Exhibit 10.5 Slot Option Agreement


                                                                                                    EXHIBIT
      10.5

    CONFIDENTIAL
      TREATMENT

    REQUEST
      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.

            


    SLOT
      OPTION AGREEMENT

    


    


    This
      SLOT
      OPTION AGREEMENT (this “Agreement”)
      is
      entered into as of the 22nd
      day of
      September, 2005, by and between Republic Airways Holdings Inc., a Delaware
      corporation (“Republic”)
      and US
      Airways, Inc., a Delaware corporation (including, as the context may require,
      on
      or after the Effective Date, as reorganized pursuant to the Bankruptcy Code)
      (“Airways”).

    


    WHEREAS,
      pursuant to that certain Investment Agreement, dated as of March 15, 2005,
      among
      Wexford Capital LLC (“Wexford”),
      Republic, Airways and US Airways Group, Inc., (the “Investment
      Agreement”),
      Airways was granted an option to sell the Commuter Slots to Republic (the
“Slots
      Option”),
      all
      as set forth on Exhibit A-1 to the Investment Agreement; and

    


    WHEREAS,
      Republic and Airways desire to enter into this Agreement, as contemplated by
      Exhibit A-1 to the Investment Agreement, in order to reflect the rights
      and
      obligations of the parties with respect to the Slots Option.

     

    NOW,
      THEREFORE, in consideration of the promises and the mutual agreements contained
      herein and for other good and valuable consideration, it is understood and
      agreed as follows:

     

    1. Definitions.
      Unless
      the context otherwise requires, (i) all definitions of documents shall
      refer to such documents as they may now or later be amended or supplemented,
      and
      (ii) all definitions of parties shall be deemed to include the successors
      and permitted assigns of such parties. For purposes of this Agreement, the
      following terms shall have the following meanings:

    


    “Acquired
      Slot Trust Agreement”
      means
      that certain trust agreement to which Republic transferred the Commuter Slots
      concurrent with the exercise of the Repurchase Option.

     

    “Affiliate”
      means,
      with respect to any specified Person, a Person that directly, or indirectly
      through one or more intermediaries, controls, is controlled by, or is under
      common control with, the specified Person, where “control” (including the terms
“controlling,”“controlled by” and “under common control with”) means the
      possession, directly or indirectly, of the power to direct or cause the
      direction of the management and policies of such Person, whether through the
      ownership of voting securities, by contract, or otherwise; provided, however,
      that when used with respect to Airways, “Affiliate” shall not include Retirement
      Systems of Alabama Holdings LLC or any entity that would be deemed an Affiliate
      of Airways solely by virtue of Retirement Systems of Alabama Holdings LLC being
      a stockholder in Airways.

    


    “Aircraft”
      means
      the “Aircraft” as defined in the Global Aircraft Transaction
      Agreement.

    


    “Aircraft
      Transaction Agreements”
      means
      the “Aircraft Transaction Agreements” as defined in the Global Aircraft
      Transaction Agreement.

    


    “Bankruptcy
      Code”
      means
      Chapter 11 of the United States Bankruptcy Code.

    


    “Bankruptcy
      Court”
      means
      the United States Bankruptcy Court for the Eastern District of Virginia,
      Alexandria Division.

    


    “Business
      Day”
      means
      any day other than a Saturday, Sunday or a day on which banking institutions
      of
      the State of New York are authorized by law or executive order to
      close.

    


    “Cases”
      means
      the voluntary petitions filed by Airways under the Bankruptcy Code in Bankruptcy
      Court on September 12, 2004.

     

    “Certificated
      Air Carrier”
      means a
      Citizen of the United States holding an air carrier operating certificate issued
      pursuant to Chapter 447 of Title 49 of the United States Code,
      for
      aircraft capable of carrying ten or more individuals or 6,000 pounds or more
      of
      cargo.

    


    “Chautauqua”
      means
      Chautauqua Airlines, Inc.

     

    “Citizen
      of the United States”
      has the
      meaning given to such term in Section 40102(a)(15) of the Transportation Code,
      or any subsequent legislation that amends, supplements or supersedes such
      provisions.

    


    “Closing”
      shall
      have the meaning set forth in Section
      3
      hereof.

    


    “Closing
      Date”
      means
      the date the Closing occurs.

    


    “Code”
      means
      the Internal Revenue Code of 1986, as amended and any successor
      thereto.

    


    “Collateral
      Agent”
      means
      Republic, in its capacity as collateral agent for the Secured Parties under
      the
      Security Agreement and Trust Security Agreement.

    


    “Commuter
      Slots”
      means
      collectively, all the DCA Slots and the LGA Slots.

    


    “Confirmation
      Order”
      means a
      Final Order of the Bankruptcy Court approving the Plan.

     

    “Consent
      and Subordination”
      means
      the Consent and Subordination with respect to any interest in the Licensed
      Slots, which Consent and Subordination shall be substantially in the form set
      forth as Exhibit
      C
      hereto.

    


    “Currently
      Owned Aircraft”
      means
      the ten (10) EMB-170 aircraft currently owned by Airways to be purchased
      concurrently with the consummation of this Agreement by Republic or its designee
      in accordance with the Global Aircraft Transaction Agreement.

    


    “DCA”
      means
      Ronald Reagan Washington National Airport.

    


    “DCA
      Slots”
      means
      those certain Unrestricted Commuter Slots at DCA described in Schedule
      1
      attached
      hereto or such lesser number of Slots and any replacement therefore as provided
      in Section
      8
      hereof
      or Section
      10.3
      of the
      Slot License Agreement.

    


    “Deed
      of Conveyance”
      means
      the deeds of conveyance transferring and conveying to Republic the Commuter
      Slots, which deeds of conveyance shall be substantially in the form set forth
      as
Exhibit A
      hereto.

     

    “Effective
      Date”
      means
      the effective date of the Plan.

     

     

    “EMB
      Committed Aircraft”
      means
      the three (3) newly-manufactured Embraer ERJ 170-100 aircraft listed on
      Schedule 10 to the Global Aircraft Transaction Agreement.

     

    “Existing
      Jet Service Agreement” means
      the
      Amended and Restated Chautauqua Jet Service Agreement, dated April 20,
      2005, between Chautauqua and Airways.

     

    “Expenses”
      means
      the reasonable legal fees and expenses incurred by Republic in connection with
      the negotiation, execution and delivery of this Agreement, the Slot License
      Agreement and the other Slot/Gate Transaction Agreements.

     

    “FAA”
      means
      the Federal Aviation Administration.

    


    “Final
      Order”
      means
      an order or judgment of the Bankruptcy Court, or other court of competent
      jurisdiction, as entered on the docket in the Cases or the docket of any other
      court of competent jurisdiction, that has not been reversed, stayed, modified
      or
      amended, and as to which the time to appeal or seek certiorari or move for
      a new
      trial, reargument or rehearing has expired, and no appeal or petition for
      certiorari or other proceedings for a new trial, reargument or rehearing has
      been timely taken, or as to which any appeal that has been taken or any petition
      for certiorari that has been timely filed has been withdrawn or resolved by
      the
      highest court to which the order or judgment was appealed or from which
      certiorari was sought or the new trial, reargument or rehearing shall have
      been
      denied or resulted in no modification of such order.

     

    “Gates”
      means
      the gates as described in the Gates Option Agreement.

    


    “Gates
      Option Agreement”
      means
      the Gates Option Agreement dated as of the Closing Date between Republic and
      Airways. 

     

    “Global
      Aircraft Transaction Agreement”
      means
      that certain agreement between Republic and Airways dated as of
      September 21, 2005.

     

    “Governmental
      Authority”
      means
      the government of the United States of America, any other nation or any
      political subdivision thereof, whether state or local, and any agency,
      authority, instrumentality, regulatory body, court, central bank or other entity
      exercising executive, legislative, judicial, taxing, regulatory or
      administrative powers or functions of or pertaining to government.

     

    “Holder
      Affiliate”
      means
      an Affiliate of Airways that is a record holder of Commuter Slots, as set forth
      on Schedule
      1.

     

    “Jet
      Service Agreements”
      means
      the Existing Jet Service Agreement and New Jet Service Agreement. For avoidance
      of doubt, this Agreement shall be deemed a Slot Option Agreement under the
      Jet
      Service Agreement.

    


    “Law”
      means
      any law, treaty, statute, ordinance, code, rule or regulation of a Governmental
      Authority or judgment, decree, order, writ, award, injunction or determination
      of an arbitrator or court or other Governmental Authority.

     

    “LGA”
      means
      New York-LaGuardia Airport, located in New York, New York.

    


    “LGA
      Slots”
      means
      those certain Unrestricted Commuter Slots at LGA described in Schedule
      1
      attached
      hereto or such lesser number of Slots and any replacement therefore as provided
      in Section
      8
      hereof
      or Section
      10.3
      of the
      Slot License Agreement. 

    


    “License
      Fees”
      means
      the license fees as described in Section 5 of the Slot License
      Agreement.

    


    “Licensed
      Slots”
      has the
      meaning set forth in the Slot License Agreement.

    


    “Lien”
      means
      any mortgage, pledge, hypothecation, assignment, deposit arrangement,
      encumbrance, lien (statutory or other), charge, or preference, priority or
      other
      security interest or preferential arrangement of any kind or nature whatsoever
      intended for security (including any conditional sale or other title retention
      agreement, any easement, right of way or other encumbrance on title to real
      property, and any financing lease having substantially the same economic effect
      as any of the foregoing).

    


    “Material
      Adverse Effect”
      means
      any condition, circumstance or event or series of conditions, circumstances
      or
      events that, individually or in the aggregate, has had or could reasonably
      be
      expected to have (a) a material adverse effect on the condition (financial
      or
      otherwise), properties, assets, business, results of operations or prospects
      of
      Airways, (b) could reasonably be expected to prevent or limit or restrict in
      any
      material respect Airways or Republic from performing their respective
      obligations hereunder or under any of the Slot/Gate Transaction Agreements
      to
      which any of them are a party or consummating any of the transactions hereunder
      or thereunder, or (c) with respect to the Commuter Slots, could reasonably
      be expected to result in any Regulatory Impairment.

    


    “Material
      Breach”
      means
      (i) with respect to Airways, a “License Default” as defined in the Slot License
      Agreement, an Event of Default as defined in the Security Agreement, the
      occurrence of an event allowing Republic to terminate under either of the Jet
      Service Agreements or a breach of any material representation, warranty,
      covenant or agreement in this Agreement, any other Slot/Gate Transaction
      Agreement, the Aircraft Transaction Agreements, or the Investment Agreement
      that
      has not been cured within the applicable cure period or if there is no
      applicable cure period within ten (10) Business Days following receipt by
      Airways of written notice from Republic of such breach and (ii) with respect
      to
      Republic, the occurrence of a Termination Event under either of the Jet Service
      Agreements or a breach of any material representation, warranty, covenant or
      agreement in this Agreement, any other Slot/Gate Transaction Agreement, the
      Aircraft Transaction Agreements, or the Investment Agreement that has not been
      cured within the applicable cure period or if there is no applicable cure period
      within ten (10) Business Days following receipt by Republic of written notice
      from Airways of such breach.

     

    “Material
      Default”
      means,
      with respect to any agreement or document, a “Material Breach” on the part of
      Airways as defined in such agreement or document, or if such term is not defined
      therein, then a breach by Airways or any of its Affiliates of any
      representation, warranty, covenant or agreement made pursuant to such agreement
      or document, which breach is materially adverse to the interests, obligations,
      rights or benefits of Republic or any of its Affiliates under such agreement
      or
      document. 

    


    “New
      Jet Service Agreement”
      means
      the Republic Jet Service Agreement, dated as of September 2, 2005, between
      Airways and Republic Airline Inc.

    


    “Omnibus
      Order”
      means
      the Final Order of the Bankruptcy Court, dated March 31, 2005, authorizing
      Airways and its Subsidiaries to enter into and execute definitive documents
      to
      implement the terms of the Investment Agreement under Sections 105, 363, 364
      and
      365 of the Bankruptcy Code and applicable Bankruptcy Rules.

    


    “Person”
      means
      any individual, corporation, company, association, partnership, limited
      liability company, joint venture, trust, unincorporated organization, or
      Governmental Authority.

     

    “Plan”
      means
      the one or more plans of reorganization that restructure Airways.

     

    “Postpetition”,
      when
      used with respect to any agreement, instrument or any obligation arising
      thereunder, any claim or proceeding or any other matter, means an agreement
      or
      instrument that was first entered into or first became effective, an obligation,
      claim or proceeding that first arose or was first instituted, or another matter
      that first occurred, after the commencement of the Cases.

     

    “Purchase
      Price”
      has the
      meaning set forth in Section
      4.1
      hereof.

    


    “Regulatory
      Impairment”
      means,
      with respect to a Commuter Slot, any action by the United States Government
      or
      an instrumentality thereof, including by statute, regulation or otherwise
      (including, without limitation, as a result of violation of the Use Provisions
      or the termination or substantial modification of the Slot Regulations), not
      at
      the direct or indirect request or petition of Republic, which results or will
      result in the impairment, restriction or Withdrawal of such Commuter Slot;
      provided,
      however,
      that
      (i) any such action that impairs or restricts, but is not a Withdrawal
      of,
      a Commuter Slot shall not be Regulatory Impairment unless it materially
      adversely affects the value of the Commuter Slot to Republic or Republic’s
      ability to own, hold, use or transfer the Commuter Slot; (ii) with respect
      to a violation of the Use Provisions, no Regulatory Impairment shall exist
      with
      respect to the affected Commuter Slot while Airways is contesting such violation
      in good faith unless and until the Withdrawal of such Commuter Slot;
      (iii) no Regulatory Impairment shall exist with respect to a Withdrawal
      of
      a Commuter Slot resulting from a violation of the Use Provisions that results
      solely from the failure of Republic (or an Affiliate of Republic) to use such
      Commuter Slot at least eighty percent (80%) of the time for which such Commuter
      Slot has been allocated to Republic (or an Affiliate of Republic) for operations
      on behalf of Airways under the Jet Service Agreements; (iv) with
      respect to the termination or substantial modification of the Slot Regulations,
      the Regulatory Impairment shall exist at such time that the statute or
      regulation affecting such termination or modification is, in the case of a
      statute, signed into law or, in the case of regulation, when the regulation
      is
      issued, even if the effective date of the termination or modification is later;
      and (v) the
      termination of the Slot Regulations effective January 1, 2007 or any date
      thereafter, with respect to the LGA Slots, pursuant to 49 U.S.C.
      Section 41715, is not a Regulatory Impairment.

    


    “Republic
      Aircraft Transaction”
      means
      the aircraft purchase and lease transactions described more specifically in
      the
      Global Aircraft Transaction Agreement.

    


    “Republic
      Lien”
      means,
      with respect to Republic or the Commuter Slots, any Lien on such property which
      (a) arises from claims against or affecting Republic not related to
      any of
      the transactions contemplated by the Slot/Gate Transaction Agreements,
      (b) results from acts or omissions of Republic in violation of Republic’s
      obligations under any of the terms of the Slot/Gate Transaction Agreements,
      or
      not related to the transactions contemplated by the Slot/Gate Transaction
      Agreements, (c) is imposed as a result of Taxes against or affecting
      Republic or any of its Affiliates not required to be indemnified by Airways
      under any of the Slot/Gate Transaction Agreements or (d) claims against
      such person arising out of any transfer by Republic of its interest in the
      Commuter Slots or the Slot/Gate Transaction Agreements, other than a transfer
      permitted by the terms of the Slot/Gate Transaction Agreements or pursuant
      to
      the exercise of remedies set forth in Section 12.2 of the Slot License
      Agreement.

     

    “Repurchase
      Option”
      means
      the option of Airways to purchase the Beneficial Interest as provided in Section
      9 of the Slot License Agreement.

    


    “Restated
      Acquired Slot Trust Agreement”
      means
      the amendment and restatement of the Acquired Slot Trust Agreement.

    


    “Secured
      Parties”
      means
      Republic, Republic Airline, Chautauqua, Shuttle America Corporation and each
      Republic Designee (as defined in the Global Aircraft Transaction Agreement)
      that
      is or becomes a party to any of the Jet Service Agreements.

    


    “Security
      Agreement”
      means
      that certain Pledge and Security Agreement among Airways and Collateral Agent
      dated as of the Closing Date.

    


    “Slot”
      means
      all of the rights and operating authority granted by the FAA pursuant to Title
      14 of the United States Code of Federal Regulations, Part 93, Subparts K and
      S
      (as amended from time to time by regulation, order or statute, or any successor
      or recodified regulation, order or statute) to conduct one Instrument Flight
      Rules (as defined under the federal aviation regulations) landing or takeoff
      operation in a specified time period at LGA or DCA.

    


    “Slot/Gate
      Transaction Agreements”
      means
      this Agreement together with the Gates Option Agreement, the Slot License
      Agreement, the Acquired Slot Trust Agreement, the Restated Acquired Slot Trust
      Agreement, the Slot Trust License Agreement, the Security Agreement and the
      Trust Security Agreement. 

     

    “Slot
      License Agreement”
      means
      the Slot License Agreement dated as of the Closing Date between Airways and
      Republic.

    


    “Slot
      Regulations”
      means
      Title 14 of the United States Code of Federal Regulations, Part 93, Subpart
      K
      and S (as amended from time to time by regulation, order or statute, or any
      successor or recodified regulation, order or statute).

    


    “Slot
      Transaction Agreements”
      means
      each of the Slot/Gate Transaction Agreements other than the Gates Option
      Agreement.

     

    “Slot
      Trust”
      means
      the trust created by the Acquired Slot Trust Agreement and continued under
      the
      Restated Acquired Slot Trust Agreement. 

    


    “Slot
      Trust License Agreement”
      means
      that certain Slot Trust License Agreement between Airways and the Slot Trustee
      to be entered into upon exercise of the Repurchase Option.

    


    “Specified
      Slot/Gates Transaction Agreements”
      means
      this Agreement, the Investment Agreement, the Gates Option Agreement, the Slot
      License Agreement, the Security Agreement, the Slot Trust License Agreement,
      and
      the Restated Acquired Slot Trust Agreement and the Trust Security
      Agreement.

    


    “Subsidiary”
      means
      as to any Person, any other Person of which more than fifty percent (50%) of
      the
      shares of the voting stock or other voting interests are owned or controlled,
      or
      the ability to select or elect more than fifty percent (50%) of the directors
      or
      similar managers is held, directly or indirectly, by such first Person or one
      or
      more of its Subsidiaries or by such first Person and one or more of its
      Subsidiaries.

     

    “Taxes”
      means
      any and all present or future taxes, levies, imposts, duties, fees, deductions,
      charges or withholdings imposed by any Governmental Authority.

     

    “Trust
      Security Agreement”
      means
      that certain Trust Security Agreement dated as of the date of the exercise
      of
      the Repurchase Option between the Slot Trust and Collateral Agent in the form
      attached as Exhibit
      B
      hereto.

     

    “Unrestricted
      Commuter Slots”
      means
      the Slots allocated by FAA as commuter slots under Title 14 of the United States
      Code of Federal Regulations, Part 93, Subparts K and S (as amended from time
      to
      time by regulation, order or statute, or any successor or recodified regulation,
      order or statute imposing any operating limitations at the applicable airport),
      to which no restrictions or limitations apply (other than those expressly set
      forth in such regulation, order or statute).

    


    “Use
      Provisions”
      means
      Section 93.227 of the Slot Regulations (as amended from time to time by
      regulation, order or statute, or any successor or recodified regulation, order
      or statute).

    


    “Withdrawal”
      means,
      with respect to a Commuter Slot, the withdrawal, recall, taking control of,
      prevention or loss of use of, or the elimination or termination of, such
      Commuter Slot or the non-application, elimination or termination of the Slot
      Regulations with respect to DCA Slots or the non-application, elimination or
      termination of the Slot Regulations with respect to the LGA Slots on a date
      prior to January 1, 2007.

    


    2. Exercise
      of Slots Option.
      Airways
      has exercised the Slots Option pursuant to a notice dated June 23, 2005,
      given pursuant to the Investment Agreement. 

     

    3. Closing.

     

    3.1. Closing.
      The
      closing on the Slots Option (the “Closing”)
      shall
      be in accordance with the terms and conditions of this Agreement. The Closing
      shall be on September 22, 2005. Subject to the satisfaction or waiver of the
      conditions set forth in Sections 5
      and 6 hereof,
      at the Closing, Airways or its Affiliates shall sell and/or shall cause to
      be
      sold to Republic and Republic shall purchase, the Commuter Slots by transferring
      the amount of the Purchase Price to Airways’ account by wire transfer of
      immediately available funds, (ii) Republic shall license the Commuter Slots
      to
      Airways pursuant to the Slot License Agreement, (iii) Airways shall
      enter
      into the Security Agreement and (iv) Airways and Republic shall enter
      into
      the Gates Option Agreement.

     

    3.2. Place
      and Time of Closing
      Subject
      to the satisfaction or, if permissible, waiver of the conditions set forth
      in
Sections 5
      and 6
      hereof,
      the Closing shall occur at the New York offices of Vedder, Price, Kaufman &
      Kammholz, P.C. at 10:00 a.m. E.T. on the date specified in Section 3.1
      or at
      such other time, date and place as the parties may agree.

     

    3.3. EXCEPT
      AS
      OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR THE DEED OF CONVEYANCE TO
      THE
      CONTRARY, INCLUDING BUT NOT LIMITED TO SECTION 7.1,
      AS
      BETWEEN AIRWAYS AND REPUBLIC, UPON CLOSING REPUBLIC SHALL UNCONDITIONALLY ACCEPT
      THE COMMUTER SLOTS “AS-IS, WHERE-IS” UPON CLOSING. THE REPRESENTATIONS AND
      WARRANTIES SET FORTH IN THIS AGREEMENT OR THE DEED OF CONVEYANCE ARE EXCLUSIVE
      AND IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES OF AIRWAYS OF ANY KIND
      WHATSOEVER, WHETHER WRITTEN, ORAL, EXPRESS OR IMPLIED, AND AIRWAYS HAS NOT
      MADE
      AND SHALL NOT BE DEEMED TO HAVE MADE, AND REPUBLIC HEREBY DISCLAIMS, ANY
      REPRESENTATIONS OR WARRANTY (EXCEPT THE REPRESENTATIONS AND WARRANTIES SET
      FORTH
      IN THIS AGREEMENT OR THE DEED OF CONVEYANCE) AS TO THE TITLE, EXISTENCE, RIGHTS,
      VALUE, OPERATION, MARKETABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR
      PURPOSE OF ANY COMMUTER SLOT OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
      WHETHER WRITTEN, ORAL, EXPRESS OR IMPLIED, WITH RESPECT TO THE COMMUTER SLOTS,
      IT BEING UNDERSTOOD THAT ALL SUCH DISCLAIMED RISKS, AS BETWEEN AIRWAYS AND
      REPUBLIC, ARE TO BORNE BY REPUBLIC.

     

    4. Purchase
      Price.

     

    4.1. Amount.
      The
      purchase price (the “Purchase
      Price”)
      for
      the Commuter Slots is Fifty-One Million Six Hundred Forty Thousand United States
      Dollars (US$51,640,000), subject to adjustment as provided in Section 8.

     


    
      
        
          


          -
            -

          


           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    4.2. Purchase
      Price Adjustment.
      The
      Purchase Price shall be reduced in accordance with Section 8
      hereof
      for any Commuter Slot subject to Regulatory Impairment prior to the Closing
      and
      not replaced by Airways in accordance with Section 8.
      There
      shall be a [*]

    


    4.3. Payment.
      Subject
      to the satisfaction or, if permissible, waiver of the conditions set forth
      in
Section 5,
      on the
      Closing Date, Republic shall pay the Purchase Price, less the amount of the
      credit for the estimate of Expenses as set forth in Section
      4.2,
      by wire
      transfer of immediately available funds to the account designated by
      Airways.

     

    


    5. Conditions
      Precedent to Republic’s Obligations to Close and to Make Payment of the Purchase
      Price.
      Republic’s obligation to purchase the Commuter Slots and to pay the Purchase
      Price shall be subject to the fulfillment (or waiver in whole or in part by
      Republic in its sole discretion) of each of the following conditions
      precedent:

     

    5.1. The
      representations and warranties of Airways contained in this Agreement, and
      in
      the certificates and documents delivered to Republic on or prior to the Closing
      Date by Airways, shall be true on the date hereof and on the date of the Closing
      as though such representations and warranties were made on and as of such date
      (unless any such representation and warranty shall have been made with reference
      to a specified date, in which case such representation and warranty shall be
      true and accurate as of such specified date).

     

    5.2. Airways
      shall have performed and complied in all material respects with all of its
      obligations under this Agreement, the Aircraft Transaction Agreements, the
      Slot/Gate Transaction Agreements and the Jet Service Agreements to which it
      is a
      party.

     

    5.3. Airways
      and each Holder Affiliate shall have executed and delivered a Deed of
      Conveyance.

     

    5.4. Airways
      and each Holder Affiliate shall have made all filings with and provide all
      notices to the FAA required to effect transfer of the Commuter Slots to
      Republic, and Republic shall have received written confirmation from the FAA
      of
      such transfer.

     

    5.5. Airways
      shall have executed and delivered the Security Agreement, Slot License Agreement
      and the Gates Option Agreement.

     

    _____

    *
      Confidential

     

    5.6. The
      Currently Owned Aircraft shall concurrently herewith have been purchased in
      accordance with the Republic Aircraft Transaction, except as otherwise agreed
      upon by the parties.

     

    5.7. Republic
      shall have received executed counterparts of the following agreements,
      instruments, certificates or documents, and such counterparts (a) shall
      have been duly authorized, executed and delivered by the respective party or
      parties thereto, (b) shall be reasonably satisfactory in form and substance
      to Republic and (c) shall be in full force and effect:

     

    (i)  this
      Agreement;

     

    (ii)  the
      Slot
      License Agreement, the Gates Option Agreement and the Security
      Agreement;

     

    (iii)  the
      Global Aircraft Transaction Agreement;

     

    (iv)  the
      New
      Jet Service Agreement;

     

    (v)  (A) a
      copy of the Certificate of Incorporation and Bylaws of Airways and resolutions
      of the board of directors of Airways, in each case certified as of the Closing
      Date, by the Secretary or an Assistant Secretary of Airways, duly authorizing
      the sale of the Commuter Slots and the license of the Commuter Slots from
      Republic under the Slot License Agreement and the execution, delivery and
      performance by Airways of the Aircraft Transaction Agreements, the Slot/Gate
      Transaction Agreements and the New Jet Service Agreements required to be
      executed and delivered by Airways on or prior to the Closing Date in accordance
      with the provisions hereof and thereof; (B) an incumbency certificate
      of
      Airways as to the person or persons authorized to execute and deliver the
      relevant documents on behalf of Airways;

     

    (vi)  an
      Officer’s Certificate of Airways, dated as of the Closing Date, stating that its
      representations and warranties set forth in this Agreement are true and correct
      as of the Closing Date (or, to the extent that any such representation and
      warranty expressly relates to an earlier date, true and correct as of such
      earlier date);

     

    (vii)  the
      following opinions of counsel, in each case dated the Closing Date:

     

    (A)  (i) an
      opinion of Vedder, Price, Kaufman and Kammholz, P.C., special New York counsel
      to Airways; and

     

    (B)  an
      opinion of Airways’ Associate General Counsel.

     

    5.8. No
      Regulatory Impairment shall have occurred for which an adjustment has not been
      made and no event or circumstances shall exist that would be likely to result
      in
      any Regulatory Impairment with respect to any of the Commuter
      Slots.

     

    5.9. No
      change
      shall have occurred after the date of this Agreement in any applicable Law
      and
      no judgment, decree, order, writ, award or determination by any Governmental
      Authority shall have been issued that makes it a violation of Law for Airways
      or
      Republic to execute, deliver and perform the Slot/Gate Transaction Agreements
      to
      which either of them is a party.

     

     

    5.10. On
      the
      Closing Date, no event shall have occurred and be continuing, or would result
      from the sale of the Commuter Slots or the other transactions contemplated
      by
Section
      3.1,
      which
      constitutes a Material Default under any Slot/Gate Transaction Agreement, the
      Jet Service Agreements, the Investment Agreement or any Aircraft Transaction
      Agreement.

     

    5.11. All
      appropriate action required to have been taken prior to the Closing Date by
      the
      FAA, or any governmental or political agency, subdivision or instrumentality
      of
      the United States, in connection with the transactions contemplated by this
      Agreement shall have been taken, and all orders, permits, waivers,
      authorizations, written transfer confirmations, exemptions and approvals of
      such
      entities required to be in effect on the Closing Date in connection with the
      transactions contemplated by this Agreement shall have been issued and all
      such
      other orders, permits, waivers, authorizations, exemptions and approvals shall
      be in full force and effect on the Closing Date.

     

    5.12. Republic
      shall have received the written consent of the Air Transportation Stabilization
      Board (the “ATSB”)
      to the
      transactions contemplated by the Slot/Gate Transaction Agreements.

     

    5.13. Republic
      shall have received a release of the Lien on the Slots granted under that
      certain $1,000,000,000 Loan Agreement dated March 31, 2003, with, inter
      alia,
      the
      several lenders from time to time parties thereto, the agent and collateral
      agent identified therein and the ATSB (the “ATSB
      Lien Release”).

     

    5.14. Republic
      shall have received a Consent and Subordination, duly executed by Airways and
      each Affiliate of Airways that is an air carrier.

     

    6. Conditions
      Precedent to Airways’ Obligations to Sell and Convey the Commuter
      Slots.
      Airways’ obligation to sell and convey the Commuter Slots to Republic shall be
      subject to the fulfillment (or waiver in whole or in part by Airways in its
      sole
      discretion) of each of the following conditions precedent:

     

    6.1. The
      representations and warranties of Republic contained in this Agreement, and
      in
      the certificates and documents delivered to Airways on or prior to the Closing
      Date by Republic, shall be true on the date hereof and on the date of the
      Closing as though such representations and warranties were made on and as of
      such date (unless any such representation and warranty shall have been made
      with
      reference to a specified date, in which case such representation and warranty
      shall be true and accurate as of such specified date).

     

    6.2. Republic
      shall have performed and complied with all of its obligations under this
      Agreement, the Investment Agreement, the Transaction Documents, the Aircraft
      Transaction Agreements, the Slot/Gate Transaction Agreements and the Jet Service
      Agreements to which it is a party.

     

    6.3. Airways
      shall have received the Purchase Price in accordance with Section 4.

     

    6.4. Republic
      shall have executed and delivered the Slot License Agreement.

    


    6.5. The
      Currently Owned Aircraft shall concurrently herewith have been purchased in
      accordance with the Republic Aircraft Transaction, except as otherwise agreed
      upon by the parties.

     

    6.6. The
      EMB
      Committed Aircraft shall have concurrently herewith been purchased and leased
      in
      accordance with the Aircraft Transaction Agreements.

     

    6.7. Airways
      shall have received executed counterparts of the following agreements,
      instruments, certificates or documents, and such counterparts (a) shall
      have been duly authorized, executed and delivered by the respective party or
      parties thereto, (b) shall be reasonably satisfactory in form and substance
      to Airways and (c) shall be in full force and effect:

     

    (i) this
      Agreement;

     

    (ii) the
      Slot
      License Agreement, the Gates Option Agreement and the Security
      Agreement;

     

    (iii) the
      Global Aircraft Transaction Agreement;

     

    (iv) the
      New
      Jet Service Agreement;

     

    (v) (A) a
      copy of
      the Certificate of Incorporation and Bylaws of Republic and resolutions of
      the
      board of directors of Republic, in each case certified as of the Closing Date,
      by the Secretary or an Assistant Secretary of Republic, duly authorizing the
      purchase of the Commuter Slots and the licensing of the Commuter Slots to
      Airways under the Slot License Agreement and the execution, delivery and
      performance by Republic of the Aircraft Transaction Agreements, the Slot/Gate
      Transaction Agreements and the Jet Service Agreements required to be executed
      and delivered by Republic on or prior to the Closing Date in accordance with
      the
      provisions hereof and thereof; 

     

    (B) an
      incumbency certificate of Republic as to the person or persons authorized to
      execute and deliver the relevant documents on behalf of Republic;

     

    (vi) an
      Officer’s Certificate of Republic, dated as of the Closing Date, stating that
      its representations and warranties set forth in this Agreement are true and
      correct as of the Closing Date (or, to the extent that any such representation
      and warranty expressly relates to an earlier date, true and correct as of such
      earlier date);

     

    (vii) the
      following opinions of counsel, in each case dated the Delivery
      Date:

     

    (A) (i) an
      opinion of Hogan and Hartson LLP, special New York counsel to Republic;
      and

     

    (B) an
      opinion of Republic’s General Counsel.

     

    6.8. Airways
      shall be satisfied that no sales, use, value added, goods and services or like
      tax, and no stamp tax duty, is payable with respect to the sale of the Commuter
      Slots on the Closing Date to the extent that Airways has liability therefore
      under Section 9.

     

    6.9. No
      change
      shall have occurred after the date of this Agreement in any applicable Law
      that
      makes it a violation of Law for Airways or Republic to execute, deliver and
      perform the Slot/Gate Transaction Agreements to which either of them is a
      party.

     

    6.10. All
      appropriate action required to have been taken prior to the Closing Date by
      the
      FAA, or any governmental or political agency, subdivision or instrumentality
      of
      the United States, in connection with the transactions contemplated by this
      Agreement shall have been taken, and all orders, permits, waivers,
      authorizations, written transfer confirmations, exemptions and approvals of
      such
      entities required to be in effect on the Closing Date in connection with the
      transactions contemplated by this Agreement shall have been issued and all
      such
      other orders, permits, waivers, authorizations, exemptions and approvals shall
      be in full force and effect on the Closing Date.

     

    6.11. Airways
      shall have received the written consent of the Air Transportation Stabilization
      Board (the “ATSB”)
      to the
      transactions contemplated by the Slot/Gate Transaction Agreements.

     

    6.12. Airways
      shall have received a release of the Lien on the Slots granted under that
      certain $1,000,000,000 Loan Agreement dated March 31, 2003, with, inter
      alia,
      the
      several lenders from time to time parties thereto, the agent and collateral
      agent identified therein and the ATSB (the “ATSB
      Lien Release”).
      

     

    7. Representations
      and Warranties.

     

    7.1. Airways
      represents and warrants to Republic:

    


    7.1.1. Airways
      is duly organized, validly existing and in good standing as a corporation under
      the laws of the State of Delaware, pursuant to Sections 1107 and 1108 of the
      Bankruptcy Code and the orders of the Bankruptcy Court has all requisite power
      and authority to carry on its business as now conducted and, except where the
      failure to do so, individually or in the aggregate, does not result in a
      Material Adverse Effect, is qualified to do business in, and is in good standing
      in, every jurisdiction where such qualification is required.

     

    7.1.2. The
      execution, delivery and performance by Airways of the Slot/Gate Transaction
      Agreements to which Airways is or will be a party and the consummation by
      Airways of the transactions contemplated thereby are within the corporate powers
      of Airways and have been duly authorized by all necessary corporate and, if
      required, stockholder action of Airways. This Agreement has been duly
      authorized, executed and delivered by Airways and constitutes the legal, valid
      and binding obligation of Airways enforceable in accordance with its
      terms.

    


    7.1.3. The
      execution, delivery and performance by Airways of the Slot/Gate Transaction
      Agreements to which Airways is or will be party (i) does not require any consent
      or approval of, registration or filing with, or any other action by, any
      Governmental Authority, except such as have been obtained or made and are in
      full force and effect (including without limitation, the Omnibus Order) and
      except (A) where failure to obtain such consent, approval, registration, filing
      or other action has not had a Material Adverse Effect, (B) the consent of the
      ATSB to the transactions contemplated by this Agreement, which has been obtained
      and is in full force and effect, (C) receipt of the ATSB Lien Release, which
      Airways represents and warrants has been obtained and is in full force and
      effect, (D) the filing of UCC financing statements (and continuation statements
      with respect thereto) pursuant to the Security Agreement and (E) the written
      approval of the FAA to the transfer of the Commuter Slots, (ii) does
      not
      violate any applicable Law or the charter, bylaws or other organizational
      documents of Airways or any order of any Governmental Authority, (iii) will
      not violate or result in a default under any Postpetition agreement or
      Postpetition loan agreement or any other Postpetition indebtedness agreement
      or
      instrument of indebtedness binding upon Airways or its assets except where
      such
      default or violation has not had a Material Adverse Effect and (iv) will not
      result in the creation or imposition of any Lien (other than the Lien of the
      Security Agreement and the Gates Option Agreement) on any assets or properties
      of Airways. 

     

    7.1.4. The
      performance of any action by Airways required or contemplated by this Agreement
      or any other Slot/Gate Agreement to which Airways is or will be a party is
      not
      restrained or enjoined by any order of the Bankruptcy Court or by any
      Governmental Authority (either temporarily, preliminarily or
      permanently).

     

     

    7.1.5. Except
      for Seabury Aviation Advisors LLC and/or its Affiliates (“Seabury”),
      no
      Person has acted, directly or indirectly, as a broker, finder or financial
      advisor of Airways in connection with the Slot/Gate Transaction Agreements,
      and
      except for Seabury (whose fees and expenses shall not be the responsibility
      of
      Republic or any of its Affiliates), no Person acting for or on behalf of Airways
      is entitled to receive any broker’s, finder’s or similar fee or commission in
      respect thereof based in any way on any agreement, arrangement or understanding
      made by or on behalf of Airways with respect to the Slot/Gate Transaction
      Agreements.

    


    7.1.6. Airways
      is not an “investment company” as defined in, or subject to regulation under,
      the Investment Company Act of 1940 or (ii) a “holding company” as defined in, or
      subject to regulation under, the Public Utility Holding Company Act of 1935.
      Airways is a Certificated Air Carrier.

     

    7.1.7. Schedule
      1
      sets
      forth a true and accurate list of the Commuter Slots. Immediately prior to
      Closing, Airways and each Holder Affiliate indicated on Schedule
      1
      is the
      FAA holder of record of each of the Commuter Slots set forth opposite its name
      on Schedule
      1
      pursuant
      to authority granted to it by the FAA under the Slot Regulations and has full
      right, title and interest in and to each of the Commuter Slots free and clear
      of
      all Liens and restrictions or limitations (other than those expressly set forth
      in such Subparts or by statute, Republic Liens, or Temporary Exchanges permitted
      by the Slot License Agreement). Schedule
      2
      hereto
      sets forth a true and accurate list of all Temporary Exchanges in effect
      immediately prior to Closing. Airways is utilizing each of the Commuter Slots
      in
      a manner consistent with all applicable laws governing Slots, including but
      not
      limited to the Use Provisions. The Commuter Slots come from Airways’ or the
      applicable Holder Affiliate’s “then-current FAA approved base” as required by
      14 C.F.R. Section 93.221, are not international Slots, temporary Slots
      or
      Slots designated for essential air service as those terms are used in 14 C.F.R.
      Section 93.219.

    


    7.1.8. Airways
      has not received any notice from any Governmental Authority and is not aware
      of
      any event or circumstance that would be likely to result in any Regulatory
      Impairment of all or any of the Commuter Slots.

    


    7.2. Republic
      represents and warrants to Airways, each of which shall survive the execution
      and delivery of this Agreement, that:

    


    7.2.1. Republic
      is duly organized, validly existing and in good standing as a corporation under
      the laws of the State of Delaware.

    


    7.2.2. The
      execution, delivery and performance by Republic of the Slot/Gate Transaction
      Agreements to which Republic is or will be a party and the consummation by
      Republic of the transactions contemplated thereby are within Republic’s
      corporate powers and have been duly authorized by all necessary corporate action
      of Republic. This Agreement has been duly authorized, executed and delivered
      by
      Republic and constitutes the legal, valid and binding obligation of Republic,
      enforceable in accordance with its terms.

     

    7.2.3. The
      execution, delivery and performance by Republic of the Slot/Gate Transaction
      Agreements to which Republic is or will be party (i) does not require
      any
      consent or approval of, registration or filing with, or any other action by,
      any
      Governmental Authority, except such as have been obtained or made and are in
      full force and effect and (ii) will not violate any applicable Law or the
      charter, bylaws or other organizational documents of Republic.

    


    7.2.4. Other
      than Affiliates of Republic, no Person has acted directly or indirectly as
      a
      broker, finder or financial advisor of Republic in connection with the Slot/Gate
      Transaction Agreements, and other than fees that may be payable to Affiliates
      of
      Republic (whose fees and expenses shall not be the responsibility of Airways
      or
      any of its Affiliates), no Person acting for or on behalf of Republic is
      entitled to receive any broker’s, finder’s or similar fee or commission in
      respect thereof based in any way on any agreement, arrangement or understanding
      made by or on behalf of Republic with respect to the Slot/Gate Transaction
      Agreements.

    8. Adjustment
      to Purchase Price.
      If
      prior to the Closing, any Commuter Slot is subject to Regulatory Impairment
      and
      Airways does not elect to replace such Slot with an Unrestricted Commuter Slot
      which in the reasonable determination of Republic is of substantially equivalent
      utility (including within substantially equivalent time period, with equal
      or
      higher level of weekly frequencies and with the right to transfer under 14
      C.F.R. § 93.221), the Purchase Price shall be reduced by [*].
      

    


    9. Tax
      Indemnification.
      

     

    (a) Airways
      shall pay, and on demand shall indemnify, protect, defend and hold harmless
      Licensor from and against, all Taxes (other than Excluded Taxes as defined
      in
      Section 9(f) hereof) which are imposed upon or with respect to, or are required
      to be paid in connection with or as a result of, any of the payments or
      transactions or activities contemplated in the Slot/Gate Transaction Agreements
      (regardless of how or when such Taxes are imposed, whether imposed upon
      Republic, Airways, the Licensed Slots or otherwise), including, without
      limitation, Taxes imposed on or with respect to, or required to be paid in
      connection with or as a result of any of the following: (i) the Licensed Slots
      or any interest in any thereof, (ii) the purchase, acceptance, delivery,
      ownership, licensing, control, possession, use or operation of the Licensed
      Slots or (iii) any License Fees, receipts, gains, earnings, income, or other
      amounts paid or payable or received or receivable with respect to the Licensed
      Slots or the transactions contemplated in the Slot Transaction Agreements,
      or
      (iv) any of the Slot/Gate Transaction Agreements or any amendment or supplement
      thereto or the execution, delivery, filing, recording, performance or
      enforcement of any thereof.

     

    (b) Payments;
      Tax Reports; Information.

     

    (i) Airways
      shall pay each Indemnified Tax (as defined in clause (ii) below) in a timely
      and
      proper manner directly to the relevant Governmental Authority or taxing
      authority, to the extent that direct payment by Airways is permitted by
      applicable Law, and shall deliver to Republic the original (or a certified
      copy
      of) an official receipt for Airways’ payment of such Tax (if obtainable by
      Airways through the exercise of reasonable efforts) or such other documentary
      evidence of Airways’ payment of such Tax as is reasonably acceptable to
      Republic. If Airways fails to pay any Indemnified Tax when due to the relevant
      Governmental Authority or other taxing authority in the time and manner required
      by the applicable provisions of the Slot/Gate Transaction Agreements, Airways
      shall indemnify Republic for, in addition to the Indemnified Tax, any
      incremental taxes, interest or penalties that may become payable by Republic
      as
      a result of any such failure. Any additional amount payable by Airways directly
      to Republic pursuant to this Section 9
      shall be
      paid together with the payment to which such additional amount relates. Any
      amount payable by Airways directly to Republic pursuant to this clause (b)
      shall
      be paid in immediately available funds within thirty (30) days after Airways
      

    _____

    *
      Confidential

    receives
      Republic’s written demand therefor (which demand shall include or be accompanied
      by a description in reasonable detail of the Indemnified Tax and the calculation
      of the indemnity demanded), provided that Airways shall not be required to
      pay
      any Tax more than five (5) Business Days before the date on which payment of
      such Tax is due. In addition, if Republic receives a written invoice or other
      documentation from a Governmental Authority or other taxing authority requesting
      payment of an Indemnified Tax, Republic will send a copy of such document to
      Airways promptly after receipt thereof.

    


    (ii) Reports.
      If any
      report, return, certification, statement or other document (a “Tax
      Document”)
      is
      required to be filed by Republic with respect to any Tax for which Airways
      is
      required to indemnify Republic pursuant to this Section 9
      (an
“Indemnified
      Tax”),
      Airways shall promptly notify Republic of such requirement and:

    


    (A) if
      permitted by applicable Law, prepare and file such Tax Document in a timely
      and
      proper manner (except for any such Tax Document which Republic notifies Airways
      in writing that Republic intends to prepare, sign and file) and deliver a copy
      of such Tax Document to Republic, provided that Republic promptly delivers
      to
      Airways, at Airways timely written request and expense, such information within
      Republic’s reasonable control as Airways may reasonably request and as may be
      reasonably necessary for Airways to prepare such Tax Document; or

     

    (B) Airways
      is not permitted by applicable Law to file such Tax Document, Airways shall
      prepare and deliver to Republic a proposed form of such Tax Document within
      a
      reasonable time prior to the time such Tax Document is required to be
      filed.

     

    (iii) Information.
      Airways
      shall furnish to Republic, promptly after receipt of Republic’s written request
      therefor, such documents and other information as are maintained by Airways
      in
      the regular course of its business or required to be maintained by it pursuant
      to applicable Law as Republic may reasonably request to enable Republic to
      comply with its Tax reporting, payment, audit and litigation requirements
      relating to Republic’s participation in the transactions contemplated in the
      Slot/Gate Transaction Agreements. In addition, Republic shall furnish to Airways
      such information maintained in the regular course of its business or required
      to
      be maintained pursuant to applicable Law as is reasonably requested by Airways
      in writing and reasonably necessary to enable Airways to comply with its Tax
      reporting, payment, audit and litigation requirements relating to the
      transactions contemplated in the Slot/Gate Transaction Agreements.

     

    (iv) Refunds.
      If and
      to the extent that Republic receives a refund (in cash, as an offset against
      any
      liability for any Tax, or otherwise) of any Indemnified Tax previously paid
      by
      Airways or for which Airways previously paid an indemnity or any additional
      amount to Republic pursuant to Sections 9
      and 10
      hereof
      (a “Refund”)
      or if
      Republic realizes a Tax Benefit that has not otherwise been taken into account
      in calculating the amount payable by Airways as a result of the payment of
      an
      Indemnified Tax, Republic shall pay to Airways, the amount of such Refund or
      Tax
      Benefit (together with any interest received or credited with respect thereto)
      minus the net amount of all Taxes payable by Republic with respect to the
      receipt or accrual of such Refund (net of all Tax Benefits not previously taken
      into account by Republic) with respect to claiming and obtaining such Refund,
      provided,
      however, that if a Material Breach with respect to Airways exists and is
      continuing, Republic may hold the amount then due to Airways under this
Section 9
      until
      such Material Breach ceases to exist, and provided, further, that in no event
      shall such payment (other than interest received or credited and net of any
      Taxes on such interest) exceed (i) the amount of all prior payments by Airways
      to Republic under Section 10 of the Slot Option Agreement or this Section 9
      minus
      (ii) the amount of all prior payments by Republic pursuant to this Section 9,
      but any
      such excess shall be carried forward and applied as a credit to reduce any
      future indemnity liability of Airways under Sections 9
      and 10.
      If
      Republic pays Airways any amount under this Section 9
      and if
      and to the extent that it is subsequently determined by the taxing authority
      having jurisdiction that Republic was not entitled to the Refund for which
      Republic made such payment to Airways, such determination shall be treated
      as
      the imposition of a Tax for which Airways is obligated to indemnify Republic
      pursuant to the provisions of Section 9.

     

    (c) Contest;
      Survival.

     

    (i) Contest.
      If
      Republic receives a written notice from any Governmental Authority or taxing
      authority asserting a liability against Republic for any Tax for which Airways
      would be required by Section 9
      to
      indemnify Republic
      (a “Tax
      Claim”),
      Republic shall give Airways written notice of such Tax Claim as soon as
      reasonably practicable, provided that any failure of Republic to give such
      notice or any delay by Republic in giving such notice shall not affect the
      obligations of Airways under this Section 9,
      except,
      and only to the extent, that Airways can demonstrate that the failure or delay
      in providing such notice was unreasonable and resulted in additional obligations
      for Airways in defending against any suit or proceeding relating to such matter.
      If Airways delivers to Republic within thirty (30) days after the date of
      receipt of Republic’s notice, a written request that Republic contest such Tax
      Claim (or, in the case of an Airways Controlled Contest, permit Airways to
      contest such Tax Claim) and if (and only so long as) the conditions described
      in
Section 9(c)(ii)
      are
      satisfied, Republic shall, in good faith and at Airways’ expense, contest (or,
      in the case of an Airways Controlled Contest, permit Airways to contest if
      permitted by applicable Law) the validity, applicability or amount (as the
      case
      may be) of the Taxes that are the subject of such Tax Claim by (A) resisting
      payment thereof, (B) not paying such Taxes except under protest if protest
      is
      necessary and proper, or (C) if payment is made, using reasonable efforts to
      obtain a refund thereof in administrative and/or judicial proceedings permitted
      by applicable Law (including all appeals, other than an appeal or petition
      to
      the United States Supreme Court).

    


    (ii) Conditions.
      Republic’s obligation under Section 9(c)(i)
      with
      respect to any Tax Claim is subject to the satisfaction of the following
      conditions at the time the contest is requested and at all times while the
      contest (if any) is continuing: (A) no Material Breach with respect to Airways
      shall have occurred and be continuing (unless
      Airways has provided to Republic security for its obligations hereunder that
      is
      reasonably satisfactory to Republic), (B) Republic shall have received (at
      Airways’ expense) from independent tax counsel selected by Airways and
      reasonably acceptable to Republic a written opinion that there is a Reasonable
      Basis (within the meaning of Formal Opinion 85-352 of the American Bar
      Association Standing Committee on Ethics and Professional Responsibility) for
      such contest, (C) Airways
      shall have agreed to pay, and shall be paying, on demand, all reasonable costs
      and expenses incurred by Republic in connection with the contest of such Tax
      Claim, (D) if the contest is to be conducted in a manner requiring payment
      of
      the Tax Claim, Airways shall have advanced to Republic, without interest, the
      amount of the Tax Claim and shall have agreed to indemnify Republic for any
      net
      adverse Tax consequences of such interest-free advance, (E) Airways shall have
      agreed in writing that the Taxes that are the subject of the Tax Claim are
      Indemnified Taxes, provided that Airways shall not be bound by such
      acknowledgement to the extent that the final determination of the Tax Claim
      articulates conclusions of law and fact that demonstrate that the Taxes that
      are
      the subject of the Tax Claim are Excluded Taxes, and (F) the action to be taken
      will not result in any risk of criminal penalty or any material risk of sale,
      forfeiture or loss of the Licensed Slots (unless Airways shall have provided
      security to Republic that is reasonably satisfactory to Republic).

     

    (iii) Airways
      Controlled Contests.
      For the
      purposes of this Section 9,
      the
      term “Airways
      Controlled Contest”
      means a
      contest pursuant to this Section 9(c)
      involving only Indemnified Taxes, provided that (A) such contest may be
      conducted under applicable Law in the name of Airways, (B) no tax return of
      Republic will be held open with respect to which Republic may be considered
      to
      have an actual or potential liability for Taxes that are not Indemnified Taxes,
      and (C) Republic shall not then be contesting the same Tax in the same
      jurisdiction. Airways shall, at its expense, conduct and control any Airways
      Controlled Contest and, in the case of any contest involving a claim for one
      or
      more Indemnified Taxes and a claim for one or more Excluded Taxes, to conduct
      and control such contest to the extent that it relates to claims for Indemnified
      Taxes, but only to the extent that the contest of the claims for Indemnified
      Taxes may be and are severed from the contest of claims for Excluded Taxes
      (and
      Republic shall, at the request and expense of Airways, use reasonable efforts
      in
      good faith to obtain such severance), provided, however, that in no event shall
      Airways be permitted, or Republic be required, to take any action pursuant
      to
      this Section 9(c)
      unless
      (and only so long as) the conditions described in Section 9(c)(ii)
      are
      satisfied. With respect to any contest conducted by Airways, Airways shall
      retain control over such contest but shall consult in good faith with Republic
      and shall consider in good faith reasonable requests of Republic, including
      reasonable requests to participate in such contest.

     

    (iv) Republic
      Controlled Contests.
      Republic shall, at the expense of Airways, conduct and control any contest
      (other than an Airways Controlled Contest) of a Tax Claim pursuant to this
      Section 9(c);
      provided,
      however,
      that in
      no event shall Republic be required to commence or continue any contest pursuant
      to this Section 9(c)
      unless
      (and only so long as) the conditions described in Section 9(c)(ii)
      are
      satisfied. With respect to any contest conducted by Republic, Republic shall
      have sole control over such contest (including choice of forum) but shall
      consult in good faith with Airways and shall consider in good faith reasonable
      requests of Airways, including reasonable requests to participate in such
      contest.

     

    (v) Republic
      shall not settle or compromise any Tax Claim or contest proceeding or (except
      as
      permitted by Section 9(c)(i))
      refrain
      from appealing any adverse determination with respect thereto without the prior
      written consent of Airways, provided that Republic may in its sole discretion
      unconditionally waive in writing its right to the indemnification provided
      for
      in Section 9,
      with
      respect to any Tax Claim and refrain from contesting, or continuing the contest
      of, such claim, in which event:

     

    (A) Airways
      shall have no liability to Republic with respect to such Tax Claim (and, if
      the
      Indemnified Tax that is the subject of such Tax Claim is a recurring Tax, with
      respect to any corresponding claim with respect to any other taxable period
      if
      and to the extent that such failure to contest has a material adverse effect
      upon the contest of such corresponding claim), and

     

    (B) Republic
      shall refund to Airways any amounts theretofore paid or advanced by Airways
      with
      respect to such Indemnified Tax, excluding all contest costs described in
Section 9(c)(ii)
      above
      previously incurred, plus interest at the rate on refunds of the relevant
      Governmental Authority or taxing authority.

     

    (vi) Upon
      a
      final determination of a contest pursuant to this Section 9(c):

    


    (A) if
      the
      amount of the indemnity payable by Airways pursuant to this Section 9
      with
      respect to the contested Tax Claim exceeds the amount (if any) advanced by
      Airways to Republic pursuant to Section 9(c)(ii)(D),
      Airways
      shall pay to Republic the amount of such excess not later than thirty (30)
      days
      after the day on which Airways receives Republic’s written demand for the
      indemnity payable by Airways after the date of such final determination;
      or

     

    (B) if
      the
      amount (if any) of the advance made by Airways to Republic pursuant to
Section 9(c)(ii)(D)
      exceeds
      the amount of the indemnity payable by Airways to Republic pursuant to this
      Section 9
      with
      respect to the contested Tax Claim, Republic shall pay to Airways the amount
      of
      such excess not later than thirty (30) days after the date on which Republic
      receives Airways’ written demand therefor after the date of such final
      determination.

    


    In
      addition, if Republic receives an award of attorney’s fees in a contest for
      which Airways has paid an allocable portion of the contest expenses, Republic
      shall pay to Airways that portion of the award that relates to the issues
      contested with respect to a Tax indemnified under this Section 9.

    


    (d) Review
      by Independent Accountants.
      In the
      event that there is a dispute with respect to the calculation of any amount
      under Section 9,
      such
      dispute will be referred to an independent accountant jointly selected by
      Republic and Airways for determination. The determination of the independent
      accountant shall be final, binding and conclusive on Airways and Republic.
      Airways shall pay the fees and expenses of the accounting firm unless the
      accounting firm determines that [*].

    


    (e) Change
      in Circumstances, Mitigation.
      If
      Airways incurs an indemnity liability under Section 9
      or if it
      becomes reasonably foreseeable that Airways would (but for this Section 9(e)
      incur an
      indemnity liability under Section 9,
      then
      Airways and Republic shall consult in good faith with a view to restructuring
      the transactions contemplated in this Agreement and the other Slot/Gate
      Transaction Agreements so that the indemnity liability can be avoided or
      minimized, provided that Republic shall not have any obligation to take any
      action pursuant to this Section 9(e)
      which
      Republic would (but for this proviso) be required to take if 

    _____

    *
      Confidential

    Republic
      determines, in its good faith, that taking such action would result in a
      material risk that Republic or any of its Affiliates could incur a liability,
      cost or expense for which Airways is not required by any Slot/Gate Transaction
      Agreement to indemnify Republic, unless Airways shall have delivered to Republic
      a written undertaking to indemnify Republic and its Affiliates against such
      loss, cost or expense in a manner reasonably satisfactory to
      Republic.

    


    (f) Definitions.
      For
      purposes of this Section 9
      the
      terms indicated below shall have the meanings given to them below:

     

    (i) “Excluded
      Tax”
      means,
      in respect of Republic, any of the following Taxes:

     

    (A) any
      Tax
      imposed (by withholding or otherwise) on, or calculated by reference to, the
      gross or net income (including any minimum Tax, any accumulated earnings Tax
      or
      personal holding company Tax, or any value added or turnover tax imposed in
      direct substitution for an income Tax), profits (including any excess profits
      Tax), gains, gross or net receipts or assets, capital, or net worth, corporate
      franchise or conduct of business of Republic by any jurisdiction under the
      laws
      of which Republic or Related Indemnitee is incorporated or otherwise organized
      or in which Republic or Related Indemnitee is booking the transactions
      contemplated by the Slot/Gate Transaction Agreements or has an office or other
      fixed place of business or is engaged in business;

    


    (B) any
      Tax
      which is imposed on or with respect to any event or period occurring after
      the
      return of the Licensed Slots to Republic pursuant to the terms of the Slot
      License Agreement or the termination of the Term or the discharge in full of
      Airways obligation to pay License Fees and other amounts due under the Slot/Gate
      Transaction Agreements, other than any Tax imposed on or with respect to any
      payment by Airways pursuant to the Slot/Gate Transaction Agreements or the
      performance of any other obligation of Airways pursuant to the Slot/Gate
      Transaction Agreements;

     

    (C)
       any
      Tax
      imposed by any Governmental Authority or taxing authority on or with respect
      to
      the sale, assignment, transfer or other disposition of all or any part of (i)
      Republic’s right, title and interest in the Licensed Slots or this Agreement,
      any other Slot/Gate Transaction Agreement or the income derived therefrom or
      (ii) Republic’s interest in itself, in each case other than any sale,
      assignment, transfer or other disposition that occurs in connection with (x)
      an
      exercise of remedies after the occurrence and during the continuance of a
      Material Breach in respect of Airways, or (y) a substitution or replacement
      of
      any Licensed Slot;

    


    (D) any
      Tax
      caused by the gross negligence or willful misconduct of Republic or its Related
      Indemnitees or the breach by Republic or its Related Indemnitees of any
      representation, warranty or covenant given by it or to be performed by it under
      this Agreement or any Slot/Gate Transaction Agreement;

    


    (E) in
      the
      case of a transferee of Republic, Taxes to the extent that the aggregate amount
      of such Taxes exceeds the aggregate amount of the Taxes that would have been
      imposed on or payable by Republic and for which Airways would have been required
      to indemnify Republic pursuant to Section 9
      under
      applicable Laws in effect on the date of transfer;

    


    (F) any
      Tax
      imposed on or payable by Republic to the extent caused by, and would not have
      been imposed but for, the existence of a Republic Lien;

    


    (G) any
      Tax
      imposed on or payable by Republic to the extent caused by the failure of
      Republic or its Related Indemnitees to file when due a Tax Document (as defined
      in Section 9(b)(ii))
      to
      which Section 9(b)(ii)
      applies,
      or to pay any Tax when due (if Republic is required to pay such Tax pursuant
      to
      the terms of the Slot/Gate Transaction Agreements), other than where any such
      failure arises as a result of any breach by Airways of any provision of, or
      the
      default by Airways in the performance of, its obligations under this Agreement
      or as a result of any Material Breach with respect to Airways occurring or
      otherwise arising as a result of the willful misconduct or gross negligence
      of
      Airways;

    


    (H) any
      Tax
      to the extent such Tax is the result of, and would not have been incurred but
      for, any activities of Republic or its Related Indemnitee in the jurisdiction
      imposing such Tax that are unrelated to Republic’s dealings with Airways,
      unrelated to the transactions contemplated in the Slot/Gate Transaction
      Agreements and unrelated to the use of the Licensed Slots thereof by Airways
      or
      any of its Affiliates;

    


    (I) any
      Tax
      to the extent such Tax is the result of, and would not have been incurred but
      for, an amendment to any Slot/Gate Transaction Agreement to which Airways is
      not
      a party unless such amendment (i) is
      made
      at Airways’ written request or with Airways written approval; (ii) is made while
      a Material Breach with respect to Airways exists; or (iii) is required by the
      terms of the Slot/Gate Transaction Agreements;

    


    (J) any
      Tax
      imposed arising from a “prohibited transaction” under Section 406 of ERISA or
      Section 4977(c)(1) of the Code;

    


    (K) any
      Tax
      to the extent that such Tax is imposed or increased as a result of the failure
      of Republic or its Related Indemnitee or any financing party to provide Airways
      any forms, certifications or other documents in conformity with the requirements
      of Section 9(c);
      or

    


    (L) any
      Tax
      incurred or increased as a result of Republic or a Related Indemnitee not being
      a “United States person” within the meaning of Section 7701(a)(3) of the Code or
      as a result of Republic’s participation in the transactions contemplated by the
      Slot/Gate Transaction Agreements through any office, permanent establishment
      or
      other place of business located outside the United States; or

    (M) any
      Tax
      which is the result of or attributable to the financing of Republic’s cost of
      acquiring, whether in whole or in part, the Commuter Slots or the Gates or
      any
      part thereof or any interest therein.

    


    (ii) “Related
      Indemnitee” means an Affiliate of Republic.

    


    (iii) “Tax
      Benefit”
      means
      any benefit with respect to Taxes (as a result of deductions, credits or other
      Tax benefits) which are actually realized by Republic or its Related Indemnitees
      and which are attributable to the incurrence or payment by Republic or its
      Related Indemnitees of any indemnified Losses or Taxes.

    


    (f) Reimbursements
      by Republic.
      If for
      any reason Airways is required to make any payment with respect to Taxes
      (including, but not limited to, any withholding Taxes) imposed on or with
      respect to Republic in respect of the transactions contemplated by the Slot/Gate
      Transaction Agreements and such Taxes are not the responsibility of Airways
      under this Section 9,
      Republic shall pay to Airways an amount which equals the amount paid by Airways
      with respect to such Taxes plus interest at the [*]
      (the
“Overdue Rate”), during the period commencing on the date Airways provides
      Republic written demand for payment of such amount pursuant to this Section 9
      and the
      date Airways actually receives such payment.

    


    10. Indemnification.

    


    10.1. Indemnification
      of Republic.
      Airways
      agrees to indemnify, defend and hold harmless Republic and its Affiliates and
      each of their respective successors, assigns, agents, employees, managers,
      officers and directors (collectively, the “Indemnitees”)
      from
      and against any and all losses, claims, damages, liabilities, costs and expenses
      (including reasonable attorneys’ fees incurred in investigating or 

    _____

    *
      Confidential

    defending
      the same) (collectively, “Damages”)
      in any
      way relating to, based upon, or arising out of (a) the Commuter Slots or the
      Gates; (b) this Agreement or any other Slot/Gate Transaction Agreement; or
      (c)
      the breach of any representation or warranty of Airways contained herein or
      in
      any other Slot/Gate Transaction Agreement; provided,
      that,
      Airways
      shall not be required to indemnify any Indemnitee for any Damages to the extent
      attributable to one or more of the following: (1) any representation
      or
      warranty by such Indemnitee in the Slot/Gate Transaction Agreements being
      incorrect in any material respect; (2) the failure by such Indemnitee
      to
      perform or observe any agreement, covenant or condition in any of the Slot/Gate
      Transaction Agreements; (3) acts or omissions involving the willful
      misconduct or gross negligence of such Indemnitee; (4) a disposition
      (voluntary or involuntary) by such Indemnitee of all or any part of such
      Indemnitee’s interest in the Commuter Slots, the Gates or the Slot/Gate
      Transaction Agreements; (5) any amount which constitutes a loss of future
      profits; (6) any Taxes; or (7) any Damages to the extent attributable
      to
      acts, omissions or events occurring with respect to the period (i) if
      the
      Repurchase Option is exercised, after termination of the Security Agreement
      in
      accordance with Section 6 thereof, and full and final compliance by
      Airways
      with all of the terms of the Slot/Gate Transaction Documents and performance
      by
      Airways of all its obligations under the Slot/Gate Transaction Documents and
      (ii) otherwise, after full and final compliance by Airways with all
      of the
      terms of the Slot License Agreement and performance by Airways of all of its
      obligations hereunder and under the Slot License Agreement.

    10.2. Indemnification
      Procedure.

    (a) Any
      Indemnitee (the “Indemnified
      Party”)
      seeking indemnification hereunder shall give to the party or parties obligated
      to provide indemnification to such Indemnified Party (the “Indemnitor”)
      a
      notice (“Claim
      Notice”)
      describing in reasonable detail the facts giving rise to its claim for
      indemnification hereunder, and shall include in such Claim Notice (if then
      known) the amount or method of computation of the amount of the claim, and
      a
      reference to the provision of this Agreement or any other agreement, document
      or
      instrument executed and delivered hereunder or in connection herewith upon
      which
      such claim is based; provided,
      that a
      Claim Notice in respect of any action at law or suit in equity against the
      Indemnified Party by a third Person, as to which indemnification will be sought,
      shall be given promptly after service of process in such action or suit is
      properly made on such Indemnified Party, and, provided,
      further,
      that
      failure of the Indemnified Party to give the Indemnitor prompt notice in respect
      of any such action or suit as provided herein shall not relieve the Indemnitor
      of its obligations hereunder, except to the extent such Indemnitor shall have
      been prejudiced by such failure.

    


    (b) If
      no
      Material Breach with respect to Airways shall have occurred and be continuing,
      the Indemnitor shall be entitled, at its sole cost and expense, acting through
      counsel reasonably acceptable to the respective Indemnified Party, (A) in any
      judicial or administrative proceeding that involves solely a claim for Damages
      subject to indemnification under this Section 10,
      to
      assume responsibility for and control thereof, (B) in any judicial or
      administrative proceeding involving a claim for Damages and other claims related
      or unrelated to the transactions contemplated by the Slot/Gate Transaction
      Agreements, to assume responsibility for and control of such claim for Damages
      subject to indemnification under this Section 10
      to the
      extent that the same may be and is severed from such other claims (and such
      Indemnified Party shall use reasonable efforts to obtain such severance), and
      (C) in any other case, to be consulted by such Indemnified Party with respect
      to
      judicial proceedings subject to the control of such Indemnified Party and to
      be
      allowed, at the Indemnitor’s sole expense, to participate therein.
      Notwithstanding any of the foregoing to the contrary, the Indemnitor shall
      not
      be entitled to assume responsibility for and control of any such judicial or
      administrative proceedings (i) if such proceedings will involve a material
      risk of the sale, forfeiture or loss of, or the creation of any Lien on, the
      Licensed Slots or any part thereof, unless in such an event the Indemnitor
      shall
      have posted a bond or other security satisfactory to the relevant Indemnified
      Parties in respect to such risk or (ii) if such proceedings could, in
      the
      reasonable judgment of the Indemnified Party, entail any risk of criminal
      liability. The Indemnified Party may participate at its own expense and with
      its
      own counsel in any judicial proceeding controlled by the Indemnitor pursuant
      to
      the preceding provisions. The
      Indemnitor shall not be liable for any settlement of any proceeding effected
      without its written consent (which consent shall not be unreasonably withheld),
      but if settled with such consent or if there be a final judgment for the
      plaintiff, the Indemnitor agrees to indemnify the Indemnified Party from and
      against any loss or liability specified in such settlement or judgment. No
      Indemnitor shall, without the prior written consent of the Indemnified Party,
      effect any settlement of any pending or threatened proceeding in respect of
      which any Indemnified Party is or could have been a party and indemnity could
      have been sought hereunder by such Indemnified Party, unless such settlement
      includes an unconditional release of such Indemnified Party from all liability
      or claims that are the subject matter of such proceeding.

    (c) With
      respect to any payment or indemnity made pursuant to this Section 10
      (including payments or indemnities made pursuant to this sentence), such payment
      or indemnity shall include any amount necessary to hold the Indemnified Party
      harmless on an after-tax basis from all Taxes required to be paid by the
      Indemnified Party with respect to such payment or indemnity; provided,
      however,
      that if
      the Indemnified Party realizes a tax benefit by reason of such payment or
      indemnity, the Indemnified Party shall pay the Indemnitor an amount equal to
      the
      net value to the Indemnified Party of such tax benefit when, and to the extent,
      realized (such payments by the Indemnified Party not to exceed in the aggregate
      the amount of the related indemnity paid by the Indemnitor), but not before
      the
      Indemnitor shall have made all payments or indemnities to or on behalf of the
      Indemnified Party required pursuant to this Section 10;
      provided,
      further,
      however,
      that if
      the Indemnified Party loses such tax benefit subsequent to any payment to the
      Indemnitor with respect thereto, the Indemnitor shall indemnify the Indemnified
      Party with respect to such loss pursuant to the provisions of this Section 10.

    


    If
      an
      Indemnified Party is not a party to this Agreement, the Indemnitor may require
      such Indemnified Party to agree in writing to the terms of this Section 10.2
      prior to
      making any payment to such Indemnified Party under this Section 10.

    


    11. No
      Waiver.
      The
      failure of a party to require performance of any provision of this Agreement
      shall in no way affect that party’s right thereafter to enforce such provision
      nor shall the waiver by a party of any breach of any provision of this Agreement
      be taken or held to be a waiver of any further breach of the same provision
      or
      any other provision. No investigation by a party hereto of any other party
      hereto prior to or after the date hereof shall stop or prevent the exercise
      of
      any right hereunder or be deemed to be a waiver of any such right.

    


    12. Severability
      and Survival of Provisions.
      If any
      provision of this Agreement is held to be invalid, illegal or unenforceable,
      the
      validity, legality and enforceability of the remaining provisions shall not
      in
      any way be affected or impaired thereby. The terms, conditions, rights and
      remedies set forth in Sections 9
      and 10
      shall
      survive the expiration or termination of this Agreement.

    


    13. Specific
      Performance.
      The
      parties hereto specifically acknowledge that monetary damages are not an
      adequate remedy for violations of this Agreement, and that any party hereto
      may,
      in its sole discretion, apply to a court of competent jurisdiction for specific
      performance or injunctive or such other relief as such court may deem just
      and
      proper in order to enforce this Agreement or prevent any violation hereof and,
      to the extent permitted by applicable Law and to the extent the party seeking
      such relief would be entitled to the merits to obtain such relief, each party
      waives any objection to the imposition of such relief.

    


    14. Interpretive
      Provisions.
      Unless
      otherwise expressly provided, the following shall apply in interpreting the
      provisions of this Agreement:

    


    (a) The
      words
“hereof”, “herein” and “hereunder” and words of similar import when used in this
      Agreement shall refer to this Agreement as a whole and not to any particular
      provision of this Agreement, and Article, Section, subsection, Annex, Schedule
      and Exhibit references are to this Agreement unless otherwise
      specified.

    


    (b) The
      meanings given to terms defined herein shall be equally applicable to both
      the
      singular and plural forms of such terms.

    


    (c) References
      to any Person shall include such Person’s successors and permitted assigns
      subject to any limitations provided for herein.

    


    (d) References
      to agreements shall include such agreements as amended, modified or
      supplemented.

    


    (e) References
      to any Law shall include such Law as amended, modified, supplemented,
      substituted, reissued or reenacted from time to time.

    


    (f) The
      words
“including”, “including, without limitation”, “including, but not limited to”
      and terms or phrases of similar import, with respect to any matter or thing,
      mean including without limitation such matter or thing.

    


    (g) Headings
      used in this Agreement are for convenience only and shall not in any way affect
      the construction of, or be taken into consideration in interpreting, this
      Agreement.

    


    15. Notices.
      All
      notices and other communications hereunder shall be in writing and shall be
      deemed to have been duly given, if delivered personally, by telecopier or sent
      by first class mail, postage prepaid, as follows:

    


    If
      to
      Airways, to:

    


    US
      Airways Group, Inc.

    2345
      Crystal Drive

    Arlington,
      Virginia 22227

    Attention:
      General Counsel

    Telecopy
      No. 703-872-5936

    


    With
      a
      copy to:

    


    Arnold
      & Porter LLP

    555
      Twelfth Street, N.W.

    Washington,
      D.C. 20004

    Attention:
      Brian Leitch, Esq.

    Telecopier
      No. 202-942-5999

    


    With
      a
      copy to:

    


    Vedder,
      Price, Kaufman & Kammholz, P.C.

    222
      N.
      LaSalle St., Suite 2400

    Chicago,
      IL 60601

    Attention:
      Joshua D. Gentner, Esq.

    Telecopier:
      (312) 609-5005

    


    If
      to
      Republic, to:

    


    Republic
      Airways Holdings Inc.

    8909
      Purdue Avenue

    Suite
      300

    Indianapolis,
      Indiana 46268

    Attention:
      Chief Executive Officer

    Telecopier:
      (317) 484-6060

    


    With
      a
      copy to:

    


    Wexford
      Capital LLC

    411
      West
      Putnam Avenue

    Greenwich,
      Connecticut 06830

    Attention:
      Arthur Amron, Vice President and General Counsel

    Telecopier:
      203 862 7312

    


    and

    Hogan
      & Hartson L.L.P.

    555
      13th
      Street,
      N.W. 

    Washington,
      D.C. 20004

    Attention:
      Robert E. Cohn, Esq. 

    Telecopier:
      (202) 637 5910

    16. Entire
      Agreement; Amendment.
      This
      Agreement and the Slot/Gate Transaction Agreements set forth the entire
      agreement between the parties hereto with respect to the transactions
      contemplated by this Agreement. Any provision of this Agreement may only be
      amended, modified or supplemented in whole or in part at any time by an
      agreement in writing among the parties hereto executed in the same manner as
      this Agreement. 

     

    17. Survival. All
      representations, warranties, indemnities and covenants made by any party hereto,
      herein or in any certificate or other instrument delivered by such party or
      on
      the behalf of any such party under this Agreement or any other Slot/Gate
      Transaction Agreement, shall be considered to have been relied upon by the
      other
      party hereto and shall survive the consummation of the transactions contemplated
      hereby on the Closing regardless of any investigation made by the other party
      or
      on behalf of the other party.

    18. Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed to constitute an original, but all of which together shall constitute
      one
      and the same document.

    19. Governing
      Law.
      To the
      extent not governed by the Bankruptcy Code, this Agreement shall be governed
      by,
      and interpreted in accordance with, the Laws of the State of New York applicable
      to contracts made and to be performed in that State without reference to its
      conflict of laws rules (other than Sections 5-1401 and 5-1402 of the
      New
      York General Obligations Law). The parties hereto agree that the appropriate
      and
      exclusive forum for any disputes arising out of this Agreement solely between
      Airways and Republic shall be the Bankruptcy Court, or if such court will not
      hear any such suit, the U.S. District Court for the Southern District of New
      York, and, the parties hereto irrevocably consent to the exclusive jurisdiction
      of such courts, and agree to comply with all requirements necessary to give
      such
      courts jurisdiction. The parties hereto further agree that the parties will
      not
      bring suit with respect to any disputes arising out of this Agreement except
      as
      expressly set forth below for the execution or enforcement of judgment, in
      any
      jurisdiction other than the above specified courts. Each of the parties hereto
      irrevocably consents to the service of process in any action or proceeding
      hereunder by the mailing of copies thereof by registered or certified airmail,
      postage prepaid, to the address specified in Section 15
      hereof.
      The foregoing shall not limit the rights of any party hereto to serve process
      in
      any other manner permitted by the Law or to obtain execution of judgment in
      any
      other jurisdiction. The parties further agree, to the extent permitted by Law,
      that final and non-appealable judgment against any of them in any action or
      proceeding contemplated above shall be conclusive and may be enforced in any
      other jurisdiction within or outside the United States by suit on the judgment,
      a certified or exemplified copy of which shall be conclusive evidence of the
      fact and the amount of indebtedness. THE PARTIES AGREE TO WAIVE ANY AND ALL
      RIGHTS THAT THEY MAY HAVE TO A JURY TRIAL WITH RESPECT TO DISPUTES ARISING
      OUT
      OF THIS AGREEMENT.

    20. Successors
      and Assigns.
      Except
      as otherwise expressly provided herein, the provisions hereof shall inure to
      the
      benefit of, and be binding upon, Airways’ and Republic’s successors and assigns.
      Neither this Agreement nor any rights or obligations hereunder shall be
      assignable by any party hereto without the prior written consent of the other
      party hereto, provided that (i) Republic shall be permitted to assign all or
      any
      portion of its rights and obligations hereunder to any of its wholly owned
      Subsidiaries so long as such Subsidiaries are Certificated Air Carriers (if
      required in connection with the rights or obligations being assigned) and
      capable of performing each of Republic’s obligations and agreements proposed to
      be assigned, without any other party’s consent,
      provided that Republic shall remain obligated hereunder, and (ii) Republic
      may
      also sell and license back and/or grant a security interest in all or any part
      of its interest in the Licensed Slots, this Agreement or any other Slot
      Transaction Agreement in accordance with Section 21
      below.

    21. Republic
      Financing Right.
      Republic may at any time, with not less than ten (10) Business Days’ notice to
      Airways, sell and license back all or any part of its interest in the Commuter
      Slots and/or grant a security interest in all or any part of its interest in
      the
      Commuter Slots, this Agreement or any other Slot Transaction Agreement to a
      third party (such third party, including any successors and assigns, an
“Assignee”
      and
      such sale and/or grant, an “Assignment”)
      provided that as (i) such Assignment does not violate the Securities
      Act or
      any other law, as the case may be, and does not require Airways to be an
“issuer” of Securities registered under the Securities Act, (ii) Assignee
      shall provide a covenant of quiet enjoyment in writing to Airways substantially
      similar to Section 11 of the Slot License Agreement, (iii) Republic
      shall pay all reasonable and documented out-of-pocket expense of Airways in
      connection with such grant and transfer or “back-leveraging” and
      (iv) except as specifically provided above, as of the date of such
      Assignment, and after giving effect thereto, none of the obligations and
      liabilities of Airways in the use and operation of the Commuter Slots or under
      or in respect of the Slot License Agreement or any other Slot Transaction
      Agreement shall be increased or altered and none of the rights and benefits
      of
      Airways in respect thereof shall be diminished, as a result of any such
      Assignment. If so directed in writing, Airways shall pay all License Fees and
      all other sums that become due under this Agreement and the Slot Transaction
      Agreements directly to Assignee or any other party designated in writing by
      Republic or such Assignee. Airways acknowledges that Republic’s right to enter
      into an Assignment is essential to Republic and, accordingly, upon the request
      of Republic or any Assignee, Airways also agrees (i) to promptly execute and
      deliver to Republic or to such Assignee an acknowledgment of the Assignment
      in
      form and substance satisfactory to the requesting party and such other documents
      and assurances reasonably requested by Republic or Assignee and (ii) to comply
      with all other reasonable requirements of any such Assignee in connection with
      any such Assignment; provided,
      that
      such documents, assurances and actions are in a form and of a nature reasonably
      acceptable to Airways. At Republic’s request, Assignee shall be added as an
      Indemnitee under the indemnities set forth in Section 10
      hereof.


    


    22. No
      Third-Party Beneficiaries.
      This
      Agreement is for the sole benefit of the parties hereto and their respective
      successors and permitted assigns and nothing herein, express or implied, is
      intended or shall confer upon any other Person any legal or equitable right,
      benefit or remedy of any nature whatsoever under or by reason of this Agreement,
      except that the provisions of Sections
      9 and 10
      shall
      inure to the benefit of and be enforceable by the Indemnitees.

    


    23. Confidentiality.
      Each
      party shall use all reasonable efforts to keep the terms of the Slot/Gate
      Transaction Agreements and the transactions contemplated thereby strictly
      confidential; provided,
      however,
      that a
      party may disclose the terms of the Slot/Transaction Agreements and the
      transactions contemplated thereby if required to do so:

    


    (a) for
      the
      purpose of legal proceedings, administrative or regulatory requirements or
      as
      otherwise required by law; 

    


    (b) to
      effect
      any registrations, notices, filings or recordation required by or pursuant
      to
      any of the Slot/Gate Transaction Agreements; or

    


    (c) for
      the
      purpose of disclosure to its auditors or to its legal or other professional
      advisers.

    


    


    [The
      remainder of this page intentionally left blank.]

    



    
      
        
           

          


           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    IN
      WITNESS WHEREOF, the parties have caused this Agreement to be executed by their
      authorized representatives as of the date first set forth above.

    


    Airways:

    


    US
      AIRWAYS, INC.

    


    


    


    By: /s/
      Stephen L. Morrell  

    Name: Stephen
      L. Morrell  

    Title: VP
      -
      Finance and Treasurer 

    


    


    Republic:

    


    
      	 	 	 	 	 	 	 	
              REPUBLIC
                AIRWAYS HOLDINGS, INC.

            


    

    


    


    


    By: /s/
      Bryan Bedford   

    Name: Bryan
      Bedford  

    Title:  President   

    


    


    



    
      
        
           

          


           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    Exhibit
      A

    


    DEED
      OF
      CONVEYANCE AND ASSIGNMENT

     

    OF
      SLOTS

     

    FOR
      VALUE
      RECEIVED, the undersigned, [Name
      of Holder]
      (“Holder”),
      on
      behalf of itself and for its successors and assigns, does hereby assign,
      transfer and convey to Republic Airways Holdings Inc. (“Republic”)
      all of
      the right, title, interests and privileges of Holder in and to the Commuter
      Slots (as defined in the Slot Option Agreement), set forth on Schedule
      1
      attached
      hereto (the “Transferred
      Slots”).

     

    This
      Deed
      of Conveyance is an absolute and complete conveyance of all of Holder’s right,
      title, interests and privileges in the Transferred Slots pursuant to that
      certain Slot Option Agreement dated as of September 22, 2005, by and between
      US
      Airways, Inc. (“Airways”)
      and
      Republic (the “Slot
      Option Agreement”).
      Capitalized terms used herein without definition shall have the meanings set
      forth in the Slot Option Agreement.

    


    Holder
      hereby represents and warrants to Republic:

     

    1. This
      Deed
      of Conveyance has been duly authorized, executed and delivered by Holder and
      constitutes the legal, valid and binding obligation of Holder enforceable in
      accordance with its terms.

    


    2. Schedule
      1
      hereto
      sets forth a true and accurate list of the Commuter Slots held by Holder.
      Immediately prior to Closing, Holder is the FAA holder of record of each of
      the
      Commuter Slots set forth on Schedule
      1
      hereto
      pursuant to authority granted to it by the FAA under the Slot Regulations and
      has full right, title and interest in and to each of such Commuter Slots free
      and clear of all Liens and restrictions or limitations (other than those
      expressly set forth in such Subparts or by statute, Republic Liens, or Temporary
      Exchanges permitted by the Slot License Agreement). Schedule
      2
      to the
      Agreement sets forth a true and accurate list of all Temporary Exchanges in
      effect immediately prior to Closing. Holder is utilizing each of the Commuter
      Slots in a manner consistent with all applicable laws governing Slots, including
      but not limited to the Use Provisions. The Commuter Slots listed on Schedule 1
      hereto
      come from Holder’s “then-current FAA approved base” as required by
      14 C.F.R. Section 93.221, are not international Slots, temporary Slots
      or
      Slots designated for essential air service as those terms are used in 14 C.F.R.
      Section 93.219.

    


    3. Holder
      has not received any notice from any Governmental Authority and is not aware
      of
      any event or circumstance that would be likely to result in any Regulatory
      Impairment of all or any of the Commuter Slots listed on Schedule 1
      hereto.

    


    The
      representations and warranties made herein by Holder expressly survive the
      Closing and the delivery of the Deed of Conveyance.

     

    IN
      WITNESS WHEREOF, the undersigned, by and through its duly undersigned authorized
      officer, does hereby execute this DEED OF CONVEYANCE as of this   
      day of
   ,
      2005.

     

    [Name
      of
      Holder]

    


    


    By:      

    Name:     

    Title:      

    


    Before
      me
      personally appeared this day

    _______________
      as _______________

    of
      ____________________________

    who
      in my
      presence did execute

    this
      Agreement and acknowledged

    that
      they
      executed this Agreement for

    the
      purpose stated herein as an act

    and
      deed
      of said company.

    


    


    


    


    Acknowledged
      and Agreed to as of

    this
      __
      day of   ,
      2005

    


    Republic
      Airways Holdings, Inc.

    


    By:       

    Name:      

    Title:      

    


    



    
      
        
           

          


           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    EXHIBIT
      B

    


    Trust
      Security Agreement

    


    


    


    



    
      
        
           

          


           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    SCHEDULE
      1

    


    


    
      	
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    _____

    *
      Confidential 


    
      
        
          


          Schedule
            1 - 

          


           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      	
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    _____

    *
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          Schedule
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    _____

    *
      Confidential


    
      
        
          


          Schedule
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    [*]

    


    _____

    *
      Confidential


    
      
        
          


          Schedule
            1 - 

          


           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    SCHEDULE
      2

    


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    _____

    *
      Confidential 


    
      
        
          


          Schedule
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    _____

    *
      Confidential 


    
      
        
          


          Schedule
            1 - 

          


           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      	
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    _____

    *
      Confidential


    
      
        
          


          Schedule
            1 - 

          


           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


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    *
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    _____

    *
      Confidential

    


    


    



    
      
        
           

          


           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    EXHIBIT
      C

    


    CONSENT
      AND SUBORDINATION

    


    


    Reference
      is made to that certain Slot Option Agreement (the “Slot Option Agreement”)
      dated as of September 22, 2005, between Republic Airways Holdings Inc.
      (“Republic”) and US Airways, Inc. (“Airways”) and the Slot License Agreement
      (the “Slot License Agreement”) dated as of September 22, 2005, between Republic
      and Airways (capitalized terms used herein will have the meaning ascribed
      thereto in the Slot License Agreement). In order to induce Republic to
      consummate the transactions under the Slot Option Agreement, the undersigned
      (“Airline”),
      on
      behalf of itself and for its successors and assigns, does hereby agree for
      the
      benefit of Republic:

    


    1. To
      the
      extent that Airline has rights as an operator of the Licensed Slots and any
      rights under any Exchange or other agreement relating to the Licensed Slots,
      any
      and all of its rights to the Licensed Slots are subject and subordinate in
      any
      and all respects to Republic’s rights under the Slot License Agreement and the
      other Slot/Gate Transaction Agreements and the terms and conditions of the
      Slot
      License Agreement and the other Slot/Gate Transaction Agreements. [This
      paragraph not applicable to Airways’ Consent and Subordination.]

    


    2. At
      any
      time during the continuance of a Material Breach with respect to Airways under
      the Slot License Agreement, Republic shall have the right to terminate any
      and
      all rights of Airline in and to the Licensed Slots, and Airline hereby
      irrevocably consents to any such termination and the transfer of such rights
      to
      Republic or its designee free and clear of any rights or interest of
      Airline.

    


    3. Airline
      hereby irrevocably appoints Republic as attorney-in-fact of Airline, with full
      authority in the place and stead of Airline and in the name of Airline or
      otherwise, from time to time in Republic’s discretion after the occurrence and
      during the continuance of a Material Breach with respect to Airways under the
      Slot License Agreement, to take any action and to execute any instrument that
      Republic may deem necessary or advisable to accomplish the purposes of the
      Slot
      License Agreement, including without limitation:

    


    (a) to
      enforce compliance with the obligations of Airline and the rights of Republic
      hereunder; and

    


    (b) to
      execute and deliver, on behalf of Airline, any documents that Republic deems
      necessary or advisable to transfer any and all interest that Airline may have
      in
      the Licensed Slots to Republic or its designee and to make such filings at
      the
      FAA in the name of Airline in connection with any such transfer including but
      not limited to written evidence of Airline’s consent to the
      transfer.

    


    4. For
      all
      purposes of this Consent and Subordination, Airline agrees to be subject to
      Section 20 of the Slot License Agreement which is hereby incorporated
      herein by reference.

    


    5. Republic
      agrees that so long as no Material Breach with respect to Airways shall have
      occurred and be continuing, neither Republic nor any Person lawfully claiming
      through Republic will interfere with Airline’s use and quiet enjoyment of the
      Licensed Slots. 

    


    Airline
      represents and warrants to Republic that this Consent and Subordination has
      been
      duly executed and delivered on behalf of Airline and constitutes a valid and
      binding obligation of Airline, enforceable against Airline in accordance with
      its terms.

    


    Republic
      represents and warrants to Airline that this Consent and Subordination has
      been
      duly executed and delivered on behalf of Republic and constitutes a valid and
      binding obligation of Republic, enforceable against Republic in accordance
      with
      its terms.

    


    


    IN
      WITNESS WHEREOF, the undersigned, by and through its duly undersigned authorized
      officer, does hereby execute this CONSENT AND SUBORDINATION as of this
      ___________ day of _________, 2005.

    


    [Name
      of Airline]

    


    


    


    By:      

    Name:     

    Title:      

    


    REPUBLIC
      AIRWAYS HOLDINGS INC.

    


    By:      

    Name:     

    Title: