the
Disclosure Statement.  Without limiting
any other provision of this Agreement, the Company Confirmation Order shall
find and provide, among other things, that (i) the Company Assets shall be
transferred to Reorganized Company consistent with this Agreement, (ii) the
only Liabilities assumed by Reorganized Company shall be the Assumed
Liabilities 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 Assumed
Contracts shall be assumed by and assigned to Reorganized Company pursuant to
Section 365 of the Bankruptcy Code and all Cure Amounts in respect thereof
shall be the responsibility of the Company Bankruptcy Estate, and Buyer shall
have no obligation to pay, or have any Liability for, such Cure Amounts, (v)
the Cancellation and Issuance shall be effected, (vi) Buyer be granted the
Buyer Claim, (vii) Buyer has acted in good faith within the meaning of Section
363(m) of the Bankruptcy Code and, as such, is entitled to the protections
afforded thereby, (viii) the Allowed Claim and the Forward Contract shall be
approved and (ix) this Agreement was negotiated, proposed and entered into by
the parties without collusion, in good faith and from arm’s length bargaining
positions.  The Company shall file,
within two weeks following the filing of the Disclosure Statement, a motion
requesting that the Company Bankruptcy Court establish an Administrative Claim
Bar Date and a Cure Claim Bar Date that conform with Sections 1.2, 1.46 and
1.48 of the Plan.  Prior to the Effective
Date (as defined in the Plan) of the Plan, the parties hereby agree to comply
with Sections 1.43, 1.113, 6.5, 6.5.1 and 6.5.2 of the Plan.

(b)           Buyer shall, as soon as reasonably
practicable after the date hereof, but not later than 15 days hereafter, file
with the Buyer Bankruptcy Court a motion to approve the transactions
contemplated hereunder, including the Allowed Claim.  The proposed Buyer Approval Order to be
submitted with the motion shall be substantially in the form attached hereto as
Exhibit C.

(c)           Each of the parties shall use reasonable
best efforts, and cooperate, assist and consult with each other, as promptly as
practicable, to secure approval of the Disclosure Statement, confirmation of
the Plan and approval of the transactions contemplated by the Plan and this
Agreement from the Company Bankruptcy Court and the Buyer Bankruptcy Court, as
applicable.  Neither the Plan nor the
Disclosure Statement nor any other material document relating to the
transactions contemplated hereby shall be amended, modified, supplemented,
withdrawn or revoked without the consent of Buyer; provided, however, that such
consent shall not be unreasonably withheld. 
The parties hereto acknowledge and agree that it would not be
unreasonable for Buyer to decline to consent to any Plan modification which
would require the

 27
 

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

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

4.7           Acquisition Proposals.

(a)           Until this Agreement has been terminated in
accordance with Section 7.1(a)(viii) (and the payments, if any, required to be
made in connection with such termination pursuant to Section 7.2(b) have been
made), the Company shall not, and shall cause its Representatives, not to,
directly or indirectly, (1) encourage (including by way of furnishing or
disclosing information), solicit, initiate, make or facilitate the making of,
or take any other action to facilitate any inquiries or the making of any
proposal that constitutes or may reasonably be expected to lead to, any
Acquisition Proposal, (2) participate in any way in discussions or negotiations
with, or furnish or disclose any information to, any Person (other than Buyer
or any of its Representatives) in connection with any Acquisition Proposal, (3)
approve or recommend, or propose to approve or recommend or publicly announce
it is considering approving or recommending, any Acquisition Proposal or (4)
enter into any agreement, letter of intent, agreement-in-principle, acquisition
agreement or other instrument contemplating or otherwise relating to any
Acquisition Proposal.  Notwithstanding
the foregoing, at any time prior to the entry of the Company Confirmation
Order, the Company and its Representatives may:

(i)            participate
in discussions or negotiations with, or furnish or disclose nonpublic
information to, any Person in response to an unsolicited, bona fide and written
Acquisition Proposal that is submitted to the Company by such Person after the
date of this Agreement and prior to the entry of the Company Confirmation Order
if and so long as (A) none of the Company or any of the Representatives of the
Company has solicited such Acquisition Proposal or otherwise violated any of
the provisions of this Section 4.7, (B) the Board of Directors of the Company
determines in good faith that (I) such Person is reasonably capable of
consummating 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 a
Superior Proposal, (C) the Board of Directors of the Company determines in good
faith, after consultation with its outside legal counsel, that failing to take
such action

 28

would
constitute a breach of its fiduciary duties under applicable Law, (D) at least
three Business Days prior to participating in discussions or negotiations with,
or furnishing or disclosing any nonpublic information to, such Person, the
Company provides Buyer with written notice of the identity of such Person and
of the Company’s intention to participate in discussions or negotiations with,
or to furnish or disclose nonpublic information to, such Person, (E) prior to
participating in discussions or negotiations with, or furnishing or disclosing
any nonpublic information to, such Person, the Company receives from such
Person an executed confidentiality agreement containing terms no less
restrictive upon such Person, in any respect, than the terms applicable to
Buyer under the Confidentiality Agreement, which confidentiality agreement
shall not provide such Person with any exclusive right to negotiate with the
Company or have the effect of prohibiting the Company from satisfying its
obligations under this Agreement, and (F) at least one Business Day prior to
furnishing or disclosing any nonpublic information to such Person, the Company
furnishes such information to Buyer (to the extent such information has not
been 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 fide
and written Acquisition Proposal that is submitted to the Company after the
date of this Agreement and prior to the entry of the Company Confirmation Order
if and so long as (A) none of the Company or any of the Representatives of the
Company has solicited such Acquisition Proposal or otherwise violated any of
the provisions of this Section 4.7, (B) the Company provides Buyer with written
notice indicating that the Company, acting in good faith, believes that the
Acquisition Proposal is reasonably likely to constitute a Superior Proposal
and, therefore, plans to conduct a meeting of the Board of Directors of the
Company for the purpose of considering whether the Acquisition Proposal
constitutes a Superior Proposal, which notice shall be delivered to Buyer at
least three Business Days prior to the date of such meeting of the Board of
Directors of the Company, (C) during the three Business Day period after the
Company provides Buyer with the written notice described in clause (B) above,
the Company shall cause its financial and legal advisors to negotiate in good
faith with Buyer (to the extent Buyer wishes to negotiate) in an effort to make
such adjustments to the terms and conditions of this Agreement such that the
Acquisition Proposal would not constitute a Superior Proposal and, therefore,
the Company would be required to proceed with the transactions contemplated
hereby on such adjusted terms, (D) notwithstanding the negotiations and
adjustments pursuant to clause (C) above but after taking into account the
results of such negotiations and adjustments, the Board of Directors of the
Company makes the determination necessary for such Acquisition Proposal to
constitute a Superior Proposal, (E) notwithstanding the negotiations and
adjustments pursuant to clause (C) above but after taking into account the
results of such negotiations and adjustments, the Board of Directors of the Company
determines in good faith, after consultation with its outside legal counsel,
that failing to approve or recommend or enter into a definitive agreement with
respect to such Acquisition Proposal would constitute a breach of its fiduciary
duties under applicable Law and (F) not later than the earlier of the approval
or recommendation of, or the execution and delivery of a definitive agreement
with respect to, any such Superior Proposal, the Company (I) terminates this
Agreement pursuant to Section 7.1(a)(viii) and (II) makes the payment of the
Termination Fee required to be made pursuant to Section 7.2(b).

 29
 

(b)           In
addition to the obligations of the Company set forth in Section 4.7(a), within
24 hours of the receipt thereof, the Company shall provide Buyer with written
notice of (i) any request for information, any Acquisition Proposal or any
inquiry, proposal, discussions or negotiations with respect to any Acquisition
Proposal, (ii) the material terms and conditions of such request, Acquisition
Proposal, inquiry, proposal, discussions or negotiations and (iii) the identity
of the Person making any such Acquisition Proposal or such request, inquiry or
proposal or with whom such discussions or negotiations are taking place, and
the Company shall promptly provide Buyer with copies of any written materials
received by the Company in connection with any of the foregoing.  The Company shall keep Buyer fully informed
of the status and general progress (including amendments or proposed amendments
to any material terms) of any such request or Acquisition Proposal and keep
Buyer fully informed as to the details of any information requested of or
provided by the Company and as to the details of all discussions or
negotiations.  Without limiting the
Company’s obligations under Section 4.7(a), the Company shall provide Buyer
with notice at least three Business Days prior to (or such lesser notice as is
provided to the members of the Board of Directors of the Company) any meeting
of the Board of Directors of the Company at which the Board of Directors is
reasonably expected to discuss or consider any Acquisition Proposal.

(c)           The
Company shall, and shall cause and instruct its Representatives to, immediately
cease all discussions or negotiations, if any, with any Person other than Buyer
that may be ongoing as of the date of this Agreement with respect to any
Acquisition Proposal.  The Company shall
immediately request each Person who has heretofore executed a confidentiality
agreement in connection with its consideration of acquiring the Company or any
portion thereof to return all nonpublic information heretofore furnished to
such Person by or on behalf of the Company. 
Any violation of this Section 4.7 by the Company’s Representatives shall
be deemed to be a breach of this Agreement by the Company, whether or not such
Representative is authorized to act and whether or not such Representative is
purporting 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           Key
Employees.  The Company shall use its
best efforts to keep available the services of each of the Key Employees by
offering to continue to employ them until Closing, provided that:  (a) from the date of this Agreement through
the Closing, the Company shall pay and provide to each such employee the
compensation and benefits provided by the Company to such employee as of the
date of this Agreement and (b) on or prior to March 1, 2007, and subject to any
customary conditions of Buyer for employment of management personnel, Buyer
shall provide to each of the Key Employees (with a copy to the Company) a
written offer of continued employment by the Company (each, a “Continued Offer of Employment”) that will include an annual
base salary no less than the annual base salary paid to such employee by the
Company on the day prior to commencement of the Company Case, such employment
to become effective upon consummation of the Closing.

4.9           State Property Taxes. 
If, following the consummation of the Closing, the Company’s position
with 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 Company
had paid such taxes consistent with Schedule 1.1(d), then Buyer shall
assume the defense of such challenge, and if such challenge is

 30
 

successful, then Buyer shall pay any
additional amounts finally adjudicated to be owed to the Challenger with
respect to such post Company Petition Date taxes.

4.10         Cure Amounts.  Notwithstanding any other provisions of this
Agreement to the contrary, upon receipt by the Company of a written notice from
Buyer with respect to the following matters, (a) the Company shall be permitted
to 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 consummation
of the Closing, Schedule 1.1(d) shall be automatically and without any
further action be amended to include such Cure Amounts which shall not exceed
$4.5 million.  Any Cure Amount proposed
by the Company to be paid in connection with the schedule referred to in
Section 1.113 of the Plan shall require Buyer’s prior written approval.

ARTICLE V

CONDITIONS TO THE
OBLIGATIONS

OF BUYER TO EFFECT THE CLOSING

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

5.1           Representations and Warranties;
Agreements; Covenants.  Each of the
representations 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 to
materiality or by reference to Material Adverse Effect or another similar
materiality qualification shall be true and correct as of the date of this
Agreement and as of the Closing, as if made at and as of such time (except to
the extent expressly made as of an earlier date, in which case as of such
date), and such representations and warranties of the Company that are not so
qualified shall be true and correct in all material respects as of the date of
this Agreement and as of the Closing, as if made at and as of such time (except
to the extent expressly made as of an earlier date, in which case as of such
date).  All the other representations and
warranties of the Company contained in this Agreement shall be true and correct
in all respects as of the date of this Agreement and as of the Closing, as if
made at and as of such time (except to the extent expressly made as of an
earlier date, in which case as of such date), except where the failure of such
representations and warranties to be so true and correct (without giving effect
to any limitation as to “materiality” or “Material Adverse Effect” or another
similar materiality qualification set forth therein) does not have, and would
not reasonably be expected to have a Material Adverse Effect.  Each of the obligations of the Company
required by this Agreement to be performed by it at or prior to the Closing
shall have been duly performed and complied with by it in all material respects
as of the Closing.  At the Closing, Buyer
shall have received a certificate, dated the Closing Date and duly executed by
the chief executive officer and the chief financial officer of the Company on
behalf of the Company, to the effect that the conditions set forth in the two
preceding sentences have been satisfied.

5.2           HSR. 
All filings required to be made under the HSR Act in connection with the
transactions contemplated hereby shall have been made and all applicable
waiting periods with

 31
 

respect to each such filing, including any
extensions thereof, shall have expired or been terminated.

5.3           DOT and FAA; Authorizations; Permits;
Consents.  (a) All approvals and
authorizations required to be obtained from the DOT and FAA in connection with
the 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 Government
Authority in connection with the transactions contemplated hereby shall have
been obtained, (c) all Permits required by the Company to operate its business
in the manner operated prior to the Closing shall be in full force and effect
and (d) all consents and approvals required to be obtained in connection with
the transactions contemplated hereby under any licenses and Contracts shall
have been obtained.

5.4           Injunction; Litigation; Legislation.  (a) No party hereto or any of their
Affiliates shall be subject to any order or injunction (whether preliminary or
permanent) restraining or prohibiting the consummation of the transactions
contemplated hereby or by the other Transaction Documents, (b) no Claim
shall have been instituted before any arbitrator, court or other Government Authority
to restrain or prohibit, or to obtain damages in respect of, the consummation
of the transactions contemplated hereby or by the other Transaction Documents,
(c) there shall not be any pending or threatened Claim by any Person
relating to the Company or the transactions contemplated hereby which could
reasonably be expected to limit or materially adversely affect Buyer’s ability
effectively to exercise full rights of ownership of the New Shares or to
operate the business of the Company and (d) no action shall have been
taken, or no statute, rule, regulation or order shall have been promulgated or
enacted by any Government Authority, which would prevent or make illegal the
consummation of the transactions contemplated hereby.

5.5           Key Employees.  Each Key Employee shall, to the extent that
he or she received a Continued Offer of Employment, have accepted his or her
Continued Offer of Employment and shall not have revoked or terminated such
acceptance or his or her employment with the Company.

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

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

5.8           Parent.  Parent shall have irrevocably (a) consented
to the transactions contemplated by this Agreement, (b) voted in favor of the
Plan and (c) withdrawn any of its claims against Buyer and/or its Affiliates
under the Buyer Case.

 32
 

ARTICLE VI

CONDITIONS TO THE OBLIGATIONS OF THE

COMPANY TO EFFECT THE CLOSING

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

6.1           Representations and Warranties;
Agreements; Covenants.  Each of the
representations and warranties of Buyer contained in this Agreement shall be
true and correct in all material respects as of the date of this Agreement and
as of the Closing, as if made at and as of such time (except to the extent
expressly made as of an earlier date, in which case as of such date).  Each of the obligations of Buyer required by
this Agreement to be performed by it at or prior to the Closing shall have been
duly performed and complied with by it in all material respects as of the
Closing.  At the Closing, the Company
shall have received a certificate, dated the Closing Date and duly executed by
an authorized officer of Buyer on behalf of Buyer, to the effect that the
conditions 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 HSR
Act in connection with the transactions contemplated hereby shall have been
made 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 to
be obtained from the DOT and FAA in connection with the transactions
contemplated hereby shall have been obtained.

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

6.4           Bankruptcy.  Each of the Company Confirmation Order and
the Buyer Approval Order shall have been entered by the Company Bankruptcy
Court and the Buyer Bankruptcy Court, respectively, shall be a Final Order and
shall be in full force and effect, and the Plan shall be effective in
accordance with its terms.  All
conditions precedent to consummation of the Plan shall have been satisfied in
all 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 the
documents listed in

Section 1.3(b).

ARTICLE VII

TERMINATION

7.1           Termination.

(a)           This Agreement may be terminated at any time
prior to the Closing:

 33
 

(i)            by
mutual consent of Buyer and the Company;

(ii)           by
Buyer or the Company, if the Closing shall not have taken place on or prior to
April 30, 2007 (the “Termination Date”);
provided, however, that the right to terminate this Agreement
under this Section 7.1(a)(ii) shall not be available to a party if such party’s
failure to perform any covenant or obligation under this Agreement or breach of
a representation or warranty contained in this Agreement has been the cause of
or 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 made
with or obtained from any Government Authority in connection with the
transactions contemplated hereby shall not have been obtained by the
Termination Date and all other conditions in Article V have been satisfied,
waived or are capable of being satisfied, then Buyer shall have the right, in
its sole discretion, to extend the Termination Date to May 30, 2007;

(iii)          by
Buyer or the Company if any court of competent jurisdiction shall have issued
an order, decree or ruling or taken any other action restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement or any
other Transaction Document, and such order, decree, ruling or other action
shall have become final and nonappealable;

(iv)          by
Buyer, if there has been any violation or breach by the Company of any
representation, warranty, covenant or obligation of or by the Company contained
in this Agreement that has rendered the satisfaction of any condition to the
obligations of Buyer impossible and such violation or breach has not been
waived by Buyer;

(v)           by
the Company, if there has been a violation or breach by Buyer of any
representation, warranty, covenant or obligation of or by Buyer contained in
this Agreement that has rendered the satisfaction of any condition to the
obligations of the Company impossible and such violation or breach has not been
waived by the Company;

(vi)          by
Buyer if (A) the Plan has not been filed by the Company with the Company
Bankruptcy Court on or prior to January 22, 2007 or (B) the Disclosure
Statement has not been filed by the Company with the Company Bankruptcy Court
on or prior to January 23, 2007;

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

(viii)        by
the Company, if the Board of Directors of the Company shall have approved or
recommended, or the Company shall have executed or entered into a definitive
agreement with respect to, a Superior Proposal in compliance with Section
4.7(a)(ii); provided, however, that such termination under this Section
7.1(a)(viii) shall not be effective until the Company has made the payment
required by Section 7.2(b).

 34
 

(b)           If Buyer or the Company shall terminate this
Agreement pursuant to the provisions hereof, such termination shall be effected
by notice to the other party specifying the provision hereof pursuant to which
such termination is made.

7.2           Effect of Termination.

(a)           In the event of the termination and
abandonment hereof prior to the Closing pursuant to the provisions of this
Article VII, this Agreement shall become void and have no effect, and, except
as provided in Section 7.2(c), each party shall pay all of its own expenses
incurred in connection herewith, without any liability on the part of any party
or its directors, officers or shareholders; provided, however,
that if this Agreement is terminated and abandoned because either party has
defaulted under or breached this Agreement, other than due to a non-willful
breach of any representation or warranty by the Company or Buyer, as
applicable, then the party so electing to terminate this Agreement shall be
entitled to pursue, exercise and enforce any and all other remedies, rights,
powers and privileges available to it at law or in equity against the other
party with respect to such breach or default.

(b)           If the Company terminates this Agreement
pursuant 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 by
the wire transfer of immediately available funds to an account that Buyer
designates not later than the date of such termination.

(c)           The Company acknowledges that the agreements
contained in Section 7.2(b) are an integral part of the transactions
contemplated hereby and that, without these agreements, Buyer would not enter
into this Agreement.  Accordingly, if the
Company fails to pay the amount payable under Section 7.2(b), then the Company
shall pay to Buyer all costs and expenses (including reasonable attorneys’ fees
and expenses) incurred by Buyer and its Affiliates in connection with the
collection of such overdue amounts and the enforcement by Buyer of its rights
under Section 7.2(b), together with interest on such overdue amounts at a rate
per 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 was
required to be made.

ARTICLE VIII

MISCELLANEOUS

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

 35
 

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

8.3           Certain Interpretative Matters.  The captions of Articles and Sections of this
Agreement are for convenience only and shall not control or affect the meaning
or construction of any of the provisions of this Agreement.  As used herein, (a) words in the
singular shall be held to include the plural and vice versa and words of one
gender shall be held to include the other gender as the context requires,
(b) the terms “hereof,” “herein,” “hereby,” and “herewith” and words of
similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole (including all of the Schedules and Exhibits) and not to
any 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 “without
limitation”.  The parties intend that
each representation, warranty and covenant herein shall have independent
significance.  If any party has breached
any representation, warranty or covenant contained herein, the fact that there
exists another representation, warranty or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
party has not breached shall not detract from or mitigate the fact that the
party is in breach of the first representation, warranty or covenant, as the
case may be.

8.4           Notices.  All notices or other communications required
or permitted hereunder shall be given in writing and given by certified or
registered mail, return receipt requested, nationally recognized overnight
delivery service, such as Federal Express, facsimile or e-mail (or like
transmission) with confirmation of transmission by the transmitting equipment
or personal delivery against receipt to the party to whom it is given, in each
case, at such party’s address, facsimile number or e-mail address set
forth below or such other address, facsimile number or e-mail address as
such party may hereafter specify by notice to the other parties hereto given in
accordance herewith.  Any such notice or
other communication shall be deemed to have been given as of the date so
personally delivered or transmitted by facsimile (or, if delivered or
transmitted after normal business hours, on the next Business Day) or e-mail or
like transmission, on the next Business Day when sent by overnight delivery
services or five days after the date so mailed if by certified or registered
mail:

If to the Company:

Mesaba Aviation, Inc.

1000 Blue Gentian Road

Suite 200

Eagan, MN 55121

Fax No.:  (651) 367-5360

E-mail Address:  john.spanjers@mesaba.com

Attention:  John G. Spanjers, President
and Chief Operating Officer

 36
 

with copies to each of:

Ravich Meyer Kirkman McGrath & Nauman, P.A.

4545 IDS Center, 80 So. 8th Street

Minneapolis, MN 55402

Fax No.:  (612) 332-8302

E-mail Address:  mlmeyer@ravichmeyer.com

Attention:  Michael L. Meyer

Official Committee of
Unsecured Creditors of Mesaba Aviation, Inc.

c/o BAE Systems Regional Aircraft

13850 McLearen Road

Herndon, VA 20171

E-mail Address: hamish.davidson@baesystems.com

Attention:  Hamish Davidson

Squire, Sanders & Dempsey L.L.P. 

Two Renaissance Square

40 North Central Avenue, Suite 2700

Phoenix, Arizona 85004

Fax No.: (602) 253-8129

E-mail Address:  chansen@ssd.com

Attention:  Craig D. Hansen

Haynes and Boone, LLP

1221 McKinney Street, Suite 2100

Houston, Texas 77010

Fax (713) 236 5408

E-Mail address: kattnerk@haynesboone.com

Attention:  Kenric D. Kattner

If to Buyer:

Northwest Airlines, Inc.

2700 Lone Oak Parkway

Eagan, MN 55121

Fax No.:  (612) 726-3416

E-mail Address:  dave.davis@nwa.com

Attention: David Davis, Senior Vice President – Finance

with copies to each of:

Northwest Airlines, Inc.

2700 Lone Oak Parkway

Eagan, MN 55121

 37
 

Fax No.:  (612) 726-7123

E-mail Address:  michael.miller@nwa.com

Attention:  Michael L. Miller, Vice
President – Law and Secretary

Hughes Hubbard & Reed
LLP

One Battery Park Plaza

New York, NY 10004

Fax No.:  (212) 422-4726

E-mail Address: 
lefkowit@hugheshubbard.com

Attention:  Kenneth A. Lefkowitz

8.5           Assignment.  This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns; provided, however,
that neither this Agreement nor any of the rights, interests or obligations
hereunder may be assigned by any of the parties hereto without the prior
written consent of the other party (except that Buyer may assign, without the
consent of the Company, (a) all of its rights and obligations under this
Agreement and any other Transaction Document to any Affiliate of Buyer, any of
whom may enforce its rights and remedies in connection with any such
assignment, including the right to acquire the New Shares, it being agreed that
no such assignment shall relieve Buyer of its obligations hereunder and (b) all
of its rights and obligations under Section 1.7 to Parent).  Any purported assignment or delegation in
violation of this Agreement shall be null and void ab initio.

8.6           Entire Agreement.  This Agreement and the other Transaction
Documents (including the Schedules and Exhibits hereto and thereto) embodies
the entire agreement and understanding of the parties with respect to the
transactions contemplated hereby and merges in, supersedes and cancels all
prior written or oral commitments, arrangements or understandings with respect
thereto, including the Summary of Terms, dated December 20, 2006 between the
Company and Buyer.  There are no
restrictions, agreements, promises, warranties, covenants or undertakings with
respect to the transactions contemplated hereby other than those expressly set
forth in this Agreement and the other Transaction Documents.

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

 38
 

8.8           Counterparts.  This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
each of which shall be deemed an original, and will become effective when one or
more counterparts have been signed by a party and delivered to the other
party.  Copies of executed counterparts
transmitted by telecopy, telefax or other electronic transmission service shall
be 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 LAWS
OF THE STATE OF MINNESOTA THAT APPLY TO CONTRACTS MADE AND PERFORMED ENTIRELY
IN SUCH STATE.

8.10         Severability.  To the fullest extent that they may
effectively do so under applicable Law, the parties hereto hereby waive any
provision of Law which renders any provision of this Agreement invalid, illegal
or unenforceable in any respect.  Such
parties further agree that any provision of this Agreement which,
notwithstanding the preceding sentence, is rendered or held invalid, illegal or
unenforceable in any respect in any jurisdiction shall be ineffective, but such
ineffectiveness shall be limited as follows: 
(a) if such provision is rendered or held invalid, illegal or
unenforceable in such jurisdiction only as to a particular Person or Persons or
under any particular circumstance or circumstances, such provision shall be
ineffective, but only in such jurisdiction and only with respect to such
particular Person or Persons or under such particular circumstance or
circumstances, as the case may be; (b) without limitation of clause (a), such
provision shall in any event be ineffective only as to such jurisdiction and
only to the extent of such invalidity, illegality or unenforceability, and such
invalidity, illegality or unenforceability in such jurisdiction shall not
render invalid, illegal or unenforceable such provision in any other
jurisdiction; and (c) without limitation of clause (a) or (b), such
ineffectiveness shall not render invalid, illegal or unenforceable this
Agreement or any of the remaining provisions hereof.

8.11         Submission to Jurisdiction; Waivers.  Each party to this Agreement hereby
irrevocably and unconditionally:

(a)           (i) agrees that any suit, action or
proceeding instituted against it by any other party with respect to this
Agreement or any other Transaction Document may be instituted, and that any
suit, action or proceeding by it against any other party with respect to this
Agreement or any other Transaction Document shall be instituted, only in any of
the following: (A) the Company Bankruptcy Court, so long as the Company Case
remains open, (B) the Buyer Bankruptcy Court, so long as the Buyer Case remains
open and (C) after the completion of the Company Case or the Buyer Case, the
state courts of Minnesota (and appellate courts from any of the foregoing) as
the party instituting such suit, action or proceeding may in its sole
discretion elect, except that any matter with respect to the Plan or its
implementation must be instituted in the Company Bankruptcy Court, (ii)
consents and submits, for itself and its property, to the jurisdiction of such
courts for the purpose of any such suit, action or proceeding instituted
against it by the other and (iii) agrees that a final judgment in any such
suit, action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by Law;

 39
 

(b)           agrees that service of all writs, process
and summonses in any suit, action or proceeding pursuant to Section 8.11(a) may
be 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 addresses
for notices pursuant to Section 8.4 hereof (with copies to such other Persons
as specified therein); provided, however, that nothing contained
in this Section 8.11 shall affect the right of the Company or Buyer or, as the
case may be, to serve process in any other manner permitted by Law;

(c)           (i) waives any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any other Transaction Document brought
in any court specified in Section 8.11(a), (ii) waives any claim that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum and (iii) agrees not to plead or claim either of the
foregoing;

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

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

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

8.13         No Presumption.  With regard to each and every term and
condition of this Agreement and the other Transaction Documents, the parties
hereto 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 required
to interpret or construe any such term or condition or any agreement or
instrument subject hereto, no consideration shall be given to the issue of
which party hereto actually prepared, drafted or requested any term or
condition of this Agreement or any agreement or instrument subject hereto.

8.14         No Third Party Beneficiary.  This Agreement is for the sole benefit of the
parties hereto and their respective successors and permitted assigns and
nothing herein, express or implied, is intended to or shall confer upon any
other Person any legal or equitable right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.

 40
 

8.15         Representations.

(a)           Notwithstanding anything contained in this
Agreement to the contrary, Buyer acknowledges and agrees that the Company is
not 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 its
Representatives has made any representation or warranty, express or implied, as
to the accuracy or completeness of any information regarding the Company, its
business or the transactions contemplated by this Agreement provided by the
Company or its Representatives to Buyer or its Representatives, and none of the
Company nor any of its Representatives will have or be subject to any liability
to Buyer or its Representatives resulting from the distribution to Buyer or its
Representatives, or Buyer’s use, of any such information, including any
confidential memoranda distributed on behalf of the Company relating to its
business or other publication or information provided to Buyer or its
Representatives, or any other document or information in any form provided by
the Company or its Representatives to Buyer or its Representatives in
connection with the sale of the New Shares and the transactions contemplated
hereby.

(b)           Notwithstanding anything contained in this
Agreement to the contrary, the Company acknowledges and agrees that Buyer is
not making any representations or warranties whatsoever, express or implied,
beyond those expressly given by Buyer in this Agreement.  Except as expressly set forth in this
Agreement, the Company further acknowledges and agrees that neither Buyer nor
any of its Representatives has made any representation or warranty, express or
implied, as to the accuracy or completeness of any information regarding Buyer,
its business or the transactions contemplated by this Agreement provided by
Buyer or its Representatives to the Company or its Representatives, and none of
Buyer nor any of its Representatives will have or be subject to any liability
to the Company or its Representatives resulting from the distribution to the
Company 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 its
Representatives to the Company or its Representatives in connection with the
transactions contemplated hereby.

[The next page is the
signature page]

 41

The parties hereto
have 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

  
					

 

 S-1

EXHIBIT A

CERTAIN DEFINED
TERMS

1.             For
purposes of the Agreement to which this Exhibit A is attached, the following
terms shall have the respective meanings specified below.

“Affiliate” means, with respect to
any Person, any other Person that directly, or through one or more
intermediaries, controls or is controlled by or is under common control with
such first Person.

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

“Associate” means, with respect to
any Person:  (a) any corporation,
partnership, joint venture or other entity of which such Person is an officer
or 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 profits
interest; or (ii) the combined voting power of interests ordinarily entitled
to vote for management or otherwise; and (b) any trust or other estate in
which such Person has a substantial beneficial interest or as to which such
Person serves as trustee or in a similar fiduciary capacity.

“Assumed Contract” means each of the
Contracts set forth on Schedule A-1, as such schedule may be amended
pursuant to this Agreement.

“Assumed Liabilities”
means (1) trade payables and accrued operating expenses, but only including
amounts owed for goods delivered or services rendered to the Company after the
Company Petition Date in the Ordinary Course and liabilities for Committed
Capital Projects to the extent set forth on Schedule A-2 but only to the
extent related to Capital Project Expenditures not yet incurred and in no event
exceeding 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 Schedule
A-2 and do not exceed the applicable amounts set forth with respect to each
such category on Schedule A-2, it being understood and agreed that in no
event shall such trade payable, accrued operating expense or Committed Capital
Projects include any amounts owed for goods or services contracted for prior to
the Company Petition Date, (2) accrued payroll for wages and salaries and
accrued employee benefits specified on Schedule A-3 of employees of the
Company, in each case, earned but not yet paid after the Company Petition Date
and since the Company’s last regular payday, the present estimate of the amount
of which for a full pay period and, if applicable, any stub period, is set
forth on Schedule A-3 (provided that Assumed Liabilities shall not
include any amount in excess of the pro-rata portion of such present estimate
from the Company’s last

 A-1
 

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

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

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

“Cap” means $10 million.

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

“Cobra” means Section
4980B of the Code and part 6 of subtitle B of Title I of ERISA.

“Company Agreements” means all
Contracts to which the Company is a party or by which the Company or any of its
property may be bound or affected.

“Company Assets” means all
of the assets, properties, privileges, claims and rights owned, used or held
for 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, wherever
located, whether or not any of such assets, properties, privileges, claims and
rights have any value for accounting purposes or are carried or reflected on or
specifically referred to in any financial statements, including all of the
following assets, properties, privileges, claims and rights owned, used or held
for use by the Company (except to the extent, if any, the following is an
Excluded Asset): (1) all Cash; (2) all billed and unbilled accounts receivable
and all notes receivable, prepaid expenses, deposits, credits, deferred
charges, advance payments, security deposits and other similar assets; (3) all
tangible assets, including property, plant, Aircraft, cars, trucks and other
transportation equipment, parts inventory, other flight equipment, ground
equipment, tools and other maintenance equipment, machinery, furniture, tenant
improvements and office equipment, furnishings and fixtures, machinery and
equipment under order or construction; (4) all Intellectual Property and other
intangible 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 evidencing
Intellectual Property, advertising and promotional materials, studies, reports,
sales and purchase correspondence, books of account and records relating to the
employees, photographs, quality control records and procedures, equipment
maintenance records, manuals and warranty information, in each case, whether in
hard copy, electronic or magnetic format; (8) all rights or

 A-2
 

choses in action arising out of occurrences before or
after the Closing, including Third Party warranties and guarantees and all
related claims, credits, rights of recovery and set-off and other similar
contractual rights, but excluding any claims that the Company may have against
Parent; and (9) all rights to insurance and condemnation proceeds relating to
any 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 any
and all (i) Shares, (ii) securities, options, warrants, rights, calls,
subscriptions, agreements, commitments or understandings of any nature
whatsoever, fixed or contingent, that directly or indirectly (A) call for the
issuance, redemption, sale, pledge or other disposition of any shares of
capital stock of the Company or any securities convertible into, or other
rights to acquire, any shares of capital stock of the Company, (B) obligate the
Company to grant, offer or enter into any of the foregoing or (C) relate to the
voting or control of such capital stock, securities or rights, and (iii) “phantom
stock,” stock appreciation rights or other similar rights the value of which is
related to or based upon the price or value of any class or series of capital
stock of the Company.

“Confidentiality Agreement”
means the Confidentiality Agreement, dated as November 10, 2006, between Buyer
and the Company.

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

“Copyrights”means all copyrights and registrations
and applications therefor and all other rights corresponding thereto, and mask
works and registrations and applications therefor.

“Cure Amounts” means the monetary
amounts, as determined by the Company Bankruptcy Court, if any, necessary to
cure all defaults, if any, and to pay all actual or pecuniary losses that have
resulted from such defaults under the Assumed Contracts as and to the extent
required under Section 365(b) of the Bankruptcy Code.

“Domain Names” means all
Internet addresses and domain names.

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

“Environmental Laws” means all Laws
relating to (a) emissions, discharges, releases or threatened releases of any
Hazardous 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 injury
or 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 on
real

 A-3
 

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

“Excluded Assets” means (1) the
Allowed 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 arising
prior to the Company Petition Date, relating to valid, enforceable and
unobjectionable claims of creditors arising prior to the Company Petition Date
and timely filed in the Company Case that are, in each case, set forth on Schedule
A-5, in each case, solely to the extent of the amount of such creditor’s
claim and to the extent approved by Buyer in writing (it being understood and
agreed that if any such creditor’s claim is determined to be less than the
amount set forth with respect thereto on Schedule A-5, such shortfall
shall be deemed a Company Asset and shall promptly following such determination
be transferred to the Reorganized Company), (5) the amounts, if any payable by
Buyer 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 Transaction
Document.

“Excluded Liabilities”
means all Liabilities of the Company (other than the Assumed Liabilities),
including (a) any Liability relating to an Assumed Contract that (i) is
required to have been discharged on or prior to the Closing, including any Cure
Amounts, or (ii) relates or arises out of a breach or default by the Company on
or prior to the Closing (including any event occurring at or prior to the
Closing that with the lapse of time or the giving of notice, or both, would
become a breach or default), (b) any Liability relating to a Rejected Contract,
(c) any Liability for refunds, (d) any Liability for Taxes, including any joint
and several legal Liability and any Liability under any tax sharing agreement
as a result of being included in a consolidated, combined or unitary group, but
excluding, solely to the extent provided under Section 4.9, any Liabilities for
post Company Petition Date state property taxes, and except as specifically set
forth on Schedule 1.1(d), (e) except to the extent expressly assumed
pursuant to clauses (2) and (3) of the definition of Assumed Liabilities, any
Liability arising (whether arising before or after the Closing) under or with
respect to any employee benefit plan or any other compensation or employee
benefit plan, policy or arrangement maintained, contributed to, or entered into
at any time by, Company or with respect to the employment of any employee,
agent or independent contractor by the Company, including any Liability arising
under or with respect to workers compensation, unemployment insurance premiums
or any claims arising under any federal, state or local tax withholding,
employment, labor or discrimination laws, (f) any Liability to the extent the
existence of which constitutes a breach of any covenant, representation or
warranty of the Company contained in or made pursuant to this Agreement
(provided that Buyer acknowledges and agrees that it shall not assert a claim
after the consummation of the Closing against the Company Bankruptcy Estate for
any such Liability), (g) unless expressly included in Assumed Liabilities, any
Liability based upon or with respect to the operation of the Company or its
business, or the operation or use of the Company’s assets, in each case, prior
to the Closing arising by operation of law under any common law or statutory
doctrine (including successor liability or de facto merger) and any other
Liability arising out of or relating to events or conditions occurring at or
prior to the Closing, (h) any Liability based upon, arising under or with
respect to the Excluded Assets, whether before, at or after the Closing, (i)
any severance Liability with respect to any pre-Closing periods to employees of
the Company and (j) any Liabilities of the Company under this Agreement or any
other Transaction Document.

 A-4
 

“Final Order” means an
order or judgment of the Company Bankruptcy Court or the Buyer Bankruptcy
Court, as applicable, or other court of competent jurisdiction with respect to
the subject matter, (i) which has not been reversed, stayed, modified, amended,
enjoined, set aside, annulled or suspended, (ii) with respect to which no
request for a stay, motion or application for reconsideration or rehearing,
notice of appeal or certiorari is filed within the deadline provided by
applicable statute or regulation or as to which any appeal that has been taken
or any petition for certiorari that has been or may be filed has been resolved
by the highest court to which the order or judgment was appealed or from which
certiorari was sought and (iii) as to which the deadlines for filing such
request, motion, petition application, appeal or notice referred to in clause
(ii) above have expired.

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

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

“Hazardous Materials” means all
pollutants, contaminants, chemicals, wastes, and any other carcinogenic,
ignitable, corrosive, reactive, flammable, explosive, toxic radioactive or
otherwise hazardous substances or materials (whether solids, liquids or gases)
that are regulated by or the subject of Environmental Laws, including
petroleum, petroleum products, crude oil or any fraction thereof, urea
formaldehyde, 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 an
agreement granting to the Company any rights in Intellectual Property owned by
a third party that is used by the Company in the conduct of its business, as
currently conducted, excluding any “shrink-wrap” or “click-wrap” license
agreements relating to Software desktop applications.

“Insider” means Parent, any director
or officer of the Company or Parent, and any Affiliate, Associate or Relative
of any of the foregoing Persons.

“Intellectual Property” means all
intellectual property rights arising under the laws of any jurisdiction in
which the Company currently is conducting business with respect to, arising
from 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 a
similar nature.

“Key Employees” means the key employees
of the Company to be identified by Buyer to the Company in writing on or prior
to March 1, 2007.

“Knowledge” means the actual
knowledge of each of the officers of the Company.

 A-5
 

“Law” or “Laws” means all statutes, codes, ordinances, decrees, rules,
regulations, standards, municipal by-laws, judicial or arbitral or
administrative or ministerial or departmental or regulatory judgments, orders,
injunctions, decisions, rulings or awards, policies or other requirement of any
Government Authority, or any provisions or interpretations of the foregoing,
including general principles of common and civil law and equity, binding on or
affecting 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, loss
and 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 or
several, due or to become due, vested or unvested, or determined or
determinable.

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

“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 the
foregoing, and all goodwill associated therewith throughout the world.

“Material Adverse Effect” means any
circumstance, state of facts or matters, change, event, occurrence, action or
omission that, individually or in the aggregate, has or could have or result in
a 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 this
Agreement or any other Transaction Document; provided, however, that Material
Adverse Effect shall not be deemed to include effects to the extent resulting
from (1) changes, after the date of this Agreement, in laws, rules or
regulations of general applicability or interpretations thereof by courts or
Government Authorities, (2) changes, after the date of this Agreement, in
general or regional economic or market conditions affecting airlines generally
except to the extent that any such changes in general or regional economic or
market 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 action
taken by or omitted by a Person:

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

(b)           such
action 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 Person
or group of Persons exercising similar authority) and is not required to be
specifically authorized by the parent company (if any) of such Person;

 A-6
 

(c)           such
action or omission is not required to be specifically authorized by a
bankruptcy court;

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

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

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

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

“Permitted Liens”
means all:

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

(b)           the title
and other interests of a lessor under a capital or operating lease or of a
licensor under a license or royalty agreement;

(c)           such
minor imperfections in title as do not detract in any material respect from the
value or utility of the subject property in the operation of the business that
uses such property.

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

“Real Properties” means all real
properties 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, and
easements, rights of way, water lines, rights of use, licenses, hereditaments,
tenements, privileges and other appurtenances thereto (such as appurtenant
rights in and to public streets).

“Real Property Leases” means all
leases, subleases, licenses, right to use or occupy and other occupancy
agreements, and all amendments, modification or supplements thereto or renewals
thereof, relating to Real Properties and to which the Company is a party or
pursuant to which the Company uses or occupies any Real Property.

 A-7
 

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

“Rejected Contract” means each of
the Contracts set forth on Schedule A-4, as such schedule may be amended
pursuant to this Agreement.

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

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

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

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

“Superior Proposal” means
an unsolicited, bona fide, written, fully-financed proposal made by any Person
other than Buyer or any of its Subsidiaries to acquire all of the capital stock
of the Company (or any successor thereto) or to acquire all or substantially
all of the assets of the Company on terms and conditions that the Board of
Directors of the Company determines in good faith, after consultation with a
nationally recognized financial advisor and taking into account all of the
terms and conditions of such proposal (including all legal, financial,
regulatory, bankruptcy and other aspects of such proposal, the form of
consideration and the risks associated with the form of consideration, any
expense reimbursement provisions, any termination fees and the conditions
associated with such proposal), is more favorable, by more than $5 million, to
the Company’s creditors and Parent from a financial point of view than the
Reference 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 or
withholding taxes, or any other tax, governmental fee or other like assessment
or charge of any kind whatsoever, imposed by any Government Authority,
including any interest and penalties (civil or criminal) on or additions to any
such taxes, whether disputed or not, and shall include any transferee liability
in 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,

 A-8
 

including, where permitted or required, combined or
consolidated returns for a group of entities and including any amendment
thereof and any schedule or attachment thereto.

“Third Party” means any Person other
than the Company, Buyer and any Subsidiary of Buyer.

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

“Transaction Document” means the
Agreement and the other agreements, instruments, certificates and documents
contemplated hereby and thereby, including each exhibit and schedule hereto and
thereto.

“UCC” means the Uniform Commercial
Code, as amended, and any successor thereto.

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

2.             The
following 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)

  

 

 A-9
 

 

	
  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

  

 

 A-10

EXHIBIT B

FORM OF PLAN

 B-1

EXHIBIT C

FORM OF BUYER APPROVAL ORDER

UNITED
STATES BANKRUPTCY COURT

SOUTHERN
DISTRICT OF NEW YORK

	
  

  	
   

  	
  x

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  In re:

  	
   

  	
  x

  	
   

  	
  Chapter 11 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NORTHWEST AIRLINES CORPORATION, et  al.,

  	
   

  	
   

  	
   

  	
  Case No. 05-17930 (ALG)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Debtors.

  	
   

  	
   

  	
   

  	
  Jointly Administered

  
						

 

ORDER
PURSUANT TO SECTION 363

OF
THE BANKRUPTCY CODE AND BANKRUPTCY

RULE 9019 APPROVING SETTLEMENT AND COMPROMISE
BETWEEN

NORTHWEST AIRLINES, INC. AND MESABA AVIATION, INC. AND

AUTHORIZING NORTHWEST AIRLINES, INC. TO ENTER INTO STOCK

PURCHASE AND REORGANIZATION AGREEMENT

Upon consideration of the motion (the “Motion”)(1) of
Northwest Airlines, Inc., as debtor and debtor in possession (“Northwest”),
seeking entry of an order pursuant to section 363 of title 11, United States
Code, (the “Bankruptcy Code”) and Rule 9019 of the Federal Rules of Bankruptcy
Procedure (the “Bankruptcy Rules”) approving a settlement and compromise
between Northwest and Mesaba Aviation, Inc. (“Mesaba”) and authorizing
Northwest to enter into and perform the Stock Purchase and Reorganization
Agreement (the “Agreement”); and due notice of the Motion having been provided
as set forth in the affidavit of service filed by Northwest, and no other or
further notice of the Motion need be provided; and the Court having determined
that the relief sought in the Motion is in the best interests of Northwest, its
estate and

(1) Capitalized terms not
defined herein shall have the meaning ascribed to them in the Motion.

 C-1
 

all parties in
interest; and upon the Motion; and all of the proceedings had before the Court;
and after due deliberation and sufficient cause appearing therefor, it is
hereby

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

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

ORDERED that subject to (i) a plan of reorganization
becoming effective in Mesaba’s bankruptcy case that implements the terms of the
Agreement, and (ii) Closing (as defined in the Agreement) of the transactions
contemplated by the Agreement, Mesaba is granted an allowed general unsecured
claim in Northwest’s bankruptcy case in an amount equal to $145 million, plus
interest on such amount from and after the petition date of Northwest’s
bankruptcy case (the “Northwest Petition Date”) to the extent that other
general unsecured creditors of Northwest receive interest from and after the
Northwest Petition Date pursuant to Northwest’s plan of reorganization (the “Mesaba
Allowed Claim”); and it is further

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

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

 C-2
 

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

ORDERED that the requirement under Rule 9013-1(b) of
the Local Bankruptcy Rules for the Southern District of New York for the filing
of a memorandum of law is waived.

	
  Dated:

  	
   

  	
  New York, New York

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
                       ,
  2007

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  UNITED STATES BANKRUPTCY JUDGE

  
					

 

 C-3Exhibit 10.1

LICENSE AGREEMENT

between

IMMUNOGEN, INC.

and

SANOFI-AVENTIS U.S. LLC

October 5, 2006

Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Company’s application requesting confidential
treatment under Rule 24b-2 of the Securities Exchange Act of 1934.

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  LICENSE GRANTS; TECHNOLOGY TRANSFER

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  License Grants

  	
  8

  
	
   

  	
  2.2

  	
  Right to Sublicense

  	
  8

  
	
   

  	
  2.3

  	
  Retained Rights of ImmunoGen

  	
  9

  
	
   

  	
  2.4

  	
  No Other Rights

  	
  9

  
	
   

  	
  2.5

  	
  Technology Transfer; ImmunoGen Activities

  	
  9

  
	
   

  	
  2.6

  	
  Compliance

  	
  10

  
	
   

  	
  2.7

  	
  Manufacture of Licensed Products for Development

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  DEVELOPMENT AND COMMERCIALIZATION OF LICENSED
  PRODUCTS

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Responsibility for Development and Commercialization

  	
  10

  
	
   

  	
  3.2

  	
  Diligence

  	
  10

  
	
   

  	
  3.3

  	
  Reportable Events

  	
  10

  
	
   

  	
  3.4

  	
  Manufacture of Licensed Products for Commercial Sale

  	
  11

  
	
   

  	
  3.5

  	
  Product Recalls

  	
  11

  
	
   

  	
  4.

  	
  PAYMENTS

  	
  11

  
	
   

  	
  4.1

  	
  Upfront Fee

  	
  11

  
	
   

  	
  4.2

  	
  Research License Term Extension Fee

  	
  11

  
	
   

  	
  4.3

  	
  ImmunoGen Activity Payments

  	
  11

  
	
   

  	
  4.4

  	
  Milestone Payments

  	
  11

  
	
   

  	
  4.5

  	
  Payment of Royalties; Royalty Rates; Accounting and
  Records

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  TREATMENT OF CONFIDENTIAL INFORMATION;

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  PUBLICITY

  	
  16

  
	
   

  	
  5.1

  	
  Confidentiality

  	
  16

  
	
   

  	
  5.2

  	
  Publicity

  	
  17

  
	
   

  	
  5.3

  	
  Publications and Presentations

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  FILING, PROSECUTION AND MAINTENANCE OF PATENT RIGHTS

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Patent Filing, Prosecution and Maintenance

  	
  18

  
	
   

  	
  6.2

  	
  Abandonment

  	
  18

  
	
   

  	
  6.3

  	
  Legal Actions

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  TERM AND TERMINATION

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Term

  	
  19

  
	
   

  	
  7.2

  	
  Termination

  	
  20

  
	
   

  	
  7.3

  	
  Consequences of Termination of Agreement

  	
  20

  
	
   

  	
  7.4

  	
  Surviving Provisions

  	
  21

  

 

 i
 

 

	
  8.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Mutual Representations and Warranties

  	
  22

  
	
   

  	
  8.2

  	
  Additional Representations of ImmunoGen

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  INDEMNIFICATION

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  Indemnification of sanofi-aventis by ImmunoGen

  	
  23

  
	
   

  	
  9.2

  	
  Indemnification of ImmunoGen by sanofi-aventis

  	
  23

  
	
   

  	
  9.3

  	
  Conditions to Indemnification

  	
  23

  
	
   

  	
  9.4

  	
  Warranty Disclaimer

  	
  24

  
	
   

  	
  9.5

  	
  Limited Liability

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  MISCELLANEOUS

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.1

  	
  Notices

  	
  24

  
	
   

  	
  10.2

  	
  Governing Law

  	
  25

  
	
   

  	
  10.3

  	
  Binding Effect

  	
  25

  
	
   

  	
  10.4

  	
  Headings

  	
  25

  
	
   

  	
  10.5

  	
  Counterparts

  	
  25

  
	
   

  	
  10.6

  	
  Amendment; Waiver

  	
  25

  
	
   

  	
  10.7

  	
  No Third Party Beneficiaries

  	
  25

  
	
   

  	
  10.8

  	
  Purposes and Scope

  	
  25

  
	
   

  	
  10.9

  	
  Assignment and Successors

  	
  26

  
	
   

  	
  10.10

  	
  Force Majeure

  	
  26

  
	
   

  	
  10.11

  	
  Interpretation

  	
  26

  
	
   

  	
  10.12

  	
  Integration; Severability

  	
  26

  
	
   

  	
  10.13

  	
  Further Assurances

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedules

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule 1

  	
  Licensed Patent Rights

  	
   

  

 

 ii

LICENSE AGREEMENT

This LICENSE AGREEMENT (this “Agreement”) is entered
into as of October 5, 2006, by and between ImmunoGen, Inc., a Massachusetts
corporation having a principal place of business at 128 Sidney Street,
Cambridge, Massachusetts 02139 (“ImmunoGen”), and sanofi-aventis U.S. LLC, a
limited liability company organized and existing under the laws of Delaware
with offices at 1041 Rt.202-206, Bridgewater, NJ 08807 (“sanofi-aventis”).  Each of sanofi-aventis and ImmunoGen is
sometimes referred to individually herein as a “Party” and collectively as the “Parties.”

WHEREAS, ImmunoGen and Aventis Pharmaceuticals,
Inc., sanofi-aventis’ predecessor in interest (“Aventis”), entered into that
certain Collaboration and License Agreement dated as of July 30, 2003 (the “Collaboration
Agreement”) pursuant to which ImmunoGen and Aventis agreed to collaborate in
the identification and validation of targets for use in the discovery of
antibodies and antibody drug conjugates for the prevention, control and/or
treatment in humans of precancerous and/or cancerous conditions; and

WHEREAS, ImmunoGen has developed certain proprietary
technology related to antibody humanization; and

WHEREAS, sanofi-aventis desires to obtain from
ImmunoGen, and ImmunoGen desires to grant to sanofi-aventis, a non-exclusive
license to use such proprietary technology in the development of its
proprietary Antibodies and the commercialization of Licensed Products resulting
therefrom.

NOW, THEREFORE, in consideration of the mutual
covenants contained herein, and for other good and valuable consideration, the
Parties hereto, intending to be legally bound, hereby agree as follows:

1.             DEFINITIONS

Any reference to a defined term not
specifically defined in this Agreement shall have the meaning set forth in the
Collaboration Agreement.  Whenever used
in this Agreement with an initial capital letter, the terms defined in this
Section 1 shall have the meanings specified.

1.1   “Affiliate” means, with respect to any Party, any Person
that, directly or through one or more Affiliates, controls, or is controlled
by, or is under common control with, such Party. For purposes of this definition, “control” means (a) ownership of
more than fifty percent (50%) of the shares of stock entitled to vote for the
election of directors in the case of a corporation, or more than fifty percent
(50%) of the equity interests in the case of any other type of legal entity,
(b) status as a general partner in any partnership, or (c) any other
arrangement whereby a Person controls or has the right to control the board of
directors of a corporation or equivalent governing body of an entity other than
a corporation.

1.2   “Annual
Net Sales” means the aggregate Net Sales during a particular
Calendar Year.

1.3   “Antibody” means a polyclonal or monoclonal antibody,
whether multiple or single chain, recombinant or naturally occurring, whole or
fragment, and any variants, derivatives or

constructs thereof, including but not limited
to, antigen binding portions including Fab, Fab’, F(ab’)2, Fv, dAb and CDR
fragments, single chain antibodies (scFv), chimeric antibodies, diabodies and
polypeptides (including any humanized versions thereof) that contain at least a
portion of an immunoglobulin that is sufficient to confer specific antigen
binding to the polypeptide.

1.4   “Applicable
Laws” means Federal, state, local, national and supra-national
laws, statutes, rules and regulations, including any rules, regulations,
guidance, guidelines or requirements of Regulatory Authorities, national
securities exchanges or securities listing organizations, that may be in effect
from time to time during the Term and applicable to a particular activity
hereunder.

1.5   “Calendar
Quarter” means the
period beginning on the Effective Date and ending on the last day of the calendar
quarter in which the Effective Date falls, and thereafter each successive
period of three (3) consecutive calendar months ending on March 31, June 30,
September 30 or December 31.

1.6   “Calendar
Year” means each
successive period of twelve (12) months commencing on January 1 and ending on
December 31.

1.7   “Collaboration Exclusions” means any
research activities directed towards Targets or Antibodies being actively
pursued in the Research Program pursuant to the Collaboration Agreement.

1.8   “Commercialization” or “Commercialize”
means any and all activities directed to the commercialization of a Licensed
Product, including pre-launch and launch activities, marketing, manufacturing
for commercial sale, promoting, detailing, distributing, offering to sell and
selling a Licensed Product, importing a Licensed Product for sale, conducting
additional human clinical trials and interacting with Regulatory Authorities
regarding the foregoing.  When used as a
verb, “Commercializing” means to engage in Commercialization and “Commercialized”
has a corresponding meaning.

1.9   “Commercially Reasonable Efforts” means, with respect
to sanofi-aventis, the efforts at least equal to those normally used by
sanofi-aventis with respect to a product or potential product of similar nature
at a similar stage in its development or product life and of similar market
potential, in view of conditions prevailing at the time, and evaluated taking
into account all relevant factors, including without limitation, the mechanism
of action, efficacy, safety, the anticipated regulatory authority approved
labeling, the competitiveness of alternative products that are in the
marketplace or under development, the patent and other proprietary position of
the product, the likelihood of Regulatory Approval, the profitability of the
product and other technical, scientific, legal, medical, marketing and
competitive factors.

1.10        “Commercialization Regulatory
Approval” means, with
respect to any Licensed Product, the granting of approval by a Regulatory Authority
of (a) an NDA in the United States, or (b) the equivalent of an NDA required by
Applicable Laws in any country or region in the Territory outside of the United
States to sell such Licensed Product for use in the Field in such country or
region.

 2
 

1.11        “Confidential
Information” means (a)
with respect to ImmunoGen, all tangible embodiments of Licensed Technology and
Licensed Patents and (b) with respect to each Party, all information and
Technology disclosed or provided by or on behalf of such Party (the “disclosing
Party”) to the other Party (the “receiving Party”) or to any of the receiving
Party’s employees, consultants, Affiliates or sublicensees; provided, that,
none of the foregoing shall be Confidential Information if: (i) as of the date
of disclosure, it is known to the receiving Party or its Affiliates as
demonstrated by credible contemporaneous written documentation, other than by
virtue of a prior confidential disclosure to such receiving Party; (ii) as of
the date of disclosure it is in the public domain, or it subsequently enters
the public domain through no fault of the receiving Party; (iii) it is obtained
by the receiving Party from a Third Party having a lawful right to make such
disclosure free from any obligation of confidentiality to the disclosing Party;
or (iv) it is independently developed by or for the receiving Party without
reference to or use of any Confidential Information of the disclosing Party as
demonstrated by credible contemporaneous written documentation.  For purposes of clarity, the terms of this
Agreement shall constitute Confidential Information of each Party.

1.12        “Control”
or “Controlled” means
with respect to Technology or Patent Rights, the possession by a Party of the
right to grant a license or sublicense to such Technology or Patent Rights as
provided herein without the payment of additional consideration to, and without
violating the terms of any agreement or arrangement with, any Third Party.

1.13        “Designated Senior Officer” means, with respect to a
Party, the senior officer designated by such Party to have final decision
making authority over disputed matters.

1.14        “Development” or “Develop” means,
with respect to each Licensed Product, all non-clinical and clinical activities
required to obtain Regulatory Approval of such Licensed Product.  For purposes of clarity, these activities
include, without limitation, test method development and stability testing,
regulatory toxicology studies, formulation, process development, manufacturing,
manufacturing scale-up, development-stage manufacturing, quality
assurance/quality control development, statistical analysis and report writing,
Clinical Trial design and operations, preparing and filing Drug Approval
Applications, and all regulatory affairs related to the foregoing.  When used as a verb, “Developing” means to
engage in Development and “Developed” has a corresponding meaning.

1.15        “Discover” or “Discovered” means, with respect
to any Licensed Product (a) the invention, discovery or identification of such
Licensed Product; (b) the identification of the function, utility or mode of
action of such Licensed Product in the Field; or (c) the identification of a
new method of synthesizing such Licensed Product.

1.16        “Drug
Approval Application” means,
with respect to a Licensed Product in a particular country or region, an
application for Commercialization Regulatory Approval for such Licensed Product
in such country or region, including without limitation: (a) an NDA or sNDA;
(b) a counterpart of an NDA or sNDA, including any MAA, in any country or
region in the Territory; and (c) all supplements and amendments to any of the
foregoing.

1.17        “Effective
Date” means the date
first set forth above in the introductory paragraph to this Agreement.

 3
 

1.18        “FDA” means the United States Food and Drug
Administration or any successor agency or authority thereto.

1.19        “FDCA”means the
United States Federal Food, Drug, and Cosmetic Act, as amended.

1.20        “Field” means all human therapeutic and diagnostic
uses of Licensed Products, provided, however, that during the Research Program
Term the Field shall not include the Collaboration Exclusions.

1.21        “First Commercial Sale” means, with respect to a Licensed Product in
any country in the Territory, the first sale, transfer or disposition for value
or for end use or consumption of such Licensed Product in such country;
provided, that, any sale to an Affiliate or Sublicensee will not constitute a
First Commercial Sale unless the Affiliate or Sublicensee is the last entity in
the distribution chain of the Licensed Product.

1.22        “Force
Majeure” means any
occurrence beyond the reasonable control of a Party that (a) prevents or
substantially interferes with the performance by such Party of any of its
obligations hereunder and (b) occurs by reason of any act of God, flood, fire,
explosion, earthquake, strike, lockout, labor dispute, casualty or accident, or
war, revolution, civil commotion, act of terrorism, blockage or embargo, or any
injunction, law, order, proclamation, regulation, ordinance, demand or
requirement of any government or of any subdivision, authority or
representative of any such government.

1.23        “Hatch-Waxman Act” means the Drug Price Competition
and Patent Term Restoration Act of 1984, as amended.

1.24        “IND”
means: (a) an Investigational
New Drug Application (as defined in the FDCA and regulations promulgated
thereunder) or any successor application or procedure required to initiate
clinical testing of a Licensed Product in humans in the United States; (b) a
counterpart of an Investigational New Drug Application that is required in any
other country or region in the Territory before beginning clinical testing of a
Licensed Product in humans in such country or region; and (c) all supplements
and amendments to any of the foregoing.

1.25        “Initiation” means, with respect to any Pivotal Clinical Trial, the
first date that a human subject is dosed in such Pivotal Clinical Trial.

1.26        “Licensed
Patent Rights” means any
of the patents and patent applications described in Schedule 1 attached
hereto, and any divisional, continuation, continuation-in-part (to the extent
that the continuation-in-part is entitled to the priority date of an initial
patent or patent application which is the subject of this Agreement), reissue,
reexamination, confirmation, revalidation, registration, patent of addition,
renewal, extension or substitute thereof, or any patent issuing therefrom or
any supplementary protection certificates related thereto.

1.27        “Licensed Product” means any product (including any
product that incorporates an Antibody) (a) the manufacture, use or sale of
which would, absent the license granted to sanofi-aventis hereunder, infringe
any Valid Claim included in the Licensed Patent Rights, 

 4
 

(b) that is Discovered and/or Developed in
whole or in part through the use of a process which is covered by a Valid Claim
included in the Licensed Patent Rights, or (c) that is not covered by (a) or
(b) but that is Discovered, Developed and/or manufactured as a result of the
use of the Licensed Technology.

1.28        “Licensed
Technology” means any Technology Controlled by ImmunoGen as of
the Effective Dateorthat is Controlled by ImmunoGen at any
time during the Term that is related to any patent or patent application
included in the Licensed Patent Rights and is necessary for sanofi-aventis to
exercise the license granted to it pursuant to Section 2.1.

1.29        “MAA” means any application filed with the relevant
Regulatory Authority seeking Regulatory Approval to market and sell a Licensed
Product outside the United States for a particular indication in the Field.

1.30        “NDA”
means a New Drug
Application, as defined in the FDCA and regulations promulgated thereunder,
or any successor application or procedure required to sell a Licensed
Product in the United States for a particular indication in the Field.

1.32        “Net Sales” means the gross amount invoiced by
sanofi-aventis or its Affiliates or Sublicensees to Third Parties in each
country in the Territory for sales of each Licensed Product in such country during the period in which
royalties are payable hereunder with respect to sales of such Licensed Product in such country, less
the following deductions from such gross amounts absorbed or accrued with
respect to such gross amounts: (a) trade, cash and/or quantity discounts allowed
and taken directly with respect
to such sales, or reflected in the invoiced amount; (b) excise, sales and other
consumption taxes (including VAT on the sale of Licensed Products and excluding
taxes based on income) and custom duties imposed upon and paid directly by
sanofi-aventis with respect to the Licensed Products, to the extent included in
the invoice price; (c) freight, insurance and other transportation charges, to
the extent included in the invoice price; (d) amounts repaid or credited by reason
of returns, rejections, defects or recalls, chargebacks, retroactive price
reductions, refunds and billing errors; and (e) compulsory payments and rebates
directly related to the sale of Licensed Products, accrued, paid or deducted,
pursuant to agreements (including, but not limited to, managed care agreements)
or governmental regulations.

Use of
Licensed Products for promotional or sampling purposes and for use in clinical
trials contemplated under this Agreement shall not be considered in determining
Net Sales.  In the case of any sale of a Licensed Products between or
among sanofi-aventis and its Affiliates or Sublicensees for resale, Net Sales
shall be calculated as above only on the first arm’s length sale thereafter to
a Third Party.

In the event a Licensed Product is sold as a component of a combination
or bundledproduct that
consists of a Licensed Product together with another therapeutically active
product for the same indication (a “Combination Product”), the Net Sales from
the Combination Product, for the purposes of determining royalty payments,
shall be determined by multiplying the Net Sales of the Combination Product (as
defined in the standard Net Sales definition above), during the applicable
royalty reporting period, by the fraction, A/A+B, where A is the average per
unit sale price of the active ingredient contained in Licensed Product when
sold separately in finished 

 5
 

form in the country in which the Combination Product is sold during the
same royalty reporting period in similar volumes and of the same class, purity
and potency and B is the average per unit sale price of the active ingredient
contained in other product(s) included in the Combination Product when sold
separately in finished form in the country during the same royalty reporting
period in similar volumes and of the same class, purity and potency in which
the Combination Product is sold, in each case during the applicable royalty
reporting period or, if sales of the Licensed Product alone did not occur in
such period, then in the most recent royalty reporting period in which arms
length fair market sales of such Licensed Product occurred.  In the event
that such average sale price cannot be determined for the Licensed Product, on
the one hand, and all other product(s) included in the Combination Product, on
the other, Net Sales for the purposes of determining royalty payments shall be
mutually agreed upon by the Parties based on the relative value contributed by
each component, such agreement to be negotiated in good faith.

1.33        “Person” means an
individual, sole proprietorship, partnership, limited partnership, limited
liability partnership, corporation, limited liability company, business
trust, joint stock company, trust, incorporated association, joint venture or
similar entity or organization, including a government or political
subdivision, department or agency of a government.

1.34        “Pivotal Clinical Trial” means, as to a particular
Licensed Product for a particular indication, a controlled and lawful study in
humans of the safety and efficacy of such Licensed Product for such indication,
which is prospectively designed to demonstrate statistically whether such
Licensed Product is safe and effective for use in such indication in a manner
sufficient to file a Drug Approval Application for the indication under
investigation in such study.

1.35        “Regulatory Approval” means, with respect to any country or region
in the Territory, any approval, product and establishment license, registration
or authorization of any Regulatory Authority required for the manufacture, use,
storage, importation, exportation, transport or sale of a Licensed Product for
use in the Field in such country or region.

1.36        “Regulatory Authority” means the FDA or any counterpart of the FDA
outside the United States, or other national, supra-national, regional, state
or local regulatory agency, department, bureau, commission, council or other
governmental entity with authority over the distribution, importation,
exportation, manufacture, production, use, storage, transport, clinical testing
or sale of a Licensed Product.

1.37        “Regulatory
Filings” means,
collectively: (a) all INDs, NDAs, establishment license applications, drug
master files, applications for designation as an “Orphan Product” under the
Orphan Drug Act, for “Fast Track” status under Section 506 of the FDCA (21
U.S.C. § 356) or for a Special Protocol Assessment under Section
505(b)(4)(B) and (C) of the FDCA (21 U.S.C. § 355(b)(4)(B)) or all other
similar filings (including CTNs, MAAs and, counterparts of any of the foregoing
in any country or region in the Territory) as may be required by any Regulatory
Authority for the Development or Commercialization of a Licensed Product in the
Territory; (b) all supplements and amendments to any of the foregoing; and (c)
all data and other information contained in, and correspondence relating to,
any of the foregoing.

 6
 

1.38        “Reportable Event” means any occurrence in a patient or
subject who is administered a Licensed Product to the extent attributable to a [***]
[***] [***] [***].

1.39        “Research
License Term” means the period beginning on the Effective Date
and ending on the third anniversary of the termination or expiration of the Research Program Term, as such
period may be extended pursuant to Section 2.1.2.

1.40        “Research Program Term” means the Research Program Term as defined pursuant to Section 2.1.2 of
the Collaboration Agreement.

1.41        “Resurfaced Antibody” means any Antibody Controlled by
sanofi-aventis that is resurfaced by ImmunoGen using the Licensed Patent Rights and/or Licensed
Technology as part of its conduct of ImmunoGen activities pursuant to Section
2.5.4.

1.42        “Royalty
Term” means, with respect to each Licensed
Product in each country in the Territory, the period beginning on the date of
First Commercial Sale of such Licensed Product in such country and continuing
until the later of (a) the expiration of the last to expire Valid Claim in such
country within the Licensed Patent Rights or (b) [***] ([***]) years from the
date of the First Commercial Sale of such Licensed Product in such country.

1.43        “sNDA”
means a Supplemental
New Drug Application, as defined in the FDCA and applicable regulations
promulgated thereunder.

1.44        “Sublicensee” means any Third Party (other than an
Affiliate) to which sanofi-aventis grants a license or sublicense pursuant to
Section 2.2.

1.45        “Technology” means, collectively, all inventions,
discoveries, improvements, trade secrets and proprietary methods, whether or
not patentable, including without limitation, macromolecular sequences, data,
formulations, processes, techniques, know-how and results (including any
negative results).

1.46        “Territory”
meansall countries of
the world.

1.47        “Third
Party” means any Person
other than sanofi-aventis and ImmunoGen and their respective Affiliates.

1.48        “Valid
Claim” means any claim
of a pending patent application or an issued unexpired patent within the
Licensed Patent Rights that (a) has not been finally cancelled, withdrawn,
abandoned or rejected by any administrative agency or other body of competent
jurisdiction, (b) has not been permanently revoked, held invalid, or declared
unpatentable or unenforceable in a decision of a court or other body of
competent jurisdiction that is unappealable or unappealed within the time
allowed for appeal, (c) has not been rendered unenforceable through disclaimer
or otherwise, and (d) is not lost through an interference proceeding.

 7
 

Additional Definitions.  In addition, each
of the following definitions shall have the respective meanings set forth in
the section of this Agreement indicated below or in the section of the
Collaboration Agreement indicated below:

	
  Definition

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  Agreement

  	
   

  	
  Recitals

  
	
  Claims

  	
   

  	
  9.1

  
	
  Collaboration
  Agreement

  	
   

  	
  Recitals

  
	
  Covered Results

  	
   

  	
  5.3

  
	
  ImmunoGen
  Indemnitees

  	
   

  	
  9.2

  
	
  Indemnified
  Party

  	
   

  	
  9.3

  
	
  Indemnifying
  Party

  	
   

  	
  9.3

  
	
  Infringement

  	
   

  	
  6.3.1(a)

  
	
  Infringement
  Notice

  	
   

  	
  6.3.1(a)

  
	
  Losses

  	
   

  	
  9.1

  
	
  Research License
  Term Extension

  	
   

  	
  2.1.2

  
	
  Research License
  Term Extension Fee

  	
   

  	
  4.2

  
	
  sanofi-aventis
  Indemnitees

  	
   

  	
  9.1

  
	
  Term

  	
   

  	
  7.1

  
	
  Third Party
  Payments

  	
   

  	
  4.5.3

  
	
  Withholding
  Taxes

  	
   

  	
  4.5.7

  

 

2.             LICENSE GRANTS; TECHNOLOGY
TRANSFER

2.1           License Grants.

2.1.1        License to sanofi-aventis.  Subject to the other terms of this
Agreement, ImmunoGen hereby grants to sanofi-aventis and its Affiliates (a) a
non-exclusive, royalty-free, license during the Research License Term, without
right to grant sublicenses, to use Licensed Technology and Licensed Patent
Rights with Antibodies Controlled by sanofi-aventis to Develop Licensed Products
in the Field and in the Territory and (b) a non-exclusive, royalty-bearing
license during the Term, including the right to grant sublicenses as provided
in Section 2.2, under the Licensed Technology and Licensed Patent Rights, to
Develop, have Developed, Commercialize and have Commercialized Licensed
Products in the Field and in the Territory.

2.1.2        Extension
of Research License Term.  Notwithstanding anything
to the contrary in Section 2.1.1, sanofi-aventis shall have the right to
extend the Research License Term for one or more additional periods
of three (3) years each by providing ImmunoGen with written notice in
accordance with Section 4.2 at any time on or before expiration of the
then-current Research License Term (each such extension, a “Research License
Term Extension”).  The Research License
Term Extension Fee shall be paid as set forth in Section 4.2.

2.2           Right to Sublicense. 
Sanofi-aventis and its Affiliates shall have the right to grant
sublicenses under the license granted to it under Section 2.1.1(b)with respect to any Licensed Product to any
Third Party; provided, that: (a) it shall be a condition of any such sublicense
that such Sublicensee agrees to be bound by all terms of this Agreement
applicable to the 

 8
 

Development and Commercialization of Licensed
Products in the Field in the Territory (including, without limitation, Sections
3.2, 3.3 and 3.4); (b) sanofi-aventis shall provide written notice to ImmunoGen
of any such proposed sublicense at least [***] ([***]) days prior to such
execution and provide redacted copies to ImmunoGen of each such sublicense
within [***] ([***]) days of such execution; (c) sanofi-aventis shall be deemed
to have guaranteed that each such Sublicensee will fulfill all of
sanofi-aventis’ obligations under this Agreement applicable to the subject
matter of such sublicense; and (d) sanofi-aventis shall not be relieved of its
obligations pursuant to this Agreement as a result of any such sublicense.

2.3           Retained Rights of ImmunoGen  Subject to the other terms of this Agreement,
ImmunoGen retains the right to use the Licensed Technology and practice the
Licensed Patent Rights (a) to perform its obligations under this Agreement
(including without limitation its obligation to perform ImmunoGen Activities in
accordance with Section 2.6.4 of this Agreement), (b) to develop, have
developed, make, have made, use, have used, sell, have sold, offer for sale,
import, have imported, export and have exported any product that is not a
Licensed Product, and (c) for any and all uses outside of the Field.

2.4           No Other Rights. 
Sanofi-aventis shall have no rights to use or otherwise exploit any
Technology Controlled by ImmunoGen except as expressly set forth herein.

2.5           Technology
Transfer; ImmunoGen Activities.

2.5.1        Transfer
of Licensed Technology. ImmunoGen shall (a) as soon as
practicable after the Effective Date, transfer to sanofi-aventis all Licensed
Technology (including any protocols) comprising and/or otherwise applicable to
the Licensed Patent Rights not previously transferred to sanofi-aventis
pursuant to the Collaboration Agreement and necessary for sanofi-aventis to perform in silico resurfacing as contemplated by this Agreement; and
(b) during the Research License Term, provide updates to sanofi-aventis of any
improvements and/or updates to the Licensed Technology or Licensed Patent
Rights that are Controlled by ImmunoGen.

2.5.2        Use of
Licensed Technology.  In
connection with the transfer of the Licensed Technology contemplated by Section
2.5.1, sanofi-aventis hereby agrees that (a) it shall not use such Licensed
Technology for any purpose other than exercising its rights or performing its obligations hereunder; (b) it shall
use such Licensed Technology only in compliance with all Applicable Laws; (c)
it shall not transfer any such Licensed Technology to any Third Party without
the prior written consent of ImmunoGen, except as expressly permitted hereby;
and (d) except for the rights expressly set forth herein, sanofi-aventis shall
not acquire any other rights, title or interest in or to such Licensed
Technology as a result of such transfer by ImmunoGen.

2.5.3        Training.  ImmunoGen shall use commercially reasonable
efforts to provide sanofi-aventis with such training as may be reasonably
necessary to enable sanofi-aventis to practice the Licensed Technology and
Licensed Patent Rights to humanize Antibodies through conference calls [***] [***]
[***] [***] to the [***] of sanofi-aventis or its Affiliates in the United
States and Europe.  All such training
calls [***] [***] shall be requested in advance 

 9
 

in writing by sanofi-aventis and shall be
scheduled by ImmunoGen at times mutually convenient to the Parties.

2.5.4        Additional
Obligations of ImmunoGen.  Subject to the other terms of this Agreement
(including without limitation Section 4.3), ImmunoGen shall use commercially
reasonable efforts to conduct such activities in connection with a Resurfaced
Antibody as sanofi-aventis may request in writing at any time during the
Research License Term.

2.6           Compliance.  Sanofi-aventis shall perform its obligations
to Develop Licensed Products in good scientific manner and in compliance in all
material respects with all Applicable Laws; provided that, with respect to each
activity so performed that will or would reasonably be expected to be submitted
to a Regulatory Authority in support of a Regulatory Filing or Drug Approval
Application, sanofi-aventis shall comply in all material respects with the regulations and guidance of the
FDA that constitute Good Laboratory
Practice or Good Manufacturing Practice (or, if and as appropriate under the
circumstances, or other comparable regulation and guidance of any applicable
Regulatory Authority in any country or region in the Territory).

2.7           Manufacture
of Licensed Products for Development.  Sanofi-aventis shall have the sole
responsibility and obligation, at its sole cost and expense, to manufacture all
Licensed Products required for the conduct of Development activities under this
Agreement (including without limitation the conduct of all necessary Clinical
Trials in the Territory) and/or the making of all Regulatory Filings and
obtaining of all Regulatory Approvals.

3.             DEVELOPMENT AND COMMERCIALIZATION
OF LICENSED PRODUCTS

3.1           Responsibility for Development and Commercialization.  Except
for the activities conducted by ImmunoGen in accordance with Section 2.5.4,
sanofi-aventis shall have the sole right, at its sole expense, for all aspects
of the Development and Commercialization of Licensed Products in the Field in the Territory, including,
without limitation, the conduct of: (a) all IND-enabling non-clinical studies;
(b) all activities related to human clinical trials; (c) all activities
relating to the manufacture and supply of Licensed
Products (including all required process development and scale up work with
respect thereto); and (d) all pre-marketing, marketing, promotion, sales,
distribution, import and export activities (including securing reimbursement,
sales and marketing and conducting any post-marketing trials or databases and
post-marketing safety surveillance). 
Without limiting the generality of the foregoing, sanofi-aventis shall
have the sole right, at its sole expense, for (i) making all Regulatory Filings
for Licensed Products and filing
all Drug Approval Applications and otherwise seeking all Regulatory Approvals
for Licensed Products, as well
as all correspondence and communications with Regulatory Authorities regarding
such matters, and (ii) reporting of all adverse events to Regulatory
Authorities if and to the extent required by Applicable Laws.

3.2           Diligence. 
Sanofi-aventis shall use Commercially Reasonable Efforts in the
conduct of all Commercialization activities it undertakes related to Licensed Products in the Field in the
Territory.  For the purpose of clarity,
sanofi-aventis shall have no diligence obligations of any kind related to the
research and Development of Licensed Products.

 10
 

3.3           Reportable
Events.  Sanofi-aventis
shall promptly provide ImmunoGen with all information related to any Reportable
Event as such information is compiled or prepared by sanofi-aventis in the
normal course of business in connection with the Development and
Commercialization of any Licensed Product and, in any event, within time frames
consistent with any reporting obligations under Applicable Laws.

3.4           Manufacture
of Licensed Products for Commercial Sale.  Unless otherwise agreed to by the Parties,
sanofi-aventis shall have the sole obligation and responsibility, at its sole
cost and expense, for the manufacture of all Licensed Products (including
without limitation the active pharmaceutical ingredient in any Licensed
Product) for commercial sale.

3.5           Product
Recalls.  In the event
that any Regulatory Authority issues or requests a recall or takes similar
action in connection with a Licensed
Product that sanofi-aventis reasonably believes is attributable to or otherwise
relates to the Licensed Technology or Licensed Patent Rights, or in the event a
Party reasonably believes that an event, incident or circumstance has occurred
that may result in the need for such a recall, such Party shall promptly advise
the other Party thereof by telephone or facsimile.  Following such notification, sanofi-aventis
shall decide and have control of whether to conduct a recall or market
withdrawal (except in the event of a recall or market withdrawal mandated by a
Regulatory Authority, in which case it shall be required) or to take other
corrective action in any country and the manner in which any such recall,
market withdrawal or corrective action shall be conducted; provided that
sanofi-aventis shall keep ImmunoGen regularly informed regarding any such
recall, market withdrawal or corrective action. 
sanofi-aventis shall bear all expenses of any such recall, market
withdrawal or corrective action (including, without limitation, expenses for
notification, destruction and return of the affected Licensed Product and any refund to customers of amounts paid for
such Licensed Product).

4.             PAYMENTS

4.1           Upfront Fee.  Sanofi-aventis shall pay ImmunoGen an upfront
fee in the amount of One Million Dollars (US $1,000,000), which amount shall be
non-refundable and non-creditable, fifty percent (50%) of which shall be
payable in immediately available funds within thirty (30) days of the Effective
Date and fifty percent (50%) of which shall be payable in immediately available
funds on the date of [***] or [***] of the [***] [***] [***].

4.2           Research
License Term Extension Fee. 
Upon the exercise by sanofi-aventis of each [***] ([***]) year Research
License Term Extension as described in Section 2.1.2, sanofi-aventis shall pay
ImmunoGen an extension fee (the “Research License Term Extension Fee”) in the
amount of [***] [***] [***] Dollars (US $[***]) in immediately available funds
within seven (7) days of the start of each such Research License Term
Extension.

4.3           ImmunoGen Activity Payments.  In consideration of the conduct by
ImmunoGen of the activities, if any, contemplated by Section 2.5.4, sanofi-aventis
shall pay ImmunoGen [***] [***] [***] Dollars (US $[***]) upon delivery by
ImmunoGen of each Resurfaced Antibody. 
ImmunoGen shall provide sanofi-aventis with an invoice promptly upon
delivery to sanofi-aventis of each Resurfaced Antibody and sanofi-aventis shall
pay each such invoice within thirty (30) days of receipt.

 11
 

4.4           Milestone Payments.

4.4.1        Milestones.
 Sanofi-aventis shall make the following
nonrefundable, non-creditable milestone payments to ImmunoGen within [***] ([***])
days after the achievement by sanofi-aventis and/or sanofi-aventis’ Affiliates
and Sublicensees of each event for each Licensed Product as set forth below:  

	
  Milestone Event

  	
   

  	
  Milestone Payment

  	
   

  
	
  [***] of [***]
  [***] for a [***] [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***] of [***] [***] [***] [***] for a [***] [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***] of [***]
  [***] [***] [***] for a [***] [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***] of [***]
  [***] [***] [***] in the [***] [***] for a [***] [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***] of [***]
  [***] [***] [***] in [***] [***] or [***] for a [***] [***]

  	
   

  	
  $

  	
  [***]

  	
   

  

 

For purposes of clarity, sanofi-aventis shall make a payment
corresponding to each of the foregoing milestone events for each Licensed Product that achieves such
milestone event; provided, however, that after the last to expire of the
Licensed Patent Rights, any milestone event achieved by sanofi-aventis shall
result in a milestone payment to ImmunoGen in an amount equal to [***] percent
([***]%) of the corresponding milestone payment amount listed above.

4.4.2        Milestone Notices.  Sanofi-aventis shall provide ImmunoGen with
prompt written notice upon each occurrence of a milestone event set forth in
Section 4.4.1.  In the event that,
notwithstanding the fact that sanofi-aventis has not given such a notice,
ImmunoGen believes any such milestone event has occurred, it shall so notify
sanofi-aventis in writing and shall provide to sanofi-aventis data,
documentation or other information that supports its belief.

4.5           Payment of Royalties; Royalty Rates; Accounting and Records.

4.5.1        Payment of Royalties.

(a)           Patent Coverage.  For each Licensed Product covered by a Valid Claim in any country in the
Territory in which it is sold, sanofi-aventis shall pay ImmunoGen a royalty
based on Annual Net Sales of such Licensed
Product in each Calendar Year (or partial Calendar Year) commencing with the
First Commercial Sale of such Licensed
Product in such country and ending upon the expiration of the Royalty Term for
such Licensed Product, at the
following rates:

	
  Annual Net Sales

  	
   

  	
  Royalty Rate (%)

  	
   

  
	
  Up to and
  including $[***] [***]

  	
   

  	
  [***]

  	
  %

  
	
  Above $[***] [***]
  and up to and including $[***] [***]

  	
   

  	
  [***]

  	
  %

  
	
  Above $[***] [***]

  	
   

  	
  [***]

  	
  %

  

 

 12

(b)           No
Patent Coverage.  For each Licensed
Product that is not covered by a Valid Claim in any country in the Territory in
which it is sold, sanofi-aventis shall pay ImmunoGen a royalty based on Annual
Net Sales of such Licensed Product in each Calendar Year (or partial Calendar
Year) commencing with the First Commercial Sale of such Licensed Product in
such country (including without
limitation the First Commercial Sale following the termination or expiration of
any Valid Claim in such country covering such Licensed Product)and ending on the
expiration of the Royalty Term for such Licensed Product at the following
rates: 

	
  Annual Net Sales

  	
   

  	
  Royalty Rate (%)

  	
   

  
	
  Up to and including
  $[***] [***]

  	
   

  	
  [***]

  	
  %

  
	
  Above $[***] [***] and
  up to and including $[***] [***]

  	
   

  	
  [***]

  	
  %

  
	
  Above $[***] [***]

  	
   

  	
  [***]

  	
  %

  

 

(c)           Applicability
of Royalty Rates. For purposes of clarity, (i) if a Licensed Product is
covered by a Valid Claim in a country within the Territory such that royalties
are paid by sanofi-aventis pursuant to Section 4.5.1(a) and, prior to the [***]
([***]) anniversary of the date of First Commercial Sale of such Licensed
Product in such country, the Licensed Product is no longer covered by a Valid
Claim in such country, sanofi-aventis shall pay ImmunoGen a royalty at the
rates set forth in Section 4.5.1(b) for that portion of the Royalty Term during
which no such Valid Claim exists in such country; and (ii) if a Licensed
Product is not covered by a Valid Claim in a country within the Territory such
that royalties are paid by sanofi-aventis pursuant to Section 4.5.1(b) and,
prior to the [***] ([***]) anniversary of the date of First Commercial Sale of
such Licensed Product, the Licensed Product becomes covered by a Valid Claim in
such country, sanofi-aventis shall pay ImmunoGen a royalty at the rates set
forth in Section 4.5.1(a) for that portion of the Royalty Term during which
such Valid Claim exists in such country.

4.5.2        Royalty
Term.  Sanofi-aventis
shall pay the royalties set forth in Section 4.5.1 with respect to each
Licensed Product on a country-by-country and product-by-product basis until
expiration of the Royalty Term with respect thereto.  Upon the expiration of the Royalty Term for
each Licensed Product in each country in the Territory, sanofi-aventis shall
have a worldwide, perpetual, fully paid-up license, with the right to
sublicense, under any and all Licensed Patents covering such Licensed Product
to develop, make, have made, use, import, offer for sale, distribute and sell
such Licensed Product in the Field and in such country.

 13
 

4.5.3        Payments
to Third Parties.  If,
during any Calendar Quarter, sanofi-aventis actually makes pursuant to a
legally binding obligation any royalty payments to one or more Third Parties in
consideration for a license, in the absence of which sanofi-aventis could not
practice the Licensed Patent Rights to produce a Licensed Product without
infringing an issued patent or patents owned by such Third Party in any country
(collectively, “Third Party Payments”), then sanofi-aventis shall have the
right to reduce the royalties otherwise due to ImmunoGen pursuant to Section
4.5.1 hereof with respect to sales in such country of such Licensed Product in
such Calendar Quarter or any subsequent Calendar Quarter by an amount equal to
up to [***] percent ([***]%) of the amount of such Third Party Payments.  Notwithstanding the foregoing, such
reductions shall in no event be greater than the royalties otherwise due to
ImmunoGen pursuant to Section 4.5.1 hereof with respect to the sales of such
Licensed Product in such country by more than [***] percent ([***]%).

4.5.4        Payment
Dates and Reports.  Royalty payments shall be made by
sanofi-aventis within [***] ([***]) days after the end of each Calendar Quarter
commencing with the Calendar Quarter in which the First Commercial Sale of a Licensed Product occurs.  All payments shall be made by wire transfer
in accordance with instructions given in writing from time to time by
ImmunoGen.  Sanofi-aventis shall also
provide, at the same time each such payment is made, a report showing: (a) the Net Sales of each Licensed Product by country in the
Territory;(b) the basis for any
deductions from gross amounts billed or invoiced to determine Net Sales; (c)
the applicable royalty rates for such Licensed
Product; (d) the exchange rates used in calculating any of the foregoing; and
(e) a calculation of the amount of royalty due to ImmunoGen.

4.5.5        Records;
Audit Rights.  For a period of [***] ([***]) years,
sanofi-aventis shall keep and maintain, and shall require its respective
Affiliates and Sublicensees to keep and maintain, such accurate and complete
books and records in connection with the sale of Licensed Products hereunder,
as are necessary to allow the accurate calculation consistent with generally
accepted accounting principles of the royalties due to ImmunoGen, including any
records required to calculate any royalty adjustments hereunder.  Once per
Calendar Year, ImmunoGen shall have the right to engage an independent certified
public accounting firm of nationally recognized standing and reasonably
acceptable to sanofi-aventis, which shall have the right to examine in
confidence the relevant books and records of sanofi-aventis and its respective
Affiliates and Sublicensees as may be reasonably necessary to determine and/or
verify the amount of royalty payments due hereunder.  Such examination
shall be conducted, and sanofi-aventis shall make its records available, during
normal business hours, after at least [***] ([***]) days prior written notice
to sanofi-aventis, as applicable, and shall take place at the facility(ies)
where such records are maintained.  Each such examination shall be limited
to pertinent books and records for any year ending not more than [***] ([***])
months prior to the date of request;provided, that, ImmunoGen shall not
be permitted to audit the same period of time more than once.  Before
permitting such independent accounting firm to have access to such books and
records, sanofi-aventis may require such independent accounting firm and its
personnel involved in such audit, to sign a confidentiality agreement (in form
and substance reasonably acceptable to each of the Parties) as to any
Confidential Information which is to be provided to such accounting firm or to which
such accounting firm will have access, while conducting the audit under this
paragraph.  The ImmunoGen independent accounting firm will prepare and
provide to 

 14
 

each Party a written report stating whether
the royalty reports submitted and royalties paid are correct or incorrect and
the specific details concerning any discrepancies.  Such accounting firm
may not reveal to ImmunoGen any information learned in the course of such audit
other than the amount of any such discrepancies.  ImmunoGen agrees to hold
in strict confidence all information disclosed to it, except to the extent
necessary for ImmunoGen to enforce its rights under this Agreement or if
disclosure is required by law.  In the event there was an underpayment by
sanofi-aventis hereunder, sanofi-aventis shall promptly (but in no event later
than [***] ([***]) days after such Party’s receipt of the independent auditor’s
report so correctly concluding) make payment to ImmunoGen of any
shortfall.  In the event that there was an overpayment by sanofi-aventis
hereunder, ImmunoGen shall promptly (but in no event later than [***] ([***])
days after ImmunoGen’s receipt of the independent auditor’s report so correctly
concluding) refund to sanofi-aventis the excess amount.  ImmunoGen shall
bear the full cost of such audit unless such audit discloses an underreporting
by sanofi-aventis of more than [***] percent ([***]%) of the aggregate amount
of royalties in any twelve (12) month period, in which case, sanofi-aventis
shall reimburse ImmunoGen for all costs incurred by ImmunoGen in connection
with such examination and audit.

4.5.6        Overdue
Payments.  All royalty payments not made within the time
period set forth in Section 4.5.4, and all milestone payments not made within
the time period specified in Section 4.4.1, shall bear interest at a rate of
one percent (1%) per month from the due date until paid in full or, if less,
the maximum interest rate permitted by Applicable Laws.  Any such overdue royalty or milestone payment
shall, when made, be accompanied by, and credited first to, all interest so
accrued.

4.5.7        Withholding
Taxes.  Any payments made by sanofi-aventis to
ImmunoGen under this Agreement shall be free and clear of any taxes, duties,
levies, fees or charges, and such amounts shall be reduced by the amount
required to be paid or withheld pursuant to any applicable law, including, but
not limited to, United States federal, state or local tax law (“Withholding
Taxes”).  Any such Withholding Taxes required by law to be paid or
withheld shall be an expense of, and borne solely by, ImmunoGen. 
Sanofi-aventis, as applicable, shall submit to ImmunoGen reasonable proof of
payment of the Withholding Taxes, together with an accounting of the
calculations of such taxes, within thirty (30) days after such Withholding
Taxes are remitted to the proper authority.  The Parties will cooperate
reasonably in completing and filing documents required under the provisions of
any applicable tax laws or under any other applicable law in connection with
the making of any required tax payment or withholding payment, or in connection
with any claim to a refund of or credit for any such payment.

4.5.8        Foreign Currency
Exchange.  With
respect to Net Sales invoiced or expenses incurred in U.S. dollars, the Net
Sales or expense amounts and the amounts due to ImmunoGen hereunder shall be
expressed in U.S. dollars.  With respect to Net Sales invoiced or expenses
incurred in a currency other than U.S. dollars, the Net Sales or expense shall
be expressed in the domestic currency of the entity making the sale or
incurring the expense, together with the U.S. dollar equivalent, calculated
using the arithmetic average of the spot rates on the last Business Day of each
month of the Calendar Quarter in which the Net Sales were made or the expense
was incurred.  The “closing mid-point rates” found in the “Dollar spot 

 15
 

forward against the Dollar” table published
by The Financial Times, or any
other publication as agreed to by the Parties, shall be used as the source of
spot rates to calculate the average as defined in the preceding sentence. 
All payments shall be made by wire transfer in U.S. dollars to the credit of
such bank account as shall be designated at least [***] ([***]) business days
in advance by ImmunoGen in writing to sanofi-aventis.

5.             TREATMENT OF CONFIDENTIAL INFORMATION;

PUBLICITY

5.1           Confidentiality

5.1.1        Confidentiality
Obligations.  ImmunoGen and sanofi-aventis each recognizes
that the other Party’s Confidential Information constitutes highly valuable
assets of such other Party.  ImmunoGen
and sanofi-aventis each agrees that, subject to Section 5.1.2, (a) during the
Research License Term and for an additional [***] ([***]) years thereafter it
will not disclose, and will cause its Affiliates and Sublicensees not to
disclose, any Confidential Information of the other Party and (b) during and
after the Term, it will not use, and will cause its Affiliates not to use, any
Confidential Information of the other Party, in either case, except as
expressly permitted hereunder.  Without limiting
the generality of the foregoing, each Party shall take such action, and shall
cause its Affiliates and Sublicensees to take such action, to preserve the
confidentiality of the other Party’s Confidential Information as such Party
would customarily take to preserve the confidentiality of its own Confidential
Information and shall, in any event, use at least reasonable care to preserve
the confidentiality of the other Party’s Confidential Information.

5.1.2        Limited
Disclosure.  ImmunoGen and
sanofi-aventis each agrees that disclosure of its Confidential Information may
be made by the other Party to any employee, consultant or Affiliate of such
other Party to enable such other Party to exercise its rights or to carry out
its responsibilities under this Agreement; provided that any such disclosure or
transfer shall only be made to Persons who are bound by written obligations as
described in Section 5.1.3.  In addition,
ImmunoGen and sanofi-aventis each agrees that the other Party may disclose its
Confidential Information (a) on
a need-to-know basis to such other Party’s legal and financial advisors and
(b) as reasonably necessary in connection with an actual or potential (i)
permitted sublicense of such other Party’s rights hereunder, (ii) debt or
equity financing of such other Party or (iii) purchase by any Third Party of
all of the capital stock or all or substantially all of the assets of such
other Party or any merger or consolidation involving such other Party; if, in
each case, the Person receiving such Confidential Information of the other
Party agrees in writing to maintain the confidentiality of such Confidential
Information of the other Party with terms at least as restrictive as those
contained in Section 5.1.1.  In addition,
each Party agrees that the other Party may disclose such Party’s Confidential
Information (A) as reasonably necessary to file, prosecute or maintain
patents or patent applications, or to file, prosecute or defend litigation
related to patents or patent applications, in accordance with this Agreement; or (B) as required by Applicable Laws;
provided that, in the case of any disclosure under this clause (B), the
disclosing Party shall (1) if practicable, provide the other Party with
reasonable advance notice of and an opportunity to comment on any such required
disclosure, (2) if requested by the other Party, cooperate in all
reasonable respects with the other Party’s efforts to obtain confidential
treatment or a protective order with respect to any such disclosure, at the
other Party’s expense 

 16
 

and (3) use good faith efforts to incorporate the
comments of such other Party in any such disclosure or request for confidential
treatment or a protective order.

5.1.3        Employees
and Consultants.  ImmunoGen and sanofi-aventis each hereby represents
that all of its employees and consultants, and all of the employees and
consultants of its Affiliates, who participate in the activities contemplated
by this Agreement or have access to Confidential Information of the other Party
are or will, prior to their participation or access, be bound by written
obligations to maintain such Confidential Information in confidence and not to
use such information except as expressly permitted hereunder.  Each Party agrees to use, and to cause its
Affiliates to use, reasonable efforts to enforce such obligations.

5.2           Publicity.  The
Parties acknowledge that the terms of this Agreement constitute Confidential
Information of each Party and may not be disclosed except as permitted by
Section 5.1.2.  Notwithstanding anything
to the contrary in Section 5.1, the Parties, upon the execution of this
Agreement, shall mutually agree to a press release with respect to this
Agreement and either Party may make subsequent public disclosure of the
contents of such press release without further approval of the other
Party.  After issuance of such press
release, except as required by
Applicable Laws, neither Party shall issue a press or news release or make any
similar public announcement (other than publication in scientific journals, in
advertising materials and brochures, or presentation at scientific conferences
and meetings and the like that are intended to be covered by, and are issued in
compliance with, Section 5.3) related to the Development or Commercialization
of a Licensed Product without the prior written consent of the other Party;
provided that notwithstanding the foregoing, ImmunoGen shall be expressly
permitted to publicly announce the occurrence of any milestone event under
Section 4.4.1; provided, however, that the text of such announcement shall be
mutually agreed to by the Parties.

5.3           Publications and Presentations.  The Parties acknowledge that scientific
publications and presentations must be strictly monitored to prevent any
adverse effect from premature publication or dissemination of results of the
activities hereunder.  Each Party
agrees that, except as required by Applicable Laws, it shall not publish or
present, or permit to be published or presented, the results of the Development
or Commercialization of a Licensed Product to the extent such results refer to
or otherwise relate to the Licensed Technology or Licensed Patent Rights (the “Covered
Results”) without the prior review by and approval of the other Party.  Each Party shall provide to the other Party the
opportunity to review each of the submitting Party’s proposed abstracts,
manuscripts or presentations (including, without limitation, information to be
presented verbally) that relate to the Covered Results at least [***] ([***])
days prior to its intended presentation or submission for publication, and such
submitting Party agrees, upon written request from the other Party given within
such [***]-[***] period, not to submit such abstract or manuscript for
publication or to make such presentation until the other Party is given up to [***]
([***]) days from the date of such written request to seek appropriate patent
protection for any Covered Rights in such publication or presentation that it
reasonably believes may be patentable. 
Once such abstracts, manuscripts or presentations have been reviewed and
approved by each Party, the same abstracts, manuscripts or presentations do not
have to be provided again to the other Party for review for a later submission
for publication.  Each Party also shall
have the right to require that any of its Confidential Information that is
disclosed in any such proposed publication or presentation be deleted prior to
such publication or 

 17
 

presentation. 
In any permitted publication or presentation by a Party, the
other Party’s contribution shall be duly recognized, and co-authorship
shall be determined in accordance with customary industry standards.

6.             FILING, PROSECUTION AND MAINTENANCE OF PATENT RIGHTS

6.1           Patent Filing, Prosecution
and Maintenance. ImmunoGen,
acting through patent counsel or agents of its choice, shall be responsible, at
its sole cost and expense, for the preparation, filing, prosecution and
maintenance of all Licensed Patent Rights. 
All costs and expenses incurred by ImmunoGen in connection with the preparation,
filing, prosecution and maintenance of Licensed Patent Rights shall be the sole
responsibility of ImmunoGen.  At
ImmunoGen’s request, sanofi-aventis shall cooperate with ImmunoGen in all
reasonable respects in connection with such preparation, filing, prosecution
and maintenance of Licensed Patent Rights.

6.2           Abandonment.  If
ImmunoGen decides to abandon or to allow to lapse any of the Licensed Patent
Rights in any country or region in the Territory, ImmunoGen shall inform
sanofi-aventis of such decision promptly and, in any event, so as to provide
sanofi-aventis a reasonable amount of time to meet any applicable deadline to
establish or preserve such Licensed Patent Rights in such country or
region.  Sanofi-aventis shall have the
right to assume responsibility for continuing the prosecution of such Licensed
Patent Rights in such country or region and paying any required fees to
maintain such Licensed Patent Rights in such country or region or defending
such Licensed Patent Rights, in each case at sanofi-aventis’s sole expense and
through patent counsel or agents of its choice. 
Sanofi-aventis shall not become an assignee of such Licensed Patent
Rights as a result of its assumption of any such responsibility.  Upon transfer of ImmunoGen’s responsibility
for prosecuting, maintaining and defending any of the Licensed Patent Rights to
sanofi-aventis under this Section 6.2, ImmunoGen shall promptly deliver to
sanofi-aventis copies of all necessary files related to the Licensed Patent
Rights with respect to which responsibility has been transferred and shall take
all actions and execute all documents reasonably necessary for sanofi-aventis
to assume such prosecution, maintenance and defense.

6.3           Legal
Actions.

6.3.1        Third Party Infringement.

(a)           In the event either Party becomes aware of any possible
infringement of, or the submission by any Third Party of an abbreviated new
drug application under the Hatch-Waxman Act that is covered by, any Licensed
Patent Rights that cover a Licensed Product (an “Infringement”), that Party
shall promptly notify the other Party and provide it with all details of such
Infringement of which it is aware (each, an “Infringement Notice”).  ImmunoGenshall have the first right and option to
eliminate such Infringement by reasonable steps, which may include the institution of legal proceedings or other
action.  All costs, including without
limitation attorneys’ fees, relating to such legal proceedings or other action
shall be borne by ImmunoGen.  If ImmunoGen does not take commercially reasonable steps to eliminate
the Infringement within [***] [***] [***] ([***]) days from any Infringement 

 18
 

Notice (or [***]-[***] ([***]) days in the case of
an Infringement under the Hatch-Waxman Act), then sanofi-aventis shall have the
right and option to do so at its expense; provided that if ImmunoGen has
commenced negotiations with an alleged infringer for elimination of such
Infringement within such [***]-[***] (or, if applicable [***]-[***]) period,
ImmunoGen shall have an additional [***] ([***]) days (or in the case of an
Infringement under the Hatch-Waxman Act, [***] ([***]) days) to conclude its
negotiations before sanofi-aventis may take steps to eliminate such
Infringement.  Neither Party shall settle
any Infringement claim or proceeding under this Section 6.3.1 without the prior
written consent of the other Party, which consent shall not be unreasonably
withheld, conditioned or delayed.

(b)           Each Party shall have the right to participate, and be
represented by counsel that it selects, in any legal proceedings or other
action instituted under this Section 6.3.1 by the other Party.  If a Party with the right to initiate legal
proceedings under Section 6.3.1 to eliminate an Infringement lacks standing to
do so and the other Party has standing to initiate such legal proceedings, then
the Party with standing shall initiate such legal proceedings at the request
and expense of the other Party.

(c)           In any action, suit or proceeding instituted
under this Section 6.3.1, the Parties shall cooperate with and assist each other in all reasonable
respects.  Upon the reasonable request of
the Party instituting such action, suit or legal proceeding, the other Party
shall join such action, suit or legal proceeding and shall be represented using
counsel of its own choice, at the requesting Party’s expense.

(d)           Any amounts recovered by either Party
pursuant to Section 6.3.1(a), whether by settlement or judgment, shall be allocated in the
following order: (i) first, to reimburse ImmunoGen and sanofi-aventis for their
reasonable out-of-pocket
expenses in making such recovery (which amounts shall be allocated pro rata according to such expenses if insufficient
to cover the totality of such expenses); and (ii) then, one hundred percent
(100%) to ImmunoGen.

6.3.2        Defense of Claims.  In the event that any action, suit or
proceeding is brought against either Party or any Affiliate or Sublicensee of
either Party alleging the infringement of the Technology or Patent Rights of a
Third Party by reason of the use by sanofi-aventis of the Licensed Technology
or Licensed Patent Rights to Develop or Commercialize any Licensed Product: (a)[***] shall have the obligation to defend
such action, suit or proceeding at its sole expense; (b) [***] shall have the
right to separate counsel at its own expense in any such action, suit or
proceeding; and (c) the Parties shall cooperate with each other in all
reasonable respects in any such action, suit or proceeding.  Each Party shall provide the other Party with
prompt written notice of the commencement of any such suit, action or
proceeding, or of any allegation of infringement of which such Party becomes
aware, and shall promptly furnish the other Party with a copy of each
communication relating to the alleged infringement that is received by such
Party.  For purposes of clarity, nothing
in this Section 6.3.2 shall affect the right of ImmunoGen to defend itself in
any action suit or proceeding.

7.             TERM AND TERMINATION

7.1           Term.  This Agreement shall
commence on the Effective Date and shall continue 

 19
 

in full force and effect until the end of the
Research License Term, and, if sanofi-aventis is Developing or Commercializing
a Licensed Product as of the end of the Research License Term, thereafter until
(a) such time as sanofi-aventis is no longer Developing at least one (1)
Licensed Product for use in the Field and in the Territory or (b) if, as of the
time sanofi-aventis is no longer Developing at least one (1) Licensed Product
for use in the Field and in the Territory, the first Commercialization
Regulatory Approval of any Licensed Product has been obtained, then such time
as the Royalty Term for the final Licensed Product has ended, unless earlier
terminated in accordance with the provisions of this Article 7 (the “Term”).

7.2           Termination.  This Agreement may be terminated at any time
by either Party as follows:

7.2.1        Termination
for Breach. 
Except as set forth herein, either Party may terminate this Agreement,
effective immediately upon written notice to the other Party, for a breach by
the other Party of any material
term of this Agreement that remains uncured [***] ([***]) days ([***] ([***])
days in the event that the breach is a failure of sanofi-aventis to make any
payment required hereunder) after the non-breaching Party first gives written
notice of such breach to the other Party. 
Notwithstanding anything to the contrary set forth herein, (a) if the
asserted breach is cured or shown to be non-existent within the applicable cure
period, the notice of breach hereunder shall be deemed automatically withdrawn;
and (b) a material breach by a party shall not give rise to the termination
right under this Section 7.2.1 to the extent such material breach arises from a
Force Majeure event as described in Section 10.11; provided, that the Party breaching
this Agreement shall have the burden of demonstrating the occurrence of a Force
Majeure.  Notwithstanding the foregoing,
a Party may not terminate this Agreement pursuant to this Section 7.2.1 at a
time when such Party has committed a breach of a material term of this
Agreement which remains uncured.

7.2.2        Termination
for Insolvency.  In the event that either Party files for
protection under bankruptcy laws, makes an assignment for the benefit of
creditors, appoints or suffers appointment of a receiver or trustee over its
property, files a petition under any bankruptcy or insolvency act or has any
such petition filed against it which is not discharged within [***] ([***])
days of the filing thereof, then the other Party may terminate this Agreement
effective immediately upon written notice to such Party.  In connection therewith, all rights
and licenses granted under this Agreement are, and shall be deemed to be, for
purposes of Section 365(n) of the United States Bankruptcy Code, licenses
of rights to “intellectual property” as defined under Section 101(56) of
the United States Bankruptcy Code.  In
the event that either Party undergoes a voluntary dissolution or winding-up of
its affairs, then the other Party may terminate this Agreement effective immediately
upon written notice to such Party.

7.3           Consequences of Termination of Agreement.  In
the event of the termination of this Agreement pursuant to Section 7.2, the
following provisions shall apply, as applicable.

7.3.1        Termination by ImmunoGen under Section 7.2.1.  If this Agreement is terminated by
ImmunoGen pursuant to Section 7.2.1:

(a)           all of the licenses granted by ImmunoGen to
sanofi-aventis pursuant to Section 2.1.1 shall immediately terminate; and

 20
 

(b)           each Party shall promptly return or
destroy all Confidential Information of the other Party that are not subject to a
continuing license hereunder; provided that each Party may retain one copy of
the Confidential Information of the
other Party in its archives solely for the purpose of establishing the contents
thereof and ensuring compliance with its obligations hereunder.

7.3.2        Termination by sanofi-aventis Pursuant to Section 7.2.1.  If this Agreement is terminated by
sanofi-aventis pursuant to Section 7.2.1:

(a)           the license granted by ImmunoGen to
sanofi-aventis pursuant to Section 7.2.1(b) shall survive solely as applied to Licensed Products being Developed or
Commercialized by sanofi-aventis as of the
effective date of termination, subject to sanofi-aventis’s continued payment of
all milestone, royalty and other payments under and in accordance with this
Agreement with respect thereto;

(b)           all
other licenses granted by ImmunoGen to sanofi-aventis pursuant to Section 2.1.1
shall immediately terminate; and

(c)           each Party shall promptly return or
destroy all Confidential Information of the other Party that are not subject to
a continuing license hereunder; provided that each Party may retain one copy of
the Confidential
Information of the other Party in its archives solely for the purpose of establishing the contents thereof and
ensuring compliance with its obligations hereunder.

7.3.3        Termination
Pursuant to Section 7.2.2. 
If this Agreement is terminated by sanofi-aventis or ImmunoGen pursuant to Section 7.2.2,
unless prohibited by Applicable Laws:

(a)           the license set forth in Section
7.2.1(b) shall survive solely as applied to Licensed Products being Developed or
Commercialized by sanofi-aventis as of the effective date of termination,
subject to sanofi-aventis’
continued payment of all milestone, royalty and other payments under and in
accordance with this Agreement with respect thereto;

(b)           all
other licenses granted by ImmunoGen to sanofi-aventis pursuant to Section 2.1.1
shall immediately terminate; and

(c)           each Party shall promptly return all
Confidential Information of the other Party that are not subject to a
continuing license hereunder; provided that each Party may retain one copy of
the Confidential
Information of the other Party in its archives solely for the purpose of
establishing the contents thereof and ensuring compliance with its obligations
hereunder.

7.4           Surviving Provisions. 
Termination or expiration of this Agreement for any reason shall be
without prejudice to:

 21
 

(a)           the
rights and obligations of the Parties provided in Sections 7.4 and Articles 5,
9 and 10 (including all other Sections or Articles referenced in any such Section or Article
and including Article 1), all of which shall survive such termination;

(b)           ImmunoGen’s
rights to receive royalties and milestone payments for the duration of any
applicable Royalty Term, if any;

(c)           any
other rights or remedies
provided at law or equity which either Party may otherwise have; and

(d)           with
respect to expiration of this Agreement, any licenses granted in
accordance with Section 4.5.2 at the expiration of the Royalty Term for each
Licensed Product in each country in the Territory.

8.             REPRESENTATIONS AND WARRANTIES

8.1           Mutual Representations and Warranties.  ImmunoGen and sanofi-aventis each
represents and warrants to the other, as of the Effective Date, as follows:

8.1.1        Organization.  It is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its organization, and has all requisite
power and authority, corporate or otherwise, to execute, deliver and perform
this Agreement.

8.1.2        Authorization.  The
execution and delivery of this Agreement and the performance by it of the transactions contemplated hereby have been duly
authorized by all necessary corporate action and will not violate (a) such
Party’s certificate of incorporation or bylaws, (b) any agreement, instrument
or contractual obligation to which such Party is bound in any material respect,
(c) any requirement of any Applicable Law, or (d) any order, writ, judgment,
injunction, decree, determination or award of any court or governmental agency
presently in effect applicable to such Party.

8.1.3        Binding Agreement.  This Agreement is a legal, valid and binding
obligation of such Party enforceable against it in accordance with its terms
and conditions.

8.1.4        No Inconsistent Obligation.  It
is not under any obligation, contractual or otherwise, to any Person that conflicts with or is inconsistent in
any respect with the terms of this Agreement or that would impede the diligent
and complete fulfillment of its obligations hereunder.

8.2           Additional Representations of ImmunoGen.  ImmunoGen further represents and warrants
to sanofi-aventis, as of the Effective Date, as follows:

8.2.1        Licensed Patent Rights.  All
Licensed Patent Rights existing as of the Effective Date are existing and, to
ImmunoGen’s knowledge, no such Licensed Patent Rights are invalid or
unenforceable.  ImmunoGen has the right
to enforce the Licensed Patent Rights existing as of the Effective Date.

8.2.2        Claims or Judgments.  There are no claims, judgment or
settlements 

 22
 

against ImmunoGen pending, or to ImmunoGen’s
knowledge, threatened, that invalidate or seek to invalidate the Licensed
Patent Rights existing as of the Effective Date.

8.2.3        Right to Technology. 
ImmunoGen has the full right, power and authority to grant the licenses
under the Licensed Technology and the Licensed Patent Rights existing as of the Effective Date granted pursuant to
this Agreement.  ImmunoGen is the sole
and exclusive owner or the exclusive licensee of the right, title, and interest
in and to the Licensed Technology and the Licensed Patent Rights, free and clear of any liens,
charges or encumbrances, including, without limitation, all patent rights
included therein, and no third party has any right, title or interest in or to
the Licensed Technology and the Licensed Patent Rights.

8.2.4        No Infringement.  To ImmunoGen’s knowledge, no Third
Party is infringing, or threatening to infringe,
the Licensed Patent Rights existing as of the Effective Date nor does ImmunoGen
have any knowledge of any patent, patent application or other intellectual
property right of any Third Party which could materially and adversely affect
the ability of sanofi-aventis to exercise or exploit any of the rights or
licenses granted to it pursuant to this Agreement.

8.2.5        No Litigation.  There is no pending or, to ImmunoGen’s
knowledge, threatened, litigation
that alleges that the proposed activities of sanofi-aventis under this
Agreement would infringe or misappropriate any intellectual property rights of
any Third Party.

9.             INDEMNIFICATION

9.1           Indemnification
of sanofi-aventis by ImmunoGen.  ImmunoGen shall indemnify,
defend and hold harmless sanofi-aventis, its Affiliates, their respective
directors, officers, employees and agents, and their respective successors,
heirs and assigns (collectively, the “sanofi-aventis Indemnitees”), against all
liabilities, damages, losses and expenses (including, without limitation,
reasonable attorneys’ fees and expenses of litigation) (collectively, “Losses”)
incurred by or imposed upon the sanofi-aventis Indemnitees, or any one of them,
as a direct result of claims, suits, actions, demands or judgments of Third
Parties, including without limitation personal injury and product liability
claims and claims of suppliers and ImmunoGen employees (collectively, “Claims”),
arising out of the material breach by ImmunoGen of this Agreement,
except with respect to any Claim or Losses that result from a material breach of this Agreement by, or
the gross negligence or willful misconduct of, sanofi-aventis; provided
that, with respect to any Claim for
which ImmunoGen has an obligation to any sanofi-aventis Indemnitee pursuant to
this Section 9.1 and sanofi-aventis has an obligation to any ImmunoGen Indemnitee
pursuant to Section 9.2, each Party shall indemnify each of the other
Party’s Indemnitees for its Losses to the extent of its responsibility,
relative to the other Party, for the facts underlying the Claim.

9.2           Indemnification of ImmunoGen by
sanofi-aventis.  Sanofi-aventis shall indemnify, defend and
hold harmless ImmunoGen, its Affiliates, their respective directors, officers,
employees and agents, and their respective successors, heirs and assigns (the “ImmunoGen
Indemnitees”), against any Losses incurred by or imposed upon the ImmunoGen
Indemnitees, or any one of them, as a direct result of Claims arising out of
(a) the material breach by sanofi-aventis of this Agreement; (b) the
Development or Commercialization (including,

 23
 

without limitation, the production, manufacture, promotion, import,
sale or use by any Person) of any Licensed Product by sanofi-aventis or any of
its Affiliates, Sublicensees, distributors or agents, except with
respect to any Claim or Losses that result from a breach of this Agreement by, or the gross negligence or willful
misconduct of, ImmunoGen; provided that with respect to any Claim for which ImmunoGen has an obligation to any
sanofi-aventis Indemnitee pursuant to Section 9.1 and sanofi-aventis has an
obligation to any ImmunoGen Indemnitee pursuant to this Section 9.2, each
Party shall indemnify each of the other Party’s Indemnitees for its Losses to
the extent of its responsibility, relative to the other Party, for the facts
underlying the Claim.

9.3           Conditions to Indemnification.  A
Person seeking recovery under this Article 9(the “Indemnified
Party”) in respect of a Claim shall give prompt notice of such Claim to the
Party from which recovery is sought (the “Indemnifying Party”) and, provided
that the Indemnifying Party is not contesting its obligation under this Article
9, shall permit the Indemnifying Party to control any litigation relating to
such Claim and the disposition of such Claim; provided that the Indemnifying
Party shall (a) act reasonably and in good faith with respect to all matters
relating to the settlement or disposition of such Claim as the settlement or
disposition relates to such Indemnified Party and (b) not settle or otherwise
resolve such claim without the prior written consent of such Indemnified Party
(which consent shall not be unreasonably withheld, conditioned or
delayed).  Each Indemnified Party shall
cooperate with the Indemnifying Party in its defense of any such Claim in all
reasonable respectsand shall have the right to
be present in person or through counsel at all legal proceedings with respect
to such Claim.

9.4           Warranty Disclaimer. 
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY
MAKES ANY WARRANTY WITH RESPECT TO ANY TECHNOLOGY, GOODS, SERVICES, RIGHTS OR
OTHER SUBJECT MATTER OF THIS AGREEMENT AND EACH PARTY HEREBY DISCLAIMS ALL
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT.

9.5           Limited Liability. 
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, NEITHER
PARTY SHALL BE LIABLE TO THE OTHER PARTY OR ANY OF ITS AFFILIATES FOR (I) ANY
SPECIAL, PUNITIVE, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING
WITHOUT LIMITATION LOST PROFITS OR LOST REVENUES, OR (II) COST OF PROCUREMENT
OF SUBSTITUTE GOODS, TECHNOLOGY OR SERVICES, WHETHER UNDER ANY CONTRACT,
WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY.

10.          MISCELLANEOUS

10.1         Notices.  All
notices and communications shall be in writing and delivered personally or by
courier or mailed via certified mail, return receipt requested, addressed as
follows, or to such other address as may be designated from time to time:

 24
 

 

	
  If to sanofi-aventis:

  	
   

  	
  If to ImmunoGen:

  
	
   

  	
   

  	
   

  
	
  sanofi-aventis
  U.S. LLC

  	
   

  	
  ImmunoGen, Inc.

  
	
  1041 Rt. 202-206

  	
   

  	
  128 Sidney Street

  
	
  Bridgewater, NJ
  08807

  	
   

  	
  Cambridge, Massachusetts 02139

  
	
  Attn: Head, US
  Alliances & Partnerships

  	
   

  	
  Attn: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  With a copy to:

  
	
  Head, US R&D
  Legal

  	
   

  	
  Mintz, Levin, Cohn, Ferris, Glovsky

  
	
   

  	
   

  	
  and Popeo, PC

  
	
   

  	
   

  	
  One Financial
  Center

  
	
   

  	
   

  	
  Boston,
  Massachusetts 02111

  
	
   

  	
   

  	
  Attention: [***]
  [***], Esq.

  
	
   

  	
   

  	
  Tel: (617)
  542-6000

  
	
   

  	
   

  	
  Fax: (617)
  542-2241

  

 

Except as otherwise expressly provided in this
Agreement or mutually agreed in writing, any notice, communication or document
(excluding payment) required to be given or made shall be deemed given or made
and effective upon actual receipt or, if earlier, (a) three (3) business days
after deposit with an internationally-recognized overnight express courier with
changes prepaid, or (b) five (5) business days after mailed by certified,
registered or regular mail, postage prepaid, in each case addressed to a
Parties at its address stated above or to such other address as such Party may
designate by written notice given in accordance with this Section 10.2.

10.2         Governing Law.  This
Agreement shall be governed by and construed in accordance with the laws of the
state of Delaware (USA), without regard to the application of principles of
conflicts of law.

10.3         Binding Effect.  This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective legal representatives, successors and permitted assigns.

10.4         Headings. 
Section and subsection headings are inserted for convenience of
reference only and do not form a part of this Agreement.

10.5         Counterparts.  This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original and both of which, together, shall constitute
a single agreement.

10.6         Amendment; Waiver.  This
Agreement may be amended, modified, superseded or canceled, and any of the
terms of this Agreement may be waived, only by a written instrument executed by
each Party or, in the case of waiver, by the Party or Parties waiving
compliance. The delay or failure of either Party at any time or times to
require performance of any provisions shall in no manner affect the rights at a
later time to enforce the same. No waiver by either Party of any condition or
of the breach of any term contained in this Agreement, whether by conduct, or
otherwise, in any one or more instances, shall be deemed to be, or considered
as, a further or continuing waiver of any such condition or of the breach of
such term or any other term of this Agreement.

 25
 

10.7         No Third Party Beneficiaries. 
Except as set forth in Sections 9.1 and 9.2, no Third Party (including,
without limitation, employees of either Party) shall have or acquire any rights
by reason of this Agreement.

10.8         Purposes and Scope.  The
Parties hereto understand and agree that this License Agreement is limited to
the activities, rights and obligations as set forth in this Agreement. Nothing
in this Agreement shall be construed (a) to create or imply a general
partnership between the Parties, (b) to make either Party the agent of the
other for any purpose, (c) to alter, amend, supersede or vitiate any other
arrangements between the Parties with respect to any subject matters not
covered hereunder, (d) to give either Party the right to bind the other, (e) to
create any duties or obligations between the Parties except as expressly set
forth herein, or (f) to grant any direct or implied licenses or any other right
other than as expressly set forth herein.

10.9         Assignment and Successors. 
Neither this Agreement nor any obligation of a Party hereunder may be
assigned by either Party without the consent of the other which shall not be
unreasonably withheld, except that each Party may assign this Agreement and the
rights, obligations and interests of such Party, in whole or in part, to any of
its Affiliates, and to any Third Party purchaser of all of the capital stock of
such Party or all or substantially all of its assets in the line of business to
which this Agreement pertains or to any successor corporation resulting from
any merger or consolidation of such Party with or into such corporation.

10.10       Force Majeure. 
Neither sanofi-aventis nor ImmunoGen shall be liable for failure of or
delay in performing obligations set forth in this Agreement, and neither shall
be deemed in breach of its obligations, if such failure or delay is due to a
Force Majeure.  In event of such Force
Majeure, the Party affected shall use reasonable efforts to cure or overcome
the same and resume performance of its obligations hereunder.

10.11       Interpretation.  The
Parties hereto acknowledge and agree that: (a) each Party and its counsel
reviewed and negotiated the terms and provisions of this Agreement and have
contributed to its revision; (b) the rule of construction to the effect that
any ambiguities are resolved against the drafting Party shall not be employed
in the interpretation of this Agreement; and (c) unless a context
otherwise requires, wherever used, the singular shall include the plural, the
plural the singular, the use of any gender shall be applicable to all genders
and the word “or” is used in the inclusive sense (and/or).

10.12       Integration; Severability.  This
Agreement and the Collaboration Agreement are the entire agreements with
respect to the subject matter hereof and supersede all other agreements and
understandings between the Parties with respect to such subject matter.  If any provision of this Agreement is or
becomes invalid or is ruled invalid by any court of competent jurisdiction or
is deemed unenforceable, it is the intention of the Parties that the remainder
of this Agreement shall not be affected.

10.13       Further Assurances.  Each
of ImmunoGen and sanofi-aventis agrees to duly execute and deliver, or cause to
be duly executed and delivered, such further instruments and do and cause to be
done such further acts and things, including, without limitation, the filing of
such additional assignments, agreements, documents and instruments, as the
other Party may at any time and from time to time reasonably request in
connection with this Agreement or to carry out 

 26
 

more effectively the provisions and purposes of, or to better assure
and confirm unto such other Party its rights and remedies under, this Agreement.

[Remainder
of page intentionally left blank.]

 27
 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representatives.

	
   

  	
  IMMUNOGEN, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SANOFI-AVENTIS U.S. LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SANOFI-AVENTIS U.S. LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 28

SCHEDULE
1

LICENSED
PATENT RIGHTS

	
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Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}]]