Document:

Exhibit 4.2

 

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

 

AMENDED AND RESTATED WARRANT

to Purchase 4,112,500 Shares of Common Stock

of

MAIR Holdings, Inc.

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

	
   

  	
  if to Northwest:

  	
   

  	
  Northwest Airlines, Inc.

  
	
   

  	
   

  	
   

  	
  2700 Lone Oak Parkway

  
	
   

  	
   

  	
   

  	
  Dept. A4400

  
	
   

  	
   

  	
   

  	
  Eagan, MN 55121

  
	
   

  	
   

  	
   

  	
  Attention:  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Northwest Airlines, Inc.

  
	
   

  	
   

  	
   

  	
  2700 Loan Oak Parkway

  
	
   

  	
   

  	
   

  	
  Dept. A6110

  
	
   

  	
   

  	
   

  	
  Eagan, MN 55121

  
	
   

  	
   

  	
   

  	
  Attention:  Vice President Network Planning

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  	
  Northwest Airlines, Inc.

  
	
   

  	
   

  	
   

  	
  2700 Lone Oak Parkway

  
	
   

  	
   

  	
   

  	
  Dept. A1180

  
	
   

  	
   

  	
   

  	
  Eagan, MN 55121

  
	
   

  	
   

  	
   

  	
  Attention:  General Counsel

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  if to the Company:

  	
   

  	
  MAIR Holdings, Inc.

  
	
   

  	
   

  	
   

  	
  150 South Fifth Street,
  Suite 1360

  
	
   

  	
   

  	
   

  	
  Minneapolis, MN 55402

  
	
   

  	
   

  	
   

  	
  Attention:  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  	
  MAIR Holdings, Inc.

  
	
   

  	
   

  	
   

  	
  150 South Fifth Street,
  Suite 1360

  
	
   

  	
   

  	
   

  	
  Minneapolis, MN 55402

  
	
   

  	
   

  	
   

  	
  Attention:  Chief Financial Officer

  

 

5

 

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

 

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

 

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

 

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

 

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

 

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

 

 

	
   

  	
  MAIR
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Paul F.
  Foley

  	
   

  
	
   

  	
  Paul F. Foley

  	
   

  
	
   

  	
  Chief Executive
  Officer

  	
   

  

 

6

 

NOTICE OF EXERCISE OF WARRANT

 

(To be executed by the registered holder

if such holder desires to exercise the Warrant.)

 

TO:                            MAIR
Holdings, Inc.

 

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

 

	
   

  	
   

  
	
   

  	
  (Print Name)

  
	
   

  	
   

  
	
  Please insert social security or other tax

  	
   

  
	
  Identification number of registered

  	
   

  
	
  Holder of certificate:

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  Signature*

  
					

 

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

 

 

FORM OF ASSIGNMENT

 

(To be executed by the registered holder

if such holder desires to transfer the Warrant.)

 

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

 

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:Exhibit 4.3

 

REGISTRATION
RIGHTS AGREEMENT

dated as of August 29, 2005

among

MAIR HOLDINGS, INC.,

 

NORTHWEST
AIRLINES, INC.,

 

BOEING
CAPITAL LOAN CORPORATION

 

and

 

U.S. BANK
NATIONAL ASSOCIATION

 

 

This
REGISTRATION RIGHTS AGREEMENT is entered into as of August 29, 2005 (this “Agreement”),
among MAIR Holdings, Inc., a Minnesota corporation (the “Company”),
Northwest Airlines, Inc., a Minnesota corporation (“NWA”), Boeing Capital Loan Corporation (together with its affiliates,
“Boeing”), and U.S. Bank National Association (the “Security Trustee”).

 

Recitals

 

WHEREAS, as of
the date hereof, NWA is the beneficial owner of a total of 5,657,113 shares
(the “Shares”) of common stock, par value $0.01 per share (the “Common
Stock”), of the Company, and warrants that give NWA the right to acquire a
total of 4,151,922 shares of Common Stock (the “Original Warrants”);

 

WHEREAS, NWA,
the Company and Mesaba Aviation, Inc., a wholly owned subsidiary of the
Company (“Mesaba”), entered into a letter of intent dated as of April 22,
2005 (the “Letter of Intent”), which contemplates, among other things, (i) an
amendment or re-issuance of the Original Warrants, such that, following such
amendment or re-issuance, NWA will hold a warrant (the “New Warrant”)
pursuant to which, upon satisfaction of the vesting conditions, NWA will be
entitled to acquire 4,112,500 shares of Common Stock at an exercise price of $8.74
per share, such New Warrant to be issued to NWA upon the execution of a new
Airline Services Agreement by NWA and Mesaba, and (ii) the execution and
delivery by NWA and the Company of this Agreement;

 

WHEREAS,
pursuant to that certain Stock Loan Agreement dated as of May 5, 2005 (the
“Loan Agreement”) among NWA, Boeing, as Administrative Agent and Lender,
and the Security Trustee, NWA has pledged the Shares to Boeing as collateral to
secure a loan, which provides for, among other things, the execution and
delivery by Boeing, the Security Trustee, NWA and the Company of this
Agreement; and

 

WHEREAS, the
Company desires to provide to NWA, the Security Trustee, Boeing and each other
Holder (as defined below) rights relating to registration under the Securities
Act (as defined below) of Registrable Securities (as defined below) on the
terms and subject to the conditions set forth herein.

 

NOW,
THEREFORE, the parties hereto hereby agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1.                                Defined
Terms.  As used herein, the terms
set forth below shall have the following meanings:

 

“Business
Day” means a day which is not a Saturday, Sunday or a day on which banks in
New York City are authorized or required by Law to close.

 

 

“Court”
means any court or arbitration tribunal established and functioning under the
Laws of any nation or state, including the United States of America, or any
political subdivision thereof, including any state of the United States of
America.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, or any
successor Law, and regulations and rules promulgated thereunder.

 

“Governmental
Authority” means any national, federal, regional, state, local or other
governmental agency, authority, administrative agency, regulatory body,
commission or instrumentality (other than a Court), including any multinational
authority having governmental or quasi-governmental powers.

 

“Holder” means NWA, the Security Trustee, Boeing and any other
direct or indirect transferee, assignee or pledgee of Registrable Securities by
NWA, Boeing or the Security Trustee; provided, however, that, notwithstanding
the foregoing, unless and until Boeing and/or the Security Trustee or any other
pledgee of all or a portion of the Registrable Securities (the “Pledged
Registrable Securities”) has at such time the right to exercise remedies, following
the occurrence of an event of default under the applicable loan agreement with
NWA, with respect to the Pledged Registrable Securities pursuant to such loan agreement,
NWA (and not Boeing and/or the Security Trustee or such other pledgee, as the
case may be) shall be permitted to effect the sale of the Pledged Registrable
Securities pursuant to any registration statement filed by the Company in
accordance with this Agreement, provided that any such sale shall be subject to
that certain Stock Indenture and Security Agreement dated as of May 5, 2005
between NWA and the Security Trustee; and Boeing and/or the Security Trustee and
any other pledgee of Pledged Registrable Securities agree to provide the
Company with written notice of an event of default giving rise to its right to
exercise remedies with respect to the Pledged Registrable Securities in
accordance with such loan agreement (to which written notice NWA hereby
consents) and, following the Company’s receipt of such written notice, Boeing and/or
the Security Trustee or such other pledgee, as the case may be (and not NWA)
shall be permitted to effect the sale of the Pledged Registrable Securities pursuant
to any registration statement filed by the Company in accordance with this
Agreement.

 

“Holders’
Counsel” means outside legal counsel selected by NWA (and, during the term
of the Loan Agreement, reasonably approved by Boeing) to represent all Holders
of Registrable Securities covered by the applicable registration statement, or,
if NWA does not own any of the Registrable Securities covered by such
registration statement, then to one counsel selected by the Holders of a
majority of the Registrable Securities being so registered to represent all
Holders of Registrable Securities being so registered.

 

“Law”
and “Laws” means all laws, statutes and ordinances of the United States
of America and any political subdivision thereof, including any state of the
United States of America, including all decisions of Courts having the effect
of law in any such jurisdiction.

 

“NASD”
means the National Association of Securities Dealers, Inc.

 

“NASDAQ”
means the National Association of Securities Dealers Automated Quotation
System.

 

2

 

“Person”
means any individual, firm, unincorporated organization, corporation (including
any not-for-profit corporation), general or limited partnership, limited
liability company, joint venture, estate, trust, association or other entity,
including any syndicate or group that would be deemed to be a person under Section 12(a)(3) of
the Exchange Act.

 

“Registrable
Securities” means the Shares and the Warrant Shares, and any Common Stock
which may be issued or distributed in respect thereof by way of stock dividend
or stock split or other distribution, recapitalization or reclassification.  Any particular Registrable Securities that
are issued shall cease to be Registrable Securities when (i) the Shelf
Registration Statement with respect to their sale has become effective under
the Securities Act and such Registrable Securities have been disposed of in
accordance with the Shelf Registration Statement, (ii) such Registrable
Securities have been distributed to the public pursuant to Rule 144 (or
any successor provision) under the Securities Act, (iii) such Registrable
Securities have been otherwise transferred, new certificates for such
securities not bearing a legend restricting further transfer shall have been
delivered by the Company and subsequent disposition of such securities shall
not require registration or qualification of such Registrable Securities under
the Securities Act or any state securities or blue sky law then in force, (iv) such
Registrable Securities may be freely sold publicly without registration under
the Securities Act pursuant to Rule 144(k) of the Securities Act or (v) such
Registrable Securities shall have ceased to be outstanding.  For the avoidance of doubt, if Boeing and/or
the Security Trustee or any other pledgee of Pledged Registrable Securities
forecloses upon such Pledged Registrable Securities in accordance with the
applicable loan agreement with NWA, such Pledged Registrable Securities shall
constitute Registrable Securities hereunder notwithstanding any transfer of
such Pledged Registrable Securities from NWA to Boeing and/or the Security
Trustee or to such other pledgee in connection with such foreclosure.

 

“Registration
Expenses” means any and all reasonable out-of-pocket expenses incident to
performance of or compliance by the Company with Article II of this
Agreement, including but not limited to (i) all SEC and stock exchange or
NASD registration and filing fees (including, if applicable, the fees and
expenses of any “qualified independent underwriter,” as such term is defined in
Schedule E to the Bylaws of the NASD, and of its counsel), (ii) all
fees and expenses of complying with securities or blue sky laws (including fees
and disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities), (iii) all printing,
messenger and delivery expenses, (iv) all fees and expenses incurred in
connection with the listing of the Registrable Securities on any securities
exchange pursuant to Article II, (v) the reasonable fees and
disbursements of outside legal counsel for the Company and of its independent
public accountants, including the expenses of any special audits and/or “cold
comfort” letters required by or incident to such performance and compliance, (vi) the
reasonable fees and disbursements of Holders’ Counsel, and (vii) any fees
and disbursements of underwriters customarily paid by issuers and other sellers
of securities, but excluding underwriting discounts and commissions and
transfer taxes, if any.

 

“Road Show
Offering” means any underwritten “take-down” of all or a portion of the
Registrable Securities covered by any registration statement having an
anticipated aggregate offering price of at least $10 million, and which is
designated by the Holder as a Road Show Offering.

 

3

 

“SEC”
means the Securities and Exchange Commission.

 

“Securities
Act” means the Securities Act of 1933, as amended, or any successor Law,
and regulations and rules issued thereunder.

 

“Warrant
Shares” means any shares of Common Stock issued pursuant to the New
Warrant.

 

Section 1.2.                                Rules of
Construction.  The language used
in this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent and no rule of strict construction will be
applied against any party.  All section headings
contained in this Agreement are for convenience of reference only, do not form
a part of this Agreement and will not affect in any way the meaning or
interpretation of this Agreement.  All
words used in this Agreement will be construed to be of such gender or number
as the circumstances require.  Unless the
context otherwise requires, “or” is disjunctive but not exclusive, words in the
singular include the plural and vice versa, and the words “hereof,” “herein”
and “hereunder” and words of similar import refer to this Agreement as a whole
and not to any particular provision of this Agreement.

 

ARTICLE II

REGISTRATION RIGHTS

 

Section 2.1.                                Shelf
Registration Statements.

 

(a)                                  If the Company at any
time after the date hereof is permitted to register securities under the Securities
Act on Form S-3 or any similar or successor short form registration
statement, then upon the request of any of the Holders of Registrable
Securities, the Company will cause to be filed and use commercially reasonable
efforts to have declared effective as soon as reasonably practicable
thereafter, one or more shelf registration statements pursuant to Rule 415
under the Securities Act (each a “Shelf
Registration Statement,” and collectively, the “Shelf Registration Statements”)
covering the Registrable Securities that names NWA, Boeing, the Security
Trustee and any other applicable Holders as selling shareholders of such
Registrable Securities; provided, however, the Company shall not be obligated
to file a Shelf Registration Statement or an amendment to a Shelf Registration
Statement previously filed that registers less than 1,000,000 Registrable
Securities (the “Minimum Number”) unless at such time all Holders
collectively hold a number of Registrable Securities that is less than such
Minimum Number and in any such case such Shelf Registration Statement shall
register the number of Registrable Securities then held by such Holders.

 

(b)                                 Each Shelf Registration
Statement will be on the appropriate form and will comply as to form in all
material respects with the requirements of the Securities Act and the rules and
regulations promulgated thereunder, permitting registration of such Registrable
Securities for resale by any Holder in the manner designated by it.  In the event any Holder holds Registrable
Securities not covered by a Shelf Registration Statement, at the request of
such Holder, the Company will amend the Shelf Registration Statement to include
such additional

 

4

 

Registrable Securities and use commercially reasonable efforts to have
such amended Shelf Registration Statement declared effective as soon as
reasonably practicable.  Each Shelf
Registration Statement filed after the filing of the first Shelf Registration
Statement filed pursuant to Section 2.1(a) of this Agreement will, to
the extent allowed under the Securities Act, constitute a post-effective
amendment to such previously filed Shelf Registration Statement under Rule 429
under the Securities Act.

 

Section 2.2.                                Maintenance
of Effectiveness.

 

(a)                                  The Company will use
its reasonable best efforts to keep any Shelf Registration Statement required
by Section 2.1(a) continuously effective, supplemented and amended to
the extent necessary to ensure that:

 

(i)                                     it is available
for sales of Registrable Securities by any Holder in accordance with Section 2.1(a) above;
and

 

(ii)                                  it conforms with the
requirements of this Agreement, the Securities Act and the policies, rules and
regulations of the SEC as announced from time to time, until such time as there
are no more Registrable Securities held by any Holders.

 

(b)                                 No Holder may include any
Registrable Securities in any Shelf Registration Statement pursuant to this
Agreement unless and until it furnishes to the Company in writing, within
20 days after receipt of a request therefor (and the Holders agree to
provide), the information with respect to itself and its plan of distribution,
and with respect to any other Holders and their plan of distribution, as
applicable, as specified in Item 507 or 508 of Regulation S-K, as
applicable, of the Securities Act for use in connection with such Shelf
Registration Statement or any prospectus or preliminary prospectus included
therein.  Each Holder that is selling
Registrable Securities pursuant to such Shelf Registration Statement agrees to
promptly furnish to the Company additional information as to itself and its
plan of distribution required to be disclosed in order to make the information
previously furnished by it to the Company not materially misleading.

 

(c)                                  Notwithstanding the foregoing,
if the Company’s Board of Directors determines in its good faith judgment, as
certified in writing by an officer of the Company to the Security Trustee that disclosure
of the existence of any acquisition or corporate reorganization or other
material transaction or development (other than a material development directly
related to the business or financial condition of NWA that has resulted in an
Event of Default (as defined in the Loan Agreement)) would be required to be
included in the Shelf Registration Statement or the related prospectus and such
disclosure would be premature and materially detrimental to the Company and its
shareholders, the Company may allow such Shelf Registration Statement to fail
to be effective or the prospectus contained therein to be unusable as a result
of such nondisclosure for no more than forty-five (45) consecutive days, and no
more than ninety (90) days in any consecutive twelve-month period.

 

Section 2.3.                                Incidental
Registration.

 

(a)                                  Right
to Include Registrable Securities. 
If the Company at any time after the date hereof proposes to register
any of its Common Stock (or any security which is convertible into or

 

5

 

exchangeable or exercisable for Common Stock) under
the Securities Act (other than a registration on Form S-4 or S-8, or any
successor or other forms promulgated for similar purposes), whether or not for
sale for its own account, in a manner which would permit registration of
Registrable Securities for sale to the public under the Securities Act, it
will, at each such time, give prompt written notice to all Holders of
Registrable Securities of its intention to do so and of such Holders’ rights
under this Section 2.3.  Upon the
written request of any such Holder made within 15 days after the receipt
of any such notice (which request will specify the number of Registrable
Securities intended to be disposed of by such Holder), the Company will effect
the registration under the Securities Act of all Registrable Securities that
the Company has been so requested to register by the Holders thereof, to the
extent requisite to permit the disposition of the Registrable Securities so to
be registered.  If a registration
requested pursuant to this Section 2.3 involves an underwritten offering,
any Holder of Registrable Securities requesting to be included in such
registration may elect, in writing prior to the effective date of the
registration statement filed in connection with such registration, not to register
such securities in connection with such registration.

 

(b)                                 Termination of Proposed
Registration.  If, at any time after giving written notice
of its intention to register any securities under the Securities Act in
accordance with the provisions of Section 2.3 hereof and prior to the
effective date of the registration statement filed in connection with such
registration, the Company determines for any reason not to proceed with the
proposed registration of the securities to be sold by it, the Company may, at
its election, give written notice of such determination to each Holder of
Registrable Securities, and, thereupon, will be relieved of its obligation to
register any Registrable Securities in connection with such registration.

 

(c)                                  Registration Statement Form;
Priority in Incidental Registrations.

 

(i)  If any registration requested pursuant
to this Section 2.3 and which is proposed by the Company to be effected by
the filing of a registration statement on Form S-3
(or any successor or similar short-form registration statement) and involves an
underwritten offering, and if the managing underwriter(s) of such offering
advise the Company that, in its opinion, the use of another form of
registration statement is of material importance to the success of the proposed
offering, then such registration will be effected on such other form.

 

(ii)  If a registration pursuant to
this Section 2.3 involves an underwritten offering and the managing
underwriter(s) advise the Company in writing that, in its opinion, the number
of securities requested to be included in such registration exceeds the number
which can be sold in such offering, so as to be likely to have an adverse
effect on the price, timing or distribution of the securities offered in such
offering as contemplated by the Company, then the Company will include in such
offering first, the securities the Company proposes to sell for its own account
and, second, the Registrable Securities that the Holders have requested to be
included in such registration (to the extent such Registrable Securities, in
the opinion of such managing underwriter(s), can be sold without having the
adverse effects referred to above), such amount to be allocated pro rata among
all requesting Holders on the basis of the relative number of shares of
Registrable Securities then held by each such Holder (provided
that any shares thereby

 

6

 

allocated to any such Holder that exceed such
Holder’s request will be reallocated among the remaining requesting Holders in
a like manner).

 

Section 2.4.                                Lock-Up.  In the case of any underwritten offering in
accordance with this Article II or any other underwritten offering of
equity securities of the Company during the term of this Agreement, to the
extent requested in writing (with reasonable prior notice) by the managing
underwriter(s) of such underwritten offering:

 

(a) in the case of an underwritten offering by
the Company, to the extent so agreed by each of the directors and officers of
the Company and by each shareholder of the Company holding not less than 10% of
the outstanding common stock of Company (unless otherwise agreed by NWA, Boeing
and/or the Security Trustee), each of NWA, Boeing, the Security Trustee, and each
Holder of Registrable Securities agrees that it shall not effect any sales of
any equity securities of the Company or of any security convertible into or
exchangeable or exercisable for any equity security of the Company (in each
case, other than as part of such underwritten offering), from 14 days
prior to the anticipated date of the pricing of such underwritten offering and
up to a 90 day period beginning on the date of consummation of such
underwritten offering (or such lesser period as such managing underwriter(s)
may permit);

 

(b) in the case of an underwritten offering by
NWA, the Company agrees that it shall not effect any sales of any equity
securities of the Company or of any security convertible into or exchangeable
or exercisable for any equity security of the Company (in each case, other than
as part of such underwritten offering), from 14 days prior to the anticipated
date of the pricing of such underwritten offering and up to a 90 day period
beginning on the date of consummation of such underwritten offering (or such
lesser period as such managing underwriter(s) may permit); and

 

(c) in the case of an underwritten offering by
Boeing and/or the Security Trustee, the Company agrees that it shall not effect
any sales of any equity securities of the Company or of any security convertible
into or exchangeable or exercisable for any equity security of the Company (in
each case, other than as part of such underwritten offering), from 14 days
prior to the anticipated date of the pricing of such underwritten offering and
up to a 90 day period beginning on the date of consummation of such
underwritten offering (or such lesser period as such managing underwriter(s)
may permit).

 

Section 2.5                                   Registration
Procedures.  In connection with
the Company’s obligations pursuant to this Article II to effect the
registration of the Registrable Securities under the Securities Act to permit
the sale of such Registrable Securities by the selling Holders in accordance
with their intended method or methods of disposition thereof, whether in an
underwritten offering or a sale not involving an underwriter, the Company will
as soon as practicable:

 

(a)                                  Prepare and file with the SEC a
registration statement or registration statements on Form S-3 and use its
reasonable best efforts to cause each such registration statement or statements
to become effective and remain effective and usable for resale of Registrable
Securities during the period that such registration statement is required to be
effective and usable as provided herein, cause such

 

7

 

registration statement to not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
and cause such registration statement and the related prospectus and any
amendment or supplement thereto, as of the effective date of such registration
statement, amendment or supplement, to comply in all material respects with any
requirements of the Securities Act and the rules and regulations
promulgated thereunder; provided, however, that before filing a registration statement or
prospectus or any amendments or supplements thereto (excluding documents that
would be incorporated or deemed to be incorporated therein by reference), the
Company will furnish to (i)  each Holder of Registrable Securities, (ii) the
Holders’ Counsel, and (iii) the managing underwriter(s), if any, copies of
all such documents proposed to be filed, which documents will be subject to the
review of the Holders, their respective legal counsel and the underwriters, and
the Company will not file any such registration statement or amendment thereto
or any prospectus or any supplement thereto (excluding such documents that,
upon filing, will be incorporated or deemed to be incorporated by reference
therein) containing any information about any of the Holders or the managing
underwriter(s), if any such Person reasonably objects.

 

(b)                                 Prepare and file with the SEC
such amendments and post-effective amendments to each registration statement as
may be necessary to keep such registration statement effective as provided
herein; cause the related prospectus to be supplemented by any required
prospectus supplement (including supplementing the prospectus to reflect all information
necessary to effect sales by pledgees of Registrable Securities), and as so
supplemented to be filed pursuant to Rule 424 (or any similar provisions
then in force) under the Securities Act; and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by
such registration statement during the applicable period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
registration statement as so amended or in such prospectus as so supplemented.

 

(c)                                  Notify each Holder for which
Registrable Securities are being registered and any managing underwriter(s)
(and, in each case, counsel therefor if appropriate notice information has been
provided reasonably in advance to the Company) promptly, and (if requested by
any such Person) confirm such notice in writing:

 

(i)                                     when a prospectus
or any prospectus supplement or post-effective amendment has been filed, and,
with respect to a registration statement or any post-effective amendment, when
the same has become effective;

 

(ii)                                  of any request by the
SEC or any other Governmental Authority for amendments or supplements to a
registration statement or related prospectus or for additional information;

 

(iii)                               of the issuance by the
SEC or any other Governmental Authority of any stop order, injunction or other
order suspending the effectiveness of a registration statement or the
initiation or threatening of any proceedings for that purpose;

 

8

 

(iv)                              if at any time the
representations and warranties of the Company contained in any agreement
entered into by the Company in connection with the offering (including any
underwriting agreement) cease to be true and correct in any material respect;

 

(v)                                 of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose;

 

(vi)                              of the occurrence of any
event, circumstance or condition that makes any statement made in such
registration statement or related prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect
or that requires the making of any changes in a registration statement,
prospectus or any such document so that, in the case of the registration
statement, it will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading and, in the case of the prospectus, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and

 

(vii)                           of the Company’s reasonable
determination that a post-effective amendment to a registration statement would
be appropriate.

 

(d)                                 Use its reasonable best efforts
to obtain the withdrawal of any order suspending the effectiveness of a
registration statement, or the lifting of any suspension of the qualification
(or exemption from qualification) of any Registrable Securities for sale in any
jurisdiction as soon as possible.

 

(e)                                  If requested by the managing
underwriter(s), if any, and any selling Holders:

 

(i)                                     promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter(s), if any, and any selling Holders
agree should be included therein as may be required by applicable Law; and

 

(ii)                                  make all required
filings of such prospectus supplement or such post-effective amendment as soon
as practicable after the Company has received notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment;

 

provided, however, that the Company will not be required to take any
actions under this Section 2.5(e) that are not, in the opinion of the
Company’s counsel, in compliance with applicable Law.

 

9

 

(f)                                    Furnish to each Holder of
Registrable Securities named in any registration statement and each managing
underwriter, if any, such number of copies of the registration statement and
any post-effective amendment thereto (but excluding schedules, all documents
incorporated or deemed incorporated therein by reference and all exhibits,
unless requested in writing by such party or such underwriter), each prospectus,
including each preliminary prospectus, and any amendment or supplement thereto
and such other documents as such party or managing underwriter may reasonably
request in order to facilitate the public sale or other disposition of
Registrable Securities by such Holder; the Company hereby consents to the use
of the prospectus, including each preliminary prospectus, by each Holder of
Registrable Securities and each underwriter of an underwritten offering, if
any, in connection with the offering and sale of Registrable Securities covered
by the prospectus or the preliminary prospectus at such times and in such
manner as permitted by this Agreement.

 

(g)                                 Prior to any public offering of
Registrable Securities, to register or qualify or cooperate with the Holders of
Registrable Securities, the underwriters, if any, and their respective counsel
in connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and
sale under the securities or blue sky Laws of such jurisdictions within the
United States as any seller of Registrable Securities or underwriter reasonably
requests in writing; use its reasonable best efforts to keep such registration
or qualification (or exemption therefrom) effective during the period the
applicable registration statement is required to be kept effective and do any
and all other acts or things necessary or advisable to enable the disposition
in each such jurisdiction of Registrable Securities covered by the applicable
registration statement; provided, however, that the Company will not be required to (i) qualify
to do business in any jurisdiction where it is not then so qualified or (ii) take
any action that would subject it to taxation or service of process in any such
jurisdiction where it is not then so subject.

 

(h)                                 Use its reasonable best efforts
to cause Registrable Securities covered by the applicable registration
statement to be registered with or approved by such other governmental agencies
or authorities within the United States except as may be required solely as a
consequence of the nature of business conducted by any Holder, in which case
the Company will cooperate in all reasonable respects with the filing of such
registration statement and the granting of such approvals as may be necessary
to enable the seller or sellers thereof or the underwriters, if any, to
consummate the disposition of such Registrable Securities.

 

(i)                                     Cooperate with the selling
Holders of Registrable Securities and the managing underwriter(s), if any, to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and enable such Registrable Securities to be
in such denominations and registered in such names as the selling Holders and
the managing underwriter(s), if any, will request at least two Business Days
prior to any sale of Registrable Securities.

 

(j)                                     Prepare a supplement or
post-effective amendment to each registration statement or a supplement to the
related prospectus or any document incorporated therein

 

10

 

by reference or file any other required
document so that, as thereafter delivered to the purchasers of Registrable
Securities being sold thereunder, such prospectus will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

 

(k)                                  Use its reasonable
best efforts to cause all Registrable Securities covered by such registration
statement to be listed on each securities exchange, if any, on which similar
securities issued by the Company are then listed.

 

(l)                                     As needed, (i) engage an
appropriate transfer agent and provide the transfer agent with printed
certificates for Registrable Securities in a form eligible for deposit with The
Depository Trust Company and (ii) provide a CUSIP number for the
Registrable Securities.

 

(m)                               Make available for reasonable
inspection during normal business hours by the selling Holders and any
underwriter participating in any disposition of Registrable Securities, and any
attorney or accountant retained by any such Person, all financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries, and cause the officers, directors and employees of the Company
and its subsidiaries to supply all information reasonably requested by the
selling Holders, any such underwriter, attorney or accountant in connection
with such registration statement; provided, however, that any records, information or documents that are
designated by the Company in writing as confidential at the time of delivery of
such records, information or documents will be kept confidential by such
Persons unless:

 

(i)                                     such records,
information or documents are in the public domain or otherwise publicly
available;

 

(ii)                                  disclosure of such
records, information or documents is required by court or administrative order;
provided, that such Person notifies the
Company of any such requirement and cooperates with the Company in seeking a
protective or restraining order limiting such disclosure; or

 

(iii)                               disclosure of such
records, information or documents, upon reasonable advice of counsel to such
Person, is otherwise required by Law (including pursuant to the requirements of
the Securities Act) or the rules or regulations of any securities exchange
or NASDAQ.

 

(n)                                 Within a reasonable time prior
to the filing of any registration statement, any prospectus, any amendment to a
registration statement or amendment or supplement to a prospectus, in each case
containing information regarding any selling Holder of Registrable Securities,
provide copies of such document to such Person and/or the managing
underwriter(s) of an underwritten offering, if any; fairly consider such
reasonable changes in any such document prior to the filing thereof as such
Person may request and not file any such document in a form to which any such
Person reasonably

 

11

 

objects; and make such of the representatives
of the Company as will be reasonably requested by any such Person available for
discussion of such document.

 

(o)                                 Comply with all applicable rules and
regulations of the SEC and make generally available to its security holders
earnings statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule promulgated
under the Securities Act) no later than 45 calendar days after the end of
any 12-month period (or 90 calendar days after the end of any 12-month
period if such period is a fiscal year) (i) commencing at the end of any
fiscal quarter in which Registrable Securities are sold to underwriters in a
firm commitment or reasonable best efforts underwritten offering or (ii) if
not sold to underwriters in such an offering, commencing on the first day of
the first fiscal quarter of the Company, after the effective date of a
registration statement, which statements will cover such 12-month period.

 

(p)                                 In connection with any
underwritten offering, the Company will enter into such customary agreements
(including an underwriting agreement) and take all such other commercially
reasonable and customary actions in connection therewith (including taking
those actions reasonably requested by the managing underwriter(s)) in order to
facilitate the disposition of such Registrable Securities and in such
connection will:

 

(i)  make such representations and
warranties to the underwriters and the selling Holders of Registrable
Securities with respect to the businesses of the Company and its subsidiaries,
the registration statement, prospectus and documents incorporated by reference
or deemed incorporated by reference therein, if any, and any other customary
representations and warranties, in each case, in form, substance and scope as
are customarily made by issuers in secondary offerings to underwriters in
underwritten offerings and confirm the same if and when requested;

 

(ii)  obtain opinions of its counsel and
updates thereof, which counsel and opinions (in form, scope and substance) will
be reasonably satisfactory to the managing underwriter(s), if any, addressed to
each of the underwriters and selling Holders covering the matters customarily
covered in opinions requested in underwritten offerings and such other matters
as may be reasonably requested by such underwriters or Holders;

 

(iii)  use its reasonable best efforts
to obtain “comfort” letters and updates thereof from its independent certified
public accountants (and, if necessary, any other certified public accountants
of any of its subsidiaries or of any business acquired by the Company for which
financial statements and financial data is, or is required to be, included in
the registration statement), addressed to each of the underwriters and the
selling Holders, if permissible, such letters to be in customary form and
covering matters of the type customarily covered in “comfort” letters in
connection with underwritten offerings;

 

(iv)  use its reasonable best efforts to
the extent reasonably requested by the managing underwriter(s) to cause its
senior officers to participate in

 

12

 

customary “road show” presentations and otherwise to facilitate,
cooperate with, and participate in the sale of such Registrable Securities and
in any customary selling efforts related thereto,; provided
that the assistance contained in this Section 2.5(p)(iv) applies
only in the event of a Road Show Offering; and

 

(v)  deliver such documents and
certificates as may be reasonably requested by the managing underwriter(s), if
any, or the selling Holders to evidence the continued validity of the
representations and warranties of the Company and its subsidiaries made
pursuant to clause (i)  above and to evidence compliance with any
customary conditions contained in the underwriting agreement.

 

The foregoing actions will be taken in
connection with each closing under such underwriting agreement as and to the
extent required thereunder.

 

Section 2.6                                   Indemnification.

 

(a)                                  Indemnification
by the Company.  In the event of any
registration of any Registrable Securities under the Securities Act pursuant to
this Agreement, the Company will, and it hereby does, indemnify and hold
harmless, the seller of any Registrable Securities covered by such registration
statement, each affiliate of such seller and their respective directors and
officers or general and limited partners (including any director, officer, affiliate,
employee, agent and controlling Person of any of the foregoing), each other
Person who participates as an underwriter in the offering or sale of such
securities and each other Person, if any, who controls such seller or any such
underwriter within the meaning of the Securities Act (collectively, the “Section 2.6(a) Indemnified Parties”), against any
and all losses, claims, damages or liabilities, joint or several, and expenses
(including reasonable attorney’s fees and reasonable expenses of investigation)
to which such Section 2.6(a)  Indemnified Party may become subject
under the Securities Act, common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof,
whether or not such Indemnified Party is a party thereto) arise out of or are
based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in any registration statement (including any amendment
or supplement thereto) under which such securities were registered under the
Securities Act, any preliminary, final or summary prospectus contained therein,
or any amendment or supplement thereto, or (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of a prospectus, in the
light of the circumstances under which they were made) not misleading, and the
Company will reimburse such Section 2.6(a) Indemnified Party for any
legal or any other expenses reasonably incurred by it in connection with
investigating or defending against any such loss, claim, liability, action or
proceeding, as such expenses are incurred; provided that the
Company will not be liable to any Section 2.6(a) Indemnified Party in
any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon any untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement or amendment or supplement thereto
or in any such preliminary, final or summary prospectus in reliance upon and in

 

13

 

conformity with written information furnished
to the Company with respect to such seller through an instrument duly executed
by such seller specifically stating that it is for use in the preparation
thereof; and provided, further,
that the Company will not be liable to any Person who participates as an
underwriter in the offering or sale of Registrable Securities or any other
Person, if any, who controls such underwriter within the meaning of the
Securities Act, under the indemnity agreement in this Section 2.6 with
respect to any preliminary prospectus or the final prospectus or the final
prospectus as amended or supplemented, as the case may be, to the extent that
any such loss, claim, damage or liability of such underwriter or controlling
Person results from the fact that such underwriter sold Registrable Securities
to a person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the final prospectus or of the final
prospectus as then amended or supplemented, whichever is most recent, if the
Company has previously furnished copies thereof to such underwriter.  For purposes of the last proviso to the
immediately preceding sentence, the term “prospectus” will not be deemed to
include the documents incorporated therein by reference, and no Person who
participates as an underwriter in the offering or sale of Registrable
Securities or any other Person, if any, who controls such underwriter within
the meaning of the Securities Act, will be obligated to send or give any
supplement or amendment to any document incorporated by reference in any preliminary
prospectus or the final prospectus to any person other than a person to whom
such underwriter had delivered such incorporated document or documents in
response to a written request therefor. 
Such indemnity will remain in full force and effect regardless of any
investigation made by or on behalf of such seller or any Section 2.6(a) Indemnified
Party, or any of their respective affiliates, directors, officers or
controlling persons, and will survive the transfer of such securities by such
seller.

 

(b)                                 Indemnification by Sellers and
Underwriters.  In the event of any registration of
Registrable Securities under the Securities Act pursuant to this Agreement,
each seller of such Registrable Securities individually (and not jointly and
severally) (except in the event the Security Trustee is the seller of
Registrable Securities on behalf of Boeing, Boeing) will, and it hereby does,
indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 2.6(a)) the Company and all other prospective sellers
(collectively, the “Section 2.6(b) Indemnified Parties” and, together with the Section 2.6(a) Indemnified
Parties, the “Indemnified Parties”) with respect to any untrue
statement or alleged untrue statement in or omission or alleged omission from
such registration statement, any preliminary, final or summary prospectus
contained therein, or any amendment or supplement, if such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company with
respect to such seller or underwriter through an instrument duly executed by
such seller or underwriter specifically stating that it is for use in the
preparation of such registration statement, preliminary, final or summary
prospectus or amendment or supplement, or a document incorporated by reference
into any of the foregoing.  Such
indemnity will remain in full force and effect regardless of any investigation
made by or on behalf of any Section 2.6(b) Indemnified Party, or any
of its affiliates, directors, officers or controlling Persons and will survive
the transfer of such securities by such seller. 
In no event will the liability of any seller of Registrable Securities
hereunder be greater in amount than the

 

14

 

dollar amount of the net proceeds received by
such seller of Registrable Securities upon the sale of the Registrable
Securities giving rise to such indemnification obligation.

 

(c)                                  Notices of Claims, Etc.  Promptly after receipt by an Indemnified
Party hereunder of written notice of the commencement of any action or
proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 2.6, such Indemnified Party will, if a claim in
respect thereof is to be made against an indemnifying party under this Section 2.6,
give written notice to the latter of the commencement of such action; provided that the failure of the Indemnified Party to give
notice as provided herein will not relieve the indemnifying party of its
obligations under the preceding subdivisions of this Section 2.6, except
to the extent that the indemnifying party is actually prejudiced by such
failure to give notice.  In case any such
action is brought against an Indemnified Party, the indemnifying party will be
entitled to participate in and to assume the defense thereof, jointly with any
other indemnifying party similarly notified to the extent that it may wish,
with counsel reasonably satisfactory to such Indemnified Party, and after
notice from the indemnifying party to such Indemnified Party of its election so
to assume the defense thereof, the indemnifying party will not be liable to
such Indemnified Party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable costs
of investigation.  Notwithstanding the
indemnifying party’s election to appoint counsel to represent an Indemnified
Party in an action, such Indemnified Party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent such Indemnified
Party would present such counsel with a conflict of interest, (ii) the
actual or potential defendants in, or targets of, any such action include both
such Indemnified Party and the indemnifying party and such Indemnified Party
shall have reasonably concluded that there may be legal defenses available to
it or other Indemnified Parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall
not have employed counsel reasonably satisfactory to such Indemnified Party to
represent such Indemnified Party within a reasonable time after notice of the
institution of such action, or (iv) the indemnifying party shall authorize
such Indemnified Party to employ separate counsel at the expenses of the
indemnifying party.  No indemnifying
party will consent to entry of any judgment or enter into any settlement which (i) does
not include as an unconditional term thereof, the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation and (ii) includes a statement as to, or an
admission of, fault, culpability or a failure to act, by or on behalf of any
Indemnified Party.

 

(d)                                 Contribution.  If the indemnification provided for in this Section 2.6
from the indemnifying party is unavailable to an Indemnified Party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to
herein, then the indemnifying party, in lieu of indemnifying such Indemnified
Party, will contribute to the amount paid or payable by such Indemnified Party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and Indemnified Parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other

 

15

 

relevant equitable considerations.  The relative fault of such indemnifying party
and Indemnified Parties will be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact, has been made by, or relates to information supplied by, such
indemnifying party or Indemnified Parties, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action.  The amount paid or payable by a
party under this Section 2.6 as a result of the losses, claims, damages,
liabilities and expenses referred to above will be deemed to include any legal
or other fees or expenses reasonably incurred by such party in connection with
any investigation or proceeding.

 

The parties
hereto agree that it would not be just and equitable if contribution pursuant
to this Section 2.6 were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph.  Notwithstanding the provisions of this Section 2.6(d),
no seller of Registrable Securities (other than a Person that participates as
an underwriter in the offering or sale of Registrable Securities) shall be
required to contribute any amount in excess of the amount by which the dollar
amount of the proceeds received by such seller from the sale of such
Registrable Securities (after deducting any fees, discounts and commissions
applicable thereto) exceeds the amount of any damages which such seller has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission, and no Person that participates as
an underwriter in the offering or sale of Registrable Securities shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities underwritten by it and distributed to
investors were offered to investors exceeds the amount of any damages which
such underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.  No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.

 

(e)                                  Other Indemnification.  Indemnification similar to that specified in
the preceding subdivisions of this Section 2.6 (with appropriate
modifications) will be given by the Company and each seller of Registrable
Securities with respect to any required registration or other qualification of
securities under any federal or state Law or regulation or governmental
authority other than the Securities Act.

 

(f)                                    Non-Exclusivity.  The obligations of the parties under this Section 2.6
will be in addition to any liability which any party may otherwise have to any
other party.

 

Section 2.7                                   Rule 144.  The Company covenants to the Holders of
Registrable Securities that to the extent the Company shall be required to do
so under the Exchange Act, it shall timely file the reports required to be
filed by it under the Exchange Act or the Securities Act (including the reports
under Sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c)(1) of Rule 144 adopted by the SEC under the
Securities Act) and the rules and regulations adopted by the SEC
thereunder, and shall take such further action as any Holder of Registrable
Securities may reasonably request, all to the extent required from time to time
to

 

16

 

enable such Holder to sell Registrable Securities
without registration under the Securities Act within the limitations provided
by Rule 144 under the Securities Act, as such rule may be amended
from time to time, or any similar or successor rule or regulation
hereafter adopted by the SEC.  Upon the
request of any Holder of Registrable Securities in connection with that Holder’s
sale pursuant to Rule 144, the Company shall deliver to such Holder a
written statement as to whether it has complied with such requirements.

 

ARTICLE III

MISCELLANEOUS

 

Section 3.1.                                Costs
and Expenses.  With respect to the registration of
Registrable Securities held by NWA, Boeing or the Security Trustee, NWA shall
pay all Registration Expenses in connection with any registration of
Registrable Securities pursuant to this Agreement (other than with respect to
registrations pursuant to Section 2.3 hereof).  To the extent the Company incurs any
additional Registration Expenses in connection with the performance of its
obligations pursuant to this Agreement (other than with respect to
registrations pursuant to Section 2.3 hereof) that are attributable to the
registration of Registrable Securities held by any Holder other than Boeing,
the Security Trustee or NWA, such Holder shall pay such Registration Expenses.  The Company shall not be required to pay any
Registration Expenses incurred in connection with the performance of its
obligations hereunder except other than with respect to registrations pursuant
to Section 2.3 hereof.

 

Section 3.2.                                Notices.  All notices, consents or other communications
required or permitted to be given under this Agreement will be in writing and
will be deemed to have been duly given and received when delivered personally,
delivery charges prepaid, or three Business Days after being sent by registered
or certified mail (return receipt requested), postage prepaid, or one Business
Day after being sent by a nationally recognized express courier service,
postage or delivery charges prepaid, to the parties at their respective
addresses stated below. Notices may also be given by facsimile and will be
deemed to have been duly given and received on the date transmitted if
confirmed answerback is received at the end of the transmission. Any party may
change its address for notice and the address to which copies must be sent by
giving notice of the new address to the other parties in accordance with this Section 3.2,
except that any such change of address notice will not be effective unless and
until received.

 

	
  If to the
  Company, to:

  
	
   

  	
   

  
	
   

  	
  MAIR Holdings, Inc.

  
	
   

  	
  Fifth Street Towers, Suite 1720

  
	
   

  	
  150 South Fifth Street

  
	
   

  	
  Minneapolis, Minnesota 55402

  
	
   

  	
  Facsimile No.:  (612) 333-0590

  

 

17

 

	
  With a
  required copy to:

  
	
   

  	
   

  
	
   

  	
  MAIR Holdings, Inc.

  
	
   

  	
  Fifth Street Towers, Suite 1720

  
	
   

  	
  150 South Fifth Street

  
	
   

  	
  Minneapolis, Minnesota 55402

  
	
   

  	
  Attn: 
  General Counsel 

  
	
   

  	
  Facsimile No.:  (612) 333-0590

  
	
   

  	
   

  
	
  If to NWA,
  to:

  
	
   

  	
   

  
	
   

  	
  Northwest Airlines, Inc.

  
	
   

  	
  2700 Lone Oak Parkway

  
	
   

  	
  Dept. A4400

  
	
   

  	
  Eagan, Minnesota  55121

  
	
   

  	
  Attn: 
  Chief Financial Officer

  
	
   

  	
  Facsimile No.:  (612) 727-4041

  
	
   

  	
   

  
	
  With a
  required copy to:

  
	
   

  	
   

  
	
   

  	
  Northwest Airlines, Inc.

  
	
   

  	
  2700 Lone Oak Parkway

  
	
   

  	
  Dept. A1180

  
	
   

  	
  Eagan, Minnesota  55121

  
	
   

  	
  Attn: 
  General Counsel

  
	
   

  	
  Facsimile No.:  (612) 726-7123

  
	
   

  	
   

  
	
  If to
  Boeing, to:

  
	
   

  	
   

  
	
   

  	
  Boeing Capital Loan Corporation

  
	
   

  	
  2215-B Renaissance Drive, Suite 18

  
	
   

  	
  Las Vegas, NV  89119

  
	
   

  	
  Attn: 
  Assistant Secretary

  
	
   

  	
  Facsimile No.:   (702) 966-4247

  
	
   

  	
  Phone: 
  (702) 940-4244

  
	
   

  	
   

  
	
  With a
  required copy to:

  
	
   

  	
   

  
	
   

  	
  Boeing Capital Loan Corporation

  
	
   

  	
  500 Naches Avenue SW, Suite 300

  
	
   

  	
  Renton, WA 
  98055

  
	
   

  	
  Attn: 
  Legal Department

  
	
   

  	
  Facsimile No.: (425) 965-4102 or

  
	
   

  	
  (425) 965-4088

  
	
   

  	
  Phone: 
  (425) 965-4125

  

 

18

 

	
  If to the
  Security Trustee, to:

  
	
   

  	
   

  
	
   

  	
  U.S. Bank National Association

  
	
   

  	
  U.S. Mail:

  
	
   

  	
  Corporate Trust Services

  
	
   

  	
  P.O. Box 778

  
	
   

  	
  Boston, Massachusetts  02102-0778

  
	
   

  	
   

  
	
   

  	
  Overnight Courier:

  
	
   

  	
  Corporate Trust Services – 3rd
  Floor

  
	
   

  	
  1 Federal Street

  
	
   

  	
  Boston, Massachusetts 02110

  
	
   

  	
  Facsimile No.: (617) 603-6665

  

 

Section 3.3.                                Assignment;
Binding Effect.  This Agreement
shall inure to the benefit of and be binding upon the successors, assigns and
transferees of each of the parties, including, without the need for an express
assignment, subsequent Holders.  If any
successor, assignee or transferee of any Holder shall acquire Registrable
Securities in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities such Person
shall be conclusively deemed to have agreed to be bound by and to perform all
of the terms and provisions of this Agreement. 
For purposes of this agreement, “successor” for any entity other than a
natural person shall mean a successor to such entity as a result of such entity’s
merger, consolidation, liquidation, dissolution, sale of substantially all of
its assets, or similar transaction.

 

Section 3.4.                                Amendment,
Modification and Waiver.  This
Agreement may be amended and the Company may take any action herein prohibited,
or omit to perform any act herein required to be performed by it, only if the
Company shall have obtained the written consent to such amendment, action or
omission to act, of the Holders of a majority of the Registrable Securities
then outstanding; provided, however, that no
amendment, waiver or consent to the departure from the terms and provisions of
this Agreement that is adverse to NWA, Boeing and/or the Security Trustee or
any of their respective successors, assigns and transferees shall be effective
as against such Person for so long as such Person holds any Registrable
Securities unless consented to in writing by such Person.

 

Section 3.5.                                Governing
Law; No Jury Trial.  This
Agreement and the rights and duties of the parties hereunder shall be governed
by, and construed in accordance with, the Laws of the State of Minnesota.  THE PARTIES HEREBY WAIVE TRIAL BY JURY IN ANY
ACTION, SUIT, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THEM AGAINST THE
OTHER IN ANY MATTERS ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS
AGREEMENT.

 

Section 3.6.                                Severability.  If
any provision of this Agreement is held invalid or unenforceable by any court
of competent jurisdiction, the other provisions of this Agreement will remain
in full force and effect.  Any provision
of this Agreement held invalid or unenforceable

 

19

 

only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.

 

Section 3.7.                                Counterparts.  This Agreement may be executed in any number
of counterparts and any party may execute any such counterpart, each of which
when executed and delivered will be deemed to be an original and all of which
counterparts taken together will constitute but one and the same
instrument.  This Agreement will become
binding when one or more counterparts taken together will have been executed
and delivered (including by facsimile) by the parties.  It will not be necessary in making proof of
this Agreement or any counterpart hereof to produce or account for any of the
other counterparts.

 

Section 3.8.                                Entire
Agreement.  This Agreement is
intended by the parties as a final expression of their agreement and intended
to be a complete and exclusive statement of the agreement and understanding of
the parties hereto in respect of the subject matter contained herein.  This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.

 

Section 3.9.                                Specific
Performance.  The parties hereto
acknowledge that there would be no adequate remedy at law if any party fails to
perform in any material respect any of its obligations hereunder, and
accordingly agree that each party, in addition to any other remedy to which it
may be entitled at law or in equity, shall be entitled to compel specific
performance of the obligations of any other party under this Agreement in
accordance with the terms and conditions of this Agreement.

 

20

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed as
of the date first written above.

 

	
   

  	
  MAIR
  HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul F. Foley

  	
   

  
	
   

  	
   

  	
  Name:  Paul F. Foley

  
	
   

  	
   

  	
  Title:  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NORTHWEST
  AIRLINES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Neal S. Cohen

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Neal S. Cohen

  	
   

  
	
   

  	
   

  	
  Title: 

  	
  Executive Vice President and Chief

  	
   

  
	
   

  	
   

  	
   

  	
  Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BOEING
  CAPITAL LOAN CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jordan S. Weltman

  	
   

  
	
   

  	
   

  	
  Name: Jordan S. Weltman

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL
  ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Donald E. Smith

  	
   

  
	
   

  	
   

  	
  Name:  Donald E. Smith

  
	
   

  	
   

  	
  Title:  Vice President

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