Exhibit 10.2 Republic Jet Service Agreement


    EXHIBIT
      10.2

    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.

    


    
 

    ______________________________________________________________________________

    


    


    


    


    REPUBLIC
      JET SERVICE AGREEMENT

    


    Between

    


    US
      AIRWAYS, INC.

    


    And

    


    REPUBLIC
      AIRLINE, INC.

    


    


    


    ______________________________________________________________________________

    


    



    
      
        
           

          
            	
                     

                  	 	 


          

          


        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    TABLE
      OF CONTENTS

    


     

    ARTICLE
      1 - COMPLIANCE WITH REGULATIONS 

     

    ARTICLE
      2 - AIR TRANSPORTATION SERVICES TO BE PROVIDED BY REPUBLIC 

     

    Section
      2.1 - Schedule Requirements 

    Section
      2.2 - Scheduling Parameters 

    Section
      2.3 - Technical Operations 

    Section
      2.4 - Regulations 

    Section
      2.5 - Operating Procedures 

    Section
      2.6 - Aircraft Registration 

    Section
      2.7 - Republic Responsibilities 

    Section
      2.8 - Substitute Aircraft 

    Section
      2.9 - Spare Aircraft and Spare Engines 

    Section
      2.10 - Jets for Jobs 

    Section
      2.11 - In-flight Sales 

    Section
      2.12 - Pass Agreement 

    Section
      2.13 -
      Processing
      Code-Share Passengers 

    Section
      2.14 - In Service Dates 

     

    ARTICLE
      3 - OPERATION UNDER THE “US AIRWAYS EXPRESS” NAME 

     

    Section
      3.1 - Servicemarks 

    Section
      3.2 - Signage 

     

    ARTICLE
      4 - US AIRWAYS’ SUPPORT SERVICES AND FACILITIES 

     

    Section
      4.1 - Fuel 

    Section
      4.2 - Reservations 

    Section
      4.3 - Station Facilities and Ground Support Service 

    Section
      4.4 - Cargo, Company Materials (“CoMat”) and Mail Handling Services 

    Section
      4.5 - Terms of Transportation, Sales and Promotion 

     

    ARTICLE
      5 - PURCHASE OF AVAILABLE SEAT MILES (“ASMS”) 

     

    Section
      5.1 - Pricing Model 

    Section
      5.2 - Direct Costs and Pass Through Costs 

    Section
      5.3 - Invoicing and Payments 

    Section
      5.4 - Profit 

    Section
      5.5 - Payments 

    Section
      5.6 - True-Up Invoices 

    Section
      5.7 - Audit and Inspection Rights 

    Section
      5.8 - Prepaid Rent Credit 

     

    ARTICLE
      6 - LIABILITY, INDEMNIFICATION AND INSURANCE 

     

    Section
      6.1 - Republic is an Independent Contractor 

    Section
      6.2 - Liability and Indemnification 

    Section
      6.3 - Insurance Coverage 

    Section
      6.4 - Cargo Liability Insurance 

     

    ARTICLE
      7 - TERM AND TERMINATION 

     

    Section
      7.1 - Effective Date and Term 

    Section
      7.2 - Regulatory Changes 

    Section
      7.3 - Termination for Cause by US Airways 

    Section
      7.4 - [Intentionally Omitted] 

    Section
      7.5 - Termination by Republic 

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    ARTICLE
      8 - PERFORMANCE ADJUSTMENTS 

     

    Section
      8.1 - [Intentionally Omitted] 

    Section
      8.2 - Performance Plan Metrics 

    Section
      8.3 - Performance Plan Penalties and Incentives 

    Section
      8.4 - Performance Exceptions 

     

    ARTICLE
      9 - SERVICE MARK LICENSE FOR SERVICES PROVIDED PURSUANT
      TO THIS AGREEMENT 

     

    Section
      9.1 - Grant of License 

    Section
      9.2 - Terms and Conditions Governing Trademark License 

     

    ARTICLE
      10 - FORCE MAJEURE 

     

    Section
      10.1 - Force Majeure 

    Section
      10.2 - Resumption of Service 

     

    ARTICLE
      11 - NOTICES 

     

    ARTICLE
      12 - MISCELLANEOUS 

     

    Section
      12.1 - Entire Agreement/Amendments/Counterparts 

    Section
      12.2 - Headings 

    Section
      12.3 - Severability 

    Section
      12.4 - Waiver 

    Section
      12.5 - Assignments 

    Section
      12.6 - Governing Law / Jury Trial Waiver 

    Section
      12.7 - No Franchise 

    Section
      12.8 - Additional US Airways Rights 

     

    ARTICLE
      13 - CONFIDENTIALITY 

     

    Section
      13.1 - Confidentiality of Agreement 

    Section
      13.2 - Confidential Information 

    Section
      13.3 - Exclusions from Confidential Information 

    Section
      13.4 - Information Shared with US Airways Group, Inc. 

    Section
      13.5 - Information Shared with Wexford and Republic 

    Section
      13.6 - Return of Documents 

    Section
      13.7 - Remedies 

    Section
      13.8 - Survival 

     

    ARTICLE
      14 - DISPUTE RESOLUTION 

     

    Section
      14.1 - Certain Disputes 

    Section
      14.2 - Dispute Resolution Proceedings 

     

    EXHIBIT
      2.2 - SCHEDULE REQUIREMENTS 

     

    Exhibit
      2.7 - DIVISION OF RESPONSIBILITIES 

     

    Exhibit
      5.1 - Pricing Model 

     

    



    
      
        
          
            	
                     

                  	 	 


          

          


        

        
        

      

      
        -3-

        
          

        

      

      
        
        

        
        

      

    



    REPUBLIC
      JET SERVICE AGREEMENT

    


    


    This
      Republic Jet Service Agreement (this “Agreement”) is made and entered as of this
      2nd day of September, 2005, by and between US Airways, Inc. (herein referred
      to
      as “US Airways”), a Delaware corporation having its principal place of business
      at 2345 Crystal Drive, Arlington, Virginia 22227, and Republic Airline, Inc.
      (herein referred to as “Republic”), an Indiana corporation, having a principal
      place of business at 8909 Purdue Road, Suite 300, Indianapolis, Indiana 46268
      (each of US Airways and Republic, a “Party” and collectively, the
“Parties”).

    


    WITNESSETH:

    


    WHEREAS,
      US
      Airways holds a certificate of public convenience and necessity issued by the
      Department of Transportation (“DOT”) authorizing US Airways to engage in the
      interstate and overseas air transportation of persons, property and mail between
      all points in the United States, its territories and possessions;

    


    WHEREAS,
      Republic holds a certificate of public convenience and necessity issued by
      the
      DOT authorizing Republic to engage in the interstate air transportation of
      persons, property and mail in the United States;

    


    WHEREAS,
      US
      Airways owns various trademarks, trade dress, service marks and logos,
      including, but not limited to, “US Airways,”“US Airways Express,” and
      distinctive exterior color decor and patterns on its aircraft (each, a “US
      Airways Servicemark” and collectively, the “US Airways
      Servicemarks”);

    


    WHEREAS,
      Republic desires to operate regional jets under the name “US Airways Express” in
      the provision of its air transportation services under the terms hereof and
      to
      acquire a nonexclusive license for use of one or more of US Airways’
      Servicemarks for use in connection with Republic’s operation of such
      services;

    


    WHEREAS,
      US
      Airways desires to have Republic operate regional jets in US Airways Express
      Service and in connection therewith to provide Republic with a nonexclusive
      license for use of one or more of US Airways’ Servicemarks; 

    


    WHEREAS,
      on
      September 12, 2004, US Airways and certain of its affiliates filed voluntary
      petitions for reorganization relief pursuant to Chapter 11 of the
      Title 11 of the United States Code, 11 U.S.C. § 101 et seq., as
      amended (Title 11, the “Bankruptcy Code”) in the United States Bankruptcy
      Court for the Eastern District of Virginia, Alexandria Division (the “Bankruptcy
      Court”) in the matter entitled, In re US Airways, Inc., et al., Case No.
      04-13819 (the “Bankruptcy Proceedings”);

    


    WHEREAS,
      US
      Airways, US Airways Group, Inc. (“Group”), Wexford Capital LLC and its
      affiliated entities (“Wexford”) and Republic Airways Holdings, Inc. and its
      affiliated entities (“RJET”) have entered into that certain Investment
      Agreement, dated as of March 15, 2005 (as such agreement may be amended from
      time to time, or any successor investment agreement, the “Investment
      Agreement”), pursuant to which US Airways was granted the following rights,
      which rights US Airways subsequently exercised: (i) to sell to and license
      back
      from RJET certain slots (the “Slot Option”) and, upon the occurrence of certain
      events, certain gates, (ii) to sell to RJET and lease back on an interim basis
      10 EMB 170 aircraft owned by US Airways (the “Owned Aircraft”); (iii) to assign
      to Republic the leases to 15 EMB 170 aircraft that are leased by US Airways
      (the
“Leased Aircraft”); (iv) to cause RJET to purchase 3 undelivered EMB 170
      aircraft contracted for by US Airways (the “Other Aircraft” and collectively
      with the Owned Aircraft and the Leased Aircraft, the “EMB Aircraft”); and (v) to
      sell certain other assets to RJET, in each case subject to the terms and
      conditions of the Investment Agreement and to such further documents as the
      parties may execute relating to such transactions;

    


    WHEREAS,
      the
      Owned Aircraft, the Leased Aircraft and the Other Aircraft are all to be placed
      into service under the terms of this Agreement.

    


    NOW
      THEREFORE,
      for and
      in consideration of the foregoing premises and the mutual covenants and
      obligations hereinafter set forth, the Parties hereby agree as
      follows:

    


    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    ARTICLE
      1 - COMPLIANCE WITH REGULATIONS

    


    Each
      Party agrees that all services, including air transportation services, performed
      by it, and any of its agents, pursuant to this Agreement or otherwise shall
      be
      conducted in full compliance with any and all applicable laws, statutes, orders,
      rules and regulations, whether now in effect or hereafter promulgated, of all
      applicable governmental agencies or authorities (such laws, statutes, orders,
      rules and regulations, “Regulations”), including, but not limited to the Federal
      Aviation Administration (the “FAA”), the Transportation Security Administration
      (the “TSA”) and the DOT (for purposes of this Agreement, any applicable
      governmental agency or authority, whether domestic or foreign, shall be referred
      to as a “Regulatory Authority”). Each Party shall be solely and exclusively
      responsible for complying with all Regulations in connection with the services
      to be provided by it hereunder, and the Parties agree that neither Party shall
      have any obligation or responsibility, whether direct or indirect, with respect
      to such compliance by the other Party, except that US Airways shall be
      responsible for sharing the costs associated with such compliance by Republic
      as
      and only to the extent expressly provided herein, and for fulfilling its
      responsibilities for emergency family assistance services as defined in the
      Emergency Assistance Agreement, executed by US Airways and Republic in
      connection with the Original Jet Services Agreement.

    


    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    ARTICLE
      2 - AIR TRANSPORTATION SERVICES TO BE PROVIDED BY REPUBLIC

    


    Section
      2.1 - Schedule Requirements

    


    At
      all
      times during the Term (as defined in Section 7.1 hereof), Republic will operate,
      in accordance with the terms and conditions hereof, US Airways Express air
      transportation service between various U.S. domestic city-pairs and between
      various U.S.-Canadian city-pairs selected in accordance with Section 2.2
      (hereinafter referred to as the “Service”) using the EMB Aircraft, or such other
      aircraft as may be substituted therefor pursuant to the terms of Section 2.8
      hereof, (all such aircraft providing the Service pursuant to the terms hereof,
      including substitute aircraft used pursuant to Section 2.8, the “Aircraft”). The
      EMB Aircraft shall be configured in single class service with 72 seats. The
      EMB
      Aircraft shall be configured with such mechanical configuration as has been
      specified by US Airways, bearing the US Airways Express livery. 

    


    Section
      2.2 - Scheduling Parameters

    


    The
      city-pairs from which the Service is to be provided by Republic pursuant to
      this
      Agreement will be selected by US Airways, in its sole discretion, subject to
      operational and safety requirements, minimum and maximum schedule requirements,
      and the other parameters set forth in this Section 2.2 and Exhibit 2.2. US
      Airways may, on sixty (60) days advance written notice to Republic, designate
      changes in any or all of the following: city-pairs served, aircraft routings
      or
      flight frequencies, provided that the new city-pairs, aircraft routings, and
      flight frequencies shall continue to satisfy the parameters set forth in this
      Section 2.2 and Exhibit 2.2. In establishing schedules, US Airways agrees to
      take into consideration Republic’s operational requirements for remain overnight
      (“RON”) maintenance and crew productivity and legality. The Parties shall
      determine mutually acceptable locations for maintenance bases and crew domiciles
      as provided in Exhibit 2.2. If Republic and US Airways subsequently agree to
      any
      change in the location of any maintenance base or crew domicile, then the
      Parties shall also agree on appropriate compensation by US Airways to Republic
      for effecting such change, including the reimbursement by US Airways of costs
      reasonably incurred by Republic that are associated with the establishment
      of a
      new maintenance base or crew domicile and the closing of any existing
      maintenance base or crew domicile. 

    


    Section
      2.3 - Technical Operations

    


    During
      the Term, Republic shall be solely responsible for the technical operation
      of
      the Aircraft and the safe performance of the flights undertaken in connection
      with the Service in accordance with all Regulations. Republic shall retain
      full
      authority, operational control and possession of the Aircraft to enable it
      to
      perform its obligations under this Section 2.3. In particular, Republic or
      its
      agents or employees shall, for the purpose of the safe performance of such
      flights, have absolute discretion in all matters concerning the preparation
      of
      the Aircraft for flight, the flight, the load carried and its distribution
      in so
      far as such matters affect the safety of the Aircraft, the decision whether
      or
      not such flight shall be undertaken, and all other matters relating to the
      technical operation of the Aircraft. Republic shall be solely responsible for,
      and US Airways shall have no liability, obligation or duty with respect to,
      the
      flight dispatch and/or conduct of Republic’s flights operated pursuant to this
      Agreement or otherwise. For the purpose of this Section 2.3, the term “flight
      dispatch” shall include, but shall not be limited to, all planning of flight
      itineraries and flight paths, fueling, payload capabilities and flight
      release.

    


    Section
      2.4 - Regulations

    


    The
      operation of the Aircraft shall be carried out in accordance with all
      Regulations and the standards and practices of Republic approved by the
      applicable Regulatory Authority thereunder. Republic shall notify US Airways
      in
      writing within two business days after receipt of any notice from any Regulatory
      Authority that asserts any noncompliance by Republic with any Regulation,
      initiates an investigation of Republic’s operations or otherwise asserts any
      wrongdoing by Republic. Republic shall cooperate promptly and fully with US
      Airways in responding to any request for information or data concerning such
      non-compliance. For purposes of this Section 2.4, an asserted noncompliance
      or
      other wrongdoing by Republic shall be considered “material” only if such
      noncompliance or other wrongdoing, if proven or admitted by Republic, could
      reasonably be expected to lead to the suspension or revocation of Republic’s
      operating certificate.

    


    Section
      2.5 - Operating Procedures

    


    To
      the
      extent not previously provided to US Airways, Republic shall deliver to US
      Airways a copy of all relevant operating specifications, operational
      regulations, manuals and calculations for each EMB Aircraft not later than
      the
      date that such Aircraft becomes subject to this Agreement. Republic shall
      deliver to US Airways, within ten (10) days after the end of each month during
      the Term, a report of the number of departures, Block Hours, flight hours,
      passengers, Available Seat Miles and revenue passenger miles with respect to
      the
      flights operated by the Aircraft during such month in the Service. US Airways
      agrees to facilitate any changes to US Airways or US Airways Express manuals,
      operating procedures, or tariffs that may be necessary to support the Republic
      operation. 

    


    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    Section
      2.6 - Aircraft Registration

    


    During
      the Term, Republic shall ensure that the Aircraft remain properly registered
      in
      the United States of America in accordance with all Regulations.

    


    Section
      2.7 - Republic Responsibilities

    


    Republic
      shall be responsible for providing, at its own cost, in connection with the
      Service to be provided by Republic under this Agreement, all services and
      materials identified under the heading “To Republic” in Exhibit 2.7 attached
      hereto and made a part hereof (collectively, the “Republic Services”).


    Section
      2.8 - Substitute Aircraft

    


    In
      addition to the EMB Aircraft specified in Section 2.1, Republic may in its
      discretion arrange for and utilize substitute EMB aircraft or another type
      of
      regional jet aircraft in US Airways Express or neutral livery to provide the
      Service under this Agreement during those periods when any EMB Aircraft may
      be
      out of service due to unforeseen and irregular maintenance requirements,
      provided that Republic may only utilize regional jet aircraft other than EMB
      Aircraft to the extent that US Airways has permitted such use in advance in
      writing. Republic shall be paid for the use of such substitute aircraft in
      the
      same manner that it is paid for the use of EMB Aircraft in accordance with
      Article 5 hereof. If a substitute aircraft shall be utilized for more
      than
      two (2) consecutive days, Republic and US Airways shall mutually agree upon
      the
      route that shall be covered by the substitute aircraft. In addition, Direct
      Costs (defined in Section 5.2) contained in the Pricing Model with respect
      to
      any substitute aircraft shall be adjusted (upward or downward) in a manner
      consistent with the principles used to reflect the differences between the
      costs
      of such substitute aircraft and the costs of EMB Aircraft for such
      aircraft-specific items as pilot and flight attendant crew costs, maintenance,
      aircraft ownership, insurance, and overheads; provided that the payment of
      “Profit” pursuant to Section 5.4 shall not be adjusted in connection with any
      such substitution. 

    


    Section
      2.9 - Spare Aircraft and Spare Engines

    


    (a) Republic
      shall designate [*]
      of the
      EMB Aircraft as “Spare Aircraft.” The Spare Aircraft may be in neutral livery.
      For the purposes of calculating the payment to Republic as described in Article
      5 of this Agreement, Spare Aircraft shall not be included as Aircraft in
      Service, but US Airways shall pay to Republic certain associated Direct Costs
      as
      detailed in the Pricing Model, such as insurance, property taxes and aircraft
      ownership costs. For the purposes of calculating the schedule requirements
      as
      described in Exhibit 2.2 to this Agreement, the Spare Aircraft shall not be
      included.

    


    (b) Republic
      shall maintain, with respect to Aircraft flown in the Service, a pool of spare
      engines in an amount equal to [*]
      of the
      total number of engines attached to such Aircraft so flown in the Service
      (rounded up or down to the nearest whole number). 

    


    Section
      2.10 - Jets for Jobs

    


    Republic
      shall comply with the applicable provisions of the “Jets for Jobs” protocol as
      ratified by the US Airways Airline Pilots Association (“ALPA”) in Letter of
      Agreement #91 to the US Airways - ALPA Collective Bargaining Agreement, or
      as
      subsequently amended, with respect to the Services to be provided under this
      Agreement, provided that Republic shall not be required to use more than
      commercially reasonable efforts to comply with any such amendments. All
      additional, direct and reasonable costs associated with such compliance
      (excluding normal pilot costs that would otherwise be paid as Direct Costs
      in
      the absence of requirements associated with “Jets for Jobs”) shall be treated as
      Pass Through Costs under Section 5.2 hereof. 

    _____

    *
      Confidential


    
      
        
            

          
            	
                     

                  	 	 


          

          


        

        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    


    Section
      2.11 - In-flight Sales

    


    US
      Airways will be responsible for the direct costs associated with sales of liquor
      or other goods on flights included in the Service and shall be entitled to
      all
      revenues generated from such in-flight sales.

    


    Section
      2.12 - Pass Agreement

    


    The
      Parties will enter into a separate agreement, consistent with agreements between
      US Airways and other US Airways Express Carriers, governing passes and reduced
      rate travel privileges.

     

    Section
      2.13 -
      Processing
      Code-Share Passengers

     

    Republic
      shall use commercially reasonable efforts to facilitate the handling of
      code-share passengers and the processing of alliance partner frequent flyer
      miles pursuant to domestic and international code-share alliance relationships
      entered into by US Airways.

     

    Section
      2.14 - In Service Dates

    


    The
      Other
      Aircraft shall be subject to this Agreement as of the date hereof. Each Owned
      Aircraft and each Leased Aircraft shall be subject to this Agreement on the
      date
      that such aircraft has been added to Republic’s operating certificate. Such
      aircraft shall be transitioned to Republic in the following order - first the
      Owned Aircraft and finally the Leased Aircraft. The parties agree to cooperate
      in the transition of such aircraft to Republic. Republic will use commercially
      reasonable efforts to transition the respective aircraft at a rate of three
      aircraft per month, subject to pilot training constraints. 

    


    


    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    ARTICLE
      3 - OPERATION UNDER THE “US AIRWAYS EXPRESS” NAME

    


    Section
      3.1 - Servicemarks

    


    Aircraft
      utilized by Republic to provide Service pursuant to this Agreement (other than
      Spare Aircraft or substitute aircraft utilized pursuant to Section 2.8) shall
      bear certain US Airways Servicemarks. The Parties acknowledge that as of the
      Effective Date, all Aircraft in Service bear US Airways Servicemarks consisting
      of the red, white, gray and blue aircraft exterior color décor and pattern
      provided by US Airways and the name “US Airways Express”. At any time during the
      Term, US Airways may, at its sole discretion, require Republic to use such
      new
      or different US Airways Servicemarks and exterior color decor and patterns
      on
      the Aircraft as US Airways may identify to Republic in writing, and Republic
      will implement such changes in accordance with a schedule mutually agreed to
      by
      the Parties. Republic shall only use interior color schemes on the Aircraft
      (other than substitute aircraft utilized pursuant to Section 2.8) that have
      been
      approved in advance in writing by US Airways. Republic shall not be required
      to
      implement changes in the exterior color decor and pattern on the Aircraft more
      than once in any consecutive three-year period. Any amounts actually expended
      by
      Republic to repaint or to redecorate the Aircraft or reconfigure or redecorate
      the interior of the Aircraft as a result of changes required by US Airways,
      shall be reimbursed by US Airways.

    


    Section
      3.2 - Signage

    


    In
      addition to use of the US Airways Servicemarks, Republic shall use and display
      signs that satisfy applicable Regulations on the interior and exterior of the
      Aircraft that identify Republic as the operator of the Services being provided
      pursuant to this Agreement. US Airways has previously approved the design and
      placement on the Aircraft of all such signs that are currently displayed. In
      the
      even that after the date hereof, Republic seeks to change any such signs,
      Republic shall obtain US Airways’ prior written approval (not to be unreasonably
      withheld or delayed) of the design and placement on the Aircraft of such changed
      signs displayed pursuant to this Section 3.2.

    


    The
      use
      of US Airways Servicemarks as set forth in this Article 3 shall be subject
      to
      the terms and conditions of this Agreement, including Article 9. 

    


    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    ARTICLE
      4 - US AIRWAYS’ SUPPORT SERVICES AND FACILITIES

    


    US
      Airways shall provide, or at its option shall cause third parties to provide,
      at
      US Airways’ cost and expense, all services and materials identified under the
      heading “To US Airways, Inc.” in Exhibit 2.7 attached hereto and made a part
      hereof, and all fuel, marketing, reservations, ground support services, station
      facilities, and cargo and mail handling services, to the extent and in the
      manner set forth in this Article 4 (collectively, the “US Airways Services”). US
      Airways shall provide the US Airways Services with respect to the Republic
      Services provided pursuant to and in accordance with the terms of this
      Agreement. 

    


    Section
      4.1 - Fuel

    


    US
      Airways, at its sole option, may either (1) reimburse Republic for its actual
      cost of fuel as a Pass Through Cost, as detailed in Exhibit 5.1 hereto; or
      (2)
      provide fuel to Republic for Services provided under this Agreement. To the
      extent that US Airways provides fuel to Republic, the cost of such fuel shall
      be
      paid for by US Airways and shall not be considered a Pass Through Cost to
      Republic. For purposes of this Agreement the cost of fuel includes the cost
      of
      all aircraft fuel and oil, plus fuel flow charges, into-plane fees, third party
      administrative charges, and de-fueling charges, and all applicable taxes on
      any
      of the foregoing.

    


    Section
      4.2 - Reservations

    


    (a) All
      reservations shall be requested and confirmed for passengers traveling on
      Aircraft operated by Republic under this Agreement through US Airways’
      reservations services. Reservations that connect to other flights operated
      by US
      Airways or other air carriers (including other flights operated by Republic),
      including for travel that originates at locations other than those served
      hereunder, shall be requested and confirmed through US Airways’ reservations
      system in accordance with methods and procedures utilized by US Airways for
      its
      passengers as may be in use from time to time. For passengers originating their
      travel at points other than those served by Republic under this Agreement,
      either using US Airways’ reservations system or the reservations systems of
      other airlines, connecting reservations to the Services of Republic shall also
      be made in accordance with methods and procedures utilized by US Airways for
      its
      passengers. US Airways shall confirm the reservations of passengers traveling
      on
      Aircraft operated by Republic hereunder through the entire itinerary of their
      scheduled trips. When contact information is supplied by the passengers making
      such reservations, US Airways shall assume the responsibility of notifying
      passengers of any changes in Republic’s schedules or operations, provided that
      Republic has provided US Airways with sufficient advance notice of any such
      changes.

    


    (b) As
      soon
      as reasonably practicable after Republic learns of any flight delay,
      cancellation or other schedule irregularity affecting its scheduled services,
      Republic shall notify US Airways’ operations control center of the existence,
      cause and anticipated duration of such flight delay, cancellation or other
      schedule irregularity in a manner prescribed by US Airways with as much detail
      as can be reasonably provided. The Parties shall coordinate all schedule changes
      as a result of any flight delay, cancellation or other schedule irregularity
      affecting the Service, and US Airways shall perform all passenger
      re-accommodations for passengers traveling on Aircraft operated by Republic
      hereunder in the same manner that US Airways would perform such services for
      its
      own passengers.

    


    (c) From
      time
      to time, and solely upon the request of Republic or its flight crews, US Airways
      may furnish Republic’s flight crews with such U.S. weather bureau information or
      data as may be available to US Airways; provided that, in furnishing any such
      weather information or data to Republic, neither US Airways nor its employees
      or
      agents shall be responsible or liable for the accuracy thereof or the accuracy
      of the transmission thereof. 

    


    Section
      4.3 - Station Facilities and Ground Support Service

    


    US
      Airways shall provide, or at its option cause third parties to provide, at
      US
      Airways’ cost and expense, the following services at locations where Republic
      provides the Service:

    


    
      	
              (a)

            	
              check-in
                and ticketing of passengers that are utilizing the Service [*]

            


    

    


    (b) use
      of US
      Airways’ passenger facilities by [*]

    


    
      	
              (c)

            	
              [*]

            


    

    


    
      	
              (d)

            	
              [*]

            


    

    


    
      	
              (e)

            	
              [*]

            


    

    


    
      	
              (f)

            	
              [*]
                and

            


    

    _____

    *
      Confidential


    
      
        
            

          
            	
                     

                  	 	 


          

          


        

        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    


    


    
      	
              (g)

            	
              [*] 

            


    

    


    If
      US
      Airways is unable to provide (or cause third parties to provide) the services
      listed in this Section 4.3 at US Airways’ own facilities, US Airways may
      provide (or cause third parties to provide) such services at any other
      facilities selected and deemed suitable by US Airways. Such alternative
      facilities shall be identified with signage and directional marking to be
      provided by US Airways to minimize passenger confusion and complaints and shall
      provide reasonable working space for Republic personnel.

    


    If
      Republic is required to make arrangements for alternative transportation, meals,
      lodging, lost baggage delivery or other accommodations for passengers utilizing
      the Service due to schedule irregularities in Republic’s operations, US Airways
      agrees to reimburse Republic for all direct and reasonable costs incurred by
      Republic in making such arrangements, provided that Republic furnishes US
      Airways with an invoice and adequate supporting documentation
      therefor.

    


    Section
      4.4 - Cargo, Company Materials (“CoMat”) and Mail Handling
      Services

    


    (a) US
      Airways’ personnel, and/or at US Airways’ option third party providers, shall
      process tickets and/or bills of lading and US Airways airway bills, accepted
      for
      transportation, and US Airways personnel and/or third party personnel shall
      load
      on Aircraft providing the Service, such cargo and U. S. mail as properly
      tendered by the United States Postal Service (“USPS”) and by cargo customers;
      provided that no Hazardous Materials may be accepted and transported on
      Aircraft, except as permitted by Regulations. Republic acknowledges that,
      notwithstanding anything to the contrary contained herein, (i) it shall obtain
      independent authority for the appropriate Regulatory Authority to carry animals
      and (ii) it shall comply with such restrictions as US Airways may impose on
      the
      carriage of animals in connection with the Service provided that such
      restrictions apply to at least one other carrier operating under a US Airways
      Servicemark pursuant to a jet services agreement (a “US Airways Express
      Carrier”) and are not inconsistent with Regulations.

    


    (b) US
      Airways shall process any Republic CoMat that Republic transports on Aircraft
      that are providing the Service. 

    


    (c) Republic
      personnel shall comply with all US Airways’ instructions and procedures with
      respect to CoMat packages tendered to US Airways pursuant
      to this Agreement.

    


    Section
      4.5 - Terms of Transportation, Sales and Promotion

    


    (a) Republic
      shall comply with US Airways’ customer service standards and with US Airways’
      Terms of Transportation, as modified or amended from time to time in accordance
      with this Section 4.5(a), including procedures with respect to schedule change
      and passenger re-accommodation procedures, when providing all Services pursuant
      to this Agreement. Such 

    


    _____

    *
      Confidential


    
      
        
           

          
            	
                     

                  	 	 


          

          


        

        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    


    Terms
      of
      Transportation shall at all times be available for public inspection at
      Republic’s corporate offices and at each airport ticket counter and sales office
      maintained and operated by US Airways in connection with the Services provided
      under this Agreement. US Airways agrees that its customer service standards
      and
      Terms of Transportation, as applicable to the Service from time to time, shall
      not be inconsistent with standard industry practice for regional jet carriers,
      shall be consistent with those prescribed for other US Airways Express Carriers,
      shall comply with all Regulations, and shall be consistent with this
      Agreement.

    


    (b) All
      tickets issued for air passenger transportation, and all bills of lading, US
      Airways airway bills and invoices issued for U. S. mail and cargo shipments
      that
      are provided on the Aircraft providing the Service shall bear the “US Airways”
      airline designator code.

    


    (c) US
      Airways shall be responsible [*].
      

    


    (d) US
      Airways shall include the scheduled air services provided by Republic pursuant
      to Article 2 in its public timetables (including Republic’s connecting schedules
      on the same basis as it does its own), if published. All references in US
      Airways’ public timetables to Republic’s US Airways Express services shall also
      contain notations indicating that such scheduled services shall be performed
      by
      Republic as an independent contractor under the appropriate US Airways
      Servicemarks, and all such references shall comply with all
      Regulations.

    


    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    ARTICLE
      5 - PURCHASE OF AVAILABLE SEAT MILES (“ASMs”)

    


    Section
      5.1 - Pricing Model

    


    US
      Airways and Republic have developed that certain cost model set forth in
      Exhibit 5.1 hereto (the “Pricing Model”) which shall be used to determine
      the compensation to be paid by US Airways for the Service to designated
      city-pairs flown by Republic, subject to adjustments pursuant Article
      8.

    


    Section
      5.2 - Direct Costs and Pass Through Costs

    


    The
      Pricing Model, which shall be used to determine compensation due to Republic
      hereunder, is divided into two categories, (1) “Direct Costs” and (2) “Pass
      Through Costs.” US Airways shall reimburse Republic for “Direct Costs” at the
      rates set forth in Exhibit 5.1 in accordance with the following:

    


    (a) with
      respect to the Per Aircraft costs, Direct Costs shall be payable with respect
      to
      the number of Aircraft that have been delivered to Republic and have become
      subject to this Agreement, whether or not such Aircraft have been placed into
      active revenue service for US Airways Express operation under this Agreement,
      as
      well as certain costs associated with Spare Aircraft and Spare
      Engines;

    _____

    *
      Confidential


    (c) with
      respect to the Per Flight Hour costs, Direct Costs shall be payable with respect
      to the number of Flight Hours for revenue flights actually flown by the Aircraft
      to provide the Service under this Agreement; 

    


    (d) with
      respect to the Per Departure costs, Direct Costs shall be payable with respect
      to the number of actual revenue departures by Aircraft to provide the
      Service.

    


    (e) with
      respect to Fixed Costs set forth therein, the amount of such fixed costs.


    


    [*] 

    


    Each
      cost
      component in Exhibit 5.1 shall be adjusted at the appropriate date of
      each
      calendar year based upon the escalation factors and dates set forth in Exhibit
      5.1. 

    


    Republic
      shall be reimbursed for “Pass Through Costs” set forth in Exhibit 5.1 based upon
      the actual costs incurred by Republic, provided Republic furnishes US Airways
      with adequate supporting documentation therefor.

    


    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    Section
      5.3 - Invoicing and Payments

    


    (a)
       During
      the Term, US Airways shall pay to Republic on each of the [*]
      days of
      each calendar month an amount equal to one third of the Estimated Monthly
      Compensation; provided that US Airways receives an invoice for each such payment
      not less than [*]
      days
      prior to the due date therefor. The “Estimated Monthly Compensation” shall be
      equal to the amount that Republic estimates in good faith shall result from
      application of the Pricing Model to the Service provided during the applicable
      month, plus the amount of Profit that Republic estimates in good faith will
      be
      payable pursuant to Section 5.4 with respect to the Service provided during
      the
      applicable month, minus the amount of the Estimated Prepaid Rent Credit or
      the
      Prepaid Rent Credit as the case may be calculated in accordance with Section
      5.8
      hereof. If US Airways does not receive an invoice from Republic at least
[*]
      days
      prior to the due date for a payment as set forth above, US Airways shall pay
      Republic within [*]
      days
      after actual receipt of such invoice. 

    


    (b) As
      soon
      as reasonably practicable after the end of each calendar month, Republic shall
      calculate the actual amount (the “Actual Monthly Compensation”) that results
      from application of the Pricing Model and Section 5.4 to the Service provided
      during such month using the actual statistics for such month and the actual
      Pass
      Through Costs incurred for such month. If the Actual Monthly Compensation
      exceeds the total of Estimated Monthly Compensation amounts previously paid
      by
      US Airways under Section 5.3(a), US Airways shall pay to Republic an amount
      equal to such difference as provided in Section 5.5 hereof, without any set
      off.
      If the 


    _____

    *
      Confidential


    total
      of
      Estimated Monthly Compensation amounts previously paid by US Airways under
      Section 5.3(a) exceeds the Actual Monthly Compensation, Republic shall refund
      the overpayment amount promptly as provided in Section 5.5 hereof, without
      any
      set off.

    


    (c) Notwithstanding
      the provisions set forth in this Article 5, (i) in the event that Republic
      is
      unable to provide the Republic Services during any period due to the grounding
      of the Aircraft as a result of a defect in the design or manufacture of the
      Aircraft, or as a result of a strike by employees of Republic, US Airways shall
      only be responsible for payment of Republic’s Fixed Costs and Per Aircraft Costs
      as set forth in Exhibit 5.1 during such period for [*]
      days;
      and (ii) in the event that Republic is unable to provide the Republic Services
      as a result of Republic’s failure to properly maintain the Aircraft or otherwise
      comply with Regulations associated with the maintenance and/or operation of
      the
      Aircraft, US Airways shall have no obligation to pay any compensation to
      Republic pursuant to this Article 5 with respect to such
      period.

    


    (d) In
      the
      event Republic is unable to provide the Republic Services during any period
      due
      to any cause not described in Section 5.3(c), including action or inaction
      by US
      Airways (including due to a strike by US Airways personnel), US Airways shall
      pay Republic [*].

    


    Section
      5.4 - Profit

    


    US
      Airways shall pay Republic the Profit shown in Exhibit 5.1 per actual Available
      Seat Mile (ASM) flown by Republic to provide the Service during the month
      provided that, if during the course of any year during the Term of this
      Agreement, the actual number of ASMs flown is less than [*],
      Republic shall be paid a Profit for the lesser of (a) [*],
      and (b)
[*].
      The
      Profit will be escalated [*],
      by
[*].

    


    Section
      5.5 - Payments

    


    All
      payments due under this Article shall be paid directly to Republic, or US
      Airways, as the case may be. Payments due hereunder shall be made within
[*]
      days of
      the calculation of any such payment. 

    


    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    Section
      5.6 - True-Up Invoices

    


    The
      Parties agree that, insofar as practicable, all true-up invoices for any month
      shall be submitted no later than [*]
      days
      after the last day of such month.
      US
      Airways shall not be obligated to accept for payment or reimbursement of Pass
      Through Costs any invoice not submitted within [*]
      days
      after the later of (i) the last day of the month in which such Pass Through
      Cost
      was incurred or (ii) the date on which the amount of such Pass Through Cost
      was
      invoiced to Republic. All true-up invoices shall be accompanied by appropriate
      calculations and adequate supporting documentation for the amounts
      invoiced.
____

    *
      Confidential
 

    Section
      5.7 - Audit and Inspection Rights

    


    (a) Upon
      not
      less than [*]
      prior
      written notice, and not more than once each calendar year, authorized
      representatives of US Airways, at its cost and expense, may audit, review and
      copy Republic’s books, records, accounts and other documents relating to the
      Pass Through Costs and to any increase in the Direct Costs payable by US Airways
      that is not based on the Consumer Price Index, provided that if Republic is
      in
      default hereunder and such audit relates to matters giving rise to or otherwise
      relating to such default, such audit shall be at Republic's cost and expense
      and
      US Airways shall not be bound by the notice and frequency restrictions set
      forth
      above. 

    


    (b) In
      the
      event that US Airways has a reasonable basis for a concern with respect to
      the
      quality or adequacy of Republic’s Aircraft maintenance program or crew training
      program or Republic’s compliance with Regulations, upon not less than
[*]
      prior
      written notice, authorized representatives of US Airways, at its cost and
      expense, may inspect Republic’s aircraft maintenance and crew training
      facilities and review and copy Republic’s aircraft maintenance records with
      respect to the Aircraft or crew training records, and such other records as
      relate to Republic’s compliance with Regulations, at reasonable times during
      Republic’s normal business hours and in a manner that does not materially
      disrupt Republic’s business or operations; provided that if Republic is in
      default hereunder and such inspection relates to matters giving rise to or
      otherwise relating to such default, such inspection shall be at Republic’s cost
      and expense and US Airways shall not be bound by the notice requirements set
      forth above. Republic shall make available to US Airways’ authorized
      representatives knowledgeable representatives of Republic to answer questions
      and otherwise assist in any such inspection, review, and upon the conclusion
      of
      such review US Airways shall provide Republic with a written report of its
      material findings,
      with
      recommendations for corrective actions to be taken by Republic specifying the
      reasons for such corrective action, including any alleged non-compliance with
      Regulations. Republic may object to such recommendations by providing US Airways
      with a detailed written objection within [*]
      after
      Republic’s receipt of such report. If Republic so objects, the Parties shall
      negotiate in good faith to determine appropriate action to be taken by Republic.
      US Airways’ recommendations may address any matter related to Republic’s
      provision of the Service so long as such recommendations are not inconsistent
      with standard industry practice for regional jet carriers, are consistent with
      those prescribed for other US Airways Express Carriers, with all Regulations,
      and with this Agreement. All proprietary information of Republic provided to
      or
      observed by US Airways in connection with any audit, review or inspection under
      this Section 5.7 shall be treated as Confidential Information under Article
      13.


    


    Section
      5.8 - Prepaid Rent Credit

    


    (a) [*]

    


    (b) [*] 

    _____

    *
      Confidential

    


    (c) [*]

    


    (d) US
      Airways shall have the right in good faith to review and verify the calculations
      made by Republic under Sections 5.8(b) and (c). In the event of any disagreement
      between the parties with respect to any such calculation, the parties shall
      negotiate in good faith to resolve such disagreement. 

    


    (e)  [*] 

    


    


    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    ARTICLE
      6 - LIABILITY, INDEMNIFICATION AND INSURANCE

    


    Section
      6.1 - Republic is an Independent Contractor

    


    (a) In
      its
      performance under this Agreement, Republic shall act, for all purposes, as
      an
      independent contractor and not as an agent for US Airways, and nothing in this
      Agreement is intended or shall be deemed to create an association, partnership,
      joint venture, agency or employer and employee relationship between the Parties.
      The employees, agents, and/or independent contractors of Republic engaged in
      performing any of the Services Republic is to perform pursuant to this Agreement
      shall be employees, agents, and independent contractors of Republic for all
      purposes, and under no circumstances shall be deemed to be employees, agents
      or
      independent contractors of US Airways. US Airways shall have no supervisory
      power or control over any employees, agents or independent contractors engaged
      by Republic in connection with its performance hereunder, and all complaints
      or
      requested changes in procedures shall, in all events, be transmitted by US
      Airways to a designated officer of Republic. Nothing contained in this Agreement
      is intended to limit or condition Republic’s control over its operations or the
      conduct of its business as an air carrier and Republic assumes all risks of
      financial losses which may result from the operation of the air transportation
      services to be provided by Republic hereunder. 

    


    (b) The
      employees, agents, and/or independent contractors of US Airways engaged in
      performing any of the services US Airways is to perform pursuant to this
      Agreement shall be employees, agents, and/or independent contractors of US
      Airways for all purposes, and under no circumstance shall they be deemed to
      be
      employees, agents, and/or independent contractors of Republic. Republic shall
      have no supervision or control over any such US Airways employees, agents,
      and/or independent contractors and any complaint, discipline or requested change
      in procedure shall be transmitted by Republic to US Airways’ designated
      representative. 

    


    Section
      6.2 - Liability and Indemnification

    


    (a) Each
      Party assumes full responsibility for any and all liability to its own
      directors, officers, employees, or agents arising from property damage or bodily
      injury, or death resulting from or sustained in the performance of its
      respective services under this Agreement, including the Services.

    _____

    *
      Confidential

    (b) Republic
      shall indemnify, defend, protect, save, and hold harmless US Airways, its
      affiliates, directors, officers, employees, and agents (the “US Airways
      Indemnitees”) from and against any and all liabilities, claims, demands, suits,
      settlement payments, judgments, damages, expenses, fines and losses (including,
      without limitation, reasonable attorneys’ fees, other professionals’ fees, and
      costs and expenses incurred in connection therewith) caused by, resulting from
      or arising out of any goods or services, including the Services, furnished
      or to
      be furnished by Republic under or pursuant to this Agreement, whether or not
      arising in tort or occasioned in whole or in part by the negligence of any
      US
      Airways Indemnitee, except for claims to the extent resulting from the gross
      negligence or willful misconduct of a US Airways Indemnitee. Republic
      shall further indemnify, defend, protect, save, and hold harmless US Airways
      from and against all fines or civil penalties incurred by US Airways that relate
      to US Airways’ actual or alleged non-compliance with Regulations to the extent
      such non-compliance results from any action or inaction by
      Republic.

    


    (c) 
      US
      Airways shall indemnify, defend, protect, save, and hold harmless Republic,
      its
      affiliates, directors, officers, employees, and agents (the “Republic
      Indemnitees”) from and against any and all liabilities, claims, demands, suits,
      settlement payments, judgments, damages, expenses, fines and losses (including,
      without limitation, reasonable attorneys’ fees, other professionals’ fees, and
      costs and expenses incurred in connection therewith) caused by, resulting from
      or arising out of any goods or services, furnished or to be furnished by US
      Airways under or pursuant to this Agreement, whether or not arising in tort
      or
      occasioned in whole or in part by the negligence of any Republic Indemnitee,
      except for claims to the extent resulting from the gross negligence or willful
      misconduct of a Republic Indemnitee. US Airways shall further indemnify, defend,
      protect, save, and hold harmless Republic from and against all fines or civil
      penalties incurred by Republic that relate to Republic’s actual or alleged
      non-compliance with Regulations to the extent such non-compliance results from
      any action or inaction by US Airways.

    


    (d) A
      person
      claiming indemnification (the “Indemnitee”) shall give the Party from which
      indemnification is sought (the “Indemnitor”) written notice of any claim or
      demand made or suit instituted against the Indemnitee which may give rise to
      indemnification hereunder, provided that failure to provide such written notice
      shall not relieve the Indemnitor of its indemnification obligations hereunder,
      except to the extent of actual damage or prejudice to the Indemnitor directly
      resulting from the failure to provide such notice. The Indemnitor, at its sole
      expense, shall handle, resolve, settle or refer any and all claims, demands
      or
      suits resulting or arising from the performance by the Indemnitor of its
      obligations under or pursuant to this Agreement. The Indemnitor shall be liable
      for the reasonable fees and expenses of one counsel selected and employed by
      the
      Indemnitee in its sole discretion for any period during which the Indemnitor
      has
      not assumed the defense of any third-party claim, demand or suit (other than
      during any period in which the Indemnitee shall have failed to provide written
      notice of such third-party claims, demands or suits as provided above). The
      Parties agree to consult and cooperate in the handling, opposition, settlement
      or defense of such claims, demands or suits but the final claims, demands or
      suits handling authority rests with the Indemnitor and its insurers; provided
      however, that, without the prior written consent of the Indemnitee, the
      Indemnitor shall not consent to the entry of any judgment or enter into any
      settlement that (i) by its terms fails to discharge the Indemnitee from the
      full
      amount of liability in connection with such third-party claim, demand or suit,
      (ii) provides for injunctive or other non-monetary relief affecting the
      Indemnitee or (iii) does not include as an unconditional term thereof the
      release of the Indemnitee that are or may be the subject of such third-party
      claim, demand or suit from all liability with respect to such claim, demand
      or
      suit by each claimant or plaintiff. The Parties’ obligations under this Section
      6.2 shall survive the expiration or termination of this Agreement.

    


    (e) Each
      Party shall be responsible for all employee-related tax, levy, benefit, pension,
      withholding, accrual, payment, reporting, and other obligations of employers
      pursuant to Regulations or contractual obligations for its respective employees,
      including: (i) personal income, wage, earnings, occupation, social security,
      workers’ compensation, unemployment, sickness and disability insurance taxes;
      (ii) payroll levies; (iii) employee medical coverage benefit requirements;
      (iv)
      air transportation travel pass benefits; and (v) pension requirements, whether
      under ERISA, state law, or otherwise.

    


    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    Section
      6.3 - Insurance Coverage

    


    (a) Republic
      shall, at all times during the Term and, provided that US Airways pays in
      advance the additional cost of such coverage as a Pass Through Costs, for a
      “tail” period of one year after termination of this Agreement, maintain in full
      force and effect, policies of insurance of the types of coverage, and in the
      minimum amounts stated below with insurers reasonably satisfactory to US
      Airways, including coverage on all Aircraft from or upon which Republic Services
      are to be provided pursuant to this Agreement. Unless otherwise specified,
      the
      minimum amounts of insurance coverage required under this Section shall be
      [*],
      combined single limit for all coverage required under this paragraph.


    


    
      	
              Type
                of Insurance Coverage

            	
              Minimum
                Amount of Insurance Coverage (U.S. Currency-Per
                Occurrence)

            
	Comprehensive
              Airline Liability Insurance (including Premises) Liability Products
              and Completed Operation Liability Insurance. 	 
              
               

            
	(a) Bodily
              Injury Passengers and Non-Passengers 	 $[*]
              Each Occurrence /Aggregate
	(b)
              Personal Injury - Passengers 	 $[*]
              Each Offense/Aggregate
	(c)
              Personal Injury - Non-Passengers 	 $[*]
              Each Offense/Aggregate
	(d)
              Property Damage 	
              $[*]
                Each Occurrence/Aggregate

            
	 	 
	
              Worker’s
                Compensation Insurance

              (Republic’s
                Employees)

            	
              [*]

            
	
              Employer’s
                Liability 

              (Republic’s
                Employees)   

            	
              $[*]  

            
	
              “All
                Risk Hull and Aviation Hull War and 

              Associated
                Perils (or equivalent) insurance on Aircraft performing Republic
                Services
                hereunder 

            	
              [*]
                or
                such lesser amount as may be consented to by US
                Airways

            


    

    _____

    *
      Confidential

    


    (b) US
      Airways may require Republic to maintain amounts different from those set forth
      in paragraph (a) above, should US Airways reasonably deem such changes to be
      appropriate.

    


    (c)
       Republic
      agrees, in addition, that all policies of insurance that it maintains pursuant
      to this Agreement (other than worker’s compensation insurance)
      shall:

    


    (i) name
      all
      US Airways Indemnitees as additional assureds thereunder with respect to
      Republic Claims for which Republic is obligated to indemnify such US Airways
      Indemnitees hereunder;

    


    (ii) ensure
      that that
      all
      such policies are primary without right of contribution by any insurance carried
      by US Airways;

    


    (iii) cover
      US
      Airways’ costs (including reasonable legal fees and expenses) of defending
      against any insured claims to the extent that such a defense is not otherwise
      provided to US Airways;

    


    (iv) provide
      cross-liability and severability of interests clauses acceptable to US Airways,
      and a specific contractual liability insurance provision covering liability
      assumed by Republic under this Agreement, and provide that US Airways shall
      have
      no responsibility for premiums, commissions, assessments or calls and the
      insurers issuing the policies shall waive their rights to any set-off or counter
      claim or any other deduction, whether by attachment or otherwise, in respect
      of
      any liability to or on behalf of US Airways with respect to such insurance
      required under this Section 6.3;

    


    (v) provide
      that any waiver of rights of subrogation against other parties by Republic
      shall
      not affect the coverage provided hereunder with respect to US Airways
      Indemnitees;

    


    (vi) with
      respect to all services performed by the Parties pursuant to this Agreement,
      provide that Republic’s underwriters shall waive any and all subrogation rights
      against all US Airways Indemnitees, except for claims based solely upon the
      gross negligence or willful misconduct of US Airways Indemnitiees;
      and

    


    (vii) provide
      that US Airways shall be given written notice at least [*]
      or such
      lesser period as may from time to time be applicable in the case of any war
      risks and allied/associated hull coverage) in advance of any cancellation,
      termination or material modification of any coverage contemplated by this
      Section 6.3. 

    


    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    (d) With
      respect to Comprehensive Airline Liability and All Risk Hull and Aviation Hull
      War and Associated Perils policies described in Section 6.3(a) of this
      Agreement, a breach of warranty clause reasonably acceptable to US Airways
      must
      be provided by Republic’s insurers.

    _____

    *
      Confidential

    


    (e) All
      aircraft hull insurance provided pursuant to this Section 6.3 shall be provided
      on an agreed value basis, and, except with the consent of US Airways, shall
      not
      be subject to more than the standard market deductibles as are agreed to in
      advance in writing by US Airways, and as certified by a recognized broker that
      in the event of loss, settled on the basis of a total loss, all losses shall
      be
      payable in full.

    


    (f)
       In
      the
      event that any of Republic’s insurance policies under this Agreement are
      obtained directly from foreign underwriters, US Airways must be allowed to
      maintain against such foreign underwriters, a direct action in the United States
      upon said insurance policies and to provide for service of process to an
      attorney located within the United States, who maintains an office in
      Washington, D.C., or New York, New York.

    


    (g) 
      Upon the
      Effective Date, and from time to time thereafter upon request by US Airways,
      Republic shall furnish to US Airways certificates of insurance satisfactory
      to
      US Airways endorsed to show the aforesaid insurance coverage, limits and
      endorsements. In addition to the certificates of insurance, Republic’s insurance
      broker shall provide its written opinion that the policy or policies of
      insurance carried by Republic are in full compliance with the requirements
      set
      forth herein and are in full force and effect. In the event of a change of
      broker by Republic, Republic will promptly notify US Airways of such new broker.
      Thereafter, such certificates shall be supplied to US Airways by such new
      broker.

    


    In
      the
      event Republic fails to maintain in full force and effect any of the insurance
      and endorsements described in this Section 6.3, US Airways shall have the right
      (but not the obligation) to procure and maintain such insurance or any part
      thereof. The cost of such insurance shall be for the account of Republic and
      shall be payable by Republic to US Airways upon demand by US Airways. The
      procurement of such insurance or any part thereof by US Airways does not
      discharge or excuse Republic’s obligation to comply with the provisions of this
      Section 6.3. Republic shall not cancel, terminate or materially alter, change
      or
      amend any of the policies required to be obtained and maintained under this
      Section 6.3 without the prior written consent of US Airways, unless such policy
      is replaced by another policy conforming to the requirements of this Section
      6.3. 

    


    Section
      6.4 - Cargo Liability Insurance

    


    US
      Airways shall maintain cargo liability insurance coverage consistent with
      applicable law, in such types and amounts it deems appropriate in its sole
      discretion, for all air freight transported by Republic under a US Airways
      airway bill as part of the Service.

    


    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    ARTICLE
      7 - TERM AND TERMINATION

    


    Section
      7.1 - Effective Date and Term 

    


    (a) This
      Agreement has been approved by a final order (the “Order”) of the Bankruptcy
      Court authorizing and directing US Airways to enter into and be bound by the
      Agreement. The Order provides that, except as provided herein, US Airways’
      obligations under the Agreement are post-petition, administrative obligations
      of
      US Airways under Section 503 of the Bankruptcy Code. Notwithstanding the
      foregoing, in the event that (i) US Airways consummates a chapter 11 plan of
      reorganization in the Cases, including a liquidating chapter 11 plan, and
      neither it nor its successor under the plan continues to operate as an airline,
      and substantially all of US Airways’ flight operations are, therefore,
      discontinued, or (ii) US Airways’ Case is dismissed or converted to a case under
      chapter 7 of the Bankruptcy Code, or US Airways is otherwise liquidated, and
      as
      a result of such dismissal, conversion or liquidation, substantially all of
      US
      Airways’ flight operations are discontinued, US Airways may reject or terminate
      this Agreement by providing ten (10) business days prior written notice to
      Republic and US Airways shall be deemed to be in material payment breach of
      this
      Agreement as of the effective date of the notice (the “Breach Date”) and
      Republic shall have, subject to objection as provided below: (x) administrative
      expense claims under sections 503 and 507 of the Bankruptcy Code for any
      obligations arising prior to the Breach Date with respect to this Agreement,
      and
      (y) general unsecured pre-petition claims under section 502(g) of the Bankruptcy
      Code for future damages resulting from such rejection or termination and for
      obligations that arise after the Breach Date with respect to this Agreement.
      In
      each case the amount of the respective claims shall be subject to the ordinary
      claims process, including the right of parties in interest to object to the
      amount (but only the amount) of such claims. In addition, Republic agrees to
      refund to US Airways any amounts paid on account of services to be performed
      after the Breach Date within 5 business days after receipt of written demand
      from US Airways.

    


    (b) The
      term
      of this Agreement with respect to Aircraft scheduled in the Service shall
      commence on September 4, 2005 and shall continue until September 4, 2015, or
      the
      expiration or termination of this Agreement pursuant to this Article 7 (the
      “Term”). 

    


    Section
      7.2 - Regulatory Changes

    


    In
      the
      event of any change in the Regulations governing the provision of the Services
      to be provided pursuant to this Agreement that materially and adversely affects
      the economic value of this Agreement, taken as a whole, to either US Airways
      or
      Republic, or both, then the Parties hereto shall consult within thirty (30)
      days
      after any of the occurrence of such Regulatory change in order to determine
      what, if any, changes to this Agreement are necessary or appropriate to preserve
      the essence of the 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 change or changes, or whether this Agreement should be canceled
      in
      light of the occurrences as 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 Section 7.2, then this Agreement may be
      canceled by the Party materially and adversely affected by such Regulatory
      change upon providing the other Party a minimum of ninety (90) days written
      notice of such cancellation.

    


    Section
      7.3 - Termination for Cause by US Airways

    


    US
      Airways may terminate this Agreement for cause, upon not less than ninety (90)
      days written notice to Republic, or on such shorter notice as may be specified
      below, should any of the events set forth in subparts (a) through (h) of this
      Section 7.3 (each a “Termination Event”) occur during the Term,
      subject
      to Republic’s rights to cure such Termination Event as set forth herein. After
      notice of termination is given, US Airways shall meet with Republic for the
      purpose of resolving the Termination Event. Should such Termination Event not
      be
      cured or corrected within ninety (90) days after Republic’s receipt of the
      notice of termination (or action diligently undertaken to cure or correct the
      Termination Event if cure or correction cannot be completed within ninety (90)
      days), then the termination shall be effective on the ninetieth day following
      delivery of such notice. If the Termination Event is cured or corrected (or
      all
      steps to remedy the situation were promptly taken if the cure or correction
      cannot be completed reasonably within ninety (90) days), the termination notice
      shall be deemed rescinded. Each of the following events is a Termination
      Event:

    


    (a) Republic
      materially fails to perform or observe any material covenant or condition or
      agreement to be performed or observed by it hereunder, provided that if Republic
      breaches any payment obligation, US Airways shall have the right to terminate
      this Agreement on ten (10) days’ prior written notice unless Republic has cured
      such breach prior to the expiration of such period. 

    


    (b) For
      any
      six month period that commences on January 1 or July 1 of any calendar year
      beginning with the first such period in which Republic operates 13 EMB Aircraft
      for the entire period (a “Performance Measurement Period”), Republic’s
      Controllable Completion Percentage (as defined in Section 8.2) is below
[*]
      and no
      Performance Exception or Force Majeure Event has occurred. 

    


    (c) Republic’s
      Controllable On-Time Departure Percentage (as defined in Section 8.2) is below
      [*]
      for any
      Performance Measurement Period and no Performance Exception or Force Majeure
      Event has occurred. 

    


    (d)
       Republic
      admits liability or is found liable for safety infractions (other than routine
      ministerial fines) by the Federal Aviation Administration which could reasonably
      be expected to lead to the suspension or revocation of Republic’s operating
      certificate; provided that US Airways’ right to terminate this Agreement under
      this paragraph shall be stayed for so long as Republic is negotiating in good
      faith with the FAA to return to compliance and maintain its operating
      certificate. 

    


    (e) In
      US
      Airways’ reasonable opinion, Republic is not complying in any material respect
      with applicable safety and operational Regulations or with safety and safety
      related operational requirements imposed by US Airways pursuant to this
      Agreement.

    


    (f) Republic
      fails to comply with the applicable provisions of the “Jets for Jobs” protocol
      as ratified by US Airways ALPA in Letter of Agreement #91 to the US Airways
      -
      ALPA Collective Bargaining Agreement, or as subsequently amended, as and to
      the
      extent applicable to Republic as provided in Section 2.10 hereof, provided
      that
      US Airways provides Republic with any such amendments within fifteen (15)
      business days of execution, and further provided that Republic shall not be
      required to use more than commercially reasonable efforts to comply with any
      such amendments.

    _____

    *
      Confidential

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    (g) Republic’s
      operating certificate is suspended or revoked.

    


    (h) In
      the
      event that (1) the Amended and Restated Chautauqua Jet Service Agreement (the
      “Chautauqua Jet Service Agreement”) between US Airways and Chautauqua Airlines,
      Inc. (“Chautauqua”) shall have been terminated by US Airways in accordance with
      the terms of such agreement or (2) RJET shall have committed a Material Breach
      under the Slots/Gates Transaction Agreements (as defined in Section 7.5 (a)
      hereof) or the Aircraft Transaction Agreements (as defined in Section 7.5(a)
      hereof) resulting in either a failure to consummate the transactions
      contemplated by either the Slots/Gates Transaction Agreements or the Aircraft
      Transaction Agreements or a termination of the Specified Slots/Gates Transaction
      Agreements or the Specified Aircraft Transaction Agreements (as defined in
      Section 7.5 (a) hereof). A termination under this subsection (h) shall be
      effective at the time US Airways provides notice of termination to Republic.
      “Material Breach” with respect to RJET shall have the respective meanings set
      forth in the Slots/Gates Transaction Agreements and Aircraft Transaction
      Agreements, as applicable.

    


    Section
      7.4
      - [Intentionally Omitted]

    


    Section
      7.5 - Termination by Republic

    


    (a) Republic
      may terminate this Agreement for cause, upon the occurrence of any of the
      following events:

    


    (i) upon
      written notice to US Airways, if US Airways fails to perform any payment
      obligation to be performed or observed by it hereunder, provided that the
      failure by US Airways to make a payment under Section 5.3(a) hereof or any
      other
      payment or payments in excess of [*]
      in the
      aggregate shall require [*]
      days
      written notice, and that the failure by US Airways to make any other payment
      shall require [*]
      days
      written notice, and further provided that in the event of a bona fide dispute
      as
      to an amount due, the parties will engage in good faith efforts to resolve
      such
      dispute in not less than [*]
      days and
      Republic shall not deliver such notice based upon US Airways’ failure to pay
      such amount subject to bona fide dispute (but only such amount), if within
      such
[*]
      day
      period (x) the parties agree on the amount due and payable and US Airways pays
      such amount to Republic, or (y) US Airways escrows any amount that remains
      subject to bona fide dispute with a third party escrow agent pursuant to an
      escrow agreement reasonably satisfactory to Republic, and the parties seek
      an
      expedited resolution of such dispute pursuant to Section 14.2 hereof, without
      requirement that the parties comply with the provisions of Section 14.1
      hereof;

    


    (ii) upon
      not
      less than ninety (90) days written notice to US Airways, if US Airways
      materially fails to perform or observe any other material covenant or condition
      or agreement to be performed or observed by it hereunder, subject to US Airways’
      rights to cure such breach as set forth herein;

    _____

    *
      Confidential

    (iii)  upon
      written notice in the event that (1) the Chautauqua Jet Service Agreement shall
      have been terminated by Chautauqua in accordance with the terms of such
      agreement, (2) RJET shall have terminated the Specified Slot/Gates Transaction
      Agreements (as defined in Section 7.5(a)(iv) below) as a result of a Material
      Breach (as defined in Section 7.5(a)(iv) below) by US Airways, or (3) RJET
      shall
      have terminated the Specified Aircraft Transaction Agreements (as defined in
      Section 7.5(a)(iv) below) as a result of a Material Breach by US Airways,
      provided that a termination under this subsection (iii) shall be effective
      at
      the later of (y) the date of such notice, and (z) the date of such termination
      of the Chautauqua Jet Service Agreement, the Specified Slots/Gates Transaction
      Agreements or the Specified Aircraft Transaction Agreements, as the case may
      be;
      and

    


    (iv)  For
      purposes of Section 7.3(h) and subsection (iii) of this Section 7.5(a), (1)
      the
      Slots/Gates Transaction Agreements shall mean those agreements to which US
      Airways or an affiliate is a party relating to the Slot Option, the Gates
      Option, the Slots License, the Repurchase Option (as defined in the Investment
      Agreement) and the other transactions related thereto, (2) the Aircraft
      Transaction Agreements shall mean those agreements to which US Airways or an
      affiliate is a party relating to the Republic Aircraft Transaction, including
      without limitation, purchase of the Owned Aircraft, the Owned Aircraft
      Leaseback, the assignment of leases relating to the Leased Aircraft (as defined
      in the Investment Agreement) and the other transactions related thereto, (3)
      Material Breach with respect to US Airways shall have the meaning provided
      in
      the Slots/Gates Transaction Agreements or Aircraft Transaction Agreements,
      as
      the case may be, (4) Material Breach with respect to RJET shall have the meaning
      provided in such Slots/Gates Transaction Agreements or Aircraft Transaction
      Agreements, as the case may be, (5) Specified Slot/Gates Transaction Agreements
      shall have the meaning provided in the Slots/Gates Transaction Agreements,
      and
      (6) Specified Aircraft Transaction Agreements shall have the meaning provided
      in
      the Aircraft Transaction Agreements.

    


    (b) After
      notice of termination is given, US Airways shall meet with Republic for the
      purpose of resolving the breach. Should such breach not be cured or corrected
      prior to the effective date of such notice, or action diligently undertaken
      to
      cure or correct the breach if cure or correction cannot be completed prior
      to
      such effective date, then the termination shall be effective on the date
      specified in the notice of termination. If the breach is cured or corrected
      in a
      timely manner (or all steps to remedy the situation were timely taken), the
      notice of termination shall be deemed rescinded.

    


    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    ARTICLE
      8 - PERFORMANCE ADJUSTMENTS

    


    Section
      8.1 - [Intentionally
      Omitted]

    


    Section
      8.2 - Performance Plan Metrics

    


    Republic’s
      operating performance for the fleet of Aircraft in the Service under this
      Agreement shall be tracked by US Airways each day based upon the following
      metrics: 

    


    (a) Controllable
      Fleet Launch:“Controllable
      Fleet Launch Percentage” is defined as the percentage of the Aircraft fleet
      departing from the gate within [*]
      of the
      scheduled departure time on its first flight of the day, excluding [*].

    


    (b) Controllable
      On Time Departure Percentage:“Controllable
      On-Time Departure Percentage” is defined as the percentage of Aircraft
      departures completed within [*]
      of its
      scheduled departure time, excluding [*].
      Any
      departure delay greater than [*]
      shall be
      considered a cancellation for purposes of calculating Controllable On-Time
      Departure Percentage, and a “departure” will not be deemed to have occurred if a
      flight returns to the gate without leaving the air field.

    


    (c) Controllable
      Completion Percentage:“Controllable
      Completion Percentage” is defined as the percentage of scheduled Aircraft
      departures completed[*].
      

    


    Within
      [*]
      days
      after the end of each calendar month during the Term, US Airways shall compute
      the metrics defined above and provide to Republic a summary statement showing
      the operating performance of Republic.

    


    Section
      8.3 - Performance Plan Penalties and Incentives 

    


    (a) Performance
      Penalties.
      Upon
      the occurrence and continuance of [*]
      or more
      of the following events for a period of [*]
      or more
      consecutive calendar months during the Term in which Republic operates
[*]
      or more
      Aircraft in the Service, and no Performance Exception or Force Majeure Event
      has
      occurred for any such month, then Republic shall pay to US Airways [*]
      each
      calendar month during such period:

    


      (i)
       Republic’s
      Controllable Fleet Launch Percentage is less than [*];
      

    (ii) Republic’s
      Controllable On-Time Departure Percentage is less than [*];

    (iii)
       Republic’s
      Controllable Completion Percentage is less than [*].

    (b) Performance
      Incentives.
      Upon
      the occurrence and continuance of [*]
      of the
      following events for any period of two consecutive calendar months during the
      Term, then US Airways shall pay to Republic [*]
      for each
      calendar month during such period:

    


    (i)
       Republic’s
      Controllable Fleet Launch Percentage is greater than [*];
      

    (ii) Republic’s
      Controllable On-Time Departure Percentage is greater than [*];

    (iii)
       Republic’s
      Controllable Completion Percentage is greater than [*].

    


    Section
      8.4 - Performance Exceptions

    


    A
      “Performance Exception” with respect to the failure on the part of Republic to
      achieve the performance metrics of Controllable Fleet Launch Percentage,
      Controllable On-Time Departure Percentage and Controllable Completion Percentage
      as defined in Section 8.3(a) and 8.3(b) shall be deemed to have occurred if
      any
      of the following conditions are met:

    _____

    *
      Confidential

    (a) Republic’s
      performance, [*].
      

    


    (b) The
      failure to achieve the performance metric is directly attributable to
[*],
      Republic shall promptly notify US Airways in writing of such event and each
      party shall promptly take steps to coordinate a commercially reasonable cure
      for
      such event. If US Airways receives written notice of an event within its control
      to correct, US Airways shall promptly provide written notice to Republic of
      the
      date by which such event is expected to be cured and shall adjust Republic’s
      affected performance metrics to the extent affected by such event during the
      period prior to such cure taking effect. 

    


    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    ARTICLE
      9 - SERVICE MARK LICENSE FOR SERVICES PROVIDED PURSUANT
      TO THIS AGREEMENT

    


    Section
      9.1 - Grant of License

    


    US
      Airways hereby grants to Republic a nonexclusive, nontransferable license to
      use
      such US Airways Servicemarks as US Airways designates from time-to-time in
      connection with the services to be rendered by Republic under this Agreement;
      provided, however,
      that at
      any time during the term of this Agreement, at US Airways sole discretion,
      US
      Airways may alter, amend or revoke the license hereby granted. US Airways may
      require, at US Airways’ expense, Republic’s use of any new or different US
      Airways Servicemarks in conjunction with the air transportation services
      provided hereunder as US Airways may determine in the exercise of its sole
      discretion and judgment.

    


    Section
      9.2 - Terms and Conditions Governing Trademark
      License

    


    (a) Republic
      acknowledges that its use of the US Airways Servicemarks creates in Republic
      no
      rights in those marks and that all use of the US Airways Servicemarks by
      Republic inures to the benefit of US Airways.

    


    Republic
      recognizes that US Airways has over the years built up a reputation as a
      provider of the highest quality services and that US Airways’ reputation and
      goodwill associated with the US Airways Servicemarks extend throughout the
      United States and internationally. Use of the US Airways Servicemarks by
      Republic and the Services provided by Republic shall conform in manner and
      style
      with quality standards specified by US Airways, so long as such quality
      standards are not inconsistent with standard industry practice for regional
      jet
      carriers, are consistent with those prescribed for other carriers operating
      under US Airways Servicemarks, comply with all Regulations, and are consistent
      with this Agreement. 

    _____

    *
      Confidential

     

    (b) Republic
      agrees that, in providing the Services it shall not advertise or make use of
      the
      US Airways Servicemarks without the prior written approval of US Airways. US
      Airways shall have absolute discretion to withhold its consent concerning any
      and all such advertising and use of the US Airways Servicemarks in advertising
      by Republic. In the event US Airways approves the use of such US Airways
      Servicemarks in any advertising, such advertising shall identify US Airways
      as
      the owner of such servicemarks, and conform with any additional requirements
      specified by US Airways. 

    


    (c) To
      the
      extent that Republic is licensed to use the US Airways Servicemarks, such
      Servicemarks shall only be used in conjunction with the Services and may not
      be
      used in connection with any other businesses or activities of Republic or any
      other entity.

    


    (d) Nothing
      in this Agreement shall be construed to give Republic the exclusive right to
      use
      the US Airways Servicemarks, or to abridge US Airways’ right to use and/or
      license its Servicemarks, and US Airways hereby reserves the right to continue
      use of the US Airways Servicemarks and to license such other uses of said
      Servicemarks as US Airways may desire.

    


    (e) No
      term
      or provision of this Agreement shall be construed to preclude the use of the
      Servicemarks “US Airways Express” or the aircraft exterior color decor and
      patterns by other individuals or entities not covered by this
      Agreement.

    


    (f) Upon
      the
      cancellation or termination of this Agreement, the license and use of the US
      Airways Servicemarks by Republic shall cease, and Republic shall not be
      permitted to use such Servicemarks thereafter, except as may be appropriate
      in
      any phase-out of service of this Agreement as determined by US Airways in US
      Airways’ sole discretion.

    


    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    ARTICLE
      10 - FORCE MAJEURE

    


    Section
      10.1 - Force Majeure 

    


    Notwithstanding
      anything to the contrary herein contained, neither party shall be liable to
      the
      other for loss, injury, damage or failure to perform under this Agreement caused
      by any of the following; provided that such events are beyond the reasonable
      control of such party (such events are referred to herein as “Force Majeure
      Events”): acts of God; acts of terrorism; governmental sanctions; war; strikes;
      labor disputes (whether causing such loss, injury, damage or failure to perform
      directly or indirectly); work stoppage; natural disaster, earthquake, fire,
      flood, or other weather-related reason; subject to each party’s obligation to
      use its commercially reasonable efforts to obtain and maintain the governmental
      authorizations, licenses, approvals, registrations and filings required under
      Regulations in order to execute or perform its obligations under this Agreement,
      failure or refusal on the part of any government or governmental agency to
      grant
      or issue necessary approvals or authorizations or the revocation of any such
      approvals; mechanical difficulties with, or damage to or destruction of, flight
      equipment; grounding of a substantial number the Aircraft by any governmental
      agency; revocation of such party’s operating certificate; activation of the U.S.
      Civil Reserve Air Fleet; or other acts of government or any other cause which
      is
      beyond the reasonable control of such party and which shall materially disrupt,
      delay, suspend, limit, curtail or prevent performance of such Party’s
      obligations under this Agreement; provided, however, that Force Majeure Events
      shall not excuse the obligations of the Parties under Article 5 or Article
      6 of
      this Agreement. 

    


    Section
      10.2 - Resumption of Service

    


    The
      party
      prevented from complying with its obligations hereunder as a result of a Force
      Majeure Event shall promptly notify the other party thereof and, at the request
      of the other Party, the Parties shall make all reasonable efforts to meet within
      48 hours of receipt of such notice by the other Party to discuss the
      circumstances and potential solutions to such Force Majeure Event, including
      mitigation of such Force Majeure Event. If either Party relies on the occurrence
      of a Force Majeure Event as a basis for being excused from performance of its
      obligations hereunder, the Party relying on the Force Majeure Event shall:
      (i)
      provide an estimate of the expected duration of the Force Majeure Event and
      its
      probable impact on the performance of such Party’s obligations under this
      Agreement, (ii) exercise commercially reasonable efforts to continue to perform
      its obligations under this Agreement, (iii) promptly use commercially reasonable
      efforts to correct or cure the Force Majeure Event and mitigate any damages
      related thereto and (iv) provide prompt notice to the other Party of the
      cessation, if any, of the Force Majeure Event. 

    


    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

    ARTICLE
      11 - NOTICES

    


    Except
      where specified elsewhere in this Agreement, any and all notices, approvals
      or
      demands required or permitted to be given by the Parties hereto (a) shall be
      effective upon receipt, (b) shall be made in writing and (c) may be sent by
      certified mail, postage prepaid, overnight courier, hand delivery, facsimile
      or
      electronic mail. When sent by mail, such notices shall also be sent by facsimile
      and by electronic mail. Notices shall be addressed as follows, provided that
      each party shall have the right to update, supplement or change such notice
      persons and/or addresses by providing written notice to the other
      party:

                       

     

    
      	 US Airways,
              Inc.:                 	 Republic Airline,
              Inc.:
	 	 
	Andrew Nocella                 	
              Bryan
                Bedford 

            
	SVP, Marketing & Planning                	Chief
              Executive Officer
	US
              Airways, Inc.	8909 Purdue Road, Suite 300
	2345 Crystal Drive	Indianapolis,
              IN 46268
	Arlington, VA 22227                 	Telephone: (317) 484-6047
	
              Email:
                andrew_nocella@usairways.com

            	Facsimile:
              (317) 484-4547
	Telephone: 703- 872-5222                	 
	Facsimile: 703-872-5534                	with copies delivered to:
	 	Tim
              Dooley
	with copies delivered at the same
              address to the attention of:              	Director FPA
	General Counsel                 	Telephone: (317) 487-4308 
	US Airways, Inc.	Facsimile: (317) 484-4580 
	 	 
	 	Arthur Amron 
	 	Principal & General Counsel
	 	Wexford Capital LLC
	 	411 West Putnam Avenue
	 	Greenwich, CT 06830
	 	Telephone: (203) 862-7012
	 	Facsimile: (203)
              862-7312


    

    
 

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    ARTICLE
      12 - MISCELLANEOUS

    


    Section
      12.1 - Entire Agreement/Amendments/Counterparts

    


    This
      Agreement constitutes the entire agreement between the parties hereto. This
      Agreement may be amended only in writing, executed by a duly authorized
      representative of each party. This Agreement may be executed by the Parties
      hereto in one or more separate counterparts, each of which, when so executed
      and
      delivered, shall be an original, but all such counterparts shall together
      constitute but one and the same instrument.

    


    Section
      12.2 - Headings

    


    The
      division of this Agreement into Articles, Sections and subsections are for
      convenience of reference only and shall not affect the construction or
      interpretation hereof.

    


    Section
      12.3 - Severability

    


    Any
      provision of this Agreement which may be determined by a court of competent
      jurisdiction to be invalid or unenforceable in such jurisdiction shall, as
      to
      such jurisdiction, be ineffective to the extent of such invalidity or
      unenforceability without invalidating or rendering unenforceable any remaining
      terms and provisions hereof, and any such invalidity or unenforceability in
      any
      jurisdiction shall not invalidate or render unenforceable such provision in
      any
      other jurisdiction. The Parties shall negotiate in good faith to replace such
      provision with an appropriate legal provision. To the extent permitted by
      Regulations, the Parties hereto hereby waive any provision thereof that renders
      any term or provision hereof invalid or unenforceable in any
      respect.

    


    Section
      12.4 - Waiver

    


    Except
      as
      otherwise specifically provided in this Agreement, a waiver by either party
      of
      any breach of any provision of this Agreement by the other party, or either
      party’s election not to exercise any remedy or enforce any right under this
      Agreement, shall not be deemed a waiver of any subsequent breach or of any
      right
      to exercise any remedy or enforce any right in the future under this Agreement,
      and all provisions of this Agreement shall remain in full force and effect.
      

    


    Section
      12.5 - Assignments

    


    The
      Parties agree that this Agreement and the rights and obligations established
      hereunder, may not be assigned, in whole or in part, without the prior written
      consent of the other, where such consent shall not be unreasonably withheld,
      except as follows:

    


    (a) US
      Airways may assign its rights and delegate its obligations hereunder, without
      any prior approval of Republic, to US Airways Group, Inc., or any subsidiary
      or
      affiliate of that company, or any successor through merger, sale of
      substantially all of its assets, or by operation of law. 

    


    (b) Republic
      may assign its rights and delegate its obligations hereunder, without any prior
      approval of US Airways, (i) to any certificated air carrier owned or controlled
      by Republic or Wexford, or (ii) to any certificated air carrier that is a
      subsidiary or affiliate of Republic, Republic or Wexford. Any such assignment
      by
      Republic shall be to an entity in compliance with US Airways “Jets for Jobs”
      protocol as ratified by US Airways ALPA in Letter of Agreement #91 to the US
      Airways - ALPA Collective Bargaining Agreement, or as further amended before
      the
      date of such assignment, provided that neither Republic nor any such assignee
      shall not be required to exert other than its commercially reasonable efforts
      to
      comply with any such further amendments. The parties recognize that US Airways
      is obligated to pay as a Pass Through Cost any additional cost incurred as
      a
      result of such compliance. Notwithstanding any such assignment, the Parties
      agree that they shall remain responsible for their financial obligations under
      this Agreement.

    


    Section
      12.6 - Governing Law / Jury Trial Waiver

    


    This
      Agreement shall be governed by, construed and enforced in accordance with the
      laws of the United States and the State of New York, as though the entire
      contract were made and to be performed in New York and without regard to New
      York’s conflict of laws, rules, or statutes. The Parties further agree that they
      consent to the exclusive jurisdiction of the Courts of New York or the federal
      courts located within the State of New York and waive any objection to
      jurisdiction, including any objection based on forum
      non conveniens.
      The
      Parties further agree to waive any right to trial by jury in any action or
      proceeding relating to this Agreement or seeking to enforce any rights under
      this Agreement.

    


    Section
      12.7 - No Franchise

    


    Nothing
      is this Agreement is intended to imply or confer upon the arrangements
      contemplated hereunder, any status as a “franchise” as recognized under any
      state law. Accordingly, no franchiser-franchisee relationship exists between
      US
      Airways and Republic as a result of this Agreement.

    


    Section
      12.8 - Additional US Airways Rights

    


    US
      Airways shall have the right, on ninety (90) days prior written notice, to
      provide Aircraft Hull and Liability Insurance at the levels specified in Section
      6.3 hereof and on terms otherwise reasonably acceptable to Republic, its lenders
      and aircraft lessors instead of paying Republic for such coverage.

    


    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

    ARTICLE
      13 - CONFIDENTIALITY

    


    Section
      13.1 - Confidentiality of Agreement

    


    The
      Parties agree that the terms of this Agreement and any other Confidential
      Information (as defined in Section 13.2 hereof) furnished hereunder shall be
      treated as confidential and shall not be disclosed to any other person or entity
      without the express written consent of the other party; provided that each
      party
      may, without the consent of the other party, disclose Confidential Information
      as expressly permitted below:

    


    (a) to
      directors, officers, employees, permitted assigns and agents of each party
      and
      their respective Affiliates (as defined in Section 13.4 or 13.5 hereof);
      or

    


    (b) to
      prospective financial institutions for the purposes of providing financing
      of
      Aircraft; or

    


    (c) to
      subcontractors, auditors, accountants or legal and financial advisors of such
      party and its Affiliates; or

    


    (d) to
      such
      other parties as may be required by any Regulations, by subpoena or by any
      other
      legal process, including in connection with any SEC or other regulatory filing
      by the Parties or their affiliates, including the filing of an S-1 registration
      statement and any related documents; or 

    


    (e) to
      any
      Regulatory Authority in connection with Republic’s certification process,
      including representatives of the DOT and FAA if requested by any such
      parties.

    


    In
      the
      event that a disclosure becomes necessary, as provided in this sub-clause (d)
      or
      (e) of this Section 13.1, each party shall consult and cooperate with the other
      party to limit (to the extent permissible) the scope and form of such
      disclosure. In the event of such disclosure required by law, only those portions
      of this Agreement required to be disclosed shall be released. The disclosing
      party shall make good faith efforts to minimize the portions to be disclosed
      and
      shall seek confidential treatment by the receiving party or agency or any
      portions disclosed. In the event of one party being served a subpoena or
      discovery request, prior to responding to the subpoena or request, the party
      served shall notify the other party, so that the other party shall have an
      opportunity to contest, if it chooses to do so, the disclosure of the content
      of
      this Agreement.

    


    Section
      13.2 - Confidential Information

    


    “Confidential
      Information” means all restricted information having business value, regardless
      of the form in which it exists, including, without limitation, the terms of
      this
      Agreement, written documents, oral communications, recordings, videos, software,
      databases, business plans, and electronic/magnetic media, provided to or
      observed by either Party pursuant to this Agreement, including information
      owned
      or provided by either Party to the other Party, except otherwise as expressly
      provided in Section 13.3 hereof. Each Party agrees that it shall maintain all
      Confidential Information in confidence using the same degree of care with
      respect to such Confidential Information as it uses in protecting its own
      proprietary information, and each Party shall use it solely for purposes of
      its
      own business operations in accordance with the terms hereof. Such Confidential
      Information shall be distributed within each Party’s company only to personnel
      with a need to know such information for permitted purposes or in compliance
      with a court order or statutory or regulatory requirements; provided, however,
      that prior to any such latter disclosure, the Party shall inform all such
      persons of the confidential nature of the information, and that it is subject
      to
      this non-disclosure obligation, and shall further instruct such persons to
      treat
      such information confidentially. The Parties expressly acknowledge and agree
      that the terms and conditions of this Agreement and any reports, invoices,
      or
      other communications between US Airways and Republic given hereunder or in
      connection herewith constitute Confidential Information of both
      Parties.

    


    Section
      13.3 - Exclusions from Confidential Information

    


    Notwithstanding
      the foregoing, Confidential Information shall not be considered confidential
      and
      each party and their respective Affiliates may disclose any item of Confidential
      Information without restriction in any of the following circumstances if such
      item:

    


    (a) is
      publicly available (either to the general public or to any relevant trade or
      industry) prior to either Party’s receipt of it from the other Party
      hereto;

    


    (b) is
      thereafter made publicly available (either to the general public or to any
      relevant trade or industry) by another Party hereto or by a third party which
      is
      entitled to make such item publicly available;

    


    (c) becomes
      available to either Party hereto on a non-confidential basis from a source
      which
      has represented to such Party that such source is entitled to disclose it;
      or

    


    (d) was
      known
      to either Party hereto on a non-confidential basis prior to its disclosure
      to
      such party by another Party hereto. The provisions of this Article 13 shall
      survive any termination of this Agreement for a period of three (3)
      years.

    


    Section
      13.4 - Information Shared with US Airways Group, Inc.

    


    Notwithstanding
      anything to the contrary herein, Republic acknowledges and agrees that any
      Confidential Information shared or given to US Airways pursuant to this
      Agreement may be shared by US Airways on a confidential basis with US Airways
      Group, Inc., and US Airways Affiliates, where US Airways Affiliates is defined
      as subsidiaries of US Airways Group, Inc., each of which shall be deemed an
      “Affiliate” of US Airways for purposes of this Article 13.

    


    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

    Section
      13.5 - Information Shared with Wexford and Republic

    


    Notwithstanding
      anything to the contrary herein, US Airways acknowledges and agrees that any
      Confidential Information shared or given to Republic pursuant to this Agreement
      may be shared by Republic on a confidential basis with Wexford and Republic
      and
      entities that are wholly owned or controlled, directly or indirectly, by Wexford
      or Republic, each of which shall be deemed an “Affiliate” of Republic for the
      purposes of this Article 13.

    


    Section
      13.6 - Return of Documents 

    


    (a) Upon
      the
      reasonable request of either Party, each party shall immediately return to
      the
      other Party, at its own expense, all documents of the requesting Party and
      all
      copies of such documents in its possession or under the control either directly
      or indirectly of its agents. Each Party acknowledges and agrees that the other
      Party shall have the right to exercise this right as many times as it deems
      necessary throughout the term of this Agreement.

    


    (b) Upon
      termination of this Agreement, with or without cause and for any reason, each
      Party shall, within ninety (90) days of such termination, either deliver to
      the
      other Party, or destroy, all of such other Party’s Confidential Information
      (including copies thereof encoded or stored on magnetic or other electronic
      media or processors; provided, however, that neither Party shall be required
      to
      purge or destroy any Confidential Information for so long as such Confidential
      Information is reasonably necessary in connection with the resolution of any
      disputes which may have at the time arisen pursuant to the terms of this
      Agreement; provided, further, that any Confidential Information not purged
      or
      destroyed pursuant to the preceding proviso shall be purged or destroyed as
      soon
      as it is no longer reasonably necessary for resolution of disputes.

    


    Section
      13.7 - Remedies

    


    Each
      party acknowledges and agrees that the Party disclosing Confidential Information
      under this Agreement shall have no adequate remedy at law if there is a breach
      or threatened breach of this Article 13 and accordingly, that the disclosing
      Party shall be entitled to an injunction or other equitable or preventative
      relief against the other Party or its representatives for such breach or
      threatened breach. Nothing herein shall be construed as a waiver of any other
      legal or equitable remedies which may be available to the disclosing Party
      in
      the event of a breach or threatened breach of this Article 13 and the disclosing
      Party may pursue any other such remedy, including the recovery of
      damages.

    


    Section
      13.8 - Survival

    


    The
      confidentiality obligations of the Parties contained in this Article 13 shall
      survive the termination of this Agreement.

    


    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

    ARTICLE
      14 - DISPUTE RESOLUTION

    


    Section
      14.1 - Certain Disputes

    


    The
      Parties shall attempt to resolve any dispute, difference, controversy or claim
      arising out of or relating to this Agreement through mutual negotiations,
      consultation and discussions for a period of thirty (30) days.

    


    Section
      14.2 - Dispute Resolution Proceedings

    


    In
      the
      event that the Parties are unable to settle their differences or disputes which
      may arise between them under Section 14.1, above, then either Party may submit
      such dispute (“Dispute”) for binding arbitration with the following
      conditions:

    


    (a) 
      the
      proceeding shall be held before a panel of three arbitrators where each Party
      shall choose one arbitrator and the third shall be selected jointly by the
      two
      appointed arbitrators and, where such agreement cannot be reached, by
      appointment of the Administrator of the American Arbitration Association or
      his
      or her designee;

    


    (b) except
      as
      modified by this Article, the Arbitration Rules of the American Arbitration
      Association shall govern the arbitration;

    


    (c) the
      proceeding shall be conducted in the State of New York;

    


    (d) the
      law
      of the United States and the State of New York shall be applied without regard
      to New York conflict of laws statutes;

    


    (e) the
      proceeding shall be closed except to the Parties, their attorneys,
      representatives, witnesses and experts, all of whom must agree to maintain
      the
      confidentiality of the dispute;

    


    (f) the
      existence, proceeding and resolution of the Dispute shall be kept confidential
      by the Parties and shall only be disclosed as permitted by Article
      13;

    


    (g) 
      the
      arbitration shall be binding upon the parties unless mutually agreed otherwise
      in writing; and

    


    (h) each
      Party shall be responsible for its own costs and expenses incurred as a result
      of, or in connection with the arbitration, including the costs, fees, and
      expenses of its own representatives and designated arbitrator, in the
      proceeding, except that the costs of the third arbitrator shall be shared
      jointly by the Parties.

    



    
      
        
            

          
            	
                     

                  	 	 


          

          


        

        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, US
      Airways and Republic have caused this Agreement to be executed by their duly
      authorized representatives on the day and year first above written.

     

    


     

    
      
        	 REPUBLIC AIRLINE,
                INC. 	 	 	 US AIRWAYS,
                INC.
	 	 	 	 
	/s/
                Bryan Bedford	 	 	 By: Ronald
                E. Stanley
	
                

              	 	 	
                

              
	Name:
                Bryan Bedford
Title: Chief
                Executive Officer
	 	 	Name:
                Ronald E. Stanley
Title: EVP
                - Finance and
                CFO



      




    
      
        
            

          
            	
                     

                  	 	 


          

          


        

        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    


    Exhibit
      2.2 - Schedule Requirements 

    


    The
      weekly schedules for the Aircraft specified by US Airways must meet the
      following minimum and maximum schedule parameters.

    Minimum   Maximum

    Scheduled
      Block Hours per Aircraft per Day  [*]    [*]

    Scheduled
      Departures per Aircraft per Day  [*]    [*]

    Available
      Seat Miles per Aircraft per Day  [*]    [*]

    


    Note:
      the
      above minimum and maximum schedule parameters apply only to those Aircraft
      scheduled in revenue service, not to spare aircraft.

    


    US
      Airways shall meet the following criteria in devising the schedule:

    


    1. Aircraft
      Turn Times

    [*]

    2. Aircraft
      Maintenance Requirements

    [*] 

    


    3.
       Maintenance
      Base Operations

    [*]

    


    4. Maintenance
      Base

    [*] 

    


    5. Crew
      Overnights

    [*]

    


    6. Crew
      Bases

    The
      schedule shall allow for the operation by Republic of the following crew bases:
      [*].
      

    


    7. Hub
      Arrivals/Departures

    [*] 

    


    7. Consent
      to Schedule Changes

    To
      the
      extent that US Airways’ schedule falls outside of the criteria set forth herein,
      US Airways shall request Republic to consent to such schedule and Republic
      shall
      not unreasonably withhold such consent provided that the schedule being
      requested shall not impose additional costs upon Republic and/or make Republic’s
      compliance with its performance requirements more difficult, further provided
      that US Airways shall have the right to reimburse Republic for such additional
      costs and/or adjust the performance criteria so that the immediately proceeding
      proviso shall no longer be applicable to the schedule request in
      question.

    _____

    *
      Confidential


    
      
        
            

          
            	
                     

                  	 	 


          

          


        

        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    


    Exhibit
      2.7 - DIVISION OF RESPONSIBILITIES 

    


    (1) The
      parties shall be responsible for providing, at their own cost, service and
      materials, as set forth below, Assignment of services and materials to
      categories shall be according to generally accepted accounting principals and
      in
      keeping with Airline Industry Standard Functional Classifications as required
      for reporting Form 41 data to the Department of Transportation. Except as
      otherwise provided in Articles 4 and 5, the assignment of responsibility shall
      be as follows:

    


    To
      Republic   To
      US
      Airways, Inc. 

    [*][*][*][*][*][*][*][*][*][*][*][*][*][*]

    


    _____

    *
      Confidential


    
      
        
            

          
            	
                     

                  	 	 


          

          


        

        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    


    Exhibit
      5.1 - Pricing Model

    


    
      	 	
              [*]

            	
              [*]

            
	
              [*]

            	 	 
	
              [*]

            	
              [*]

            	
              [*]

            
	
              [*]

            	
              [*]

            	
              [*]

            
	
              [*]

            	
              [*]

            	
              [*]

            
	
              [*]

            	
              [*]

            	
              [*]

            
	 	 	 
	
              [*]

            	 	 
	
              [*]

            	
              [*]

            	
              [*]

            
	
              [*]

            	
              [*]

            	
              [*]

            
	
              [*]

            	
              [*]

            	
              [*]

            
	
              [*]

            	
              [*]

            	
              [*]

            
	 	 	 
	
              [*]

            	 	 
	
              [*]

            	
              [*]

            	
              [*]

            
	
              [*]

            	
              [*]

            	
              [*]

            
	
              [*]

            	
              [*]

            	
              [*]

            
	
              [*]

            	
              [*]

            	
              [*]

            
	 	 	 
	
              [*]

            	 	 
	
              [*]

            	
              [*]

            	
              [*]

            
	
              [*]

            	
              [*]

            	
              [*]

            
	
              [*]

            	
              [*]

            	
              [*]

            
	 	 	 
	
              [*]

            	 	 
	
              [*]

            	
              [*]

            	
              [*]

            
	
              [*]

            	
              [*]

            	
              [*]

            
	 	 	 
	
              [*]

            	 	 
	
              [*]

            	
              [*]

            	
              [*]

            
	
              [*]

            	
              [*]

            	
              [*]

            
	 	 	 
	
              [*]

            	 	 
	
              [*]

            	
              [*]

            	
              [*]

            
	
              [*]

            	
              [*]

            	
              [*]

            
	 	 	 
	
              [*]

            	
              [*]

            	
              [*]

            
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 


    

    
 

    [*][*][*][*][*][*][*][*][*] 

     

    _____

    *
      Confidential

    [*]   [*]

    [*] [*]

    [*][*][*][*][*][*][*] 

    


    


    [*][*][*]

    


    [*]

    


    [*]

    


    _____

    *
      Confidential


    
      
        
            

          
            	
                     

                  	 	 


          

          


        

        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    


    [*]

    


    [*]

    
      	 	 	 	 	 	 	 
	
              [*]:

            	 	 	 	 	
              [*]

            	
              [*]

            
	
              [*]

            	
              [*]

            	 	 	 	
              [*]

            	
              [*]

            
	
              [*]

            	
              [*]

            	 	 	 	 	 
	
              [*]

            	
              [*]

            	 	 	 	 	 
	
              [*]

            	
              [*]

            	 	 	 	 	 
	
              [*]

            	
              [*]

            	 	 	 	 	 
	
              [*]

            	
              [*]

            	 	 	 	 	 
	
              [*]

            	
              [*]

            	 	 	 	 	 
	
              [*]

            	
              [*]

            	 	 	 	 	 
	 	 	 	 	 	 	 
	
              [*]

            	
              [*]

            	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
              [*] 

            	 	 	 	 	 	 
	
              [*]

            
	
              [*]

            


    

    _____

    *
      Confidential

     

    
      
        
        

      

      
        -33-