United Express Agreement, by and between UAL and Shuttle America


     

    
      	
              EXHIBIT
                10.41

            
	
              CONFIDENTIAL
                TREATMENT

            
	
              REQUESTED
                PURSUANT TO RULE 24b-2

            
	
               

            
	
              Certain
                portions of this exhibit have been omitted pursuant to a request
                for
                confidential treatment under Rule 24b-2 of the Securities Exchange
                Act of
                1934. The omitted materials have been filed separately with the Securities
                and Exchange Commission.

            


    

    


     

     

     

     

    
 

    United
      Express® Agreement

    between

    United
      Air Lines, Inc.

    and

    Shuttle
      America Corp.

     

    


     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    


    
      	
               

            	
              TABLE
                OF CONTENTS

            	 
	
              ARTICLE

            	
              TITLE
                PAGE

            	 
	
              I.

            	
              DEFINITIONS

            	
            
	
              II.

            	
              SCOPE,
                TERM, AND CONDITIONS

            	
               

            
	
              A.

            	
              SCOPE

            	
               

            
	
              B.

            	
              TERM

            	
               

            
	
              C.

            	
              CONDITIONS

            	
               

            
	
              D.

            	
              CERTAIN
                ACTIONS UPON EFFECTIVENESS

            	
               

            
	
              III.

            	
              SUPPORT
                SERVICES AND FACILITIES

            	
               

            
	
              A.

            	
              GENERAL

            	
               

            
	
              B.

            	
              SPECIAL
                SUPPORT SERVICES

            	
               

            
	
              C.

            	
              COMMUNICATIONS

            	
               

            
	
              D.

            	
              RESERVATIONS

            	
               

            
	
              E.

            	
              OPERATIONS

            	
               

            
	
              F.

            	
              STATION
                SUPPORT SERVICES

            	
               

            
	
              G.

            	
              TARRIFFS
                AND SCHEDULE PUBLICATION

            	
               

            
	
              H.

            	
              ADVERTISING
                AND PROMOTIONS

            	
               

            
	
              I.

            	
              AUTOMATION

            	
               

            
	
              J.

            	
              CONTRACTOR
                ASSISTANCE

            	
               

            
	
              IV.

            	
              AIR
                SERVICES TO BE PROVIDED BY CONTRACTOR

            	
               

            
	
              A.

            	
              AIRCRAFT
                TO BE USED

            	
               

            
	
              B.

            	
              TECHNICAL
                SPECIFICATIONS

            	
               

            
	
              C.

            	
              SCHEDULES
                AND CHARTERS TO BE OPERATED BY CONTRACTOR

            	
               

            
	
              D.

            	
              INVENTORY

            	
               

            
	
              E.

            	
              FLIGHT
                CREWS TO BE USED

            	
               

            
	
              F.

            	
              INFLIGHT
                SALES

            	
               

            
	
              V.

            	
              OPERATING
                RESTRECTIONS

            	
               

            
	
              A.

            	
              UNITED
                EXPRESS OPERATIONS ONLY

            	
               

            
	
              B.

            	
              CODE
                SHARE LIMITATION

            	
               

            
	
              C.

            	
              NO
                OPERATION OUTSIDE AGREEMENT

            	
               

            
	
              D.

            	
              SEVERABILITY
                AND REMEDY

            	
               

            
	
              VI.

            	
              LICENSE

            	
               

            
	
              A.

            	
              GRANT
                OF LICENSE

            	
               

            
	
              B.

            	
              TERMS
                AND CONDITIONS GOVERNING LICENSE

            	
               

            
	
              C.

            	
              INFRINGEMENT

            	
               

            
	
              VII.

            	
              ADDITIONAL
                UNDERTAKINGS

            	
               

            
	
              A.

            	
              PASS
                THROUGH COSTS

            	
               

            
	
              B.

            	
              BULK
                PURCHASES

            	
               

            
	
              C.

            	
              FUEL

            	
               

            
	
              D.

            	
              UNIFORMS

            	
               

            
	
              E.

            	
              PASSES
                AND REDUCED RATE TRAVEL

            	
               

            
	
              F.

            	
              ENVIRONMENTAL

            	
               

            
	
              VIII.

            	
              RATES
                PAYABLE TO CONTRACTOR

            	 
	
              A.

            	
              RATES

            	
               

            
	
              B.

            	
              MARKUP

            	
               

            
	
              C.

            	
              OPERATING
                GOALS

            	
               

            
	
              D.

            	
              WIRE
                TRANSFER AND RECONCILIATION

            	
               

            
	
              IX.

            	
              FEES
                PAYABLE TO UNITED

            	
               

            
	
              A.

            	
              GOVERNMENT
                ASSISTANCE

            	
               

            
	
              X.

            	
              MAINTENANCE
                AND FUELING

            	
               

            
	
              XI.

            	
              U.S.MAIL

            	
               

            
	
              XII.

            	
              INSURANCE

            	
               

            
	
              A.

            	
              INSURANCE
                TYPES

            	
               

            
	
              B.

            	
              30-DAY
                NOTICE

            	
               

            
	
              C.

            	
              ALTERATIONS

            	
               

            
	
              D.

            	
              FAILURE
                TO MAINTAIN INSURANCE

            	
               

            
	
              XIII.

            	
              LIABILITY
                AND INDEMNIFICATION

            	
               

            
	
              A.

            	
              EMPLOYER’S
                LIABILITY AND WORKERS’ COMPENSATION

            	
               

            
	
              B.

            	
              INDEMNIFICATION
                BY CONTRACTOR

            	
               

            
	
              C.

            	
              INDEMNIFICATION
                BY UNITED

            	
               

            
	
              D.

            	
              CONTRACTOR’S
                SUPPLIES LIABILITY

            	
               

            
	
              E.

            	
              INDEMNITY
                FOR INFORMATION

            	
               

            
	
              F.

            	
              CERTAIN
                DEFINITIONS 

            	
               

            


    

    
      	
              XIV.

            	
              REPORTS

            	
               

            
	
              A.

            	
              BOARDING
                INFORMATION

            	
               

            
	
              B.

            	
              OPERATING
                PERFORMANCE

            	
               

            
	
              C.

            	
              FINANCIAL
                STATEMENTS

            	
               

            
	
              D.

            	
              BENCHMARKING

            	
               

            
	
              E.

            	
              GOVERNMENT
                FILINGS

            	
               

            
	
              F.

            	
              COPY
                OF GOVERNMENT REPORTS

            	
               

            
	
              XV.

            	
              INDEPENDENT
                CONTRACTORS AND UNAUTHORIZED OBLIGATIONS

            	
               

            
	
              A.

            	
              INDEPENDENT
                CONTRACTORS

            	
               

            
	
              B.

            	
              EMPLOYEES

            	
               

            
	
              C.

            	
              UNAUTHORIZED
                OBLIGATIONS

            	
               

            
	
              D.

            	
              CONTRACTOR
                OPERATED FLIGHTS

            	
               

            
	
              XVI.

            	
              DEFAULT
                AND TERMINATION

            	
               

            
	
              A.

            	
              OPERATIONS
                DEFAULT

            	
               

            
	
              B.

            	
              COVENANT
                DEFAULT

            	
               

            
	
              C.

            	
              DEFAULT
                BY CONTRACTOR

            	
               

            
	
              D.

            	
              SIMILAR
                AGREEMENTS

            	
               

            
	
              E.

            	
              NON-COMPLIANCE
                WITH STANDARDS

            	
               

            
	
              F.

            	
              CONSEQUENCES
                OF TERMINATION

            	
               

            
	
              H.

            	
              RESTRICTED
                ACTIONS

            	
               

            
	
              I.

            	
              CALL
                OPTION

            	
               

            
	
              XVII.

            	
              ASSIGNMENT,
                MERGER AND ACQUISITION

            	
               

            
	
              A.

            	
              ASSIGNMENT

            	
               

            
	
              B.

            	
              MERGER

            	
               

            
	
              C.

            	
              ACQUISITION

            	
               

            
	
              XVIII.

            	
              CHANGE
                OF LAW

            	
               

            
	
              XIX.

            	
              TAXES,
                PERMITS AND LICENSES

            	
               

            
	
              A.

            	
              TRANSACTION
                TAXES

            	
               

            
	
              B.

            	
              PAYROLL
                TAXES

            	
               

            
	
              C.

            	
              PERMITS
                AND LICENSES

            	
               

            
	
              XX.

            	
              REVIEW

            	
               

            
	
              XXI.

            	
              JURUSTICTION

            	
               

            
	
              XXII.

            	
              NOTICES

            	
               

            
	
              XXIII.

            	
              APPROVALS
                AND WAIVERS

            	
               

            
	
              XXIV.

            	
              GOVERNING
                LAW

            	
               

            
	
              XXV.

            	
              CUMULATIVE
                REMEDIES

            	
               

            
	
              XXVI.

            	
              FORCE
                MAJEURE

            	
               

            
	
              A.

            	
              FORCE
                MAJEURE

            	
               

            
	
              B.

            	
              EFFECT
                ON MARKUP

            	
               

            
	
              C.

            	
              FIXED
                AND OVERHEAD REDUCTION

            	
               

            
	
              XXVII.

            	
              SEVERABILITY
                AND CONSTRUCTION

            	
               

            
	
              XVIII.

            	
              ACKNOWLEDGEMENT

            	
               

            
	
              XXIX.

            	
              CONFIDENTIALITY

            	
               

            
	
              XXX.

            	
              RELATED
                AND THIRD PARTY AGREEMENTS

            	
               

            
	
              XXXI.

            	
              ENTIRE
                AGREEMENT

            	
               

            
	
              XXXIII.

            	
              REFERENCES
                TO TIME PERIODS

            	
               

            
	 	
              APPENDIX
                A

            	
               

            
	 	
              APPENDIX
                B

            	
               

            
	 	
              APPENDIX
                E

            	
               

            
	 	
              DEFNITIONS

            	
               

            
	 	
              APPENDIX
                F

            	
               

            
	 	
              APPENDIX
                G

            	
               

            
	 	
              APPENDIX
                H

            	
               

            
	 	
              APPENDIX
                I

            	
               

            
	 	
              APPENDIX
                J

            	
               

            
	 	 	
            


    

    


    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    


    UNITED
      EXPRESSÒ
      AGREEMENT

     

    This
      Agreement between United Airlines Inc. (“United”) and Shuttle America Corp.
      (“Contractor”) dated as of December 28, 2006, (a) amends and supercedes the
      United ExpressÒ
      Agreement between United and Republic Airline Inc., dated as of February 13,
      2004, as previously amended (the “Republic Agreement”) and (b) amends and
      supercedes the United ExpressÒ
      Agreement between United and Shuttle America Corp, dated as of February 13,
      2004
      as previously amended (the “Shuttle America Agreement”)

     

    WITNESSETH:

     

    WHEREAS,
      United holds a certificate of public convenience and necessity issued pursuant
      to the Federal Aviation Act of 1958 authorizing United to engage in air
      transportation of persons, property and mail, and is a major airline providing
      scheduled air service in both national and international markets;

     

    WHEREAS,
      Contractor is an air carrier holding a certificate of public convenience and
      necessity to be issued pursuant to the Federal Aviation Act of 1958 that will
      authorize it to engage in air transportation of persons and property and provide
      high frequency, short-haul scheduled service in particular regions;

     

    WHEREAS,
      United owns various trademarks, service marks, trade names, logos, emblems,
      uniform designs and distinctive exterior and interior color decor and patterns
      for its aircraft, including, but not limited to, the service mark United Express
      (hereinafter referred to individually and collectively as “United
      Marks”
      or
“Marks”);

     

    WHEREAS,
      United has entered into agreements with several regional carriers to provide
      air
      transportation services under the United Express mark for city pairs where
      it is
      generally uneconomic for United to operate such services;

     

    WHEREAS,
      United will provide Contractor, pursuant to the terms of this Agreement, a
      non-exclusive license to use one or more of the United Marks in connection
      with
      Contractor’s United Express Services.

     

    NOW,
      THEREFORE, in consideration of the foregoing premises, mutual covenants and
      obligations hereinafter contained, the parties agree as follows:

     

    I.  DEFINITIONS

     

    A.  “Aircraft
      Used in United Express Service”
      means
      any type and amount of aircraft set forth in Appendix
      B.

     

    B.  “Apollo
      Services”
      means
      the computerized Apollo Reservations and Ticketing Service (or any similar
      or
      substitute service offered by or on behalf of United), which performs flight,
      hotel, rental car and other travel related services, reservations and ticket
      issuance functions.

     

    C.  “Carrier
      Controlled Costs”
      means
      those types and categories of costs deemed within the control of Contractor
      as
      provided in Appendix
      E.

     

    D.  “Contractor’s
      United Express Services”
      means
      the services or operations provided and maintained by Contractor in connection
      with providing scheduled air transportation service as a United Express Carrier
      and related ground and other services to United and its affiliates pursuant
      to
      the terms of this Agreement (including, without limitation, the services
      required under Article
      IV).

     

    E.  “Default”
      means,
      individually or collectively, a Section
      A Default,
      a
Section
      B Default,
      a
Section
      C Default,
      a
Section
      D Default,
      or a
Section
      E Default,
      each as
      defined in Article
      XVI.

     

    F.  [Intentionally
      Omitted]

     

    G.  “Effective
      Date”
      means
      February 13, 2004.

     

    H.  “Environmental
      Laws”
      means
      all federal, state, local and foreign laws and regulations, and airport rules,
      regulations and policies relating to pollution or the environment, including,
      without limitation, laws and regulations relating to emissions to the air,
      discharges to surface and subsurface waters, safe drinking water, the storage,
      release, disposal, transport or handling of chemicals, pollutants, contaminants,
      wastes, hazardous substances, petroleum and petroleum products, and aircraft
      noise, vibration, exhaust and overflight.

     

    I.  “Ground
      Handling”
      means
      the provision of duties applicable to one or more of the following: (1) customer
      service ticket counter, (2) customer service gates (3) ground handling ramp,
      including mail and freight, (4) gate receipt and dispatch; all in accordance
      with United Express Service Standards. 

     

    J.  “Joint
      Location”
      means
      any airport terminal where Contractor provides Contractor’s United Express
      Services pursuant to this Agreement and both United and Contractor have
      employees stationed.

     

    K.  “Marks”
      or “United Marks”
      shall
      have the meaning set forth in the recitals of this Agreement.

     

    L.  “Pass
      Through Cost”
      means
      those type and categories of costs deemed not to be within the control of
      Contractor, as specified in Appendix
      E.

     

    M.  “Rates”
      shall
      have the meanings set forth in Article
      VIII.

     

     

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        
    N.  “Related
        Agreements” shall
        have the meaning set forth in Article
        XXX 

    

     

        O.  “Revenue
      Passenger”
      means
      each passenger traveling on Contractor in connection with Contractor’s United
      Express Services who holds a ticket (electronic or otherwise), flight coupon,
      voucher or other form of document that (i) entitles that passenger to board
      an
      aircraft and (ii) is issued pursuant to or in connection with a published or
      unpublished fare. Passengers traveling on a purchased ticket (including ID50
      airline industry reduced rate tickets), wholesaler voucher, or voucher issued
      as
      denied boarding compensation, shall be considered to be Revenue Passengers.
      In
      addition, passengers traveling on a free ticket as (or as part of) a Mileage
      PlusÒ
      award or
      a free ticket issued in conjunction with a two-for-one fare or other similar
      fare established by United, shall be considered to be Revenue Passengers. A
      passenger traveling on any other type of free or service charge-based ticket,
      including, but not limited to, a site inspection ticket, or wholesaler
      compensation ticket, any travel agent or wholesaler traveling on a positive
      space or space available ticket, and any employee of United, Contractor or
      any
      other carrier traveling on either a positive space or space available ticket,
      shall not be considered a Revenue Passenger. All Revenue Passengers shall be
      considered when calculating any Monthly Incentive Payment.

     

        P.  “Support
      Services”
      means
      those activities set forth in Article
      III
      which
      are related to the operation of airline services except during
      flight.

     

        Q.  “Termination
      Date”
      shall
      mean, with respect to the Article
      II
      specified aircraft types and ground operations, the applicable expiration,
      removal, or cancellation dates set forth in Article
      II.
      

     

        R.  “United
      Express Best Practice Operating Performance”
means
      for each of the four operating performance metrics outlined in Article
      VIII.C,
      the
      simple average of the calendar year’s twelve operating performance levels (or
      results) generated by using the best operating performance attained (whether
      “best” is the highest or the lowest, as applicable) for each performance metric
      of all United Express Carriers in each month.

     

        S.   “United
      Express Carrier”
      means an
      air carrier which has been contractually given a non-exclusive license to use
      the mark United Express and one or more other United Marks in connection with
      providing air transportation service to United pursuant to an agreement between
      United and such air carrier.

     

        T.  “United
      Express Service Standards” or “Service Standards”
      means
      the procedures prescribed by United that describe United’s approved standards,
      policies, requirements and procedures for various activities relating to the
      provision of air transportation services. These Service Standards are provided
      in Appendix
      I.

     

        U.  “United
      Location”
      means
      any airport terminal facility where Contractor and United both have operations
      and United, but not Contractor, has employees stationed.

     

        V.  “United’s
      Actual Cost” means
      any
      and all costs or expenses actually incurred by United, not including any markup
      by United, any allocation of administrative or overhead expenses, or any
      administrative service charge imposed by United.

     

    II.  SCOPE,
      TERM,
      AND CONDITIONS

     

        A.  SCOPE

     

    The
      scope
      of this Agreement pertains to the type and amount of Contractor’s aircraft set
      forth on Appendix
      B
      hereto,
      and as such, operations may be amended in accordance herewith from time to
      time.

     

        B.  TERM This
      Agreement is effective as of the Effective Date, and shall terminate with
      respect to the applicable aircraft types and amounts as set forth
      below:

     

    
      	1.  	
              Regional
                Jets Term. For
                any ERJ-170 regional jet aircraft subject to this Agreement, the
                aircraft
                shall be divided into two (2) tranches. The term of this Agreement
                for the
                first ERJ tranche (the first eight aircraft delivered) shall expire
                on
                June 30, 2014. The term of the Agreement for the second ERJ tranche
                ( the
                next [*] aircraft) shall expire on June 30, 2015.
                

            


    

    
    C.  CONDITIONS

     

    1.  Renewal
      Option for Regional Jets.
      Upon
      expiration of the term of this Agreement for each tranches of ERJ aircraft
      as
      described in Article
      II.B.1,
      United
      may renew the term for all or none of the ERJ aircraft covered under the terms
      of this Agreement, for an additional term of five (5) years or less, by
      providing written notice to Contractor by no later than December 31, 2012 which
      notice shall specify the period of the renewal term.

     

    2.  [INTENTIONALLY
      OMITTED] 

     

    3.  Ground
      Operations.
      Contractor agrees to be ground handled by ground service providers of United’s
      choosing. Notwithstanding this, Contractor’s incentive goals will be based on
      the operating performance at all stations for which it provides air service.
      United shall issue a Standards of Service document to all ground service
      providers, which will outline United’s expectations for
      the
      ground service provider’s responsibilities, duties, and processes and
      procedures.

     

    4.  Pilot
      Consideration for 70-seat Regional Jet Employment for Furloughed United
      Pilots.
      Contractor acknowledges that United has been required to furlough some of its
      pilots over the past several years. As additional consideration, Contractor
      has
      agreed to provisions outlined in Letter Number 03-22, “Job Opportunities for
      Furloughed United Pilots” between United and the Air Line Pilot Association
      dated August 21, 2003, the express terms of which are incorporated herein by
      reference. United retains the right to recall furloughed pilots hired by
      Contractor. Any additional expenses borne by Contractor due to (a) incremental
      wages that must be paid to furloughed pilots and (b) incremental training
      expenses (determined in the manner specified below) will be reimbursed by
      United. Incremental training expenses for furloughed United Pilots, which shall
      be determined at the end of each calendar quarter during the term of this
      Agreement, shall be the remaining unamortized prorated portion of training
      expenses (which the parties agree shall be [*]
      per
      pilot) for any furloughed pilot that is recalled within 24 months of that
      furloughed pilot’s commencement of work with Contractor. United agrees that it
      shall provide Contractor at least 90 days prior notice before it recalls
      furloughed United pilots employed by Contractor.

    
      __________

      *
        Confidential

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    
      	D.  	
              BANKRUPTCY
                PROVISION
 

            


    

     

       Except
      as
      provided in this paragraph, United’s obligations under this Agreement shall be
      allowable post-petition, administrative expense obligations of United’s
      bankruptcy estate under Section 503 of the Bankruptcy Code. If United breaches
      this Agreement before the effective date of its plan of reorganization,
      Contractor shall have, subject to objection as provided below, allowed
      post-petition administrative expense claims as provided in the Bankruptcy Code.
      In addition, and notwithstanding the foregoing, this Agreement shall be
      terminated upon the happening of either of the following events: (i) United’s
      plan of reorganization (the “Plan”) in its Chapter 11 bankruptcy case (the
“Case”) under which United continues to operate as an airline is not confirmed
      by the Bankruptcy Court and United discontinues all or substantially all flight
      operations, or (ii) the Case is dismissed or converted to a case under Chapter
      7
      of the Bankruptcy Code and United suspends or discontinues flight operations.
      In
      the event of such termination, United shall be deemed to have breached the
      Agreement as of the effective date of such termination (the “Breach Date”) and
      Contractor shall have, subject to objection as provided below, allowed
      administrative expense claims (the “Claims”) (a) for any obligations of United
      under this Agreement arising before the Breach Date, provided, however, that
      this administrative expense claim shall be limited to actual services rendered
      at the contract rate and shall not include any claim for future damages or
      lost
      profits resulting from such termination, (b) for any amounts paid or required
      to
      be paid by Contractor (i) to United Express passengers, (ii) under interline
      and
      clearinghouse agreements and (iii) to Contractor’s United Express employees in
      each case for which Contractor has not already been reimbursed by United; (c)
      for any sums paid or required to be paid by Contractor to third parties in
      connection with the manufacture, purchase, lease or financing of aircraft
      undertaken as part of Contractor’s commitments under this Agreement and any
      maintenance equipment or services or spare parts associated with such aircraft
      ,
      including, but not limited to, deposits, down payments, prepayments and
      financing and similar fees; (d) for two year’s aircraft ownership costs,
      calculated as provided in Section VIII.A.8 for each aircraft as to which
      Contractor has taken delivery prior to the Breach Date, provided that if
      Contractor is able to utilize such aircraft in some other manner then United
      will only be responsible for the variance between the cost stated in section
      VIII.A.8 and the aircraft ownership costs recovered by Contractor during such
      two year period in connection with such utilization; (e) for [*]
      in
      respect of Contractor’s reasonable startup costs and expenses such as pilot
      training expenses and certification costs; provided, however, that Contractor
      shall take commercially reasonable actions to mitigate its damages from the
      the
      categories of activities set forth in clauses (a) through (d) above upon a
      termination of this Agreement. All of Contractor’s obligations to United under
      the Agreement shall immediately terminate as of the Breach Date. Any party
      in
      interest, including United, shall retain the right, during the normal claims
      objection process, to object to the amount (but not the administrative claim
      character or priority) of any claim filed by Contractor except with respect
      to
      the damages set forth in clause (e) above. In addition, subject to Contractor’s
      rights of setoff and recoupment under Section 553 of the Bankruptcy Code,
      Contractor agrees to refund to United any
      amounts prepaid on account of services to be performed after the Breach Date
      by
      Contractor or its agents pursuant to this Agreement, but only to the extent
      such
      services are not subsequently performed upon request of United and that
      Contractor realizes
      an actual savings by not performing such services. United agrees to file and
      diligently prosecute a motion seeking bankruptcy court approval of the terms
      and
      conditions of this Agreement. In the event United does not obtain such
      bankruptcy court approval in an order in form and substance satisfactory to
      Contractor by no later than March 19, 2004, Contractor shall have the right
      to
      terminate this Agreement. Unless waived by United, Contractor must make such
      termination decision by March 23, 2004. 

     

    III.  SUPPORT
      SERVICES AND FACILITIES

     

    A.  GENERAL

     

    1.  Support
      Services.

     

    United
      and Contractor will provide Support Services and facilities to the extent and
      in
      the manner set forth in the subsequent provisions of this Article
      III.
      All
      such Support Services and facilities set forth in this Article
      III
      will be
      furnished only with respect to Contractor’s United Express Services.


     

    2.  Approval
      of Support Services.

     

    United
      reserves the right to approve or disapprove the implementation of any Support
      Services or facilities offered to Contractor for Contractor’s United Express
      Services by any third party at any location. Such approval shall not be
      unreasonably withheld.

     

    B.  SPECIAL
      SUPPORT SERVICES

     

    In
      addition to other services to be made available to or provided to Contractor
      pursuant to this Agreement, and as summarized in and in accordance with
Appendix
      C
      (Ground
      Handling) and Appendix
      D
      (Contractor Support Services), United agrees that it or its designees will
      provide and Contractor agrees to use the following services and facilities
      for
      Contractor’s United Express Services, be they provided by United or its
      designee:

     

    1.  Use
      of the United Designator Code.
      All
      scheduled air transportation provided by Contractor as a part of Contractor’s
      United Express Services will be displayed by United in Apollo Services, the
      Official Airline Guide (“OAG”)
      and
      all other computerized reservations systems, using the appropriate United
      designator code, “UA”
      or “UA*,”
      and a
      flight number within a range of flight numbers assigned by United.

     

    2.  Use
      of Apollo Services. In
      providing Contractor’s United Express Services, Contractor will only use Apollo
      Services, including United’s automated check-in, United’s ticketing (including
      United’s electronic ticketing service, E-TicketSM) and boarding passes, advance
      seat reservation system and United’s automated baggage tag printing and baggage
      tracing systems.

     

    3.  Participating
      in United’s Mileage PlusÒ
      Program.
      At
      United’s discretion, all passengers with paid tickets traveling on a flight
      segment included in Contractor’s United Express Services, whether or not in
      conjunction with a United flight segment, will be awarded mileage credits for
      United’s Mileage Plus Program or any other frequent flyer program as
      specifically approved by United. Contractor shall not participate in the
      frequent traveler program of any other carrier in connection with Contractor’s
      United Express Services, unless otherwise mutually agreed between United and
      Contractor in writing. United has sole discretion concerning decisions relating
      to accrual or redemption of award travel on Contractor’s United Express flights.
      In addition, United will bear the cost of providing redemption travel and
      receive all revenue and benefits from the sale of frequent flyer credits (e.g.
      miles) related to Contractor’s United Express service. 

     

    4.  [Intentionally
      omitted.]

    __________

    
      *
        Confidential

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    5.  Customer
      Service Training.
      On a
      schedule, at a place, to an extent, for a number of persons, and in a manner
      determined by United, United will provide training for Contractor’s instructors
      that United deems sufficient to permit Contractor’s instructors to be able to
      provide and train others to provide customer services for Contractor’s United
      Express Services. Contractor will have no obligation to pay United for such
      training. However, Contractor agrees to adhere to the United Express Service
      Standards as outlined in Appendix
      I
      for all
      Customer Service of their United Express flights.

     

    C.  COMMUNICATIONS

     

    1.  Telephone
      and Data Lines.
      United,
      at its expense, will provide and maintain or arrange for the provision of
      reservations telephone lines connecting the cities served by Contractor in
      connection with Contractor’s United Express Services with United’s Reservations
      Centers. United, at its expense, will establish, operate and maintain or arrange
      for the provision of the data circuits from Contractor’s mutually agreed upon
      locations linking the United-approved data processing equipment at those
      locations with Apollo Services. United, at its expense, will also provide and
      arrange for Contractor’s SOC Communication with Apollo Services. United will
      determine, at its sole discretion, the necessity and feasibility of installing
      all such communications equipment. All other telephone expenses, such as
      Contractor’s long distance expenses shall be borne by Contractor as a station
      operating expense.

     

    2.  Protection
      of Circuits.
      Contractor will take all necessary precautions to protect the data circuits
      provided for Contractor’s use pursuant to this Agreement by United or its
      designee.

     

    D.  RESERVATIONS

     

    1.  Reservations
      Functions. United
      agrees to provide, at its expense, the following reservations functions for
      Contractor’s United Express Services:

     

    a.  Answering
      reservations telephones, providing information regarding schedules and fares,
      making bookings and providing other services normally associated with airline
      reservations services in accordance with United’s established
      procedures.

     

    b.  Providing
      personnel so that telephone calls are answered at a service level determined
      by
      United.

     

    c.  Answering
      all calls terminating on specified telephone lines as United or United Express,
      at United’s option.

     

    d.  To
      the
      extent practicable, re-accommodating and notifying passengers of confirmation
      on
      United, Contractor and other airlines and clearance from wait-list.

     

    e.  Reviewing
      and processing inbound prepaid ticket advices.

     

    f.  Providing
      reservations services to the hearing impaired via a special telephone number
      during normal business hours.

     

    g.  Comply
      with DOT disclosure requirements.

     

    2.  Apollo
      Services Activities.
      Contractor agrees to use Apollo Services for the following activities for
      Contractor’s United Express Services, which are to be provided by
      United:

     

    a.  Establishment,
      maintenance, display and change of passenger name records (PNRs).

     

    b.  Confirmation
      of passengers against seat inventory on Contractor’s United Express Services and
      United’s scheduled flights and on other airlines where flight availability is
      maintained in Apollo Services.

     

    c.  Maintenance
      of seat availability for Contractor’s United Express Services scheduled
      flights.

     

    d.  Transmission
      of availability status messages (AVS) for Contractor’s United Express Services
      scheduled flights to other airlines with which United has an agreement in
      accordance with Standard Industry Passenger Procedures (SIPP).

     

    e.  Process
      inbound reservations messages received from ARINC addressed to
      Contractor.

     

    f.  Routing
      of all inbound messages received from ARINC, other than as stated in
Article
      III.D.2.e
      above,
      to a computer message queue.

     

    3.  CRS
      Fees.
      Computer Reservations System fees (“CRS
      Fees”)
      charged to Contractor as a result of passengers booked on Contractor’s United
      Express service will be direct billed to and payable by United. 

     

    4.  Travel
      Agent Commissions.
      United
      will be responsible for and shall pay directly all travel agent commissions
      charged in connection with the sale of tickets or other services on Contractor’s
      United Express Service. 

     

    
    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    E.  OPERATIONS

     

    1.  Scheduled
      Service Update. Following
      the departure of a Contractor’s United Express flight the Contractor will
      provide accurate updates of its flights’ planned and actual departure and
      arrival times (including updates of irregularities) in Apollo Services as soon
      as the planned flight schedule is changed and the flight departs and arrives
      or
      suffers an irregularity. Specifically, this includes updating via ACARS or
      if
      ACARS is malfunctioning via a mutually agreed upon manual process the out,
      off,
      on and in times for the aircraft within [*] minutes of the occurrence of each
      event. In the event of a Contractor’s controllable flight delays, cancellations
      or other schedule irregularities affecting Contractor’s United Express Service
      flights, and as soon as information concerning such irregularities is available,
      Contractor shall update Apollo Services and, when requested by United, notify
      the designated United organization. On board delayed flights, Contractor shall
      provide updates to Customers in no less than [*] minute intervals. For purposes
      of this Agreement, such scheduled and actual departure and arrival and
      irregularity information shall be known as “FLIFO.” United will notify
      Contractor in writing as soon as practicable after United determines that
      Contractor has failed to update FLIFO in a timely and accurate manner. If
      Contractor fails [*] times in any consecutive [*] period (the “FLIFO Threshold”)
      to update FLIFO in a timely and accurate manner as soon as it becomes evident
      to
      Contractor that a schedule deviation shall take place, then upon notification
      by
      United to Contractor, Contractor shall pay United damages of [*] for each
      occurrence over and above the first [*] occurrences during such [*] period
      United agrees to bill Contractor any amount owed under this Section within
      [*]
      after the end of each calendar [*] period during which Contractor has exceeded
      the FLIFO Threshold. Such damages shall be United’s exclusive remedy for
      Contractor’s non-compliance with this paragraph and may be collected by setoffs
      against other amounts owed by United to Contractor hereunder. Contractor shall
      not be responsible for any costs or failure by the Ground Handlers to update
      FLIFO information.

     

    2.  Denied
      Boarding (Payload Range Restrictions). Contractor
      is required to provide to United, upon specific written request from United,
      specific station best estimates regarding the weight restrictions and aircraft
      limitations, which could reasonably be expected to routinely result in denied
      boardings. Such requests shall be made by United’s Revenue Management Department
      (WHQIM) and responses from Contractor shall be provided within two (2) weeks
      of
      such request. In the event Contractor fails to respond to such requests or
      such
      responses are materially inaccurate, United reserves the right to bill
      Contractor, and Contractor shall reimburse United, for denied boarding expenses
      resulting from weight restrictions relating to such failure to respond or
      materially inaccurate response.

     

    3.  No
      Flight Dispatch Duty. Contractor
      will be solely responsible for, and United will have no obligations or duties
      with respect to, the dispatch of Contractor’s flights. For the purposes of this
      Article III, the term “dispatch” will include, but will not be limited to, all
      planning of aircraft itineraries and routings, fueling and flight
      release.

     

    4.  Compliance
      with Statutes. Contractor
      hereby represents, warrants and covenants that all air transportation services
      performed by it pursuant to this Agreement or otherwise will be conducted in
      full compliance with all applicable statutes, orders, rules and regulations,
      whether now in effect or hereafter promulgated, of all governmental agencies
      having jurisdiction over Contractor’s operations, including, but not limited to,
      the Federal Aviation Administration (“FAA”) and the Department of Transportation
      (“DOT”). Contractor’s compliance with such governmental statutes, orders, rules
      and regulations will be the sole and exclusive obligation of Contractor and
      United will have no obligation, responsibility or liability, whether direct
      or
      indirect, with respect to such matters except as otherwise expressly provided
      herein. Additionally, Contractor will comply during the term of this Agreement
      with the United/United Express Safety Standards, as described on Appendix
      H.

     

    5.  Weather
      Information Service. From
      time
      to time and upon the request of Contractor or its flight crews, United may
      furnish Contractor’s flight crews with such U.S. Weather Bureau information or
      data as may be available to United; provided that (i) in furnishing any such
      weather information or data to Contractor, neither United nor its employees
      or
      agents will be responsible or liable for the accuracy thereof and, (ii) any
      and
      all costs or expenses associated with such weather information or data are
      carrier controlled costs and will be paid by Contractor.

     

    6.  Diversions.
      United
      will pay Contractor for all diversions completed within [*] hours of the
      scheduled arrival time based on the actual block hours flown from the original
      departure city to the diversion point and from the diversion point to the
      original destination city. A diversion flight will also be considered completed
      if the passengers arrive at the scheduled arrival city within [*] hours of
      the
      scheduled arrival time via ground transportation from the diversion point to
      the
      original destination city. The cost of busing to the originally scheduled
      airport will be borne by Contractor. Contractor will use its best efforts to
      assure that no bus segment exceeds 100 air miles as defined in the Apollo
      mileage database. United will pay Contractor for a diverted flight that is
      completed via ground transportation based on the original scheduled block hour
      time for that segment. In the event a diverted flight is not completed within
      the [*] hour time frame, no payment is due for the diverted flight segment
      (e.g.
      flight segment will be excluded from the monthly operating statistics used
      in
      calculating payments to Contractor). In addition, United will not pay any costs
      associated with aircraft repositioning.

     

    7.  Ground
      Delay Program.
      Contractor will participate in United’s ground delay program, which stipulates
      that United may request Contractor to cancel, and Contractor shall cancel,
      flights to free ATC slots at a hub when the FAA or United’s Station Control
      Center has initiated a Ground Delay Program (“GDP”). For cancellations requested
      by United as part of the GDP, and in accordance with Article VIII, United shall
      pay Contractor only a portion of the amounts normally due had the flights not
      been cancelled. United will pay [*] of the Completed Block Hour and Completed
      Departure rates (Carrier Controlled Costs only). All payments will be based
      upon
      the scheduled block hours and departures for such scheduled flights. No payments
      will be made with respect to Pass Through Costs in these categories. (e.g.
      fixed
      overhead).

     

    8.  Significantly
      Delayed Flights. In
      the
      event that Contractor operates a flight more than [*] hours late from the
      scheduled departure time with a revenue passenger load factor of less than
      [*],
      OR, more than [*] hours late with [*] revenue passengers (“Significantly Delayed
      Flight”). Contractor shall not be reimbursed for such flight (e.g. flight
      segment will be excluded from the monthly operating statistics used in
      calculating payments to Contractor). United and Contractor will make good faith
      efforts to establish a process by which Contractor may solicit and receive
      United’s concurrence to be paid for an otherwise Significantly Delayed
      Flight.

     

    9.  Station
      Operations Center (SOC) - Hub Locations. At
      United’s request and expense (and not included in the rates outlined in Appendix
      E), Contractor will provide adequate staffing in the United Airlines SOC of
      each
      designated hub city. If the number of departures in any single hub city exceeds
      [*] per day, Contractor will provide a full-time representative at United’s
      request and at United’s expense (in additional to the rates outlined in Appendix
      E). Such staffing will be provided during all normal hours of operation. If
      the
      number of daily departures does not exceed [*] per day, then Contractor will
      provide a point of contact and make a representative available on a limited
      basis as requested by United.

    
      __________

      *
        Confidential

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

        F.  STATION
      SUPPORT SERVICES

     

    
      	1.  	
              If
                United would like Contractor to provide station support services
                Contractor will provide a bid for these
                services.

            


    

     

    
      	2.  	
              Contractor
                agrees to be ground handled by ground service providers of United’s
                choosing provided that the ground handler complies with Contractor’s
                procedures. 

            


    

     

    
      	3.  	
              United
                shall issue a Standards of Service document to all ground service
                providers, which outline United’s expectations of the ground service
                providers responsibilities, duties and processes.
                

            


    

     

    
      	4.  	
              Contractor
                agrees to participate in the creation of United Express Regional
                Ground
                Operations Manual and will subsequently seek acceptance of the manual
                from
                the FAA as Contractor’s own ramp handling procedures. Within a reasonable
                period of time, Contractor will obtain approval from the FAA and
                will
                participate in the current United Airlines Deicing
                Committee.

            


    

     

    
      	5.  	
              Contractor
                is required to participate in CORA and United will be responsible
                for slot
                management of Contractor’s United Express
                flights

            


    

    
       

          G.  TARIFFS
        AND SCHEDULE PUBLICATION 

    

     

    1.  General.

     

    a.  United
      shall have the sole right and power to establish and modify, from time to time,
      the fare/rate classes and fare/rate levels (including through fares) and
      fare/rate descriptions for all Contractor’s United Express Services in the city
      pairs operated by Contractor under this Agreement, in a manner consistent with
      pricing (including joint fares) established by United. United shall comply
      with
      applicable governmental regulations pertaining to public disclosure of fares,
      rates and rules tariffs and shall pay for any fines or civil penalties incurred
      by Contractor as a result of violations by United thereof, and for the cost
      of
      defense of such claims of violations including the cost of defending or
      negotiating the terms of a consent order or decree.

     

    2.  Passenger
      Fare Tariffs.

     

    a.  United
      shall be entitled to 100% of the fares and prorates received by United or
      Contractor in connection with any fares attributable to passengers who travel
      on
      Contractor’s United Express Services. All passenger fare tariffs published for
      Contractor’s United Express Services shall be included as part of United’s
      tariffs.

     

    b.  Contractor
      shall notify the Airline Tariff Publishing Company or any successor company
      performing the same or equivalent services (“ATPCO”)
      that
      United is authorized to supply, modify or withdraw such rates with ATPCO. United
      may file changes to such fares from time to time with ATPCO as UA
      fares.

     

    3.  Air
      Freight and Mail Rates.

     

    a.  For
      all
      markets operated by Contractor under this Agreement, United shall have the
      sole
      right and power to establish and modify from time to time all air freight and
      cargo rates and mail rates covering mail, general commodity, Small Package
      DispatchÔ
      (SPD)
      and priority air freight shipments and all other air transportation services
      (other than mail delivery) for Contractor’s United Express Services in these
      markets. All such airfreight rates for Contractor’s United Express Services
      shall be included as part of United’s airfreight and cargo rates tariffs.
      Contractor shall notify ATPCO that United is authorized to supply, modify or
      withdraw such rates with ATPCO.

     

    b.  United
      shall be entitled to 100% of the fares and prorates received by United or
      Contractor in connection with any fares attributable to mail or freight shipped
      on Contractor’s United Express Services. 

     

    4.  Timetables.
      United
      will reflect Contractor’s United Express Services in computerized reservations
      systems, United’s internal reservations system and Contractor’s United Express
      Services flight connections to United will be listed as UA connections. United
      will provide information such that references in computerized reservations
      systems and United’s internal reservations system to Contractor’s United Express
      Services will also contain notations indicating that such services are performed
      by Contractor as an independent contractor under the appropriate United Marks.
      A
      similar notation will be made in the OAG or any successor publication commonly
      used by the airline industry for the dissemination of schedule information.
      Such
      notations shall comply with all applicable regulations of DOT.

     

    H.  ADVERTISING
      AND PROMOTIONS

     

    1.  Travel
      Certificate Program. United
      will allow Contractor to accept, and Contractor agrees to accept, United/United
      Express Amenities, Promotional Discount(s) and/or Free Travel Certificates
      on
      Contractor’s United Express flight segments, whether or not such Amenities,
      Promotional Discount(s) and/or Free Travel Certificates are in conjunction
      with
      a United flight segment.

     

    2.  Right
      to Advertise Using Marks. To
      the
      extent Contractor is licensed to use the Marks, Contractor may in its capacity
      as a United Express Carrier and at its sole expense, with no reimbursement
      from
      United, use the marks to advertise Contractor’s United Express Services.
      However, any and all such advertisements using one or more of the United Marks
      will identify United as the owner of those United Marks (including in any state
      company name registrations required of Contractor), and to the extent that
      any
      Mark is registered, will so specify. Notwithstanding the above, no
      advertisement, solicitation, document or other material using any United Mark
      will be published or otherwise promulgated without United’s prior inspection and
      approval. No advertising that relates in any way to United, United Express
      or
      Contractor’s United Express Services will be placed by Contractor with an
      outside advertising agency unless United has given its prior consent regarding
      copy, layout and the specific media plan. In addition, where United has agreed
      to share the costs of any such advertising, Contractor will obtain the prior
      consent of United regarding the funds to be expended for such
      advertising.

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    3.  Prior
      Approval of United. Contractor
      agrees that it will not use (or attempt to register) any United trade name
      or
      service mark, including, but not limited to, the names “UNITED AIR LINES, INC.,”
“UNITED AIRLINES,” or “UNITED,” or United’s logo in any advertising, or other
      document or material without first obtaining United’s prior approval of each
      such use.

    
       

      I.  AUTOMATION

    

     

    1.  Use
      and Protection. When Contractor
      uses internal United Apollo Services automation, Contractor agrees to comply
      with and abide by all terms and restrictions imposed by United on the use of
      Apollo Services and associated Automation Equipment, as defined below.
      Contractor agrees that all instructions, procedures and manuals provided by
      United in connection with Contractor’s use of Apollo Services and Automation
      Equipment (“Automation Information”) are and will remain the property of United.
      Contractor acknowledges that Apollo Services contains software, which is
      confidential and proprietary information of United or its affiliates (such
      as
      Galileo International) or any successor thereto. Contractor further agrees
      that
      it will not (or cause any third party to) duplicate, copy or otherwise reproduce
      any such software or Automation Information or furnish or disclose any such
      software or Automation Information to any other party or to Contractor’s
      employees other than such employees who have a need to know and who are aware
      of
      and understand the confidential and proprietary nature of the software and
      Automation Information unless mandated by the government.

     

    2.  Installation
      and Training. United
      shall install or cause to be installed a minimum of one terminal plus associated
      equipment for printing messages, data, air tickets, boarding passes and baggage
      tags (“Automation Equipment”) at Contractor’s airport locations and selected
      administrative locations. United will determine, in the exercise of its sole
      discretion and judgment, the necessity and feasibility of installing and
      upgrading Automation Equipment, so long as the quantity and quality of
      Automation Equipment installed at Contractor’s airport locations are sufficient
      to permit Contractor to satisfy the standards for Contractor’s United Express
      Services under this Agreement. Any and all modifications, enhancements,
      improvements or developments pertaining to the Automation Equipment, or other
      new related technology, may be made available to Contractor by United, in its
      sole discretion, under terms and conditions to be determined by United on a
      case-by-case basis. United will train Contractor’s instructors, as applicable,
      in the proper use of Apollo Services and Automation Equipment as described
      in
      the Customer Service/Reservations Handbook or any other related United
      guidelines. Contractor agrees to establish a training program with internal
      instructors. Only qualified personnel who have satisfactorily completed a United
      prescribed training program will be permitted to operate any Automation
      Equipment (hereinafter “Designated Users”). United may, at its discretion,
      monitor or test the proficiency level of Designated Users. If United determines
      that their proficiency levels are insufficient for the proper use of the
      Automated Equipment or Apollo Services, then Contractor must arrange for its
      Designated Users to undertake any further training which United determines
      necessary to bring such Designated Users to the desired proficiency
      level.

     

            3.  Standards
      of Use.

     

    a. To
      maintain an effective interconnection between Apollo Services and the Automation
      Equipment and to prevent misuse thereof, when Contractor uses Apollo Services
      and the Automation Equipment, Contractor must use and operate these (a) in
      strict accordance with operating instructions provided by United or its
      affiliates in the Customer Services Policies and Procedures, United’s Computer
      Security Regulations, and any other related United or affiliate guidelines,
      and
      (b) solely for the performance of the specific business functions designated
      by
      United. Any undesignated business use and all non-business uses are strictly
      prohibited. Prohibited uses include, but are not limited to, personal messages,
      servicing subscribers, travel agencies, or any other third party, training
      any
      other party or any other use designated as prohibited in the Apollo Services
      Manual. Contractor will maintain a list of all employees and agents who have
      access to Apollo Services and their assigned file numbers and passwords. United
      may at any time deny access to Apollo Services to any employee of Contractor
      if
      such employee is found by United to have abused Apollo Services or the
      Automation Equipment. Contractor will take all precautions necessary to prevent
      unauthorized operation or use of Apollo Services and the Automation
      Equipment.

     

    b. Contractor
      will not alter or change the Apollo Services display as provided by United
      or
      its affiliate without the written consent of United. Contractor may not provide
      Apollo Services or its database to any other person or entity without the
      written consent of United.

     

    c. Except
      as
      expressly permitted in this Agreement or other written agreement with United,
      Contractor will not cause any Apollo Services (including, but not limited to,
      its software, data bases, intellectual property, and customer information)
      to be
      used (as a basis for any software development or otherwise), commercially
      exploited, copied, redistributed, retransmitted, published, sold, rented,
      leased, marketed, sublicensed, pledged, assigned, disposed of, encumbered,
      transferred, or otherwise altered, modified or enhanced, without the express
      written permission of United.

     

    d. Contractor
      will not engage in any speculative booking or reservation of space for any
      airline, hotel, rental car company, or any other vendor’s service or product
      available through Apollo Services.

     

    4.  Maintenance,
      Repair and Modification.

     

    a. United
      will provide or cause to be provided to Contractor repair and maintenance
      services required for the Automation Equipment at United’s expense. To maintain
      an effective interconnection between the Automation Equipment and Apollo
      Services and to preserve the functional integrity of the Automation Equipment,
      neither Contractor nor any third party, other than a third party designated
      by
      United, will perform or attempt to perform maintenance, repair work, alterations
      or modifications, of any nature whatsoever, to the Automation Equipment.
      Contractor will provide free positive space travel on Contractor’s United
      Express flights for United’s Computer Terminal Technicians or replacements when
      such travel is for the purpose of repairing Apollo Services or any Automation
      Equipment.

     

    b. Contractor
      will reimburse United for the costs of any such repairs or maintenance
      attributable to Contractor’s willful misconduct, gross negligence, or
      persistent, negligent acts or omissions.

     

    c. United
      or
      its designee will have the right to enter upon any Contractor location during
      Contractor’s business hours for the purpose of monitoring Contractor’s operation
      of the Automation Equipment and Apollo Services, inspecting the Automation
      Equipment, performing such repairs or maintenance as may be necessary or
      removing the Automation Equipment; provided, however, that United will not
      during the course of such monitoring, inspection, repair, or removal
      unreasonably interfere with Contractor’s business.

     

    5.  Downtime.
      United
      will notify Contractor of any scheduled or pre-announced downtimes of Apollo
      Services.

    
       


    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    6.  No
      Warranty; Release.

     

    UNITED
      MAKES NO WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY IMPLIED
      WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT
      TO
      THE AUTOMATION EQUIPMENT OR APOLLO SERVICES.

    
          CONTRACTOR
        HEREBY WAIVES AND RELEASES UNITED AND ITS AFFILIATES, AND THEIR SUCCESSORS
        FROM
        ANY AND ALL OTHER OBLIGATIONS AND LIABILITIES AND ALL RIGHTS, CLAIMS AND
        REMEDIES OF CONTRACTOR AGAINST UNITED OR ITS AFFILIATES, EXPRESS OR IMPLIED,
        ARISING BY LAW OR OTHERWISE, DUE TO ANY DEFECTS, ERRORS (INCLUDING, WITHOUT
        LIMITATION, ANY ERRORS IN RESERVATIONS AVAILABILITY RECORDS), MALFUNCTIONS
        OR
        INTERRUPTIONS OF SERVICE TO APOLLO SERVICES OR THE AUTOMATION EQUIPMENT,
        INCLUDING ANY LIABILITY, OBLIGATION, RIGHT, CLAIM OR REMEDY IN TORT, AND
        INCLUDING ANY LIABILITY, OBLIGATION, RIGHT, CLAIM OR REMEDY FOR LOSS OF REVENUE
        OR PROFIT OR ANY OTHER DIRECT, INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL
        DAMAGES. 

    

     

    Contractor
      shall not be liable for, and United releases Contractor from, any liability
      for
      any flight cancellation or delay, to the extent it results from any malfunction
      in or interruption of Apollo Services or the Automation Equipment; and,
      notwithstanding any other provision hereof, no such cancellation or delay shall
      be included in any performance calculation relating to operating goals except
      for occasions to the extent such failure is the result of Contractor’s own
      misuse or negligence. 

     

    7.  Ownership
      and Liens. It
      is
      understood and agreed that: (i) all Automation Equipment will remain the sole
      property of United; (ii) Contractor will not remove any identifying marks from
      any Automation Equipment; (iii) Contractor will not subject the Automation
      Equipment to any lien or encumbrance; and (iv) Contractor will return the
      Automation Equipment to United immediately upon the termination of this
      Agreement.

     

    J.  CONTRACTOR
      ASSISTANCE

     

    Contractor
      will furnish United with all information in Contractor’s possession or that can
      be reasonably produced by Contractor that United may require to carry out the
      services and functions contemplated by this Article
      III.

     

    
      IV.  AIR
        SERVICES TO BE PROVIDED BY CONTRACTOR

    

     

    A.  AIRCRAFT
      TO BE USED

     

    1.  Aircraft
      Types.
      Unless
      otherwise agreed by United, Contractor will provide Contractor’s United Express
      Services, in accordance with its United Express Schedule as referenced in
Article
      IV.B.1, and
      as
      amended from time to time in accordance with the terms of this Agreement, using
      the type and amount of aircraft set forth in Appendix
      B.
      The
      aircraft will be scheduled, taking into account heavy scheduled maintenance
      requirements, the spare ratio indicated in Article
      IV.B.2
      below,
      and the schedule requirements in Appendix K:

     

    a.  In
      accordance with the terms and conditions of this Agreement, Contractor is
      authorized to fly the following aircraft under Contractor’s United Express
      Services: 

     

    i.  [*]
      ERJ-170 aircraft which Contractor shall cause to be delivered in a timeline
      substantially consistent with the schedule set forth on Appendix
      B.

     

    B.  TECHNICAL
      SPECIFICATIONS

     

    1.  Technical
      Specifications

     

    a.  Any
      aircraft used in United Express service by Contractor pursuant to Article
      IV.A will
      bear
      those United Marks which are expressly designated by United, whether included
      on
Appendix
      A
      or
      otherwise established by United. Technical specifications covering aircraft
      colors, schemes, United Marks and other elements of exterior and interior
      aircraft decor will be provided to Contractor by United. Except as provided
      herein, Contractor will have all aircraft used to provide Contractor’s United
      Express Services painted and decorated with the exterior and interior color
      decors and patterns specified by United at Contractor’s sole expense. In
      accordance with the technical specifications referenced in this Article
      IV.B.1,
      Contractor will be responsible for maintaining all of its aircraft.

     

    b.  In
      addition to the use of the United Marks on its aircraft, Contractor will use
      and
      display a suitable sign or insignia on the exterior of its aircraft that
      identifies Contractor as the operator of the services being provided pursuant
      to
      this Agreement. The use and display of such sign or insignia will be subject
      to
      the prior written approval of United, such approval not to be unreasonably
      withheld or delayed, as to its nature, size and location on Contractor’s
      aircraft.

     

    c.  Aircraft
      Communications Addressing and Reporting System -ACARS. Contractor
      is required to use an ACARS system on all United Express flights for the purpose
      of providing timely, automated, and accurate off, on, in and out times.
      Contractor agrees to cover the cost of the equipment (excluding systems
      programming, integration or IT related expense related to installation) and
      the
      ongoing operation of the equipment (excluding any periodic IT related expenses
      due to the integration of ACARS with United systems.) 

     

    2.  Spare
      Aircraft. In
      addition to the aircraft referenced in Article
      IV.A.1
      above,
      if requested by United, Contractor will use reasonable efforts to arrange for
      and make available for its use such spare aircraft as are required to
      effectively maintain Contractor’s United Express Services. Pursuant to this
      Agreement, a spare aircraft shall be provided such that the ratio of “aircraft
      in schedule” divided by “aircraft in fleet” shall not exceed [*] for all
      aircraft types. United shall pay costs that are consistent with every other
      aircraft in the program, including aircraft ownership costs and one-time startup
      costs relating to such spare aircraft. This is equivalent to one spare for
      every
      [*] aircraft. Notwithstanding the preceding sentence, Contractor will be
      authorized to operate the thirteenth regional jet put into service as a spare
      aircraft. [*]
      Additionally, all other airlines that Contractor provides service for must
      have
      a spare ratio equal to or greater than United’s.

    
      __________

      *
        Confidential

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    3.  Mark
      Change. United
      may from time to time change the Marks to be used for United Express Carriers.
      At any time during the term of this Agreement, and in the sole discretion of
      United, Contractor may be required to use such new or different Marks, external
      or internal color decors and patterns on its aircraft and uniform design as
      United may determine and to discontinue use of old marks, external and internal
      color decors and patterns, and uniform designs. Upon written notice from United,
      which will include the specifications for any such changes in Marks or exterior
      or interior aircraft decor and patterns or uniform designs, Contractor will
      effect such changes in accordance with the schedule mutually agreed to by the
      parties. United will pay all costs incurred in complying with the requirements
      established in this paragraph.

    
       

    

    4.  Substitute
      Aircraft. 

     

    a.  In
      the
      event that a scheduled aircraft is down-gauged to a smaller aircraft, United
      will pay the rates for the smaller aircraft that actually flies the departure.
      In the event that a scheduled aircraft is up-gauged to a larger aircraft, United
      will pay the rate for the originally scheduled departure for both the original
      and return flight, if applicable. If United requests in writing that a larger
      aircraft is substituted for a smaller scheduled aircraft, United will pay the
      rates for the larger aircraft. United will not pay for any additional
      substitutions that are a result of the original United requested substitution
      beyond those approved by United. Contractor will provide to United along with
      the normal reconciliation support materials, copies of United’s request to
      substitute aircraft. 

     

    b.  Subject
      to the provisions of IV.B.2, in the event Contractor is unable to operate a
      particular scheduled frequency with an aircraft bearing United Marks, Contractor
      will notify United of such event and the circumstances of Contractor’s inability
      to operate and Contractor will be permitted to operate an aircraft bearing
      different elements of aircraft exterior decor than those specified above. If
      such operations extend beyond a continuous forty-eight (48) hour period,
      Contractor must seek and obtain United’s approval for such aircraft
      substitutions; provided that if Contractor purchases or leases a used aircraft
      which does not contain appropriate United Marks, Contractor will notify United
      and Contractor may operate such aircraft without United’s Marks for up to 60
      days after the date of purchase or lease of such aircraft by
      Contractor.

     

    C.  SCHEDULES
      AND CHARTERS TO BE OPERATED BY CONTRACTOR

     

    1.  United
      Express Schedule. Commencing
      on the in service date of the first aircraft, Contractor will provide
      Contractor’s United Express Services in the markets determined by United.
      Subsequently, United will provide at least sixty (60) days notice of any planned
      scheduled changes. United may under extraordinary circumstances provide less
      than sixty (60) days notice on city pairs to be served, which Contractor shall
      use commercially reasonable efforts to accommodate. For
      any
      new cities, Contractor and United will determine a mutually viable ramp-up
      plan
      for implementation of service.

     

    2.  United
      Schedule Consent Required. United
      may adjust Contractor’s schedule from time to time subject to (i) a minimum of
      sixty (60) days’ prior written notice to Contractor except for schedule changes
      that introduce new international or FAA Designated Special Training Airports,
      for which United will provide a minimum of ninety (90) days’ notice to
      Contractor. Should Contractor be unable to start service, due to a legal or
      regulatory constraint, Contractor will provide United notice of this within
      7
      days after receipt of original notice, and (ii) compliance with any regulatory
      requirements with respect to service to affected airports. Contractor will
      ensure that any of its requests for changes in the use by Contractor of the
“UA”
or “UA*” code on future routes or in the flight frequencies or city pairs, or
      any of them, as operated or served by Contractor (whether necessitated by
      altered connections, operating experience or other reason) must be submitted
      to
      United within 14 days from the date that the proposed schedule is delivered
      to
      the Contractor. Contractor and United will work to complete Contractor’s review
      at least ninety (90) days prior to the effective date of such change. All such
      changes must be approved in advance by United. The requests for such changes,
      and the approvals thereof, must be made in writing, by mail, facsimile,
      telegram, telecopy or other electronic message transmittal. If upon review
      of
      Contractor’s request, the parties mutually agree to make a Contractor requested
      change, and the automation equipment needed to implement the change is
      available, then such change will be made as soon as reasonably practicable
      within the aforementioned ninety (90) day period. Within the operating
      capability of the aircraft used by Contractor, as described in Article
      IV.A,
      and
      subject to the provisions with respect to changes in city pairs as provided
      above, Contractor will comply with all requests by United to increase, decrease
      or in any other way adjust or terminate the flight frequencies or city pairs,
      or
      both, as operated and served by Contractor pursuant to this
      Agreement.

     

    3.  Charter. Contractor
      may provide charter flights in any aircraft used in Contractor’s United Express
      Services and shall be permitted to retain all revenues from such charters,
      provided that Contractor agrees to pay United a fee of [*] per block hour for
      use of any aircraft covered under the terms of this Agreement (both United
      Express liveried and spare aircraft) and provided that operation of such charter
      services do not impede in any way the ability of Contractor to provide United
      Express services and operations required by this Agreement. In the case of
      each
      such charter, Contractor hereby agrees that it will not (and it will not permit
      others to) operate, promote or otherwise market the charter under the United
      Express name, the UA or UA* designator code or any other United Marks or
      identification (excepting only the unavoidable use of United Express liveried
      aircraft and permanent airport signage). Contractor shall provide written notice
      to United of any charter flight using aircraft used in Contractor’s United
      Express Services not later than the later of (i) the thirtieth day prior to
      the
      date of such charter flight or (ii) three business days after Contractor
      finalizes the arrangements for such charter.

    
    

     

            4.  Changes
      Input to Reservations Systems. Changes
      to Contractor’s schedules as set forth in this Article
      IV.C
      and
      which otherwise are in accordance with the terms and conditions of this
      Agreement will be submitted by Contractor for input into United’s internal
      reservations system and computerized reservations systems. At no time may
      Contractor make any changes to flights operated by United or any other
      carrier.

     

    5.  Operating
      Commitment. Contractor
      agrees to operate Contractor’s United Express Services in order to provide air
      transportation services scheduled pursuant to this Article
      IV.C (as
      modified from time to time) throughout the term of this Agreement.

     

    D.  INVENTORY 

     

    1.  United
      will have the sole right to use, set and control availability, levels and use
      of
      all seat inventory for the aircraft used by Contractor in Contractor’s United
      Express Services. United will take all revenue and inventory risk and will
      maintain inventory and pricing responsibility. Contractor is prohibited from
      providing positive space leisure travel, or any other confirmed leisure travel
      that requires removal of a seat from inventory, to any person other than the
      people outlined in Appendix
      J,
      on
      Contractor’s United Express flights without the prior written consent of United.
      All positive space and leisure travel must be ticketed on United approved ticket
      stock with Contractor’s full IATA serial and ticketing numbers. Positive space
      travel is permitted for Contractor’s, Contractor’s affiliates and United’s
      employees for actual business purposes, including deadheading flight crews,
      and
      for Contractor’s employees and Contractor’s affiliates and Eligibles in
      emergency situations only. Contractor may not issue positive space business
      travel to anyone other than Contractor’s own employees and Contractor’s
      affiliates’ employees and only in connection with business purposes and
      emergency situations related to United Express Services. If in any way
      Contractor issues tickets in violation of this provision in any form, within
      two
      (2) years of each such violation, Contractor may be billed via the ACH, and
      Contractor will pay United, the full unrestricted fare for the class of service
      provided on such route for any such inappropriate ticketing. Contractor
      also agrees to comply with all rules and regulations for positive space and
      space available travel as outlined in the Related Agreements. 

    
       

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    E.  FLIGHT
      CREWS TO BE USED

     

    1.  Flight
      Crew. All
      of
      Contractor’s United Express Services will be operated with crews consisting of a
      captain or pilot, and a first officer or co-pilot. All such crew members will
      at
      all times meet all currently applicable governmental requirements, as such
      requirements may be amended from time to time during the life of this Agreement,
      and will be fully licensed and qualified for the services to be performed
      hereunder. In addition, each of Contractor’s captains will hold a current
      Airline Transport Pilot Certificate and an adequate number of Flight Crews
      to be
      used in United Express service must be qualified to fly between all city pairs
      that Contractor will be serving hereunder. Crewmembers will also meet all
      requirements imposed by the insurance policies that are to be maintained
      pursuant to
      Article XII.

     

    2.  Flight
      Attendants. Contractor’s
      flight attendants will at all times possess all necessary training and meet
      all
      currently applicable governmental requirements, as such requirements may be
      amended from time to time during the life of this Agreement. 

    
       

    

    F.  INFLIGHT
      SALES

     

    Contractor
      may, at United’s request, be required to sell beer, liquor and other goods on
      flights included in Contractor’s United Express Service. Any additional goods or
      services Contractor would like to sell or promote onboard the aircraft are
      subject to United’s approval. Contractor agrees that such in-flight sales shall
      be conducted in a manner consistent with in-flight sales provided on United’s
      flights. For beer and liquor sales only, Contractor will be solely responsible
      for the direct costs associated with such in-flight sales and shall be entitled
      to all revenues generated from such in-flight sales (except SkyMall). For all
      other products, services or food put on the aircraft at United’s request, United
      shall be responsible for the incremental costs of such products, services or
      food and shall be entitled to all of the revenue associated with such products,
      services or food. United shall use its commercially reasonable efforts to assist
      Contractor in securing an economical price for the in-flight items.

     

    V.  OPERATING
      RESTRICTIONS

     

    A.  UNITED
      EXPRESS OPERATIONS ONLY

     

    Other
      than pursuant to this Agreement, including Article
      V.B
      below,
      Contractor shall not, and directly or indirectly, engage or attempt to engage,
      on its or their own behalf or on behalf of a third party, in the business of
      providing air transportation at any of United’s Hubs (DEN, IAD, LAX, ORD, SEA,
      SFO) for any carrier that has or attempts to have hub operations at any of
      those
      same hubs in connection with such hub operations of such carrier. 

     

    B.  CODE
      SHARE LIMITATION

     

    Other
      than code share or marketing agreements operated for US Airways and Delta
      Airlines prior to the date of the Agreement, Contractor will not operate any
      additional regional jets (50 seat or larger) or Turbo Props pursuant to a
      marketing or code share relationship with any party other than United at the
      following airports: DEN, LAX, SFO, ORD, IAD or SEA for the term of this
      agreement. Should United decide to cease major hub operations at any
      aforementioned airport, Code Share Limitations will not apply at that airport.
      Notwithstanding the foregoing, Contractor may only fly to aforementioned hubs
      under codeshare or marketing relationships with another carrier as a ‘spoke
      service’ from another carrier’s hubs from an airport other than those
      aforementioned. To the extent Contractor terminates any existing Delta Airlines
      or US Airways agreements, which contractually provide for service obligations
      at
      the aforementioned airports, Contractor may not recommence operations with
      that
      party which allow hub flying at aforementioned airports at any later time for
      the duration of the term of this Agreement.

    


    C.  NO
      OPERATION OUTSIDE AGREEMENT

     

    Without
      the prior written consent of United, Contractor will not use any of the services
      (excluding maintenance service) afforded to Contractor by United to provide
      air
      transportation or related services to other carriers or affiliates of Contractor
      without the consent of United. Under no circumstances will Contractor be
      permitted to operate aircraft bearing the United Marks in city pairs other
      than
      those specified by United pursuant to Article
      IV,
      without
      the prior written consent of United, other than charters operated as provided
      in
Article
      IV.C.3 hereof.
      Contractor will not, without United’s prior written consent, permit any third
      party, whether under a lease arrangement or otherwise, to operate any aircraft
      bearing the United Marks.

     

    
      
      
      D.  SEVERABILITY
      AND REMEDY

     

    1.  If
      the
      restrictions set forth in Article
      V.A or V.B or V.C
      or any
      part thereof should, for any reason whatsoever, be declared invalid by a court
      of competent jurisdiction, the validity or enforceability of the remainder
      of
      such restrictions shall not thereby be adversely affected. In the event that
      any
      time, scope or territorial limitation is deemed to be unreasonable by a court
      of
      competent jurisdiction, then Contractor agrees and submits to the reduction
      of
      either said time, scope or territorial limitation to such a time period, scope
      or area as said court shall deem reasonable. In the event the Contractor shall
      be in violation of the aforementioned restrictive covenants, then the time
      limitation thereof shall be extended for a period of time equal to the period
      of
      time during which such breach or breaches should occur.

     

    VI.  LICENSE

     

    A.  GRANT
      OF LICENSE

     

    Contractor
      will conduct all operations described in Article
      IV.B,
      and any
      additional operations undertaken by subsequent amendment hereto, under the
      Marks
      set forth in Appendix
      A
      or other
      marks designated by United pursuant to this Article
      VI.A and
      subject to Article
      IV.A.
      In
      consideration for the services to be provided by Contractor under this
      Agreement, United hereby grants to Contractor, upon the terms and conditions
      herein contained, a nonexclusive, nontransferable, non sub-licensable right
      and
      license to use the United Marks, and Contractor hereby undertakes the obligation
      to use the licensed United Marks in connection with the services to be rendered
      by Contractor under this Agreement; provided, however, that at any time during
      the term of this Agreement, United may alter, amend or revoke the license hereby
      granted and require Contractor’s use of any new or different Marks in
      conjunction with the air transportation services provided hereunder as United
      may determine in the exercise of its sole discretion and judgment.

    
       

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    B.  TERMS
      AND CONDITIONS GOVERNING LICENSE

     

    1.  United
      Marks.
      Contractor hereby acknowledges United’s ownership of the United Marks, further
      acknowledges the validity of the United Marks and agrees that it will not do
      anything in any way to infringe or abridge United’s rights in its marks or
      directly or indirectly to challenge the validity of the United
      Marks.

    
       

    

    2.  Service
      Standards.
      Contractor agrees that, in providing services under this Agreement in
      conjunction with one or more of the United Marks, it will comply with all
      service quality standards prescribed by United for United Express Carriers
      (“United
      Express Service Standards or Service”).
      United Express Service Standards include, but are not limited to, United
      standards for (a) aircraft types, as referenced in Article
      IV.A,
      (b)
      customer service, as set forth in United’s Customer Service Policies and
      Procedures, (c) minimum customer service training requirements consistent with
      United’s customer service practices and procedures, (d) in-flight amenities and
      service, (e) aircraft appearance, (f) United/United Express safety programs
      (and
      Contractor will enter into any agreements relating to such programs that are
      similar to those offered to other United Express Carriers), (g) any other
      quality control measures designated by United, as such standards may be
      prescribed by United from time to time and (h) customer problem resolution
      (“CPR”).
      As
      necessary, United will provide training to Contractor’s designated instructors
      in the requirements of United’s Customer Service Policies and Procedures and CPR
      programs; provided that United will at its expense provide a trainer and
      materials, and United agrees that the Service Standards prescribed by it will
      not be unreasonable in light of the facilities and aircraft available to
      Contractor. United will have the right, from time to time, to inspect
      Contractor’s United Express Services to determine if they conform to the United
      Express Service Standards. In the event United determines that Contractor is
      not
      in compliance with the Service Standards United will notify Contractor and
      Contractor will promptly rectify any such noncompliance. Failure on the part
      of
      United to conduct such inspections will not relieve Contractor of its
      obligations to conform to United’s Service Standards. If Contractor fails to
      comply with any material part of the Service Standards and such failure is
      not
      corrected as soon as practicable (and, in any event, within 30 days or with
      respect to a failure that cannot be corrected within 30 days, if Contractor
      has
      not commenced corrective action within 30 days) after Contractor’s receipt of
      written notice of such failure from United, then United may, at its discretion,
      following 30 days prior written notice to Contractor restrict or eliminate
      Contractor’s pleasure travel privileges, require Contractor to bear costs
      reasonably related to such failure in excess of normal guidelines, suspend
      Contractor’s authority to serve specified city pair markets, or impose other
      available remedies. The United Express Service Standards are outlined in
Appendix
      I,
      and may
      be changed by United upon notice given to Contractor from time to
      time.

    
       

    

    3.  
      [Intentionally omitted.]

     

    4.  Liability
      for Operations.
      Nothing
      in this Article
      VI.B
      is
      intended to nor will be construed so as to relieve Contractor of any liability
      or to impose any liability on United for Contractor’s United Express Services by
      virtue of any of United’s rights under Article
      VI.B.2,
      whether
      exercised or not.

     

    5.  Non-Exclusivity.
      Nothing
      in this Agreement is intended nor will be construed to give Contractor the
      exclusive right to use the United Marks, or to abridge United’s right to use or
      to license the Marks, and United hereby reserves the right to continue use
      of
      the United Marks and to license such other uses of such Marks as United may
      desire.

     

    6.  Reversion
      of Marks.
      Upon
      termination of this Agreement for any reason, the right to use herein granted
      for the United Marks will immediately revert back to United, and Contractor
      will
      have no right to use such Marks in any way. Further, Contractor will, at its
      sole cost and expense immediately upon termination of this Agreement, remove
      all
      United Marks from its aircraft, its other vehicles, the uniforms of its
      personnel, its facilities and from any and all other places or things controlled
      or formerly controlled by Contractor.

     

    C.  INFRINGEMENT

     

    United
      will, at its expense, defend, indemnify, release, protect, save and hold
      Contractor, its officers, directors, agents and employees harmless from and
      against any and all liabilities, damages, expenses, losses, claims, demands,
      suits, fines or judgments, including but not limited to attorneys’ and
      witnesses’ fees, costs and expenses incident thereto, which may be suffered by,
      accrue against, be charged to or be recovered from Contractor as a result of
      any
      third-party claim that the use by Contractor of any United Mark in accordance
      with the terms of this Agreement infringes a registered trademark or service
      mark of any third party in the United States, and will pay all costs, damages
      and attorneys’ fees that a court finally awards as a result of such claim. To
      qualify for such defense and payment, Contractor must (i) give United prompt
      written notice of any such claim and (ii) allow United to control the defense
      of
      the claim and all related settlement negotiations and fully cooperate with
      United in its defense of the claim and the conduct of any settlement
      negotiations. United’s obligation hereunder is conditioned on Contractor’s
      agreement that if any Mark becomes, or in United’s opinion is likely to become,
      the subject of such a claim, Contractor will not dispute that United, at its
      option, may either procure the right for Contractor to continue using such
      Mark
      or to replace or modify such Mark so that it becomes non-infringing. If a United
      Mark is changed, it is United’s responsibility to compensate Contractor for any
      incremental costs due to the Mark being changed. This Article
      VI.C
      states
      United’s entire obligation to Contractor regarding infringement or the
      like.

     

    VII.  ADDITIONAL
      UNDERTAKINGS

     

    A.  PASS
      THROUGH COSTS

     

    From
      time
      to time and at anytime, United reserves the right to assume responsibility
      from
      Contractor for purchasing of all Pass Through Cost products and services used
      by
      Contractor pursuant to this Agreement, including the right to return such
      responsibility to Contractor with reasonable notice not to exceed 365
      days.

     

    B.  BULK
      PURCHASES

     

    Each
      party may assist the other in obtaining goods and services useful to the other
      party, including, without limitation, fuel, uniforms, supplies and ground
      equipment, in a more economical manner. If United identifies opportunities
      for
      cost savings as a result of bulk purchasing on behalf of Contractor, Contractor
      is obligated to participate in the new cost saving initiative. Contractor and
      United shall agree on a case-by-case basis how to share the benefits of any
      cost
      savings initiatives. 

     

    C.  FUEL

     

    United,
      by or through it’s subsidiaries,
      agents or affiliates, shall have the option to procure fuel and fuel services
      for or on behalf of Contractor. Contractor agrees to assist United, its
      subsidiaries, agents or affiliates in identifying fuel or fuel service
      procurement opportunities, to provide data or analysis pursuant thereto, and
      to
      enter into agreements for the provision of said fuel or fuel services, including
      any provisions therein, at the direction of United. United shall use its best
      efforts to accommodate any operational or other requirements of Contractor
      related to fuel or fuel services procured for or on behalf of
      Contractor.

    
       

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    D.  UNIFORMS

     

    Contractor,
      at its own expense, shall pay for and require all of its Flight Crews, defined
      as all Pilots, First Officers, and Flight Attendants who provide Contractor’s
      United Express Services, to wear uniforms which are in the United Express colors
      and styles, as approved by United, such approval not to be unreasonably withheld
      or delayed, while performing Contractor’s United Express Services and as
      outlined in Appendix
      I.
      Contractor agrees that all such Flight Crews employed by Contractor shall wear
      the above-described uniforms while performing United Express services. Any
      other
      employees of Contractor who are visible to the public, other Flight Crews,
      will
      wear uniforms reviewed and approved by United, which approval shall not be
      unreasonably withheld.
      If
      United develops or designs new uniforms for United Express operations, United
      will cover any incremental costs to Contractor of such new uniforms.


    
       

    

    E.  PASSES
      AND REDUCED RATE TRAVEL

     

    Each
      party will comply with the terms of a separate agreement between them under
      which are granted to certain employees of the other party certain passes and
      reduced rate pleasure travel privileges. However, United has the right to retain
      all revenue generated from reduced rate travel, including companion passes,
      both
      on United and United Express operated flights.

    
       

    

    F.  ENVIRONMENTAL 

     

    1.  With
      respect to all matters that relate to or may affect the environment, Contractor
      agrees to conduct its operations in a prudent manner, taking reasonable
      preventive measures to avoid environmental liabilities, including, without
      limitations, measures to prevent unpermitted releases to the
      environment.

     

    2.  Contractor
      agrees, at its own expense, to conduct its operations in compliance with all
      local, state, and federal environmental laws and regulations, including all
      environmental rules, regulations, and policies dictated by the applicable
      airport authority, including ensuring its employees are trained in the
      procedures required to meet all environmental laws and regulations.


     

    3.  To
      the
      extent associated with Contractor’s activities (or its agents, provided that
      ground service providers or its agents shall not be deemed agents of
      Contractor), Contractor shall be responsible, and will indemnify United, for
      any
      and all environmental liabilities, including, without limitation, any penalties
      or costs associated with any enforcement action, airport authority action,
      or
      private claim, any remediation or restoration costs, any investigation costs,
      legal or environmental consultant costs, or any property damage
      costs.

     

    4.  For
      any
      leased areas that are jointly operated by both Contractor and United, the
      following additional provisions apply.

     

    a. Contractor
      shall ensure its own activities comply with Environmental Laws, which may
      include, when appropriate, coordination with United, such as to identify spill
      prevention procedures for any shared equipment. If any tanks for ground support
      equipment (“GSE”) fueling are shared, both parties must ensure the fuel complies
      with the sulfur concentration limitations required under Section 211(g) of
      the
      Clean Air Act, and its implementing regulations at 40 CFR Part 80, (including
      any amendments, revisions, or succeeding statues and regulations), and provide
      documentation if requested.

     

    b. Except
      for de minimis amounts, Contractor shall promptly notify United’s facility
      Environmental Coordinator of any spills or leaks of hazardous substances,
      including petroleum substances, and provide copies of any written reports
      provided to the applicable agencies and airport authorities. 

     

    c. Contractor
      shall provide copies of any notices of violations for environmental compliance
      received from any environmental agency or airport authorities.

     

    VIII.  RATES
      PAYABLE TO CONTRACTOR

     

    A.  RATES

     

    1.  Consideration.
      For and
      in consideration of the transportation services, facilities and other services
      to be provided by Contractor hereunder, the right of United to (i) control
      all
      aspects of inventory as described in Article
      IV.D,
      (ii)
      receive and retain all air fares, cargo rates and mail charges received by
      Contractor and United, and (iii) receive and retain all other revenue received
      by Contractor and United as provided in this Agreement, and other valuable
      consideration provided under this Agreement, United shall pay Contractor
      specified “Carrier
      Controlled Costs”
      (together with “Markup” as defined in Article
      VIII.B)
      and
      specified “Pass
      Through Costs”
      for the
      Reimbursement Categories as detailed in Appendix
      E for
      each
      aircraft type. 

     

    2.  Definitions.
      Contractor and United agree to the definitions for both Carrier
      Controlled
      and
Pass
      Through Costs
      as
      defined in Appendix
      E.
      Except
      as
      otherwise provided herein, Contractor is responsible for any and all other
      costs
      necessary to operate the aircraft covered under the terms of this Agreement
      in
      accordance with the “United Express Service Standards.” United is not
      responsible for any other costs not specifically covered in this
      Agreement.

     

    3.  Reimbursement
      Categories.
      The
      Pass Through Costs and Carrier Controlled Costs are grouped by “Reimbursement
      Categories” for
      each
      aircraft type. Within
      each Reimbursement Category, are specific kinds or types of expenses as outlined
      in Appendix
      E.

     

    4.  Unit
      Rate.
      Each
      Reimbursement Category, whether the costs are Pass Through Costs or Carrier
      Controlled Costs, is expressed in terms of one or more “Unit
      Rates.”
      The
      Unit
      Rates express
      the basic measurement and constitute the driver of costs for each Reimbursement
      Category. Each Reimbursement Category has specific Unit Rates as outlined in
      Appendix
      E.

     

    The
      Unit
      Rates in Appendix E are effective from March 1, 2005 through December 31, 2005
      and incorporate the 2005 Annual Adjustment Factor. 

    
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    5.  Annual
      Adjustment Factors.
      Effective as of January 1st
      2005 and
      each January 1st
      thereafter for the term of this agreement, Contractor and United agree to
      increase or leave constant all Carrier Controlled Costs, excluding aircraft
      ownership, within the Reimbursement Categories for the ensuing contract year
      by
      an amount equal to the then applicable Carrier Controlled Costs multiplied
      by
      the applicable “Annual
      Adjustment Factors” set
      forth
      on Appendix
      E.
      Rates
      shall be adjusted in accordance with the procedures set forth in Appendix
      E. Except
      as
      expressly provided in this Agreement, the parties do not want to perform, and
      have not provided for, any additional rate changes, rate negotiations or rate
      setting process. Annual CPI increases (if any) are to be capped at [*].
      If
      during any year during the first [*]
      of the
      term of this Agreement, CPI is negative, the rates that are subject to CPI
      adjustment for such year will remain unchanged. If during any year after the
      first [*]
      of the
      term of this Agreement, (a) CPI is between [*]
      and
[*],
      the
      rates that are subject to CPI adjustment for such year will increase by CPI
      [*];
      (b) CPI
      is a negative number in excess of [*],
      the
      rates that are subject to CPI adjustment for such year will remain unchanged.
      Example.
      For
      example, if as January 1, 2005, , the rate for the Completed Block Hours
      Reimbursement Category is [*]
      per
      block hour and the CPI adjustment factor is [*],
      then
      the annual the Carrier Controlled Cost element effective as of such anniversary
      of this Agreement shall be [*]
      ([*]
      multiplied
      by [*]).

    
       

    

    6.  “CPI”
shall
      mean the Consumer Price Index, U.S. City Average, Urban Wage Earners and
      Clerical Workers, All Items (base index year 1982-1984=100) as published by
      the
      United States Department of Labor, Bureau of Labor Statistics. If the manner
      in
      which the Consumer Price Index as determined by the Bureau of Labor Statistics
      shall be substantially revised, including, without limitation, a change in
      the
      base index year, an adjustment shall be made by the parties in such revised
      index which would produce results equivalent, as nearly as possible, to those
      which would have been obtained if such Consumer Price Index had not been so
      revised. If the Consumer Price Index shall become unavailable to the public
      because publication is not readily available to enable the parties to make
      the
      adjustment referred to in this Section, then the parties shall mutually agree
      to
      substitute therefore a comparable index based upon changes in the cost of living
      or purchasing power of the consumer dollar published by any other governmental
      agency or, if no such index shall be available, then a comparable index
      published by a major bank or other financial institution or by a university
      or a
      recognized financial publication.

     

    For
      purposes of calculating Annual Adjustment Factors under this Agreement, the
      parties agree that CPI shall be calculated based upon the average of the change
      for each month during the period at issue for the preceding 12 month period
      in
      the Consumer Price Index, U.S. City Average, Urban Wage Earners and Clerical
      Workers, All Items (base index year 1982-1984 = 100) as published by the U.S.
      Department of Labor, Bureau of Labor Statistics for each month. An example
      of
      such calculation is set forth in the attached Appendix L.

    
       

    

            7.  Commercially
      Reasonable Efforts.
      Contractor agrees to use commercially reasonable efforts to control its Carrier
      Controlled Costs and Pass Through Costs. The parties agree to discuss any
      failure by Contractor to use reasonable efforts to control costs. 

    
       

    

    8.  Aircraft
      Ownership Costs.
      

        a) Regional
      Jet Aircraft Rent.
      United
      will pay actual aircraft ownership costs for the ERJ-170 fleet provided the
      fleet average remains between [*]
      and
[*].
      United
      also reserves the right to finance any aircraft allocated for United Express
      Services subject to the requirements of paragraph c below. Contractor agrees
      to
      share on a [*]
      basis
      the cost savings generated from monthly average fleet ownership costs, which
      fall below [*]
      per
      month per aircraft. Contractor will also share on a [*]
      basis
      the burden of cost increases due to monthly average fleet ownership costs,
      which
      rise above [*]
      per
      month per aircraft. In the event Contractor leases an aircraft, the aircraft
      ownership costs for such aircraft shall be the amount payable by Contractor
      under the respective lease. In the event Contractor owns an aircraft subject
      to
      debt financing, the aircraft ownership costs for such aircraft shall be the
      amount payable by Contractor as debt service payments in respect of such
      Aircraft, calculated as if [*]
      of the
      aircraft purchase price was financed by such debt. In the event that the amounts
      financed under such lease or debt financing do not include Contractor’s third
      party costs and expenses incurred in connection with the acquisition and
      financing of such aircraft, the aircraft ownership costs shall include, in
      addition to the amount of such lease or debt service payments, the additional
      costs that would have been reflected in the lease or debt service payments
      under
      the terms of the respective lease or debt financing for such costs and expenses
      not to exceed [*]
      of the
      aircraft purchase price (the “Additional
      Financing Amount”).
      Notwithstanding the above, at no time will United’s total aircraft ownership
      cost per aircraft exceed a fleet average of [*]
      per
      aircraft per month excluding Markup.

     

        b)
      Amended
      [*].
      Republic Airways Holdings Inc. (“Republic”) shall provide United with an amended
[*]
      (the
“Amended [*]”)
      calculated and applied as provided herein. The Amended [*]
      shall be
      (a) [*]
      per
      month for each aircraft operated in revenue service (i.e. excluding spares)
      by
      Chautauqua Airlines Inc. or Contractor under a United Express Agreement
[*]
      aircraft
      and up to a total of [*]
      aircraft, and (b) [*]
      per
      month for each aircraft operated in revenue service (i.e. excluding spares)
      by
      Chautauqua or Contractor under a United Express Agreement in excess of
[*]
      aircraft. For purposes of calculating the Amended [*],
      the
      Amended [*]
      will be
      prorated when an aircraft is introduced into service or removed from service
      after the start of the month. In addition, irrespective of the ERJ170 spare
      count shown on Exhibit B, the actual number of aircraft operated in revenue
      service will be used to determine the basis for the Amended [*].

    


        c)Right
      to Finance.
      Before
      finalization of any and all aircraft purchase and financing agreements,
      Contractor will advise United of expected, estimated ownership costs for
      aircraft covered under proposed aircraft purchase and financing agreements.
      Should United be able to secure financing such that the ownership cost to United
      (excluding Markup) be less than the [*]
      of the
      estimated costs (excluding markup) provided by Contractor, United reserves
      the
      right to finance those aircraft to be covered by the Contractor’s proposed
      aircraft purchase and financing agreements. In the event United exercises such
      right, (i) it shall provide written notice to Contractor within [*]
      after
      receipt of notice from Contractor of the proposed aircraft purchase and
      financing agreements, and (ii) for each such aircraft it shall make a
[*]
      monthly
      payment to Contractor in lieu of any Markup on the ownership cost of such
      aircraft.

     

    B.  MARKUP

     

    1.  Markup.
      Markup
      will remain fixed for the duration of this Agreement. Markup will be applied
      only to Carrier Controlled Costs (excluding aircraft ownership). 

     

    a.  Operating
      goals will be set consistent with the methodology outlined in Article
      VIII.C.
      

     

    b.  “A”
level
      performance in all categories will result in a [*]
      markup

     

    c.  “B”
level
      performance in all categories will result in a [*]
      markup

     

    d.  “C”
level
      performance in all categories will result in a [*]
      markup

     

    e.  “D”
level
      performance in all categories will result in a [*]
      markup

     

    2.  One-Time
      Markup on New Aircraft. With
      any
      new aircraft brought in the United system, United shall pay a markup of
[*]
      on only
      the one-time startup costs noted in Appendix
      E.

     

    3.  Markup
      on Aircraft Ownership Costs.

     

    a.  Markup
      on
      Aircraft. United agrees to pay actual aircraft ownership costs on Aircraft
      plus
      a markup of [*],
      not to
      exceed [*]
      per
      aircraft per month. 

    
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    C.  OPERATING
      GOALS

     

    For
      each
      calendar month and for Contractor’s entire United Express operations,
      Contractor’s actual Performance Level shall be measured as the combined
      performance of Contractor’s and Chautauqua Airlines, Inc.’s United Express
      operations with respect to each of four Operating Goals. To establish the
Total
      Markup
      to be
      applied hereunder, add together the four applicable Markup Points (percentage
      figures) associated with the relevant Performance Metrics set forth on
Appendix
      F,
      yielding a sum that is designated as the Total
      Markup Factor.
      Multiply the Total Markup Factor by the total aggregate Carrier Controlled
      Costs
      for the month in question, and the resultant amount is designated as the
Markup
      as
      detailed in Appendix
      F.

     

    1.  Operating
      Goals Methodology.
      Up until
      the earlier of i.) the time at which Contractor first has [*]
      aircraft
      in schedule for United Express or ii.) Contractor has operated for [*]
      months
      for United Express, Contractor will be paid a “B” level markup across all
      operating goals. After which the Contractor’s Monthly Operating Goals for the
      calendar year will be established using one of the two predetermined
      methodologies set forth below and will take effect on January 1 of each year.
      

     

    a.
      When
      United’s annual Mainline performance (defined as performance for United
      Airlines’ domestic, mainline flights, weighted by departures) for any of the
      four Operating Goals for the most recent calendar year completed is better
      than
      United Express Best Practice Operating Performance for the most recent calendar
      year completed, the below methodology shall be used to determine the goal for
      upcoming calendar year for that individual Operating Goal.

    
       

    

    i.  Contractor’s
      On-Time Zero (“On-Time
      Zero or On-Time”)
      Operating Goal is calculated as equal to United’s Operating Mainline Performance
      (United Airlines’ domestic mainline flights, weighted by departures), adjusted
      downwards [*]
      percentage points then adjusted for regional differences. Regional differences
      will be accounted for by taking the resulting goal generated by the previous
      sentence and multiplying that number by the quotient of the weighted average
      of
      United Mainline On Time Zero performance for the hubs in which Contractor
      operates (weighted by Contractor hub departures) and the United Mainline System
      On Time Zero Performance (performance for United Airlines’ domestic mainline
      flights, weighted by departures).

     

    ii.  Contractor’s
      Controllable Flight Completion (“Controllable
      Completion” or “Controllable Flight Completion”)
      Operating Goal is equal to United’s system-wide Mainline Operating Performance
      (United Airlines’ domestic mainline flights, weighted by departures) for its own
      operation adjusted downward by [*]
      percentage points. Controllable Flight Completion excludes cancellations due
      to
      weather, Air Traffic Control (“ATC”) cancellations, requests by United to cancel
      flights in conjunction with the Ground
      Delay Program,
      acts or
      omissions by United, its agents and ground service providers and emergency
      airworthiness directives. 

    
       

    

    iii.  Contractor’s
      Mishandled Bag (“Mishandled
      Bags”)
      Operating Goal is calculated as equal to United’s system-wide Operating
      Performance (domestic performance, weighted by departures) for its own operation
      adjusted upward by [*]
      points
      then adjusted for regional differences. Regional differences will be accounted
      for by taking the resulting goal generated by the previous sentence and
      multiplying that number by the quotient of the weighted average of United
      Mainline Mishandled Bag performance (domestic flights, for the hubs in which
      Contractor operates (weighed by Contractor hub departures) and the United
      Mainline System Mishandled Bag Performance (domestic performance, weighted
      by
      departures.)

    
       

    

    iv.  Contractor’s
      Year 1 Repurchase Intent (“Repurchase
      Intent or
      RPI”)
      Operating Goal will be United Express Best Practice minus [*]
      percentage points. Concurrent with the annual goal setting process, starting
      in
      year [*]
      and
      ending in year [*],
      the
[*]
      percentage points referenced in the previous sentence will be reduced by
[*]
      percentage points each year such that in year [*],
      and for
      every year thereafter Contractor’s Repurchase Intent (“Repurchase Intent or
      RPI”) Operating Goal will be United Express Best Practice Performance minus
[*]
      percentage points.

     

    b.  When
      United’s Mainline performance (domestic mainline flights, weighted by
      departures) for any of the four Operating Goals for the most recent calendar
      year completed is worse than United Express Best Practice Operating Performance
      for the most recent calendar year completed, the below methodology shall be
      used
      to determine the goal for the upcoming year for that individual Operating Goal.
      

     

    i.  Contractor’s
      On-Time Zero (“On-Time
      Zero
      or
On-Time”)
      Operating Goal is calculated as equal to the United Express Best Practice
      Operating Performance (where individual United Express Carrier Performance
      has
      been regionally normalized) adjusted down [*]
      percentage points then re-adjusted for regional differences accounting for
      regions in which Contractor operates. Regional differences will be accounted
      for
      by taking the resulting goal generated by the previous sentence and multiplying
      that number by the quotient of the weighted average of United Mainline On Time
      Zero performance (domestic mainline flights, weighted by departures) for the
      hubs in which Contractor operates (weighted by Contractor hub departures) and
      the United Mainline System On Time Zero Performance (domestic mainline flights,
      weighted by departures).

     

    ii.  Contractor’s
      Controllable Flight Completion (“Controllable
      Completion”
      or
“Controllable
      Flight Completion”)
      Operating Goal is equal to United Express Best Practice Performance adjusted
      downward by [*]
      percentage points. Controllable Flight Completion excludes cancellations due
      to
      weather, Air Traffic Control (“ATC”)
      cancellations, requests by United to cancel flights in conjunction with the
      Ground Delay Program, acts or omissions by United and emergency airworthiness
      directives. 

     

    iii.  Contractor’s
      Mishandled Bag (“Mishandled
      Bags”)
      Operating Goal is calculated as equal to United Express Best Practice
      Performance (where individual United Express Carrier Performance has been
      regionally normalized) adjusted upward by [*]
      points
      then re-adjusted for regional differences accounting for regions in which
      Contractor operates. Regional differences will be accounted for by taking the
      resulting goal generated by the previous sentence and multiplying that number
      by
      the quotient of the weighted average of United Mainline Mishandled Bag
      performance (domestic flights, weighted by departures) for the hubs Contractor
      operates in (weighed by Contractor hub departures) and the United Mainline
      System Mishandled Bag Performance (domestic flights, weighted by
      departures).

     

    iv.  Contractor’s
      Year 1 Repurchase Intent (“Repurchase
      Intent or
      RPI”)
      Operating Goal will be United Express Best Practice minus [*]
      percentage points. Concurrent with the annual goal setting process, starting
      in
      year [*]
      and
      ending in year [*],
      the
[*]
      percentage points referenced in the previous sentence will be reduced by
[*]
      percentage points each year such that in year [*],
      and for
      every year thereafter Contractor’s Repurchase Intent (“Repurchase Intent or
      RPI”) Operating Goal will be United Express Best Practice Performance minus
[*]
      percentage points.

     

    
      
      
        2. B-
      Level Performance.
      Contractor’s Monthly Operating Goals, as defined above in Article
      VIII.C.1
      and
      adjusted for seasonality (as outlined in Article
      VIII.C.6, (below),
      define the minimum performance necessary to achieve at least B-Level
      Performance.

     

    3. Performance
      Grade Widths.“Grade
      Widths”
(the
      range between the lowest end of each Performance Level) remain constant and
      will
      not be changed over the entire Term of this Agreement and are as set forth
      in
Appendix
      F.

    
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    4. Example.
      The
      Grade Width for A, C and D level performance will be automatically computed
      on
      an annual basis once the numbers for the bottom of B Performance Levels are
      established. For example, if the Contractor’s Monthly Operating Goal for the
      Controllable Completion Operating Category is determined to be [*],
      that is
      the bottom of the B-Performance Level. Applying the methodology, in the
      performance Grade Width table referenced above, the bottom of the A- Performance
      Level would be [*]
      ([*]
      plus
[*]).
      Furthermore, the bottom of the C Performance Level would be [*]
      ([*]
      minus
[*]).
      Based
      on these numbers the Grade Widths, before application of any Seasonality
      Adjustment Factors would be as follows:

     

    Level
      A=[*]

     

    Level
      B=[*]

     

    Level
      C=[*]

     

    Level
      D=[*]

    
       

    

    5. United
      and Contractor have developed a Monthly Incentive Payment (“Markup”)
      program (“Incentive Program”) that is based upon Contractor’s scheduled
      operating goals established herein (“Operating Goals” or “Monthly Operating
      Goals”). Contractor’s performance is evaluated with respect to actual (i)
      on-time performance, (ii) controllable flight completion rates (iii) baggage
      handling, and (iv) customer repurchase intent on all flights operated by
      Contractor as United Express. Contractor’s actual performance (“Performance
      Level” or “Level of Performance”)
      with
      respect to each of these four operating goals will be used to determine the
      amount of Markup applicable to the Carrier Controlled Costs pursuant to the
      procedures set forth herein

    
       

    

    6.  Seasonality
      Adjustment.
      At the
      beginning of each year, after Contractor’s Monthly Operating Goals for the year
      have been calculated by the methodology outlined above but before Contractor’s
      Monthly Operating Goals are finalized, Contractor may create the final
      Performance Level goals by multiplying any of the three Contractor’s Monthly
      Operating Goals by
      a
      seasonality factor developed by Contractor provided that the twelve (12) month
      straight average of each of Contractor’s Monthly Operating Goals remains
      unchanged after seasonality factors are applied. 

    
       

    

    D.  WIRE
      TRANSFER AND RECONCILIATION

     

    1.  On
      a
      monthly basis and in a format to be set by United, Contractor will provide
      an
      estimate of its monthly Carrier Controlled Costs with Markup, assuming C Level
      Performance and assuming a [*]
      Completion factor and a [*]
      load
      factor, plus its Pass Through Costs (which are never subject to Markup) with
      the
      exception of Markup on aircraft ownership costs and Markup on the one-time
      start-up costs for new aircraft, each of which shall be paid in full. This
      estimate will be based upon the schedule to be operated during the upcoming
      month and shall be provided no later than 7 days prior to the start of the
      month
      in which the wire transfers shall be made. [*]
      If such
      day falls on a Saturday the payment will be made the previous business day.
      If
      such day falls on a Sunday or Holiday the payment will be made on the following
      business day. If United objects to such estimate, United retains the right
      to
      withhold payment of only such costs that are objected to by United, which will
      then be subject to the reconciliation process outlined in Article
      VIII.D.2.
      If
      United objects to such estimate, it shall provide written notice of such
      objection, which shall include a detailed statement of the specific grounds
      for
      its objection, within 3 business days after its receipt of such estimate.


     

    2.  Complete
      Reconciliation of Carrier Controlled Costs (and associated Markup) according
      to
      actual Performance Levels, and Pass Through Costs paid under Article
      VIII.D.1
      and as
      established in accordance with the terms of this Agreement, shall be completed
      by United on a monthly basis, but no later than 180 days after month’s
      end:

     

    a.  Monthly
      Reconciliation - Carrier Controlled Costs. On or before the thirtieth
      (30th)
      day
      after the last day of each calendar month, Contractor shall submit to United
      a
      report detailing actual operational statistics pertaining to the payment of
      Carrier Controlled Costs, with a content reasonably determined by United, in
      a
      format mutually agreeable to United and Contractor. United and Contractor agree
      to make a good faith effort to reconcile any differences in operational
      statistics data used to calculate reconciliation payments and if necessary
      round
      to the nearest 1/10th
      of 1%,
      or if equidistant, to the nearest even 1/10th
      of 1%.


     

    b.  Monthly
      Reconciliation -
      Pass
      Through Costs. On or before the ninetieth (90th)
      day
      after the last day of each calendar month, Contractor shall submit to United
      (in
      a format to be determined by United) documentation sufficient to support its
      actual expenses for Pass Through Costs items, including copies of invoices.
      Upon
      submission of the information, Contractor must notify United in writing if
      any
      3rd
      party
      information is missing from the submission information, and provide an
      explanation for the delay. Under no circumstances will Contractor be reimbursed
      by United for Pass Through Costs claimed more than six (6) months after the
      expense was incurred and payable. United
      agrees to submit payment no more than 30 (thirty) days after receipt of this
      information. United will make objections to Pass Through Cost reconciliation
      no
      later than 180 days after the expense was incurred.  

     

    
      IX.  FEES
        PAYABLE TO UNITED

    

     

    A.  GOVERNMENT
      ASSISTANCE

     

    Any
      and
      all direct or indirect assistance received by Contractor as a result of
      government assistance or bail-out plans that cover costs not incurred by the
      Contractor or revenues that are generated by passengers carried by Contractor
      and pertaining to Contractor’s United Express Service will be forwarded directly
      to United. Examples include, but are not limited to, direct payments to
      Contractor, loan programs, reimbursement of security fees, and waivers of any
      and all fees and taxes.

     

    X.  MAINTENANCE
      AND FUELING

     

    United
      will have no responsibility under this Agreement for maintenance or fueling
      of
      Contractor’s aircraft.

     

    XI.  U.S.
      MAIL

     

    United
      and Contractor agree to cooperate in making bids for mail carriage.

    
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    XII.  INSURANCE

     

    A.  INSURANCE
      TYPES

     

    During
      the term of this Agreement, Contractor agrees to procure and maintain in full
      force and effect, at its own expense, policies of insurance with insurers of
      recognized reputation and responsibility, which provide, unless otherwise
      provided in the Aircraft Leases, at a minimum the following
      insurance:

     

    1.  Comprehensive
      Airline Liability Insurance, including but not limited to Aircraft Liability,
      Passenger Liability, Comprehensive General Liability Insurance, War Risk and
      Allied perils, including both passengers and other third parties, Cargo
      Liability and Baggage Liability Insurance, with combined single limits for
      each
      and every loss and each aircraft of not less than (i) U.S. $300,000,000, or
      (ii)
      U.S. $3,000,000 per available seat or (iii) the limits that Contractor has
      in
      place, whichever is greatest. Any policies of insurance carried in accordance
      with this Article
      XII.A.1
      will
      also contain or be endorsed to contain those provisions set forth in the
      attached Appendix
      G.

     

    2.  Aircraft
      Hull All Risks Insurance, including ground and flight coverage on Contractor’s
      aircraft, including its engines and all its parts when installed or temporarily
      detached from Contractor’s aircraft on a repair-or-replace basis with a
      deductible United has reasonably deemed appropriate.

     

    3.  Contractor
      agrees to maintain Workers’ compensation in statutory amounts required by each
      state in which any work is performed, in whole or in part; Employers’ Liability,
      with policy limits not less than $1,000,000 combined single limit, for all
      of
      Contractor’s United Express employees. United shall in no way be liable for any
      workers’ compensation claims paid by Contractor related to any of Contractor’s
      operations. The Contractor’s insurer agrees to waive rights of subrogation
      against United with respect to worker’s compensation claims. 

     

    4.  Contractor
      agrees to maintain Commercial Automobile Liability Insurance covering all owned,
      non-owned leased, and hired automobiles, trucks and trailers, with policy limits
      of not less than $5,000,000 combined single limit per occurrence to cover
      Contractor’s entire United Express operation.

     

    5.  Contractor
      will be responsible for the first $1,000,000 of loss or damage to all automation
      equipment provided by United to Contractor. Contractor will evidence property
      insurance and name United as loss payee. 

    
       

    

    B.  30-DAY
      NOTICE

     

    On
      or
      before the Effective Date of this Agreement, and not less than thirty (30)
      days
      and seven (7) days notice with respect to war risk, before the expiration or
      termination date of any insurance required to be maintained by Contractor under
      Article
      XII.A
      above,
      Contractor will furnish United with certificates of insurance, substantially
      in
      the form of the attached Appendix
      G,
      evidencing compliance with the foregoing requirements, unless otherwise provided
      in writing between the parties.

    
       

    

    C.  ALTERATIONS

     

    United
      has the right to make reasonable alterations in the requirements set forth
      in
      this Article
      XII
      above,
      in respect of the types and scope of coverage and amounts of insurance, any
      such
      alteration being deemed reasonable if readily available and if it becomes the
      custom in the industry.

    
       

    

    D.  FAILURE
      TO MAINTAIN INSURANCE

     

    In
      the
      event that Contractor fails to acquire or maintain insurance as herein provided,
      United may at its option secure such insurance on Contractor’s behalf at
      Contractor’s expense.

     

    XIII.  LIABILITY
      AND INDEMNIFICATION

     

    A.  EMPLOYER’S
      LIABILITY AND WORKERS’ COMPENSATION

     

    Each
      party hereto assumes full responsibility for its employer’s liability and
      workers’ compensation liability to its own officers, directors, employees or
      agents on account of injury or death resulting from or sustained in the
      performance of their respective service under this Agreement. Each party, with
      respect to its own employees, accepts full and exclusive liability for the
      payment of workers’ compensation and employer’s liability insurance premiums
      with respect to such employees, and for the payment of all taxes, contributions
      or other payments for unemployment compensation or old age benefits, pensions
      or
      annuities now or hereafter imposed upon employers by the government of the
      United States or by any state or local governmental body with respect to such
      employees measured by the wages, salaries, compensation or other remuneration
      paid to such employees, or otherwise, and each party further agrees to make
      such
      payments and to make and file all reports and returns, and to do everything
      to
      comply with the laws imposing such taxes, contributions or other
      payments.

     

    
      
      
      B.  INDEMNIFICATION
      BY CONTRACTOR

     

    Contractor
      hereby assumes liability for and agrees to indemnify, release, defend, protect,
      save and hold United and its officers, directors, agents and employees harmless
      from and against any and all liabilities, damages, expenses, losses, claims,
      demands, suits, fines or judgments, including but not limited to, attorneys’ and
      witnesses’ fees, costs and expenses incident thereto, which may be suffered by,
      accrue against, be charged to or be recovered from United or its officers,
      directors, employees or agents, by reason of any injuries to or deaths of
      persons, except for injury or death of United employees, or the loss of, damage
      to or destruction of property, including the loss of use thereof, arising out
      of, in connection with or in any way related to any act, error, omission,
      operation, performance or failure of performance of Contractor or its officers,
      directors, employees and agents, regardless of any contributory negligence
      either active, passive or otherwise on the part of United or its officers,
      directors, employees or agents (but excluding the reckless and willful
      misconduct or gross negligence of United or its officers, directors, employees
      or agents), which is in any way related to the services of Contractor
      contemplated by or provided pursuant to this Agreement. United will give
      Contractor prompt and timely notice of any claim made or suit instituted against
      United which in any way results in indemnification hereunder, and Contractor
      will have the right to compromise or participate in the defense of same to
      the
      extent of its own interest. 

     

    C.  INDEMNIFICATION
      BY UNITED

     

    United
      hereby assumes liability for and agrees to indemnify, release, defend, protect,
      save and hold Contractor and its officers, directors, agents and employees
      harmless from and against any and all liabilities, damages, expenses, losses,
      claims, demands, suits, fines or judgments, including but not limited to,
      attorneys’ and witnesses’ fees, costs and expenses incident thereto, which may
      be suffered by, accrue against, be charged to or be recovered from Contractor
      or
      its officers, directors, employees or agents, by reason of any injuries to
      or
      deaths of persons, except for injury or death of Contractor’s employees, or the
      loss of, damage to or destruction of property, including the loss of use
      thereof, arising out of, in connection with or in any way related to any act,
      error, omission, operation, performance or failure of performance of United
      or
      its officers, directors, employees or agents regardless of any contributory
      negligence either active, passive or otherwise on the part of Contractor or
      its
      officers, directors, employees, or agents (but excluding the reckless and
      willful misconduct or gross negligence of Contractor or its officers, directors,
      employees or agents), which is in any way related to the services of United
      contemplated by or provided pursuant to this Agreement. Contractor will give
      United prompt and timely notice of any claim made or suit instituted against
      Contractor which in any way results in indemnification hereunder, and United
      will have the right to compromise or participate in the defense of same to
      the
      extent of its own interest.

    
       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    D. CONTRACTOR’S
      SUPPLIES LIABILITY

     

    Contractor
      hereby assumes liability for and agrees to indemnify, release, defend, protect,
      save and hold United and its officers, directors, agents and employees from
      and
      against any and all liabilities, damages, losses, claims, demands, suits, fines
      or judgments, including but not limited to attorneys’ and witnesses’ fees, costs
      and expenses incident thereto, which may be suffered by, accrue against, be
      charged to or be recovered from United or its officers, directors, employees,
      or
      agents by reason of any losses or damages incurred on account of the loss,
      misapplication, theft or forgery of passenger tickets, exchange orders or other
      supplies furnished by or on behalf of United to Contractor, or the proceeds
      thereof, whether or not such proceeds have been deposited in a bank and whether
      or not such loss is occasioned by the insolvency or bankruptcy of a bank in
      which Contractor may have deposited such proceeds, other than a loss caused
      by a
      bank to which funds have been transmitted at the express direction of United.
      Contractor’s responsibility hereunder for passenger tickets, exchange orders and
      other supplies will commence immediately upon the delivery of said passenger
      tickets, exchange orders, and other supplies into the possession of Contractor
      or any duly authorized officer, agent or employee of Contractor. United will
      furnish Contractor prompt and timely notice of any claims made or suits
      instituted against United which in any way may result in the indemnification
      hereunder, and Contractor will have the right to compromise or participate
      in
      the defense of same to the extent of its own interest. This paragraph does
      not
      apply in situations to the extent the losses or damages are caused by the
      willful misconduct or gross negligence of United or its officers, directors,
      employees, or agents.

     

    E. INDEMNITY
      FOR INFORMATION

     

    Each
      party hereby assumes liability for and agrees to release, defend, protect,
      save,
      indemnify and hold the other party, its officers, directors, employees and
      agents harmless from all liabilities, damages, losses, claims, demands, suits,
      fines or judgments including, but not limited to, attorneys’ and witness’ fees,
      costs and expenses incident thereto, of such party and any third person, express
      or implied, arising by law or otherwise, as a result of, or related to, any
      material errors in information provided by the other party under this Agreement,
      regardless of any contributory negligence of the other party either active,
      passive or otherwise (but excluding the gross negligence or willful misconduct
      of the other party or its officers, directors, employees or agents). Each
      party’s waiver and release to the other party in this Article XIII.F applies to
      any liability, obligation, right, claim, or remedy in tort and including any
      liability, obligation, right, claim, or remedy for loss of revenue or profit
      or
      any other direct, indirect, incidental, special, or consequential damages,
      notwithstanding the above, this paragraph does not apply to losses or damages
      to
      the extent they are under [*]
      per year
      or to the extent they are in excess of [*]
      per
      year.

    
       

    

    F. CERTAIN
      DEFINITIONS

     

    As
      used
      in this Article
      XIII
      for
      purposes of identifying an indemnified party, all references to United include
      United’s parent company, and any wholly-owned subsidiary of United or its
      parent, and their respective employees, officers, directors and agents, and
      all
      references to Contractor include Contractor’s parent company, and any
      wholly-owned subsidiary of Contractor or its parent, and their respective
      employees, officers, directors and agents. For purposes of this Article
      XIII
      any
      passenger who connects in any city from a flight on United or Contractor (the
      “Carrying
      Party”)
      within
      four (4) hours after the end of such flight to a flight of the other party
      (the
“Connecting
      Party”)
      become
      passengers of the Connecting Party when such passenger enters the hold room
      or
      waiting area to which they were deplaned in such city from the Carrying Party’s
      flight to such on-line city. A passenger of the Carrying Party who does not
      have
      a connecting flight with the other party hereto and prior to entering the hold
      room or waiting area after deplaning from the Carrying Party’s flight in the
      Connection City is a passenger of the Carrying Party. For purposes of this
      Article
      XIII,
      neither
      loading bridges, hallways, stairways, nor ramp areas will be considered part
      of
      the hold room or waiting area.

    
       

    

    XIV.  REPORTS

     

    A.  BOARDING
      INFORMATION

     

    Information
      reports containing data covering boarding, and other information agreed to
      by
      the parties for Contractor’s operations hereunder will be produced from the
      close-out entries and provided by United to Contractor on a monthly basis 15
      days after the month end.

     

    B.  OPERATING
      PERFORMANCE

     

    Contractor
      will furnish to United within ten (10) working days after the end of each month
      a detailed report of its operating performance, this report will include
      information on Contractor’s performance during the preceding month for each of
      the items designated by United, including, but not limited to, Operating
      Performance Standards and aircraft appearance. 

     

    C.  CORPORATE
      AUDIT

     

    United
      may inspect and audit Contractor’s corporate records related to Pass Through
      Costs at any time, provided that such inspections do not unreasonably interfere
      with Contractor’s business. Additionally, United may inspect and audit all of
      Contractor’s corporate records and accounts solely related to Contractor’s
      United Express Services, in conjunction with the benchmarking studies conducted
      in 2009 and 2013 provided that such inspections do not unreasonably interfere
      with Contractor’s business.

     

    D.  FINANCIAL
      STATEMENTS

     

    Contractor
      will furnish to United, (i) within 45 days after the end of each calendar
      quarter, unaudited financial statements, including Contractor’s then current
      corporate balance sheet and profit and loss statement, either separately or
      on a
      consolidated basis, and (ii) within 90 days after the end of the Contractor’s
      fiscal year, Contractor’s then current, audited financial statements including,
      either separately or on a consolidated basis, the balance sheet and the profit
      and loss statement, together with associated footnotes, and a copy of the
      independent auditor’s report. If
      Contractor fails to provide financial statements within the 45-day or 90-day
      period, as outlined above, United may withhold all reconciliation payments
      pending the receipt of financial documents. Contractor may satisfy its
      obligations under this provision by providing United with copies of filings
      by
      Contractor or an affiliate on SEC Forms 10K or 10Q that include Contractor’s
      financial performance.

     

    
      
      
      E.  BENCHMARKING

     

    In
      2009
      and 2013, Contractor agrees to participate diligently in a detailed update
      of
      Contractor’s United Express expenses. Contractor agrees not to provide United
      Costs data to any other carrier or third party and United agrees not to provide
      Contractor cost data to any other carrier or third party except as required
      by
      law (including federal or state securities laws or regulations) or by the rules
      and regulations of any stock exchange or association on which securities of
      either party or any of its affiliates are traded, or in any proceeding to
      enforce the provisions of this Agreement. In the event either party believes
      it
      is required to disclose the other party’s cost data to any other carrier or
      third party, it shall provide to the owner of such data prior written notice
      of
      such contemplated disclosure in sufficient time to enable the owner to seek
      a
      protective order or other appropriate protection, and upon the owner’s request,
      the disclosing party shall cooperate with any such effort by the owner. Nothing
      in this paragraph is intended to override any non-disclosure obligation of
      either party to protect the confidential information of the other party that
      is
      in its possession.


    
      __________

      *
        Confidential

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    F.  GOVERNMENT
      FILINGS

     

    Contractor
      will be responsible for filing all reports relating to its operations with
      the
      DOT, FAA and other applicable government agencies (other than any such reports
      for which United has assumed the responsibility to file them on Contractor’s
      behalf), and commencing at such time as it commenced United Express flight
      operations, Contractor will promptly furnish United with copies of all such
      reports and such other available traffic and operating reports as United may
      request from time to time during the life of this Agreement. To the extent
      only
      United is in possession of relevant statistics used in such reports, United
      will
      provide such available statistics to Contractor as necessary for Contractor
      to
      complete these filings. If United fails to provide such statistics to Contractor
      sufficiently in advance of the applicable deadline for such filings, and
      Contractor is unable to submit such filings by the deadline because of such
      delay, United will reimburse Contractor for any fines or penalties incurred
      by
      Contractor as a result of its failure to submit such filings by the
      deadline.

     

    G.  COPY
      OF GOVERNMENT REPORTS

     

    Contractor
      will promptly furnish United with a copy of every final report that Contractor
      prepares, whether or not such report is filed with the FAA, NTSB or any other
      governmental agency, relating to any accident or incident involving an aircraft
      used by Contractor pursuant to this Agreement, when such accident or incident
      is
      claimed to have resulted in the death or injury to any person or the loss of,
      major damage to or destruction of any property.

    
       

      XV.  INDEPENDENT
        CONTRACTORS AND UNAUTHORIZED OBLIGATIONS 

    

     

    A.  INDEPENDENT
      CONTRACTORS

     

    1.  The
      employees, agents and independent contractors of each party hereto (the
“Employer”) engaged in performing any of the services the Employer is to perform
      pursuant to this Agreement are employees, agents, and independent contractors
      of
      the Employer for all purposes and under no circumstances will be deemed to
      be
      employees or agents or independent contractors of the other Party (the
“non-Employer”). The Non-Employer will have no supervision or control over any
      such Employer’s employees, agents and independent contractors and any complaint
      or requested change in procedure made by the Non-Employer will be transmitted
      by
      it to the Employer’s designated representatives. In its performance under this
      Agreement, each party will act for all purposes, as an independent contractor
      and not as an agent for the other party. 

    
       

    

    2.  Notwithstanding
      the fact that Contractor has agreed to follow certain procedures, instructions
      and United Express Service Standards pursuant to this Agreement, United will
      have no supervisory power or control over any employees, agents or independent
      contractors engaged by Contractor in connection with its performance hereunder,
      and all complaints or requested changes in procedures made by United will,
      in
      all events, be transmitted by United to Contractor’s designated representatives.
      Nothing contained in this Agreement is intended to limit or condition
      Contractor’s control over its operations or the conduct of its business as an
      air carrier, and Contractor and its principals assume all risks of financial
      losses which may result from the operation of the air services to be provided
      by
      Contractor hereunder.

    
       

    

    B.  EMPLOYEES

     

    The
      employees, agents and independent contractors of United engaged in performing
      any of the services United is to perform pursuant to this Agreement are
      employees, agents and independent contractors of United for all purposes and
      under no circumstances will be deemed to be employees, agents or independent
      contractors of Contractor. Contractor will have no supervision or control over
      any such United employees, agents and independent contractors and any complaint
      or requested change in procedure made by Contractor will be transmitted by
      Contractor to United’s designated representatives. In its performance under this
      Agreement, United will act, for all purposes, as an independent contractor
      and
      not as an agent for Contractor.

     

    C.  UNAUTHORIZED
      OBLIGATIONS

     

    1.  Nothing
      in this Agreement authorizes United to make any contract, agreement, warranty
      or
      representation on Contractor’s behalf, or to incur any debt or obligation in
      Contractor’s name (“Contractor
      Unauthorized Obligation”);
      and
      United hereby agrees to defend, indemnify, save, release and hold Contractor
      and
      its officers, directors, employees and agents harmless from any and all
      liabilities, claims, judgments and obligations which arise as a result of or
      in
      connection with or by reason of any such Contractor Unauthorized Obligation
      made
      by United or its officers, directors, employees, agents or independent
      contractors (other than Contractor) in the conduct of United’s
      operations.

     

    2.  Nothing
      in this Agreement authorizes Contractor to make any contract, agreement,
      warranty or representation on United’s behalf, or to incur any debt or
      obligation in United’s name (“United
      Unauthorized Obligation”);
      and
      Contractor hereby agrees to defend, indemnify, save, release and hold United
      and
      its officers, directors, employees and agents harmless from any and all
      liabilities, claims, judgments and obligations which arises as a result of
      or in
      connection with or by reason of any such United Unauthorized Obligation made
      by
      Contractor or its officers, directors, employees, agents or independent
      contractors (other than United) in the conduct of Contractor’s
      operations.

     

    D.  CONTRACTOR
      OPERATED FLIGHTS

     

    The
      fact
      that Contractor’s operations are conducted under the United Marks and listed
      under the UA designator code will not affect their status as flights operated
      by
      Contractor, and Contractor and United agree to advise all third parties,
      including passengers, of this fact.

     

     

    
       

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    XVI.  DEFAULT
      AND TERMINATION

     

    A.  OPERATIONS
      DEFAULT 

     

    1.  If
      either
      party becomes insolvent; is not regularly paying its bills when due without
      just
      cause; takes any step leading to its cessation as a going concern; makes an
      assignment of substantially all of its assets for the benefit of creditors
      or a
      similar disposition of the assets of the business; or either ceases or suspends
      operations for reasons other than an Article
      XXVI Force
      Majeure condition (a “Section
      A Default”),
      then
      the other party (the “Insecure
      Party”)
      may
      terminate this Agreement on not less than 10 days written notice (the “Notice
      Period”) to such party (the “Section
      A Defaulting Party”)
      unless
      the Section A Defaulting Party immediately gives adequate assurance of the
      future performance of this Agreement within the Notice Period by establishing
      an
      irrevocable letter of credit—issued by a U.S. bank acceptable to the Insecure
      Party, on terms and conditions acceptable to the Insecure Party, and in an
      amount sufficient to cover all amounts potentially due from the Section A
      Defaulting Party under this Agreement—that may be drawn upon by the Insecure
      Party if the Section A Defaulting Party does not fulfill its obligations under
      this Agreement in a timely manner. 

     

    2. If
      bankruptcy proceedings are commenced with respect to the Section A Defaulting
      Party and if this Agreement has not otherwise terminated, then to the extent
      permitted by the Bankruptcy Court, the Insecure Party may upon ninety (90)
      days’
prior written notice suspend all further performance of this Agreement until
      the
      Section A Defaulting Party assumes or rejects this Agreement pursuant to Section
      365 of the Bankruptcy Code or any similar or successor provision. Any such
      suspension of further performance by the Insecure Party pending the Section
      A
      Defaulting Party’s assumption or rejection will not be a breach of this
      Agreement and will not affect the Insecure Party’s right to pursue or enforce
      any of its rights under this Agreement or otherwise. 

     

    B.  COVENANT
      DEFAULT

     

    If
      either
      party (the “Section
      B Defaulting Party”)
      shall
      refuse, neglect or fail to perform, observe, or keep any material covenants,
      agreements, terms or conditions contained herein on its part to be performed,
      observed, and kept (other than any such covenant or agreement for which this
      Agreement provides an exclusive remedy and other than the covenants described
      in
Article
      XVI.D),
      and
      such refusal, neglect or failure (individually and collectively, a “Breach”)
      shall
      continue for a period of thirty (30) days after written notice to cure such
      Breach to the Section B Defaulting Party thereof or such longer period as may
      be
      demonstrably necessary to complete the cure of such failure (but such longer
      period may not exceed 60 days after the receipt of the notice to cure) (a
“Section
      B Default”)
      then
      the other party may upon thirty (30) days’ notice to the Section B Defaulting
      Party terminate this Agreement. If a notice of Breach is delivered and a notice
      of termination is not delivered within forty-five (45) days after the end of
      the
      30 or 60 day cure period, as applicable, the other party shall be deemed to
      have
      waived its right hereunder to terminate for the particular occurrence of Breach
      for which the Section B Defaulting Party received notice. Notwithstanding the
      foregoing, if United shall permanently cease operations as a certificated air
      carrier, Contractor may give written notice and terminate the Agreement
      effective immediately after such cessation of operations.

     

    C.  DEFAULT
      BY CONTRACTOR

     

    If
      Contractor shall refuse, neglect or fail to cure or perform any one of the
      following conditions outlined in Article
      XVI.C.1
      or
Article
      XVI,C.2
      below ,
      United may give Contractor written notice to correct such condition or cure
      such
      breach. Upon written notice of breach, Contractor shall have thirty (30) days
      in
      order to cure such breach, and if any such condition or breach shall continue
      beyond thirty (30) days after notice to Contractor thereof (a “Section
      C Default”),
      then
      United may terminate this Agreement upon thirty (30) days’ written notice to
      Contractor if:

     

    1.  Contractor’s
      operations fall below C level performance in all of the following three goals
      for a period of three (3) consecutive months OR for a period of 6 months within
      a 12-month period:

     

    a.  Controllable
      Flight Completion;

     

    b.  Mishandled
      Bags; or

     

    c.  On-Time
      Zero;

     

    2.  Contractor
      knowingly maintains falsified books or records or submits false reports of
      a
      material nature

     

    D.  SIMILAR
      AGREEMENTS

     

    United
      may immediately terminate this Agreement (i) if Contractor is in breach of
      the
      terms of Article
      V.A.
      (United
      Express Operations Only) or (ii) if Contractor is in breach of the terms of
      Article
      V.B (Code
      Share Limitation) (a “Section
      D Default”).
      

     

    E.  NON-COMPLIANCE
      WITH STANDARDS

     

    If
      Contractor shall refuse, neglect, or fail to perform or observe the provisions
      of the United Express Service Standards or Aircraft Ground Handling Procedures
      to be performed, observed, and kept with regard to one or more city pairs under
      this Agreement, and such refusal, neglect or failure shall continue for a period
      of sixty (60) days after United delivers written notice to cure such default
      to
      Contractor thereof (a “Section
      E Default”)
      then
      United may upon thirty (30) days’ notice to Contractor terminate this Agreement
      with regard to the city pairs involved or ninety (90) days’ notice to Contractor
      as to the entire Agreement at United’s discretion.

    
       

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    F.  CONSEQUENCES
      OF TERMINATION

     

    Any
      termination pursuant to one or more of the provisions of this Agreement will
      be
      without additional liability to the party initiating such termination and will
      not be construed so as to relieve either party hereto of any debts or
      obligations, monetary or otherwise, to the other party that accrued hereunder
      prior to the effective date of such termination. Each party will be entitled
      to
      any and all damages recoverable and remedies under law or in equity against
      the
      other for any breach by the other party of this Agreement, regardless of whether
      the non-breaching party elects to terminate this Agreement; provided that the
      liquidated damages provided for in Article
      XVI.G
      shall
      constitute full payment and the exclusive remedy for any damages suffered by
      United in the event it terminates this Agreement pursuant to the terms of this
      Article
      XVI sections A, B, C.2 or D. 

     

    G. LIQUIDATED
      DAMAGES

     

    1. Except
      as
      otherwise provided hereunder, if United terminates this Agreement pursuant
      to
      the terms of this Article
      XVI
      as a
      result of a Section A Default, a Section B Default, a Section C.2 default or
      a
      Section D default by Contractor, then Contractor will be obligated to pay United
      liquidated damages. Such liquidated damages will be calculated in the manner
      provided herein and shall not constitute a penalty. 

     

    2.
      If
      United is entitled to collect liquidated damages from Contractor as a result
      of
      Contractor’s material breach of this Agreement, United’s liquidated damages
      shall be calculated as follows: lost contribution (which shall be conclusively
      deemed to be [*]
      of
      United’s average monthly net revenue, defined as total Origination and
      Destination revenue minus taxes and commissions, from Contractor’s United
      Express flights during the immediately preceding [*]
      period)
      multiplied by the following percentages for each month in the following periods
      - (a) [*]
      for the
      first [*]
      following the termination of the Agreement, (b) [*]
      for the
      next [*],
      and (b)
[*]
      for the
      next [*].
      Such
      amounts shall be subject to mitigation to the extent United can replace
      Contractor’s United Express services.

     

    3.  The
      provisions of this Section XVI.G shall not apply to any termination as a result
      of a Section C.1 default, or a Section E default.

     

    
      
      
      H.  RESTRICTED
      ACTIONS 

     

    Contractor
      shall not take, nor agree to take, any of the following actions without United’s
      prior written consent: (a) dispose of any of United’s assets, or (b) enter into
      any agreements with third parties which create liens, claims or encumbrances
      on
      any of United’s assets. To the extent that Contractor engages in, invests in or
      otherwise is responsible (financially or otherwise) for any business, activity
      or operation other than Contractor’s United Express Services, and unless
      otherwise expressly agreed in writing with United, Contractor will ensure that
      the costs and expenses associated with or allocable to such other businesses,
      activities or operations are not charged to or recovered from United in any
      way.

     

    I.  CALL
      OPTION

     

    1. United
      will have the option to assume Contractor’s ownership or leasehold interest, as
      the case may be, in certain aircraft as more fully described in Article
      XVI.I.
      (the
“Call
      Option”)
      in any
      one or more of the following circumstances:

     

    a.  If
      Contractor wrongfully terminates this Agreement, (in which event United will
      also be entitled to Liquidated Damages to the extent provided in Article
      XVI.G);
      or


     

    b.  If
      United
      terminates this Agreement for Contractor’s breach of this Agreement for any one
      or more of the following reasons (in which event United will also be entitled
      to
      Liquidated Damages to the extent provided in Article
      XVI.G)

     

    i. Contractor’s
      operating performance falls below the following two levels for three consecutive
      months or any 6 month period within a rolling 12 month period:

     

    (a).less
      than [*]
      controllable completion factor (excluding cancellations caused solely by
      weather, ATC, United caused problems, and/or labor actions); and

     

    (b).less
      than [*]
      on-time
      zero;

     

    ii. Contractor
      enters into a new codeshare with another airline in breach of Article
      V.A or
      V.B;
      or


     

    iii. Contractor
      breaches its obligations contained in Article
      V.A
      or
V.B;
      or


     

    iv. Contractor’s
      operating certificate is revoked or suspended by the FAA, for safety issues
      or
      concerns, for a period of four consecutive months. 

     

    2.  Such
      Call
      Option will be governed by the terms set forth below:

     

    a. The
      Call
      Option shall apply to any or all regional jet aircraft operated by Contractor
      as
      United Express pursuant to the terms of this Agreement at the time of the event
      or events described in Article XVI.I.1 above, provided that if United exercises
      the Call Option for less than all of such regional jet aircraft, it shall not
      exercise such Call Option for at least [*]
      such
      aircraft which are to be selected by United.

     

    b. United
      shall deliver notice of its election to exercise the Call Option no later than
      45 days following the date of notice of termination of this Agreement.


     

    c. Within
      [*]
      business
      days following its receipt of a notice by United of its notice of termination,
      Contractor shall provide United with: (i) copies of documentation relating
      to
      interests to be assumed by United or retired at United’s expense as a result of
      an aircraft lease assignment, sublease or purchase; (ii) lease rates and other
      financial information relevant to the assignment, sublease or purchase; and
      (iii) the identity of and contact information for all parties with an interest
      in said aircraft. 

    
      __________

      *
        Confidential

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    d. [Intentionally
      Omitted.] 

     

    e. In
      the
      event United exercises its Call Option (i) with respect to aircraft that are
      owned by Contractor or an affiliate of Contractor, Contractor or such affiliate
      shall sell the aircraft to United for the purchase price set forth in paragraph
      f below, and (ii) with respect to aircraft that are leased by Contractor, (A)
      if
      the leases to such aircraft may be assigned to United, United shall assume
      the
      leases with respect to such aircraft, and (B) if the leases to such aircraft
      may
      not be assigned to United or a consent required cannot be obtained, United
      shall
      sublease such aircraft from Contractor pursuant to a sublease with terms and
      conditions that are the same for the remaining term as they are in the lease
      under which Contractor leases the aircraft. The effective date of any such
      sale,
      lease, or sublease shall occur promptly after United’s election to exercise the
      Call Option but no later than [*]
      days
      after the notice.

     

    f. In
      the
      event of a sale of an aircraft under paragraph e(i) above, the purchase price
      for the aircraft shall be [*].

     

    g. In
      the
      event of a lease assumption under sub paragraph e(ii)(A) above, Contractor
      shall
      be entitled to either a full release from all liabilities and obligations under
      such lease other than obligations relating to periods prior to the date of
      assignment to United or United shall indemnify the Contractor from liabilities
      and obligations arising after the date of assignment. Contractor shall indemnify
      United from all liabilities and obligations arising prior to the date of the
      assignment. 

     

    h. In
      the
      event of either a lease assumption under paragraph e(ii)(A) above or a sublease
      under paragraph e(ii)(B) above United will indemnify Contractor against all
      liabilities arising from and after such assignment or sublease as the case
      may
      be. Contractor shall indemnify United from all liabilities and obligations
      arising prior to the date of the assignment or sublease, as the case may be.
      United shall also attempt to obtain a termination of all guarantees and return
      to Contractor (or reimburse) all applicable deposits, letters of credit, or
      other collateral, but such release shall not include (and instead Contractor
      shall assign to the extent assignable to United without further compensation,
      and if not assignable, Contractor shall subrogate its rights regarding any
      such
      deposits or reserves held by or subject to the security interest of third
      parties to United or otherwise put United in the same position as if such rights
      were assignable) any deposits or reserves held by or subject to the security
      interest of third parties related to the maintenance or operation of the
      aircraft (including the airframe, any engine, any landing gear, or other
      component or part). United shall assume all obligations of Contractor with
      respect to such lease or sublease as of the date of assignment or sublease
      and
      adjustments shall be made between the parties for advance or arrears payment
      of
      rent. Such adjustment shall be the difference between: (i) the cash amount
      of
      rent actually paid under the lease during its entire term as of the time of
      the
      assignment, and (ii) the total rent due during the entire term of the lease
      times the percentage of the number of days since the beginning of the lease
      to
      the total number of days in the entire term of the lease. In the event that
      United and the Contractor working together are unable to obtain a release,
      for
      the benefit of Contractor, then United shall indemnify Contractor from and
      against all losses and liabilities of any kind arising from and after such
      assignment or sublease in the same manner contemplated above.

     

    
          i. Following
        a notice of termination from United, provided that Contractor does not operate
        the aircraft in a manner that is prohibited under the terms of this Agreement,
        United shall continue to pay aircraft ownership costs as provided in Section
        VIII.A.8 hereof in respect of all aircraft subject to United’s exercise of its
        Call Option until (a) in the event United exercises its Call Option, the
        effective date of the sale, lease or sublease of the respective aircraft
        as
        provided herein, or (b) in the event that United does not exercise its Call
        Option, the date of expiration of its Call Option, the date of United’s written
        notice providing United’s early release of its rights to such Call Option, or
        the date of United’s revocation of its exercise of the Call Option as provided
        under paragraph f, in each case with respect to any particular aircraft.
        

    

     

    j. For
      each
      aircraft that United acquires pursuant to the Call Option, United will purchase
      from the Contractor and take delivery of a mutually-selected, proportional
      share
      of Contractor’s spare engines, rotable and expendable spare parts, and tools,
      owned by Contractor to support the operation of the aircraft type. The aggregate
      proportional share of Contractor’s spare engines, spare parts and tools shall be
      determined as the number of aircraft acquired by United as a percentage of
      the
      Contractor’s fleet, by aircraft type. Spare parts, spare engines and tools will
      be purchased by United at fair market value in “as is where is” condition with
      fair market value determined in the manner provided in paragraph f
      above.

     

    k. In
      the
      event United exercises its Call Option with respect to any aircraft as to which
      Contractor has prepaid rent under the terms of any lease or financing agreement,
      United shall reimburse Contractor for all prepaid rent to the extent not
      previously included in the aircraft ownership costs previously paid by United
      or
      otherwise.

     

    XVII.  ASSIGNMENT,
      MERGER AND ACQUISITION

     

    A.  ASSIGNMENT

     

    This
      Agreement may be terminated by either United or Contractor (the “First
      Party”)
      if the
      other party assigns this Agreement or any of its rights, duties or obligations
      under this Agreement (except an assignment of the right to money to be received
      hereunder and except to any affiliate of Contractor) without the prior written
      consent of the First Party. In the event that this Agreement is assigned in
      violation of this Article
      XVII,
      without
      such consent having been given in writing, the First Party will have the right
      to terminate this Agreement immediately by telegraphic or written notice to
      the
      other party; provided, however, that a corporate reorganization that does not
      result in a material change in the ultimate ownership of Contractor from the
      ownership that existed prior to such transaction will not be considered an
      assignment as long as all of the entities succeeding to any of the assets or
      liabilities of Contractor prior to such corporate reorganization agree to be
      bound by this Agreement.

     

    B.  MERGER

     

    In
      the
      event Contractor or Republic merges with, or if control of Contractor or
      Republic is acquired by, another air carrier, or a corporation directly or
      indirectly owning or controlling or directly or indirectly owned or controlled
      by another air carrier (a “Holding
      Company”),
      or a
      corporation directly or indirectly owned or controlled by any such Holding
      Company, United will have the option to terminate this Agreement without
      liability to Contractor, but shall have no such option if (1) Contractor or
      Republic is the acquiring or surviving entity in such merger or acquisition,
      (2)
      the ultimate beneficial ownership of the surviving entity immediately following
      such transaction is substantially similar (i.e. at least [*]
      common
      ownership) to the ultimate beneficial ownership of Contractor or Republic as
      the
      case may be immediately prior to such transaction. 

    
      __________

      *
        Confidential

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    C.  ACQUISITION

     

    1.  For
      purposes of this Article
      XVII.C, a
      “Qualifying
      Transaction”
      means
      any actual, contemplated or proposed (a) merger of Contractor or Republic with
      another company, (b) sale, transfer or lease by Contractor of substantially
      all
      its assets, rights or powers (other than in the ordinary course of business),
      or
      (c) issuance or sale of stock of Contractor or Republic representing a
[*]
      of
      beneficial ownership or voting control (other than the issuance or sale of
      stock
      in Contractor or Republic in a registered public offering under the Securities
      Act of 1933, as amended) in a single transaction or series of related
      transactions; provided, however, that a Qualifying Transaction shall not include
      (d) a corporate reorganization or other transaction that does not result in
      a
      change of over [*]
      in the
      ultimate beneficial ownership or voting control of Contractor or Republic from
      the ownership that existed prior to such transaction, (e) a transaction in
      which
      Contractor or Republic is the surviving entity, (f) a transaction in which
      the
      surviving entity is controlled, directly or indirectly, by Wexford Capital
      LLC,
      provided that in each case the surviving entity agrees to be bound by this
      Agreement or (g) any proposed sale or disposition by Contractor of its aircraft
      or assets that: (i) have become worn out or obsolete or are no longer used
      and
      useful in Contractor’s day-to-day business; provided, however, that such sale or
      disposition does not impair or negatively affect Contractor’s ability to
      complete scheduled service on a day to day basis under this Agreement; or (ii)
      are being replaced with other assets of a similar type which are at least of
      equal quality and utility to Contractor in carrying on its day to day business
      and meeting its obligation under this Agreement. 

    
       

                  2.  Contractor
        and Republic each agrees that if it desires to engage in a Qualifying
        Transaction, it shall (a) give United written notice of its intention to
        engage
        in such Qualifying Transaction together with the material terms and conditions
        of such proposed transaction (the “Notice”),
        (b)
        negotiate in good faith with United to determine terms and conditions on
        which
        Contractor or Republic and United could complete such Qualifying Transaction
        and
        (c) grant United or any United affiliated entity a right of refusal or of
        offer
        (the “United
        ROFR”)
        regarding such proposed Qualifying Transaction, subject to any conflicting
        prior
        right of refusal granted by Contractor, Republic or any of their affiliates
        before January 27, 2004. The United ROFR shall give United or any United
        affiliated entity the right to enter into a Qualifying Transaction upon the
        terms set forth in the Notice; provided that if United is unable to match
        such
        terms due to United’s inability to provide the specific types of consideration
        (e.g., stock, rights or assets) to be delivered by a third party thereunder,
        Contractor agrees to negotiate promptly in good faith in order to determine
        an
        amount and type of consideration with an equivalent after-tax economic value
        to
        Contractor or its affiliates which could be paid or delivered to Contractor
        or
        its affiliates in lieu of such specific consideration. Contractor agrees
        that
        any and all information provided to any third party in connection with a
        Qualifying Transaction will be provided to United with the Notice or as promptly
        as possible thereafter. 

    

    


                3.  United
      shall deliver to Contractor written notice of its preliminary election to
      exercise the United ROFR (a “ROFR
      Notice”)
      not
      later than 10 business days after the receipt of the Notice by United. Within
      10
      business days after the later of (a) United’s delivery of a ROFR Notice, or (b)
      the delivery to United by Contractor of the information referred to in paragraph
      2, United shall have the right to withdraw its ROFR Notice. If (c) United does
      not issue a timely ROFR Notice, (d) withdraws a ROFR Notice, or (e)
      notwithstanding United’s issuance and failure to withdraw a ROFR Notice, United
      and Contractor or Republic are unable to agree on terms and conditions of a
      Qualifying Transaction among themselves, Contractor or Republic shall have
      the
      right to enter into the Qualifying Transaction with a third party, but may
      not
      do so on any terms more beneficial to such third party than was offered to
      United.

     

    XVIII.  CHANGE
      OF LAW

     

    Notwithstanding
      anything herein to the contrary, in the event there is any change in the
      statutes governing the economic regulation of air transportation, or in the
      applicable rules, regulations or orders or interpretation of any such rule,
      regulation or order of the DOT or other department of the government having
      jurisdiction over air transportation, which change or changes materially affect
      the rights or obligations of either party hereto under the terms of this
      Agreement, then the parties hereto will consult, no later than thirty (30)
      days
      after any of the occurrences described herein, in order to determine what,
      if
      any, changes to this Agreement are necessary or appropriate, including but
      not
      limited to the early termination of this Agreement. If the parties hereto are
      unable to agree whether any change or changes to this Agreement are necessary
      and proper, or as to the terms of such changes, or whether this Agreement should
      be terminated in light of the occurrences described above, and such failure
      to
      reach agreement continues for a period of thirty (30) days following the
      commencement of the consultations provided for by this Article
      XVIII,
      then
      this Agreement may be terminated by either party immediately upon providing
      the
      other party thirty (30) days’ prior written notice of such termination. Any such
      termination will be without additional obligation or liability to both parties
      except that such termination will not relieve either party of any debt or
      obligation, monetary or otherwise, accruing hereunder prior to the effective
      date of termination.

     

    XIX.  TAXES,
      PERMITS AND LICENSES

     

    A.  TRANSACTION
      TAXES

     

    Contractor
      agrees to indemnify and hold United harmless from any and all penalties or
      interest arising out of any real and personal property, sales and use,
      occupational, gross receipts, value added, income, franchise and any other
      taxes, customs, duties, excise taxes, fees, charges or assessments, of any
      nature whatsoever imposed by any federal, state, local or foreign government
      or
      taxing authority upon Contractor or United with respect to Contractor’s
      performance of this Agreement, or to Contractor’s operations, or the equipment
      contained therein or services provided thereby, or the revenues derived
      therefrom (except for penalties or interests arising out of any tax upon or
      measured by United’s revenues, net income or any franchise tax). If a claim is
      made against United for any penalties or interest referred to above, United
      will
      promptly notify Contractor and request payment of such claim. If requested
      by
      Contractor in writing, United will upon receipt of indemnity and evidence that
      Contractor has made adequate provision for the payment of such penalties or
      interest, reasonably satisfactory to United, contest the validity, applicability
      or amount of such penalties or interest, taxes and other charges at Contractor’s
      expense. Contractor shall pay United upon demand for all expenses incurred
      (including, without limitation, all costs, expenses, losses, legal and
      accountants’ fees, penalties and interest) in making payment, in protesting or
      seeking refund of such penalties or interest.

     

    B.  PAYROLL
      TAXES

     

    Contractor
      acknowledges that it is responsible for and will pay to the appropriate
      authority, and will indemnify and hold United harmless from, any and all federal
      or state payroll taxes, FICA, unemployment tax, state unemployment compensation
      contribution, disability benefit payments, insurance costs and any other
      assessments or charges which relate directly or indirectly to the employment
      by
      Contractor of Contractor’s employees. United acknowledges that it is responsible
      for and will pay to the appropriate authority, and will indemnify and hold
      Contractor harmless from, any and all federal or state payroll taxes, FICA,
      unemployment tax, state unemployment compensation contribution, disability
      benefit payments, insurance costs and any other assessments or charges which
      relate directly or indirectly to the employment by United of United’s
      employees.

     

    C.  PERMITS
      AND LICENSES

     

    Contractor
      will comply with all federal, state and local laws, rules and regulations,
      will
      timely obtain and maintain any and all permits, certificates or licenses
      necessary for the full and proper conduct of its operations, and will pay all
      fees assessed for airport use including but not limited to landing fees, user
      airport fees and prorated airport facility fees. Contractor further agrees
      to
      comply with all mandatory resolutions issued by the Air Transport Association
      of
      America (“ATA”)
      and all
      non-binding recommended resolutions of the ATA, which are adopted by
      United.

    
      __________

      *
        Confidential

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    XX.  REVIEW

     

    During
      the term of this Agreement United may, at any time at its discretion, require
      a
      joint review of Contractor’s aircraft and facilities to determine whether
      Contractor’s United Express Services are meeting the requirements of this
      Agreement. Such review can include an obligation for Contractor to respond
      to
      information requests and to provide relevant documents. This review is not
      intended nor shall it be construed to relieve Contractor of its responsibility
      to provide a quality and airworthy aircraft that satisfies all FAA regulations.
      In addition, upon request by United, within thirty (30) days after each calendar
      quarter United and Contractor will meet to review Contractor’s United Express
      Services during the preceding calendar quarter.

     

    XXI.  JURISDICTION

     

    With
      respect to any lawsuit, action, proceeding or claim relating to this Agreement
      or any other agreement between United and Contractor (hereinafter, any such
      lawsuit, action, proceeding or claim is referred to as a “Lawsuit”),
      each
      of the parties hereto irrevocably (i) submits to the exclusive jurisdiction
      of
      the courts of the State of Illinois and the United States District Court located
      in the City of Chicago, Illinois, and (ii) waives any objection which it may
      have at any time to the laying of venue of any Lawsuit brought in any court,
      waives any claim that any Lawsuit has been brought in any inconvenient forum,
      and further waives the right to object, with respect to any Lawsuit, that such
      court does not have jurisdiction over such party. Nothing in this Agreement
      precludes either party hereto from bringing Lawsuits in any other jurisdiction
      in order to enforce any judgment obtained in any Lawsuit referred to in the
      preceding sentence, nor will the bringing of such enforcement Lawsuit in any
      one
      or more jurisdictions preclude the bringing of any enforcement Lawsuit in any
      other jurisdiction.

     

    
    

    XXII.  NOTICES

     

    Any
      and
      all notices, approvals or demands required to be given in writing by the parties
      hereto will be sufficient if sent by facsimile, certified mail, postage prepaid,
      overnight delivery by a nationally recognized delivery company or hand delivery,
      to United, addressed to:

     

    United
      Air Lines, Inc.

    1200
      E.
      Algonquin Road

    Elk
      Grove
      Township, Illinois 60007

    Attn:
      -
      Director, United Express 

    Fax:
      847-364-6728

     

    and
      to
      Contractor, addressed to:

     

    Shuttle
      America Corp.

    8909
      Purdue Road, Suite 300

    Indianapolis,
      Indiana 46268 

    Attn:
      Chief Executive Officer 

    Fax:
      317-484-6047

    


    With
      a
      copy to:

    


    Wexford
      Capital LLC

    411
      West
      Putnam Avenue

    Greenwich,
      CT 06830

    Attn:
      President & General Counsel

    Fax
      Nos.:
      203-862-7320

    203-862-7310
      

     

    or
      to
      such other addresses in the continental United States as the parties may specify
      in writing. 

     

    XXIII.  APPROVALS
      AND WAIVERS

     

    A.  Whenever
      this Agreement requires the prior approval or consent of United, Contractor
      will
      make a timely request to United therefore and the consent will be obtained
      in
      writing. United will also consider, in its sole discretion, other reasonable
      requests individually submitted in writing by Contractor for United’s consent to
      a waiver of any obligation imposed by this Agreement.

     

    B.  United
      assumes no liability or obligations to Contractor by providing any waiver,
      approval, consent or suggestion to Contractor in connection with this Agreement,
      or by reason of any neglect, delay or denial of any request
      therefore.

     

    C.  Except
      as
      otherwise provided for in this Agreement, no failure by either party to execute
      any power reserved to it by this Agreement, or to insist upon strict compliance
      by the other party with any obligation or condition hereunder, and no custom
      or
      practice of the parties at variance with the terms hereof will constitute a
      waiver of such party’s right to demand exact compliance with any of the terms
      herein. Waiver by such party of any particular default by the other party will
      not affect or impair such party’s rights with respect to any subsequent default
      of the same, similar or different nature, nor will any delay, forbearance or
      omission of such party to exercise any power or right arising out of any breach
      or default by the other party of any of the terms or provisions hereof will
      affect or impair such party’s right to exercise the same or constitute a waiver
      by such party of any right hereunder or the right to declare any subsequent
      breach or default and to terminate this Agreement prior to the expiration of
      its
      term. Subsequent acceptance by such party of any payments due to it hereunder
      will not be deemed to be a waiver by such party of any preceding breach by
      the
      other party of any terms, covenants or conditions of this
      Agreement.

     

    XXIV.  GOVERNING
      LAW

     

    This
      Agreement and any dispute arising hereunder, including any action in tort,
      will
      be governed by and construed and enforced in accordance with the internal laws
      of the State of Illinois.

     

    XXV.  CUMULATIVE
      REMEDIES

     

    Unless
      and to the extent as may be otherwise expressly stated in this Agreement, no
      right or remedy conferred upon or reserved to Contractor or United by this
      Agreement is intended to be, nor shall be deemed, exclusive of any other right
      or remedy herein or by law or equity provided or permitted, but each will be
      cumulative of every other right or remedy.

    
       

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    XXVI.  FORCE
      MAJEURE

     

    A.  FORCE
      MAJEURE.

     

    Neither
      party shall be liable for delays or failure in performance hereunder caused
      by
      acts of God, acts of terrorism or hostilities, war, strike, labor dispute,
      work
      stoppage, fire, act of government, court order or any other cause, whether
      similar or dissimilar, individually or collectively, “Force Majeure” events
      beyond the control of Contractor or United. 

     

    B.  EFFECT
      ON MARKUP.

     

    In
      the
      event of a Force Majeure or other disruption resulting in at least a one-day
      suspension of greater than [*]
      of
      Contractor’s United Express scheduled flights for a period of more than
[*],
      United
      retains the right to reduce Contractor’s Markup to [*]
      for A,
      B, or C level performance, and to [*]
      for D
      level performance, for the lesser of the duration of effect of the Force Majeure
      event or [*].
      The
      adjusted Markup under a Force Majeure event will be part of a broader United
      Express program where all carriers provide assistance at levels that are
      proportionate to their United Express operations. 

     

    C.   FIXED
      AND OVERHEAD REDUCTION.

     

    In
      the
      event of a Force Majeure event, resulting in a suspension of greater than
[*]
      of
      Contractor’s United Express scheduled flights for a period of more than
[*],
      upon
      providing prior written notice to Contractor United shall have the right after
      the date of such notice to apply an equivalent percentage reduction to all
      Fixed
      and Overhead cost categories (Non-Aircraft), for the duration of the Force
      Majeure event. This reduction will become permanent in the event a permanent
      schedule reduction is necessary. The reduction in fixed and overhead costs
      under
      a Force Majeure event will be part of a broader United Express program where
      all
      carriers provide assistance at levels that are proportionate to their United
      Express operations.

     

    
      XXVII.
        SEVERABILITY AND CONSTRUCTION

    

     

    A.  Each
      term
      or provision of this Agreement will be considered severable, and if, for any
      reason, any such term or provision herein is determined to be invalid and
      contrary to, or in conflict with, any existing or future law or regulation
      by a
      court or agency having valid jurisdiction, such will not impair the operation
      of, or have any other effect upon, other terms or provisions of this Agreement
      as may remain otherwise enforceable, and the latter will continue to be given
      full force and effect and bind the parties hereto, and said invalid terms or
      provisions will be deemed not to be a part of this Agreement.

     

    B.  The
      captions appearing in this Agreement have been inserted for convenience only
      and
      will not control, define, limit, enlarge or affect the meaning of this Agreement
      or any of its provisions.

     

    XVIII.
      ACKNOWLEDGMENT

     

    A.  Each
      party expressly disclaims the making of, and acknowledges that it has not
      received, any warranty or guarantee, express or implied, as to the potential
      volume, profits or success of the business venture contemplated by this
      Agreement.

     

    B.  Each
      party acknowledges that it has received, read and understood this Agreement
      and
      the Appendices hereto.

     

    XXIX.
      CONFIDENTIALITY

     

    A.   Except
      as
      required by law (including federal or state securities laws or regulations)
      or
      by the rules and regulations of any stock exchange or association on which
      securities of either party or any of its affiliates are traded, or in any
      proceeding to enforce the provisions of this Agreement, or is required in
      connection with a S-1 filing with redactions as agreed upon by both parties,
      United and Contractor hereby agree not to publicize or disclose to any third
      party the terms or conditions of this Agreement or any of the Related Agreements
      without the prior written consent of the other parties thereto.

     

    B.  Except
      as
      required by law (including federal or state securities laws or regulations)
      or
      by the rules and regulations of any stock exchange or association on which
      securities of either party or any of its affiliates are traded, or in any
      proceeding to enforce the provisions of this Agreement, United and Contractor
      hereby agree not to disclose to any third party any confidential information
      or
      data, both oral and written, received from the other and designated as such
      by
      the other without the prior written consent of the party providing such
      confidential information or data.

     

    C.  If
      either
      party is served with a subpoena or other process requiring the production or
      disclosure of any of the agreements, information or data described in
Article
      XXVIII.A
      or
Article
      XXVIII.B,
      then
      the party receiving such subpoena or other process, before complying with such
      subpoena or other process, shall immediately notify the other party of same
      and
      permit said other party a reasonable period of time to intervene and contest
      or
      limit disclosure or production, and upon the request of such party shall
      cooperate with any such effort to contest or limit disclosure or
      production.

     

    D.  Upon
      termination of this Agreement, each party must return to the other any
      confidential information or data received from the other and designated as
      such
      by the party providing such confidential information or data which is still
      in
      the recipient’s possession or control.

    
      __________

      *
        Confidential

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    XXX. RELATED
      AND THIRD PARTY AGREEMENTS

     

    United
      and Contractor shall enter into agreements listed below in this Article
      XXX
      (the
“Related
      Agreements”).
      All
      such Related Agreements will automatically terminate contemporaneously with
      the
      termination of this Agreement unless termination shall otherwise be effected
      in
      accordance with the terms of such Related Agreements.

     

    
      	a.  	
              Reciprocal
                Interline Agreement/Space Available Employee and Eligible Travel
                Agreement
                (United Contract No. 165980)

            


    

     

    b.  United
      Express Positive Space Travel Agreement (United Contract No.
      165979)

     

    c.  Emergency
      Response Agreement (United Contract No. 165981)

     

    XXXI. ENTIRE
      AGREEMENT

     

    This
      Agreement, together with the Related Agreements, including any Appendices,
      Attachments and Exhibits attached hereto and thereto, contains the complete,
      final and exclusive agreement between the parties hereto with respect to the
      subject matter hereof, and supersedes all previous agreements and
      understandings, oral and written, with respect to such specific matter and
      said
      Agreement will not be modified, amended or terminated by mutual agreement or
      in
      any manner except by an instrument in writing, executed by the parties
      hereto.

     

    XXXIII.
      REFERENCES TO TIME PERIODS

     

    All
      references to the term “year”
      in this
      Agreement shall mean contract year unless specifically stated otherwise. All
      references to the term “month”
      in this
      Agreement shall mean a full calendar month; provided that if the Effective
      Date
      shall be other than the first day of a calendar month, then the first
“month”
      of this
      Agreement shall commence on the Effective Date and end on the last day of the
      month in which the Effective Date occurs. All references to the term
“quarter”
      in this
      Agreement shall mean a calendar quarter; provided that the first “quarter”
      of this
      Agreement shall commence on the Effective Date and terminate on the last day
      of
      the calendar quarter in which the Effective Date occurs. Calendar quarters
      shall
      be January 1 through March 31, April 1 through June 30, July 1 through September
      30, and October 1 through December 31.

    
      __________

      *
        Confidential

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have by their duly authorized officers
      caused this Agreement to be entered into and signed as of the day and year
      first
      above written.

     

     

     

     

     

     

    
      	SHUTTLE AMERICA
              CORP.	 	 	UNITED AIRLINES,
              INC.
	 	 	 	 
	/s/ Bryan
              K.
              Bedford	 	 	/s/ Frederic
              F. Brace
	
              

            	 	 	
              

            
	Name:
              Bryan K.
              Bedford
Title: Chief Executive Officer
	 	 	Name:
              Frederic F.
              Brace
Title: Executive Vice President and Chief Financial
              Officer



    

     

     

    
      Accepted
        & Agreed 

      as
        to
        Sections XVII B & C only

    

     

    
REPUBLIC
      AIRWAYS HOLDINGS
      INC.
      	 	 	 	 
	/s/ Bryan
              K.
              Bedford	 	 	 
	
              

            	 	 	
            
	Name:
              Bryan K.
              Bedford
Title: Chief Executive Officer
	 	 	 


    

    
      	 
	 
	 
	 
	 
	 


    

    


    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

     

     

    


    APPENDIX
      A

     

    UNITED
      MARKS

    


    


     

    UNITED
      EXPRESS

     

    Stylized
      UNITED EXPRESS lettering

     

    UNITED
      EXPRESS colors

     

    Stylized
      letters UA

     

    Uniform
      Design

     

    Aircraft
      exterior and interior color decor

     

    Other
      United Marks approved by United for use by Contractor

     

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    APPENDIX
      B

     

    RJ-
      70FLEET PLAN

    


    


    
      	 	 	 	
              Units

            	
              In-Service

            	
              Spare

            	
              Total
                Deliveries

            	 	 
	 	 	 	 	 	 	 	 	 
	
              Delivery
                Dates:

            	 	 	 	 	 	 	 
	 	 	 	 	 	 
	
              10/17/2004

            	 	 	
              3

            	
              2

            	
              1

            	
              3

            	 	 
	
              11/1/2004

            	 	 	
              2

            	
              4

            	
              1

            	
              5

            	 	 
	
              11/21/2004

            	 	 	
              2

            	
              6

            	
              1

            	
              7

            	 	 
	
              12/1/2004

            	 	 	
              1

            	
              7

            	
              1

            	
              8

            	 	 
	
              12/19/2004

            	 	 	
              2

            	
              9

            	
              1

            	
              10

            	 	 
	
              1/2/2005

            	 	 	
              2

            	
              11

            	
              1

            	
              12

            	 	 
	
              1/16/2005

            	 	 	
              1

            	
              12

            	
              1

            	
              13

            	 	 
	
              2/1/2005

            	 	 	
              1

            	
              13

            	
              1

            	
              14

            	 	 
	
              3/1/2005

            	 	 	
              1

            	
              14

            	
              1

            	
              15

            	 	 
	
              4/1/2005

            	 	 	
              1

            	
              15

            	
              1

            	
              16

            	 	 
	
              5/1/2005

            	 	 	
              1

            	
              16

            	
              1

            	
              17

            	 	 
	
              6/1/2005

            	 	 	
              1

            	
              17

            	
              1

            	
              18

            	 	 
	
              6/12/2005

            	 	 	
              1

            	
              18

            	
              1

            	
              19

            	 	 
	
              7/1/2005

            	 	 	
              1

            	
              19

            	
              1

            	
              20

            	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	
              6/7/2005

            	 	 	
              1

            	
              19

            	
              2

            	
              21

            	 	 
	
              6/25/2005

            	 	 	
              1

            	
              20

            	
              2

            	
              22

            	 	 
	
              7/1/2005

            	 	 	
              1

            	
              21

            	
              1

            	
              23

            	 	 
	
              Sep-05

            	 	 	
              1

            	
              22

            	
              1

            	
              24

            	 	 
	
              Oct-05

            	 	 	
              1

            	
              23

            	
              1

            	
              25

            	 	 
	
              Nov-05

            	 	 	
              1

            	
              24

            	
              1

            	
              26

            	 	 
	
              Nov-05

            	 	 	
              1

            	
              25

            	
              1

            	
              27

            	 	 
	
              Dec-05

            	 	 	
              1

            	
              26

            	
              1

            	
              28

            	 	 
	 	 	 	 	 	 	 	 	 
	
              Total

            	 	 	
              28

            	
              26

            	
              2

            	
              28

            	 	 
	
              Note:
                Contractor shall not be liable for any aircraft delivery delays resulting
                from verifiable manufacturer

              caused
                actions.

            
	
            


    

     

     

    
      __________

      *
        Confidential


    

    
      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

    

    APPENDIX
      C

    


    GROUND
      HANDLING***

    


    Table
      left intentionally blank

    


    


    
      	
              Airport

            	
              Customer
                Service/Ticket Counter*

            	
              Customer
                Service/Gates

            	
              Ground
                Handling/Ramp

            	
              Receipt/Dispatch

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 


    

     

    * Includes
      Small Package Dispatch (SPD)

    


    *** For
      purposes of the table above, Contractor or United, as applicable, shall provide
      or cause to be provided the designated services as shown in the table.


     

    
      
 

    

    
      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

    

    


    


    APPENDIX
      D
      

     

    Contractor
      Support Services

     

    At
      all
      locations not set forth on Appendix
      C
      where
      Contractor operates scheduled air transportation as a United Express Carrier
      (i.e., Contractor Locations), Contractor will provide the following minimum
      services:

     

    (a) Contractor’s
      employees shall be fully qualified personnel to handle Contractor’s
      operations.

     

    (b) Posting
      of signage and decor appointment as specified by United.

     

    (c) Adequate
      check-in areas including passenger waiting room facilities.

     

    (d) Security
      facilities, personnel and passenger screening procedures as are required by
      applicable orders, rules and regulations of the FAA or other government agencies
      and those standards specified by United.

     

    (e) Capability
      of operating Automation Equipment (Apollo Services) for the purpose of providing
      passenger processing and operations in the configuration and under the
      procedures specified by United.

     

    (f) Baggage
      handling, delivery and tracing in accordance with procedures issued by
      United.

     

    


    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

     

    


    APPENDIX
      E

     

    REIMBURSEMENT
      CATEGORIES

    


    CARRIER
      CONTROLLED COSTS IN 2005 ECONOMICS

    


    United
      shall pay Contractor the following Reimbursement Category Unit Rates for
      Contractor’s United Express flights operated using the aircraft set forth
      below:

     

    
      	
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      __________

      *
        Confidential

    

    
      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

    

    


    


     

    REIMBURSEMENT
      CATEGORIES

    


     

    PASS-THRU
      COSTS

    


    
      	
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      __________

      *
        Confidential


    

    
      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

    

    


    DEFINITIONS

     

     

    Descriptions
      of Carrier Controlled Costs

     

    General
      Statement: Notwithstanding
      the following descriptions, any costs incurred by Contractor that are described
      as Pass-Through Costs on this Exhibit E shall not be considered Carrier
      Controlled Costs. Any costs incurred by Contractor that are not Pass-Through
      Costs under the Agreement, regardless of whether such costs are described below,
      shall be considered Carrier Controlled Costs, except for those costs that are
      typically considered the responsibility of the Ground Handling Provider as
      defined in United’s contracts for ground handling services. The characterization
      of any cost as a Carrier Controlled Cost in the following descriptions shall
      not
      impair any provision of the Agreement that specifically requires United to
      reimburse Contractor for such cost.

     

    i)  Flight
      Crews (Captains, First Officers and Flight Attendants)

     

    a)  Wages,
      benefits (including health insurance, pensions, 401k, and any other benefits),
      payroll associated taxes and incentives (premiums for longevity, geography,
      certificates/licenses, profit sharing, bonuses and any other incentives) for
      all
      paid hours (including but not exclusive of hours for reserve employees,
      overtime, vacation, holidays, sick days, and paid leave) for the following
      work
      categories:

     

    ii)  Pilots
      and Flight Attendants for all equipment types, including reserve crews and
      any
      other crews on the Contractor payroll.

     

    iii)  Pilot
      and
      Flight Attendant Administration and Management, including senior management
      crew
      scheduling, labor relations management.

     

    iv)  Domicile
      administration.

     

    a)  All
      uniform related charges for all of the above work categories, including
      purchase, repair, and cleaning charges.

     

    b)  All
      training associated with the work groups above, including but not exclusive
      of:

     

    v)  Recurring
      and Attrition: Any training expense that occurs annually for all types of
      employees, new planes or attrition. Includes Labor payments to those employees
      being trained (including all types of charges mentioned in paragraph i.a),
      trainer time and salary, equipment and facility rental, training administration
      costs associated with recurring training, and any training materials required.
      Excludes expenses associated with bringing new aircraft into the system.


     

    vi)  Ramp-up:
      Training expense that occurs due to new planes taken on. Includes Labor payments
      to those employees being trained (including all items in paragraph i.a); Trainer
      time and salary; Equipment and facility rental; Training administration costs
      associated with one-time training; Any training materials required; Uniforms
      & headsets; Pilot navigational charts.

     

    vii)  Maintenance:

     

    a)  Maintenance
      labor for all labor categories of aircraft mechanics, (e.g., engine specialists,
      parts clerks, etc.), including base wages, benefits, payroll associated taxes
      and incentives (premiums for longevity, geography, certificates/licenses, profit
      sharing, bonuses and any other incentives) for all paid hours (including but
      not
      exclusive of overtime, holidays, vacation, sick days and paid leave).


     

    b)  Maintenance
      Overhead: All hangar, parts/storage shop and maintenance management office
      rent
      and maintenance facility charges. All sundry and clerical items associated
      with
      the management of Contractor’s maintenance function, including but not exclusive
      of office supplies and furniture, maintenance schematic drawings and manuals,
      maintenance IT hardware/software.

     

    c)  Maintenance
      Management Overhead: Labor for all management and administration associated
      with
      the Contractor’s management of the maintenance function, including base wages,
      benefits, payroll associated taxes and incentives (including premiums for
      longevity, geography, certificates/licenses, profit sharing, bonuses and any
      other incentives) for all paid hours (including but not exclusive of overtime,
      vacation, holidays, sick days and paid leave). 

     

    d)  Outsource
      Maintenance Services: All charges net of warranty reimbursement for any and
      all
      services and/or products (including but not exclusive of components, line,
      engine, airframe, C&D checks, avionics, APU) provided by a third party for
      the maintenance of Contractor’s aircraft or maintenance functions.

     

    e)  Other
      Maintenance: Parts, spares, tools, equipment and any other personnel, service
      or
      material expenses, associated with the maintenance of Contractor’s aircraft or
      maintenance functions.

     

    viii)  Operations

     

     

    
       

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    a)  RON
      (Remain Over Night): Hotel, transportation, and per diem for all pilots and
      flight attendants.

     

    b)  Interrupted
      Trip Expense: Includes all mishandled bag related expenses and all hotel,
      transportation and meal accommodation expenses for any passenger traveling
      on
      Contractor’s flights.

     

    c)  Catering
      and on-board services: Includes all cost associated with providing food (snack
      and beverage service) for passengers, excluding liquor. This includes but is
      not
      limited to costs for the food and beverages, catering supplies 

     

    d)  Crew
      Scheduling: Labor for all management and administration associated with the
      Contractor’s crew scheduling function, including base wages, benefits, payroll
      associated taxes and incentives (including premiums for longevity, geography,
      certificates/licenses, profit sharing, bonuses and any other incentives) for
      all
      paid hours (including but not exclusive of overtime, vacation, holidays, sick
      days and paid leave). All Information Technology related charges (e.g., systems,
      software and hardware) and other costs associated with crew scheduling
      functions.

     

    e)  Dispatch/flight
      operations center: Flight operations center and all costs associated with it
      including personnel, facilities, management and systems.

     

    ix)  Corporate
      Overhead

     

    a)  Headquarters
      Facilities: All corporate real estate rent and associated facility
      charges

     

    b)  Management
      overhead: Labor for all management and administration whether or not based
      in
      Indianapolis, Indiana, including base wages, benefits, payroll associated taxes
      and incentives (including premiums for longevity, geography,
      certificates/licenses, profit sharing, bonuses and any other incentives) for
      all
      paid hours (including but not exclusive of overtime, vacation, holidays, sick
      days and paid leave). 

     

    c)  Other:
      Out-sourced corporate overhead services (e.g., consulting, legal expenses),
      other depreciation and any other overhead costs spread over multiple cost
      categories (e.g., memberships, office supplies, employee testing, IT, insurance
      costs that are not Pass-Through Costs, other repairs and maintenance, software
      licensing, parking, safety office, flight standards, communications, etc.);
      includes non-aircraft interest expense, if any.

     

    x)  Aircraft
      Ownership

     

    a)  All
      charges, except Aircraft Property Taxes (as described in the description of
      Pass-Through Costs), associated with aircraft ownership including but not
      exclusive of lease, depreciation, other financing expense, and related start-up
      costs (including painting).

     

    b)  All
      spare
      engine ownership expense

     

    c)  Hull
      Insurance - consists of premiums and other charges of insurers for Aircraft
      Hull
      All Risks Insurance as described in the Agreement, plus fees and expenses of
      insurance brokers in connection with the procurement or maintenance of such
      insurance, and surplus lines tax.


     

    Descriptions
      of Pass-Through Costs

     

    
      	1.  	
              Fuel
                and Oil - consists of the cost of all aircraft fuel and oil, plus
                fuel
                flow charges, into-plane fees, and de-fueling charges, and all applicable
                taxes on any of the foregoing.

            


    

     

    
      	2.  	
              Landing
                Fees - consists of all airport landing fees, Aircraft Rescue Fire
                Fighter
                (ARFF) charges or similar charges, apron fees, and any other fees
                charged
                by airport operators to cover airfield costs or other airport
                facilities.

            


    

     

    
      	3.  	
              War
                Risk Insurance - consists of premiums and other charges of insurers
                for
                War Risk and Allied Perils Insurance, plus fees and expenses of insurance
                brokers in connection with the procurement or maintenance of such
                insurance.

            


    

     

    
      	4.  	
              Liability
                Insurance - consists of premiums and other charges of insurers for
                all
                other liability insurance as described in the Agreement, plus fees
                and
                expenses of insurance brokers in connection with the procurement
                or
                maintenance of such insurance.

            


    

     

    
      	5.  	
              Aircraft
                Property Taxes - consists of all property taxes (however designated,
                including excise or franchise taxes imposed on the ownership of property,
                ad valorem taxes, and special assessments or levies) related to aircraft,
                spare parts and engines.

            


    

     

    
      	6.  	
              Security
                Charges - consists of all charges imposed by governmental agencies,
                including the Transportation Security Administration (TSA) or any
                other
                entity performing functions of the TSA, or by any third-party contractor
                of any governmental agency, with respect to airport security
                services

            


    

     

    
      	7.  	
              Engine
                LLP Coverage - a part with a limitation on use stated in cumulative
                engine
                flight hours or cycles, established by the OEM or the Federal Aviation
                Administration.

            


    

     

    
      	8.  	
              [*]

            


    

     

    


    


     

    
      __________

      *
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    APPENDIX
      F 

     

    INCENTIVE
      PROGRAM

    


     

    


     

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      *
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    APPENDIX
      G 

     

    LIABILITY
      INSURANCE

    


    Issued
      by:

     

    Date
      of
      Issue:

     

    THIS
      IS
      TO CERTIFY TO: UNITED AIR LINES, INC.

     

    that
      Insurers are providing 100% of the following Aircraft Hull & Liability
      Insurances:

     

    
      	
              NAME
                INSURED:

            	
            
	
              PERIOD
                OF INSURANCE:

            	 
	
              INSURERS:

            	 
	
              POLICY
                NUMBER:

            	 
	
              GEOGRAPHICAL
                LIMITS:

            	
              Worldwide
                Hull War limited to Western Hemisphere with commercial and or FAA
                provided
                insurance; territorial limitations not defined in FAA
                policy.

            
	
              AIRCRAFT
                INSURED:

            	
              All
                aircraft owned or operated by the Named Insured.

            
	
              DESCRIPTION
                OF COVERAGE:

               

            	
              Comprehensive
                Airline Liability Insurance, Contractual Liability, including Aircraft
                Liability, Passenger Liability, War Risk should the FAA stop carrying
                it,including both Passengers and Other Third Parties, Cargo Liability
                and
                Comprehensive General Liability, including Hangarkeepers, Excess
                Automobile, Host Liquor Liability,Personal Injury, and Products
                Liability/Completed Operations coverage. All Risk Physical Damage
                Hull
                Coverage.

            
	
              LIMIT
                OF LIABILITY

               

            	
              Combined
                Single Limits to be specified consistent with Article
                I.2.1.
                Aircraft Hull All Risk per the Agreed Value, or up to $300,000,000
                per
                added aircraft.

               

            


    

    SPECIAL
      PROVISIONS:

    The
      insurers agree that coverage under this policy, by formal endorsement or
      otherwise, is extended to insure all relevant terms and conditions of the United
      Express Agreement, subject to the policy terms, conditions, limitations and
      exclusions, between Contractor and United concerning Contractor’s Aircraft,
      (hereinafter referred to as “Agreement”), including, inter alia:

    


    1. The
      Insurers accept and insure the Indemnity and Hold Harmless provisions of the
      Agreement, subject to the policy terms, conditions, limitations and
      exclusions.

    


    2. United,
      its affiliates, and their respective directors, officers, employees, agents
      and
      indemnitees are named as additional insureds to the extent of the liability
      assumed by Contractor under the Agreement, subject to the policy terms,
      conditions, limitations and exclusions.

    


    3. The
      Insurers agree that United shall not be liable for, nor have any obligation
      to
      pay any premium due hereunder, and Insurers further agree that they shall not
      offset or counter-claim any unpaid premium against the interest of
      United.

    


    4. The
      Insurers agree that all provisions of this insurance, except for the limits
      of
      liability, shall operate in the same manner as if there were a separate policy
      issued to each Insured.

    


    5. The
      Insurers agree that this insurance shall be primary insurance without any right
      of contribution from any other insurance which is carried by
      United.

    


    6. The
      Insurers agree to waive their rights of subrogation against United, its
      officers, directors, employees and indemnitees, to the extent the Contractor
      has
      waived and released its rights under the Agreement.

    


    7. The
      Insurers agree that as respects the interest of United, its directors, officers,
      employees and indemnitees, this insurance shall not be invalidated by any action
      or inaction of the Contractor, its officers, directors or employees, and shall
      insure United, its directors, officers, employees and indemnitees regardless
      of
      any breach or violation of any warranties, declarations, conditions or
      exclusions contained in the policy by the Contractor, its officers, directors
      or
      employees.

    


    8. In
      the
      event of cancellation for any reason whatever or if any change of a restrictive
      nature is made affecting the insurance certified hereunder, or if this insurance
      is allowed to lapse due to non-payment of premium, such cancellation, change
      or
      lapse shall not be effective as to United, its directors, officers, employees
      and indemnitees for at least thirty (30) days (ten (10) days in the case of
      non-payment of premiums, seven (7) days notice of cancellation with respect
      to
      war risk) after written notice by registered mail of such cancellation, change
      or lapse shall have been mailed to United.

    


    9. With
      respect to claims or causes of action in favor of United or its directors,
      officers, agents or employees, they shall not be considered as additional
      insured thereunder.

    


    Dated:   

    Authorized
      Representative:     


    
       

    

    
      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

    

    


    APPENDIX
      H 

     

    SAFETY
      STANDARDS FOR UNITED AIRLINES AND UNITED EXPRESS
      CARRIERS

    


    We
      have
      developed common safety standards to evaluate and effectively manage safety.
      We
      will commit to: 

    


    Contractor
      represents and warrants that it is in compliance with the U.S. Department of
      Defense (DoD) Quality and Safety Requirements (and any other applicable
      governmental quality or safety requirement) and continues to comply with all
      applicable Federal Aviation Regulations (F.A.R.). Contractor further warrants
      that it shall maintain compliance with these requirements for the term of this
      Agreement. Any failure to maintain such compliance shall immediately be brought
      to United’s attention together with the corrective actions taken by Contractor
      or a correction action plan. Any non-compliance with any safety requirements
      or
      corrective action plans shall be grounds for partial or complete suspension
      or
      termination by United, without further liability, of this Agreement or any
      of
      the terms or conditions of this Agreement; but, with reservation of all other
      rights and remedies available to United. Additional safety reviews and audits
      may be required at United’s discretion and Contractor shall cooperate with all
      such reviews and audits. 

    


    In
      addition, Contractor agrees to the following:

     

    
      	·  	
              Mutual
                support of one another in implementing these standards by sharing
                safety
                data, information and expertise.

            


    

     

    
      	·  	
              Quality
                maintenance and operations training
                programs

            


    

     

    
      	·  	
              A
                carrier internal evaluation program to monitor key safety issues,
                including maintenance practices, required inspection items, technical
                document control, dangerous goods handling, training records and
                qualifications for all personnel.

            


    

     

    
      	·  	
              Quality
                programs to manage outsourcing of
                services.

            


    

     

    
      	·  	
              A
                formalized maintenance quality assurance
                program.

            


    

     

    
      	·  	
              Implementation
                of a program to rectify FAA inspection
                findings.

            


    

     

    
      	·  	
              Presence
                of a voluntary disclosure program.

            


    

     

    
      	·  	
              Formal
                process to routinely bring safety and compliance issues to the attention
                of carrier’s senior management.

            


    

     

    
      	·  	
              Anonymous
                safety hazard reporting system.

            


    

     

    
      	·  	
              A
                Senior Management policy statement supporting open safety reporting
                by
                employees.

            


    

     

    
      	·  	
              Director
                of Safety, reporting to the highest levels of management, overseeing
                the
                carrier’s safety programs.

            


    

     

    
      	·  	
              Process
                for managing required corrective actions from FAA and internal audit
                program as well as employee
                disclosure.

            


    

     

    
      	·  	
              Ongoing
                flight safety education/feedback
                program.

            


    

     

    
      	·  	
              Ground
                safety program in airport operating
                areas.

            


    

     

    
      	·  	
              Incident
                investigation process that includes accountability, recommendations
                and
                actions taken.

            


    

     

    
      	·  	
              Establishment
                and maintenance of emergency response procedures and
                manual.

            


    

     

    
      	·  	
              Participation
                in UAL/industry safety information exchange
                forum.

            


    

    
       

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    


    APPENDIX
      I

     

    UNITED
      EXPRESS SERVICE STANDARDS

    These
      Service Standards are meant to provide an overview for United Express carriers
      of the service expectations established by United Airlines for the day-to-day
      delivery of United’s product. This document is not intended to be an all
      inclusive manual of regulations, but to instead serve as a simple, helpful
      source of information. The Service Standards outlined herein may change from
      time to time, subject to the needs of the operation and our product delivery
      objectives. Any changes to these standards are at the sole discretion of United
      Airlines and are not subject to contractual negotiations as to United’s right to
      change the standards. Provided, however, since the parties have agreed to
      specific compensation formulas and performance goals in this Agreement, it
      follows that the parties would agree that the standards shall not be altered
      or
      changed, if such changes would affect the Contractor’s economics within the
      Agreement. If such changes are mutually deemed by United and the Contractor
      to
      materially affect the economics of the Agreement, then the parties will agree
      upon the economic changes required to compensate the Contractor for the change
      in the standards. If, after 30 days, no agreement can be reached between the
      parties as to either materiality or cost impact, an independent arbitrator
      will
      be mutually agreed to and assigned to settle the dispute. 

     

    It
      is the
      responsibility of each United Express carrier to maintain an adequate number
      of
      employees at each station to operate in a safe and reliable manner, which serves
      the customer at the levels of service outlined by these Service
      Standards.

     

    CUSTOMER
      SERVICE

    


    Uniforms:
      United
      Express employees are required to wear the United designated uniform for
      Customer Service personnel. There is to be no deviation from this uniform and
      it
      is to be worn at all times while on duty. Employees in uniform, on or off duty
      are not allowed to drink intoxicating beverages, give the appearance of being
      intoxicated or visit any establishment whose primary purpose is to dispense
      liquor (e.g. bars, saloons, cocktail lounges, liquor stores). "Uniform" refers
      to any uniform apparel bearing the United brand or insignia, or which can be
      in
      any way identified with United Airlines or United Express. Because the actions
      and appearance of employees influence, to a considerable extent, the public's
      opinion of the United brand, uniformed employees must be mindful of this and
      conduct themselves accordingly. For complete information on the uniform and
      accessory items, review the Customer Service Uniform Appearance
      Guidelines.

    


    United
      may elect to change the United Express uniform from time to time, and may
      request that old uniform items be eliminated as an approved uniform item.
      Following such a change in the designated uniform, United will compensate the
      Contractor and/or its employees for the value lost on the retired uniform
      item(s). 

    


    Training:
      Each
      United Express carrier is responsible to train all Customer Service
      Representative (CSR) employees of the Contractor, including employees of another
      carrier who may be contracted to perform these duties on behalf of the
      Contractor, using the same training modules and computer assisted training
      provided by United Airlines. This training will include, but is not limited
      to,
      all functional aspects for customer handling at the ticket counter, gate, or
      baggage service The Contractor, in stations where the Contractor is not the
      United designated United Express Customer Service provider, will be responsible
      for the training the employees of the designated Customer Service provider
      regarding the difference in the Contractors procedures and policies, and the
      handling of the Contractors Aircraft.

    


    United
      Airlines will provide the necessary “Train the Trainer” support, but it is the
      responsibility of each United Express carrier to maintain trainer proficiency,
      knowledge and skill level.

    


    
      	·  	
              Each
                new hire or newly assigned CSR of the Contractor, must receive formal
                Express customer service training as soon as possible, but not later
                than
                30 days from the date of employment or 30 days after his or her
                assignment. In either case, training must be specific to the employee’s
                job function and task assignment. An employee may not work in an
                area in
                which he or she has not been properly
                trained.

            


    

    


    
      	·  	
              Each
                CSR of the Contractor must maintain proficiency in product knowledge,
                delivery and skill level.

            


    

    


    
      	·  	
              Each
                United Express carrier may add to the United training curriculum
                to meet
                its individual carrier needs, but it may not delete any portion of
                the
                United designated curriculum without written approval by United
                Airlines.

            


    

    


    
      	·  	
              All
                CSRs of the Contractor must complete TL17/17 lessons each week within
                7
                days of issuance.

            


    

    


    Service
      Delivery:
      In the
      most basic interaction with the customer, United’s service standards encompass
      the foundation of service, which is: 1) Greet the customer. 2) Use the
      customer’s name. 3) Listen to the customer and respond to their needs. 4) Give
      direction to the next step. 5) Acknowledge the customer’s importance to United
      and thank them for flying United Express.

    


    Goals:

    
      	·  	
              Lobby
                line wait time: 10 minutes

            


    

    
      	·  	
              Jet
                bridge delivery time: 1 minute

            


    

    
      	·  	
              Meet
                the inbound aircraft (non-jet bridge locations) and open aircraft
                passenger door within 2 minutes of block
                time.

            


    

     

    Service
      Tools:
      Customer
      Problem Resolution, or CPR, was created as a means to provide customer service
      employees with the ability to resolve customer problems on the spot, as they
      occur. CPR may include certificates for a free drink, a credit of Mileage Plus
      miles to a customer’s Mileage Plus account, or a Travel Certificate to be used
      towards the purchase of future airline tickets. Other tools may also include
      accommodation vouchers for hotels, cab/bus, or meals. It is the responsibility
      of the Express carrier to use and manage these tools within United Airlines
      guidelines. The Express carrier is accountable for the safeguarding and
      appropriate use of these very important customer tools. As long as CPR tools
      are
      used appropriately, the Contractor will not be charged by United for the cost
      associated with such usage. 

    
      
 

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    Flight
      Close Out:
      In any
      city in which the Contractor is hired to perform ground handling, the Contractor
      is responsible for ensuring all flights are closed out in Apollo/ACI immediately
      after departure. This includes making the appropriate PB, PFS and PD entries.
      All passenger counts, including revenue and non-revenue passengers, denied
      boardings, as well as an accounting of any bags held off due to weight/space
      restrictions, should be noted in the open comments field of the flight close
      out
      message. Flight close out must be completed within 10 minutes of flight
      departure.

    


    Flight
      Information (FLIFO):
      All
      flights must be updated with OUT/OFF/ON/IN times within ten (10) minutes of
      actual occurrence to ensure accurate information to customers and to employees
      making operational decisions. The ground handling agent must also enter all
      ETAs
      and ETDs within ten (10) minutes of the scheduled departure/arrival, and at
      every 10 minute interval thereafter for ongoing or rolling delayed
      flights.

    


    Customer
      Service Supplies:
      A
      carrier designated by United to perform Customer Service functions at a location
      must maintain an adequate amount of Customer Service supplies to conduct its
      day-to-day business operation. Such carrier will use United Airlines designated
      supplies and vendors and is responsible for the purchase of those supplies,
      except where United handles that carrier.

     

    RAMP
      SERVICE

    


    Uniforms:
      United
      Express employees are required to wear the United designated uniform for Ramp
      Service personnel. There is to be no deviation from this uniform and it is
      to be
      worn at all times while on duty. Employees in uniform, on or off duty are not
      allowed to drink intoxicating beverages, give the appearance of being
      intoxicated or visit any establishment whose primary purpose is to dispense
      liquor (e.g. bars, saloons, cocktail lounges, liquor stores). "Uniform" refers
      to any uniform apparel bearing the United brand or insignia, or which can be
      in
      any way identified with United Airlines or United Express. Because the actions
      and appearance of employees influence, to a considerable extent, the public's
      opinion of the United brand, uniformed employees must be mindful of this and
      conduct themselves accordingly.

     

    
      	·  	
              In
                a line station, employees may combine pieces of the customer service
                uniform with pieces of the ramp uniform as long as the shirt or blouse
                is
                either the customer service shirt or blouse, or the ramp knit
                shirt.

            


    

     

    
      	·  	
              In
                a hub station, ramp personal must wear combinations of the United
                ramp
                uniform only.

            


    

    


    For
      a
      review of the Ramp Service uniform, review the Ramp Service Uniform
      Guide.

    


    United
      may elect to change the United Express uniform from time to time, and may
      request that old uniform items be eliminated as an approved uniform item.
      Following such a change in the designated uniform, United will compensate the
      Contractor and/or its employees for the value lost on the retired uniform
      item(s). 

    


    Training:
      It is
      the responsibility of each Express carrier to train its Ramp Service employees
      including employees of another carrier who may be contracted to perform these
      duties on behalf of the Contractor. This training will include, but is not
      limited to, load planning, baggage handling, ramp safety and security, ramp
      driving, aircraft familiarization, aircraft servicing, receipt and dispatch
      of
      aircraft, baggage make-up, baggage transfer, claim area delivery, baggage
      scanning, live animal handling, dangerous goods and aircraft de-icing. The
      Contractor, in stations where the Contractor is not the United designated United
      Express Ramp Service provider, will be responsible for the training the
      employees of the designated Ramp Service provider regarding the difference
      in
      the Contractors procedures and policies, and the handling of the Contractors
      Aircraft.

     

    
      	·  	
              Each
                new hire, or newly assigned Ramp Service employee of the Contractor,
                must
                receive formalized training as soon as possible, but not later than
                30
                days after his or her date of employment or date of
                assignment.

            


    

    


    
      	·  	
              Each
                Ramp Service employee of the Contractor must maintain product and
                delivery
                proficiency, knowledge and skill
                level.

            


    

    


    Baggage
      Transfer:
      In a Hub
      or connecting station, the United designated Ramp Service provider is
      responsible for the transfer of all baggage/mail/cargo to United, other United
      Express carriers and other airlines. Transferred bags are delivered as
      follows:

    


    
      	·  	
              Carry-on
                (security checked) bags placed in the pit/hole, are to be removed
                and
                delivered to the customers immediately at
                planeside.

            


    

    


    
      	·  	
              ‘City
                Bags’ are to be delivered directly to the baggage claim
                area.

            


    

    


    
      	·  	
              ‘Hot
                Bags’, whose window of time is determined on a local level by United
                Airlines, are to be delivered to the connecting flight at the gate.
                The
                gate drop point is to be determined locally by
                United.

            


    

    


    
      	·  	
              ‘Cold
                Bags’, bags outside the Hot Bag window, are to be delivered to the
                designated sorter belt or transfer
                point.

            


    

    


    
      	·  	
              ‘Interline
                Bags’ (non United or United Express connecting bags) are to be delivered
                to the designated interline drop
                point.

            


    

     

    Goals
      for the United Designated Ramp Service Provider:

    


    
      	·  	
              Claim
                Area Baggage Delivery:
                Priority Bags delivered First; Last City bag delivered within 20
                minutes
                of flight Block time

            


    

    
      	·  	
              Scanning:
                97% scanning rate uploaded within 10 minutes of departure of each
                flight

            


    

    
      	·  	
              MBTA
                (Mishandled Baggage Trend Analysis or the ratio of passengers mishandled
                per 1000 boarded.):
                Rates are determined in conjunction with United’s corporate goal on an
                annual basis

            


    

    
      	·  	
              Message
                or meter to downline station with the transfer bag loading placements
                referred to as XBUE (Express Baggage loading message):
                Sent within 10 minutes of the departure of each
                flight

            


    

    
      	·  	
              Baggage
                Loading Audits: 95%
                compliance

            


    

     

     

    
       

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    Ground
      Handling:
      United
      Express carriers are responsible for obtaining all applicable federal, state,
      and local regulatory approvals for conducting business at each location from
      which they operate. In addition, carriers will ensure their ground handling
      procedures will satisfy all federal, state, and local regulations. Each carrier
      will provide United with a copy of its station and ground handling
      procedures.

    
       

    

    From
      time
      to time, it may become necessary for United to ground handle United Express,
      or
      on very limited occasions for United Express to handle United.. It is the
      responsibility of the Contractor to train the ground handling carrier in all
      aspects of the required work to be performed to support the Contractors
      procedures and policies, and the handling of the Contractors Aircraft. . Such
      work may include, but is not limited to:

    


    
      	·  	
              Receipt
                and dispatch of aircraft, ramp safety, ramp driving, aircraft differences,
                aircraft servicing (potable water and lavatory), aircraft cleaning,
                towing, baggage handling, baggage loading and transferring, live
                animal
                handling, deicing, weight and balance, and dangerous
                goods.

            


    

    


    Required
      training may be done one-on-one, group, or train-the-trainer. In the case of
      train-the-trainer, it is then the responsibility of the ground-handling carrier
      to train other additional personnel. The ground handling carrier will ensure
      that proper training records are initiated, retained and current.

    


    The
      ground-handling carrier will ensure that all required licenses and logs are
      maintained and retained as necessary.

    


    Each
      carrier is responsible for acquiring its required licenses.

    


    The
      ground handling carrier will cooperate with any required governmental or
      corporate inspection or audit, and will correct any deficiencies found in an
      immediate and timely manner.

    


    The
      Contractor is responsible for managing all performance related criteria.
      However, the ground handling carrier will make every “best faith” effort to
      ensure that all performance requirements are met and that the operation of
      the
      Contractor is given the same priority as that given it’s own operation and the
      operation of other United Express carriers.

    


    The
      ground handler agrees to keep the Contractor informed of any deficiencies,
      irregularities and breach of procedures or problems of any type that may
      negatively impact the Contractor or carrier’s certificate. Further, if an
      employee(s) of ground handler are found to be responsible for a breach that
      results in a fine to the Contractor, then United will use reasonable efforts
      to
      require the ground handling carrier to compensate the Contractor for the amount
      of the fine.

    


    The
      ground handler will immediately advise the Contractor of any material change
      in
      space, parking location, manpower, or any other shortcoming that may impact
      its
      operation or costs. The ground handler will make every “best faith” effort to
      ensure that all performance requirements are met and that the operation of
      the
      Contractor is given the same priority as that given it’s own operation and the
      operation of other United Express carriers.

    


    The
      ground handler will use its own ground equipment wherever possible. However,
      if
      specialized equipment ( i.e. equipment specific to Contractor’s operations of
      ERJ-170s as opposed to standard equipment required for the operation of
      ERJ-170s) for the Contractor’s particular aircraft is needed, it is the
      responsibility of the Contractor to provide said equipment at no cost to the
      ground handler. However, United will compensate the Contractor for the cost
      of
      providing specialized equipment as defined above, provided United has the
      opportunity in advance to approve such specialized equipment.

     

    IN
      FLIGHT

    


    Uniforms:
      United
      Express Flight Attendants are required to wear the United designated uniform.
      Notwithstanding this, United and the Contractor have agreed to modifications
      in
      the uniform requirements as outlined in Section VII.D of the Agreement.
      Employees in uniform, on or off duty are not allowed to drink intoxicating
      beverages, give the appearance of being intoxicated or visit any establishment
      whose primary purpose is to dispense liquor (e.g. bars, saloons, cocktail
      lounges, liquor stores). "Uniform" refers to any uniform apparel bearing the
      United brand or insignia, or which can be in any way identified with United
      Airlines or United Express. Because the actions and appearance of employees
      influence, to a considerable extent, the public's opinion of the United brand,
      uniformed employees must be mindful of this and conduct themselves accordingly.
      For complete information on the uniform and accessory items, review the Customer
      Service Uniform Appearance Guidelines.

    


    United
      may elect to change the United Express uniform from time to time, and may
      request that old uniform items be eliminated as an approved uniform item.
      Following such a change in the designated uniform, United will compensate the
      Contractor and/or its employees for the value lost on the retired uniform
      item(s). 


    


    Training:
      It
      is the
      responsibility of each United Express carrier to train its own Flight Attendants
      in accordance with its FAA Certified program.

    


    In
      Flight Service:

    


    
      	·  	
              Wherever
                possible, snack and beverage items should be consistent with the
                products
                served by United Airlines. United acknowledges that Contractor has
                priced
                its rates for in flight service to provide a soft drink and a peanut-like
                snack to each passenger. Any changes to this level of in flight service
                will require an adjustment to the catering cost
                category.

            


    

    
      	·  	
              Each
                United Express aircraft will be supplied by United with an adequate
                supply
                of Hemispheres and SkyMall Magazines. United Express must place these
                two
                magazines in the designated seat pocket of each seat. Hemisphere
                and
                SkyMall magazines are the only magazines authorized in the seat pockets.
                Exceptions must be approved in writing by
                United

            


    

    
      	·  	
              In
                all on board announcements, it is appropriate to announce the United
                Express carrier’s name, but the name “United Express” must be included.
                For example, “On behalf of Shuttle America, we would like to thank you for
                flying United Express today”.

            


    

    
      	·  	
              While
                the contract carrier provides basic announcements, United may request
                that
                United Express make promotional announcements on behalf of United
                from
                time to time. Such requests will be honored and
                executed.

            


    

     

     

    
       

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    OPERATIONAL
      GOALS

    


    There
      are
      four (4) primary operational Goals that each Express carrier is expected to
      achieve: On-time-zero; Controllable Completion (less Weather/ATC/UA Requested
      Cancellations); MBTA, and Repurchase Intent. These goals are set at the
      beginning of each calendar year and may be adjusted year over year. In addition,
      other target goals may be added to help improve the operation, such as: STAR,
      Arrival: 14, Block Time, etc. It is expected that each carrier use its “best
      faith effort” in achieving these goals, whether contractual or otherwise,
      provided that the addition or changes to the goals do not affect the economics
      of the Agreement. Such goals may be changed or added to, as operational needs
      demand. 

     

    
      	·  	
              Controllable
                Completion:
                The Controllable flight completion goal shall be defined as to exclude
                all
                cancellations due to weather, ATC restrictions, acts or omissions
                caused
                by United or its employees or agents, cancellations resulting from
                emergency airworthiness directives, and requests made by United to
                cancel
                flights to free up ATC slots.

            


    

    


    
      	·  	
              On
                Time Zero:
                The On Time Zero goal is the carriers system wide On Time Performance.
                

            


    

    


    
      	·  	
              Mishandled
                Baggage-MBTA:
                (See above definition) 

            


    

    


    Repurchase
      Intent (RPI) - Marketrak:
      United
      Airlines receives feedback from our customers through the “Marketrak” survey
      program on their satisfaction in flying United Express. Each United Express
      carrier participates fully in this program. Ratings for RPI are not compared
      between carriers. Each carrier’s individual rating is compared to its own
      historical performance.

    


    
      	·  	
              Repurchase
                Intent (RPI):
                RPI is based upon customer response to their intent to repurchase
                or use
                again the United Express product as reflected in the Marketrak
                survey

            


    

     

    MISCELLANEOUS

    


    ACARS:
      The
      Contractor is expected to use an ACARS system on all United Express flights
      for
      the purpose of providing timely and accurate Flight Information (FLIFO). United
      agrees that the cost of ACARS unit will be part of the Aircraft Ownership cost
      of the airplanes, and that United will assume responsibility for the one time
      connectivity cost of the ACARS system.

    


    Signage:
      It is
      the responsibility of the designated United Express ground handler to provide
      appropriate and adequate brand signage, which is designated and approved by
      United Airlines. Brand name(s) to be used on signage is as follows:

    


    
      	·  	
              United
                Handled City:
                All signage will reflect the United Airlines brand. United Express
                signs
                may be used at the departure gate for United Express flights at the
                discretion of United.

            


    

    
      	·  	
              Shared
                United/United Express Handled City:
                All signage at the ticket counter will reflect the United Airlines
                brand.
                Signage at the United Express handled gate(s) will reflect the United
                Express brand. Signage on the approach to the airport and on the
                curb to
                the airport terminal will primarily reflect United Airlines, but
                may, if
                appropriate, reflect United Express as
                well.

            


    

    
      	·  	
              United
                Express Handled City:
                All signage will reflect the United Express
                brand.

            


    

    


    It
      is the
      responsibility of the designated United Express ground handler to ensure that
      all federally mandated signage is in place in accordance with regulations at
      each United Express station. The Contractor will be responsible for such signage
      on the aircraft.

    


    Small
      Package Dispatch (SPD):
      Express
      carriers will participate in United’s SPD program, accepting SPD shipments at
      the ticket counter up to 30 minutes prior to the departure of each flight and
      returning SPD shipments to the designated delivery point within 30 minutes
      of
      the arrival of each flight.

    


    U.S.
      Mail:
      Express
      carriers will participate with United in the transportation of U.S. Mail in
      accordance with applicable guidelines. Each carrier will work with United in
      obtaining USPS Air System Contracts for United designated market.

    


    Station
      Operations Center (SOC) - Hub Locations:
      Each
      United Express carrier will provide adequate staffing in the United Airlines
      SOC
      of each designated hub city where the Contractor has more than 100 daily
      departures. Such Staffing, when required, will be provided during all normal
      hours of operation.


    
      
 

    

    
      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

    

    


    


     

    APPENDIX
      J

     

    OFFICER
      POSITION’S ENTITLED TO POSITIVE SPACE LEISURE TRAVEL ON CONTRACTOR’S UNITED
      EXPRESS FLIGHTS

    


    


    [*]

    


    [*]&
      Chief Operation Officer [*]

    


    [*]

    


    


    Does
      not
      include children or other dependents

     

     

    

      __________

      *
        Confidential

    

    
      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

    

    


    APPENDIX
      K

     

    SCHEDULE
      PARAMETERS

    


    The
      weekly schedules for the aircraft specified by United must meet the following
      minimum and maximum schedule parameters:

     

    
      	 	
              Minimum

            	
              Maximum

            
	
              Average
                Scheduled Block Hours per day 

            	
              [*]

            	
              [*]

            
	 	 	 
	
              Average
                Scheduled Departures per day 

            	 	
              [*]

            


    

     

    United
      will meet the following criteria in devising the schedule:

    


    
      	1.  	
              Aircraft
                Turn Times

            


    

    For
      operations at United designated hub the minimum turn time (defined as the time
      from Aircraft blocking in to Aircraft unblocking) will be [*].
      For
      operations at a non-United hub, the minimum turn time will be [*].
      Turn
      times for aircraft that will have a scheduled crew change will be a minimum
      of
[*].
      

     

    


    
      	2.  	
              Aircraft
                Maintenance Requirements

            


    

    Contractor
      will require the greater of [*]
      aircraft
      or [*]
      of the
      fleet to be scheduled for overnight maintenance for a minimum period of
[*]
      per day
      for [*] each
      week
      (Weekday Entry). In addition, the greater of [*]
      aircraft
      or [*]
      of the
      fleet will be scheduled for [*]
      of
      continuous maintenance time each week beginning on Saturday afternoon (Weekend
      Entry).

    


    


    
      	3.  	
              Maintenance
                Base(s) Contractor
                will establish a single maintenance base in Indianapolis, Indiana.
                As the
                fleet expands it is expected that an additional maintenance base(s)
                will
                be required, at such time the Contractor will evaluate potential
                maintenance base locations. Following a review of the potential locations
                with United, the Contractor will determine the location and activation
                date of the addition maintenance base. Each maintenance base in the
                Contractors United Express system will have at least three (3) Weekday
                Entries upon full fleet implementation. Once a maintenance base is
                establish, then the Contractor will require a [*]
                notice, if United desires to relocate the base. Further, if United
                requires that a base to be relocated or if a base no longer meets
                the
                Weekday Entry minimum stated above, then United will be responsible
                for
                the Contractors relocation and / or shut down cost. The Contractor
                will
                use its best efforts to minimize the cost of the relocation and /
                or shut
                down. 

            


    

    
 

    
      	4.  	
              Crew
                Overnights The
                Contractor’s United Express schedule will allow for a single crew (two
                Pilots and two Flight Attendants) overnight in outstations and will
                not
                require the Contractor to schedule any continuous duty overnights.
                Any
                costs incurred by Contractor as a result of United failing to meet
                this
                parameter will be borne by United. A single crew overnight requires
                that
                the crew’s scheduled rest period is at least [*]
                hours. 

            


    

    


    


    
      	5.  	
              Crew
                Bases

            


    

    The
      Contractor will establish a single crew base for Pilots and Flight Attendants
      in
      Indianapolis, Indiana. As the fleet expands it is expected that an additional
      crew base(s) will be required, at such time the Contractor will evaluate
      potential crew base locations. Following a review of the potential locations
      with United, the Contractor will determine the location and activation date
      of
      the addition crew base. Each crew base in the Contractors United Express system
      will have at least [*]
      overnight aircraft and [*]
      mid-day
      aircraft turns. Once a crew base is establish, then the Contractor will require
      a [*]
      notice,
      if United desires to relocate the base. Further, if United requires that a
      base
      be relocated or if a base no longer meets the scheduling parameters minimums
      stated above in this section then, United will be responsible for the
      Contractors relocation and / or shut down cost. The Contractor will use its
      best
      efforts to minimize the cost of the relocation and / or shut down.

    


    


    
      	6.  	
              International
                and New Airport Operations

            


    

    The
      Contractor will require [*]
      notice
      prior to the scheduled operation to any new International
      destination.

    


    [*]

    


    
      __________

      *
        Confidential