Document:

Capacity Purchase Agreement by and between Continental Airlines, Republic Airways
      Holdings and Chautauqua Airlines

    

    

    
      	
               EXHIBIT
                10.5

            
	
               CONFIDENTIAL
                TREATMENT

            
	
               REQUESTED
                PURSUANT TO RULE 24b-2

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

    

     

    
 

    CAPACITY
      PURCHASE AGREEMENT

    

    Between

    

    Continental
      Airlines, Inc.,

    

    Republic
      Airways Holdings Inc. 

    

    and

    

    Chautauqua
      Airlines, Inc.

    

    

    

    Dated
      as of July
      21, 2006

    

    

    

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    Table
      of Contents

    

     

    
      
        	 Parties        	
                1

              
	 	 
	 Recitals	
                 1

              

      

    

     

     

    ARTICLE
      I

    DEFINITIONS

     

    ARTICLE
      II

    CAPACITY
      PURCHASE, SCHEDULES AND FARES

    
      
        	 Section 2.01 Capacity
                Purchase	 	 
	 Section 2.02 Flight-Related
                Revenues	 	 
	 Section 2.03 Pass
                Travel	 	 
	 Section 2.04 Conversion
                of Covered Aircraft Livery	 	 

      

    

     

    ARTICLE
      III

     

    
      	 CONTRACTOR COMPENSATION	 	 
	 Section 3.01 Base
              and Incentive Compensation	 	 
	 Section 3.02 Periodic
              Adjustment of Base and Incentive Compensation	 	 
	 Section 3.03 Contractor
              Expenses	 	 
	 Section 3.04 Continental
              Expenses	 	 
	 Section 3.05 Audit
              Rights; Financial Information	 	 
	 Section 3.06 Billing
              and Payment; Reconciliation.	 	 

    

     

     

    ARTICLE
      IV

     

    
      	 CONTRACTOR OPERATIONS AND AGREEMENTS
              WITH CONTINENTAL	 	 
	 Section 4.01 Crews,
              Etc.	 	 
	 Section 4.02 Governmental
              Regulations	 	 
	 Section 4.03 Quality
              of Service	 	 
	 Section 4.04 Incidents
              or Accidents	 	 
	 Section 4.05 Emergency
              Response	 	 
	 Section 4.06 Safety
              Matters	 	 
	 Section 4.07 Master
              Facility and Ground Handling Agreement	 	 
	 Section 4.08 Codeshare
              Terms	 	 
	 Section 4.09 Fuel
              Purchasing Agreement	 	 
	 Section 4.10 Slots
              and Route Authorities	 	 
	 Section 4.11 Use
              of Continental Marks	 	 
	 Section 4.13 Catering
              Standards	 	 
	 Section 4.14 Ticket
              Handling Terms	 	 
	 Section 4.15 Fuel
              Efficiency Program	 	 
	 Section 4.16 Permitted
              Charters	 	 

    

    
       

    

    ARTICLE
      V

     

    
      	 CERTAIN RIGHTS OF CONTINENTAL	 	 
	 Section 5.01 Use
              of Covered Aircraft	 	 
	 Section 5.02 Most
              Favored Nations	 	 
	 Section 5.03 Change
              of Control	 	 

    

    
    

     

    
      
        
        

      

      
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    ARTICLE
      VI

    INSURANCE

     

    
      	 Section 6.01 Minimum
              Insurance Coverages	 	 
	 Section 6.02 Endorsements	 	 
	 Section 6.03 Evidence
              of Insurance Coverage	 	 

    

    
    

    ARTICLE
      VII

     

    
      	 INDEMNIFICATION	 	 
	 Section 7.01 Contractor
              Indemnification of Continental	 	 
	 Section 7.02 Continental
              Indemnification of Contractor	 	 
	 Section 7.03 Indemnification
              Claims	 	 
	 Section 7.04 Employer’s
              Liability; Independent Contractors; Waiver of Control	 	 
	 Section 7.05 Survival	 	 

    

    
    

    ARTICLE
      VIII

     

    
      	 TERM, TERMINATION AND DISPOSITION OF
              AIRCRAFT	 	 
	 Section 8.01 Term	 	 
	 Section 8.02 Early
              Termination	 	 
	 Section 8.03 Disposition
              of Aircraft during Wind-Down Period	 	 

    

    
    

    ARTICLE
      IX

     

    
      	 REPRESENTATIONS, WARRANTIES AND
              COVENANTS	 	 
	 Section 9.01 Representations
              and Warranties of Contractor	 	 
	 Section 9.02 Representations
              and Warranties of Continental	 	 

    

    
    

    ARTICLE
      X

     

    
      	 MISCELLANEOUS	 	 
	 Section 10.01 Transition
              Arrangements	 	 
	 Section 10.02 Notices	 	 
	 Section 10.03 Binding
              Effect; Assignment	 	 
	 Section 10.04 Amendment
              and Modification	 	 
	 Section 10.05 Waiver	 	 
	 Section 10.06 Interpretation	 	 
	 Section 10.07 Confidentiality	 	 
	 Section 10.08 Arbitration	 	 
	 Section 10.09 Counterparts	 	 
	 Section 10.10 Severability	 	 
	 Section 10.11 Equitable
              Remedies; Certain Liquidated Damages	 	 
	 Section 10.12 Relationship
              of Parties	 	 
	 Section 10.13 Entire
              Agreement; No Third Party Beneficiaries	 	 
	 Section 10.14 Governing
              Law	 	 
	 Section 10.15 Parent
              Guarantee	 	 
	 Section 10.16 Right
              of Set-Off	 	 
	 Section 10.17 Cooperation
              with Respect to Reporting	 	 
	 Section 10.18 Extension
              of Aircraft Term	 	 
	 Section 10.19 Other
              Adjustments to Schedule 1	 	 
	 Section 10.20 Termination
              of April 18, 2006 Agreement	 	 
	 Section 10.21 Life
              Limited Parts.	 	 

    

     

    

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    
      	 SCHEDULE 1:	 Covered Aircraft & Delivery
              Schedule
	 SCHEDULE 2: 	  [Reserved]
	 SCHEDULE 3: 	 Compensation for Capacity
              Purchase
	 	 
	 EXHIBIT A: 	 Definitions
	 EXHIBIT B: 	  [Reserved]
	 EXHIBIT C:	 Master Facility and Ground Handling
              Agreement
	 EXHIBIT D: 	 Terms of Codeshare
              Arrangements
	 EXHIBIT E: 	 Non-Revenue Pass Travel
	 EXHIBIT F:	 Fuel Purchasing Agreement
	 EXHIBIT G:	 Use of Continental Marks
	 EXHIBIT H:	 Use of Contractor Marks
	 EXHIBIT I: 	 Catering Standards
	 EXHIBIT J: 	 Reasonable Operating
              Constraints
	 EXHIBIT K:	 Ticket Handling Terms
	 EXHIBIT L:	 Fuel Efficiency Program
	 EXHIBIT M:	 Form of Guarantee of
              Parent

    

            

     

    
      
        
        

      

      
        -4-

        
          

        

      

    

    CAPACITY
      PURCHASE AGREEMENT

     

    This
      Capacity Purchase Agreement (this “Agreement”),
      dated
      as of July 21, 2006, is between Continental Airlines, Inc., a Delaware
      corporation (“Continental”),
      Republic Airways Holdings Inc., a Delaware corporation (“Parent”),
      and
      Chautauqua Airlines, Inc., an Indiana corporation (“Contractor”).

     

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

     

    
      	
               ARTICLE
                I 

            
	
               DEFINITIONS

            

    

    
    

    Capitalized
      terms used in this Agreement (including, unless otherwise defined therein,
      in
      the Schedules, Appendices and Exhibits to this Agreement) shall have the
      meanings set forth in Exhibit
      A
      hereto.

    
      	
               ARTICLE
                II 

            

    

    CAPACITY
      PURCHASE, SCHEDULES AND FARES

     

    Section
      2.01  Capacity
      Purchase. Continental
      agrees to purchase the capacity of each Covered Aircraft for the period
      beginning on the date such aircraft is presented for service by Contractor
      under
      this Agreement and ending on the exit date set forth for such aircraft on
Schedule
      1,
      as such
      date my be extended pursuant to Section
      10.18
      hereof,
      in each case unless such aircraft is earlier withdrawn pursuant to Article
      VIII,
      all
      under the terms and conditions set forth herein and for the consideration
      described in Article III.
      Subject
      to the terms and conditions of this Agreement, Contractor shall provide all
      of
      the capacity of the Covered Aircraft solely to Continental and use the Covered
      Aircraft solely to operate the Scheduled Flights.

     

    (a)  Fares,
      Rules and Seat Inventory.
      Continental shall establish and publish all fares and related tariff rules
      for
      all seats on the Covered Aircraft. Contractor shall not publish any fares,
      tariffs, or related information for the Covered Aircraft. In addition,
      Continental shall have complete control over all seat inventory and inventory
      and revenue management decisions for the Covered Aircraft, including overbooking
      levels, discount seat levels and allocation of seats among various fare
      buckets.

     

    (b)  Flight
      Schedules.
      Continental shall, in its sole discretion, establish and publish all schedules
      for the Covered Aircraft (such scheduled flights, together with Charter Flights
      and ferry flights required to accommodate such scheduled flights and Charter
      Flights (excluding ferry flights resulting from Permitted Charters) or otherwise
      made at Continental’s request, referred to herein as “Scheduled
      Flights”),
      including determining the city-pairs served, frequencies, utilization and timing
      of scheduled arrivals and departures, and shall, in its sole discretion, make
      all determinations regarding the establishment and scheduling of any Charter
      Flights; provided
      that
      such schedules shall be subject to Reasonable Operating Constraints. Continental
      shall also be entitled, in its sole discretion and at any time prior to takeoff,
      to direct Contractor to delay or cancel a Scheduled Flight, including without
      limitation for delays and cancellations that are ATC
      or
      weather related, and Contractor shall take all necessary action to give effect
      to any such direction.
      Contractor and Continental shall meet monthly (but not later than the fourth
      Friday of each calendar month) to review the planned flight schedules for the
      Covered Aircraft for each of the next six months. At such meeting, Continental
      shall present a planned flight schedule for the Covered Aircraft for each of
      the
      next six months, including a proposed Final Monthly Schedule for the next
      calendar month. At such meeting, Continental shall review and consider any
      changes to the planned flight schedule for the Covered Aircraft, including
      the
      proposed Final Monthly Schedule, suggested by Contractor. Not later than three
      Business Days prior to the beginning of each calendar month, Continental will
      deliver to Contractor the Final Monthly Schedule. Following such monthly
      meetings and delivery of the Final Monthly Schedule, however, Continental may
      make such adjustments to the proposed Final Monthly Schedule as it deems
      appropriate (subject to Reasonable Operating Constraints).

     

    (c)  Wet
      Leases.
      At
      Continental’s option, and provided that Contractor is not adversely affected in
      any material respect, Contractor shall “wet lease” one or more of the Covered
      Aircraft to Continental, on terms mutually acceptable to the parties hereto,
      which terms are identical in all material respects, economically and otherwise,
      to the terms of this Agreement (taking into account the inherent differences
      between a “wet lease” arrangement and a capacity purchase arrangement), and such
“wet lease” shall supersede the capacity purchase provisions of this Agreement
      with respect to such Covered Aircraft. In such event, Contractor’s compensation
      hereunder, including without limitation in this Article
      II,
      in
Article
      III
      and in
Schedule
      3,
      shall
      be adjusted so that Contractor’s aggregate compensation from such “wet lease”
arrangements and the capacity purchase arrangements applicable to the remaining
      Covered Aircraft are equal to the amount of Contractor’s aggregate compensation
      had no such “wet lease” arrangements been entered into.

     

    (d)  Start
      Up Dates.
      The
      Covered Aircraft shall be placed into service under the terms and conditions
      of
      this Agreement on such dates as are provided on Schedule
      1.

     

    (e)  Spare
      Aircraft.
      Notwithstanding anything in this Section
      2.01
      or
      elsewhere in this Agreement to the contrary, Contractor may use (i) Spare
      Aircraft that are not Covered Aircraft to operate the Scheduled Flights and
      Permitted Charters, and (ii) Spare Aircraft that are Covered Aircraft to operate
      flights that are not Scheduled Flights and Permitted Charters, including flights
      for other air carriers.
      One of
      the Spare Aircraft constituting a Covered Aircraft shall be used by Contractor
      as an operational spare, and the other Spare Aircraft constituting a Covered
      Aircraft shall be used by Contractor as a maintenance spare to replace Covered
      Aircraft that are out of service due to scheduled maintenance checks. In the
      event that more than one Covered Aircraft is out of service at any time due
      to
      scheduled maintenance checks, then a third Covered Aircraft may be temporarily
      designated as a Spare Aircraft (but shall not be painted in neutral colors
      nor
      shall its livery be changed), but only for so long as more than one Covered
      Aircraft remains out of service for such scheduled maintenance checks. In
      addition, if at any time no Covered Aircraft is scheduled to be out of service
      due to scheduled maintenance checks for a period of at least five consecutive
      weeks, then Contractor shall notify Continental of such circumstance not less
      than [*]
      in
      advance of such period and the Spare Aircraft to be used as a maintenance spare
      shall be made available for Scheduled Flights during such period.

     

    Section
      2.02  Flight-Related
      Revenue. Contractor
      and Parent acknowledge and agree that, except for revenues from Permitted
      Charters as provided in Section
      4.16,
      all
      revenues resulting from the sale and issuance of passenger tickets associated
      with the operation of the Covered Aircraft and all other sources of revenue
      associated with the operation of the Covered Aircraft, including without
      limitation revenues relating to the transportation of cargo or mail and revenues
      associated with food, beverage and duty-free services and guaranteed or
      incentive payments from airport, local or municipal authorities in connection
      with scheduling flights to such airport or locality, are the sole property
      of
      and shall be retained by Continental (or, if received by Contractor or Parent,
      shall be promptly remitted to Continental). 

     

    Section
      2.03  Pass
      Travel. All
      pass
      travel and other non-revenue travel on any Scheduled Flight shall be
      administered in accordance with Exhibit E.

     

    Section
      2.04  Conversion
      of Covered Aircraft Livery. Continental
      shall be responsible for Contractor’s reasonable out-of-pocket costs of
      preparing each Covered Aircraft (other than the Spare Aircraft), up to
[*]
      for
      each
      CRJ Aircraft and [*]
      for
      each
      ERJ Aircraft, prior to its being placed into service hereunder, in the livery
      required by Paragraph
      8
      of
Exhibit
      G
      (including replacing all seatcovers on all CRJ Aircraft). In addition,
      Continental shall have the unilateral right to change the color referenced
      in
      the last sentence of Paragraph
      8
      of
Exhibit
      G
      at any
      time prior to September 1, 2006.

    ___________

    *Confidential

    
      -5-

      
        

      

    

    
    

    ARTICLE
      III  

    CONTRACTOR
      COMPENSATION

     

    Section
      3.01  Base
      and Incentive Compensation. For
      and
      in consideration of the transportation services, facilities and other services
      to be provided by Contractor hereunder, Continental shall pay Contractor the
      base and incentive compensation as provided in Paragraph
      A
      of
Schedule
      3
      hereto,
      subject to the terms and conditions set forth in this Article
      III.

    Section
      3.02  Periodic
      Adjustment of Base and Incentive Compensation. The
      rates
      under this Agreement set forth in Appendix
      1
      to
Schedule
      3
      hereto
      and the Controllable Completion Factor Incentive Rate set forth in Appendix
      2
      to
Schedule
      3
      hereto
      shall remain in effect through December 31, 2007, and thereafter shall be
      adjusted on each January 1, beginning with January 1, 2008, as follows: the
      new
      rates, applicable beginning on such January 1, shall equal the rates in effect
      on the immediately preceding December 31 multiplied by the lower of (a) the
      Annual CPI Change and (b) [*];
      provided
      that the
      rates “generally for each Covered Aircraft for each day in the Term” and
“separately for each Covered Aircraft for each month in the Term,” in each case
      as set forth or cross-referenced on Appendix 1
      to
Schedule 3
      shall
      not be adjusted pursuant to this Section 3.02.

     

    Section
      3.03  Contractor
      Expenses. Except
      as
      provided otherwise in Section
      3.04,
      Contractor shall pay in accordance with commercially reasonable practices all
      expenses incurred in connection with Contractor’s provision of Regional Airline
      Services.

     

    Section
      3.04  Continental
      Expenses

     

    (a)  Certain
      Expenses.
      Continental shall incur directly those expenses relating to the Regional
      Airlines Services that are described in Paragraph
      B(1)
      of
Schedule
      3.

     

    (b)  Design
      Changes.
      Continental shall be responsible for any reasonable out-of-pocket expenses
      relating to interior and exterior design changes to the Covered Aircraft and
      other product-related changes required by Continental, including
      facility-related design changes and the cost of changes in uniforms and other
      livery, in each case that occur outside of Contractor’s normal aircraft and
      facility refurbishment program.

     

    Section
      3.05  Audit
      Rights;
      Financial Information. Contractor
      shall make available for inspection by Continental and its outside auditors
      and
      advisors, within a reasonable period of time after Continental makes a written
      request therefor, all of Contractor’s books and records (including all financial
      and accounting records and operations reports, and records of other subsidiaries
      or affiliates of Contractor, if any) as necessary to audit any reimbursement
      of
      expenses set forth on Appendix 3 of Schedule 3 hereto. In connection with such
      audit, Continental and its outside auditors and advisors shall be entitled
      to
      make copies and notes of such information as they deem necessary and to discuss
      such records with Contractor’s Chief Financial Officer or such other employees
      or agents of Contractor knowledgeable about such records. Upon the reasonable
      written request of Continental or its outside auditors or advisors, Contractor
      will cooperate with Continental and its outside auditors and advisors to permit
      Continental and its outside auditors and advisors access to Contractor’s outside
      auditors for purposes of reviewing such records.
      In
      addition, Contractor and Parent shall deliver or cause to be delivered to
      Continental (I) as soon as available, but in any event within 90 days after
      the
      end of each fiscal year, a copy of the consolidated balance sheet of Parent,
      as
      at the end of such year, and the related consolidated statements of income
      and
      retained earnings and of cash flows of Parent for such year, setting forth
      in
      each case in comparative form the figures for the previous year, reported on
      by
      an independent certified public accountants of nationally recognized standing;
      and (II) as soon as available, but in any event not later than 45 days after
      the
      end of each of the first three quarterly periods of each fiscal year, the
      unaudited consolidated balance sheet of Parent, as at the end of such quarter,
      and the related unaudited consolidated statements of income and retained
      earnings and of cash flows of Parent for such quarter and the portion of the
      fiscal year through the end of such quarter, setting forth in each case in
      comparative form the figures for the previous year, certified by a responsible
      officer of Parent, as being fairly stated in all material respects (subject
      to
      normal year-end audit adjustments); provided,
      that no
      party shall be required to deliver financial statements pursuant to this
      sentence if such party is a reporting issuer pursuant to Section 13 or 15(d)
      of
      the Securities Exchange Act of 1934, as amended, and such financial statements
      are timely filed with the Securities and Exchange Commission pursuant thereto.
      All financial statements delivered hereunder shall be complete and correct
      in
      all material respects and shall be prepared in reasonable detail and in
      accordance with GAAP applied consistently throughout the periods reflected
      therein and with prior periods (except as approved by such accountants or
      officer, as the case may be, and disclosed therein).

    
      ___________

      *Confidential

    

    
      
        
        

      

      
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    Section
      3.06  Billing
      and Payment; Reconciliation.

     

    (a) Billing
      and Payment.
      On the
      next Business Day after Contractor receives the Final Monthly Schedule from
      Continental pursuant to Section 2.01(b),
      Contractor shall present a reasonably detailed written invoice for amounts
      due
      under this Agreement in respect of the Base Compensation for the Scheduled
      Flights during the month to which such Final Monthly Schedule pertains.
      Continental shall pay Contractor the amount due under such invoice (the
“Invoiced
      Amount”),
      subject to Continental’s right to dispute any calculations set forth on such
      invoice that do not comply with the terms of this Agreement, net of amounts
      owed
      by Contractor to Continental,
      including without limitation amounts owed under the
      Master Facility and Ground Handling Agreement and/or any other amounts as
      mutually agreed to by both Contractor and Continental, as follows:

     

    (i)  That
      portion of the Invoiced Amount constituting aircraft rent, and one-quarter
      of
      the balance of the Invoiced Amount shall be payable by Continental to
      Contractor, by electronic transfer of funds to a bank account designated by
      Contractor, available on or before the first day of the month (or if such day
      is
      not a Business Day, the next Business Day) to which such invoice relates;

     

    (ii)  One-quarter
      of the balance of the Invoiced Amount shall be payable by Continental to
      Contractor, by electronic transfer of funds to a bank account designated by
      Contractor, available on or before the 8th day of the month (or if such day
      is
      not a Business Day, the next Business Day) to which the invoice
      relates;

     

    (iii)  One-quarter
      of the balance of the Invoiced Amount shall be payable by Continental to
      Contractor, by electronic transfer of funds to a bank account designated by
      Contractor, available on or before the 15th day of the month (or if such day
      is
      not a Business Day, the next Business Day) to which the invoice relates;
      and

     

    (iv)  One-quarter
      of the balance of the Invoiced Amount shall be payable by Continental to
      Contractor, by electronic transfer of funds to a bank account designated by
      Contractor, available on or before the 22nd day of the month (or if such day
      is
      not a Business Day, the next Business Day) to which the invoice
      relates.

     

    (b)  Reconciliation.
      Not
      later than 14 days following the end of each month, Contractor and Continental
      shall reconcile actual amounts due in respect of such month with the estimated
      amounts included in the Invoiced Amount for such items for such month in
      accordance with the terms and conditions set forth in Schedule
      3.
      On or
      before the 15th day following the end of such month (or if such day is not
      a
      Business Day, the next Business Day), such reconciled amounts for such month
      to
      the extent applicable: (i) shall be paid by Continental to Contractor, together
      with any payment to be made by Continental pursuant to Section 3.06(a)(iii)
      above,
      or (ii) shall be paid by Contractor to Continental or set off by Continental
      against any other amounts owing to Contractor under this Agreement or any
      Ancillary Agreement. Further reconciliations shall be made on or prior to the
      22nd day following the end of such month (or if such day is not a Business
      Day,
      the next Business Day) to the extent necessary as a result of Continental’s
      review of financial information provided by Contractor in respect of such month.
      Such further reconciled amounts for such month to the extent applicable (x)
      shall be paid by Continental to Contractor, together with any other payment
      to
      be made by Continental pursuant to Section
      3.06(a)(iv)
      above,
      or (y) shall be paid by Contractor to Continental or set off by Continental
      against any other amounts owing to Contractor. If, subsequent to any
      reconciliation payments or set-off, as the case may be, Contractor’s financial
      statements are restated, amended or otherwise adjusted for any calendar month
      or
      quarter, then the reconciled amounts for such period shall be recalculated
      in
      accordance with the terms and conditions set forth in Schedule 3,
      and the
      parties shall make further payments or set off further amounts as appropriate
      in
      respect of such recalculations.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    ARTICLE
      IV  

    CONTRACTOR
      OPERATIONS
      AND
      AGREEMENTS WITH CONTINENTAL

     

    Section
      4.01  Crews,
      Etc.   

    

    (a) Contractor
      shall be responsible for providing all crews (flight and cabin) and maintenance
      personnel and, at Contractor Airports, gate agents and other ground personnel,
      necessary to operate the Scheduled Flights and for all aspects (personnel and
      other) of dispatch control.

    

    (b) Continental
      agrees to give Contractor pilots preferential interview status for any pilot
      opening that may occur at Continental, consistent with commitments concerning
      pilots of other carriers. Contractor agrees to give any furloughed Continental
      pilot preferential interview status for any pilot openings that may occur at
      Contractor consistent with Contractor’s commitments concerning pilots of other
      carriers. Any furloughed Continental pilot hired by Contractor shall be required
      to comply with all standard terms and conditions of employment applicable to
      employees of Contractor, but will not be required by Contractor to resign from
      Continental as a condition for applying or being employed as a pilot of
      Contractor.

    

    Section
      4.02  Governmental
      Regulations. Contractor
      has and shall maintain all certifications, permits, licenses, certificates,
      exemptions, approvals, plans, and insurance required by governmental
      authorities, including, without limitation, FAA, DOT and TSA, to enable
      Contractor to perform the services required by this Agreement. All flight
      operations, dispatch operations and all other operations and services undertaken
      by Contractor pursuant to this Agreement shall be conducted, operated and
      provided by Contractor in compliance with all U.S. and foreign governmental
      laws, regulations and requirements, including, without limitation, those
      relating to airport security, the use and transportation of hazardous materials
      and dangerous goods, crew qualifications, crew training and crew hours, the
      carriage of persons with disabilities and without any violation of U.S. or
      foreign laws, regulations or governmental prohibitions. All Covered Aircraft
      shall be operated and maintained by Contractor in compliance with all laws,
      regulations and governmental requirements, Contractor’s own operations manuals
      and maintenance manuals and procedures, and all applicable equipment
      manufacturers’ manuals and instructions.

     

    Section
      4.03  Quality
      of Service. At
      all
      times, Contractor shall provide Regional Airline Services with appropriate
      standards of care, but in no event lower than such standards utilized by
      Continental as of the date of this Agreement. Continental procedures,
      performance standards and means of measurement thereof concerning the provision
      of air passenger and air cargo services shall be applicable to all Regional
      Airline Services provided by Contractor. Contractor shall achieve at least
      the
      comparable quality of airline service as provided by Continental, subject to
      limitations imposed by the type of aircraft used by Contractor and its route
      network. Contractor shall comply with all airline customer service commitments
      and policies of Continental as of the date hereof, including without limitation
      the “CustomerFirst” commitments, and employee conduct, appearance and training
      policies in place as of the date hereof, and shall handle customer-related
      services in a professional, businesslike and courteous manner. In connection
      therewith, Contractor shall maintain aircraft cleaning cycles and policies,
      and
      shall maintain adequate staffing levels, to ensure at least a comparable level
      of customer service and operational efficiency that Continental achieves,
      including without limitation in respect of customer complaint response,
      ticketing and boarding timing, oversales, baggage services and handling of
      irregular operations. In addition, at the request of Continental, Contractor
      shall comply with all such airline customer service commitments, policies and
      standards of care of Continental as adopted, amended or supplemented after
      the
      date hereof. Contractor shall ensure that all Covered Aircraft are equipped
      with
      an aircraft communications addressing and reporting system that provides
      operational information in a form reasonably acceptable to Continental, half
      of
      the cost of which will be borne by Continental, up to an amount equal to
      one-half of the amount which ARINC Incorporated would charge for providing
      similar services. Contractor shall provide Continental with timely communication
      regarding the status of all Scheduled Flights, and shall perform closeout
      procedures at service levels at least as high as those of Continental at
      comparably-sized airports. Contractor will use Continental’s standard procedures
      for processing and adjudicating all claims for which Contractor is responsible
      in an effort to avoid such matters becoming the subject of claims, litigation
      or
      an investigation by a governmental agency or authority. At either party’s
      request, Contractor and Continental will meet to discuss and review Contractor’s
      customer service and handling procedures and policies and its employees’
conduct, appearance and training standards and policies.
      Continental shall give Contractor not less than 15 days prior written notice
      of
      any non-safety-related breach of this Section
      4.03
      prior to
      exercising any remedy regarding such breach.

     

    Section
      4.04  Incidents
      or Accidents. Contractor
      shall promptly notify Continental of all irregularities involving a Scheduled
      Flight or Covered Aircraft operated by Contractor, including, without
      limitation, aircraft accidents and incidents, which result in any damage to
      persons and/or property or may otherwise result in a complaint or claim by
      passengers or an investigation by a governmental agency or authority. Contractor
      shall furnish to Continental as much detail as practicable concerning such
      irregularities and shall cooperate with Continental at Contractor’s own expense
      in any appropriate investigation.

     

    Section
      4.05  Emergency
      Response. Contractor
      shall adopt Continental’s Emergency Response Plan for aircraft accidents or
      incidents. In the event of an accident or incident involving a Covered Aircraft
      or Scheduled Flight, Continental will have the right to manage the emergency
      response efforts on behalf of Contractor with full cooperation from
      Contractor.

     

    Section
      4.06  Safety
      Matters. In
      the
      event of a reasonable safety concern, Continental shall have the right, at
      its
      own cost, to inspect, review, and observe Contractor’s operations of Scheduled
      Flights. Notwithstanding the conduct or absence of any such review, Contractor
      is and shall remain solely responsible for the safe operation of its aircraft
      and the safe provision of Regional Airline Services, including all Scheduled
      Flights, and nothing in this Section 4.06 or otherwise in this Agreement is
      intended or shall be interpreted to make Continental responsible for such safety
      matters.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    Section
      4.07  Master
      Facility and Ground Handling Agreement. Contemporaneous
      with the execution and delivery of this Agreement, Contractor and Continental
      shall enter into a Master Facility and Ground Handling Agreement in the form
      attached hereto as Exhibit
      C.

     

    Section
      4.08  Codeshare
      Terms. Contractor
      agrees to operate all Scheduled Flights using the Continental flight code and
      flight numbers assigned by Continental, or such other flight codes and flight
      numbers as may be assigned by Continental (to accommodate, for example, a
      Continental alliance partner), and otherwise under the codeshare terms set
      forth
      in Exhibit
      D.

     

    Section
      4.09  Fuel
      Purchasing Agreement. Contemporaneous
      with the execution and delivery of this Agreement, Continental and Contractor
      shall enter into the Fuel Purchasing Agreement in the form attached hereto
      as
Exhibit
      F.

     

    Section
      4.10  Slots
      and Route Authorities. At
      the
      request of Continental made during the Term or upon termination of this
      Agreement, Contractor shall use its commercially reasonable efforts to transfer
      to Continental or its designee, to the extent permitted by law, any airport
      takeoff or landing slots, route authorities or other similar regulatory
      authorizations transferred to Contractor by Continental for use in connection
      with Scheduled Flights, or held by Contractor and used for Scheduled Flights,
      in
      consideration of the payment to Contractor of the net book value, if any, of
      such slot, authority or authorization on Contractor’s books. Contractor’s
      obligations pursuant to the immediately preceding sentence shall survive the
      termination of this Agreement for so long as any transfer requested pursuant
      to
      this Section
      4.10
      shall
      not have been completed. Contractor hereby agrees that all of Contractor’s
      contacts or communications with any applicable regulatory authority concerning
      any airport takeoff or landing slots, route authorities or other similar
      regulatory authorizations used for Scheduled Flights will be coordinated through
      Continental. If any airport takeoff or landing slot, route authority or other
      similar regulatory authorization transferred to Contractor by Continental for
      use in connection with Scheduled Flights, or held by Contractor and used for
      Scheduled Flights is withdrawn or otherwise forfeited as a result of
      Controllable Cancellations or any other reason within Contractor’s reasonable
      control, then Contractor agrees to pay to Continental promptly upon demand
      an
      amount equal to the market value of such withdrawn or forfeited slot, authority
      or authorization.

     

    Section
      4.11  Use
      of Continental Marks. Continental
      hereby grants to Contractor the non-exclusive and non-transferable rights to
      use
      the Continental Marks and other Identification as provided in, and Contractor
      shall use the Continental Marks and other Identification in accordance with
      the
      terms and conditions of, Exhibit
      G.

     

    Section
      4.12  Use
      of Contractor Marks. Contractor
      hereby grants to Continental the non-exclusive and non-transferable rights
      to
      use the Contractor Marks as provided in, and Continental shall use the
      Contractor Marks in accordance with the terms and conditions of, Exhibit
      H.

     

    Section
      4.13  Catering
      Standards. Continental
      and Contractor shall comply with the catering requirements set forth on
Exhibit
      I
      hereto.
      The parties agree that, in the event of a conflict between the provisions of
      Exhibit
      I
      and the
      Contractor Ground Handling Agreement, the provisions of Exhibit
      I shall
      control.

     

    Section
      4.14  Ticket
      Handling Terms. Continental
      and Contractor shall comply with the ticket handling requirements set forth
      in
Exhibit
      K
      hereto.
      The parties agree that, in the event of a conflict between the provisions of
      Exhibit
      K
      and the
      Contractor Ground Handling Agreement, the provisions of Exhibit
      K
      shall
      control.

     

    Section
      4.15  Fuel
      Efficiency Program. Contractor
      shall use its commercially reasonable best efforts to promptly adopt and adhere
      to a fuel efficiency program as described on Exhibit
      L
      hereto.

     

    Section
      4.16  Permitted
      Charters. With
      Continental’s prior written consent (which consent shall not be unreasonably
      withheld with respect to any request for a charter flight made within six months
      of such flight), Contractor shall be permitted to operate charter flights
      (“Permitted
      Charters”)
      using
      the Covered Aircraft, provided that Contractor pays Continental a fee of
[*].
      Any
      revenue from the Permitted Charters shall be solely for the account of
      Contractor, and any expense, direct or indirect, related to the Permitted
      Charters (including ferrying or repositioning flights required following or
      anticipating any Permitted Charters and costs incurred by Continental if, as
      a
      result of a Permitted Charter, a Scheduled Flight is delayed or cancelled)
      shall
      be sole responsibility of Contractor.

    
      ___________

      *Confidential

    

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    ARTICLE
      V  

    CERTAIN
      RIGHTS OF CONTINENTAL

     

    Section
      5.01  Use
      of Covered Aircraft. Contractor
      and Parent agree that, except as otherwise directed or approved in writing
      by
      Continental pursuant to Section
      4.16
      or
      otherwise in Continental’s sole discretion, the Covered Aircraft (other than
      Covered Aircraft that are Spare Aircraft which may be used as provided in
Section
      2.01(e)),
      may be
      used only to provide Regional Airline Services. Without the written consent
      of
      Continental, the Covered Aircraft may not be used by Contractor for any other
      purpose, including without limitation flying for any other airline or on
      Contractor’s own behalf.

     

    Section
      5.02  Most
      Favored Nations. Each
      of
      Contactor and Parent represents to Continental that in its reasonable view
      as of
      the date hereof the overall terms of this Agreement are more favorable to
      Continental than the overall terms of any other existing agreement pursuant
      to
      which Contractor provides comparable services to any other major
      carrier.

     

    Section
      5.03  Change
      of Control. Upon
      the
      occurrence of a Change of Control of Parent or Contractor without the prior
      written consent of Continental, Continental shall have the right to terminate
      this Agreement on 90 days prior written notice to Contractor, such notice to
      be
      delivered not later than 90 days after Continental becomes aware of such Change
      of Control (which termination shall not be effective if the circumstances giving
      rise to such Change of Control shall no longer exist on the 30th day after
      Continental delivers such written notice to Contractor).

     

    
      
        	
                 ARTICLE
                  VI

              
	
                 INSURANCE

              

      

    

     

    Section
      6.01  Minimum
      Insurance Coverages. During
      the Term, in addition to any insurance required to be maintained by Contractor
      pursuant to the terms of any aircraft lease, or by any applicable governmental
      or airport authority, Contractor shall maintain, or cause to be maintained,
      in
      full force and effect policies of insurance with insurers of recognized
      reputation and responsibility, in each case to the extent available on a
      commercially reasonable basis, as follows:

     

    (a)  Comprehensive
      aircraft hull and liability insurance, including aircraft third party, passenger
      liability (including passengers’ baggage and personal effects), cargo and mail
      legal liability, and all-risk ground and flight physical damage, with a combined
      single limit of not less than [*]
      per
      occurrence and a minimum limit in respect of personal injury (per clause AVN
      60
      or its equivalent) of [*]
      per
      occurrence and in the aggregate, and War Risk hull and liability insurance
      as provided by the Federal Aviation Administration program with a combined
      single limit no less than [*]
      per
      occurrence;

     

    (b)  Workers’
      compensation as required by the appropriate jurisdiction and employer’s
      liability with a limit of not less than [*]
      combined
      single limit; and

     

    (c)  Other
      property and liability insurance coverages of the types and in the amounts
      that
      would be considered reasonably prudent for a business organization of
      Contractor’s size and nature, under the insurance market conditions in effect at
      the time of placement, but in any event of the type and the amount that
      Continental may reasonably require to prevent or minimize a disruption in the
      provision of Regional Airline Services resulting from a casualty or liability
      incident related to Contractor’s operations. All coverages described in this
Section
      6.01
      shall be
      placed with deductibles reasonably prudent for a business organization of
      Contractor’s size and nature, under the insurance market conditions in effect at
      the time of placement.

     

    Section
      6.02  Endorsements.
      Contractor
      shall cause the policies described in Section
      6.01
      to be
      duly and properly endorsed by Contractor’s insurance underwriters with respect
      to Contractor’s flights and operations as follows: 

     

    (a)  To
      provide that the underwriters shall waive subrogation rights against
      Continental, its directors, officers, agents, employees and other authorized
      representatives, except for their gross negligence or willful
      misconduct;

     

    (b)  To
      provide that Continental, its directors, officers, agents, employees and other
      authorized representatives shall be endorsed as additional insured parties,
      except for their gross negligence or willful misconduct;

     

    (c)  To
      provide that insurance shall be primary to and without right of contribution
      from any other insurance which may be available to the additional
      insureds;

     

    (d)  To
      include a breach of warranty provision in favor of the additional
      insureds;

     

    (e)  To
      accept
      and insure Contractor’s hold harmless and indemnity undertakings set forth in
      this Agreement, but only to the extent of the coverage afforded by the policy
      or
      policies; and

     

    (f)  To
      provide that such policies shall not be canceled, terminated or materially
      altered, changed or amended until 30 days (but seven days or such lesser period
      as may be available in respect of hull, war and allied perils) after written
      notice shall have been sent to Continental. 

     

    Section
      6.03  Evidence
      of Insurance Coverage. At
      the
      commencement of this Agreement, and thereafter at Continental’s request,
      Contractor shall furnish to Continental evidence reasonably satisfactory to
      Continental of such insurance coverage and endorsements, including certificates
      certifying that such insurance and endorsements are in full force and effect.
      Initially, this evidence shall be a certificate of insurance. If Contractor
      fails to acquire or maintain insurance as herein provided, Continental may
      at
      its option secure such insurance on Contractor’s behalf at Contractor’s
      expense.

    
      ___________

      *Confidential

    

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    
      ARTICLE
        VII  

    

    INDEMNIFICATION

     

    Section
      7.01  Contractor
      Indemnification of Continental. Contractor
      shall be liable for and hereby agrees to fully defend, release, discharge,
      indemnify and hold harmless Continental, its directors, officers, employees
      and
      agents from and against any and all claims, demands, damages, liabilities,
      suits, judgments, actions, causes of action, losses, costs and expenses of
      any
      kind, character or nature whatsoever, including attorneys’ fees, costs and
      expenses in connection therewith and expenses of investigation and litigation
      thereof, which may be suffered by, accrued against, charged to, or recoverable
      from Continental or its directors, officers, employees or agents, including
      but
      not limited to, any such losses, costs and expenses involving (i) death or
      injury (including claims of emotional distress and other non-physical injury
      by
      passengers) to any person including any of Contractor’s or Continental’s
      directors, officers, employees or agents, (ii) loss of, damage to, or
      destruction of property (including real, tangible and intangible property,
      and
      specifically including regulatory property such as route authorities, slots
      and
      other landing rights), including any loss of use of such property, and (iii)
      damages due to delays in any manner, in each case arising out of, connected
      with, or attributable to (w) any act or omission by Contractor or any of its
      directors, officers, employees or agents relating to the provision of Regional
      Airline Services, (x) the performance, improper performance, or non-performance
      of any and all obligations to be undertaken by Contractor or any of its
      directors, officers, employees or agents pursuant to this Agreement, or (y)
      the
      operation, non-operation, or improper operation of the Covered Aircraft or
      Contractor’s equipment or facilities at any location, in each case excluding
      only claims, demands, damages, liabilities, suits, judgments, actions, causes
      of
      action, losses, costs and expenses to the extent resulting from the gross
      negligence or willful misconduct of Continental or its directors, officers,
      agents or employees (other than gross negligence or willful misconduct imputed
      to such indemnified person by reason of its interest in a Covered Aircraft).
      Contractor will use commercially reasonable efforts to cause and assure that
      Contractor will at all times be and remain in custody and control of all
      aircraft, equipment, and facilities of, or operated by, Contractor, and
      Continental and its directors, officers, employees and agents shall not, for
      any
      reason, be deemed to be in custody or control, or a bailee, of such aircraft,
      equipment or facilities.

     

    Section
      7.02  Continental
      Indemnification of Contractor. Continental
      shall be liable for and hereby agrees fully to defend, release, discharge,
      indemnify, and hold harmless Contractor, its directors, officers, employees,
      and
      agents from and against any and all claims, demands, damages, liabilities,
      suits, judgments, actions, causes of action, losses, costs and expenses of
      any
      kind, character or nature whatsoever, including attorneys’ fees, costs and
      expenses in connection therewith and expenses of investigation and litigation
      thereof, which may be suffered by, accrued against, charged to, or recoverable
      from Contractor, or its directors, officers, employees or agents, including
      but
      not limited to, any such losses, costs and expenses involving (i) death or
      injury (including claims of emotional distress and other non-physical injury
      by
      passengers) to any person including any of Contractor’s or Continental’s
      directors, officers, employees or agents, (ii) loss of, damage to, or
      destruction of property (including any loss of use of such property including
      real, tangible and intangible property, and specifically including regulatory
      property such as route authorities, slots and other landing rights), and (iii)
      damages due to delays in any manner, in each case arising out of, connected
      with, or attributable to, (x) the performance, improper performance, or
      nonperformance of any and all obligations to be undertaken by Continental or
      any
      of its directors, officers, employees or agents pursuant to this Agreement,
      (y)
      the operation, non-operation or improper operation of Continental’s aircraft,
      equipment or facilities (excluding, for the avoidance of doubt, Covered Aircraft
      and any equipment or facilities leased or subleased by Continental to
      Contractor) at any location, in each case excluding only claims, demands,
      damages, liabilities, suits judgments, actions, causes of action, losses, costs
      and expenses to the extent resulting from the negligence or willful misconduct
      of Contractor or its directors, officers, agents or employees. Continental
      will
      use commercially reasonable efforts to cause and assure that Continental will
      at
      all times be and remain in custody and control of any aircraft, equipment and
      facilities of, or operated by, Continental, and Contractor and its directors,
      officers, employees and agents shall not, for any reason, be deemed to be in
      the
      custody or control, or a bailee, of such aircraft, equipment or
      facilities.

     

    Section
      7.03  Indemnification
      Claims. A
      party
      (the “Indemnified
      Party”)
      entitled to indemnification from another party under the terms of this Agreement
      (the “Indemnifying
      Party”)
      shall
      provide the Indemnifying Party with prompt written notice (an “Indemnity
      Notice”)
      of any
      third party claim which the Indemnified Party believes gives rise to a claim
      for
      indemnity against the Indemnifying Party hereunder. The Indemnifying Party
      shall
      be entitled, if it accepts financial responsibility for the third party claim,
      to control the defense of or to settle any such third party claim at its own
      expense and by its own counsel; provided
      that the
      Indemnified Party’s prior written consent (which may not be unreasonably
      withheld or delayed) must be obtained prior to settling any such third party
      claim. The Indemnified Party shall provide the Indemnifying Party with such
      information as the Indemnifying Party shall reasonably request to defend any
      such third party claim and shall otherwise cooperate with the Indemnifying
      Party
      in the defense of any such third party claim. Except as set forth in this
Section
      7.03,
      the
      Indemnified Party shall not enter into any settlement or other compromise or
      consent to a judgment with respect to a third party claim as to which the
      Indemnifying Party has an indemnity obligation hereunder without the prior
      written consent of the Indemnifying Party (which may not be unreasonably
      withheld or delayed), and the entering into of any settlement or compromise
      or
      the consent to any judgment in violation of the foregoing shall constitute
      a
      waiver by the Indemnified Party of its right to indemnity hereunder to the
      extent the Indemnifying Party was prejudiced thereby. Any Indemnifying Party
      shall be subrogated to the rights of the Indemnified Party to the extent that
      the Indemnifying Party pays for any loss, damage or expense suffered by the
      Indemnified Party hereunder. If the Indemnifying Party does not accept financial
      responsibility for the third party claim or fails to defend against the third
      party claim that is the subject of an Indemnity Notice within 30 days of
      receiving such notice (or sooner if the nature of the third party claim so
      requires), or otherwise contests its obligation to indemnify the Indemnified
      Party in connection therewith, the Indemnified Party may, upon providing written
      notice to the Indemnifying Party, pay, compromise or defend such third party
      claim without the prior consent of the (otherwise) Indemnifying Party. In the
      latter event, the Indemnified Party, by proceeding to defend itself or settle
      the matter, does not waive any of its rights hereunder to later seek
      reimbursement from the Indemnifying Party. 

     

    Section
      7.04  Employer’s
      Liability; Independent Contractors; Waiver of Control

     

    (a)  Employer’s
      Liability and Workers’ Compensation.
      Each
      party hereto assumes full responsibility for its employer’s and workers’
compensation liability to its respective officers, directors, employees or
      agents on account of injury or death resulting from or sustained in the
      performance of their respective service under this Agreement. Each party, with
      respect to its own employees, accepts full and exclusive liability for the
      payment of workers’ compensation and employer’s liability insurance premiums
      with respect to such employees, and for the payment of all taxes, contributions
      or other payments for unemployment compensation or old age or retirement
      benefits, pensions or annuities now or hereafter imposed upon employers by
      the
      government of the United States or any other governmental body, including state,
      local or foreign, with respect to such employees measured by the wages,
      salaries, compensation or other remuneration paid to such employees, or
      otherwise. 

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    (b)  Employees,
      etc., of Contractor.
      The
      employees, agents, and independent contractors of Contractor engaged in
      performing any of the services Contractor is to perform pursuant to this
      Agreement are employees, agents, and independent contractors of Contractor
      for
      all purposes, and under no circumstances will be deemed to be employees, agents
      or independent contractors of Continental. In its performance under this
      Agreement, Contractor will act, for all purposes, as an independent contractor
      and not as an agent for Continental. Notwithstanding the fact that Contractor
      has agreed to follow certain procedures, instructions and standards of service
      of Continental pursuant to this Agreement, Continental will have no supervisory
      power or control over any employees, agents or independent contractors engaged
      by Contractor in connection with its performance hereunder, and all complaints
      or requested changes in procedures made by Continental will, in all events,
      be
      transmitted by Continental to Contractor’s designated representative. Nothing
      contained in this Agreement is intended to limit or condition Contractor’s
      control over its operations or the conduct of its business as an air
      carrier.

     

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

     

    (d)  Contractor
      Flights.
      The
      fact that Contractor’s operations are conducted under Continental’s Marks and
      listed under the CO designator code will not affect their status as flights
      operated by Contractor for purposes of this Agreement or any other agreement
      between the parties, and Contractor and Continental agree to advise all third
      parties, including passengers, of this fact.

     

    Section
      7.05  Survival
      The
      provisions of this Article
      VII
      shall
      survive the termination of this Agreement for a period of seven
      years.

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    ARTICLE
      VIII  

    TERM,
      TERMINATION AND DISPOSITION OF AIRCRAFT

     

    Section
      8.01  Term.
      The
      Term
      of this Agreement shall commence on and shall be effective as of the date that
      the first Covered Aircraft is placed into service under the terms and conditions
      of this Agreement (the “Commencement
      Date”)
      and,
      unless earlier terminated or extended as provided herein, shall continue until
      the exit date of the last Covered Aircraft, as such date may be extended
      pursuant to Section
      10.18
      hereof
      (the “Term”).

     

    Section
      8.02  Early
      Termination

     

    (a)  By
      Continental for Cause.
      Continental shall have the right to terminate this Agreement, immediately upon
      written notice (but without any prior notice) following the occurrence of any
      event that constitutes Cause. Any termination pursuant to this Section
      8.02(a)
      shall
      supersede any other termination pursuant to any other provision of this
      Agreement (even if such other right of termination shall already have been
      exercised), and the date of first occurrence of such event constituting Cause
      shall be the Termination Date for purposes of this Agreement (and such
      Termination Date pursuant to this Section
      8.02(a)
      shall
      supersede any other Termination Date that may have been previously established
      pursuant to another termination). In the event that Continental shall not have
      delivered written notice of termination pursuant to this Section
      8.02(a)
      within
      four months after Continental receives written notice from Contractor of the
      occurrence of any event that constitutes Cause by Contractor, then Continental
      shall be conclusively deemed to have waived any right to terminate this
      Agreement based upon such event; provided
      that
      such waiver shall not apply to any subsequent or continuing event that
      constitutes Cause.

     

    (b)  By
      Continental for Breach.
      Continental may terminate this Agreement, upon two Business Days prior written
      notice, upon the occurrence of (x) a material breach of this Agreement by
      Contractor as described in clause
      (ii)
      below,
      which breach shall not have been cured, or (y) a breach of the guarantee
      executed by Parent pursuant to Section
      10.15.
      Continental may terminate this Agreement upon the occurrence of any other
      material breach of this Agreement by Contractor, which breach shall not have
      been cured within 60 days after written notice of such breach is delivered
      by
      Continental to Contractor (which 60-day notice period may run concurrently
      with
      the 15-day notice period, if any, provided pursuant to Section
      4.03
      for
      non-safety-related breaches). The parties hereto agree that, without limiting
      the circumstances or events that may constitute a material breach, each of
      the
      following shall constitute a material breach of this Agreement by Contractor:
      (i) the occurrence of a System Flight Disruption, (ii) a reasonable and good
      faith determination by Continental, using recognized standards of safety, that
      there is a material safety concern with the operation of any Scheduled Flights,
      (iii) the grounding of any of the Contractor Fleets by regulatory or court
      order
      or other governmental action, (iv) a Controllable Completion Factor for
      any 2
      consecutive calendar months
      of
[*]
      or below
      (excluding any cancellations resulting from a Labor Strike, labor slowdown
      or
      other similar action) and (v) a Controllable On-Time Departure Rate (excluding
      any delays resulting from a Labor Strike, labor slowdown or other similar
      action) for
      any 2
      consecutive calendar months
      of
[*]
      or
      below. In the event that Continental shall not have delivered written notice
      of
      termination pursuant to this Section
      8.02(b)
      within
      four months after Continental receives written notice from Contractor of any
      material breach of this Agreement by Contractor, then Continental shall be
      conclusively deemed to have waived any right to terminate this Agreement based
      upon such breach; provided
      that
      such waiver shall not apply to any subsequent or continuing breach.

     

    (c)  By
      Contractor for Breach.
      Contractor may terminate this Agreement upon (i) five Business Days prior
      written notice upon any failure by Continental to make any payment or payments
      under this Agreement aggregating in excess of [*]
      (or
[*]
      at any
      time when there are [*]
      or fewer
      Covered Aircraft), including without limitation, any payments which become
      due
      during any Wind-Down Period, but specifically excluding any amounts which are
      the subject of a good faith dispute between the parties, which failure shall
      not
      have been cured within such five Business Day period, (ii) the occurrence of
      any
      other failure by Continental to make any payment or payments under this
      Agreement aggregating in excess of [*],
      including without limitation, any payments which become due during any Wind-Down
      Period, but specifically excluding any amounts which are the subject of a good
      faith dispute between the parties, which failure shall not have been cured
      within 20 days after written notice of such breach is delivered by Contractor
      to
      Continental, or (iii) the occurrence of any other material breach of this
      Agreement by Continental, including without limitation, any breach during any
      Wind-Down Period, which breach shall not have been cured within 60 days after
      written notice of such breach is delivered by Contractor to Continental. In
      the
      event that Contractor shall not have delivered written notice of termination
      pursuant to this Section
      8.02(c)
      within
      four months after Contractor receives written notice from Continental of any
      material breach of this Agreement by Continental, then Contractor shall be
      conclusively deemed to have waived any right to terminate this Agreement based
      upon such breach; provided
      that
      such waiver shall not apply to any subsequent or continuing breach.

     

    (d) Survival
      During Wind-Down Period.
      Upon
      any termination hereunder, the Term shall continue, and this Agreement shall
      survive in full force and effect, beyond the Termination Date until the end
      of
      the Wind-Down Period, and the rights and obligations of the parties under this
      Agreement, including without limitation remedies available upon the occurrence
      of events constituting Cause or material breach, shall continue with respect
      to
      the Covered Aircraft until they are withdrawn from this Agreement.

     

    Section
      8.03  Disposition
      of Aircraft during Wind-Down Period

    
      ___________

      *Confidential

    

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    (a)  Termination
      by Continental for Cause.
      If this
      Agreement is terminated pursuant to Section 8.02(a),
      then
      the Covered Aircraft shall be withdrawn from the capacity purchase provisions
      of
      this Agreement as of the Termination Date and shall cease to be Covered Aircraft
      as of such date. The provisions of this Section 8.03(a)
      shall
      supersede any Wind-Down Schedule delivered pursuant to any other provision
      of
      this Agreement.

     

    (b)  Termination
      by Continental for Breach or Change of Control.
      If this
      Agreement is terminated by Continental under Section
      8.02(b)
      or
Section
      5.03,
      then
      the Covered Aircraft, or in the event of a termination under Section
8.02(b)(iii),
      the
      Covered Aircraft that are included within the grounded Contractor Fleets, shall
      be withdrawn from the capacity purchase provisions of this Agreement in
      accordance with the following terms and conditions:

     

    (i)  Within
      90
      days of delivery of any notice of termination delivered pursuant to Section
      8.02(b)
      or
Section
      5.03,
      Continental shall deliver to Contractor an irrevocable written Wind-Down
      Schedule, providing for the withdrawal of such Covered Aircraft from the
      capacity purchase provisions of this Agreement, delineating the number of each
      aircraft type to be withdrawn by month.

     

    (ii)  In
      the
      event of a termination pursuant to Section
      8.02(b)
      or
Section
      5.03,
      the
      Wind-Down Schedule may not commence until the Termination Date and may not
      provide for the withdrawal of any Covered Aircraft beyond the following dates:
      for any ERJ aircraft, any date more than 60 months after the Termination Date,
      and for any CRJ aircraft, any date beyond the then-applicable exit date for
      such
      Covered Aircraft.

     

    (c)  Termination
      by Contractor for Breach.
      If this
      Agreement is terminated by Contractor under Section
      8.02(c),
      then
      the Covered Aircraft shall be withdrawn from the capacity purchase provisions
      of
      this Agreement in accordance with the following terms and conditions: The notice
      of termination delivered by Contractor to Continental pursuant to Section
      8.02(c)(i)
      shall be
      irrevocable and shall contain a Termination Date that is not more than 60 days
      after the date of such notice; provided
      that
      such termination notice shall be void and of no further effect automatically
      upon the payment by Continental prior to such Termination Date of all unpaid
      amounts giving rise to the default under Section
      8.02(c)(i).
      As of
      the Termination Date set forth in a notice of termination delivered pursuant
      to
Section
      8.02(c)(i),
      all of
      the Covered Aircraft shall automatically be withdrawn from the capacity purchase
      provisions of this Agreement and shall cease to be Covered Aircraft as of such
      date. The notice of termination delivered by Contractor to Continental pursuant
      to Section
      8.02(c)(ii)
      shall be
      irrevocable and shall contain a Termination Date that is at least 10 days and
      not more than 360 days after the date of such notice. The notice of termination
      delivered by Contractor to Continental pursuant to Section
      8.02(c)(iii)
      shall be
      irrevocable and shall contain a Termination Date that is at least 180 days
      after
      the date of such notice. Prior to the earlier of the second business day prior
      to the Termination Date and the 90th day after receipt of such termination
      notice pursuant to Section
      8.02(c)(ii)
      or
8.02(c)(iii),
      Continental shall deliver to Contractor a Wind-Down Schedule beginning on such
      Termination Date; provided
      that no
      Wind-Down Period shall occur following a termination pursuant to Section
      8.02(c)(ii)
      if
      Continental shall not have cured the payment default giving rise to such
      termination prior to or simultaneously with its delivery of the Wind-Down
      Schedule to Contractor. The Wind-Down Schedule may not provide for the
      withdrawal of more than [*]
      Covered
      Aircraft per month, and may not provide for the withdrawal of any Covered
      Aircraft beyond the following dates: for any ERJ Aircraft, any date more than
      12
      months after the Termination Date, and for any CRJ Aircraft, any date beyond
      the
      then-applicable exit date for such Covered Aircraft.

     

    (d)  Termination
      at End of Term.
      If the
      Agreement is terminated at the end of the Term (other than pursuant to
Section
      8.02),
      then
      each Covered Aircraft shall be withdrawn from the capacity purchase provisions
      of this Agreement on the exit date set forth for such Covered Aircraft on
Schedule
      1,
      as
      amended.

     

    (e)  Other
      Remedies for Labor Strike and Other Circumstances.
      In the
      event of (i) the occurrence of a Labor Strike that shall have continued for
      at
      least three consecutive days or (ii) the mandatory grounding of any of the
      Contractor Fleets by the FAA, then for so long as such Labor Strike or grounding
      shall continue and thereafter until the number of Scheduled Flights that are
      Controllable On-Time Departures on any day of the week equals or exceeds the
      number of Scheduled Flights that were Controllable On-Time Departures on the
      same day of the week prior to such Labor Strike or grounding, Continental shall
      not be required to pay any of the amounts set forth or cross-referenced on
      Appendix
      1
      to
Schedule
      3
      as being
      required “for each day in the Term,” “generally for each Covered Aircraft for
      each day in the Term” or “separately for each Covered Aircraft for each month in
      the Term.” The rights set forth in this Section
      8.03(e)
      are in
      addition to, and not in limitation of, any other right of Continental arising
      hereunder.

     

    (f)  Punitive
      Damages.
      No
      party to this Agreement or any of its affiliates shall be liable to any other
      party hereto or any of its affiliates for claims for punitive, special or
      exemplary damages, arising out of or relating to this Agreement or the
      transactions contemplated hereby, regardless of whether a claim is based on
      contract, tort (including negligence), strict liability, violation of any
      applicable deceptive trade practices act or similar law or any other legal
      or
      equitable principle, and each party releases the others and their respective
      affiliates from liability for any such damages. No party shall be entitled
      to
      rescission of this Agreement as a result of breach of any other party’s
      representations, warranties, covenants or agreements, or for any other matter;
      provided
      that
      nothing in this Section
      8.03(f)
      shall
      restrict the right of any party to exercise any right to terminate this
      Agreement pursuant to the terms hereof.

    
      ___________

      *Confidential

    

    
      
        
        

      

      
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    ARTICLE
      IX  

    REPRESENTATIONS,
      WARRANTIES AND COVENANTS

     

    Section
      9.01  Representations
      and Warranties of Contractor. Contractor
      represents, warrants and covenants to Continental as of the date hereof as
      follows:

     

    (a)  Organization
      and Qualification.
      Contractor is a duly organized and validly existing corporation under the laws
      of the State of Indiana. Contractor has the corporate power and authority to
      own, operate and use its assets and to provide the Regional Airline Services.
      Contractor is duly qualified to do business as a foreign corporation under
      the
      laws of each jurisdiction that requires such qualification.

     

    (b)  Authority
      Relative to this Agreement.
      Contractor has the corporate power and authority to execute and deliver this
      Agreement and to consummate the transactions contemplated hereby in accordance
      with the terms hereof. The execution and delivery of this Agreement and the
      consummation of the transactions contemplated hereby have been duly authorized
      by all necessary corporate action on the part of Contractor. This Agreement
      has
      been duly and validly executed and delivered by Contractor and is, assuming
      due
      execution and delivery thereof by Continental and that Continental has legal
      power and right to enter into this Agreement, a valid and binding obligation
      of
      Contractor, enforceable against Contractor in accordance with its terms, except
      as enforcement hereof may be limited by bankruptcy, insolvency, fraudulent
      conveyance, reorganization, moratorium and other similar laws relating to or
      affecting the enforcement of creditors’ rights generally and legal principles of
      general applicability governing the availability of equitable remedies (whether
      considered in a proceeding in equity or at law or otherwise under applicable
      law).

     

    (c)  Conflicts.
      Neither
      the execution or delivery of this Agreement nor the performance by Contractor
      of
      the transactions contemplated hereby will (i) violate, conflict with, or
      constitute a default under any of the terms of Contractor’s certificate of
      incorporation, by-laws, or any provision of, or result in the acceleration
      of
      any obligation under, any material contract, sales commitment, license, purchase
      order, security agreement, mortgage, note, deed, lien, lease or other agreement
      to which Contractor is a party or by which it or any of its properties or assets
      may be bound, (ii) result in the creation or imposition of any lien, charge
      or
      encumbrance in favor of any third person or entity, (iii) violate any law,
      statute, judgment, decree, order, rule or regulation of any governmental
      authority or body, or (iv) constitute any event which, after notice or lapse
      of
      time or both, would result in such violation, conflict, default, acceleration
      or
      creation or imposition of liens, charges or encumbrances.

     

    (d)  No
      Default.
      Contractor is not (i) in violation of its charter or by-laws, (ii) in
      breach or default in any material respect, and no event has occurred which,
      with
      notice or lapse of time or both, would constitute such a breach or default,
      in
      the due performance or observance of any term, covenant or condition contained
      in any indenture, mortgage, deed of trust, loan agreement or other agreement
      or
      instrument to which it is a party or by which it is bound or to which any of
      its
      properties or assets is subject or (iii) in violation of any law,
      ordinance, governmental rule, regulation or court decree to which it or its
      property or assets may be subject or has failed to obtain any material license,
      permit, certificate, franchise or other governmental authorization or permit
      necessary to the ownership of its property or to the conduct of its business,
      where such violation, breach, default or failure would have a material adverse
      effect on Contractor or on its ability to provide Regional Airlines Services
      and
      otherwise perform its obligations hereunder. To the knowledge of Contractor,
      no
      third party to any indenture, mortgage, deed of trust, loan agreement, lease
      or
      other agreement or instrument that is material to Contractor to which Contractor
      is a party or by which any of them are bound or to which any of their properties
      are subject, is in default in any material respect under any such agreement.
      

     

    (e)  Broker.
      Contractor has not retained or agreed to pay any broker or finder with respect
      to this Agreement and the transactions contemplated hereby.

     

    (f)  Financial
      Statements.
      The
      financial statements (including the related notes and supporting schedules)
      of
      each of Contractor and Parent delivered (or, if filed with the Securities and
      Exchange Commission, made available) to Continental immediately prior to the
      date hereof fairly present in all material respects the consolidated financial
      position of Contractor or Parent, as the case may be, and their respective
      results of operations as of the dates and for the periods specified therein.
      Since the date of the latest of such financial statements, there has been no
      material adverse change nor any development or event involving a prospective
      material adverse change with respect to Contractor or Parent, as the case may
      be. Such financial statements have been prepared in accordance with generally
      accepted accounting principles in the United States consistently applied
      throughout the periods involved, except to the extent disclosed
      therein.

     

    (g)  Insurance.
      Contractor is insured by insurers of recognized financial responsibility against
      such losses and risks and in such amounts and with such deductibles as are
      customary in the businesses in which they are engaged. Contractor has not
      received notice of cancellation or non-renewal of such insurance. All such
      insurance is outstanding and duly in force on the date hereof. Contractor has
      no
      reason to believe that it will not be able to renew its existing insurance
      coverage as and when such coverage expires or to obtain similar coverage from
      similar insurers as may be necessary to continue its business at a cost that
      would not have a material adverse effect on Contractor or Parent.

     

    (h)  No
      Proceedings.
      There
      are no legal or governmental proceedings pending, or investigations commenced
      of
      which Contractor or Parent has received notice, in each case to which Contractor
      or Parent is a party or of which any property or assets of Contractor or Parent
      is the subject which, if determined adversely to Contractor or Parent, would
      individually or in the aggregate have a material adverse effect on Contractor
      or
      Parent or on Contractor’s ability to provide Regional Airlines Services and
      otherwise perform its obligations hereunder; and to the best knowledge of
      Contractor and Parent, no such proceedings are threatened or contemplated by
      governmental authorities or threatened by others.

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    (i)  No
      Labor Dispute.
      No
      labor dispute with the employees of Contractor exists or, to the knowledge
      of
      Contractor or Parent, is imminent which would reasonably be expected to have
      a
      material adverse effect on Contractor or on its ability to provide Regional
      Airlines Services and otherwise perform their respective obligations
      hereunder.

     

    (j)  Permits.
      Contractor possesses or, in the case of the CRJ Aircraft will possess not later
      than December 1, 2006, all material certificates, authorizations and permits
      issued by FAA and other applicable federal, state or foreign regulatory
      authorities necessary to conduct their respective businesses, to provide
      Regional Airlines Services and otherwise to perform their respective obligations
      hereunder, and neither Contractor nor Parent has received any notice of
      proceedings relating to the revocation or modification of any such certificate,
      authorization or permit which, individually or in the aggregate, if the subject
      of an unfavorable decision, ruling or finding, would result in a material
      adverse effect on Contractor or Parent or on their ability to conduct their
      respective businesses, to provide Regional Airlines Services and otherwise
      to
      perform their respective obligations hereunder.

     

    Section
      9.02  Representations
      and Warranties of Continental. Continental
      represents and warrants to Contractor as of the date hereof as
      follows:

     

    (a)  Organization
      and Qualification.
      Continental is a duly incorporated and validly existing corporation in good
      standing under the laws of the State of Delaware.

     

    (b)  Authority
      Relative to this Agreement.
      Continental has the corporate power and authority to execute and deliver this
      Agreement and to consummate the transactions contemplated hereby in accordance
      with the terms hereof. The execution and delivery of this Agreement and the
      consummation of the transactions contemplated hereby have been duly authorized
      by all necessary corporate action on the part of Continental. This Agreement
      has
      been duly and validly executed and delivered by Continental and is, assuming
      due
      execution and delivery thereof by Contractor and Parent and that Contractor
      and
      Parent each has legal power and right to enter into this Agreement, a valid
      and
      binding obligation of Continental, enforceable against Continental in accordance
      with its terms, except as enforcement hereof may be limited by bankruptcy,
      insolvency, fraudulent conveyance, reorganization, moratorium and other similar
      laws relating to or affecting the enforcement of creditors’ rights generally and
      legal principles of general applicability governing the availability of
      equitable remedies (whether considered in a proceeding in equity or at law
      or
      otherwise under applicable law).

     

    (c)  Conflicts;
      Defaults.
      Neither
      the execution or delivery of this Agreement nor the performance by Continental
      of the transactions contemplated hereby will (i) violate, conflict with, or
      constitute a default under any of the terms of Continental’s certificate of
      incorporation, by-laws, or any provision of, or result in the acceleration
      of
      any obligation under, any material contract, sales commitment, license, purchase
      order, security agreement, mortgage, note, deed, lien, lease or other agreement
      to which Continental is a party or by which it or its properties or assets
      may
      be bound, (ii) result in the creation or imposition of any lien, charge or
      encumbrance in favor of any third person or entity, (iii) violate any law,
      statute, judgment, decree, order, rule or regulation of any governmental
      authority or body, or (iv) constitute any event which, after notice or lapse
      of
      time or both, would result in such violation, conflict, default, acceleration
      or
      creation or imposition of liens, charges or encumbrances.

     

    (d)  Broker.
      Continental has not retained or agreed to pay any broker or finder with respect
      to this Agreement and the transactions contemplated hereby.

     

    (e)  No
      Proceedings.
      There
      are no legal or governmental proceedings pending, or investigations commenced
      of
      which Continental has received notice, in each case to which Continental is
      a
      party or of which any property or assets of Continental is the subject which,
      if
      determined adversely to Continental, would individually or in the aggregate
      have
      a material adverse effect on Continental or on its ability to perform its
      obligations hereunder; and to the best knowledge of Continental, no such
      proceedings are threatened or contemplated by governmental authorities or
      threatened by others.

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    ARTICLE
      X  

    MISCELLANEOUS

     

    Section
      10.01  Transition
      Arrangements

     

    (a)  Scheduling.
      Subsequent to the execution of this Agreement, and prior to the commencement
      of
      the Term, Contractor and Continental shall work together to facilitate the
      initial monthly scheduling of Scheduled Flights.

     

    (b)  Other
      Setup Arrangements.
      Subsequent to the execution of this Agreement, and prior to the commencement
      of
      the Term, Contractor and Continental shall work together to facilitate all
      other
      relevant aspects of the commencement of Contractor’s provision of Regional
      Airlines Services as of the beginning of the Term, including without limitation
      the provision of passenger-related airport services, ground handling services
      and technology-related services (subject to the related cost-allocation
      provisions in Section
      4.03).

     

    Section
      10.02  Notices.
      All
      notices made pursuant to this Agreement shall be in writing and shall be deemed
      given upon (a) a transmitter’s confirmation of a receipt of a facsimile
      transmission (but only if followed by confirmed delivery by a standard overnight
      courier the following Business Day or if delivered by hand the following
      Business Day), or (b) confirmed delivery by a standard overnight courier or
      delivered by hand, to the parties at the following addresses:

     

    if
      to
      Continental:

    Continental
      Airlines, Inc.

    1600
      Smith Street, HQSCD

    Houston,
      Texas 77002

    Attention:
      Senior Vice President - Corporate Development

    Telecopy
      No.: (713) 324-8601

    with
      a
      copy to:

    Continental
      Airlines, Inc.

    1600
      Smith Street, HQSLG

    Houston,
      Texas 77002

    Attention:
      General Counsel

    Telecopy
      No.: (713) 324-5082

    and
      to:

    Continental
      Airlines, Inc.

    1600
      Smith Street, HQSFP

    Houston,
      Texas 77002

    Attention:
      Staff Vice President - Financial Planning

    Telecopy
      No.: (713) 324-5225

    if
      to
      Contractor:

    Chautauqua
      Airlines, Inc.

    8909
      Purdue Road, Suite 300

    Indianapolis,
      IN 46268

    Attention:
      Chief Financial Officer

    Telecopy
      No.: 317-484-4545

    with
      a
      copy to:

    Arthur
      H.
      Amron

    Wexford
      Capital LLC

    411
      West
      Putnam Avenue

    Greenwich,
      CT 06830

    Telecopy
      No.: 203-862-7312

    if
      to
      Parent:

    Republic
      Airways Holdings Inc.

    8909
      Purdue Road, Suite 300

    Indianapolis,
      IN 46268

    Attention:
      President and Chief Executive Officer

    Telecopy
      No.: 317-484-4547

    or
      to
      such other address as any party hereto may have furnished to the other parties
      by a notice in writing in accordance with this Section
      10.02.

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    Section
      10.03  Binding
      Effect; Assignment. This
      Agreement and all of the provisions hereof shall be binding upon the parties
      hereto and inure to the benefit of the parties hereto and their respective
      successors and permitted assigns. Except with respect to a merger or other
      consolidation of either party with another Person (and without limiting
      Continental’s rights pursuant to Section
      5.03
      hereof),
      neither this Agreement nor any of the rights, interests or obligations hereunder
      shall be assigned by any party hereto without the prior written consent of
      the
      other parties.

     

    Section
      10.04  Amendment
      and Modification. This
      Agreement may not be amended or modified in any respect except by a written
      agreement signed by the parties hereto that specifically states that it is
      intended to amend or modify this Agreement.

     

    Section
      10.05  Waiver.
      The
      observance of any term of this Agreement may be waived (either generally or
      in a
      particular instance and either retroactively or prospectively) by the party
      entitled to enforce such term, but such waiver shall be effective only if it
      is
      in writing signed by the party against which such waiver is to be asserted
      that
      specifically states that it is intended to waive such term. Unless otherwise
      expressly provided in this Agreement, no delay or omission on the part of any
      party in exercising any right or privilege under this Agreement shall operate
      as
      a waiver thereof, nor shall any waiver on the part of any party of any right
      or
      privilege under this Agreement operate as a waiver of any other right or
      privilege under this Agreement nor shall any single or partial exercise of
      any
      right or privilege preclude any other or further exercise thereof or the
      exercise of any other right or privilege under this Agreement. No failure by
      any
      party to take any action or assert any right or privilege hereunder shall be
      deemed to be a waiver of such right or privilege in the event of the
      continuation or repetition of the circumstances giving rise to such right unless
      expressly waived in writing by each party against whom the existence of such
      waiver is asserted.

     

    Section
      10.06  Interpretation.
      The
      table
      of contents and the section and other headings and subheadings contained in
      this
      Agreement and in the exhibits and schedules hereto are solely for the purpose
      of
      reference, are not part of the agreement of the parties hereto, and shall not
      in
      any way affect the meaning or interpretation of this Agreement or any exhibit
      or
      schedule hereto. All references to days or months shall be deemed references
      to
      calendar days or months. All references to “$” shall be deemed references to
      United States dollars. Unless the context otherwise requires, any reference
      to
      an “Article,” a “Section,” an “Exhibit,” or a “Schedule” shall be deemed to
      refer to a section of this Agreement or an exhibit or schedule to this
      Agreement, as applicable. The words “hereof,” “herein” and “hereunder” and words
      of similar import referring to this Agreement refer to this Agreement as a
      whole
      and not to any particular provision of this Agreement. Whenever the words
“include,” “includes” or “including” are used in this Agreement, unless
      otherwise specifically provided, they shall be deemed to be followed by the
      words “without limitation.” This Agreement shall be construed without regard to
      any presumption or rule requiring construction or interpretation against the
      party drafting or causing the document to be drafted.

     

    Section
      10.07  Confidentiality.
      Except
      as
      required by law or stock exchange or other regulation or in any proceeding
      to
      enforce the provisions of this Agreement, or as otherwise provided below, each
      party hereby agrees not to publicize or disclose to any third party the terms
      or
      conditions of this Agreement or any of the Ancillary Agreements, or any exhibit,
      schedule or appendix hereto or thereto, without the prior written consent of
      the
      other parties thereto (except that a party may disclose such information to
      its
      third party consultants, advisors and representatives, in each case who are
      themselves bound to keep such information confidential). Except as required
      by
      law or stock exchange or other regulation or in any proceeding to enforce the
      provisions of this Agreement or any of the Ancillary Agreements, or as otherwise
      provided below, each party hereby agrees not to disclose to any third party
      any
      confidential information or data, both oral and written, received from the
      other, whether pursuant to or in connection with this Agreement or any of the
      Ancillary Agreements, and designated as such by the other without the prior
      written consent of the party providing such confidential information or data
      (except that a party may disclose such information to its third party
      consultants, advisors and representatives, in each case who are themselves
      bound
      to keep such information confidential). Each of party hereby agrees not to
      use
      any such confidential information or data of the other party other than in
      connection with performing their respective obligations or enforcing their
      respective rights under this Agreement or any of the Ancillary Agreements,
      or as
      otherwise expressly permitted or contemplated by this Agreement or any of the
      Ancillary Agreements. If either party is served with a subpoena or other process
      requiring the production or disclosure of any of such agreements or information,
      then the party receiving such subpoena or other process, before complying with
      such subpoena or other process, shall immediately notify the other parties
      hereto of same and permit said other parties a reasonable period of time to
      intervene and contest disclosure or production. Upon termination of this
      Agreement, each party must return to each other any confidential information
      or
      data received from the other and designated as such by the party providing
      such
      confidential information or data which is still in the recipient’s possession or
      control. Without limiting the foregoing, no party shall be prevented from
      disclosing the following terms of this Agreement: the number of aircraft subject
      hereto, the periods for which such aircraft are subject hereto, and any
      termination provisions contained herein. The provisions of this Section 10.07
      shall
      survive the termination of this Agreement for a period of ten
      years.

     

    Section
      10.08  Arbitration

     

    (a)  Agreement
      to Arbitrate.
      Subject
      to the equitable remedies provided under Section
      10.11,
      any and
      all claims, demands, causes of action, disputes, controversies and other matters
      in question (all of which are referred to herein as “Claims”)
      arising out of or relating to this Agreement, shall be resolved by binding
      arbitration pursuant to the procedures set forth by the International Institute
      for Conflict Prevention and Resolution (the “CPR”).
      Each
      of the parties agrees that arbitration under this Section
      10.08
      is the
      exclusive method for resolving any Claim and that it will not commence an action
      or proceeding based on a Claim hereunder, except to enforce the arbitrators’
decisions as provided in this Section
      10.08,
      to
      compel any other party to participate in arbitration under this Section
      10.08.
      The
      governing law for any such action or proceeding shall be the law set forth
      in
Section
      10.08(f).

    (b)  Initiation
      of Arbitration.
      If any
      Claim has not been resolved by mutual agreement on or before the 15th
      day
      following the first notice of the Claim to or from a disputing party, then
      the
      arbitration may be initiated by one party by providing to the other party a
      written notice of arbitration specifying the Claim or Claims to be arbitrated.
      If a party refuses to honor its obligations to arbitrate under this provision,
      the other party may compel arbitration in either federal or state court in
      Houston, Texas and seek recovery of its attorneys’ fees and court costs incurred
      if the arbitration is ordered to proceed.

     

    (c)  Place
      of Arbitration.
      The
      arbitration proceeding shall be conducted in Houston, Texas, or some other
      location mutually agreed upon by the parties.

     

    (d)  Selection
      of Arbitrators.
      The
      arbitration panel (the “Panel”)
      shall
      consist of three arbitrators who are qualified to hear the type of Claim at
      issue. They may be selected by agreement of the Parties within thirty days
      of
      the notice initiating the arbitration procedure, or from the date of any order
      compelling such arbitration to proceed. If the Parties fail to agree upon the
      designation of any or all the Panel, then the Parties shall request the
      assistance of the CPR. The Panel shall make all of its decisions by majority
      vote. Evident partiality on the part of an arbitrator exists only where the
      circumstances are such that a reasonable person would have to conclude there
      in
      fact existed actual bias, and a mere appearance or impression of bias will
      not
      constitute evident partiality or otherwise disqualify an arbitrator. The
      decision of the Panel will be binding and non-appealable, except as permitted
      under the Federal Arbitration Act.

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    (e)  Choice
      of Law as to Procedural Matters.
      The
      enforcement of this agreement to arbitrate, and all procedural aspects of the
      proceeding pursuant to this agreement to arbitrate, including but not limited
      to, the issues subject to arbitration (i.e., arbitrability), the scope of the
      arbitrable issues, and the rules governing the conduct of the arbitration,
      unless otherwise agreed by the Parties, shall be governed by and construed
      pursuant to the Federal Arbitration Act.

     

    (f)  Choice
      of Law as to Substantive Claims.
      In
      deciding the substance of the parties’ Claims, the arbitrators shall apply the
      substantive laws of the State of Texas (excluding Texas choice-of-law principles
      that might call for the application of the law of another
      jurisdiction).

     

    (g)  Procedure.
      It is
      contemplated that the arbitration proceeding will be self-administered by the
      parties and conducted in accordance with procedures jointly determined by the
      Panel and the Parties; provided, however, that if either or both Parties
      believes the process will be enhanced if it is administered by the CPR, then
      either or both Parties shall have the right to cause the process to become
      administered by the CPR and, thereafter, the arbitration shall be conducted,
      where applicable or appropriate, pursuant to the administration of the CPR.
      In
      determining the extent of discovery, the number and length of depositions,
      and
      all other pre-hearing matters, the Panel shall endeavor to the extent possible
      to streamline the proceedings and minimize the time and cost of the
      proceedings.

     

    (h)  Final
      Hearing.
      The
      final hearing shall be conducted within 120 days of the selection of the entire
      Panel. The final hearing shall not exceed ten business days, with each party
      to
      be granted one-half of the allocated time to present its case to the
      arbitrators, unless otherwise agreed by the Parties.

     

    (i)  Damages.
      Only
      actual damages may be awarded. It is expressly agreed that the Panel shall
      have
      no authority to award treble, exemplary or punitive damages of any type under
      any circumstances regardless of whether such damages may be available under
      the
      applicable law.

     

    (j)  Decision
      of the Arbitration.
      The
      Panel shall render its final decision and award in writing within 20 days of
      the
      completion of the final hearing completely resolving all of the Claims that
      are
      the subject of the arbitration proceeding. The Panel shall certify in its
      decision that no part of its award includes any amount for treble, exemplary
      or
      punitive damages. The Panel’s decision and award shall be final and
      non-appealable to the maximum extent permitted by law. Any and all of the
      Panel’s orders and decisions will be enforceable in, and judgment upon any award
      rendered in the arbitration proceeding may be confirmed and entered by, any
      federal or state court in Houston, Texas having jurisdiction.

     

    (k)  Confidentiality.
      All
      proceedings conducted hereunder and the decision and award of the Panel shall
      be
      kept confidential by the Panel and, except as required by law or stock exchange
      regulation or in any proceeding to enforce any decision or award by the Panel,
      by the Parties.

     

    Section
      10.09  Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument. The Agreement may be executed by facsimile signature.

     

    Section
      10.10  Severability.
      Any
      provision of this Agreement which is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions hereof. Any such prohibition or unenforceability in any jurisdiction
      shall not invalidate or render unenforceable such provision in any other
      jurisdiction.

     

    Section
      10.11  Equitable
      Remedies;
      Certain Liquidated Damages

     

    (a)  Equitable
      Remedies.
      Each
      party acknowledges and agrees that, under certain circumstances, the breach
      by a
      party of a term or provision of this Agreement will materially and irreparably
      harm the other party, that money damages will accordingly not be an adequate
      remedy for such breach and that the non-defaulting party, in its sole discretion
      and in addition to its rights under this Agreement and any other remedies it
      may
      have at law or in equity, may apply to any court of law or equity of competent
      jurisdiction (without posting any bond or deposit) for specific performance
      and/or other injunctive relief in order to enforce or prevent any breach of
      the
      provisions of this Agreement.

     

    (b)  Certain
      Liquidated Damages.
      If
      Contractor shall fail to complete Schedule 1
      in
      accordance with Section
      10.19
      with
      respect to the TBD Aircraft (including meeting the date milestones contained
      therein) (it being understood that Schedule
      1
      shall be
      deemed complete for purposes of this Section
      10.11(b)
      if not
      more than an aggregate of five TBD Aircraft to be identified by any milestone
      set forth in such Section
      10.19
      are not
      so identified by such milestone), then for each TBD Aircraft in excess of such
      five TBD Aircraft for which complete information is not provided, Contractor
      shall (x) identify by “number” and “scheduled delivery date” on Schedule
      1
      the TBD
      Aircraft for which information is deemed to have been omitted, and (y) pay
      to
      Continental within 10 days following such failure liquidated damages in an
      amount determined as follows:

     

    
      	 	
              (i)

            	
              [*]
                for a TBD Aircraft the scheduled delivery date for which is more
                than
                [*]
                after
                the relevant milestone giving rise to such
                failure;

            

    

     

    
      	 	
              (ii)

            	
              [*]
                for a TBD Aircraft the scheduled delivery date for which is less
                than (or
                exactly) [*]
                after the relevant milestone giving rise to such failure;
                and

            

    

     

    
      	 	
              (iii)

            	
              [*]
                for a TBD Aircraft the scheduled delivery date for which is less
                than (or
                exactly) [*]
                after the relevant milestone giving rise to such
                failure.

            

    

     

    The
      parties agree that the damages to be suffered by Continental in connection
      with
      Contractor’s failure to complete Schedule 1
      as
      described above shall be difficult to calculate, and that the foregoing
      liquidated damages are a good faith estimate of such damages, and that such
      liquidated damages are not intended to be a penalty. The parties further agree
      that the foregoing liquidated damages and the right to terminate pursuant to
      Section
      8.02(a)
      shall be
      Continental’s sole and exclusive remedies against Parent and Contractor for any
      damages suffered solely as a result of Contractor’s failure to provide complete
      information with respect to the TBD Aircraft as described above (it being agreed
      that separate payment obligations are set forth in Section
      10.19
      for the
      failure to identify up to an aggregate of five TBD Aircraft to be identified
      by
      any milestone set forth in such Section
      10.19).
      In
      connection with a payment of liquidated damages in respect of a TBD Aircraft,
      Schedule 1
      shall be
      automatically amended without any further action by any party hereto to
      eliminate such TBD Aircraft and thereby reduce the aggregate number of Covered
      Aircraft on such schedule.

    
      ___________

      *Confidential

    

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    (c)  Other
      Limitations on Seeking Damages.
      Neither
      the right of any party to terminate this Agreement, nor the exercise of such
      right, shall constitute a limitation on such party’s right to seek damages or
      such other legal redress to which such party may otherwise be entitled;
provided
      that,
      absent the occurrence of another breach of this Agreement by Contractor,
      Continental shall not be entitled to seek damages solely for the occurrence
      of
      (i) an event of Cause of the type described in clause
      (iii)
      or
clause
      (v)
      of the
      definition thereof, (ii) a material breach of the type described in clause
      (iii)
      of
Section
      8.02(b),
      or
      (iii) a termination pursuant to Section
      5.03.

     

    Section
      10.12  Relationship
      of Parties. Nothing
      in this Agreement shall be interpreted or construed as establishing between
      the
      parties a partnership, joint venture or other similar arrangement.

     

    Section
      10.13  Entire
      Agreement;
      No Third Party Beneficiaries. This
      Agreement (including the exhibits and schedules hereto) and the Ancillary
      Agreements are intended by the parties as a complete statement of the entire
      agreement and understanding of the parties with respect to the subject matter
      hereof and all matters between the parties related to the subject matter herein
      or therein set forth. This Agreement is made among, and for the benefit of,
      the
      parties hereto, and the parties do not intend to create any third-party
      beneficiaries hereby, and no other Person shall have any rights arising under,
      or interests in or to, this Agreement.

     

    Section
      10.14  Governing
      Law. Except
      with respect to matters referenced in Section
      10.08(e)
      (which
      shall be governed by and construed pursuant to the Federal Arbitration Act),
      this Agreement shall be governed by and construed in accordance with the laws
      of
      the State of Texas (excluding Texas choice-of-law principles that might call
      for
      the application of the law of another jurisdiction) as to all matters, including
      matters of validity, construction, effect, performance and remedies. Except
      as
      otherwise provided in Section
      10.08(e),
      any
      action arising out of this Agreement or the rights and duties of the parties
      arising hereunder may be brought, if at all, only in the state or federal courts
      located in Harris County, Texas.

     

    Section
      10.15  Parent
      Guarantee. Contemporaneous
      with the execution and delivery of this Agreement, Parent shall execute a
      guarantee in favor of Continental in form of Exhibit
      M.
      Parent
      hereby agrees that it shall not participate in any transaction or series of
      transactions if, after giving effect to such transaction or series of
      transactions, Contractor will become the Subsidiary of another Person, unless
      at
      the time such transactions are consummated the entity with respect to which
      Contractor is or will be a Subsidiary executes and delivers to Continental
      a
      guarantee of the obligations of Contractor under this Agreement and the
      Ancillary Agreements substantially in the form of Exhibit M.

     

    Section
      10.16  Right
      of Set-Off. If
      any
      party hereto shall be in default hereunder to any other party, then in any
      such
      case the non-defaulting party shall be entitled to set off from any payment
      owed
      by such non-defaulting party to the defaulting party hereunder any amount owed
      by the defaulting party to the non-defaulting party
      thereunder; provided
      that
      contemporaneously with any such set-off, the non-defaulting
      party
      shall give written notice of such action to the defaulting
      party;
      provided
      further
      that the
      failure to give such notice shall not affect the validity of the set-off.
It
      is
      specifically agreed that (i) for purposes of the set-off by any non-defaulting
      party,
      mutuality shall be deemed to exist among the parties; (ii) reciprocity among
      the
      parties exists with respect to their relative rights and obligations in respect
      of any such set-off; and (iii) the right of set-off is given as additional
      security to induce the parties to enter into the transactions contemplated
      hereby and by the Ancillary Agreements. Upon completion of any such set-off,
      the
      obligation of the defaulting party to the non-defaulting party shall be
      extinguished to the extent of the amount so set-off. Each party hereto further
      waives any right to assert as a defense to any attempted set-off the
      requirements of liquidation or mutuality. This set-off provision shall be
      without prejudice, and in addition, to any right of set-off, combination of
      accounts, lien or other right to which any non-defaulting party is at any time
      otherwise entitled (either by operation of law, contract or otherwise),
      including without limitation pursuant to Section
      3.06(b)(ii)
      hereof.

     

    Section
      10.17  Cooperation
      with Respect to Reporting. Each
      of
      the parties hereto agrees to use its commercially reasonable efforts to
      cooperate with each other party in providing necessary data, to the extent
      in
      the possession of the first party, required by such other party in order to
      meet
      any reporting requirements to, or otherwise in connection with any filing with
      or provision of information to be made to, any regulatory agency or other
      governmental authority.

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    Section
      10.18  Extension
      of Aircraft Term. At
      any
      time and from time to time, and at its sole option, Continental may extend
      the
      exit date for any Covered Aircraft (which shall extend the capacity purchase
      provisions hereof with respect to such Covered Aircraft to such later exit
      date)
      by delivering to Contractor a revised Schedule
      1
      reflecting such later exit date; provided,
      that no
      extension of the exit date for a CRJ Aircraft shall be permitted by Continental
      hereunder if (a) the resulting exit date would be subsequent to the date that
      is
      14 days prior to the end of the then-applicable lease term for such aircraft
      and
      (b) Contractor or Parent does not have the unilateral right to extend such
      lease
      term to a date coincident with or subsequent to the resulting exit date;
provided
      further,
      that
      Contractor shall be deemed to have the unilateral right to extend such lease
      term if Continental and Contractor’s or Parent’s lessor shall have negotiated a
      lease extension to a date coincident with the resulting exit date at a lease
      cost not in excess of the rent per month for such aircraft on Schedule
      1
      (or such
      other amount as Continental shall agree to include in an amended Schedule
      1),
      which
      lease extension shall otherwise be on the same terms and conditions as the
      lease
      being extended; provided
      further,
      that any
      extension shall be made only in increments of twelve months; provided
      further,
      that the
      exit date for any Covered Aircraft may be extended more than once; provided
      further,
      that the
      exit date for any Covered Aircraft shall not be extended more than an aggregate
      of five extension years; and provided
      further,
      that no
      extension may be made upon less than six months’ prior written notice. Upon
      delivery to Contractor, such revised Schedule
      1
      shall be
      incorporated into this Agreement without any further action by any party and
      shall thereafter constitute the amended and restated Schedule
      1
      for all
      purposes of this Agreement. Upon any determination by Contractor not to renew
      any lease for any Covered Aircraft, Contractor shall promptly notify
      Continental.

     

    Section
      10.19  Other
      Adjustments to Schedule 1. Continental
      and Contractor have agreed to the scheduled delivery dates, scheduled exit
      dates
      and aircraft rent per month for the following aircraft listed on Schedule
      1:
      aircraft nos. 3-4, 11-12, 15-18, 22-23, 27-28, 31-32 and 36-37, 4144. With
      respect to the remaining 24 aircraft to be listed on Schedule
      1
      (the
“TBD
      Aircraft”),
      Contractor agrees (i) to use its reasonable commercial efforts to negotiate,
      for
      a period of not less than 30 days after the date hereof, with potential lessors
      of TBD Aircraft to minimize the costs of leasing such aircraft and to maximize
      the flexibility for extending the term of such leases, (ii) to include
      Continental in all such negotiations, (iii) to use its reasonable commercial
      efforts to agree to any negotiated lease for a TBD Aircraft that contains terms
      that are acceptable to both Continental and Contractor, (iv) following any
      such
      agreement that reduces such lease costs below [*]
      per
      month, to adjust the “rent per month” for such Covered Aircraft set forth on
Schedule
      1
      to
      reflect any difference between the lease costs in such negotiated lease and
      [*]
      per
      month, and (v) following any such agreement that contains more flexible terms
      with regard to lease extensions than the exit date extension provisions
      contained herein, to adjust such exit date extension provisions to match such
      increased flexibility in such negotiated lease and, if such negotiated lease
      includes lease costs in excess of [*]
      per
      month agreed upon by Continental, to reflect any difference between the lease
      costs in such negotiated lease and [*]
      per
      month. In addition, Contractor agrees to provide Continental with manufacturer
      serial numbers and all other missing information from Schedule
      1
      with
      respect to eight of the TBD Aircraft not later than 90 days after the date
      hereof, an additional eight of the TBD Aircraft not later than 120 days after
      the date hereof, and the final eight of the TBD Aircraft not later than 150
      days
      after the date hereof. Upon review and written acceptance by Continental within
      10 days of receipt (which acceptance shall not be unreasonably withheld so
      long
      as such schedule, as amended or completed, is consistent with the provisions
      set
      forth above and the notations on Schedule
      1
      as
      attached hereto), such revised Schedule
      1
      shall be
      incorporated into this Agreement without any further action by any party and
      shall thereafter constitute the amended and restated Schedule
      1
      for all
      purposes of this Agreement. If Contractor does not identify any of the TBD
      Aircraft and complete Schedule
      1
      with
      respect thereto in accordance with the foregoing milestones, Contractor shall
      pay to Continental a fee of [*]
      for each
      TBD Aircraft not so identified for each day until such aircraft is so identified
      and such schedule is complete with respect thereto; provided
      that
      Continental shall have the right at its sole discretion to amend Schedule 1
      at any
      time during such period to reduce the aggregate number of Covered Aircraft
      by
      eliminating the TBD Aircraft not yet identified. Not later than January 1,
      2007,
      Contractor will provide to Continental a schedule of the lease expiration dates
      for all Covered Aircraft, and shall promptly provide notice to Continental
      upon
      any subsequent change to any lease expiration date for any Covered
      Aircraft.

     

    Section
      10.20  Termination
      of April 18, 2006 Agreement. The
      parties hereto, constituting all of the parties to that certain Capacity
      Purchase Agreement dated April 18, 2006 (the “April
      CPA”),
      hereby agree that the April CPA and each of the Ancillary Agreements (as defined
      therein) are terminated as of the date hereof and, other than with respect
      to
      the confidentiality provisions of Section 10.07 of the April CPA, shall be
      of no
      further force or effect. Except with respect to such confidentiality provisions
      (which shall continue to apply in accordance with their terms), no party thereto
      shall have any liability to any other party thereto arising thereunder, and
      each
      party waives any claims it has or may have against each other party arising
      thereunder.

     

    Section
      10.21  Life
      Limited Parts.

     

    Continental
      and Contractor shall each cooperate with one another in order to manage and
      minimize engine life limited parts (“LLP”)
      expenses for Covered Aircraft. To that end, Contractor shall provide annual
      projections of LLP requirements and supplemental notice of specific engine
      maintenance events which require LLP replacement as they are scheduled.
      Continental may, at its option and with Contractor’s consent (which consent
      shall not be unreasonably withheld) provide or arrange the provision of used
      serviceable LLPs that otherwise meet Contractor’s specifications and reasonable
      minimum cycle-remaining requirements, to be incorporated into a Covered
      Aircraft. In connection with the withdrawal of any Covered Aircraft from the
      capacity purchase provisions of this Agreement (whether at the end of such
      aircraft’s scheduled term or otherwise), Continental shall pay Contractor for
      the pro-rata cost (based on useful life and using the then-current catalogue
      price for LLPs) of all LLPs consumed for all Scheduled Flights by such Covered
      Aircraft under this Agreement, and Contractor shall pay Continental for the
      pro-rata cost (based on useful life and using the then-current catalogue price
      for LLPs) of all LLPs provided by Continental and incorporated into such Covered
      Aircraft pursuant to the previous sentence and not consumed for any Scheduled
      Flights under this Agreement.

    

    
      ___________

      *Confidential

    

    

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

     

    

      

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

     

    
      	 	 	 
	 	CONTINENTAL
              AIRLINES, INC.
	 
 	 
 	 
 
	 	By:  	/s/ Jeffery
              A. Smisek
	 	
              
Jeffery
              A. Smisek
	 	Title:
              President 

    

    
      	 	 	 
	 	CHAUTAUQUA
              AIRLINES, INC.
	 
 	 
 	 
 
	 	By:  	/s/ Bryan
              Bedford
	 	
              
Name:
              Bryan Bedford
	 	Title:
              Chairman & CEO 

    

    

      	 	 	 
	 	REPUBLIC
              AIRWAYS HOLDINGS INC.
	 
 	 
 	 
 
	 	By:  	/s/ Bryan
              Bedford
	 	
              
Name:
              Bryan Bedford
	 	Title:
              Chairman, President & CEO

    

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    SCHEDULE
      1

    Covered
      Aircraft&
      Delivery Schedule

    As
      last adjusted on: July 21, 2006

    
      	
              Number1

            	
              Aircraft
                Type2

            	
              Tail
                Number

            	
              MSN

            	
              Scheduled
                Delivery Date3,4

            	
              Scheduled
                Exit Date5,6

            	
              Scheduled
                Term

            	
              Rent
                Per Month7

            
	
              1.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              2.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              3.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              4.  

            	
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              [*]

            
	
              5.  

            	
              [*]

            	
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              6.  

            	
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              7.  

            	
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              8.  

            	
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              9.  

            	
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              10.  

            	
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              11.  

            	
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              12.  

            	
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              13.  

            	
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              14.  

            	
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              15.  

            	
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              16.  

            	
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              17.  

            	
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              18.  

            	
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              [*]

            
	
              19.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
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              [*]

            
	
              20.  

            	
              [*]

            	
              [*]

            	
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              [*]

            	
              [*]

            
	
              21.  

            	
              [*]

            	
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              [*]

            	
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              [*]

            	
              [*]

            
	
              22.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
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              [*]

            
	
              23.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              24.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              25.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              26.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              27.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              28.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              29.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              30.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              31.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              32.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              33.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              34.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              35.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              36.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              37.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              38.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              39.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              40.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              41.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              42.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              43.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              44.  

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            	
              [*]

            

    

     

    1 Up
      to two
      delivery positions to be designated as Spare Aircraft.

    2 Each
      Covered Aircraft must be an aircraft constituting part of the Contractor Fleet.
      The 44 Covered Aircraft shall include a minimum of 20 ERJ Aircraft and one
      CRJ
      Aircraft.

    3 The
      Scheduled Delivery Dates for all Covered Aircraft must satisfy the following
      conditions: the 44 Covered Aircraft must be delivered and in service not earlier
      than January 1, 2007 and not later than July 15, 2007, with not more than 10
      Covered Aircraft being delivered in any calendar month.

    4 The
      actual delivery date (within the designated month) shall be determined by
      agreement between Continental and Contractor.

    5 In
      the
      aggregate, that 10 of the 44 Covered Aircraft shall have scheduled exit dates
      that are five years after the scheduled delivery date, 17 of the 44 Covered
      Aircraft shall have scheduled exit dates that are three years after the
      scheduled delivery date and 17 of the 44 Covered Aircraft shall have scheduled
      exit dates that are two years after the scheduled delivery date. The actual
      scheduled exit date for any aircraft shall be the relevant anniversary date
      of
      the day such aircraft became subject to the capacity purchase provisions hereof
      and became a Covered Aircraft hereunder.

    6 The
      exit
      dates set forth in this Schedule
      1
      shall be
      adjusted from time to time to reflect any extension of the exit date for any
      Covered Aircraft pursuant to Section
      10.l8
      of this
      Agreement.

    7 The
      rent
      per month shall be [*],
      subject
      to change in accordance with Section
      10.19
      of this
      Agreement.

     

    
      	
              ___________

              *Confidential

            	 

    

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

    

    

      
         

      

      
         

      

    

    SCHEDULE
      2

    [Reserved]

    

    

    

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    SCHEDULE
      3

    Compensation

    

    

    
      	
              A.

            	
              Base
                and Incentive Compensation.

            

    

    

    
      	 	
              1.

            	
              Base
                Compensation.
                Continental will pay to Contractor, in respect of the Covered Aircraft,
                block hours, flight hours, rent, departures and each day in the Term,
                an
                amount calculated for each of the foregoing measurements and aggregated,
                as follows for each calendar month:

            

    

    

    
      	a.  	
              for
                each Covered Aircraft, the “rent per month” set forth for such aircraft on
                Schedule 1
                hereto; provided,
                that for any calendar month in which such Covered Aircraft enters
                or exits
                service hereunder, such amount shall be multiplied by a fraction,
                the
                numerator of which is the actual number of days in such month such
                aircraft constituted a Covered Aircraft, and the denominator of which
                is
                the actual number of days in such month;
                plus

            

    

     

    
      	b.  	
              the
                weighted average number of Covered Aircraft during such month, multiplied
                by the rate “generally for each Covered Aircraft for each day in the Term”
                as set forth in Appendix
                1
                hereto, multiplied by the actual number of days in such month;
                plus

            

    

     

    
      	c.  	
              the
                number of block hours set forth on the Final Monthly Schedule for
                such
                month, multiplied by the “block hour” rate as set forth in Appendix
                1
                hereto, multiplied by [*];
                plus

            

    

     

    
      	d.  	
              for
                the first two months of the Term, flight hours calculated at [*]
                of
                the number of block hours set forth on the Final Monthly Schedule
                for such
                month, and thereafter the trailing two-month average ratio of actual
                flight hours flown to actual block hours flown, multiplied by the
                number
                of block hours set forth on the Final Monthly Schedule for such month,
                in
                each case multiplied by the “flight hour” rate as set forth in
                Appendix
                1
                hereto, multiplied by [*];
                plus

            

    

     

    
      	e.  	
              the
                number of departures set forth on the Final Monthly Schedule for
                such
                month, multiplied by the rate set forth in Appendix
                1
                hereto for each Scheduled Flight departure, multiplied by [*];
                plus

            

    

     

    
      	f.  	
              the
                number of departures set forth on the Final Monthly Schedule for
                such
                month at all Contractor Airports, multiplied by the rate set forth
                in
                Appendix
                1
                hereto for each Scheduled Flight departure at a Contractor Airport,
                multiplied by [*];
                plus

            

    

     

    
      	g.  	
              the
                actual number of days in such month multiplied by the rate “for each day
                in the Term” set forth in Appendix
                1
                hereto.

            

    

    
      ___________

      *Confidential

    

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

    In
      addition, Continental will pay Contractor an allocation for Reconciled Expenses
      set forth in Appendix
      3,
      and as
      reconciled and further described in Paragraph
      B(6)(a)
      below:

    

    
      	 	
              h.

            	
              for
                Reconciled Expenses constituting payments for Terminal Facilities
                at
                Contractor Airports, property taxes, glycol and de-icing costs at
                Contractor Airports, and passenger-related interrupted trip costs
                (including hotel, meal and calling card vouchers) and baggage handling
                claims, repairs and delivery costs related to Uncontrollable Cancellations
                and oversales at Contractor Airports, Base Compensation shall include
                the
                amount set forth for such Reconciled Expenses on Appendix
                3;
                and

            

    

    

    
      	 	
              i.

            	
              for
                Reconciled Expenses constituting payments for passenger liability
                insurance, hull
                and war risk insurance costs,
                landing fees, air navigation fees, TSA fees or charges and any other
                passenger security fees or charges for security at all Contractor
                Airports, Base Compensation shall include an allocation based on
                the
                factors set forth for such Reconciled Expenses on Appendix
                3
                and calculated in accordance with Paragraph
                B(6)(b).
                

            

    

    

    The
      aggregate Base Compensation shall be invoiced as provided in Section
      3.06(a).

    

    
      	 	
              2.

            	
              Incentive
                Compensation.
                With respect to each calendar month, incentive compensation shall
                be
                calculated as follows:

            

    

    

    
      	 	
              a.

            	
              On-Time
                Bonus/Rebate.
                The reconciliation for any calendar month shall include, as applicable,
                a
                bonus (represented by a payment by Continental to Contractor) or
                a rebate
                (represented by a payment by Contractor to Continental), in each
                case in
                respect of on-time performance, as determined pursuant to Appendix
                4
                to
                this Schedule
                3.

            

    

    

    
      	 	
              b.

            	
              Fuel
                Efficiency Bonus.
                The reconciliation for any calendar month shall include, as applicable,
                a
                bonus (represented by a payment by Continental to Contractor) as
                determined pursuant to Appendix
                4
                to
                this Schedule
                3.

            

    

    

    The
      aggregate Incentive Compensation shall be invoiced as provided in Section
      3.06(b).

    

    
      	
              B.

            	
              Expenses
                and Reconciliation.

            

    

    

    
      	 	
              1.

            	
              Passenger
                and Cargo Revenue-Related Expenses.
                With respect to Scheduled Flights, in consideration of the provision
                by
                Contractor of Regional Airline Services and its compliance with the
                other
                terms and conditions of this Agreement, the following expenses shall
                be
                incurred directly by Continental:

            

    

    

    
      	(a)  	
              passenger
                and cargo revenue-related expenses, including but not limited to
                commissions, taxes and fees related to the transportation of passengers
                or
                cargo, food and beverage costs, charges for fare or tariff filings,
                sales
                and advertising costs, computer reservation system fees, credit card
                fees,
                interline fees, revenue taxes, GDS fees, airport collateral materials,
                reservation costs, revenue accounting costs, including costs associated
                with ticket sales reporting and unreported sales, OnePass participation
                costs and Continental Currencies;

            

    

     

    
      	(b)  	
              glycol,
                de-icing and snow removal costs at Continental Airports;
                

            

    

     

    
      	(c)  	
              denied
                boarding amenities and travel certificates;

            

    

     

    
      	(d)  	
              passenger-related
                interrupted trip costs (including hotel, meal and calling cards vouchers)
                and baggage handling claims, repairs and delivery costs related to
                Uncontrollable Cancellations and oversales at Continental
                Airports;

            

    

     

    
      	(e)  	
              as
                provided by and in consideration of Contractor’s compliance with its
                obligations under the Fuel Purchasing Agreement, fuel, fuel taxes
                and fuel
                into plane charges, including administration fees, if
                any;

            

    

     

    
      	(f)  	
              rent
                for Terminal Facilities at Continental Airports;
                

            

    

     

    
      	(g)  	
              ground
                handling costs at Continental Airports, for which costs Continental
                is
                responsible pursuant to the Continental Ground Handling Agreement;
                

            

    

     

    
      	(h)  	
              technology
                services related to all passenger services processes;
                and

            

    

     

    
      	(i)  	
              TSA
                fees or charges and any other passenger security fees or charges
                for
                security at all Continental
                Airports.

            

    

     

    2. [Reserved]

    

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

    3. Flight
      Reconciliation.

    

    
      	 	
              a.

            	
              With
                respect to Scheduled Flights, for any calendar month in which Contractor’s
                actual block hours flown exceeds the block hours invoiced pursuant
                to
                Paragraph
                A(1)(c)
                for such calendar month, then the reconciliation for such period
                shall
                include a payment by Continental to Contractor in an amount equal
                to the
                product of (i) the difference between the actual block hours flown
                for
                Scheduled Flights and such invoiced block hours, multiplied by (ii)
                the
                Base Compensation per block hour
                as
                set forth in Appendix 1
                hereto.

            

    

    

    
      	 	
              b.

            	
              With
                respect to Scheduled Flights, for any calendar month for which the
                block
                hours invoiced pursuant to Paragraph
                A(1)(c)
                exceeds Contractor’s actual block hours flown in such calendar month, then
                the reconciliation for such period shall include a payment by Contractor
                to Continental in an amount equal to the product of (i) the difference
                between such invoiced block hours and the actual block hours flown
                for
                Scheduled Flights, multiplied by (ii) the Base Compensation per block
                hour
                as
                set forth in Appendix
                1
                hereto.

            

    

    

    
      	 	
              c.

            	
              With
                respect to Scheduled Flights, for any calendar month in which Contractor’s
                actual flight hours flown exceeds the flight hours invoiced pursuant
                to
                Paragraph
                A(1)(d)
                for such calendar month, then the reconciliation for such period
                shall
                include a payment by Continental to Contractor in an amount equal
                to the
                product of (i) the difference between the actual flight hours flown
                for
                Scheduled Flights and such invoiced flight hours, multiplied by (ii)
                the
                Base Compensation per flight hour
                as
                set forth in Appendix 1
                hereto.

            

    

    

    
      	 	
              d.

            	
              With
                respect to Scheduled Flights, for any calendar month for which the
                scheduled flight hours invoiced pursuant to Paragraph
                A(1)(d)
                exceeds Contractor’s actual flight hours flown in such calendar month,
                then the reconciliation for such period shall include a payment by
                Contractor to Continental in an amount equal to the product of (i)
                the
                difference between such invoiced flight hours and the actual flight
                hours
                flown for Scheduled Flights, multiplied by (ii) the Base Compensation
                per
                flight hour
                as
                set forth in Appendix
                1
                hereto.

            

    

    

    
      	 	
              e.

            	
              With
                respect to Scheduled Flights, for any calendar month in which Contractor’s
                actual departures exceeds the scheduled departures invoiced pursuant
                to
                Paragraph
                A(1)(e)
                for such calendar month, then the reconciliation for such period
                shall
                include a payment by Continental to Contractor in an amount equal
                to the
                product of (i) the difference between the departures for Scheduled
                Flights
                and such invoiced departures, multiplied by (ii) the Base Compensation
                per
                Scheduled Flight departure
                as
                set forth in Appendix
                1
                hereto.

            

    

    

    
      	 	
              f.

            	
              With
                respect to Scheduled Flights, for any calendar month for which the
                scheduled departures invoiced pursuant to Paragraph
                A(1)(e)
                exceeds Contractor’s actual departures in such calendar month, then the
                reconciliation for such period shall include a payment by Contractor
                to
                Continental in an amount equal to the product of (i) the difference
                between such invoiced departures and the actual departures for Scheduled
                Flights, multiplied by (ii) the Base Compensation per Scheduled Flight
                departure
                as
                set forth in Appendix
                1
                hereto.

            

    

    

    
      	 	
              g.

            	
              With
                respect to Scheduled Flights, for any calendar month in which Contractor’s
                actual departures at a Contractor Airport exceeds the scheduled invoiced
                pursuant to Paragraph
                A(1)(f)
                for such calendar month, then the reconciliation for such period
                shall
                include a payment by Continental to Contractor in an amount equal
                to the
                product of (i) the difference between the departures for Scheduled
                Flights
                at Contractor Airports and such invoiced departures, multiplied by
                (ii)
                the Base Compensation per Scheduled Flight departure at
                Contractor Airports as
                set forth in Appendix
                1
                hereto.

            

    

    

    
      	 	
              h.

            	
              With
                respect to Scheduled Flights, for any calendar month for which the
                scheduled departures at Contractors Airports invoiced pursuant to
                Paragraph
                A(1)(f)
                exceeds Contractor’s actual departures at Contractor Airports in such
                calendar month, then the reconciliation for such period shall include
                a
                payment by Contractor to Continental in an amount equal to the product
                of
                (i) the difference between such invoiced departures and the actual
                departures at Contractor Airports for Scheduled Flights, multiplied
                by
                (ii) the Base Compensation per Scheduled Flight departure
                at
                Contractor Airports as set forth in Appendix
                1
                hereto.

            

    

    

    
      	 	
              4.

            	
              Flight
                Cancellation Reconciliation.

            

    

    

    
      	 	
              a.

            	
              With
                the exception of the first three months of operations, with
                respect to Scheduled Flights, for any calendar month in which (x)
                the
                actual number of Controllable
                Cancellations
                exceeds (y) the product of [*] multiplied
                by the total number of actual Scheduled Flight departures in such
                calendar
                month (the “Benchmark
                Controllable Cancellation Number”
                for such calendar month), then the
                reconciliation for such period shall include a payment by Contractor
                to
                Continental in an amount equal to the product of (i)
                the Controllable Completion Factor Incentive Rate set forth on
                Appendix
                2
                multiplied by (ii) the number of such excess actual Controllable
                Cancellations over the Benchmark Controllable Cancellation
                Number.

            

    

    

    
      	 	
              b.

            	
              With
                the exception of the first three months of operations, with
                respect to Scheduled Flights, for any calendar month in which (x)
                the
                Benchmark
                Controllable Cancellation Number for such calendar month exceeds
                (y)
                the
                actual number of Controllable
                Cancellations
                in
                such calendar month,
                then the
                reconciliation for such period shall include a payment by Continental
                to
                Contractor in an amount equal to the product of (i)
                the Controllable Completion Factor Incentive Rate as set forth in
                Appendix
                2
                multiplied by (ii) the excess of such Benchmark Controllable Cancellation
                Number over the number of actual Controllable
                Cancellations.

            

      	 

              ___________

              *Confidential

            	 	 

    

     

     

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

    
      	 	
              c.

            	
              [Intentionally
                omitted.]

            

    

    

    
      	 	
              d.

            	
              For
                all purposes of this Agreement, the term Uncontrollable Cancellations
                shall include the following:

            

    

    

    
      	 	 	
              I.

            	
              After
                presentation of the Final Monthly Schedule pursuant to Section
                2.01(b)
                of
                the Agreement, if Continental makes any changes to such schedule
                that
                result in a cancellation of a Scheduled Flight, then such cancellation
                shall constitute an Uncontrollable
                Cancellation.

            

      	 	 	II.	If
              any proposed Scheduled flight on a planned flight schedule involves
              a
              flight to a new airport which will be a Contractor Airport, and Contractor
              experiences a delay in preparing the required facilities and making
              all
              necessary arrangements to complete a flight to such airport, which
              delay
              either (i) in caused by the Environmental Protection Agency, airport
              or
              any other governmental authority, or (ii) occurs after Contractor received
              less than 90 days' advance notice of such Scheduled Flight to a new
              airport and used its commercially reasonable efforts to prepare the
              required facilities and make all necessary arrangements (all in accordance
              with the Master Facility and Ground Handling Agreement), and in either
              case such Scheduled flight is cancelled, then such cancellation shell
              constitute an Uncontrollable
              Cancellation.

    

    

    
      	 	
              e.

            	
              For
                purposes of this Schedule
                3,
                in the event of a Labor Strike, labor slowdown or other similar action,
                all calculations of the
                actual number of Controllable
                Cancellations
                and the Benchmark
                Controllable Cancellation Number shall not include any Scheduled
                Flight
                cancelled as a result of such Labor Strike, labor slowdown or other
                similar action.

            

    

    

    
      	 	
              f.

            	
              Contractor
                hereby agrees that each cancellation of a Scheduled Flight shall
                be
                designated as either a Controllable Cancellation or an Uncontrollable
                Cancellation on a basis consistent with Continental’s historical
                experience and practice with operators of its regional
                jets.

            

    

     

    
      	 	
              5.

            	
              Payload
                Restriction Reconciliation.
                Appendix
                7
                shall set forth the number of seats per Scheduled Flight, in each
                market
                and on each aircraft type set forth on Appendix
                7,
                that Contractor shall make available for sale by Continental. Appendix
                7
                shall be provided by Continental prior to the operation of the first
                Scheduled Flight, and shall be amended from time to time as may be
                required in response to governmental regulation or safety matters;
                provided
                that Contractor shall have given Continental not less than 30 days’
                advance written notice of such amendment and met (or offered to meet)
                with
                Continental to discuss such
                adjustments.

            

    

    

    6. Reconciled
      Expenses.

    

    
      	 	
              a.

            	
              The
                following expenses incurred in connection with Scheduled Flights
                shall be
                reconciled monthly (except as specifically set forth below) to actual
                costs: (i) rent paid by Contractor for Terminal Facilities at Contractor
                Airports (it being understood, for the avoidance of doubt, that the
                term
                “rent” as used herein shall not be deemed to include indemnity or similar
                payments, irrespective of its definition under any applicable lease);
                (ii)
                property taxes (but excluding all other taxes including without limitation
                income, profits, withholding, employment, social security, disability,
                occupation, severance, excise ad valorem, sales, use and franchise
                taxes);
                (iii) passenger liability, hull
                and war risk insurance costs;
                provided,
                that Continental shall not pay to Contractor any amount in respect
                of this
                clause
                (iii)
                that is in excess of the Average Peer Group Rates; (iv) landing fees;
                (v) glycol and de-icing costs at Contractor Airports;
                (vi) passenger-related interrupted trip costs (including hotel, meal
                and calling cards vouchers) and baggage handling claims, repairs
                and
                delivery costs related to Uncontrollable Cancellations and oversales
                at
                Contractor Airports, at a per passenger cost not unreasonably in
                excess of
                Continental’s per passenger cost for its regional airline passengers;
                (vii) air navigation fees paid to NavCanada (or any Canadian
                successor thereto) and Servicios a la Navegación en el Espacio Aéreo
                Mexicano (SENEAM) (or any Mexican successor thereto), in each case
                in
                respect of Scheduled Flights, and (viii) the amount of TSA fees or
                charges
                and any other passenger security fees or charges for security at
                all
                Contractor Airports (collectively, the “Reconciled
                Expenses”).
                The Base Compensation includes allocations of the Reconciled Expenses
                as
                set forth in Appendix
                3
                and with respect to certain Reconciled Expenses, as further provided
                in
                Paragraph
                B(6)(b)
                below. If in any month the Contractor’s actual Reconciled Expenses exceed
                the amount of Reconciled Expenses included in the Base Compensation
                in
                accordance with Appendix
                3
                and with respect to certain Reconciled Expenses as further provided
                in
                Paragraph
                B(6)(b)
                below for such month, Continental shall pay to Contractor an amount
                equal
                to such difference. If in any month the amount of Reconciled Expenses
                included in the Base Compensation in accordance with Appendix
                3
                and with respect to certain Reconciled Expenses as further provided
                in
                Paragraph
                B(6)(b)
                below for such month exceeds the Contractor’s actual Reconciled Expenses,
                Contractor shall pay to Continental an amount equal to such
                difference.

            

    

    

    
      	 	
              b.

            	
              The
                allocations included in Base Compensation for Reconciled Expenses
                of the
                type set forth in Paragraph
                A(1)(i)
                for any particular month shall be calculated as provided
                below:

            

    

    

    
      	 	
              I.

            	
              The
                amount of passenger liability, hull and war risk insurance costs
                referred
                to in clause (iii) of Paragraph
                B(6)(a)
                and the amount of TSA fees or charges and any other passenger security
                fees or charges at all Contractor Airports for security referred
                to in
                clause (viii) of Paragraph
                B(6)(a)
                included in the Base Compensation for any particular month will be
                equal
                to the product of (1) the insurance rate and TSA rates set forth
                on
                Appendix
                3
                multiplied by (2) the Forecasted Passengers for such
                month.

            

    

    

    
      	 	
              II.

            	
              The
                amount of landing fees referred to in clause (iv) of Paragraph
                B(6)(a)
                included in the Base Compensation for any particular month will be
                equal
                to the aggregate sum of the following products: (1) the landing fee
                rate
                set forth in Appendix
                3,
                multiplied by (2) the number of scheduled departures set forth in
                the
                Final Monthly Schedule, multiplied by (3) [*].

            

      	 	 	 

      	 	III.	The
              amount of Canada and Mexico air navigation fees referred to in clause
              (vii) of Paragraph B(6)(a) included in the Base Compensation for any
              particular month will be equal to the aggregate sum of the following
              products: (1) the Canadian and Mexican air navigation rates set forth
              in
              Appendix 3, multiplied by (2) the number of scheduled departures
              set forth in the final Monthly Schedule, multiplied by (3)
              [*].

    

    

    
      	 	
              7.

            	
              No
                Reconciliation for Fines, Etc. Notwithstanding
                anything to the contrary contained in this Paragraph
                B,
                Continental shall not be required to incur any cost or make any
                reconciliation payment pursuant to this Paragraph
                B
                to
                the extent that such cost or reconciliation payment is attributable
                to any
                costs, expenses or losses (including fines, penalties and any costs
                and
                expenses associated with any related investigation or defense) incurred
                by
                Contractor as a result of any violation by Contractor of any law,
                statute,
                judgment, decree, order, rule or regulation of any governmental or
                airport
                authority. Continental shall be liable for all any costs, expenses
                or
                losses (including fines, penalties and any costs and expenses associated
                with any related investigation or defense) incurred by Contractor
                as a
                result of any violation by Continental or its agents of any law,
                statute,
                judgment, decree, order, rule or regulation of any governmental or
                airport
                authority.

            

    

     

    
      ___________

      *Confidential

    

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    

    Schedule
      3 Appendices

     

    

    Appendix
      1     Base
      Compensation Rates 

    Appendix
      2     Controllable
      Completion Factor Incentives

    Appendix
      3     Reconciliation
      Of Expenses

    Appendix
      4     Incentive
      Bonuses/Rebates

    Appendix
      5     Insurance
      Rates

    Appendix
      6     [Intentionally
      Omitted]

    Appendix
      7     Minimum
      Seats
      for Scheduled Flights

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

    Appendix
      1 to Schedule 3

    

    Base
      Compensation Rates

    

    $[*]separately
      for each Covered Aircraft for each month in the Term

    $[*]generally
      for each Covered Aircraft for each day in the Term

    $[*]for
      each
      actual block hour

    $[*]for
      each
      actual flight hour

    $[*]for
      each
      Scheduled Flight departure

    $[*]for
      each
      Scheduled Flight departure at a Contractor Airport

    $[*]for
      each
      day in the Term

    

    

    *
      This
      rate, calculated separately for each Covered Aircraft, shall be the “rent per
      month” set forth on Schedule 1
      for such
      Covered Aircraft, calculated for months in which such aircraft enters or exits
      service hereunder as provided in Paragraph
      A(1)(a)
      of this
Schedule
      3.

    

    

    These
      Base Compensation Rates shall be adjusted pursuant to the terms of Section
      3.02
      of this
      Agreement.

     

    
      ___________

      *Confidential

    

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    

    Appendix
      2 to Schedule 3

    

    Controllable
      Completion Factor Incentives

    

    

    
      	
              "Controllable
                Completion Factor Incentive Rate"
                shall be [*],
                as adjusted pursuant to

            
	
              Section
                3.02 of this Agreement.

            	 	 

    

    
      ___________

      *Confidential

    

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

    Appendix
      3 to Schedule 3

    

    Reconciliation
      of Expenses

    

    

    
      	
              Reconciled

            	
              Schedule
                3

            	
              Statistical

            	 
	
              Expense

            	
              Reference

            	
              Driver

            	
              Rate

            
	
              Terminal
                Facility Rent at Contractor Airports

            	
              Sched3.B.6(a)(i)

            	
              Fixed

            	
              [*]

            
	
              Property
                Taxes

            	
              Sched3.B.6(a)(iii)

            	
              Fixed

            	
              [*]

            
	
              Passenger
                Liability, Hull and War Risk Insurance

            	
              Sched3.B.6(a)(iv)

            	
              Passengers

            	
              [*]

            
	
              Landing
                Fees

            	
              Sched3.B.6(a)(v)

            	
              Departures

            	
              [*]

            
	
              Glycol
                and De-icing at Contractor Airports

            	
              Sched3.B.6(a)(vi)

            	
              Fixed

            	
              [*]

            
	
              Interrupted
                Trip and Baggage Handling at Contractor Airports

            	
              Sched3.B.6(a)(vii)

            	
              Fixed

            	
              [*]

            
	
              Canadian
                and Mexican Air Navigation

            	
              Sched3.B6(a)(viii)

            	
              Departures

            	
              [*]

            
	
              TSA
                fees or charges and any other passenger security fees or charges
                for
                security at all Contractor Airports

            	
              Sched
                3.B.6(a)(ix)

            	
              Passengers

            	
              [*]

            
	 	 	 	 
	
              The
                Appendix 3 Rates shall be adjusted from time to time with the mutual
                agreement of the parties to reflect the actual rates charged to
                Contractor.

            

    

    

    ___________

    *Confidential

      
        
          
          

        

        
          -32-

          
            

          

        

        
          
          

        

      

    Appendix
      4 to Schedule 3

    

    Incentive
      Bonuses/Rebates

    
 

    1. On
      Time Bonus/Rebate:
      For
      purposes of Paragraph
      A(2),
      the
      bonus or rebate, as the case may be, for on-time performance shall be determined
      as follows: 

     

    
      	a. 	Contractor's
              on-time Scheduled flight departures (i.e. Scheduled Flight departures
              that
              actually departed not later than the scheduled departure time excluding
              departures impacted by weather or ATC or unscheduled, extra-section
              or
              diversion related departures) to or from each of [*]shall
              be measured.
	 	 
	
              b. 

            	
              If Contractor’s actual percentage of on-time Scheduled
                Flight departures (as a percentage of Contractor’s actual departures
                excluding departures impacted by weather or ATC or unscheduled,
                extra-section or diversion related departures) for any such calendar
                month
                to or from any of [*]
                is
                above the Annual Historical Percentage set forth below for such airport,
                then the reconciliation payment for such month shall include a payment
                by
                Continental to Contractor equal to [*]
                multiplied by the number of Contractor’s actual departures (excluding
                departures impacted by weather or ATC or unscheduled, extra-section
                or
                diversion related departures) for such month at such airport, multiplied
                by the excess of Contractor’s actual percentage of on-time Scheduled
                Flight departures over the Annual Historical Percentage of on-time
                Scheduled Flight departures. If Contractor’s actual percentage of on-time
                Scheduled Flight departures (as a percentage of actual departures
                excluding departures impacted by weather or ATC or unscheduled,
                extra-section or diversion related departures) for any such calendar
                month
                to or from any of [*]
                is
                below the Annual Historical Percentage set forth below for such airport,
                then the reconciliation payment for such month shall include a payment
                by
                Contractor to Continental equal to [*]
                multiplied by the number of Contractor’s actual departures (excluding
                departures impacted by weather or ATC or unscheduled, extra-section
                or
                diversion related departures) for such month at such airport, multiplied
                by the excess of the Annual Historical Percentage of on-time Scheduled
                Flight departures over Contractor’s actual percentage of on-time Scheduled
                Flight departures. For purposes of this Appendix
                4,
                the “Annual
                Historical Percentage”
                for any of [*]
                for any year shall equal the average of the actual percentage of
                on-time
                Scheduled Flight departures (as a percentage of Contractor’s flown
                departures excluding departures impacted by weather or ATC, and
                unscheduled, extra section or diversion related departures) of Covered
                Aircraft during such year in each of the last five full calendar
                years (or
                such lesser number of years as shall date back to January 1, 2004);
                provided
                that for the purposes of calculating the Annual Historical Percentage
                inclusive of years through December 31, 2006 calculations shall include
                all of Continental’s regional jet aircraft. Should the processes currently
                utilized by the air traffic control system in the United States to
                manage
                commercial aircraft change, Contractor and Continental agree to meet
                and
                confer to adjust the targets. Additionally, should Continental’s ground
                handling performance materially change from historical performance
                levels,
                Contractor and Continental agree to meet and confer to adjust the
                targets.
                Should the parties be unable to reach an agreement on prospective
                targets,
                the on-time incentive provisions set forth in this Appendix
                4
                to
                Schedule
                3
                will cease to be of any force or effect. As of January 1, 2006, the
                Annual
                Historical Percentages for [*]
                were as follows:

            

    

    
 

    
      	
              [*]

            	
              [*]

            	
              [*]

            
	
              [*]

            	
              [*]

            	
              [*]

            

    

    

    2. Fuel
      Efficiency Bonus:
      At
      Continental’s expense Contractor agrees to develop a fuel efficiency program
      modeled on Continental’s fuel program as set forth in Exhibit L.
      Contractor acknowledges that such program is the property of Continental, shall
      be deemed confidential by Contractor and, for Contractor but not for
      Continental, shall be subject to the provisions of Section
      10.07
      of the
      Agreement. For purposes of Paragraph
      A(2),
      the
      bonus, as the case may be, for fuel burn reduction shall be determined as
      follows: 

    

    
      	
              a.

            	
              The
                Contractor’s second year of operation will be the first year under which
                the Contractor will be eligible to receive a bonus payment. The
                Contractor’s first year of operations will provide the baseline by which
                the second year of operations will be measured. The baseline for
                each
                subsequent year will be the previous year’s performance. For each year a
                Block Hour Fuel Burn Rate will be calculated by dividing gallons
                consumed
                in a given year by total block hours flown in the same
                year.

            

    

    

    
      	
              b.

            	
              The
                Contractor’s bonus will be calculated by subtracting (a) the current
                year’s Block Hour Fuel Burn Rate from (b) the baseline year’s Block Hour
                Fuel Burn Rate, and multiplying the positive difference, if any,
                by (c)
                Continental’s average domestic price per gallon of fuel paid in the
                current year, multiplied by (d) the total gallons consumed by Contractor
                in current year multiplied by (e) 0.1. Any expense born by Continental
                to
                develop the Fuel Efficiency program will offset any fuel bonus payment
                until the balance of such account is
                zero.

            

    

    

    ___________

    *Confidential

      
        
          
          

        

        
          -33-

          
            

          

        

        
          
          

        

      

    Appendix
      5 to Schedule 3

    

    Insurance
      Rates

    

    
      	
              Insurance
                Type

            	
              Rate

            	
              Driver
                Units

            
	 	 	 
	
              Hull
                Insurance

            	
              [*] 

            	
              per
                $100 value

            
	 	 	 
	
              Liability
                Insurance

            	
              [*]

            	
              per
                Departure

            
	 	 	 
	
              Liability
                Insurance

            	
              [*]

            	
              per
                Passenger

            
	 	 	 
	
              War
                Risk Insurance

            	
              [*]

            	
              per
                1000 RPMs

            
	 	 	 
	
              War
                Risk Insurance

            	
              [*]

            	
              per
                Passenger

            
	 	 	 

    

     

     

    
      ___________

      *Confidential
 

    

    
      
        
        

      

      
        -34-

        
          

        

      

      
        
        

      

    

    Appendix
      6 to Schedule 3

    

    [Intentionally
      omitted]

    

    

    
      
        
        

      

      
        -35-

        
          

        

      

      
        
        

      

    

    Appendix
      7 to Schedule 3

    

    Minimum
      Seats for Scheduled Flights

    

    

    Appendix
      7
      shall be
      provided and subsequently adjusted from time to time in accordance with the
      provisions of Paragraph
      B.5
      of this
Schedule
      3.

    

    
 

     

    
 

    
      
        
        

      

      
        -36-

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    Definitions

     

    Agreement
      - means
      the Capacity Purchase Agreement, dated as of July 21, 2006, among Continental,
      Parent and Contractor, as amended from time to time pursuant to Section
      10.04
      hereof.

     

    Ancillary
      Agreements
      - means
      each of the agreements entered into by Continental and Contractor substantially
      in the form of Exhibits B, C, F and M hereto, together with all amendments,
      exhibits, schedules and annexes thereto (including any ground handling
      agreements entered into pursuant to Exhibit C).

     

    Annual
      CPI Change
      -
means,
      for any January 1, the
      fraction (expressed as a number rounded to four decimal places) as determined
      on
      the immediately preceding December 15th
      (or the
      first Business Day thereafter on which relevant CPI figures are publicly
      available) equal to the quotient obtained by dividing the simple average of
      the
      sum of the CPI for each of the last twelve months ending November immediately
      preceding such January 1 by the simple average of the sum of the CPI for each
      of
      the last twelve months ending November of the preceding year. (As an example,
      and
      for illustrative purposes only, the
      Annual CPI Change for January 1, 2005 would be equal to 188.383 (the simple
      average of the sum of the CPI for the last twelve months ending November of
      2004) divided by 183.6750 (the simple average of the sum of the CPI for the
      last
      twelve months ending November of 2003), or 1.0256.)

     

    Annual
      Historical Percentage
      - is
      defined in Appendix
      4
      to
Schedule
      3.

     

    April
      CPA
      - is
      defined in Section
      10.20.

     

    Average
      Peer Group Rates
      - means,
      with respect to any insurance coverage and as of any date of determination,
      (x)
      the insurance rates set forth on Appendix
      5
      to
Schedule
      3,
      multiplied by (y) the average percentage increase or decrease, as appropriate,
      from January 1, 2006 to such date of determination, in the cost of such
      insurance coverage for the five
      regional airlines with annual revenues per passenger mile closest to those
      of
      Contractor,
      as
      determined by available information obtained from public sources or reputable
      insurance brokers, excluding (i) any such regional airline that experienced
      a
      major loss within the previous three years, and (ii) any regional airline whose
      insurance rates are included with its major airline partner(s).

     

    Base
      Compensation
      - is
      defined in Paragraph
      A(1)
      of
Schedule
      3.

     

    Benchmark
      Controllable Cancellation Number
      - is
      defined in Paragraph
      B(4)(a)
      of
Schedule
      3.

     

    Benchmark
      Controllable Cancellation Percentage
      - means
[*].

     

    Business
      Day
      - means
      each Monday, Tuesday, Wednesday, Thursday and Friday unless such day shall
      be a
      day when financial institutions in New York, New York or Houston, Texas are
      authorized by law to close.

     

    Cause
      - means
      (i) the suspension for three consecutive days or longer or the revocation of
      Contractor’s authority to operate as a scheduled airline, (ii) the ceasing
      of Contractor’s operations as a scheduled airline, other than as a result of a
      Labor Strike or the mandatory grounding of any of the Contractor Fleets by
      the
      FAA, and other than any temporary cessation for not more than 14 consecutive
      days, (iii) the occurrence of a Labor Strike that shall have continued for
      10
      consecutive days or longer, (iv) the failure of Schedule 1
      to have
      been completed in accordance with Section
      10.19
      (including meeting the date milestones contained therein) (it being understood
      that Schedule
      1
      shall be
      deemed complete for purposes of this definition if not more than an aggregate
      of
      five TBD Aircraft to be identified by any milestone set forth in such
Section
      10.19
      are not
      so identified by such milestone), (v) a Controllable On-Time Departure Rate
      (including any delays resulting from a Labor Strike, labor slowdown or other
      similar action) for
      any
      two consecutive calendar months
      of
[*]
      or below
      or (vi) a willful or intentional material breach of this Agreement by Parent
      or
      Contractor that substantially deprives Continental of the benefits of this
      Agreement, which breach shall have continued for 45 days after notice thereof
      is
      delivered by Continental to Parent or Contractor, as the case may
      be.

    

    Change
      of Control
      -
      means:

    

    
      	
              (i)

            	
              Parent
                or Contractor consolidates with, or merges with or into, a Prohibited
                Person or conveys, transfers, leases or otherwise disposes of all
                or
                substantially all of its assets to a Prohibited Person, or a Prohibited
                Person consolidates with, or merges with or into, Parent or Contractor
                in
                any such event pursuant to a transaction in which the voting securities
                of
                Parent or Contractor are converted into or exchanged for cash or
                securities of a Prohibited Person, except where the holders of voting
                securities of Parent or Contractor immediately prior to such transaction
                own not less than a majority of the voting securities of the surviving
                or
                transferee corporation immediately after such transaction, in each
                case
                other than any such transaction between Parent or Contractor on the
                one
                hand, and Continental and/or any of its Subsidiaries on the
                other;

            

    

    

    
      	
              (ii)

            	
              the
                direct or indirect acquisition by a Prohibited Person or any Person
                directly or indirectly controlling a Prohibited Person of beneficial
                ownership of 15% (unless such person is the largest shareholder of
                Parent
                or Contractor, in which case 10%) or more of the capital stock or
                voting
                power of Parent or Contractor; provided
                that the acquisition of capital stock of Parent or Contractor by
                Delta Air
                Lines pursuant to contractual rights existing as of the date hereof
                shall
                not constitute a Change of Control, unless Delta shall at any time
                file a
                Schedule 13D in respect of such
                ownership;

            

    

    

    
      	
              (iii)

            	
              the
                direct or indirect acquisition by any “person” or “group” (as such terms
                are used in Section 13(d) of the Securities Exchange Act of 1934)
                not
                described in clause
                (ii)
                above, of beneficial ownership of more than 25% of the capital stock
                or
                voting power of Parent or Contractor, other than (A) Continental
                or its
                Subsidiaries or (B) any “person” or “group” that is a Person who has a
                Schedule 13D on file with the Securities and Exchange Commission
                pursuant
                to the requirements of Rule 13d-1 under the Securities Exchange Act
                of
                1934 (the “Exchange
                Act”)
                with respect to its holdings of Parent’s or Contractor’s voting securities
                (a “13D
                Person”),
                so long as (1) such 13D Person is principally engaged in the business
                of
                managing investment funds for unaffiliated securities investors and,
                as
                part of such 13D Person’s duties as agent for fully managed accounts,
                holds or exercises voting or dispositive power over Parent’s or
                Contractor’s voting securities, (2) such 13D Person was a Person who had a
                Schedule 13G on file with the Securities and Exchange Commission
                pursuant
                to the requirements of Rule 13d-1 under the Exchange Act with respect
                to
                its holdings of Parent’s or Contractor’s voting securities, and became a
                13D Person pursuant to Rule 13d-1(f)(1), and (3) such 13D Person
                acquires
                and continues to have beneficial ownership of Parent’s or Contractor’s
                voting securities pursuant to trading activities undertaken in the
                ordinary course of such 13D Person’s business and not with the purpose nor
                the effect, either alone or in concert with any 13D Person, of exercising
                the power to direct or cause the direction of the management and
                policies
                of Parent or Contractor or of otherwise changing or influencing the
                control of Parent or Contractor, nor in connection with or as a
                participant in any transaction having such purpose or effect, including
                any transaction subject to Rule 13d-3(b) of the Exchange Act; provided,
                that a “Change of Control” shall not occur pursuant to this clause
                (iii)
                if
                such “person” or “group” reduces its ownership of the capital stock or
                voting power of Parent or Contractor, as the case may be, to less
                than 25%
                within 30 days of the acquisition of ownership of at least 25% of
                such
                capital stock or voting power;

            

      	
              ___________

              *Confidential

            	 

    

    
       

    

    
      
        
        

      

      
        -37-

        
          

        

      

      
        
        

      

    

    
      	
              (iv)

            	
              the
                liquidation or dissolution of Parent or Contractor in connection
                with
                which Contractor ceases operations as an air
                carrier;

            

    

    

    
      	
              (v)

            	
              the
                sale, transfer or other disposition of all or substantially all of
                the
                airline assets of Parent or Contractor on a consolidated basis directly
                or
                indirectly to a Prohibited Person or its affiliate, whether in a
                single
                transaction or a series of related transactions;
                or

            

    

    

    
      	
              (vi)

            	
              the
                execution by Parent or Contractor of bona fide definitive agreements,
                the
                consummation of the transactions contemplated by which would result
                in a
                transaction described in the immediately preceding
                clauses.

            

    

    

    Charter
      Flights
      - means
      any flight by a Covered Aircraft for charter operations at the direction of
      Continental that is not reflected in the Final Monthly Schedule.

     

    Commencement
      Date -
      is
      defined in Section 8.01.

     

    Continental
      - means
      Continental Airlines, Inc., a Delaware corporation, and its successors and
      permitted assigns.

     

    Continental
      Airport
      - means
      any airport at which Continental provides or arranges for the provision of
      ground handling services pursuant to the Continental Ground Handling
      Agreement.

     

    Continental
      Currencies
      - means
      inflight currency coupons issued by Continental that may only be purchased
      at
      any Continental eService Center and may only be redeemed for alcoholic beverages
      or headsets on any Continental or Contractor flight.

     

    Continental
      Ground Handling Agreement
      - means
      that certain IATA Standard Ground Handling Agreement (April 1993 version)
      between Continental and Contractor, together with Annex A thereto (Ground
      Handling Services, April 1993 version) and Annex B thereto substantially in
      the
      form of Exhibit
      C
      to the
      Master Facility and Ground Handling Agreement (or as otherwise agreed or
      amended) providing for the provision by or on behalf of Continental to
      Contractor of ground handling services at the airports specified
      therein.

     

    Continental
      Hub Airport
      - means
      any airport at which Continental operates an average of more than [*]
      flights/day.

     

    Continental
      Marks
      - is
      defined in Exhibit
      G.

     

    Contractor
      -
      means
      Chautauqua Airlines, Inc., an Indiana corporation, and its successors and
      permitted assigns.

     

    Contractor
      Airport
      - means
      (i) any airport at which Contractor provides or arranges for the provision
      of
      ground handling services pursuant to the Contractor Ground Handling Agreement,
      and (ii) any other airport into or out of which Contractor operates any
      Scheduled Flight and which is not a Continental Airport.

     

    Contractor
      Fleet
      - means
all
      or
      any of the following fleets of Covered Aircraft (to the extent that any Covered
      Aircraft are part of such fleet): CRJ Aircraft, ERJ Aircraft, or any portion
      of
      such aircraft consisting of one or more models, or any subgroup of such aircraft
      as determined from time to time by regulatory or court order or other
      governmental action (for example, all such aircraft manufactured within specific
      time frames).

     

    Contractor
      Ground Handling Agreement
      -
means
      that certain IATA Standard Ground Handling Agreement (April 1993 version)
      between Continental and Contractor, together with Annex A thereto (Ground
      Handling Services, April 1993 version) and Annex B thereto substantially in
      the
      form of Exhibit
      D
      to the
      Master Facility and Ground Handling Agreement (or as otherwise agreed or
      amended) providing for the provision by or on behalf of Continental to
      Contractor of ground handling services at the airports specified
      therein.

     

    Contractor
      Marks
      - is
      defined in Exhibit
      H.

    
      ___________

      *Confidential

    

    
      
        
        

      

      
        -38-

        
          

        

      

      
        
        

      

    

    Contractor
      Services
      - is
      defined in the Master Facility and Ground Handling Agreement.

     

    Controllable
      Completion Factor Incentive Rate
      - is
      defined in Appendix
      2
      to
Schedule 3.

     

    Controllable
      Cancellation
      - means
      a cancellation of a Scheduled Flight that is not an Uncontrollable
      Cancellation.

     

    Controllable
      Cancellation Factor
      - means,
      for any period of determination, the percentage of flights completed during
      such
      period, excluding Uncontrollable Cancellations.

     

    Controllable
      On-Time Departure -
      means a
      flight departing within 15 minutes of scheduled departure time during such
      period, excluding flights impacted by ATC, weather-related delays, aircraft
      damage caused by Continental or its agents or any other circumstance beyond
      Contractor’s control.

     

    Controllable
      On-Time Departure Rate
      - means,
      for any period of determination, the percentage of flights that are Controllable
      On-Time Departures.

     

    Covered
      Aircraft
      - means
      all of the aircraft listed on Schedule
      1
      (as
      amended from time to time pursuant to the provisions of this Agreement) and
      presented for service by Contractor, as adjusted from time to time for
      withdrawals pursuant to Article
      VIII
      and for
      exit date extensions pursuant to Section
      10.18.

    

    CPI
      - means
      (i) the Consumer Price Index for All Urban Consumers - U.S. City
      Average, All Items, Not Seasonally Adjusted Base Period: 1982-84 = 100, as
      published by the Bureau of Labor Statistics, United States Department of Labor,
      or (at any time when the Bureau of Labor Statistics is no longer publishing
      such
      Index) as published by any other agency or instrumentality of the United
      States of America, or (ii) at any time after the index described in
      clause (i) shall have been discontinued, any reasonably comparable
      replacement index or other computation published by the Bureau of Labor
      Statistics or any other agency or instrumentality of the United States of
      America. If any such index shall be revised in any material respect (such as
      to
      change the base year used for computation purposes), then all relevant
      determinations under this Agreement shall be made in accordance with the
      relevant conversion factor or other formula published by the Bureau of Labor
      Statistics or any other agency or instrumentality of the United States of
      America, or (if no such conversion factor or other formula shall have been
      so
      published) in accordance with the relevant conversion factor or other formula
      published for that purpose by any nationally recognized publisher of such
      statistical information.

     

    CRJ
      Aircraft
      - means
      any Bombardier CRJ-200 ER or LR aircraft.

     

    DOT
      - means
      the United States Department of Transportation.

     

    Enplanement
      - means
      one passenger for such passenger’s entire one-way flight itinerary, regardless
      of how many Scheduled Flights or flight segments comprise such
      itinerary.

     

    ERJ
      Aircraft
      - means
      any A1P-powered Embraer ERJ-145LR aircraft.

     

    FAA
      - means
      the United States Federal Aviation Administration.

     

    Final
      Monthly Schedule -
      means
      the final schedule of Scheduled Flights for the next calendar month
      delivered by Continental to Contractor pursuant to Section 2.01(b).

     

    Flight
      Cancellation Reconciliation
      - is
      defined in Paragraph
      B(6)
      of
Schedule
      3.

     

    Flight
      Reconciliation
      - is
      defined in Paragraph
      B(3)
      of
Schedule
      3.

     

    Forecasted
      Passengers
      - means,
      for any month, the forecasted Revenue Onboards derived from the Final Monthly
      Schedule for the previous month.

     

    Fuel
      Purchasing Agreement
      - means
      that certain Fuel Purchasing Agreement, dated as of July 21, 2006, between
      Continental and Contractor, in the form attached hereto as Exhibit
      F
      (or as
      otherwise agreed or amended).

     

    Identification
      - means
      the Continental Marks, the aircraft livery set forth on Exhibit
      H,
      the
      Continental flight code and other trade names, trademarks, service marks,
      graphics, logos, employee uniform designs, distinctive color schemes and other
      identification selected by Continental in its sole discretion for the Regional
      Airline Services to be provided by Contractor, whether or not such
      identification is copyrightable or otherwise protected or protectable under
      federal law.

     

    Labor
      Strike
      - means
      a labor dispute, as such term is defined in 29 U.S.C.
      Section 113(c) involving
      Contractor and some or all of its employees, which dispute results in a
      union-authorized strike resulting in a work stoppage.

     

    
      
        
        

      

      
        -39-

        
          

        

      

      
        
        

      

    

    LLP
      - is
      defined in Section
      10.21.

     

    Master
      Facility and Ground Handling Agreement
      - means
that
      certain Master Facility and Ground Handling Agreement, dated as of July 21,
      2006, between Continental and Contractor, in the form attached hereto as
Exhibit
      C
      (or as
      otherwise agreed or amended).

     

    Parent
      - means
      Republic Airways Holdings Inc., a Delaware corporation, and its successors
      and
      permitted assigns.

     

    Permitted
      Charters -
      is
      defined in Section
      4.16.

     

    Person
      - means
      an individual, partnership, limited liability company, corporation, joint stock
      company, trust, estate, joint venture, association or unincorporated
      organization, or any other form of business or professional entity.

     

    Prohibited
      Person
      - means
      (i) an air carrier (other than Continental and its successors and any Subsidiary
      thereof), the consolidated annual revenues of which for the most recently
      completed fiscal year for which audited financial statements are available
      are
      in excess of the Revenue Threshold as of the date of determination (or the
      U.S.
      dollar equivalent thereof), in each case other than any air carrier at least
      75%
      of whose available seat miles, together with the available seat miles of its
      affiliates, are flown under the livery or brand of another air carrier, and
      (ii)
      any executive officer, as of the date hereof or any date of determination,
      of an
      air carrier (other than Continental and its successors and any Subsidiary
      thereof), the consolidated annual revenues of which for the most recently
      completed fiscal year for which audited financial statements are available
      are
      in excess of the Revenue Threshold as of the date of determination and any
      entity in which such current executive officer is an officer or significant
      shareholder.

     

    Reasonable
      Operating Constraints
      - means
      the operating constraints on Scheduled Flights set forth on Exhibit
      J.

     

    Reconciled
      Expenses
      - is
      defined in Paragraph
      B(6)(a)
      of
Schedule
      3.

     

    Regional
      Airline Services
      - means
      the provisioning by Contractor to Continental of Scheduled Flights and related
      ferrying using the Covered Aircraft in accordance with this
      Agreement.

     

    Revenue
      Onboard
      - means
      one revenue-generating passenger on one flight segment, regardless of whether
      such flight segment is all or part of such passenger’s entire one-way flight
      itinerary.

     

    Revenue
      Threshold
      - means
[*], as
      such
      amount may be increased based on the amount by which, for any date of
      determination, the most recently published CPI has increased to such date above
      the CPI for calendar year 2000. For purposes hereof, the CPI for calendar year
      2000 is the monthly average of the CPI for the twelve months ending on December
      31, 2000.

     

    Scheduled
      ASMs
      - means,
      for any period of calculation, the available seat miles for all Scheduled
      Flights during such period of calculation.

     

    Scheduled
      Flight
      - means
      a flight as determined by Continental pursuant to Section 2.01(b)
      (including all Charter Flights).

     

    Spare
      Aircraft
      - means
      any ERJ Aircraft or CRJ Aircraft (including up to two or, pursuant only to
      Section
      2.01(e),
      three
      Covered Aircraft) that are designated by Contractor as spare aircraft and which
      will be painted in neutral livery, both with respect to interior markings and
      exterior colors and markings which may be used by Contractor to replace another
      aircraft in the operation of a Scheduled Flight that otherwise would be
      cancelled.

     

    Subsidiary
      - means,
      as to any Person, (a) any corporation more than 50% of whose stock of any
      class or classes having by the terms thereof ordinary voting power to elect
      a
      majority of the directors of such corporation (irrespective of whether or not
      at
      the time, any class or classes of such corporation shall have or might have
      voting power by reason of the happening of any contingency) is at the time
      owned
      by such Person directly or indirectly through Subsidiaries and (b) any
      partnership, association, joint venture, limited liability company, joint stock
      company or any other form of business or professional entity, in which such
      Person directly or indirectly through Subsidiaries has more than 50% equity
      interest at any time. 

    
      ___________

      *Confidential

    

    
      
        
        

      

      
        -40-

        
          

        

      

      
        
        

      

    

    System
      Flight Disruption
      - means
      the failure by Contractor to complete at least [*]
      of the
      aggregate Scheduled ASMs in any three consecutive calendar months, or at least
      [*]
      of the
      aggregate Scheduled ASMs in any consecutive 45-day period, in each case
      excluding the effect of Uncontrollable Cancellations; provided,
      that if
      the average number of Block Hours flown per Covered Aircraft during such period
      is more than the average number of Block Hours flown per Covered Aircraft during
      the three consecutive calendar months immediately preceding the period first
      measured, then the calculation for purposes of this definition shall disregard
      that number of Scheduled ASMs for such period as is necessary to reduce the
      average number of Block Hours flown per Covered Aircraft during such period
      to
      the average number of Block Hours flown per Covered Aircraft during prior three
      consecutive calendar month period; provided
      further,
      that a
      System Flight Disruption shall be deemed to continue until the next occurrence
      of a single calendar month in which Contractor completes at least [*]
      of the
      aggregate Scheduled ASMs; and provided
      further,
      that
      completions and cancellations of Scheduled Flights on any day during which
      a
      Labor Strike is continuing shall not be taken into account in the foregoing
      calculations.

     

    TBD
      Aircraft
      - is
      defined in Section
      10.19.

     

    Term
      - has
      the meaning set forth in Section
      8.01,
      as
      earlier terminated pursuant to Section 8.02,
      if
      applicable, and any Wind-Down Period.

     

    Terminal
      Facilities - means
      “Terminal Facilities” as such term is defined in the Master Facility and Ground
      Handling Agreement.

     

    Termination
      Date
      - means
      the date of early termination of this Agreement, as provided in a notice
      delivered from one party to the others pursuant to Section 8.02,
      or, if
      no such early termination shall have occurred, the date of the end of the
      Term.

     

    TSA
      - means
      the United States Transportation Security Administration.

     

    Uncontrollable
      Cancellation
      - means
      a cancellation of a Scheduled Flight as a result of weather, air traffic
      control, an event described in Paragraph B(4)(d)
      of
Schedule 3
      or any
      other circumstance beyond Contractor’s reasonable control,
      in each
      case as coded on Contractor’s operations reports in accordance with
      Continental’s standard coding policies and consistent with Contractor’s past
      practices, it being understood and agreed that if Continental’s operations are
      subject to the same circumstance giving rise to the cancellation and Continental
      does not cancel flights as a result, such cancellation shall be a Controllable
      Cancellation, it being further understood and agreed that cancellations
      resulting from a labor slowdown or other similar action, but not constituting
      a
      Labor Strike, shall not constitute Uncontrollable Cancellations.

     

    Wind-Down
      Period
      - means
      the period after the Termination Date and until the time when the last Covered
      Aircraft has been withdrawn from the capacity purchase provisions of this
      Agreement.

     

    Wind-Down
      Schedule -
      means
      the schedule, determined as provided in Article
      VIII
      of this
      Agreement, for Covered Aircraft to be withdrawn from the capacity purchase
      provisions of this Agreement.

    
      ___________

      *Confidential

    

    
      
        
        

      

      
        -41-

        
          

        

      

      
        
        

      

    

    

     

    
 

    EXHIBIT
      B

    [Reserved]
      

    

    

    
      
        
        

      

      
        -42-

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      C

    Master
      Facility and Ground Handling Agreement

    
      

      
        
          
          

        

        
          -43-

          
            

          

        

        
          
          

        

      

      MASTER
        FACILITY 

      AND
        

      GROUND
        HANDLING AGREEMENT

      

      among
        

      

      Continental
        Airlines, Inc.

      

      Republic
        Airways Holdings Inc.

      

      and

      

      Chautauqua
        Airlines, Inc.

      

      

      Executed
        as of July 21, 2006

      
        
          
          

        

        
          -44-

          
            

          

        

        
          
          

        

      

       

      MASTER
        FACILITY AND GROUND HANDLING AGREEMENT

      

      

      This
        Master Facility and Ground Handling Agreement (this “Agreement”),
        dated
        as of July 21,
        2006 is
        among Continental Airlines, Inc., a Delaware corporation (“Continental”),
        Republic Airways Holdings Inc., a Delaware corporation (“Parent”)
        and
        Chautauqua Airlines, Inc., an Indiana corporation and a wholly-owned subsidiary
        of Parent (“Carrier”
and,
        collectively with Parent, “Contractor”).

      

      WHEREAS,
        Continental,
        Parent and Carrier are parties to that certain Capacity
        Purchase Agreement, dated as of July 21, 2006 (as amended from time to time,
        the
“Capacity
        Purchase Agreement”);

       

      WHEREAS,
        Continental, Parent and Carrier desire to establish the terms by which both
        Continental and Contractor will use and share airport facilities in furtherance
        of the Capacity Purchase Agreement, to include, without limitation, the mutual
        or coordinated use of airport facilities at any airport in or out of which
        Continental operates any flight or Contractor operates any Scheduled Flight,
        and
        the terms by which each of them will provide certain ground handling services
        for the other at certain airports in furtherance of the Capacity Purchase
        Agreement;

       

      NOW,
        THEREFORE, for
        and
        in consideration of the mutual covenants and obligations hereinafter contained,
        Continental and Contractor agree as follows:

      

      Section
        1. Defined
        Terms.
        Capitalized terms used in this Agreement (including, unless otherwise defined
        therein, in the Exhibits, Schedules and Annexes to this Agreement) and not
        otherwise defined herein shall have the respective meanings ascribed to such
        terms in the Capacity Purchase Agreement. The following terms shall have
        the
        meanings set forth below:

      

      “Airport
        Authority”
shall
        mean any municipal, county, state or federal governmental authority, or any
        private authority, owning or operating any Applicable Airport with authority
        to
        lease, convey or otherwise grant rights to use any airport
        facilities.

      

      “Applicable
        Airport”
shall
        mean any Continental Airport or Contractor Airport.

      

      “Continental
        Airport”
shall
        mean (i) each Hub Airport and (ii) each other airport at which Continental
        provides or arranges for the provision of ground handling services pursuant
        to
        the Continental Ground Handling Agreement.

      

      “Continental
        Ground Handling Agreement”
shall
        mean that certain IATA Standard Ground Handling Agreement (April 1993 version)
        between Continental and Contractor, together with Annex A thereto (Ground
        Handling Services, April 1993 version), and Annex B thereto substantially
        in the
        form of Exhibit
        C
        hereto
        (or as otherwise agreed) providing for the provision by or on behalf of
        Continental to Contractor of ground handling services at the airports specified
        therein.

      

      “Contractor
        Airport”
shall
        mean any airport at which Contractor provides or arranges for the provision
        of
        ground handling services pursuant to the Contractor Ground Handling Agreement
        (except for any Hub Airport), and any other airport into or out of which
        Contractor operates any Scheduled Flight and which is not a Continental
        Airport.

      

      “Contractor
        Ground Handling Agreement”
shall
        mean that certain IATA Standard Ground Handling Agreement (April 1993 version)
        between Contractor and Continental, together with Annex A thereto (Ground
        Handling Services, April 1993 version), and Annex B thereto substantially
        in the
        form of Exhibit
        D
        hereto
        (or as otherwise agreed) providing for the provision by or on behalf of
        Contractor to Continental and, at Continental’s request from time to time, its
        codeshare partners, of ground handling services at the airports specified
        therein.

      

      “Contractor
        Services”
shall
        mean Regional Airline Services as contemplated by the Capacity Purchase
        Agreement and the ground handling services contemplated by the Contractor
        Ground
        Handling Agreement.

      

      “Contractor
        Terminal Facility”
shall
        mean any Terminal Facility to the extent owned, leased, subleased or otherwise
        retained or used by Contractor for the provision of Contractor
        Services.

      

      “Hub
        Airport”
shall
        mean, as of any date of determination, [*].

      

      “Non-Terminal
        Facilities”
shall
        mean all maintenance, training, office and other facilities and spaces at
        an
        Applicable Airport or adjacent thereto that are not Terminal
        Facilities.

      

      “Terminal
        Facilities”
shall
        mean all terminal facilities and spaces leased, subleased or otherwise retained
        or used by a party at an Applicable Airport, including without limitation
        all
all
        passenger lounges, passenger holding areas, aircraft parking positions (which
        may or may not be adjacent to a passenger holding area) and associated ramp
        spaces, gates (including loading bridges and associated ground equipment
        parking
        areas), ticketing counters, curbside check-in facilities, baggage
        makeup areas, inbound baggage areas, crew rooms, in-terminal office spaces,
        associated employee parking areas and other terminal facilities.

      
        ___________

        *Confidential

      

      
        
          
          

        

        
          -45-

          
            

          

        

        
          
          

        

      

      “Transfer”
shall
        mean any lease, sublease, assignment, disposition or other
        transfer.

      

      Section
        2. Lease,
        Use and Modification of Airport Facilities.

      

      (a) Continental
        and Contractor agree that the use by Contractor of all Terminal Facilities
        at
        all Applicable Airports for the provision of Contractor Services shall be
        at the
        direction of Continental. In furtherance of this Section
        2(a),
        from
        time to time, and notwithstanding the execution of any lease, sublease or
        other
        agreement pursuant to this Section
        2,
        at the
        request and direction of Continental and subject to Section
        2(b),
        and
        subject to the provisions of Sections
        6(c)
        and
6(f)
        relating
        to Transfers in connection with certain terminations, Contractor
        shall:

       

      (i) use
        its
        commercially reasonable efforts to enter into a lease, sublease or other
        appropriate agreement with any Airport Authority at any Applicable Airport
        for
        the lease, sublease or use of any Terminal Facilities used or to be used
        in
        connection with the provision of Contractor Services;

      

      (ii) use
        its
        commercially reasonable efforts to amend, modify or terminate any agreement
        with
        any Airport Authority at any Applicable Airport for the lease, sublease or
        use
        of any Contractor Terminal Facilities;

      

      (iii) use
        its
        commercially reasonable efforts to obtain the consent of any relevant Airport
        Authority at any Applicable Airport for the Transfer to Continental or its
        designee of any lease, sublease or other agreement in respect of any Contractor
        Terminal Facility, or for the right of Continental or its designee to use
        any
        Contractor Terminal Facility;

      

      (iv) enter
        into a sublease substantially in the form of Exhibit
        A
        hereto
        (or as otherwise agreed) for the sublease to Continental or its designee
        of
        Contractor’s interest in any Contractor Terminal Facility;

      

      (v) enter
        into an assignment substantially in the form of Exhibit
        B
        hereto
        (or as otherwise agreed) for the assignment to Continental or its designee
        of
        Contractor’s interest in any Contractor Terminal Facility;

      

      (vi) enter
        into a sublease substantially in the form of Exhibit
        A
        hereto
        (or as otherwise agreed) for the sublease to Contractor of Continental’s
        interest in any Terminal Facility used or to be used in connection with the
        provision of Contractor Services;

      

      (vii) enter
        into an assignment substantially in the form of Exhibit
        B
        hereto
        (or as otherwise agreed) for the assignment to Contractor of Continental’s
        interest in any Terminal Facility used or to be used in connection with the
        provision of Contractor Services; and

      

      (viii) take
        any
        other action reasonably requested by Continental in furtherance of this
Section
        2(a).

      

      (b) The
        assignments and subleases to be entered into pursuant to Section
        2(a)
        shall be
        subject to the rights of the Applicable Airports in such Terminal Facilities
        and
        to the receipt of all necessary consents from Airport Authorities and other
        third parties to such sublease or assignment.

      

      (c) Each
        of
        Contractor and Continental shall pay for all landing fees for its flights
        at all
        Applicable Airports, and to the extent that the other party is obligated
        to make
        such payments under any applicable lease or other agreement, the first party
        hereby indemnifies and agrees to hold harmless the other party for all such
        amounts.

      

      (d) Contractor
        shall perform in a timely manner all obligations under all leases, subleases
        and
        other agreements to which Contractor is or becomes a party for the use of
        Contractor Terminal Facilities, including without limitation making in a
        timely
        manner all payments of rent and other amounts due under such agreement, and
        shall use commercially reasonable efforts to keep such agreements in effect
        (or
        to promptly renew or extend such agreements on substantially similar terms
        as
        directed by Continental).

      

      (e) Contractor
        shall obtain the written consent of Continental prior to entering into any
        lease
        or other agreement for the use or modification of, or otherwise relating
        to, any
        Contractor Terminal Facilities (or other airport facilities which would become
        Contractor Terminal Facilities), or amending or modifying in any manner any
        such
        agreement, or consenting to any of the same. 

      

      (f) Contractor
        shall give Continental at least 30 days’ prior written notice before ceasing to
        use any Contractor Terminal Facilities, provided
        that no
        such notice shall be required where such use is ceasing because Continental
        has
        informed Contractor that no Scheduled Flights will be scheduled in or out
        of
        such location.

      

      Section
        3. Exclusivity.
        

       

          Each
        Contractor Terminal Facility used for the provision of Regional Airline Services
        shall be used by Contractor exclusively for the provision of Contractor
        Services, and may not be used by Contractor in connection with any other
        flights, including any flights using an Uncovered Aircraft, or for any other
        purpose; provided
        that the
        foregoing limitation shall not apply to:

              (i) baggage
        claim and other similar facilities that are leased or otherwise made available
        to all air carriers at such airport on a common-use or joint-use basis;
        or

      

              (ii) to
        any
        facilities that are properly required by an Airport Authority to be made
        available for use by others in accordance with any applicable agreement that
        is
        in place as of the date hereof or has been approved by Continental under
        Section
        2(f).

                  

      
        
          
          

        

        
          -46-

          
            

          

        

        
          
          

        

      

      Section
        4. Ground
        Handling.

      

      (a) Each
        of
        Continental and Contractor shall enter into the Continental Ground Handling
        Agreement. Notwithstanding the identity of the lessee, sublessor or sublessee
        under any lease or other agreement relating to any Terminal Facilities,
        Continental shall use commercially reasonable efforts to provide Contractor
        with
        access to all Terminal Facilities at each Continental Airport, and at any
        Contractor Airport where Continental is the lessee or sublessee, in each
        case as
        reasonably necessary for the provision of Regional Airline Services. In
        connection with Continental granting to Contractor access to any Terminal
        Facilities leased by Continental pursuant to this Section
        4(a),
        Contractor covenants and agrees, for the benefit of Continental and its lessor,
        that Contractor shall not, by its use and occupancy of such facilities, violate
        any of the provisions of such lease or other agreements relating thereto
        which
        have been made available to Contractor, and that it shall not knowingly permit
        any breach of any of the obligations of Continental under such agreements,
        and
        Contractor further agrees to release and indemnify Continental in respect
        of
        such facilities to the same extent as provided in Section
        11
        of the
        Form of Sublease Agreement attached hereto as Exhibit
        A
        (which
        provisions are hereby incorporated by reference), as if a sublease in respect
        of
        such facilities had been entered into by Continental and
        Contractor.

      

      (b) Each
        of
        Continental and Contractor shall enter into the Contractor Ground Handling
        Agreement. Notwithstanding the identity of the lessee, sublessor or sublessee
        under any lease or other agreement relating to any Terminal Facilities,
        Contractor shall use commercially reasonable efforts to provide Continental
        or
        its designee with access to all Terminal Facilities at each Contractor Airport,
        and at any Continental Airport where Contractor is the lessee or sublessee,
        in
        each case as reasonably necessary for Continental’s or such designee’s
        operations for which Contractor is providing ground handling services pursuant
        to the Contractor Ground Handling Agreement. In connection with Contractor
        granting to Continental access to any Terminal Facilities leased by Contractor
        pursuant to this Section
        4(b),
        Continental covenants and agrees, for the benefit of Contractor and its lessor,
        that Continental shall not, by its use and occupancy of such facilities,
        violate
        any of the provisions of such lease or other agreements relating thereto
        which
        have been made available to Contractor, and that it shall not knowingly permit
        any breach of any of the obligations of Contractor under such agreements,
        and
        Continental further agrees to release and indemnify Contractor in respect
        of
        such facilities to the same extent as provided in Section
        11
        of the
        Form of Sublease Agreement attached hereto as Exhibit
        A
        (which
        provisions are hereby incorporated by reference), as if a sublease in respect
        of
        such facilities had been entered into by Contractor and
        Continental.

      

      Section
        5. Capital
        Costs and Modification Designs.

      

      (a) Contractor
        Funded.
        Contractor shall fund all capital expenditures required to be made by
        Continental or Contractor under any lease or other appropriate agreement
        pertaining to Terminal Facilities to which either of them is a
        party:

      

      (i) in
        connection with any Terminal Facility used for the provision of Contractor
        Services at any Contractor Airport; provided,
        that
        Contractor shall not be required to fund any expenditures that are subject
        to
        the provisions of Section
        5(b)(i);

      

      (ii) in
        connection with any non-passenger-related Terminal Facility (including crew
        rooms, break rooms and office space) used exclusively or dedicated exclusively
        to Contractor at any Continental Airport; and

      

      (iii) in
        respect of ground handling equipment of the type described in Paragraph 1.1.3
        of
        the Continental Ground Handling Agreement as being supplied by the Carrier
        (as
        defined therein);

      

        provided,
          however,
          that
          Contractor shall not make any capital expenditures pursuant to the foregoing
          clauses
          (i)
          and
(ii) unless
          Continental has specifically approved such capital expenditure, which approval
          shall not be unreasonably withheld if such capital expenditures are required
          by
          an applicable Airport Authority or if required under the terms of an applicable
          lease or other applicable agreement in effect as of the date hereof or
          to which
          Continental shall have consented pursuant to Section
          2(e);
          and
provided,
          further,
          that
          Contractor shall not be required to make any capital expenditures in respect
          of
          ground handling equipment of the type described in Paragraph 1.1.3 of the
          Contractor Ground Handling Agreement as being supplied by the Carrier (as
          defined therein).

      

       

      
        
          
          

        

        
          -47-

          
            

          

        

        
          
          

        

      

          (b) Continental
        Funded.
        Continental shall fund all capital expenditures required to be made by
        Continental or Contractor under any lease or other appropriate agreement
        pertaining to Terminal Facilities to which either of them is a party:

      

      (i) in
        respect of any Terminal Facility used for the provision of Contractor Services
        as required in connection with a change to the Continental Marks or the other
        Identification, except for such capital expenditures made as a part of
        Contractor’s customary refurbishment expenditures;

      

      (ii) in
        respect of any Terminal Facility used for the provision of Contractor Services
        at any Continental Airport; provided,
        that
        Continental shall not be required to fund any expenditures that are subject
        to
        the provisions of Section
        5(a)(ii);
        and

      

      (iii) in
        respect of ground handling equipment of the type described in Paragraph 1.1.3
        of
        the Contractor Ground Handling Agreement as being supplied by the Carrier
        (as
        defined therein); 

      provided,
        however,
        that
        Continental shall not be required to make any capital expenditures in respect
        of
        ground handling equipment of the type described in Paragraph 1.1.3 of the
        Continental Ground Handling Agreement as being supplied by the Carrier (as
        defined therein).

      

        (c) Airport
          Conversion.
          If
          during the Term a Contractor Airport becomes a Continental Airport, then
          Continental shall purchase from Contractor at their book value at such
          time (as
          reflected on Contractor’s books) all fixtures and other unremovable capitalized
          items located at the Contractor Terminal Facilities at such Airport that
          have
          been paid for by Contractor pursuant to clause (i)
          of
Section
          5(a)
          and
          approved by Continental pursuant to the proviso to Section
          5(a);
          provided
          that any
          payment under this Section
          5(c)
          shall
          not be in duplication of any payment made under Section
          6.
          If a
          Continental Airport becomes a Contractor Airport, then Contractor shall
          have no
          obligation to Continental in respect of expenditures that have been made
          prior
          to such conversion pursuant to Section
          5(b).

         

      

      (d) Reimbursements.
        Any
        reimbursement (whether or not made in the form of a rental credit) by any
        Airport Authority of any capital expenditures made by Contractor or Continental
        and referenced in this Section
        5
        shall be
        remitted to the party (Contractor or Continental) that funded such capital
        expenditures, except that any such reimbursement in respect of fixtures or
        other
        capitalized items purchased by Continental pursuant to Section
        5(c)
        shall be
        remitted to Continental, and provided
        that any
        such reimbursement to Contractor shall be applied, for all purposes relating
        to
        the Capacity Purchase Agreement, as a reduction of book value of the asset
        or
        assets in respect of which such capital expenditure was made.

      

      (e) Modification
        Designs.
        The
        designs (including the design and construction specifications and scope of
        work)
        for any modification of Contractor Terminal Facilities, including without
        limitation all modifications funded by capital expenditures pursuant to
Section
        5,
        shall
        be generated by Continental and shall be consistent with the Continental
        Marks
        and other Identification. The contractors hired to make such modifications
        shall
        be selected by Continental. All such modifications, including without limitation
        all modifications funded by capital expenditures pursuant to Section
        5,
        shall
        be consistent with the requirements of the applicable leases or other relevant
        agreements in respect of such Terminal Facilities.

      

      Section
        6. Transfer
        of Terminal Facilities.

      

      
        
          
          

        

        
          -48-

          
            

          

        

        
          
          

        

      

      (a) Except
        as
        otherwise provided in Section
        2(a),
        Section
        5(c)
        or this
Section
        6,
        during
        the Term Contractor shall not Transfer all or any portion of its interest
        in any
        Contractor Terminal Facility. Any purported Transfer of an interest in a
        Contractor Terminal Facility in violation of Section
        2(a),
        Section
        5(c)
        or this
Section
        6
        shall be
        void and ineffectual ab
        initio.

      

      (b) Upon
        the
        termination or other non-temporary cessation of all Scheduled Flights into
        or
        out of any Applicable Airport at which there are any Contractor Terminal
        Facilities (including in connection with the termination of the Capacity
        Purchase Agreement), Continental shall provide written notice as soon as
        practicable (but in no event later than 20 Business Days after such termination
        or other non-temporary cessation) to Contractor of Continental’s intention to
        retain for itself or its designee any Contractor Terminal Facilities at such
        Applicable Airport.

      

      (c) If,
        pursuant to a notice delivered pursuant to Section
        6(b),
        Continental or its designee is retaining any or all of the Contractor Terminal
        Facilities, then Continental shall purchase from Contractor, at their book
        value
        (as reflected on Contractor’s books) at the time such notice is delivered, all
        fixtures and other unremovable capitalized items paid for by Contractor (with
        Continental’s approval pursuant to Section
        5)
        in
        connection with the use of such Contractor Terminal Facilities;
        provided
        that any
        payment under this Section
        6(c)
        shall
        not be in duplication of any payment made under Section
        5(c).
        In
        addition, Contractor shall use commercially reasonable efforts to assign
        the
        rights and obligations of the lease or other applicable agreements with regard
        to such Contractor Terminal Facilities to Continental or its designee, in
        which
        event Continental shall assume such rights and obligations applicable to
        such
        Contractor Terminal Facilities, including without limitation the obligation
        to
        make all rental or similar payments from and after the date of such assignment,
        but not including any amounts owed in respect of any breach by Contractor
        of
        such lease or applicable agreements. Prior to the consummation of such
        assignment, Contactor shall continue to fulfill its obligations under such
        lease
        or other applicable agreements; provided
        that
        Continental shall promptly reimburse Contractor for all rental or similar
        payments applicable to such Contractor Terminal Facilities from the date
        of such
        notice until the lease or applicable agreements are assigned, but not including
        any amounts owed in respect of any breach by Contractor of such lease or
        applicable agreements.

      

      (d) If,
        pursuant to a notice delivered pursuant to Section
        6(b),
        Continental is not retaining one or more of the Contractor Terminal Facilities
        (such Contractor Terminal Facilities not so retained, the “Continental
        Rejected Facilities”),
        then
        Contractor shall provide written notice as soon as practicable (but in no
        event
        later than 20 Business Days after receipt of a notice pursuant to Section
        6(b))
        to
        Continental of Contractor’s intention to retain or reject the Continental
        Rejected Facilities; provided
        that if
        such termination of Scheduled Flights is pursuant to a termination of the
        Capacity Purchase Agreement for Cause, then, without limiting any of
        Continental’s remedies under the Capacity Purchase Agreement, Contractor shall
        retain all of the Continental Rejected Facilities.

      

      (e) If,
        pursuant to a notice delivered pursuant to, or the proviso of, Section
        6(d),
        Contractor is retaining any of the Continental Rejected Facilities, then
        Continental’s obligations under this Agreement shall terminate with respect to
        those Continental Rejected Facilities as of the date of such
        notice.

      

      (f) If
        pursuant to a notice delivered pursuant to Section
        6(d),
        Contractor is not retaining one or more of the Continental Rejected Facilities
        (such Continental Rejected Facilities not so retained, the “Contractor
        Rejected Facilities”),
        then
        Continental shall purchase from Contractor, at their book value (as reflected
        on
        Contractor’s books) at the time such notice is delivered, all fixtures and other
        unremovable capitalized items paid for by Contractor (with Continental’s
        approval pursuant to Section
        5)
        in
        connection with the use of the Contractor Rejected Facilities. In addition,
        at
        Continental’s direction, Contractor shall use commercially reasonable efforts to
        either (i) terminate the lease or other agreement applicable with respect
        to any
        such Contractor Rejected Facility, (ii) assign the rights and obligations
        of
        such leases or other applicable agreements to Continental or its designee,
        in
        which event Continental shall assume such rights and obligations applicable
        to
        such Contractor Rejected Facilities, including without limitation the obligation
        to make all rental or similar payments from and after the date of such
        assignment, including any termination payments, but not including any amounts
        owed in respect of any breach by Contractor of such lease or applicable
        agreements; provided
        that any
        payment under this Section
        6(f)
        shall
        not be in duplication of any payment made under Section
        5(c),
        or
        (iii) continue to fulfill its obligations under such lease or other applicable
        agreements; provided
        that
        Continental shall promptly reimburse Contractor for all rental or similar
        payments applicable to such Contractor Rejected Facilities from the date
        of
        Contractor’s notice until the leases or applicable agreements terminate or are
        otherwise assigned, but not including any amounts owed in respect of any
        breach
        by Contractor of such lease or applicable agreements.

      

      (g) Notwithstanding
        any other provision of this Section
        6,
        if
        Contractor returns to or otherwise reuses any Contractor Rejected Facility
        or
        begins the use of any other Terminal Facilities at such airport reasonably
        similar to any Contractor Rejected Facility (other than at the written direction
        of Continental pursuant to Section
        2
        or
        otherwise pursuant to the Capacity Purchase Agreement) within six months
        of the
        termination or other non-temporary cessation of all Scheduled Flights to
        such
        airport, then Contractor shall reimburse Continental for all amounts paid
        to
        Contractor pursuant to this Section
        6.

      

      (h) For
        purposes of this Agreement, the parties agree that the cessation of seasonal
        Scheduled Flights upon the end of the relevant season shall constitute a
        temporary cessation if such Scheduled Flights are expected to resume in the
        subsequent relevant season.

      

      7. Term.
        This
        Agreement shall terminate at the end of the Term; provided
        that,
        any
        right or obligation hereunder that is specifically extended beyond the
        termination of this Agreement shall be so extended.

      

      8. Continental
        Inventory, Equipment and Non-Terminal Facilities.
        After
        receipt of notice by Continental from time to time of inventory or equipment
        available for acquisition from Continental, Contractor agrees to use reasonable
        commercial efforts to satisfy all of its inventory or equipment acquisition
        requirements in connection with the provision of Contractor Services by
        acquiring items of such inventory and equipment from Continental. After receipt
        of notice by Continental from time to time of any Non-Terminal Facilities
        available for lease or sublease from Continental, Contractor agrees to use
        reasonable commercial efforts to satisfy all of its Non-Terminal Facility
        requirements in connection with the provision of Contractor Services by leasing
        or subleasing any such Non-Terminal Facilities from Continental. 

      

      9. Cooperation.
        Notwithstanding any other provision of this Agreement, each of the parties
        hereto shall use commercially reasonable efforts to comply in a timely manner
        with all reasonable requests of the other parties made from time to time
        that
        are in furtherance of this Agreement.

      

      10. Relationship
        of the Parties.
        Nothing
        in this Agreement shall be interpreted or construed as establishing among
        the
        parties a partnership, joint venture or other similar arrangement.

      

      
        
          
          

        

        
          -49-

          
            

          

        

        
          
          

        

      

      11. Binding
        Effect; Assignment.
        This
        Agreement and all of the provisions hereof shall be binding upon the parties
        hereto and inure to the benefit of the parties hereto and their respective
        successors and permitted assigns. Neither this Agreement nor any of the rights,
        interests or obligations hereunder shall be assigned by a party hereto without
        the prior written consent of the other parties.

      

      12. Counterparts.
        This
        Agreement may be executed in two or more counterparts, each of which shall
        be
        deemed an original, but all of which together shall constitute one and the
        same
        instrument. The Agreement may be executed by facsimile signature.

      

      13. Governing
        Law.
        This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of Texas (excluding Texas choice-of-law principles that might call
        for the
        application of the law of another jurisdiction) as to all matters, including
        matters of validity, construction, effect, performance and
        remedies.

      

      14. Arbitration.
        Any
        Claims arising out of or related to this Agreement shall be resolved by binding
        arbitration pursuant to the provisions of Section 11.08 of the Capacity Purchase
        Agreement.

      

      15. Confidentiality.
        Except
        as required by law or in any proceeding to enforce the provisions of this
        Agreement, Continental, Parent and Carrier hereby agree not to publicize
        or
        disclose to any third party the terms or conditions of this Agreement or
        any
        exhibit, schedule or appendix hereto without the prior written consent of
        the
        other parties hereto. Except as required by law or in any proceeding to enforce
        the provisions of this Agreement, Continental, Parent and Carrier hereby
        agree
        not to disclose to any third party any confidential information or data,
        both
        oral and written, received from the other in connection with this Agreement
        and
        designated as such by the other, without the prior written consent of the
        party
        providing such confidential information or data. If any party is served with
        a
        subpoena or other process requiring the production or disclosure of any of
        such
        agreements or information, then the party receiving such subpoena or other
        process, before complying with such subpoena or other process, shall immediately
        notify the other parties of same and permit said other parties a reasonable
        period of time to intervene and contest disclosure or production. Upon
        termination of this Agreement, each party must return to each other any
        confidential information or data received from the other and designated as
        such
        by the party providing such confidential information or data which is still
        in
        the recipient’s possession or control.

      

      16. Equitable
        Remedies.
        Each of
        Continental, Parent and Carrier acknowledges and agrees that under certain
        circumstances the breach by Continental, Parent or Carrier of a term or
        provision of this Agreement will materially and irreparably harm the other
        party, that money damages will accordingly not be an adequate remedy for
        such
        breach and that the non-defaulting party, in its sole discretion and in addition
        to its rights under this Agreement and any other remedies it may have at
        law or
        in equity, may apply to any court of law or equity of competent jurisdiction
        (without posting any bond or deposit) for specific performance and/or other
        injunctive relief in order to enforce or prevent any breach of the provisions
        of
        this Agreement.

       

      

              17. Subject
          to Capacity Purchase Agreement.
          Notwithstanding anything to the contrary contained in this Agreement, the
          provisions of this Agreement shall be subject in all respects to any provisions
          of the Capacity Purchase Agreement that require any true-up or
          reconciliation payment be made by Continental, Parent or
          Carrier.

      

       

       

      
        
          
          

        

        
          -50-

          
            

          

        

        
          
          

        

      

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

         

        
          	 	 	 
	 	CONTINENTAL
                  AIRLINES, INC.
	 
 	 
 	 
 
	 	By:  	/s/ Jeffery
                  A. Smisek
	 	
                  
Jeffery
                  A. Smisek
	 	Title:
                  President 

        

        
          	 	 	 
	 	CHAUTAUQUA
                  AIRLINES, INC.
	 
 	 
 	 
 
	 	By:  	/s/ Bryan
                  Bedford
	 	
                  
Name:
                  Bryan Bedford
	 	Title:
                  Chairman & CEO 

        

        

          	 	 	 
	 	REPUBLIC
                  AIRWAYS HOLDINGS INC.
	 
 	 
 	 
 
	 	By:  	/s/ Bryan
                  Bedford
	 	
                  
Name:
                  Bryan Bedford
	 	Title:
                  Chairman, President &
CEO

        

      

      

        
           

        

      

      
        
          
          

        

        
          -51-

          
            

          

        

        
          
          

        

      

      EXHIBIT
        A 

      to
        the
        Master Facility and Ground Handling Agreement

      

      FORM
        OF SUBLEASE AGREEMENT

      

      This
        Sublease Agreement (this “Agreement”),
        dated
        as of the __ day of __________, by and between __________, a __________
        corporation (“Sublessor”),
        whose
        address is __________, and __________, a __________ corporation (“Sublessee”),
        whose
        address is __________.

      

      WITNESSETH:

      
 

      WHEREAS,
        Sublessor and Sublessee are parties to that certain Master Facility and Ground
        Handling Agreement dated as of ●, 2006 ( the Master Facility
        Agreement");

       

      WHEREAS,
        Sublessor has entered into various agreements (such agreements, as the same
        may
        have been or may from time to time be amended, the “Prime
        Agreements”)
        with
        other parties (“Prime
        Lessors”)
        pursuant to which the Prime Lessors have conferred upon Sublessor the right
        to
        use certain premises;

      

      WHEREAS,
        Sublessor desires to allow Sublessee the right to use certain portions of
        the
        premises that Sublessor has the right to use pursuant to the Prime Agreements
        (such portions, together with such associated rights and privileges, such
        as
        reasonable and necessary ingress and egress thereto to the extent permitted
        by
        the applicable Prime Agreement, are described on Schedule 1 attached hereto
        and
        are hereinafter referred to as the "Subleased
        Premises”);
        and,

      

      WHEREAS,
        Sublessee desires to hire and take said Subleased Premises as provided herein,
        in accordance with the terms and conditions hereinafter set forth.

      

      NOW,
        THEREFORE, for and in consideration of the mutual covenants and agreements
        herein contained, Sublessor and Sublessee agree as follows:

      

      1-
        Subleased Premises

      

      
        	
                a)

              	
                Sublessor
                  hereby lets unto Sublessee and Sublessee hereby hires and takes
                  from
                  Sublessor the Subleased Premises in accordance with the terms and
                  conditions hereof. 

              

      

      

      
        	
                b)

              	
                Sublessee
                  agrees and accepts the associated rights and privileges granted
                  under the
                  Prime Agreements, subject, however, to the following limitations
                  and
                  reservations, and subject to other terms and conditions set forth
                  in this
                  Agreement:

              

      

      

      
        	 	
                (1)

              	
                The
                  Prime Agreements, insofar as they relate to the Subleased Premises,
                  and
                  such Prime Agreements are hereby incorporated by this reference
                  as if
                  fully set forth herein.

              

      

      

      
        	 	
                (2)

              	
                Sublessee
                  covenants and agrees, for the benefit of Sublessor and the Prime
                  Lessors,
                  that it shall not, by its use and occupancy of the Subleased Premises,
                  violate any of the provisions of the Prime Agreements relating
                  thereto,
                  and that it shall not knowingly permit any breach of any of the
                  obligations of Sublessor under such Prime Agreements. Sublessee
                  covenants
                  and agrees that this Agreement shall be in all respects subject
                  and
                  subordinate to the Prime Agreements relating thereto. Nothing contained
                  in
                  this Agreement shall be deemed to confer upon Sublessee any rights
                  that
                  are not granted by or are in conflict with the applicable Prime
                  Agreement.
                  

              

      

      

      
        	 	
                (3)

              	
                Sublessor
                  reserves the right to enter upon the Subleased Premises at any
                  time during
                  an emergency to take such action therein as may be required for
                  the
                  protection of persons or property and at other reasonable times
                  for the
                  purpose of inspection, maintenance, making repairs, replacements,
                  alterations or improvements (to the Subleased Premises or to other
                  areas),
                  showing to prospective subtenants or other users, and for other
                  purposes
                  permitted elsewhere in this
                  Agreement.

              

      

      

      2
        -
        CONDITION OF SUBLEASED PREMISES AND ALTERATIONS

      

      Except
        to
        the extent that Sublessor has been granted representations or warranties
        under
        the Prime Agreements regarding the condition of the Subleased Premises the
        benefit of which may, pursuant
        to the applicable Prime Agreement and applicable law, inure to Sublessee
        (in
        which case such representations and warranties shall be deemed made by Sublessor
        in favor of Sublessee), Sublessee accepts the Subleased Premises AS-IS, WITH
        ALL
        FAULTS, LATENT OR KNOWN. Subject to the foregoing, Sublessor MAKES NO
        WARRANTIES, GUARANTEES, OR REPRESENTATIONS OF ANY KIND EITHER EXPRESS OR
        IMPLIED, ARISING BY LAW OR OTHERWISE, PERTAINING TO THIS AGREEMENT OR THE
        PROPERTY DESCRIBED IN THIS AGREEMENT. Subject to the foregoing, SUBLESSEE
        HEREBY
        WAIVES, AND SUBLESSOR EXPRESSLY DISCLAIMS ALL WARRANTIES, GUARANTEES AND
        REPRESENTATIONS, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, INCLUDING
        BUT
        NOT LIMITING THE GENERALITY OF THE FOREGOING, ANY IMPLIED WARRANTY OF FITNESS
        FOR A PARTICULAR PURPOSE OR REGARDING THE CONDITION OF THE PROPERTY. Subject
        to
        the forgoing, IN NO EVENT SHALL SUBLESSOR’S LIABILITY OF ANY KIND UNDER THIS
        AGREEMENT INCLUDE ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES
        EVEN IF SUBLESSOR SHALL HAVE BEEN ADVISED OF THE POSSIBILITY OF POTENTIAL
        LOSS
        OR DAMAGE.

      

      Any
        alterations will be the sole responsibility and expense of the Sublessee
        and
        will require the prior written approval of Sublessor and, if required under
        the
        applicable Prime Agreement, the respective Prime Lessor.

      

      
        
          
          

        

        
          -52-

          
            

          

        

        
          
          

        

      

      3
        -
        TERM

      

      The
        term
        of this Agreement shall commence as of the date of first occupancy of the
        Subleased Premises by Sublessee and (unless sooner terminated as hereinafter
        provided) shall continue in effect thereafter until terminated pursuant to
        the
        provisions of this Agreement or the Master Facility Agreement, but under
        no
        circumstances shall it continue beyond the term of the Prime Agreement (as
        the
        same may be extended) relating to such portion of the Subleased
        Premises.

      

      4
        -
        RENTAL

      

      For
        the
        use of the Subleased Premises, Sublessee agrees to pay to Sublessor the amounts
        set forth for each separate Subleased Premises location on Schedule 2 attached
        hereto. 

      

      5
        -
        UTILITIES AND SERVICES

      

      Sublessor
        shall not be liable for any interruptions of utilities or services arising
        from
        repairs, alterations, or improvements on or about the Subleased Premises,
        except
        (and only) to the extent that the Prime Lessor of such portion of the Subleased
        Premises is liable to Sublessor for such event. Sublessee shall pay Sublessor
        an
        equitably allocated pro rata share of any electrical, gas, water or other
        utility costs associated with the use by Sublessee of the Subleased Premises.

      

      6
        -
        GOVERNMENT REQUIREMENTS

      

      Sublessee
        shall procure from all governmental authorities having jurisdiction over
        the
        operations of Sublessee at the Subleased Premises, all licenses, certificates,
        permits or other authorization which may be necessary for the conduct of
        its
        operations. Sublessee shall also at all times promptly observe, comply with,
        and
        execute the provisions of any and all present and future governmental laws,
        rules, regulations, requirements, orders and directives which may apply to
        the
        operations of Sublessee on the Subleased Premises or its occupancy
        thereof.

      

      7
        -
        RULES, REGULATION & ADMINISTRATION

      

      Sublessee
        covenants and agrees to observe and obey the applicable rules and regulations
        promulgated by the applicable Prime Lessor and all reasonable rules and
        regulations promulgated by Sublessor
        for the conduct of tenants and subtenants at the Subleased Premises; and
        to
        observe and obey all present rules and regulations issued by Sublessor and/or
        the respective Prime Lessor for safety, health, preservation of the Subleased
        Premises, security and all reasonable rules and regulations promulgated in
        writing in the future by Sublessor and/or the respective Prime
        Lessor.

      

      8
        -
        OTHER OBLIGATIONS OF SUBLESSEE

      

      Sublessee,
        in its use of all of the Subleased Premises and related facilities, and in
        the
        conduct of its operations, shall:

      

      	a)  	
              Conduct
                its operations in an orderly and proper manner. Sublessee shall not
                create
                or generate or permit the creation or generation of vibrations
                that could reasonably be regarded as posing a material risk of damage
                to
                the Subleased Premises; unreasonably loud noises; the emission of
                steam,
                gases or unpleasant or noxious odors; nor in any other manner annoy,
                disturb or be offensive to other tenants or users of the premises
                or
                common areas.

            

      

      	b)  	
              Comply
                with all applicable federal, state and local laws, ordinances, regulations
                and orders. Without limiting the generality of the foregoing, to
                the
                extent that the activities of Sublessee shall be subject to the same,
                Sublessee shall comply with the
                following:

            

      

      
        	 	
                1.

              	
                Compliance
                  with Regulations.
                  Sublessee shall comply with the regulations relative to nondiscrimination
                  in federally assisted programs of the United States Department
                  of
                  Transportation (hereinafter “DOT”)
                  Title 49, Code of Federal Regulations, Part 21, as they may be
                  amended
                  from time to time (“Regulations”),
                  which are herein incorporated by reference and made a part of this
                  Agreement.

              

      

      

      
        	 	
                2.

              	
                Nondiscrimination
                  Generally.
                  Sublessee shall not discriminate on the grounds of race, color,
                  sex, creed
                  or national origin in the selection and retention of subcontractors,
                  including procurements of materials and leases of equipment.
                  

              

      

      

      
        
          
          

        

        
          -53-

          
            

          

        

        
          
          

        

      

      
        	 	
                3.

              	
                Solicitations
                  for Subcontractors, Including Procurements of Materials and
                  Equipment.
                  If required by the Regulations, in all solicitations either by
                  competitive
                  bidding or negotiation made by Sublessee for work to be performed
                  under a
                  subcontract, including procurements of materials or leases of equipment,
                  each potential subcontractor or supplier shall be notified by Sublessee
                  of
                  Sublessee’s obligations under the Regulations relative to
                  nondiscrimination on the grounds of race, color, or national
                  origin.

              

      

      

      
        	 	
                4.

              	
                Information
                  and Reports.
                  Sublessee shall provide all information and reports required by
                  the
                  Regulations or directives issued pursuant thereto and shall permit
                  access
                  to its books, records, accounts other sources of information, and
                  its
                  facilities as may be determined by the airport sponsor or the Federal
                  Aviation Administration (the “FAA”)
                  to be pertinent to ascertain compliance with such Regulations,
                  orders, and
                  instructions. Where any information required of Sublessee is in
                  the
                  exclusive possession of another who fails or refuses to furnish
                  this
                  information, Sublessee shall so certify to the airport sponsor
                  or the FAA,
                  as appropriate, and shall set forth what efforts it has made to
                  obtain the
                  information.

              

      

      

      
        	 	
                5.

              	
                Nondiscrimination
                  Covenant.
                  Sublessee hereby covenants and agrees, as a covenant running with
                  the
                  land, that in the event facilities are constructed, maintained,
                  or
                  otherwise operated by Sublessee on the Subleased Premises for a
                  purpose
                  for which a DOT program or activity is extended or for another
                  purpose
                  involving the provision of similar services or benefits, Sublessee
                  shall
                  maintain and operate such facilities and services in compliance
                  with all
                  other requirements imposed pursuant to 49 CFR Part 21, Nondiscrimination
                  in Federally Assisted Programs of the Department of Transportation,
                  and as
                  said Regulations may be amended. Sublessee hereby covenants and
                  agrees, as
                  a covenant running with the land: (1) that no person on the grounds
                  of
                  race, color, sex, creed or national origin shall be excluded from
                  participation in, denied the benefits of, or be otherwise subjected
                  to
                  discrimination in the use of the Subleased Premises, (2) that in
                  the
                  construction of any improvements on, over, or under such Subleased
                  Premises and the furnishing of services thereon, no person on the
                  grounds
                  of race, color, sex, creed or national origin shall be excluded
                  from
                  participation in, denied the benefits of, or otherwise be subjected
                  to
                  discrimination, (3) that Sublessee shall use the Subleased Premises
                  in
                  compliance with all other requirements imposed by or pursuant to
                  49 CFR
                  Part 21, Nondiscrimination in Federally Assisted Programs of the
                  Department of Transportation, and as said Regulations may be amended.
                  Sublessee assures that it will comply with pertinent statutes,
                  Executive
                  Orders and such rules as are promulgated to assure that no person
                  shall,
                  on the grounds of race, creed, color, national origin, sex, age,
                  or
                  handicap be excluded from participating in any activity conducted
                  with or
                  benefiting from Federal assistance.

              

      

      

      
        	
                c)

              	
                Control
                  the demeanor and appearance of its officers, and employees so as
                  to
                  maintain professional standards and upon objection from Sublessor
                  or the
                  respective Prime Lessor concerning the conduct, demeanor, or appearance
                  of
                  any person, Sublessee shall immediately take all steps necessary
                  to remove
                  the cause of the objection.

              

      

      

      
        	
                d)

              	
                Not
                  allow garbage, debris, or other waste materials (whether solid,
                  liquid or
                  gaseous) to collect or accumulate on the Subleased Premises or
                  in access
                  and service areas of the Subleased Premises used by Sublessee,
                  and
                  Sublessee shall cause to be removed from the Subleased Premises
                  any debris
                  and other waste material generated by Sublessee. Sublessee shall
                  use all
                  due care when effecting removal of all such waste and shall effect
                  such
                  removal pursuant to the applicable regulations existing at Subleased
                  Premises for the removal of waste as promulgated by the respective
                  Prime
                  Lessor, Sublessor or others having jurisdiction. Sublessee shall
                  keep all
                  lobbies, vestibules and steps within the Subleased Premises free
                  from dirt
                  and rubbish.

              

      

      

      
        	
                e)

              	
                Sublessee
                  is responsible to maintain at all times the Subleased Premises
                  and all
                  equipment, fixtures, and materials used by Sublessee thereon, or
                  in other
                  areas, in a clean and sanitary
                  manner.

              

      

      

      It
        is
        intended that the standards and obligations imposed by this section shall
        be
        maintained or complied with by Sublessee in addition to its compliance with
        any
        applicable governmental laws, ordinances and regulations currently in effect
        or
        which may be enacted.

      

      9
        -
        MAINTENANCE AND REPAIR

      

      
        	
                a)

              	
                Sublessee
                  shall take good care of the Subleased Premises while they are under
                  Sublessee’s control and shall make or cause to be made at its own expense
                  all installations, repairs, replacements, redecorating and other
                  maintenance necessary to keep the Subleased Premises, and equipment,
                  fixtures, furnishings and signs therein clean and in good condition
                  and
                  repair; all of which shall be in accordance with the standards
                  of the
                  facility and of a quality and class not inferior to the original
                  material
                  or workmanship. All maintenance and repair work undertaken by Sublessee
                  shall be done in a good and workmanlike manner, leaving the Subleased
                  Premises free of liens for labor and
                  materials.

              

      

      

      
        	
                b)

              	
                Sublessee
                  shall maintain the Subleased Premises and conduct its operations
                  in such
                  manner that at no time during the letting hereunder will it do
                  or
                  knowingly permit to be done any act or thing upon the Subleased
                  Premises
                  which will invalidate or conflict with any fire and casualty insurance
                  policies covering the Subleased Premises, or any part thereof,
                  or the
                  Subleased Premises, or any part thereof, or which may create a
                  hazardous
                  condition so as to increase the risk normally attendant upon the
                  operations contemplated hereunder, and Sublessee shall promptly
                  observe
                  and comply with any and all present and future rules and regulations,
                  requirements, orders and directions of Fire Underwriters Association
                  or of
                  any other board or organization which may exercise similar functions.
                  Any
                  increase in fire or casualty insurance premiums attributable to
                  Sublessee’s acts or omissions under this Agreement shall be promptly
                  reimbursed by Sublessee, upon receipt of Sublessor’s invoice
                  therefor.

              

      

      

      
        
          
          

        

        
          -54-

          
            

          

        

        
          
          

        

      

      10
        -
        RELATIONSHIP

      

      It
        is
        expressly understood and agreed that Sublessee is and shall be an independent
        contractor and operator, responsible for its acts or omissions in connection
        with its use and occupancy of the Subleased Premises and any related areas
        used
        by Sublessee.

      

      11
        -
        RELEASE AND INDEMNITY

      

      Release

      

      Sublessee
        agrees that Sublessor shall not be liable for any loss or damage to any property
        of any persons (including property of Sublessee, its officers, directors,
        employees, agents, customers, concessionaires, vendors, contractors or
        invitees), occasioned by theft, fire, acts of God, or any governmental body
        or
        authority, injunction, riot, war, other tenants of the Subleased Premises
        or the
        premises of which the Subleased Premises are a part, or any damage or
        inconvenience which may arise through repair, or alteration of the Subleased
        Premises, or failure to make repairs in a timely manner, or the unavailability
        of utilities, or for any other cause, except
        to the extent caused by the gross negligence or willful misconduct of Sublessor
        or the respective Prime Lessor, it being agreed that this release shall apply
        to
        claims resulting from the negligence of Sublessor or such Prime
        Lessor.
        Sublessor agrees that any waivers of claims for property damage contained
        in the
        respective Prime Agreement made by the Prime Lessor thereunder shall inure
        to
        the benefit of Sublessee to the extent permitted by the applicable Prime
        Agreement and applicable law. 

      

      Indemnity

      

      Anything
        in this Agreement to the contrary notwithstanding, and without limiting
        Sublessee’s obligation to provide insurance pursuant to Article 12 hereunder,
        Sublessee covenants and agrees that it shall indemnify, defend and save harmless
        Sublessor, its affiliates (other than Sublessee), any affected Prime Lessor,
        and
        their respective directors, officers, employees, agents, successors and assigns
        (“Indemnitees”),
        from
        and against all liabilities, losses, damages, penalties, claims, costs, charges
        and expenses, causes of action and judgments of any nature whatsoever, including
        without limitation reasonable attorney's fees, costs and related expenses
        that
        may be imposed upon or incurred by the Indemnitees by reason or arising out
        of
        any of the following, except if caused by the negligence or willful misconduct
        of any such Indemnitee (it being acknowledged, however, that if the
        indemnification obligations of Sublessor under the respective Prime Agreement
        requires Sublessor to indemnify such Prime Lessor (or other parties therein
        identified) Sublessee shall be required to indemnify such Prime Lessor and
        other
        identified parties to the same extent;
        and that such indemnification duties may apply even where an Indemnitee under
        the applicable Prime Agreement is negligent or otherwise at
        fault):

      

      
        	
                a)

              	
                Any
                  occupancy, management or use of the Subleased Premises, or areas
                  surrounding the Subleased Premises or the service areas, parking
                  areas, or
                  pedestrian areas in or around the Subleased Premises, by Sublessee
                  or any
                  of its directors, officers, agents, contractors, servants, employees,
                  licensees, invitees, successors and
                  assigns;

              

      

      

      
        	
                d)

              	
                Any
                  negligence on the part of Sublessee or any of its directors, officers,
                  agents, contractors, servants, employees, licensees, invitees,
                  successors
                  and assigns;

              

      

      

      
        	
                c)

              	
                Any
                  accident, injury to or death of any person, or damage to or destruction
                  of
                  any property of Sublessee or its officers, directors, employees,
                  agents,
                  customers, concessionaires, vendors, contractors or invitees occurring
                  in
                  or on the Subleased Premises; or

              

      

      

      
        	
                d)

              	
                Any
                  failure on the part Sublessee to comply with any of the covenants,
                  agreements, terms or conditions contained in this
                  Agreement.

              

      

      

      12
        -
        INSURANCE

      

      Without
        limiting Sublessee’s obligation to indemnify Sublessor as provided for in this
        Agreement, Sublessee shall procure and maintain, at its own cost and expense,
        at
        all times during the term of this Agreement, insurance of the following types
        in
        amounts not less than those indicated with insurers satisfactory to
        Sublessor:

      

      Comprehensive
        public liability insurance with limits of not less than [*]
        per
        occurrence for death or bodily injury; workers compensation insurance with
        statutory limits; and employer's liability insurance of not less than
[*]
        in
        limits.

      
        ___________

        *Confidential

      

      
        
          
          

        

        
          -55-

          
            

          

        

        
          
          

        

      

      Such
        insurance shall contain the following endorsements:

      

      
        	
                (1)

              	
                Name
                  Sublessor and the respective Prime Lessor, its parents and subsidiaries,
                  their respective directors, officers, employees, agents, successors
                  and
                  assigns, as Additional Insureds as it pertains to this Agreement
                  and the
                  respective Subleased Premises. Upon written notice from Sublessor,
                  Sublessee shall promptly cause any other party required to be named
                  by as
                  an Additional Insured under the Prime Agreement to be so
                  named.

              

      

      

      
        	
                (2)

              	
                Include
                  a Severability of Interest (Cross Liability) provision whereby
                  such
                  insurance applies separately to each insured to the extent of Sublessee’s
                  indemnity obligations hereunder.

              

      

      

      
        	
                (3)

              	
                Include
                  a breach of warranty clause in favor of the Additional Insureds,
                  whereby
                  such insurance shall not be invalidated by any breach of warranty
                  by
                  Sublessee.

              

      

      

      
        	
                (4)

              	
                Include
                  a blanket contractual liability clause to cover the liability and
                  indemnity assumed by the Sublessee under this
                  Agreement.

              

      

      

      
        	
                (5)

              	
                Provide
                  that such insurance is primary without right of contribution from
                  Sublessor’s insurance.

              

      

      

      
        	
                (6)

              	
                Provide
                  that Sublessor is not obligated for payment
                  of any premiums,
                  deductibles, retention or other self-insurances
                  thereunder.

              

      

      

      
        	
                (7)

              	
                Provide
                  for 30 days advance notice to Sublessor and the respective Prime
                  Lessor,
                  by registered or certified mail, of any cancellation, reduction,
                  lapse or
                  other material change.

              

      

      

      
        	
                (8)

              	
                Include
                  a Waiver of Subrogation clause in favor of the Additional
                  Insureds.

              

      

      

      The
        indemnities and insurance provisions contained or referred to herein shall
        survive the expiration or other termination of this Agreement.

      

      13
        -
        ASSIGNMENT

      

      This
        Agreement and the rights and obligations created hereunder may not be assigned
        or delegated by Sublessee without the prior written consent of Sublessor
        and, if
        required of Sublessor under the applicable Prime Agreement, the applicable
        Prime
        Lessor; but subject to the foregoing, this Agreement and the rights and
        obligations of the parties hereby created, shall be binding upon and inure
        to
        the benefit of the parties hereto, their respective successors, assigns and
        legal representatives. Sublessor reserves the right to assign or transfer
        its
        interest hereunder without notice.

      14
        -
        WAIVER

      

      The
        observance of any term of this Agreement may be waived (either generally
        or in a
        particular instance and either retroactively or prospectively) by the party
        entitled to enforce such term, but such waiver shall be effective only if
        it is
        in writing signed by the party against which such waiver is to be asserted.
        Unless otherwise expressly provided in this Agreement, no delay or omission
        on
        the part of any party in exercising any right or privilege under this Agreement
        shall operate as a waiver thereof, nor shall any waiver on the part of any
        party
        of any right or privilege under this Agreement operate as a waiver of any
        other
        right or privilege under this Agreement nor shall any single or partial exercise
        of any right or privilege preclude any other or further exercise thereof
        or the
        exercise of any other right or privilege under this Agreement. No failure
        by
        either party to take any action or assert any right or privilege hereunder
        shall
        be deemed to be a waiver of such right or privilege in the event of the
        continuation or repetition of the circumstances giving rise to such right
        unless
        expressly waived in writing by the party against whom the existence of such
        waiver is asserted.

      

      15
        -
        FORCE MAJEURE

      

      Neither
        party shall be deemed in violation of this Agreement if it is prevented from
        performing any of its non-monetary obligations hereunder by any labor or
        industrial dispute; civil disturbance; vandalism or act of a public enemy;
        shortage of labor, energy or material; court order, regulation, action or
        non-action of any governmental authority; weather condition; natural disaster;
        act of God; or other circumstances not reasonably within its control, and
        which,
        with the exercise of due diligence, it is unable to overcome; provided that,
        the
        provisions of this Article 15 shall not apply where the time period for
        Sublessor to perform its obligations under the Prime Agreement would not
        be
        extended upon the occurrence of any of the foregoing. Each party shall give
        the
        other immediate notice of such interruption, shall make all reasonable efforts
        to eliminate it as soon as possible, and at its conclusion, shall resume
        performance in accordance with its obligations hereunder; provided that,
        neither
        party shall be required to settle or compromise any strike or other labor
        dispute to so eliminate such interruption. 

      16
        -
        NOTICE

      

      All
        notices made pursuant to this Agreement shall be in writing and shall be
        deemed
        given upon (a) a transmitter’s confirmation of a receipt of a facsimile
        transmission (but only if followed by confirmed delivery of a standard overnight
        courier the following Business Day or if delivered by hand the following
        Business Day), or (b) confirmed delivery of a standard overnight courier
        or
        delivered by hand, to the parties at the following addresses:

      

      if
        to
        Sublessor:

      

      [insert]

      

      if
        to
        Sublessee:

      

      [insert]

      

      or
        to
        such other address as either party hereto may have furnished to the other
        party
        by a notice in writing in accordance with this Article 16.

      

      
        
          
          

        

        
          -56-

          
            

          

        

        
          
          

        

      

      17
        -
        TERMINATION

      

      Without
        limiting any rights of Sublessor, either at law or in equity, to exercise
        any
        remedies available to Sublessor as may be afforded by operation of law, this
        Agreement may be terminated as follows:

      

      
        	
                a)

              	
                Immediately
                  upon termination or expiration of the respective Prime Agreement
                  (notwithstanding that such agreement may remain in effect as to
                  space
                  other than the Subleased Premises), or upon expiration or termination
                  of
                  Sublessor’s right to grant Sublessee the right to occupy and use the
                  applicable portion of the Subleased
                  Premises.

              

      

      

      
        	
                b)

              	
                Immediately
                  without notice to Sublessee if Sublessee files a voluntary petition
                  in
                  bankruptcy or if proceedings in bankruptcy shall be instituted
                  against it
                  and not dismissed within 30 days, or that a court shall take jurisdiction
                  of Sublessee or its assets pursuant to proceedings brought under
                  the
                  provisions of any Federal Reorganization Act, or that a receiver
                  of
                  Sublessee’s assets shall be appointed and such taking or appointment shall
                  not be stayed or vacated within a period of 30
                  days.

              

      

      

      
        	
                c)

              	
                Immediately
                  upon written notice to Sublessee, if Sublessee fails to pay any
                  installment of rent or additional rent within 10 days after receipt
                  of
                  written notice that the same was not paid when
                  due.

              

      

      

      
        	
                d)

              	
                Immediately
                  upon written notice to Sublessee, if Sublessee fails to perform,
                  keep, and
                  observe any of the terms, covenants or conditions herein contained
                  on the
                  part of Sublessee to be performed, kept, or observed and such failure
                  continues for 30 days after the date of written notice thereof
                  is sent to
                  Sublessee; provided that, if Sublessor would have a lesser period
                  of time
                  to cure such default under the applicable Prime Agreement, then
                  Sublessee
                  shall only be permitted the time period that Sublessor would be
                  permitted
                  to cure such default, less 48 hours; it being further agreed that
                  Sublessor may, but shall not be obligated to, take any action it
                  reasonably deems necessary or advisable at Sublessee’ expense to cure such
                  default if such default causes interference with Sublessor’s operations or
                  if it is determined by Sublessor, acting reasonably, that such
                  default is
                  likely to result in Sublessor’s loss of the use of the Subleased Premises
                  pursuant to the Prime Agreement.

              

      

      

      
        	
                e)

              	
                Immediately
                  by either party upon the acquisition or condemnation of the Subleased
                  Premises by eminent domain, in which event Sublessee shall have
                  no claim
                  for the unexpired term nor a claim for any part of the award made
                  for the
                  Subleased Premises.

              

      

      

      In
        the
        event that this Agreement is terminated in accordance with the foregoing
        provisions prior to the expiration of the term after a default by Sublessee
        hereunder, Sublessor may (but shall not be obligated to) relet the Subleased
        Premises for a term and upon any conditions it may deem proper. In no event
        will
        Sublessee be entitled to receive any payment from Sublessor if the profits
        from
        such reletting exceed the rental reserved to be paid hereunder by Sublessee.
        Any
        termination by Sublessor under this section shall not affect or impair the
        right
        of Sublessor to recover actual damages occasioned by any default by Sublessee
        that may be recoverable under applicable law.

      

      18
        -
        SURRENDER OF SUBLEASED PREMISES

      

      Upon
        expiration or other termination of this Agreement, Sublessee shall remove
        all
        its signs, trade fixtures and any other personal property, repair all damage
        caused by removal, and surrender the Subleased Premises in good order and
        condition, reasonable wear and tear excepted. If Sublessee fails to surrender
        possession as aforestated, Sublessor may re-enter and repossess the Subleased
        Premises without further notice (any personal property therein being deemed
        abandoned by Sublessee) and Sublessee hereby waives service of any notice
        of
        intention to re-enter and/or right to redeem that may be granted by applicable
        laws.

      

      Sublessor
        agrees that on payment of the rents and any other payments due, and performance
        of the covenants and agreements on the part of Sublessee to be performed
        hereunder, Sublessee shall peaceably have and enjoy the Subleased Premises
        for
        the uses granted to Sublessee hereunder, subject to Sublessor’s continued rights
        under the applicable Prime Agreement and any limitations otherwise stated
        herein.

      20
        -
        CONDITIONS

      

      It
        is
        agreed that if required under the terms of the applicable Prime Agreement,
        the
        use of the Subleased Premises by Sublessee is subject to the consent and
        approval of the applicable Prime Lessor. If written consent by any Prime
        Lessor
        is denied after reasonable efforts by the parties hereto to obtain such consent,
        then either party may, at its option (but without limiting any of Sublessor’s
        rights in respect of any breach of the terms hereof prior to such rescission)
        rescind its signature hereon and thereafter this Agreement shall become null
        and
        void (but only as to the portion of the Subleased Premises covered by such
        Prime
        Agreement), and the parties shall become discharged from all further unaccrued
        liabilities hereunder. If the consent of any Prime Lessor is required, then
        for
        purposes of submittal of this Agreement for the consent of such Prime Lessor,
        it
        is agreed that Schedule 1 may be redacted so as to describe only the portion
        of
        the Subleased Premises as are leased by Sublessor from such Prime Lessor
        and so
        as to set forth only the respective Prime Agreements that pertain to the
        Subleased Premises.

      21
        -
        TAXES

      

      If
        Sublessor shall be assessed for taxes on any of the Sublessee’s leasehold
        improvements, equipment, furniture, fixtures, personal property or business
        operations, Sublessee shall pay to Sublessor the amount of such taxes within
        10
        days after delivery of a written statement thereof.

      

      [signature
        page follows]

      
        
          
          

        

        
          -57-

          
            

          

        

        
          
          

        

      

      

      

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

      

      

      

      SUBLESSOR     SUBLESSEE

      

      

      

      BY:
        __________________________  BY:
        ___________________________

       

      

      _______________    _____________________

      _______________    _____________________

      _______________    _____________________

      

      

      DATE:
        _______________________   DATE:
        _________________________

      

      

      

      Schedules
        to be added:

      

      Schedule
        1 - Description of Subleased Premises

      Schedule
        2 - Rental Amounts for Subleased Premises

      

      

        
           

        

      

      
        
          
          

        

        
          -58-

          
            

          

        

        
          
          

        

      

      EXHIBIT
        B

      to
        the
        Master Facility and Ground Handling Agreement

      

      FORM
        OF ASSIGNMENT

      

      This
        Agreement (this “Agreement”)
        is
        made and entered into, and is to be effective on, this the ____ day of
        ____________ (the “Effective
        Date”),
        by
        ____________, a ____________ corporation (“Assignor”)
        and
        ____________, a ____________ corporation (“Assignee”),
        [and
        the ____________ (“Airport
        Lessor”)].

      

      W
        I T N E
        S S E T H:

      

      WHEREAS,
        Assignor leases space], designated on Exhibit(s) _____ attached hereto and
        made
        a part hereof (together the “Premises”),
        at
        ____________ at the ____________ Airport, ____________ (the “Airport”)
        under
        a certain [Airport Use and Lease Agreement dated ____________, (as amended,
        hereinafter referred to as the “Lease”)]
        between Assignor and the Airport Lessor;

      

      WHEREAS,
        a copy of the Lease has been provided to Assignee and is incorporated herein
        by
        reference;

      

      WHEREAS,
        Assignee operates at the Airport and from portions of the Premises;

      

      WHEREAS,
        Assignor desires to assign to Assignee [all] [a portion] of Assignor’s remaining
        right, title and interest in the Lease [insofar (and only insofar) as the
        Lease
        pertains to certain leased premises and improvements described on the attached
        Annex 1], such space herein called the “Assigned
        Space”
and
        the
        improvements located within the Assigned Space are herein called the
“Assigned
        Space Improvements”.
        The
        Assigned Space and Assigned Space Improvements are herein called the
“Assigned
        Premises”;

      

      WHEREAS,
        Assignee desires to accept such assignment from Assignor; 

      

      [WHEREAS,
        such assignment requires the prior written consent of the Airport Lessor];
        

      

      [WHEREAS,
        pursuant to the Lease, such assignment does not require the consent of the
        Airport Lessor (but written notice of such assignment is required to be given
        to
        the Airport Lessor)]. 

      

      NOW,
        THEREFORE, in consideration of the assignment herein made and of the mutual
        agreements and covenants hereinafter set forth, the parties hereto agree
        as
        follows:

      

      1. DEMISE
        AND USE Effective
        on the Effective Date, Assignor hereby assigns to Assignee all of the interest
        of the lessee under the Lease [insofar (and only insofar) as the Lease pertains
        to the Assigned Premises].

      

      2. ACCEPTANCE
        OF ASSIGNMENT Assignee
        accepts the foregoing assignment of the Lease [insofar (and only insofar)
        as the
        Lease pertains to the Assigned Premises] and covenants with Assignor, from
        and
        after the Effective Date, to pay all rent and other charges provided for
        in the
        Lease, as amended and to perform and observe all of the other covenants,
        conditions and provisions in the Lease, as amended, to be performed or observed
        by or on the part of Assignor as tenant under the Lease [in respect of the
        Assigned Premises].

      

      
        
          
          

        

        
          -59-

          
            

          

        

        
          
          

        

      

      3. WARRANTIES
        Assignor
        hereby warrants and covenants that (i) except for the rights and interests
        of
        the Airport Lessor under the Lease, Assignor is now the sole owner of all
        rights
        and interests in and to the Assigned Premises, (ii) the Lease[, as it relates
        to
        the Assigned Premises,] is in full force and effect, (iii) Assignor has complied
        with all terms and provisions of the Lease [as it relates to the Assigned
        Premises] and same is not currently in default and Assignor knows of no
        condition which with the passage of time or giving of notice might constitute
        a
        default under the Lease by any party, and (iv) the Assigned Premises and
        the
        Lease [, insofar as it relates to the Assigned Premises,] are free from all
        liens and encumbrances. A copy of the Lease (and all amendments thereto)
        are
        attached as Annex 2.

      Subject
        to the foregoing, Assignee accepts the Assigned Premises and equipment thereon
        “AS IS” and acknowledges that there is, with respect to the Assigned Premises
        and equipment thereon, NO WARRANTY, REPRESENTATION, OR CONDITION OF ANY KIND,
        EXPRESS OR IMPLIED, INCLUDING THE WARRANTY OF MERCHANTABILITY OR OF FITNESS
        FOR
        A PARTICULAR PURPOSE, and that none shall be implied by law. Except as stated
        in
        this Agreement, Assignee acknowledges that Assignor has made no representations
        with respect to the Assigned Premises or equipment. Final determination of
        the
        suitability of the Assigned Premises or equipment for the use contemplated
        by
        Assignee is the sole responsibility of Assignee, and Assignor shall have
        no
        responsibility in connection with such suitability. 

      

      4. ASSIGNEE
        TO COMPLY WITH LEASE TERMS Assignee
        agrees to perform and observe all of the covenants, conditions and terms
        of the
        Lease relating to the period of time from and after the Effective Date
        [(insofar, but only insofar, as the same related to the Assigned Premises)],
        and
        to protect, defend, indemnify and hold harmless Assignor from and against
        all
        claims, damages, and expenses of any kind asserted by any person or entity,
        including the Lessor, arising out of the nonperformance, nonobservance or
        improper performance or observance of the covenants, conditions or terms
        of the
        Lease [(insofar, but only insofar, as the same relates to the Assigned
        Premises)]. Assignor shall comply with all remaining terms of the Lease,
        to the
        extent any non-compliance could adversely affect Assignee rights in or to
        the
        Assigned Premises. Assignor agrees to protect, defend, indemnify and hold
        harmless Assignee from and against all claims, damages, and expenses of any
        kind
        asserted by any person or entity, including the Airport Lessor, arising out
        of
        the nonperformance, nonobservance or improper performance or observance prior
        to
        the Effective Date of the covenants, conditions or terms of the Lease [(insofar,
        but only insofar as the same relates to or effects the Assigned Premises)].
        Nothing herein shall be construed as to obligate Assignee to be responsible
        in
        any way for any hazardous material located in, or the environmental condition
        of, the Assigned Premises as of the Effective Date to the extent not caused
        by
        or arising from Assignee’s operations. 

      

      5. APPROVALS [This
        Agreement shall not become effective unless and until the consent of the
        Airport
        Lessor is given by execution of consents for the assignments herein made,
        which
        consents shall be requested on the standard form for such consents by the
        lessor
        as attached hereto as Annex 3. Assignor and Assignee hereby mutually agree
        to
        expeditiously take any and all actions, and to cooperate fully with each
        other,
        with respect to obtaining any approvals, authorizations, licenses or similar
        items that may be necessary or desirable in order to carry out the agreements
        set forth herein or contemplated hereby. The parties hereto agree to request
        the
        consent of the Lessor on the consent form attached hereto as Annex 3. The
        parties agree to make such reasonable changes to such form as may be required
        by
        Lessor.]

      

      [Consent
        by Airport Lessor.
        Airport
        Lessor, as evidenced by its execution below, does hereby consent to this
        Assignment, [releases Assignor from all of its responsibilities and obligations
        under the Lease that are attributable to the period of time after the Effective
        Date, and] agrees to look solely to Assignee for performance of all obligations
        thereafter under the Lease [as it relates to the Assigned
        Premises].]

      

      [Acknowledgement.
        Assignor
        and Airport Lessor hereby represent to Assignee that the Lease is currently
        in
        full force and effect, and that they know of no events of default relating
        to
        the Lease or the Assigned Premises as of the date hereof.] 

      

      6. APPLICABLE
        LAW [The
        laws of the State where the Assigned Premises are located shall be used in
        interpreting this Agreement and in determining the rights of the parties
        under
        it.]

      

      7. SEVERABILITY
        If
        any
        part of this Agreement is held to be invalid by final judgment of any court
        of
        competent jurisdiction, the part held invalid shall be modified to the extent
        necessary to make it valid or, if necessary, excised, and the remainder of
        the
        Agreement shall continue to remain effective.

       

      8. ENTIRE
        AGREEMENT This
        Agreement contains the entire agreement between the parties with respect
        to its
        subject matter and may not be changed in any way, except by a written instrument
        executed by the parties and, if necessary, approved by the Airport Lessor.
        

       

      9. SUCCESSORS
        AND ASSIGNS The
        provisions of this Agreement shall be binding on the parties, their successors
        and assigns.

      

      
        
          
          

        

        
          -60-

          
            

          

        

        
          
          

        

      

       

       

      IN
        WITNESS WHEREOF, the parties have properly executed this Agreement effective
        the
        date first above written.

      

      ATTEST:      [ASSIGNOR]

      

      ____________________________   BY:_____________________________

      

      TITLE:__________________________

      

      DATE:__________________________

      

      

      ATTEST:      [ASSIGNEE]

      

      ____________________________   BY:_____________________________

      

      TITLE:__________________________

       

      DATE:

      

      

      

      [Consent
        of Airport Lessor

      

      

      By:
        _________________________  

      Name:

      Title: 

      

      Date:
        _______________________] 

      

      

      Exhibits
        to be Attached:

       

      Annex
        1 -
        Description of Assigned Space

      Annex
        2 -
        Copy of Lease

      Annex
        3 -
        Request for Consent 

      
        
          
          

        

        
          -61-

          
            

          

        

        
          
          

        

      

      ANNEX
        1

      to
        the
        Form of Assignment 

      

      DESCRIPTION
        OF ASSIGNED SPACE

      
        
          
          

        

        
          -62-

          
            

          

        

        
          
          

        

      

      ANNEX
        2

      to
        the
        Form of Assignment 

      

      COPY
        OF LEASE

      
        
          
          

        

        
          -63-

          
            

          

        

        
          
          

        

      

      ANNEX
        3

      to
        the
        Form of Assignment 

      

      REQUEST
        FOR CONSENT TO ASSIGNMENT

      

      

      ____________,
        a ____________ corporation (“Assignor”)
        and
        ____________, a ____________ corporation (“Assignee”)
        hereby
        apply to the [____________] (the “Airport
        Lessor”)
        for
        its consent to an Assignment attached as Exhibit “A” and dated ____________ (the
“Effective Date”), for premises described therein (the “Assigned
        Premises”)
        as
        required by the [____________ Use and Lease Agreement] (the “Agreement”)
        with
        ____________ for certain premises at ____________ Airport. As consideration
        for
        the granting of the aforesaid consent and without limitation of any right
        or
        remedy of the Airport Lessor as set out in the Agreement, Assignor and Assignee
        agree with the Airport Lessor as follows:

      

      
        	
                1.

              	
                Assignor
                  represents to Assignee that to its knowledge as of the date hereof,
                  the
                  agreement dated ____________, by and between the Airport Lessor,
                  as
                  Lessor, and Assignor, as Lessee, is in full force and effect and
                  there are
                  no rental fees in arrears and no notices of termination or default
                  are
                  outstanding.

              

      

      

      
        	
                2.

              	
                The
                  parties hereto recognize and agree that the cancellation, termination,
                  or
                  expiration of the Agreement shall serve to terminate Assignor’s and
                  Assignee’s rights and obligations concerning the Assigned
                  Premises.

              

      

      

      
        	
                3.

              	
                All
                  notices to Assignee (as Lessee) with respect to the Assigned Premises
                  pursuant to the Agreement shall hereinafter be sent to Assignee
                  at the
                  following address:

              

      

      _______________

      _______________

      _______________

       

      
        	4.	In addition, it is expressly understood
                and
                agreed as follows:

      

      	(a)  	
              That
                by the granting of this consent to Assignment, the Airport Lessor
                is not
                consenting in advance to any future subleases or assignments of the
                Assigned Premises or any other facilities by [either Assignor or]
                Assignee. 

            

      

      	(b)  	
              That
                no future amendment, modification or alteration to the Assignment
                shall be
                or become effective without prior notice to and approval by the Airport
                Lessor if required by the provisions of the
                Agreement.

            

      

      	(c)  	
              That
                Airport Lessor, as evidenced by it execution of this consent below,
                [releases Assignor from all of its responsibilities and obligations
                under
                the Lease that are attributable to the period of time after the Effective
                Date, and] agrees to look solely to Assignee for performance of all
                obligations thereafter under the Lease [as it relates to the Assigned
                Premises].

            

      

      	(d)  	
              [That
                Assignor and Airport Lessor hereby represent to Assignee that the
                Lease is
                currently in full force and effect, and that they know of no events
                of
                default relating to the Lease or the Assigned Premises as of the
                date
                hereof.] 

            

      
        
          
          

        

        
          -64-

          
            

          

        

        
          
          

        

      

      The
        parties accept the foregoing acknowledgments and agreements and the Airport
        Lessor hereby consents to the Assignment attached as Exhibit “A”. However, the
        terms of the Agreement and this Request for Consent shall prevail over any
        conflicting terms or provisions contained in Exhibit “A” hereto.

      

      FOR
        THE
        AIRPORT LESSOR:   FOR
        [ASSIGNOR]:

      APPROVED      APPROVED

      

      

      ________________________________  ________________________________

      Name:       Name:

      

      Title:
        Director, Department of Aviation  Title:____________________________

      

      Date:__________________________  Date:___________________________

      

      

      

      FOR
        [ASSIGNEE]:

      APPROVED

      ATTEST/SEAL:

      

      ________________________________  _________________________________

      Name:       Name:

      

      Title:
        Corporate Secretary    Title:_____________________________

      

      Date:____________________________  Date:_____________________________

      

      
        
          
          

        

        
          -65-

          
            

          

        

        
          
          

        

      

      EXHIBIT
        C 

      to
        the
        Master Facility and Ground Handling Agreement

      

      FORM
        OF CONTINENTAL GROUND HANDLING AGREEMENT

      (Continental
        as Handling Company, Contractor as Carrier)

      

      
        
          
          

        

        
          -66-

          
            

          

        

        
          
          

        

      

       

      CONTINENTAL
        GROUND HANDLING AGREEMENT

      (Continental
        as Handling Company, Contractor as Carrier)

       

      
        	
                AHM
                  810 - Annex B

                 

              

      

       

      STANDARD
        GROUND HANDLING AGREEMENT

      SIMPLIFIED
        PROCEDURE

       

      ANNEX
        B.SYS.0 - LOCATIONS AGREED SERVICES, FACILITIES AND
        CHARGES

       

      to
        the
        Standard Ground Handling Agreement (SGHA) of April 1993

       

      Between: Chautauqua
        Airlines, Inc.

      8909
        Purdue Road, Suite 300

      Indianapolis,
        IN 46268

      Attention:
        Chief Financial Officer

      (hereinafter
        referred to as the “Carrier”)

       

      And: Continental
        Airlines, Inc.

      1600
        Smith Street

      Mail
        Stop
        HQSLG

      Houston,
        Texas 77002

      (hereinafter
        referred to as the “Handling Company”)

       

      effective
        from: July
        21,
        2006

       

      This
        Annex B.SYS.0

       

      for
        the
        location : The
        Handling Company shall provide ground handling services as provided herein
        for
        Scheduled Flights at the airports set forth on Schedule 1 hereto. 

      
    In
        addition
        to the airports on Schedule 1, the Handling Company shall also provide ground
        handling services to the Carrier for Scheduled Flights pursuant to the terms
        hereof at each additional airport to which Scheduled Flights are scheduled
        to
        fly after the date hereof (each, a “New Airport”) unless the Handling Company
        gives at least 90 days’ prior written notice (or such shorter period of time as
        is reasonably practicable) before the commencement of Scheduled Flights to
        such
        New Airport that the Handling Company elects not to provide ground handling
        services at such airport. Schedule 1 shall be amended to reflect each such
        addition. The Handling Company may also elect, upon at least 90 days’ prior
        written notice to the Carrier, to provide ground handling services as provided
        herein to the Carrier for Scheduled Flights at any airport to which Scheduled
        Flights fly at the time of such election. Schedule 1 shall be amended to
        reflect
        each such addition.

      
         

            Notwithstanding
          the
          foregoing, the Handling Company may elect to terminate the provision of
          services
          by the Handling Company pursuant hereto at any airport upon at least 90
          days’
prior written notice to the Carrier and in any event only at such time
          as the
          Carrier, using its commercially reasonable efforts, is able to provide
          the
          ground handling services provided by the Handling Company hereunder with
          respect
          to Scheduled Flights at such airport. 

         

            In
          addition,
          the provisions of this agreement shall terminate with respect to any airport
          to
          which Scheduled Flights cease to be scheduled (other than a temporary cessation,
          it being understood that the cessation of seasonal Scheduled Flights upon
          the
          end of the relevant season shall constitute a temporary cessation if such
          Scheduled Flights are expected to resume in the subsequent relevant season).
          Schedule 1 shall be amended to reflect each such termination.

      

      is
        valid
        from: July
        21,
        2006

      and
        replaces: N/A

       

          Capitalized
        terms used herein that are not defined herein or in the Standard Ground Handling
        Agreement of April 1993 as published by the International Air Transport
        Association (the “Main Agreement”) or in Annex A thereto, shall have the
        meanings given to such terms in the Capacity Purchase Agreement among Carrier,
        Handling Company and Republic Airways Holdings Inc., Carrier’s parent, as
        amended from time to time (the “Capacity Purchase Agreement”) or the
Master
        Facility and Ground Handling Agreement among
        Carrier, Handling Company and Republic Airways Holdings Inc., as
        amended
        from
        time to time.

       

          This
        Annex B
        is prepared in accordance with the simplified procedure whereby the Carrier
        and
        the Handling Company agree that the terms and conditions of the Main Agreement
        and Annex A to the Main Agreement shall apply as if such terms were repeated
        here in full, except as otherwise modified pursuant to this Annex B. By signing
        this Annex B, the parties confirm that they are familiar with the aforementioned
        Main Agreement and Annex A. The Main Agreement and Annex A, as modified pursuant
        to this Annex B shall be referred to herein as the “Agreement.”

       

      
        
          
          

        

        
          -67-

          
            

          

        

        
          
          

        

      

      PARAGRAPH
        1 - HANDLING CHARGES

       

      
        	
                1.1

              	
                The
                  Handling Company shall provide the services of Annex A enumerated
                  below
                  for the Carrier’s Scheduled Flights at the locations set forth
                  above:

              

      

       

      1.1.1. For
        services of the Annex A in its: 

       

      SECTION
        1
        - REPRESENTATION
        AND ACCOMMODATION:

      1.1.2.,
        1.1.3., 1.1.4.

      1.2.1.,
        1.2.2, 1.2.3.

       

      SECTION
        2
        - LOAD
        CONTROL AND COMMUNICATION:

      2.1.3.

      2.2.1.,
        2.2.2., 2.2.3.

       

      SECTION
        4
        - PASSENGERS
        AND BAGGAGE:

      4.1.1.,
        4.1.2., 4.1.3., 4.1.4., 4.1.5., 4.1.6, 4.1.7.(in accordance with the Baggage
        Resolution System Agreement, 4.2., 4.3., 4.4.1., 4.4.2. (a), 4.4.4. (a)(c),
        4.4.5., 4.4.6., 4.4.7.

       

      SECTION
        5
        - CARGO
        AND MAIL:

      5.1.
        thru
        5.5 (CO’s cargo products)

       

      SECTION
        6
        - RAMP:

      6.1.,
        6.2.1., 6.2.2. (a), 6.2.3. (on request at ad hoc rate), 6.3., 6.4.3., 6.4.4.,
        6.4.5., 6.4.6. (a)(b), 6.4.7., 6.4.8., 6.4.9., 6.4.12., 6.5.1. (on request
        at ad
        hoc rate), 6.6.1., 6.7.1.

       

      SECTION
        7
        - AIRCRAFT
        SERVICING:

      7.2.2.,
        7.3., 7.6.2. (ad hoc rates apply)

       

      
        	 	
                1.1.2.

              	
                NO
                  FEES FOR SERVICES COVERED UNDER THE SECTIONS LISTED
                  ABOVE:

              

      

       

      The
        ground handling services to be provided hereunder shall be provided in
        consideration of the mutual obligations of the Handling Company and the Carrier
        set forth in the Capacity Purchase Agreement among the Carrier, the Handling
        Company and Parent, with no fee charged hereunder; provided
        that the
        additional charges specified in Paragraph 2 below shall apply when applicable;
        and provided
        further
        that the
        Carrier will be responsible for all airport landing fees and other airport
        taxes
        or charges, and shall make payment directly therefor (unless Contractor is
        instructed in writing by Continental that Continental will make such payment
        directly).  

       

      
        	 	
                1.1.3

              	
                EQUIPMENT
                  PROVIDED BY CARRIER:

              

      

       

      
        	 	 	
                Notwithstanding
                  anything contained in Paragraph 1.1.1 to the contrary, at each
                  airport
                  that does not constitute a Hub Airport, the Carrier shall be responsible
                  for supplying all ground handling equipment that is usable only
                  for
                  regional jets or turboprops of the type used by Contractor for
                  Scheduled
                  Flights (as opposed to other types of jets flown by the Handling
                  Company),
                  which, as of the date hereof, is the equipment set forth on Schedule
                  2
                  hereto, and which equipment shall not be used by Handling Company
                  for any
                  purpose other than providing ground handling services to Carrier.
                  At all
                  Hub Airports, the Handling Company shall be responsible for supplying
                  such
                  equipment. As between Handling Company and Carrier, Handling Company
                  shall
                  be responsible for supplying all other ground handling equipment
                  necessary
                  for the provision of ground handling services
                  hereunder.

              

      

       

      
        
          
          

        

        
          -68-

          
            

          

        

        
          
          

        

      

      PARAGRAPH
        2 - ADDITIONAL CHARGES

       

      
        	
                2.1

              	
                Services
                  in Annex A which are not included in Paragraph 1 of this Annex
                  and all
                  other additional services when available will be charged for as
                  follows:

              

      

       

      
        	 	
                2.1.1.

              	
                Overtime.
                  If, upon Carrier’s request, the Handling Company agrees to provide
                  additional personnel in order to handle a flight outside of the
                  scheduled
                  arrival and departure times or for any other reason, the Handling
                  Company
                  will not charge Carrier more than the Handling Company’s actual cost of
                  providing such additional
                  personnel.

              

      

       

      PARAGRAPH
        3 - DISBURSEMENTS

       

      
        	
                3.1

              	
                At
                  the Handling Company’s request, disbursements made on behalf of the
                  Carrier shall be reimbursed to the Handling Company at
                  cost.

              

      

       

      PARAGRAPH
        4 -SETTLEMENT OF ACCOUNT

       

      
        	4.1	All payments to be made pursuant to
                this
                Agreement shall be subject to the setoff provisions of the Capacity
                Purchase Agreement. Notwithstanding Article 7.2 of the Main Agreement,
                and
                subject to such setoff provisions of the Capacity Purchase Agreement,
                settlement of account shall be effected through the IATA Clearing
                House
                via the Airlines Clearing House in accordance with the Rules and
                Regulations of the IATA Clearing House and the Airlines Clearing
                House.

      

       

      PARAGRAPH
        5 - TERMINATION OF AGREEMENT

       

      
        	5.1	This Agreement may be terminated by
                either
                party at any time following the termination of the Capacity Purchase
                Agreement; provided, that this Agreement may not be terminated pursuant
                to
                this sentence during the Wind-Down Period with respect to any location
                to
                which Scheduled Flights continue to fly during such Wind-Down Period.
                If
                the Carrier fails to make payments as agreed upon in Paragraph 4.1.,
                the
                Handling Company may terminate the Agreement upon twenty-four (24)
                hours
                notice by letter, teletype or facsimile.

      

       

      PARAGRAPH
        6 - TRANSFER OF SERVICES

       

      
        	6.1	In accordance with Article 3.1 of
                the Main
                Agreement, the Handling Company may subcontract the services of Annex
                A as
                necessary in order to support the Carrier’s
                operation.

      

      
         

      

      PARAGRAPH
        7 - OTHER MODIFICATIONS TO MAIN AGREEMENT

       

      
        	7.1	Sections 2.2, 3.2, 11.4, 11.5, 11.6,
                11.7 and
                11.10 and Article 9 of the Main Agreement shall not apply to this
                Agreement. 
	 	 
	7.2	Handling Company and Carrier agree
                that all
                third-parties engaged by Carrier or Handling Company as of the date
                hereof, or engaged by Handling Company after the date hereof, to
                provide
                ground handling services to Carrier at any of the airports listed
                on
                Schedule 1 hereto are hereby approved for all purposes of Section
                3.1 and
                Section 3.2, as appropriate, of the Main
                Agreement.

      

       

      
        	
                7.3

              	
                Carrier
                  specifically acknowledges that Article 8 of the Main Agreement
                  provides that Handling Company is not to be responsible for, and
                  that
                  Carrier is to indemnify Handling Company in respect of, legal liability
                  for certain claims arising out of the provision of ground handling
                  services even in circumstances where Handling Company is negligent,
                  and
                  Carrier agrees not to contend
                  otherwise.

              

      

       

      
        	
                7.4

              	
                This
                  Agreement shall be governed by and construed in accordance with
                  the laws
                  of the State of Texas as provided in Section 11.14 of the Capacity
                  Purchase Agreement.

              

      

      

      
        	
                7.5

              	
                Any
                  Claims arising out of or related to this Agreement shall be resolved
                  by
                  binding arbitration pursuant to the provisions of Section 11.08
                  of the
                  Capacity Purchase Agreement.

              

      

      

      
        
          
          

        

        
          -69-

          
            

          

        

        
          
          

        

      

       

       

      IN
        WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
        by
        their respective officers duly authorized thereuntu, as of the 21st day of
        July,
        2006.

       

       

      
        	Handling Company:  	 	 	Carrier:
	Continental
                Airlines, Inc.	 	 	Chautauqua
                Airlines, Inc.
	/s/ Jeffery
                A. Smisek	 	 	/s/ Bryan
                Bedford
	
                

              	 	 	
                

              
	Name:
                Jeffery A.
                Smisek
Title: President
	 	 	Name:
                Bryan
                Bedford
Title: Chairman & CEO

      

      

      

      Schedule
        1 Airports

      Schedule
        2  Carrier
        Equipment

      
        
          
          

        

        
          -70-

          
            

          

        

        
          
          

        

      

      

      
        	
                AHM
                  810 - Annex B

                 

              

      

      

      Schedule
        1 

      CONTINENTAL
        AIRPORTS [To Be Provided]

      

      
        
          
          

        

        
          -71-

          
            

          

        

        
          
          

        

      

      

 

      

      
        	
                AHM
                  810 - Annex B

                 

              

      

      

      Schedule
        2

      CARRIER
        EQUIPMENT

      

      

      [to
        be
        added]

      

      

      
        
          
          

        

        
          -72-

          
            

          

        

        
          
          

        

      

      EXHIBIT
        D 

      to
        the
        Master Facility and Ground Handling Agreement

      

      FORM
        OF CONTRACTOR GROUND HANDLING AGREEMENT

      (Contractor
        as Handling Company, Continental as Carrier)

      

      
        
          
          

        

        
          -73-

          
            

          

        

        
          
          

        

      

       

      CONTRACTOR
        GROUND HANDLING AGREEMENT

      (Contractor as Handling Company, Continental as
        Carrier)

       

      
        	
                AHM
                  810 - Annex B

                 

              

      

       

      STANDARD
        GROUND HANDLING AGREEMENT

      SIMPLIFIED
        PROCEDURE

       

      ANNEX
        B.SYS.0 - LOCATIONS AGREED SERVICES, FACILITIES AND
        CHARGES

       

      to
        the
        Standard Ground Handling Agreement (SGHA) of April 1993

       

      Between: Continental
        Airlines, Inc.

      1600
        Smith Street

      Mail
        Stop
        HQSLG

      Houston,
        Texas 77002

      (hereinafter
        referred to as the “Carrier”)

       

      And: Chautauqua
        Airlines, Inc.

      8909
        Purdue Road, Suite 300

      Indianapolis,
        IN 46268

      Attention:
        Chief Financial Officer

      (hereinafter
        referred to as the “Handling Company”)

       

      effective
        from: July
        21,
        2006

       

      This
        Annex B.SYS.0

       

      for
        the
        location: The
        Handling Company shall provide ground handling services as provided herein
        at
        the airports set forth on Schedule 1 hereto.

       

      The
        Carrier may elect, at its sole discretion and upon at least 90 days notice
        to
        the Handling Company, to require the Handling Company to provide ground handling
        services to the Carrier at any airport other than a Hub Airport. Schedule
        1
        shall be amended to reflect each such addition.

       

      Notwithstanding
        the foregoing, the Carrier may elect, at its sole discretion and upon at
        least
        90 days’ prior written notice to the Handling Company, to terminate the
        provision of services covered hereunder by the Handling Company at any airport.
        In addition, the provisions of this agreement shall terminate with respect
        to
        any airport to which Scheduled Flights cease to be scheduled (other than
        a
        temporary cessation, it being understood that the cessation of seasonal
        Scheduled Flights upon the end of the relevant season shall constitute a
        temporary cessation if such Scheduled Flights are expected to resume in the
        subsequent relevant season). Schedule 1 shall be amended to reflect each
        such
        termination.

       

      is
        valid
        from: July
        21,
        2006

      and
        replaces: N/A

       

      Capitalized
        terms used herein that are not defined herein or in the Standard Ground Handling
        Agreement of April 1993 as published by the International Air Transport
        Association (the “Main Agreement”) or in Annex A thereto, shall have the
        meanings given to such terms in the Capacity Purchase Agreement among Carrier,
        Handling Company and Republic Airways Holdings Inc., Handling Company’s parent,
        as amended from time to time (the “Capacity Purchase Agreement”) or the
Master
        Facility and Ground Handling Agreement among
        Carrier, Handling Company and Republic Airways Holdings Inc., as
        amended
        from
        time to time.

       

      This
        Annex B is prepared in accordance with the simplified procedure whereby the
        Carrier and the Handling Company agree that the terms and conditions of the
        Main
        Agreement and Annex A to the Main Agreement shall apply as if such terms
        were
        repeated here in full, except as otherwise modified pursuant to this Annex
        B. By
        signing this Annex B, the parties confirm that they are familiar with the
        aforementioned Main Agreement and Annex A. The Main Agreement and Annex A,
        as
        modified pursuant to this Annex B shall be referred to herein as the
“Agreement.” 

       

      
        
          
          

        

        
          -74-

          
            

          

        

        
          
          

        

      

       

      PARAGRAPH
        1 - HANDLING CHARGES

       

      
        	
                1.1

              	
                The
                  Handling Company shall provide the services of Annex A enumerated
                  below
                  for the Carrier’s scheduled flights at the locations set forth
                  above:

              

      

       

      
        	 	
                1.1.1.

              	
                For
                  services of the Annex A in its: 

              

      

       

      SECTION
        1
        - REPRESENTATION
        AND ACCOMMODATION:

      1.1.2.,
        1.1.3., 1.1.4.

      1.2.1.,
        1.2.2, 1.2.3.

       

      SECTION
        2
        - LOAD
        CONTROL AND COMMUNICATION:

      2.1.3.

      2.2.1.,
        2.2.2., 2.2.3.

       

      SECTION
        4
        - PASSENGERS
        AND BAGGAGE:

      4.1.1.,
        4.1.2., 4.1.3., 4.1.4., 4.1.5., 4.1.6, 4.1.7.(in accordance with the Baggage
        Resolution System Agreement, 4.2., 4.3., 4.4.1., 4.4.2. (a), 4.4.4. (a)(c),
        4.4.5., 4.4.6., 4.4.7.

       

      SECTION
        5
        - CARGO
        AND MAIL:

      5.1.
        thru
        5.5 (CO’s cargo products)

       

      SECTION
        6
        - RAMP:

      6.1.,
        6.2.1., 6.2.2. (a), 6.2.3. (on request at ad hoc rate), 6.3., 6.4.3., 6.4.4.,
        6.4.5., 6.4.6. (a)(b), 6.4.7., 6.4.8., 6.4.9., 6.4.12., 6.5.1. (on request
        at ad
        hoc rate), 6.6.1., 6.7.1.

       

      SECTION
        7
        - AIRCRAFT
        SERVICING:

      7.2.2.,
        7.3., 7.6.2. (ad hoc rates apply)

       

      
        	 	
                1.1.2.

              	
                FEES
                  FOR SERVICES COVERED UNDER THE SECTIONS LISTED
                  ABOVE:

              

      

       

      The
        charges set forth below do not include airport landing fees, or any other
        airport taxes or charges. The Carrier will be responsible for such charges
        at
        its own expense and shall make payment directly therefor.

       

      Flight
        Fee:

      
        	 	 	
                The
                  Carrier shall pay to the Handling Company a Base Per Flight Fee
                  for the
                  ground handling services listed above to be provided hereunder,
                  which fee
                  shall equal the Handling Company’s cost of providing such services, as
                  reasonably determined by the Handling Company and subject to the
                  audit
                  rights of the Carrier as set forth in Section 3.05 of the Capacity
                  Purchase Agreement.

              

      

       

      
        	 	
                1.1.3

              	
                EQUIPMENT
                  PROVIDED BY CARRIER:

              

      

       

      
        	 	 	
                Notwithstanding
                  anything contained in Paragraph 1.1.1 to the contrary, at each
                  airport,
                  the Carrier shall be responsible for supplying all ground handling
                  equipment that is usable only for jet aircraft other than regional
                  jets,
                  which, as of the date hereof, is the equipment set forth on Schedule
                  2
                  hereto, and which equipment shall not be used by Handling Company
                  for any
                  purpose other than providing ground handling services to Carrier.
                  As
                  between Handling Company and Carrier, Handling Company shall be
                  responsible for supplying all other ground handling equipment necessary
                  for the provision of ground handling services
                  hereunder.

              

      

       

      PARAGRAPH
        2 - ADDITIONAL CHARGES

       

      
        	
                2.1

              	
                Services
                  in Annex A which are not included in Paragraph 1 of this Annex
                  and all
                  other additional services when available will be charged for as
                  follows:

              

      

       

      
        	 	
                2.1.1.

              	
                Overtime.
                  If, upon Carrier’s request, the Handling Company agrees to provide
                  additional personnel in order to handle a flight outside of the
                  scheduled
                  arrival and departure times or for any other reason, the Handling
                  Company
                  will charge Carrier the Handling Company’s actual cost of providing such
                  additional personnel.

              

      

       

      
        	 	
                2.1.2.

              	
                Supplies.  The
                  Carrier will furnish the Handling Company those items specific
                  to its
                  operation, such as, but not limited to, cabin appearance supplies,
                  (i.e.
                  safety cards, pillows and blankets), baggage tags, forms, ticket
                  envelopes, tariffs, timetables, etc. Any materials or supplies
                  provided to
                  the Carrier by the Handling Company will be charged back to the
                  Carrier at
                  the Handling Company’s replacement
                  cost.

              

      

       

      
        	 	
                2.1.3.

              	
                Third
                  Party Services.
                  The Carrier shall, at the Handling Company’s discretion, be responsible
                  for the cost and/or a pro-rata share of the cost, whichever is
                  applicable,
                  incurred by the Handling Company for outside vendor services, such
                  as, but
                  not limited to, water/lavatory services, cabin appearance, ramp
                  handling
                  services, bussing services, aircraft de-icing, aircraft washing
                  and
                  aircraft maintenance services, skycaps, security screening, armed
                  guard
                  and armored car services, baggage claim security, janitorial services,
                  baggage delivery services, wheel chair services, electric cart
                  services,
                  denied boarding compensation, distressed passenger meals and overnight
                  accommodation, etc.

              

      

       

      
        	 	
                2.1.4.

              	
                De-Icing.
                  For de-icing services provided by the Handling Company, the Handling
                  Company shall charge the Carrier the procurement cost of fluids
                  and all
                  other actual costs of the Handling Company for providing such de-icing
                  services including the Handling Company’s actual labor costs associated
                  with such services.

              

      

       

      
        	 	
                2.1.5.

              	
                Training.
                  The Carrier agrees to reimburse the Handling Company for all associated
                  out-of-pocket expenses required to train the Handling Company’s employees
                  in the Carrier’s procedures and administrative
                  requirements.

              

      

       

       

      
        
          
          

        

        
          -75-

          
            

          

        

        
          
          

        

      

      PARAGRAPH
        3 - DISBURSEMENTS

       

      
        	
                3.1

              	
                Disbursements
                  made on behalf of the Carrier shall be reimbursed to the Handling
                  Company
                  at cost.

              

      

       

      PARAGRAPH
        4 -SETTLEMENT OF ACCOUNT

       

      
        	
                4.1

              	
                Notwithstanding
                  Article 7.2 of the Main Agreement and subject to the setoff provisions
                  of
                  the Capacity Purchase Agreement, settlement of account shall be
                  effected
                  through the IATA Clearing House via the Airlines Clearing House
                  in
                  accordance with the Rules and Regulations of the IATA Clearing
                  House and
                  the Airlines Clearing House.

              

      

       

      PARAGRAPH
        5 - TERMINATION OF AGREEMENT

       

      
        	
                5.1

              	
                This
                  Agreement may be terminated by either party at any time following
                  the
                  termination of the Capacity Purchase Agreement; provided, that
                  this
                  Agreement may not be terminated pursuant to this sentence during
                  the
                  Wind-Down Period with respect to any location to which Scheduled
                  Flights
                  continue to fly during such Wind-Down Period. If the Carrier fails
                  to make
                  payments as agreed upon in Paragraph 4.1., the Handling Company
                  may
                  terminate the agreement upon twenty-four (24) hours notice by letter,
                  teletype or facsimile.

              

      

       

      PARAGRAPH
        6 - TRANSFER OF SERVICES

       

      
        	
                6.1

              	
                In
                  accordance with Article 3.1 of the Main Agreement, the Handling
                  Company
                  may subcontract the services of Annex A as necessary in order to
                  support
                  the Carrier’s operation.

              

      

       

      PARAGRAPH
        7 -
        OTHER
        MODIFICATIONS TO MAIN AGREEMENT

       

      
        	
                7.1

              	
                Upon
                  the request of the Carrier from time to time at its sole discretion,
                  and
                  for so long as requested by the Carrier during the Term of this
                  Agreement,
                  the Handling Company shall provide ground handling services pursuant
                  to
                  this Agreement, for the fees specified for such services herein,
                  at any
                  location covered by this Annex B to any of the Carrier’s codeshare
                  partners.

              

      

       

      
        	
                7.2

              	
                Sections
                  2.2, 3.2, 11.4, 11.5, 11.6, 11.7 and 11.10 and Article 9 of the
                  Main
                  Agreement shall not apply to this
                  Agreement.

              

      

       

      7.3 Handling
        Company and Carrier agree that all third-parties engaged by Carrier or Handling
        Company as of the date hereof, or engaged by Carrier after the date hereof,
        to
        provide ground handling services to Carrier at any of the airports listed
        on
        Schedule 1 hereto are hereby approved for all purposes of Section 3.1 and
        Section 3.2, as appropriate, of the Main Agreement.

       

      
        	
                7.4

              	
                In
                  connection with the determination of the Base Per Flight Fee pursuant
                  to
                  Section 1.1.2 above and the charges pursuant to Section 2 above,
                  Handling
                  Company shall make available for inspection by Carrier and its
                  outside
                  auditors, within a reasonable period of time after Carrier makes
                  a written
                  request therefor, all of Handling Company’s books and records (including
                  all financial and accounting records) relating to this Agreement
                  and the
                  provision of services hereunder by Handling Company. Each of Carrier
                  and
                  its outside auditors shall be entitled to make copies and notes
                  of such
                  information as it deems necessary and to discuss such records with
                  Handling Company’s Chief Financial Officer or such other employees or
                  agents of Handling Company knowledgeable about such records. Upon
                  the
                  reasonable written request of Carrier or its outside auditors,
                  Handling
                  Company will cooperate with Carrier and its outside auditors to
                  permit
                  Carrier and its outside auditors access to Handling Company’s outside
                  auditors for purposes of reviewing such
                  records.

              

      

       

      
        	
                7.5

              	
                Carrier
                  specifically acknowledges that Article 8 of the Main Agreement
                  provides that Handling Company is not to be responsible for, and
                  that
                  Carrier is to indemnify Handling Company in respect of, legal liability
                  for certain claims arising out of the provision of ground handling
                  services even in circumstances where Handling Company is negligent,
                  and
                  Carrier agrees not to contend
                  otherwise.

              

      

       

      
        	
                7.6

              	
                This
                  Agreement shall be governed by and construed in accordance with
                  the laws
                  of the State of Texas as provided in Section 11.14 of the Capacity
                  Purchase Agreement.

              

      

      

      
        	
                7.7

              	
                Any
                  Claims arising out of or related to this Agreement shall be resolved
                  by
                  binding arbitration pursuant to the provisions of Section 11.08
                  of the
                  Capacity Purchase Agreement.

              

      

      

      
        
          
          

        

        
          -76-

          
            

          

        

        
          
          

        

      

       

       

      IN
        WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
        by
        their respective officers duly authorized thereunto, as of the 21st day
        of
        July, 2006.

       

      

      
        	Carrier:	 	 	Handling
                Company:
	Continental
                Airlines, Inc.	 	 	Chautauqua
                Airlines, Inc.
	By:	 	 	By:
	/s/ Jeffery
                A. Smisek	 	 	/s/ Bryan
                Bedford
	
                

              	 	 	
                

              
	Name:
                Jeffery A. Smisek
Title: President
	 	 	Name:
                Bryan Bedford
Title: Chairman &
CEO

      

      Schedule
        1 Airports

      Schedule
        2 Carrier
        Equipment

      
        
          
          

        

        
          -77-

          
            

          

        

        
          
          

        

      

      

      
        	
                AHM
                  810 - Annex B

                 

              

      

      

      Schedule
        1 

      CONTRACTOR
        AIRPORTS (To Be Provided)

      

      

      
        
          
          

        

        
          -78-

          
            

          

        

        
          
          

        

      

      

      
        	
                AHM
                  810 - Annex B

                 

              

      

      

      Schedule
        2

      CARRIER
        EQUIPMENT

      

      

      [to
        be
        added]

      

      

      

      

      

    

    

    
      
        
        

      

      
        -79-

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      D

    Terms
      of Codeshare Arrangements 

    

    

    1. Contractor’s
      use of CO code.
      During
      the Term of the Agreement, Continental shall place its designator code, “CO”, on
      all Scheduled Flights operated by Contractor. Continental may suspend the
      display of its code on flights operated by Contractor if Contractor is in breach
      of any of its safety-related obligations, or material breach of any of its
      operational obligations, under the Agreement during the period that such breach
      continues. All Contractor operated flights that display the CO code are referred
      to herein as “CO* Flights”.

    

    2. Contractor’s
      display of CO code.
       

    

    
      	 	
              (a)

            	
              All
                CO* Flights will be included in the schedule, availability and fare
                displays of all computerized reservations systems in which Continental
                and
                Contractor participate, the Official Airline Guide (to the extent
                agreed
                upon) and Continental's and Contractor’s internal reservation systems,
                under the CO code, to the extent possible. Continental and Contractor
                will
                take the appropriate measures necessary to ensure the display of
                the
                schedules of all CO* Flights in accordance with the preceding
                sentence.

            

    

    

    
      	 	
              (b)

            	
              Continental
                and Contractor will disclose and identify the CO* Flights to the
                public as
                actually being a flight of and operated by Contractor, in at least
                the
                following ways:

            

    

    

    
      	 	
              (i)

            	
              a
                symbol will be used in timetables and computer reservation systems
                indicating that CO* Flights are actually operated by
                Contractor;

            

    

    

    
      	 	
              (ii)

            	
              to
                the extent reasonable, messages on airport flight information displays
                will identify Contractor as the operator of flights shown as CO*
                Flights;
                

            

    

    

    
      	 	
              (iii)

            	
              Continental
                and Contractor advertising concerning CO* Flights and Continental
                and
                Contractor reservationists will disclose Contractor as the operator
                of
                each CO* Flight; and

            

    

    

    (iv) in
      any
      other manner prescribed by law.

    

    3. Terms
      and Conditions of Carriage.
      In all
      cases the contract of carriage between a passenger and a carrier will be that
      of
      the carrier whose code is designated on the ticket. Continental and Contractor
      shall each cooperate with the other in the exchange of information necessary
      to
      conform each carrier’s contract of carriage to reflect service offered by the
      other carrier.

    

    4. Notification
      of irregularities in operations.
      Contractor shall promptly notify Continental of all irregularities involving
      a
      CO* Flight which result in any material damage to persons or property as soon
      as
      such information is available and shall furnish to Continental as much detail
      as
      practicable. For purposes of this section, notification shall be made as
      follows:

    

    Continental
      Airlines System Operations Control Center (SOCC)

    1600
      Smith

    Houston,
      Texas 77002

    Attention:
      Operations Director

    Phone
      no.
      (713) 324-7209

    Fax
      no.
      (713) 324-2138

    SITA
      FCFDDCO

    

    5. Code
      Sharing License.

    

    (a)  Grant
      of License.
      Subject
      to the terms and conditions of the Agreement, Continental hereby grants to
      Contractor a nonexclusive, nontransferable, revocable license to use the CO*
      designator code on all of its flights operated as a CO* Flight.

    

    (b)  Control
      of CO* Flights.
      Subject
      to the terms and conditions of the Agreement, Contractor shall have sole
      responsibility for and control over, and Continental shall have no
      responsibility for, control over or obligations or duties with respect to,
      each
      and every aspect of Contractor’s operation of CO* Flights.

    

    6. Display
      of other codes.
      During
      the Term of the Agreement, Continental shall have the exclusive right to
      determine which other airlines (“Alliance
      Airlines”),
      if
      any, may place their two letter designator codes on flights operated by
      Contractor with Covered Aircraft and to enter into agreements with such Alliance
      Airlines with respect thereto.
      Contractor
      will cooperate with Continental and any Alliance Airlines in the formation
      of a
      code share relationship between Contractor and the Alliance Airlines and enter
      into reasonably acceptable agreements and make the necessary governmental
      filings, as requested by Continental, with respect thereto.

    

    7. Customer
      First.
      During
      the period that Continental places its designator code on flights operated
      by
      Contractor, Contractor will adopt and follow plans and policies comparable
      (to
      the extent applicable and permitted by law and subject to operational
      constraints) to Continental’s Customer First Commitments as presently existing
      and hereafter modified. Contractor acknowledges that it has received a copy
      of
      Continental’s presently existing Customer First Commitments. Continental will
      provide Contractor with any modifications thereto promptly after they are
      made.

    

    

    
      
        
        

      

      
        -80-

        
          

        

      

      
        
        

      

    

    EXHIBIT
      E

    Non-Revenue
      Pass Travel

    

    

    Continental
      will have the sole right to design, implement and oversee a pass travel program
      for the Regional Air Services, including jump seat policies.

    

    

    
      
        
        

      

      
        -81-

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      F

    Fuel
      Purchasing Agreement

    

    

    THIS
      FUEL
      PURCHASING AGREEMENT (this “Agreement”)
      is
      made as of this 21st day of July, 2006, by and between CONTINENTAL AIRLINES,
      INC., a Delaware corporation (“Continental”),
      and
      Chautauqua Airlines, Inc. an Indiana corporation (“Contractor”).

    

    WHEREAS,
      Continental, Contractor and Republic Airways, Inc., Contractor’s parent
      (“Parent”),
      are
      entering into a Capacity Purchase Agreement contemporaneously with the execution
      of this Agreement (the “Capacity
      Purchase Agreement”);

    

    WHEREAS,
      Contractor has requested that Continental purchase on Contractor’s behalf and
      supply it with all of the jet fuel needed to provide the Regional Airline
      Services, and Continental is willing to do so on the terms and subject to the
      conditions of this Agreement;

    

    NOW,
      THEREFORE, in consideration of the premises and other good and valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged,
      the
      parties hereby agree as follows:

    

    1. Definitions.
      All
      capitalized terms that are used and not otherwise defined herein shall have
      the
      meanings given to such terms in the Capacity Purchase Agreement.

    

    2. Products
      Covered.
      The
      product covered by this Agreement shall be aviation jet fuel meeting ASTM
      Specification D 1655-99 (such fuel being referred to herein as “Fuel”).
      The
      definition of future products and the scope of this Agreement may be revised
      from time to time upon mutual consent of the parties.

    

    3. Services
      to Be Provided.
      Continental shall supply or cause to be supplied to Contractor all Fuel that
      Contractor shall require to provide the Regional Airline Services, and
      Contractor shall purchase and pay for such Fuel in accordance with the terms
      and
      conditions of Section
      5
      of this
      Agreement. In connection with the provision of Fuel to Contractor pursuant
      to
      this Agreement, Continental shall manage all aspects of procuring, transporting
      and delivering Fuel to Contractor in respect of Regional Airline Services,
      including without limitation selecting the source of Fuel, negotiating and
      consummating agreements with fuel suppliers and into-plane service providers,
      providing consortium representation and furnishing day-to-day management
      pertaining to any fuel-related services. Continental shall be the exclusive
      provider of Fuel and fuel-related services used to provide Regional Airline
      Services during the term of this Agreement.

    

    4. Planning.
      Contractor will provide Continental each month with a rolling twelve-month
      forecast of fuel needs not later than the 5th day of such month, which forecast
      shall reflect the Final Monthly Schedule for such month, Continental’s proposed
      schedule for Scheduled Flights for the two months following such month as
      presented to Contractor pursuant to Section
      2.01(b)
      of the
      Capacity Purchase Agreement and such other information published by Continental
      regarding scheduled Contractor flights over the next twelve-month
      period.

    

    5. Price
      and Payment.
      In
      consideration of Continental providing Fuel and other services to Contractor
      pursuant to this Agreement, Contractor, in addition to other consideration
      as
      set forth on Paragraph
      A
      of
Schedule
      3
      to the
      Capacity Purchase Agreement, shall pay Continental [*]
      per
      calendar month. This amount shall be included in the Invoiced Amount pursuant
      to
Section
      3.06(a)
      of the
      Capacity Purchase Agreement. For the avoidance of doubt, the parties agree
      that
      all of Continental’s costs, gains or losses resulting from engaging in any
      fuel-price hedging transactions with respect to Fuel provided to Contractor
      under this Agreement shall be for Continental’s account. Upon Continental’s
      request, Contractor agrees to execute promptly a written statement (on an
      Internal Revenue Service certificate entitled “Waiver For Use By Ultimate
      Purchasers Of Aviation-Grade Kerosene Used In Nontaxable Uses” or such other
      certificate or document as may be reasonably requested by Continental)
      stipulating that Continental is the ultimate vendor of the fuel sold to
      Contractor by Continental hereunder.

    

    6. Fuel
      Consortia.
      Continental may, in its sole discretion and at its sole expense, direct
      Contractor to do any of the following (in which event Contractor shall comply
      with Continental’s directions): (i) join any fuel consortium selected by
      Continental at any airport at which Continental provides Fuel to Contractor,
      (ii) terminate any membership that it has or may have in any such consortium
      or
      (iii) not join any such consortium at any such airport and, in lieu thereof,
      pay
      a non-member fee to such consortium for the right to use fuel stored at such
      consortium’s storage facilities, in each case of clauses (i) through (iii), with
      respect only to Contractor’s provision of Regional Airline
      Services.

    

    7. Term.
      This
      agreement is coterminous with the Capacity Purchase Agreement and may be
      terminated by either party upon the termination of the Capacity Purchase
      Agreement; provided, however, that if a party hereto elects to terminate this
      Agreement as a result of the Capacity Purchase Agreement being terminated,
      the
      terms of this Agreement shall continue with respect to any locations to which
      Scheduled Flights are flown during the Wind-Down Period. 

    

    8. Authority.
      Each of
      the parties hereto represents to the other that (a) it has the corporate power
      and authority to execute, deliver and perform this Agreement, (b) the execution,
      delivery and performance of this Agreement by it has been duly authorized by
      all
      necessary corporate action, (c) it has duly and validly executed and delivered
      this Agreement, and (d) this Agreement is a legal, valid and binding obligation,
      enforceable against it in accordance with its terms subject to applicable
      bankruptcy, insolvency, reorganization, moratorium or other similar laws
      affecting creditors’ rights generally and general equity
      principles.

    
      ___________

      *Confidential

    

    
      
        
        

      

      
        -82-

        
          

        

      

      
        
        

      

    

    9. Arbitration
      of Disputes.
      Any
      dispute arising hereunder shall be resolved in accordance with the provisions
      of
Section
      10.08
      of the
      Capacity Purchase Agreement.

    

    10. Binding
      Effect; Assignment.
      This
      Agreement and all of the provisions hereof shall be binding upon the parties
      hereto and inure to the benefit of the parties hereto and their respective
      successors and permitted assigns. Neither this Agreement nor any of the rights,
      interests or obligations hereunder shall be assigned by either party without
      the
      prior written consent of the other party. Notwithstanding the foregoing,
      Continental may assign its rights and delegate its duties hereunder to any
      of
      its affiliates.

    

    11. Employees
      of Continental.
      The
      employees, agents and independent contractors of Continental engaged in
      performing any of the services Continental is to perform pursuant to this
      Agreement are employees, agents and independent contractors of Continental
      for
      all purposes, and under no circumstances will be deemed to be employees, agents
      or independent contractors of Contractor. In its performance under this
      Agreement, Continental will act, for all purposes, as an independent contractor
      and not as an agent for Contractor. Contractor will have no supervisory power
      or
      control over any employees, agents or independent contractors engaged by
      Continental in connection with its performance hereunder. 

    

    12. Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Texas (other than laws regarding conflicts of laws) as to all matters,
      including matters of validity, construction, effect, performance and remedies.
      

    

    13. Notices.
      All
      notices shall be in writing and shall be deemed given upon (a) a transmitter’s
      confirmation of a receipt of a facsimile transmission (but only if followed
      by
      confirmed delivery of a standard overnight courier the following Business Day
      or
      if delivered by hand the following Business Day), or (b) confirmed delivery
      of a
      standard overnight courier or delivered by hand, to the parties at the following
      addresses: 

    

    if
      to
      Continental:

    Continental
      Airlines, Inc.

    1600
      Smith Street, HQSCD

    Houston,
      Texas 77002

    Attention:
      Senior Vice President - Corporate Development

    Telecopy
      No.: (713) 324-3229

    with
      a
      copy to:

    Continental
      Airlines, Inc.

    1600
      Smith Street, HQSCD

    Houston,
      Texas 77002

    Attention:
      General Counsel

    Telecopy
      No.: (713) 324-5161

    and
      to:

    Continental
      Airlines, Inc.

    1600
      Smith Street, HQSFP

    Houston,
      Texas 77002

    Attention:
      Staff Vice President - Financial Planning

    Telecopy
      No.: (713) 324-5225

    if
      to
      Contractor, to:

    Chautauqua
      Airlines, Inc.

    8909
      Purdue Road,

    Suite
      300

    Indianapolis,
      IN 46268

    Attention:
      Chief Financial Officer

    Telecopy
      No.: 317-484-4545

    with
      a
      copy to:

    Arthur
      H.
      Amron

    Wexford
      Capital LLC

    411
      West
      Putnam Avenue

    Greenwich,
      CT 06830

    Telecopy
      No.: 203-862-7312

    

    or
      to
      such other address as either party hereto may have furnished to the other party
      by a notice in writing in accordance with this Section
      13.
      

    

    
      
        
        

      

      
        -83-

        
          

        

      

      
        
        

      

    

    14.  Severability.
      Any
      provision of this Agreement which is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions hereof. Any such prohibition or unenforceability in any jurisdiction
      shall not invalidate or render unenforceable such provision in any other
      jurisdiction. 

    

    15. Entire
      Agreement.
      Except
      as otherwise set forth in this Agreement, this Agreement constitutes the entire
      agreement between the parties hereto with respect to the subject matter hereof
      and supersedes all prior agreements and understandings, whether written or
      oral,
      between the parties with respect to such subject matter. 

    

    16. Amendment
      and Modification.
      This
      Agreement may not be amended or modified in any respect except by a written
      agreement signed by both of the parties hereto that specifically states that
      it
      is intended to amend or modify this Agreement. 

    

    17. Third
      Party Beneficiaries.
      Nothing
      in this Agreement, express or implied, is intended to or shall confer upon
      any
      Person any legal or equitable right, benefit or remedy of any nature whatsoever
      under or by reason of this Agreement, and no Person shall be deemed a third
      party beneficiary under or by reason of this Agreement. 

    

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

    

    19. Waiver.
      The
      observance of any term of this Agreement may be waived (either generally or
      in a
      particular instance and either retroactively or prospectively) by the party
      entitled to enforce such term, but such waiver shall be effective only if it
      is
      in writing signed by the party against which such waiver is to be asserted
      that
      specifically states that it is intended to waive such term. Unless otherwise
      expressly provided in this Agreement, no delay or omission on the part of any
      party in exercising any right or privilege under this Agreement shall operate
      as
      a waiver thereof, nor shall any waiver on the part of any party of any right
      or
      privilege under this Agreement operate as a waiver of any other right or
      privilege under this Agreement nor shall any single or partial exercise of
      any
      right or privilege preclude any other or further exercise thereof or the
      exercise of any other right or privilege under this Agreement. No failure by
      either party to take any action or assert any right or privilege hereunder
      shall
      be deemed to be a waiver of such right or privilege in the event of the
      continuation or repetition of the circumstances giving rise to such right unless
      expressly waived in writing by the party against whom the existence of such
      waiver is asserted. 

    

    20. References;
      Construction.
      The
      section and other headings and subheadings contained in this Agreement are
      solely for the purpose of reference, are not part of the agreement of the
      parties hereto, and shall not in any way affect the meaning or interpretation
      of
      this Agreement. All references to days or months shall be deemed references
      to
      calendar days or months. Unless the context otherwise requires, any reference
      to
      a “Section” shall be deemed to refer to a section of this Agreement. The words
“hereof,” “herein” and “hereunder” and words of similar import referring to this
      Agreement refer to this Agreement as a whole and not to any particular provision
      of this Agreement. Whenever the words “include,” “includes” or “including” are
      used in this Agreement, unless otherwise specifically provided, they shall
      be
      deemed to be followed by the words “without limitation.” This Agreement shall be
      construed without regard to any presumption or rule requiring construction
      or
      interpretation against the party drafting or causing the document to be drafted.
      

    
      
        
        

      

      
        -84-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
      by
      their respective officers duly authorized thereunto, as of the date first above
      written. 

     

     

     

    
      	 	 	 	 
	CONTINENTAL
              AIRLINES, INC.	 	 	CHAUTAUQUA
              AIRLINES, INC.
	/s/ Jeffery
              A. Smisek	 	 	/s/ Bryan
              Bedford
	
              

            	 	 	
              

            
	Name:
              Jeffery A. Smisek
Title: President
	 	 	Name:
              Bryan Bedford
Title: Chairman &
CEO

    

      
         

      

    

     

    
 

    
      
        
        

      

      
        -85-

        
          

        

      

      
        
        

      

    

    EXHIBIT
      G

    Use
      of Continental Marks and Other Identification

    

    
      	
              1.

            	
              Grant.
                Continental hereby grants to Contractor, and Contractor accepts,
                a
                non-exclusive, personal, non-transferable, royalty-free right and
                license
                to adopt and use the Continental Marks and other Identification in
                connection with the rendering by Contractor of Regional Airline Services,
                subject to the conditions and restrictions set forth
                herein.

            

    

    

    
      	
              2.

            	
              Ownership
                of the Continental Marks and Other Identification.

            

    

    

    
      	 	
              a.

            	
              Continental
                shall at all times remain the owner of the Continental Marks and
                the other
                Identification and any registrations thereof and Contractor’s use of any
                Continental Marks or other Identification shall clearly identify
                Continental as the owner of such marks (to the extent practical)
                to
                protect Continental’s interest therein. All use by Contractor of the
                Continental Marks and the other Identification shall inure to the
                benefit
                of Continental. Nothing in this Agreement shall give Contractor any
                right,
                title, or interest in the Continental Marks or the other Identification
                other than right to use the Continental Marks and the other Identification
                in accordance with the terms of this
                Agreement.

            

    

    

    
      	 	
              b.

            	
              Contractor
                acknowledges Continental’s ownership of the Continental Marks and the
                other Identification and further acknowledges the validity of the
                Identification. Contractor agrees that it will not do anything that
                in any
                way infringes or abridges Continental’s rights in the Identification or
                directly or indirectly challenges the validity of the
                Identification

            

    

    

    
      	
              3.

            	
              Use
                of the Continental Marks and the Other Identification.

            

    

    

    
      	 	
              a.

            	
              Contractor
                shall use the Continental Marks and other Identification only as
                authorized herein by Continental and in accordance with such standards
                of
                quality as Continental may
                establish.

            

    

    

    
      	 	
              b.

            	
              Contractor
                shall use the Identification on all Covered Aircraft (other than
                the Spare
                Aircraft) and all facilities, equipment and printed materials used
                in
                connection with the Regional Airline
                Services.

            

    

    

    
      	 	
              c.

            	
              Contractor
                shall not use the Identification for any purpose other than as set
                forth
                in this Exhibit
                G,
                and specifically shall have no right to use the Continental Marks
                or other
                Identification on or in any aircraft other than Covered Aircraft
                or in
                connection with any other operations of Contractor.
                

            

    

    

    
      	 	
              d.

            	
              Continental
                shall have exclusive control over the use and display of the Continental
                Marks and other Identification, and may change the Identification
                at any
                time and from time to time (including by adding or deleting marks
                from the
                list specified in this Exhibit
                G),
                in which case Contractor shall as soon as practicable make such changes
                as
                are requested by Continental to utilize the new Identification;
                provided
                that Continental shall either pay directly the reasonable costs of
                making
                such changes to the Identification or shall promptly reimburse Contractor
                for its reasonable expenses incurred in making such
                changes.

            

    

    

    
      	 	
              e.

            	
              Nothing
                shall abridge Continental’s right to use and/or to license the
                Identification, and Continental reserves the right to the continued
                use of
                all the Identification, to license such other uses of the Identification
                and to enter into such agreements with other carriers providing for
                arrangements similar to those with Contractor as Continental may
                desire.
                No term or provision of this Agreement shall be construed to preclude
                the
                use of the Continental Marks or other Identification by other persons
                or
                for similar or other uses not covered by this
                Agreement.

            

    

    

    
      	
              4.

            	
              Continental-Controlled
                Litigation.
                Continental at its sole expense shall take all steps that in its
                opinion
                and sole discretion are necessary and desirable to protect the Continental
                Marks and other Identification against any infringement or dilution.
                Contractor agrees to cooperate fully with Continental in the defense
                and
                protection of the Continental Marks and other Identification as reasonably
                requested by Continental. Contractor shall report to Continental
                any
                infringement or imitation of, or challenge to, the Continental Marks
                and
                other Identification, immediately upon becoming aware of same. Contractor
                shall not be entitled to bring, or compel Continental to bring, an
                action
                or other legal proceedings on account of any infringements, imitations,
                or
                challenges to any element of the Continental Marks and other
                Identification without the written agreement of Continental. Continental
                shall not be liable for any loss, cost, damage or expense suffered
                or
                incurred by Contractor because of the failure or inability to take
                or
                consent to the taking of any action on account of any such infringements,
                imitations or challenges or because of the failure of any such action
                or
                proceeding. If Continental shall commence any action or legal proceeding
                on account of such infringements, imitations or challenges, Contractor
                agrees to provide all reasonable assistance requested by Continental
                in
                preparing for and prosecuting the
                same.

            

    

    

    
      	
              5.

            	
              Revocation
                of License.
                Continental shall have the right to cancel the license provided herein
                in
                whole or in part at any time and for any reason, in which event all
                terminated rights to use the Identification provided Contractor herein
                shall revert to Continental and the Continental Marks and the other
                Identification shall not be used by Contractor in connection with
                any
                operations of Contractor. The following provisions shall apply to
                the
                termination of the license provided herein: (i) in the case of a
                termination of the license to use the globe element of the Continental
                Marks, Contractor shall cease all use of the globe element of the
                Continental Marks with respect to each Covered Aircraft within 90
                days of
                such aircraft being withdrawn from the capacity purchase provisions
                of the
                Agreement, and shall cease all use of the globe element of the Continental
                Marks in all other respects within 90 days of last Covered Aircraft
                being
                withdrawn from this Agreement (unless this Agreement is terminated
                for
                Cause or pursuant to Section
                9.02(a)
                or
                the first sentence of Section
                9.02(b),
                in which case Contractor shall cease all use of the globe element
                of the
                Continental Marks within 45 days of the Termination Date); (ii) in
                the
                case of a termination of the license to use any other Continental
                Marks
                and Identification, Contractor shall cease all use of such other
                Continental Marks and Identification within 45 days of the termination
                of
                the license for such other Continental Marks and other Identification.
                Within such specified period, Contractor shall cease all use of such
                other
                Continental Marks and Identification, and shall change its facilities,
                equipment, uniforms and supplies to avoid any customer confusion
                or the
                appearance that Contractor is continuing to have an operating relationship
                with Continental, and Contractor shall not thereafter make use of
                any
                word, words, term, design, name or mark confusingly similar to the
                Continental Marks or other Identification or take actions that otherwise
                may infringe the Continental Marks and the other
                Identification.

            

    

    

    
      
        
        

      

      
        -86-

        
          

        

      

      
        
        

      

    

    
      	
              6.

            	
              Assignment.
                The non-exclusive license granted by Continental to Contractor is
                personal
                to Contractor and may not be assigned, sub-licensed or transferred
                by
                Contractor in any manner without the written consent of a duly authorized
                representative of Continental.

            

    

    

    
      	
              7.

            	
              Continental
                Marks.
                The Continental Marks are as
                follows:

            

    

    

    CONTINENTAL
      EXPRESS

    CONTINENTAL
      EXPRESS’S LOGO (DESIGN) IN COLOR

    CONTINENTAL
      EXPRESS’S LOGO (DESIGN) IN BLACK & WHITE

     

    [Missing
      Graphic Reference]

    8. Aircraft
      Livery.
      With
      the exception of the Spare Aircraft (which may be in neutral livery), the
      aircraft livery shall be as follows, unless otherwise directed by Continental:
      The colors blue, gray, white and gold are used on the aircraft. The color white
      appears on the top approximate 2/3 of the body of the aircraft; the color gray
      appears below the color white on the remainder of the bottom portion of the
      body
      of the aircraft; the color gold is used as a stripe or band dividing the white
      and gray colors. The tail of the aircraft is primarily blue with the globe
      logo
      design in a gold and white combination and the trade name is written in blue
      on
      the white portion of the body of the aircraft. The color blue is the dominant
      aircraft interior color.

    

    
      	
              9.

            	
              Survival.
                The provisions of this Exhibit
                G
                shall survive the termination of this Agreement for a period of six
                years.

            

    

    

    
      
        
        

      

      
        -87-

        
          

        

      

      
        
        

      

    

    EXHIBIT
      H

    Use
      of Contractor Marks

    

    

    
      	
              1.

            	
              Grant.
                Contractor hereby grants to Continental, and Continental accepts,
                a
                non-exclusive, personal, non-transferable, royalty-free right and
                license
                to adopt and use the Contractor Marks (as defined below) in connection
                with Continental’s entering into this Agreement, subject to the conditions
                and restrictions set forth herein.

            

    

    

    
      	
              2.

            	
              Ownership
                of the Contractor Marks.

            

    

    

    
      	 	
              a.

            	
              Contractor
                shall at all times remain the owner of the Contractor Marks and any
                registrations thereof and Continental’s use of any Contractor Marks shall
                clearly identify Contractor as the owner of such marks (to the extent
                practical) to protect Contractor’s interest therein. All use by
                Continental of the Contractor Marks shall inure to the benefit of
                Contractor. Nothing in this Agreement shall give Continental any
                right,
                title, or interest in the Contractor Marks other than right to use
                the
                Contractor Marks in accordance with the terms of this
                Agreement

            

    

    

    
      	 	
              b.

            	
              Continental
                acknowledges Contractor’s ownership of the Contractor Marks and further
                acknowledges the validity of the Contractor Marks. Continental agrees
                that
                it will not do anything that in any way infringes or abridges Contractor’s
                rights in the Contractor Marks or directly or indirectly challenges
                the
                validity of the Contractor Marks.

            

    

    

    
      	
              3.

            	
              Use
                of the Contractor Marks.

            

    

    

    
      	 	
              a.

            	
              Continental
                shall use the Contractor Marks only as authorized herein by Contractor
                and
                in accordance with such standards of quality as Contractor may
                establish.

            

    

    

    
      	 	
              b.

            	
              Continental
                shall use the Contractor Marks as necessary or appropriate in
                Continental’s sole discretion in connection with the Regional Airline
                Services, including without limitation the sale or disposition by
                Continental of the seat inventory of the Scheduled
                Flights.

            

    

    

    
      	 	
              c.

            	
              Continental
                shall not use the Contractor Marks for any purpose other than as
                set forth
                in this Exhibit
                H,
                and specifically shall have no right to use the Contractor Marks
                in
                connection with any other operations of
                Continental.

            

    

    

    
      	 	
              d.

            	
              Contractor
                may change the Contractor Marks at any time and from time to time
                (including by adding or deleting marks from the list specified in
                this
                Exhibit
                H),
                in which case Continental shall as soon as practicable make such
                changes
                as are requested by Contractor to utilize the new Contractor Marks;
                provided
                that Contractor shall either pay directly the reasonable costs of
                making
                such changes to the Contractor Marks or shall promptly reimburse
                Continental for its reasonable expenses incurred in making such
                changes.

            

    

    

    
      	 	
              e.

            	
              Nothing
                shall abridge Contractor’s right to use and/or to license the Contractor
                Marks, and Contractor reserves the right to the continued use of
                all the
                Contractor Marks, to license such other uses of the Contractor Marks
                and
                to enter into such agreements with other carriers providing for
                arrangements similar to those with Continental as Contractor may
                desire.
                No term or provision of this Agreement shall be construed to preclude
                the
                use of the Contractor Marks by other persons or for other similar
                uses not
                covered by this Agreement.

            

    

    

    
      	
              4.

            	
              Contractor-Controlled
                Litigation.
                Contractor at its sole expense shall take all steps that in its opinion
                and sole discretion are necessary and desirable to protect the Contractor
                Marks against any infringement or dilution. Continental agrees to
                cooperate fully with Contractor in the defense and protection of
                the
                Contractor Marks as reasonably requested by Contractor. Continental
                shall
                report to Contractor any infringement or imitation of, or challenge
                to,
                the Contractor Marks, immediately upon becoming aware of same. Continental
                shall not be entitled to bring, or compel Contractor to bring, an
                action
                or other legal proceedings on account of any infringements, imitations,
                or
                challenges to any element of the Contractor Marks without the written
                agreement of Contractor. Contractor shall not be liable for any loss,
                cost, damage or expense suffered or incurred by Continental because
                of the
                failure or inability to take or consent to the taking of any action
                on
                account of any such infringements, imitations or challenges or because
                of
                the failure of any such action or proceeding. If Contractor shall
                commence
                any action or legal proceeding on account of such infringements,
                imitations or challenges, Continental agrees to provide all reasonable
                assistance requested by Contractor in preparing for and prosecuting
                the
                same.

            

    

    

    
      	
              5.

            	
              Revocation
                of License.
                Contractor shall have the right to cancel the license provided herein
                in
                whole or in part at any time and for any reason, in which event all
                terminated rights to use the Contractor Marks provided Continental
                herein
                shall revert to Contractor and the Contractor Marks shall not be
                used by
                Continental in connection with any operations of Continental. Continental
                shall cease all use of the Contractor Marks in all respects upon
                the last
                Covered Aircraft being withdrawn from this Agreement. Continental
                shall
                not thereafter make use of any word, words, term, design, name or
                mark
                confusingly similar to the Contractor Marks or take actions that
                otherwise
                may infringe the Contractor Marks.

            

    

    

    
      	
              6.

            	
              Assignment.
                The non-exclusive license granted by Contractor to Continental is
                personal
                to Continental and may not be assigned, sub-licensed or transferred
                by
                Continental in any manner without the written consent of a duly authorized
                representative of Contractor.

            

    

    

    
      	
              7.

            	
              Contractor
                Marks.
                The Contractor Marks are as follows:

            

    

    

    [Missing
      Graphic Reference].

    

    
      	
              8.

            	
              Survival.
                The provisions of this Exhibit
                H
                shall survive the termination of this Agreement for a period of six
                years.

            

    

    

    
      
        
        

      

      
        -88-

        
          

        

      

      
        
        

      

    

    EXHIBIT
      I

    Catering
      Standards

    

    Station
      Services

    

    
      	·  	
              Contractor
                will provide caterer oversight at Contractor Airports that are non-Chelsea
                Catering locations. Continental will provide caterer oversight at
                Continental Airports that are non-Chelsea Catering
                locations.

            

    

    

    
      	·  	
              At
                Contractor Airports without contract catering, Contractor will provide
                supplies and beverage uplift as necessary and will remove, store
                and
                re-board perishable supply and beverage items on RON/originating
                flights.
                At Continental Airports without contract catering, Continental will
                provide supplies and beverage uplift as necessary and will remove,
                store
                and re-board perishable supply and beverage items on RON/originating
                flights.

            

    

    

    
      	·  	
              Contractor
                will provide meal ordering services at Contractor Airports that are
                non-Chelsea Catering locations or where catering is downlined by
                Chelsea
                Catering. Continental will provide meal ordering services at Continental
                Airports that are non-Chelsea Catering locations or where catering
                is
                downlined by Chelsea Catering.

            

    

    

    
      	·  	
              Contractor
                will provide trained catering truck guide person for all Contractor
                Airports that are Chelsea Catering locations to assist with backing
                off
                the aircraft. Continental will provide trained catering truck guide
                person
                for all Continental Airports that are Chelsea Catering locations
                to assist
                with backing off the aircraft.

            

    

    

    
      	·  	
              Contractor
                will coordinate and communicate with Chelsea Catering regarding all
                flight
                activity, cancellations and irregular operations providing necessary
                information in a timely manner.

            

    

    

    Onboard
      Services

    

    
      	·  	
              Continental
                has right to determine meal/beverage service parameters and scheduling
                for
                Scheduled Flights.

            

    

    

    
      	·  	
              Continental
                has right to conduct onboard service audits on Scheduled Flights
                to ensure
                service standards are being met.

            

    

    

    
      	·  	
              Contractor
                flight attendants providing Regional Airline Services will be trained
                on
                meal and beverage service procedures, including liquor and duty-free
                sales
                and cash handling, and will collect all on-board revenue for liquor
                and
                duty-free sales.

            

    

    

    
      	·  	
              Contractor
                will provide sufficient galley service ship's equipment to operate,
                such
                as hot jugs, coffee makers and trash
                bins.

            

    

    

    
      	·  	
              Continental
                will provide all liveried catering items, including cups, napkins,
                etc.

            

    

    
      	·  	 

    

    
      
        
        

      

      
        -89-

        
          

        

      

      
        
        

      

    

    EXHIBIT
      J

    Reasonable
      Operating Constraints 

    

    The
      weekly schedules for the Covered Aircraft shall meet all of the following
      requirements:

    

    1.  Minimum
      & Maximum Scheduling Parameters:

    

    
      	 	 Minimum	  Maximum
	Scheduled Block Hours per Aircraft per
              day  	 [*]	 [*]
	Scheduled Departures per Aircraft per
              day 	 [*]	 [*]

    

     

    

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

    

    2.  Aircraft
      Maintenance Requirements.

    

    One-third
      of the Covered Aircraft (rounded up to the nearest whole number excluding Spare
      Aircraft) shall be scheduled for a minimum of nine (9) hours of overnight
      maintenance per aircraft for six (6) days per week. The parties will agree
      to a
      reasonable number of aircraft that shall be scheduled for sixteen (16) hours
      of
      continuous maintenance time per aircraft each week beginning on Saturday
      afternoon.

    

    3.  Maintenance
      Bases.

    

    Contractor
      and Continental will meet and confer on maintenance bases and maintenance base
      operations as they related to the Covered Aircraft.

    

    4.  Crew
      Overnights.

    

    The
      schedule shall allow for single overnights of crews in outstations and shall
      not
      require Contractor to schedule any continuous duty overnights. Any additional
      costs associated with continuous duty overnights or high-speed overnights shall
      be for the account of Continental and shall be invoiced separately by Contractor
      as a Reconciled Expense.

    

    5.  Certain
      Other Restrictions.

    

    Notwithstanding
      any other provision of this Agreement, Contractor shall not be required to
      provide Regional Airline Services to Continental consisting of Scheduled Flights
      to or from any of the following locations at any time when such location
      constitutes a Continental Hub Airport: [*].

    

    
      ___________

      *Confidential

    

    

      
         

      

    

     

    
      
        
        

      

      
        -90-

        
          

        

      

      
        
        

      

    

    EXHIBIT
      K

    Ticket
      Handling Terms

    

    1. Passenger
      Ticket Stock and Accounting Procedures.
      Continental will provide Contractor with Continental passenger ticket stock
      in
      accordance with the following procedures:

    A. Continental
      will supply Contractor with adequate supplies of all necessary passenger ticket
      forms, bag tags, boarding passes, validator plates and other documents and
      materials necessary to enable Contractor to operate in a manner consistent
      with
      Continental procedures, upon request to the office designated by Continental
      from time to time. A receipt for all ticket forms delivered to Contractor shall
      be signed by an appropriate representative of Contractor, and Contractor shall
      comply with Continental’s procedures with respect to the control of,
      safeguarding of and accounting for ticket stock and validator plates. All
      tickets and other documents and materials supplied by Continental for use in
      connection with the Agreement shall be and remain the property of Continental
      and shall be held in trust for Continental by Contractor and issued or otherwise
      utilized only as provided in the Agreement.

    

    B. Contractor
      shall be responsible for the safe and secure custody and care of all tickets
      and
      other documents and materials furnished by Continental. The tickets and other
      documents of Continental shall be secured in a manner satisfactory to
      Continental and consistent with any applicable IATA standards and
      specifications. Such tickets and documents and all records relating to them
      and
      to the sale of transportation on Continental shall at all times be made
      available for inspection by Continental or its designated representative.

    

    C. All
      tickets shall be issued by Contractor in accordance with the currently effective
      tariffs and contract of carriage applicable to the transportation being
      purchased and applicable trade manuals, all in accordance with appropriate
      instructions, which may be issued from time to time by Continental.

    

    D. All
      tickets shall be issued by Contractor in numerical sequence and all must be
      accounted for at each reporting period. All auditors’ coupons for tickets issued
      by Contractor and all coupons of voided tickets shall be sent to the office
      or
      offices designated by Continental from time to time on the workday following
      issuance.

    

    E. All
      checks accepted for the sale of tickets on Continental ticket stock shall be
      payable to Continental and acceptance of checks shall conform to Continental’s
      acceptance procedures. Any losses resulting from returned checks where
      Contractor has failed to follow Continental’s acceptance procedures, will be
      charged to Contractor after Continental exhausts reasonable efforts to
      collect.

    

    F. All
      tickets issued for a form of payment other than cash or check shall be supported
      by such documents as shall be specified by Continental.

    

    G. Contractor
      shall assume full liability for and agrees to defend, indemnify and hold
      Continental harmless from and against any and all claims, demands, liability,
      expenses, losses, costs or damages whatsoever in any manner arising out of
      or
      attributed to Contractor’ possession, issuance, loss, misapplication, theft, or
      forgery of tickets, other travel documents, or supplies furnished by Continental
      to Contractor including but not limited to lost ticket forms, bag tags, boarding
      passes or other documents and errors in ticket issuance. In the event Contractor
      loses or has stolen any ticket, fails to return tickets or other documents
      to
      Continental upon demand, fails to remit pursuant to the Agreement the monies
      to
      which Continental is entitled from the sale of any such ticket or document,
      or
      fails to account properly for any such tickets or document, Contractor shall
      be
      liable to Continental for the agreed value of any such ticket or document,
      which
      is agreed to be the actual damages or loss sustained by Continental from usage
      of any such ticket or document, as measured by the then current, non-discounted
      retail price of the transportation or other service obtained with the ticket
      or
      document or, if such value cannot be determined, US [*]
      per
      ticket.

    

    H. Contractor
      may accept all credit cards honored by Continental and is appointed
      Continental’s agent for such purpose, provided:

    

    (i) Contractor
      observes the floor limits for each credit card set by the issuer of the credit
      card (the “Card
      Issuer”)
      as
      amended by the Card Issuer from time to time;

    

    (ii) Contractor
      accepts each credit card within the terms of the contracts between Continental
      and Card Issuer;

    

    (iii) Contractor
      complies with 14 CFR, Part 374;

    

    (iv) Contractor
      does not accept blacklisted cards;

    

    (v) Contractor
      shall reimburse Continental for any losses incurred by Continental as a result
      of Contractor’ failure to observe the terms of this section or of the contracts
      between Continental and the Card Issuer;

    

    (vi) Contractor
      complies with all of Continental’s established procedures relating to credit
      cards; and

    

    (vii) For
      tickets that are not for transportation on Scheduled Flights, Contractor shall
      reimburse Continental for all charge backs, returns and other direct charges
      attributable to or arising from Contractor’ acceptance of credit cards, unless
      either (a) Continental has realized an offsetting credit (including through
      the
      return and cancellation of a previously issued ticket) or (b) such charge back,
      return or other charge resulted from the gross negligence, recklessness, or
      willful misconduct of Continental. 

     

     

     

    
      
        
          ___________

          *Confidential

        

      

      
        -91-

        
          

        

      

      
        
        

      

    

    I. Contractor
      shall prepare and furnish to Continental all written reports, accounts, and
      documentation with regard to ticket handling that Continental may require daily
      or at such lesser frequency as Continental may prescribe, at its sole
      discretion, from time to time during the life of the Agreement. Contractor
      will
      comply with all reasonable procedures specified by Continental with regard
      to
      ticket handling.

    

    J. Within
      two business days after the termination of the Agreement for any reason,
      Contractor will return to Continental all passenger ticket forms, bag tags,
      boarding passes and other documents provided to Contractor by Continental
      pursuant to the Agreement.

    

    2. Deposits.
      Contractor shall deposit all funds, both cash and checks, realized from the
      sale
      of tickets on Continental ticket stock by it in Continental accounts maintained
      at depositories from time to time designated by Continental on or before the
      first banking day following receipt of such funds.

    

    3. Ticket
      Acceptance.
      For the
      term of the Agreement, Continental hereby authorizes Contractor to accept flight
      coupons written for CO* Flights in accordance with any applicable restrictions.
      Contractor shall not endorse or refund any such coupons without Continental’s
      written consent, except in accordance with Continental’s contract of
      carriage.

    
 

    
      
         

      

    

     

    
      
        
        

      

      
        -92-

        
          

        

      

      
        
        

      

    

    EXHIBIT
      L

    Fuel
      Efficiency Program

    

    Contractor
      shall use commercially reasonable efforts to develop and maintain a
      comprehensive fuel efficiency program, acceptable to Continental, in a timely
      manner and with the overall objective of operating and maintaining the Covered
      Aircraft in a manner that maximizes fuel efficiency, with due consideration
      to
      other performance objectives. The program will include applicable data
      collection and trend analysis, and will set and track target metrics.
      Continental shall audit Contractor’s program at its discretion, but at no less
      than annual intervals. Such audits will be based on the IATA Fuel and Emissions
      Efficiency Checklist, supplemented by the IATA Guidance Material and Best
      Practices for Fuel and Environmental Management, any applicable manufacturer
      material, Continental’s own fuel efficiency program applicable to its own fleet,
      and any other material standard in the industry.

    

    Contractor’s
      fuel efficiency program shall emphasize at least the following:

    

    
      	1.  	
              A
                “cost index” (CI) based flight planning system, or as an alternative a
                flight planning system that adequately balances the cost of fuel
                versus
                the cost of time on a segment specific basis. The ability to provide
                the
                system with current and accurate applicable costs is
                required.

            

    

    

    
      	2.  	
              Flight
                planning technology that accurately predicts fuel burn and optimizes
                lateral and vertical profiles for takeoff and landing runway, climb
                and
                descent, crossing restrictions, special use airspace, preferred routings,
                enroute altitude agreements, etc.

            

    

    

    
      	3.  	
              Appropriate,
                implemented, well documented, and thoroughly trained policies and
                procedures for dispatchers, pilots, load planners, station agents,
                mechanics and management that maximize opportunities for fuel efficiency.
                

            

    

    

    
      	4.  	
              An
                active interface with appropriate Air Traffic Control (ATC) facilities,
                management, and other personnel to minimize operational restrictions,
                and
                improve ATC handling of Contractor flights.

            

    

    

    
      	5.  	
              Well-defined
                and fully integrated flight planning fuel policies, including statistical
                tracking of fuel added by pilots and dispatchers, efficient reserves,
                guidelines for efficient alternate selection, a “no-alternate” policy, and
                target “fuel on deck”.

            

    

    

    
      	6.  	
              Thorough
                and effective pilot and dispatcher training on aerodynamics, cruise
                performance and overall fuel efficient flying in initial, transition,
                upgrade, and recurrent programs, with an emphasis on operating the
                aircraft at the most efficient speeds and altitudes as well as correct
                descent and approach planning. 

            

    

    

    
      	7.  	
              Maximized
                use of on-board Flight Management Systems (FMS) or performance management
                computers as an in-flight fuel efficiency tool. Applicable thorough
                and
                effective training is required. 

            

    

    

    
      	8.  	
              An
                effective fuel tankering program, including automated tankering
                suggestions and calculations, using validated methods and formulas.
                

            

    

    

    
      	9.  	
              Thorough
                statistical tracking, analysis and measurement of fuel efficiency
                using
                actual data, data from flight plans, and FOQA data with a comprehensive
                plan to identify and correct deficiencies, including individual pilot
                and
                dispatcher issues. 

            

    

    

    
      	10.  	
              A
                designated manager charged with overall responsibility for fuel efficiency
                either as a stand alone position, or as a substantial element of
                an
                individual job description. 

            

    

    

    
      	11.  	
              The
                inclusion of fuel efficiency issues and targets in appropriate job
                descriptions and performance objectives. Applicable work groups include,
                but are not limited to, pilots, dispatchers, SOCC managers, and gate
                and
                ramp personnel.

            

    

    

    
      	12.  	
              A
                weight management program that prevents the carriage of unnecessary
                galley
                supplies, spare parts and equipment, customer service items, etc.
                

            

    

    

    
      	13.  	
              A
                center of gravity management system that considers the most efficient
                center of gravity in load
                distribution.

            

    

    

    
      	14.  	
              Adequate
                ground equipment and an APU management program that prevents unnecessary
                or costly operation of the APU.

            

    

    

    
      	15.  	
              An
                engine-out taxi program both before takeoff and after
                landing.

            

    

    

    
      	16.  	
              Fuel
                and operationally efficient takeoff and landing flap selection
                priorities.

            

    

    

    
      	17.  	
              An
                engine maintenance program or maintenance contracts that track
                deterioration in Specific Fuel Consumption (SFC) and allow for cost
                effective early removal and repair/overhaul of high burn
                engines.

            

    

    

    
      	18.  	
              An
                airframe maintenance program that measure airframe drag and corrects
                high
                drag airframes that exceed an agreed upon threshold. An airframe
                maintenance program shall also include scheduled thorough aerodynamic
                conformity checks and corrective
                action.

            

    

    
      
        
        

      

      
        -93-

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      M

    Form
      of Guarantee of Parent

    

    THIS
      GUARANTEE AGREEMENT (this “Guarantee”),
      effective as of July 21, 2006
      (the
“Effective
      Date”)
      by
      REPUBLIC AIRWAYS HOLDINGS INC., a Delaware corporation (“Guarantor”),
      for
      the benefit of CONTINENTAL AIRLINES, INC., a Delaware
      corporation (“Continental”).

     

    RECITALS

     

    WHEREAS
      Continental, Guarantor and Chautauqua Airlines, Inc., an Indiana corporation
      (“Contractor”)
      are
      prepared to enter into that certain Capacity Purchase Agreement, dated as of
      July 21, 2006 (“CPA”);

     

    WHEREAS,
      pursuant to the CPA, Contractor is obligated, among other things, to provide
      Regional Airline Services to Continental and, in certain circumstances, to
      make
      certain reconciliation or indemnity payments to Continental;

     

    WHEREAS,
      Continental, Guarantor and Contractor are prepared to enter into the Ancillary
      Agreements pursuant which Contractor is obligated, among other things, to
      provide ground handling and other services to Continental and, in certain
      circumstances, to make certain payments to Continental;

     

    WHEREAS,
      Contractor is the wholly-owned subsidiary of Guarantor; and

     

    WHEREAS,
      it is a condition precedent to Continental’s execution and delivery of the CPA
      that Guarantor execute and deliver this Guarantee;

     

    NOW,
      THEREFORE, for and in consideration of the foregoing and other good and valuable
      consideration, the receipt and sufficiency of which Guarantor acknowledges,
      Guarantor covenants and agrees for the benefit of Continental as
      follows:

     

    
      	
              ARTICLE
                XI

            
	
               DEFINITIONS

            

    

    
    

    Section
      1.01  Certain
      Definitions. Any
      terms
      not defined herein shall have the definition given such term in the Capacity
      Purchase Agreement. As used in this Agreement, the following terms have the
      following meanings:

     

    “Beneficiaries”
has
      the
      meaning given to that term in Section 3.07.

     

    “Contractor”
has
      the
      meaning given to that term in the Recitals.

     

    “Continental”
has
      the
      meaning given to that term in the Recitals.

     

    “CPA”
has
      the
      meaning given to that term in the Recitals.

     

    “Default
      Interest”
has
      the
      meaning given to that term in Section 3.06.

     

    “Documents”
has
      the
      meaning given to that term in Section 2.02(b).

     

    “Effective
      Date”
has
      the
      meaning given to that term in the preamble.

     

    “Guarantee”
has
      the
      meaning given to that term in the preamble.

     

    “Guarantor”
has
      the
      meaning given to that term in the preamble.

     

    Section
      1.02  Other
      Definitions. Other
      terms defined in this Guarantee have the meanings so given them. Capitalized
      terms used but not defined herein shall the same meaning herein as in the
      CPA.

     

    Section
      1.03  Terminology.
      Unless
      the context of this Guarantee clearly requires otherwise, (a) pronouns, wherever
      used herein, and of whatever gender, shall include natural persons and
      corporations, partnerships, limited liability companies and entities of every
      kind and character, (b) the singular shall include the plural wherever and
      as
      often as may be appropriate, (c) the word “includes”
or
      “including”
shall
      mean “including
      without limitation”,
      and
      (d) the words “hereof”,
      “herein”,
      “hereunder”,
      and
      similar terms in this Guarantee shall refer to this Guarantee as a whole and
      not
      any particular section or article in which such words appear. The section,
      article, and other headings in this Guarantee are for reference purposes and
      shall not control or affect the construction of this Guarantee or the
      interpretation hereof in any respect. Article, section, subsection, and exhibit
      references are to this Guarantee unless otherwise specified. All exhibits
      attached to this Guarantee constitute a part of this Guarantee and are
      incorporated herein. All references to a specific time of day in this Guarantee
      shall be based upon Central Standard Time or Central Daylight Time, whichever
      is
      applicable.

     

    
      
        
        

      

      
        -94-

        
          

        

      

      
        
        

      

    

    
      	
              ARTICLE II 

            
	
              GUARANTEE

            

    

     

    Section
      2.01  Guarantee
      of Obligations. Guarantor
      unconditionally, absolutely and irrevocably guarantees unto the Beneficiaries
      the
      timely payment and performance by Contractor of all of its obligations under
      the
      CPA and the Ancillary Agreements, including the obligation to provide Regional
      Airlines Services, to provide ground handling services, and to make all
      indemnification payments and reconciliation payments that Contractor is required
      to make pursuant to the CPA and the Ancillary Agreements.

     

    Section
      2.02  Guarantee
      Absolute. This
      Guarantee is absolute, continuing and independent of, and in addition to, any
      and all rights and remedies Continental may have under the CPA or any Ancillary
      Agreement and any other guaranties or documents now or hereafter given in
      connection therewith by Guarantor or others. Except as otherwise expressly
      herein provided, the enforceability of Guarantor’s obligations hereunder in
      accordance with the terms hereof shall not in any way be discharged, impaired
      or
      otherwise affected by:

     

    a.  Any
      change in the time, manner or place of payment of amounts due under the CPA
      or
      any Ancillary Agreement, or any other change or modification in or of any terms,
      provisions, covenants or conditions of any or all of them;

     

    b.  The
      entering into, or the modification or amendment in or of, any lease or sublease
      of any aircraft or engine, any contract or arrangement for the maintenance
      or
      refurbishment of any aircraft or engine, any contract or arrangement for the
      provision of ground handling services, any
      lease, sublease or other agreement relating to the use of any terminal or
      non-terminal airport facility,
      or any
      loan agreement, note, deed of trust, assignment, contract or other document
      or
      agreement entered into by Contractor or Guarantor relating to the provision
      of
      Regional Airline Services (together with the CPA
      and the
      Ancillary Agreements, the “Documents”);

     

    c.  Any
      lack
      of validity or enforceability of any of the Documents;

     

    d.  Any
      release or amendment or waiver of or consent to the modification of any other
      guarantee of payment or performance of all or any obligations under the CPA
      or
      any Ancillary Agreement, or any sale or transfer by Contractor of any of its
      interest in the CPA or any Ancillary Agreement (without implying that Contractor
      has consented or will consent to any such sale or transfer);

     

    e.  Any
      sale
      or transfer by Guarantor of any of its interest in Contractor (without implying
      that Guarantor has consented or will consent to any such sale or
      transfer);

     

    f.  Any
      release or waiver of or delay in the enforcement of rights against Contractor,
      Guarantor or any other person or entity under any of the Documents or against
      any security thereunder;

     

    g.  The
      exercise by Continental of any of its rights or remedies under any one or more
      of the Documents; or

     

    h.  Any
      other
      circumstance which might otherwise constitute a defense available to, or
      discharge of, Guarantor.

     

    Section
      2.03  Guarantee
      of Payment. This
      Guarantee is a guarantee of payment and performance and not merely a guarantee
      of collection, and Guarantor’s liabilities and obligations under this Guarantee
      are and shall at all times continue to be absolute, irrevocable and
      unconditional in all respects in accordance with the terms of this Guarantee,
      and shall at all times be valid and enforceable without set off, deduction
      or
      counterclaim irrespective of any other agreements or circumstances of any nature
      whatsoever which might otherwise constitute a defense to this Guarantee or
      the
      obligations of Guarantor under this Guarantee.

     

    Section
      2.04  Financial
      Statements. Not
      later
      than ninety (90) days following the end of each calendar year, Guarantor shall
      deliver to Continental a copy of Guarantor’s audited consolidated financial
      statements for such calendar year, certified by Guarantor as being true, correct
      and complete, together with a report thereon of Guarantor’s independent
      auditors; provided,
      that
      Guarantor shall not be required to deliver financial statements pursuant to
      this
      sentence if it is a reporting issuer pursuant to Section 13 or 15(d) of the
      Securities Exchange Act of 1934, as amended, and such financial statements
      are
      timely filed with the Securities and Exchange Commission pursuant
      thereto.

     

    
      
        
        

      

      
        -95-

        
          

        

      

      
        
        

      

    

    Section
      2.05  Representations.
      Guarantor
      represents, warrants and covenants that:

     

    a.  All
      financial statements heretofore delivered to Continental with respect to
      Guarantor are, and all financial statements hereafter delivered to Continental
      by Guarantor will be, true and correct in all material respects and fair
      presentations of Guarantor as of the respective dates thereof;

     

    b.  No
      material adverse change has occurred in the financial condition of Guarantor
      since December 31, 2004;

     

    c.  Guarantor
      is a duly organized and validly existing corporation in good standing under
      the
      laws of the State of Delaware. Guarantor has the corporate power and authority
      to enter into and perform its obligations under this Guarantee. Guarantor is
      duly qualified to do business as a foreign corporation under the laws of each
      jurisdiction that requires such qualification.

     

    d.  This
      Guarantee has been duly executed and delivered by Guarantor and constitutes
      the
      legal, valid and binding obligation of Guarantor, fully enforceable against
      Guarantor in accordance with the terms hereof except as may be limited by
      applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
      affecting the rights of creditors and subject to the principles of
      equity;

     

    e.  Neither
      the execution or delivery of this Agreement nor the performance by Guarantor
      of
      the transactions contemplated hereby will (i) violate, conflict with, or
      constitute a default under any of the terms of Guarantor’s certificate of
      incorporation, by-laws, or any provision of, or result in the acceleration
      of
      any obligation under, any material contract, sales commitment, license, purchase
      order, security agreement, mortgage, note, deed, lien, lease or other agreement
      to which Guarantor is a party or by which any of them or any of their respective
      properties or assets may be bound, (ii) result in the creation or imposition
      of
      any lien, charge or encumbrance in favor of any third person or entity, (iii)
      violate any law, statute, judgment, decree, order, rule or regulation of any
      governmental authority or body, or (iv) constitute any event which, after notice
      or lapse of time or both, would result in such violation, conflict, default,
      acceleration or creation or imposition of liens, charges or
      encumbrances;

     

    f.  No
      consent of any other person and no consent, license, permit, approval or
      authorization of, exemption by, notice or report to, or registration, filing
      or
      declaration with, any governmental authority, bureau or agency is required
      in
      connection with the execution, delivery or performance by Guarantor, the
      enforceability against Guarantor, or the validity, of this
      Guarantee;

     

    g.  Guarantor
      has, independently and with advice of counsel of Guarantor’s choice and without
      reliance upon Continental, and based upon such documents and information as
      Guarantor has deemed appropriate, made its own analysis and decision to enter
      into this Guarantee;

     

    h.  The
      financial statements (including the related notes and supporting schedules)
      of
      Guarantor delivered (or, if filed with the Securities and Exchange Commission,
      made available) to Continental immediately prior to the date hereof fairly
      present in all material respects the consolidated financial position of
      Guarantor and its results of operations as of the dates and for the periods
      specified therein. Since the date of the latest of such financial statements,
      there has been no material adverse change nor any development or event involving
      a prospective material adverse change with respect to Guarantor. Such financial
      statements have been prepared in accordance with generally accepted accounting
      principles in the United States consistently applied throughout the periods
      involved, except to the extent disclosed therein;

     

    i.  Guarantor
      is insured by insurers of recognized financial responsibility against such
      losses and risks and in such amounts and with such deductibles as are customary
      in the businesses in which it is engaged, and Guarantor has not received notice
      of cancellation or non-renewal of such insurance. All such insurance is
      outstanding and duly in force on the date hereof. Guarantor has no reason to
      believe that it will not be able to renew its existing insurance coverage as
      and
      when such coverage expires or to obtain similar coverage from similar insurers
      as may be necessary to continue its business at a cost that would not have
      a
      material adverse effect on Guarantor;

     

    j.  No
      litigation, arbitration, investigation or administrative proceeding of or before
      any court, arbitrator or governmental authority, bureau or agency is currently
      pending or, to the knowledge of Guarantor, threatened: (i) with respect to
      this
      Guarantee or any of the transactions contemplated by this Guarantee; (ii) with
      respect to the CPA or any Ancillary Agreement or any of the transactions
      contemplated thereby; or (iii) against or affecting Guarantor, or any of its
      property or assets, which, if adversely determined, would have a material
      adverse effect on the ability of Guarantor to perform its obligations hereunder;
      and

     

    k.  Guarantor
      has filed or caused to be filed all tax returns required to be filed, and has
      paid all taxes due on said returns or on any assessments made against Guarantor,
      which if not filed or not paid would have a material adverse effect on the
      business, operations, assets or condition, financial or otherwise, of Guarantor
      (other than those being contested in good faith by appropriate proceedings
      for
      which adequate reserves have been provided for in accordance with generally
      accepted accounting principles).

     

    Without
      limiting the other remedies of the Beneficiaries as a result of a breach of
      any
      of the foregoing representations and warranties, Guarantor hereby agrees to
      indemnify the Beneficiaries, their Affiliates and their respective officers,
      directors, partners, members, employees and agents, and hold them harmless
      from
      and against any and all losses, claims, damages, liabilities, expenses
      (including without limitation reasonably legal fees and expenses), judgments,
      fines and settlements any of them may incur as a result of any material breach
      of any representation or warranty contained herein.

     

    Section
      2.06  Reinstatement.
      This
      Guarantee shall continue to be effective, or be reinstated (as the case may
      be)
      if at any time payment by Contractor or Guarantor of all or any part of any
      sum
      payable pursuant to the CPA or any Ancillary Agreement, this Guarantee or the
      other Documents is rescinded or otherwise must be returned by Continental upon
      Contractor’s insolvency, bankruptcy or reorganization, all as though such
      payment had not been made. Until all of the obligations guaranteed hereunder
      shall have been paid or performed in full, Guarantor shall have no right of
      subrogation or any other right to enforce any remedy which any of the
      Beneficiaries now has or may hereafter have against Contractor. 

     

    Section
      2.07  Self-Help
      Rights. If
      Guarantor fails or refuses to perform any or all monetary or non-monetary
      obligations that are guarantied hereunder and, in the case of any non-monetary
      obligations, such failure or refusal continues for twenty (20) days
      following written notice thereof to Guarantor, then, in addition to any other
      rights and remedies which any Beneficiary may have hereunder or elsewhere,
      and
      not in limitation thereof, any Beneficiary shall have the right (but without
      any
      obligation so to do) to take action (including the payment of amounts due to
      any
      third party) to satisfy such obligation either before or after the exercise
      of
      any right or remedy of Continental against Contractor or Guarantor. The amounts
      of any and all expenditures so made by Continental in satisfaction of such
      obligation (INCLUDING
      ANY SUCH EXPENDITURE ARISING FROM OR IN CONNECTION WITH CONTINENTAL’S NEGLIGENCE
      IN TAKING SUCH ACTION, BUT EXCEPTING
      ANY SUCH EXPENDITURES TO THE EXTENT PROVEN TO HAVE BEEN CAUSED BY OR ARISING
      FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
      CONTINENTAL)
      shall
      be immediately due and payable to Continental by Guarantor.

     

    
      
        
        

      

      
        -96-

        
          

        

      

      
        
        

      

    

    
      	
              ARTICLE
                III

            
	
              MISCELLANEOUS

            

    

    
    

    Section
      3.01  Exhausting
      Recourse. Continental
      shall not be obligated to pursue or exhaust its recourse against Contractor
      or
      any other Person or guarantor, or any security it may have for satisfaction
      of
      the obligations guarantied hereunder, before being entitled to performance
      by
      Guarantor of each and every one of the obligations hereunder. No delay on the
      part of Beneficiaries in exercising any right or remedy under this Guarantee
      or
      failure to exercise the same shall operate as a waiver in whole or in part
      of
      any such right or remedy. No notice to or demand on Contractor or failure to
      give any such notice to or make any such demand on Contractor shall be deemed
      to
      be a waiver of the obligations of Guarantor hereunder or of the right of
      Beneficiaries to take further action without notice or demand as provided in
      this Guarantee. No course of dealing between Guarantor and Beneficiaries shall
      change, modify or discharge, in whole or in part, this Guarantee or any of
      the
      obligations of Guarantor hereunder.

     

    Section
      3.02  Guarantee
      Remains Effective. This
      Guarantee shall remain in full force and effect, notwithstanding any invalidity,
      irregularity, or unenforceability of any one or more of the CPA and the
      Ancillary Agreements. No release or discharge of Contractor in any receivership,
      bankruptcy, winding-up or other creditor proceedings shall affect, diminish
      or
      otherwise impair or otherwise be a defense to the enforcement of this Guarantee
      by the Beneficiaries. The liability of Guarantor shall not be affected by
      Continental causing work necessary for the provision of Regional Airline
      Services to be done, or by Continental’s pursuing any other remedies provided
      for in the Documents. 

     

    Section
      3.03  No
      Conditions. This
      Guarantee has been delivered free of any conditions and, except as otherwise
      expressly set forth herein, no representations have been made to Guarantor
      affecting or limiting the liability of Guarantor hereunder except as expressly
      provided herein.

     

    Section
      3.04  No
      Bar
      or Defense; Waiver of Defenses. No
      action
      or proceeding brought or instituted under this Guarantee and no recovery in
      pursuance thereof shall be a bar or defense to any further action or proceeding
      which may be brought under this Guarantee by reason of any further default
      or
      defaults hereunder or in the performance and observance of the terms, covenants,
      conditions, and provisions in the Documents. 

     

    Guarantor
      hereby waives all suretyship defenses and defenses in the nature thereof.
      Guarantor hereby further waives presentment, protest, notice, demand, or action
      or delinquency in respect to any obligation hereby guarantied except as
      expressly provided herein. Guarantor waives acceptance of this
      Guarantee.
      Without limiting the generality of the foregoing, Guarantor specifically waives
      any requirements imposed by or to which Guarantor may otherwise be entitled
      by
      virtue of the suretyship laws of the State of Texas, including requirements
      pursuant to Rule 31 of the Texas Rules of Civil Procedure, Section 17.001 of
      the
      Texas Civil Practice and Remedies Code and Chapter 34 of the Texas Business
      and
      Commerce Code.

     

    Section
      3.05  Liability
      Independent. The
      liability of Guarantor hereunder is independent of any other bonds or guaranties
      or other obligations at any time in effect with respect to the Documents and
      may
      be enforced regardless of the existence, validity, enforcement or
      non-enforcement of any such other guaranties or other obligations.

     

    Section
      3.06  Expenses.
      Any
      and
      all amounts due and owing by Guarantor to Continental hereunder that are not
      paid in full to Continental within ten (10) days following the earlier of the
      due date or demand therefor shall bear interest from the date such amounts
      were
      due hereunder until paid in full at the highest contract rate of interest
      permitted by applicable law (the “Default
      Interest”).

     

    Section
      3.07  Binding
      Effect. Neither
      this Guarantee nor any provisions hereof may be amended, modified, waived,
      discharged, or terminated orally, except by an instrument in writing duly signed
      by or on behalf of the party against whom enforcement of such amendment,
      modification, waiver, discharge or termination is sought. This Guarantee shall
      inure to the benefit of Continental and its successors and assigns
      (collectively, the “Beneficiaries”),
      and
      shall be binding upon Guarantor and its successors and assigns; provided,
      however,
      that
      Guarantor shall in no event have the right to assign or transfer Guarantor’s
      obligations and liabilities under this Guarantee in whole or part and any such
      attempted assignment or transfer without the prior written consent of
      Continental shall be null and void and of no force or effect. This Guarantee
      is
      intended to be for the benefit of, and shall be enforceable by, only the
      Beneficiaries and not by any third parties (including creditors of the
      Beneficiaries).

     

    Section
      3.08  Entire
      Agreement. This
      Guarantee, together with the CPA and the Ancillary Agreements, to the extent
      references are made thereto in this Guarantee, contain the undersigned’s sole
      and entire understanding and agreement with respect to its entire subject
      matter, and all prior negotiations, discussions, commitments, representations,
      agreements and understandings heretofore had between Continental and Guarantor
      with respect thereto are merged herein.

     

    Section
      3.09  Governing
      Law. This
      instrument shall be governed by and construed in accordance with the laws of
      the
      State of Texas.

     

    Section
      3.10  Reliance.
      Guarantor
      acknowledges that Continental will rely upon this Guarantee in entering into
      the
      CPA and the Ancillary Agreements.

     

    
      
        
        

      

      
        -97-

        
          

        

      

      
        
        

      

    

    Section
      3.11  Notices.
      Unless
      otherwise expressly permitted by the terms of this Guarantee, all notices,
      consents, approvals and other communications required or permitted hereunder
      shall be in writing and shall be deemed to have been properly given if delivered
      by hand personally to the addressee or sent overnight by a nationally recognized
      air courier, and

     

    If
      directed to Guarantor, addressed to:

    Republic
      Airways Holdings Inc.

    8909
      Purdue Road, Suite 300

    Indianapolis,
      IN 46268

    Attention:
      President and Chief Executive Officer

    Telecopy
      No.: 317-484-4547

    

    with
      a copy to:

    

    Arthur
      H.
      Amron

    Wexford
      Capital LLC

    411
      West
      Putnam Avenue

    Greenwich,
      CT 06830

    Telecopy
      No.: 203-862-7312

    

    If
      directed to Continental, addressed to:

    Continental
      Airlines, Inc.

    1600
      Smith Street, HQSCD

    Houston,
      Texas 77002

    Attention:
      Senior Vice President - Corporate Development

    Telecopy
      No.: (713) 324-8601

    

    with
      a copy to:

    Continental
      Airlines, Inc.

    1600
      Smith Street, HQSLG

    Houston,
      Texas 77002

    Attention:
      General Counsel

    Telecopy
      No.: (713) 324-5082

    

    and
      to:

    

    Continental
      Airlines, Inc.

    1600
      Smith Street, HQSFP

    Houston,
      Texas 77002

    Attention:
      Staff Vice President - Financial Planning

    Telecopy
      No.: (713) 324-5225

    

    or
      to
      such other address as last designated by a party by notice in writing to the
      other party hereto.

    Section
      3.12  Waiver
      of Jury Trial. Guarantor
      and Continental each hereby knowingly, voluntarily and intentionally waive
      the
      right to a trial by jury in respect of any litigation based hereon, arising
      out
      of, under or in connection with this Guarantee. This waiver is a material
      inducement for Guarantor to deliver and Continental to accept this
      Guarantee.

     

    Section
      3.13  Drafting
      of Guarantee. Guarantor
      represents and warrants that (i) it was represented by counsel of its choice,
      who has reviewed this Guarantee and advised it of the contents and meaning;
      (ii)
      it is signing this Guarantee voluntarily and with full understanding of its
      contents and meaning; (iii) it waives any claim or defense that this Guarantee
      should be construed more strictly against the other party as the drafter
      thereof.

     

    Section
      3.14  Severability.
      If
      any
      provision of this Guarantee or its application to any Person or circumstance
      is
      held invalid or unenforceable to any extent, the remainder of this Guarantee
      and
      the application of that provision to other Persons or circumstances is not
      affected in that provision shall be enforced to the greatest extent permitted
      by
      law.

     

    Section
      3.15  Further
      Assurances. In
      connection with this Guarantee and the transactions contemplated by it,
      Guarantor shall execute and deliver any additional documents and instruments
      and
      perform any additional acts that may be necessary or appropriate to effectuate
      and perform the provisions of this Guarantee and those
      transactions.

     

    Section
      3.16  Multiple
      Counterparts. This
      Guarantee may be executed in any number of counterparts and with the same effect
      as if all signing parties had signed the same document. All counterparts shall
      be construed together and constitute the same instrument.

     

    
      
        
        

      

      
        -98-

        
          

        

      

      
        
        

      

    

     

     

     

    EXECUTED
      as of the Effective Date.

    
      	 	 	 
	 	GUARANTOR:
	 
 	 
 	 
 
	
            	By:  	/s/ 
Bryan
              Bedford
	 	
              
Name:
              Bryan Bedford
	 	Title:
              Chairman, President and CEO

    

    
      
        
        

      

      
        -99-Exhibit 10.185

                              STANDARD DEFINITIONS

            "50/50  Loan"  shall mean a  Timeshare  Loan where the  Obligor  has
elected to make a down payment equal to at least 50% of the total purchase price
of the Timeshare  Property or Timeshare  Properties  with the remaining  balance
(together  with  interest)  due within one year of the  origination  date,  such
balance to be paid either in 12 monthly amortizing installments of principal and
interest or all principal and interest due in a lump sum payment on the one year
anniversary of the origination of the Timeshare Loan.

            "ACH  Form"  shall  mean  the ACH  authorization  form  executed  by
Obligors  substantially  in the form  attached  as Exhibit C to each of the Sale
Agreement, the Transfer Agreement and the Bluegreen Purchase Agreement.

            "Act"  shall  have  the  meaning  specified  in  Section  1.4 of the
Indenture.

            "Additional Servicing Compensation" shall mean any late fees related
to late payments on the Timeshare  Loans,  any  non-sufficient  funds fees,  any
processing  fees,  any  Liquidation  Expenses  collected by the Servicer and any
unpaid  out-of-pocket  expenses  incurred by the Servicer during the related Due
Period.

            "Adjusted  Note Balance"  shall equal,  for any Class of Notes,  the
Outstanding  Note  Balance  of such  Class  of Notes  immediately  prior to such
Payment Date, less any Note Balance  Write-Down  Amounts  previously  applied in
respect  of such  Class of Notes;  provided,  however,  to the  extent  that for
purposes of consents, approvals, voting or other similar acts of the Noteholders
under any of the  Transaction  Documents,  "Adjusted Note Balance" shall exclude
Notes which are held by Bluegreen or any Affiliate thereof.

            "Administration  Agreement" shall mean the administration agreement,
dated as of  September  15,  2006,  by and  among the  Administrator,  the Owner
Trustee,  the Issuer and the Indenture Trustee,  as amended from time to time in
accordance with the terms thereof.

            "Administrator"  shall mean  Bluegreen  or any  successor  under the
Administration Agreement.

            "Administrator Fee" shall equal on each Payment Date an amount equal
to the product of (i)  one-twelfth  and (ii) (A) if  Bluegreen  or an  affiliate
thereof is the  Administrator,  $1,000.00 and (B) if Wilmington Trust Company is
the Administrator, $20,000.00.

            "Adverse  Claim"  shall  mean any  claim of  ownership  or any lien,
security  interest,  title retention,  trust or other charge or encumbrance,  or
other type of preferential  arrangement having the effect or purpose of creating
a lien or  security  interest,  other  than  the  interests  created  under  the
Indenture or any other  Transaction  Document in favor of the Indenture  Trustee
and the Noteholders.

<PAGE>

            "Affiliate" shall mean any Person:  (a) which directly or indirectly
controls,  or is controlled by, or is under common control with such Person; (b)
which  directly or  indirectly  beneficially  owns or holds five percent (5%) or
more of the voting stock of such  Person;  or (c) for which five percent (5%) or
more of the voting stock of which is directly or indirectly  beneficially  owned
or held by such Person; provided, however, that under no circumstances shall (i)
the Owner  Trustee be deemed to be an Affiliate of the Issuer,  the Depositor or
the Trust  Owner,  nor shall any of such parties be deemed to be an Affiliate of
the Owner Trustee or (ii)  Bluegreen be deemed an Affiliate of any 5% or greater
shareholder  of Bluegreen  or any  Affiliate  of such  shareholder  who is not a
Direct  Affiliate  (as  defined  herein)  of  Bluegreen,   nor  shall  any  such
shareholder be deemed to be an Affiliate of Bluegreen.  The term "control" means
the  possession,  directly  or  indirectly,  of the power to direct or cause the
direction  of the  management  and  policies  of a Person,  whether  through the
ownership of voting securities,  by contract or otherwise.  For purposes of this
definition,  any  entity  included  in  the  same  GAAP  consolidated  financial
statements  as  Bluegreen   shall  be  an  Affiliate  of  Bluegreen  (a  "Direct
Affiliate").

            "Aggregate  Closing Date  Collateral  Balance" is an amount equal to
$153,000,000.

            "Aggregate  Initial Note Balance" is equal to the sum of the Initial
Note Balances for all Classes of Notes.

            "Aggregate  Loan Balance" means the sum of the Loan Balances for all
Timeshare Loans (other than Defaulted Timeshare Loans).

            "Aggregate  Outstanding  Note  Balance"  is  equal to the sum of the
Outstanding Note Balances for all Classes of Notes.

            "Aruba Club Loans" shall mean all timeshare loans  originated by the
Aruba  Originator  on or after  January 26, 2004 each  secured by Co-op  Shares,
which  entitle  the owner  thereof  to use and  occupy a fixed Unit at La Cabana
Resort.

            "Aruba Loans" shall mean, collectively, the Aruba Club Loans and the
Aruba Non-Club Loans.

            "Aruba Non-Club Loans" shall mean timeshare loans  originated by the
Aruba  Originator  prior to  January  26,  2004,  each  evidenced  by a  Finance
Agreement for the purchase of Co-op Shares.

            "Aruba Originator" shall mean Bluegreen  Properties,  N.V., an Aruba
corporation.

            "Assignment of Mortgage"  shall mean,  with respect to a Deeded Club
Loan, a written  assignment of one or more Mortgages from the related Originator
or Seller to the Indenture Trustee, for the benefit of the Noteholders, relating
to one or more Timeshare  Loans in recordable  form, and signed by an Authorized
Officer of all necessary parties,  sufficient under the laws of the jurisdiction
wherein the  related  Timeshare  Property is located to give record  notice of a
transfer of such Mortgage and its proceeds to the Indenture Trustee.

                                     - 2 -
<PAGE>

            "Association"   shall  mean  the   not-for-profit   corporation   or
cooperative association responsible for operating a Resort.

            "Assumption  Date"  shall have the meaning  specified  in the Backup
Servicing Agreement.

            "Authorized  Officer" shall mean,  with respect to any  corporation,
limited  liability  company or  partnership,  the  Chairman  of the  Board,  the
President,  any Vice  President,  the Secretary,  the  Treasurer,  any Assistant
Secretary,  any Assistant  Treasurer,  Managing Member and each other officer of
such  corporation or limited  liability  company or the general  partner of such
partnership  specifically authorized in resolutions of the Board of Directors of
such  corporation or managing member of such limited  liability  company to sign
agreements,  instruments or other  documents in connection with the Indenture on
behalf of such corporation,  limited  liability  company or partnership,  as the
case may be.

            "Available  Funds" shall mean for any Payment Date, (A) all funds on
deposit in the  Collection  Account  after  making all  transfers,  deposits  or
payments from (i) the Lockbox Account  pursuant to the Lockbox  Agreement,  (ii)
the General Reserve Account  pursuant to Section 3.2(b) of the Indenture,  (iii)
the Prefunding  Account  pursuant to Section  3.2(c) of the Indenture,  (iv) the
Capitalized Interest Account pursuant to Section 3.2(d) of the Indenture (v) the
Club Originator or the Depositor, as the case may be, pursuant to Section 4.6 of
the Indenture,  and (vi) the Servicer  pursuant to the  Indenture,  plus (B) all
investment  earnings  on funds on deposit  in the  Collection  Account  from the
immediately  preceding  Payment Date through such Payment Date, if any, less (C)
amounts on deposit in the Collection  Account related to collections  related to
any Due Periods  subsequent to the Due Period related to such Payment Date, less
(D) any Additional Servicing  Compensation on deposit in the Collection Account,
less  (E)  Misdirected  Deposits,  if  any.   Notwithstanding  anything  in  the
Transaction  Documents  to the  contrary,  Available  Funds  shall only  include
amounts described in the foregoing sentence and not amounts otherwise  deposited
voluntarily by Blugreeen or any of its Affiliates.

            "Backup  Servicer"  shall mean  Concord  Servicing  Corporation,  an
Arizona corporation, and its permitted successors and assigns.

            "Backup  Servicing   Agreement"  shall  mean  the  backup  servicing
agreement,  dated as of  September  15,  2006,  by and  among  the  Issuer,  the
Depositor,  the Servicer,  the Backup Servicer and the Indenture Trustee, as the
same may be amended, supplemented or otherwise modified from time to time.

            "Backup  Servicing  Fee"  shall  on each  Payment  Date  (so long as
Concord Servicing Corporation is the Backup Servicer), be equal to:

            (A) prior to the removal or resignation  of Bluegreen,  as Servicer,
the greater of (i)  $1,000.00  and (ii) the product of (1)(x)  $0.10 and (y) the
number of  Timeshare  Loans in the Trust  Estate at the end of the  related  Due
Period up to 20,000 and (2)(x)  $0.075 and (y) the number of Timeshare  Loans in
the Trust Estate at the end of the related Due Period in excess of 20,000, and

                                     - 3 -
<PAGE>

            (B) after the removal or resignation of Bluegreen,  as Servicer,  an
amount equal to the product of (i)  one-twelfth  of 1.50% and (ii) the aggregate
Loan Balance as of the first day of the related Due Period.

            "Bankruptcy Code" shall mean the federal Bankruptcy Code, as amended
(Title 11 of the United States Code).

            "Beneficiary" shall be as defined in the Club Trust Agreement.

            "Benefit  Plan" shall mean an "employee  benefit plan" as defined in
Section 3(3) of ERISA,  or any other "plan" as defined in Section  4975(e)(1) of
the Code,  that is subject to the  prohibited  transaction  rules of ERISA or of
Section  4975 of the  Code or any  plan  that is  subject  to any  substantially
similar provision of federal, state or local law.

            "Bluegreen"  shall  mean  Bluegreen  Corporation,   a  Massachusetts
corporation, and its permitted successors and assigns.

            "Bluegreen  Owned  Resorts"  shall mean a Resort in which  Bluegreen
acquired or developed a significant number of the vacation  ownership  interests
associated  with the  Resort,  even if  Bluegreen  no  longer  owns  substantial
vacation  ownership  interests in the Resort and includes the following resorts:
Casa del Mar Resort,  Daytona  SeaBreeze(TM),  The Fountains  (f/k/a Oasis Lakes
Resort),  Grande  VillasTM at World Golf  Village(R),  The  Hammocks at Marathon
Resort(TM),  Orlando's Sunshine Resort(TM), Solara Surfside(TM) Resort, Mountain
Run at BoyneTM, The Falls VillageTM Resort, The Suites at Hershey(TM),  Carolina
Grande(TM),  Harbour  LightsTM  Resort,  The Lodge  Alley  Inn(TM),  Shore Crest
Vacation  VillasTM,  Laurel CrestTM Resort,  MountainLoftTM  Resort,  Shenandoah
CrossingTM, Christmas Mountain VillageTM and La Cabana Resort.

            "Bluegreen   Purchase   Agreement"   shall  mean  the  purchase  and
contribution  agreement,  dated  as of  September  15,  2006,  between  the Club
Originator  and the  Depositor  pursuant  to  which  the Club  Originator  sells
Timeshare  Loans to the Depositor on the Closing Date and during the  Prefunding
Period.

            "Book-Entry  Note"  shall mean a  beneficial  interest in the Notes,
ownership  and  transfers  of which shall be made  through  book-entries  by the
Depository.

            "Boyne  Resort" shall mean the Resort  located in Michigan  known as
Mountain Run at Boyne(TM).

            "Business  Day"  shall  mean any day other  than (i) a  Saturday,  a
Sunday,  or  (ii)  a day  on  which  banking  institutions  in  New  York  City,
Wilmington,  Delaware,  the State of Florida,  the city in which the Servicer is
located or the city in which the Corporate Trust Office of the Indenture Trustee
is located, are authorized or obligated by law or executive order to be closed.

            "BXG  Timeshare  I" shall  mean BXG  Timeshare  Trust I, a  Delaware
statutory trust.

                                     - 4 -
<PAGE>

            "Capitalized  Interest Account" shall mean the account maintained by
the Indenture Trustee pursuant to Section 3.2(d) of the Indenture.

            "Capitalized   Interest   Account   Initial   Deposit"  shall  equal
$550,391.14.

            "Capitalized Interest Requirement" shall mean for each Determination
Date  during  the  Prefunding  Period,  an amount  equal to the  product  of (i)
one-twelfth  of the weighted  average Note Rates of each Class of Notes and (ii)
the amount on deposit in the Prefunding Account.

            "Casa del Mar Resort" shall mean the Resort located in Florida known
as Casa del Mar Beach Resort.

            "Cede & Co." shall mean the initial  registered holder of the Notes,
acting as nominee of The Depository Trust Company.

            "Certificate"  shall mean a Trust Certificate or a Residual Interest
Certificate, as applicable.

            "Certificate  Distribution Account" shall have the meaning specified
in Section 5.01 of the Trust Agreement.

            "Certificate  of Trust" shall mean the  Certificate  of Trust in the
form attached as Exhibit A to the Trust Agreement.

            "Certificateholders" shall mean the holders of the Certificates.

            "Class" shall mean,  as the context may require,  any of the Class A
Notes,  the Class B Notes,  the Class C Notes, the Class D, the Class E Notes or
the Class F Notes.

            "Class A Notes" shall have the meaning  specified in the Recitals of
the Issuer in the Indenture.

            "Class B Notes" shall have the meaning  specified in the Recitals of
the Issuer in the Indenture.

            "Class C Notes" shall have the meaning  specified in the Recitals of
the Issuer in the Indenture.

            "Class D Notes" shall have the meaning  specified in the Recitals of
the Issuer in the Indenture.

            "Class E Notes" shall have the meaning  specified in the Recitals of
the Issuer in the Indenture.

            "Class F Notes" shall have the meaning  specified in the Recitals of
the Issuer in the Indenture.

                                     - 5 -
<PAGE>

            "Closing Date" shall mean September 21, 2006.

            "Club" shall mean Bluegreen Vacation Club Trust,  formed pursuant to
the Club Trust Agreement, doing business as Bluegreen Vacation Club.

            "Club  Loans"  means,  collectively,  the Deeded  Club Loans and the
Aruba Club Loans.

            "Club  Management  Agreement"  shall mean that  certain  Amended and
Restated  Management  Agreement  between the Club  Managing  Entity and the Club
Trustee, dated as of May 18, 1994, as amended from time to time.

            "Club  Managing  Entity" shall mean  Bluegreen  Resorts  Management,
Inc., a Delaware  corporation,  in its capacity as manager of the Club and owner
of the Club's reservation system, and its permitted successors and assigns.

            "Club  Originator"  shall  mean  Bluegreen,  in its  capacity  as an
Originator.

            "Club Property" shall mean Timeshare  Properties,  Owner Beneficiary
Rights and Vacation Points.

            "Club  Trust  Agreement"  shall  mean,  collectively,  that  certain
Bluegreen  Vacation  Club  Trust  Agreement,  dated as of May 18,  1994,  by and
between the Developer and the Club  Trustee,  as amended,  restated or otherwise
modified from time to time,  together with all other  agreements,  documents and
instruments governing the operation of the Club.

            "Club   Trustee"  shall  mean  Vacation   Trust,   Inc.,  a  Florida
corporation,  in its capacity as trustee under the Club Trust Agreement, and its
permitted successors and assigns.

            "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time and any successor statute,  together with the rules and regulations
thereunder.

            "Collection   Account"  shall  mean  the  account   established  and
maintained by the Indenture Trustee pursuant to Section 3.2(a) of the Indenture.

            "Collection  Policy"  shall  mean  the  collection  policies  of the
initial  servicer  in effect on the  Closing  Date  attached as Exhibit K to the
Indenture,  as may be amended from time to time in accordance with the Servicing
Standard

            "Completed  Unit" shall mean a Unit at a Resort which has been fully
constructed  and  furnished,  has  received  a valid  permanent  certificate  of
occupancy, is ready for occupancy and is subject to a time share declaration.

            "Confidential   Information"  means  information   obtained  by  any
Noteholder including,  without limitation, the Preliminary Confidential Offering
Circular dated  September 6, 2006 or the  Confidential  Offering  Circular dated
September 13, 2006 related to the Notes and the Transaction  Documents,  that is
proprietary in nature and that was clearly marked or labeled as

                                     - 6 -
<PAGE>

being confidential  information of the Issuer, the Servicer or their Affiliates,
provided that such term does not include information that (a) was publicly known
or otherwise known to the Noteholder prior to the time of such  disclosure,  (b)
subsequently  becomes  publicly  known  through  no  act  or  omission  by  such
Noteholder  or any Person acting on its behalf,  (c) otherwise  becomes known to
the  Noteholder  other than through  disclosure  by the Issuer,  the Servicer or
their Affiliates or (d) any other public disclosure  authorized by the Issuer or
the Servicer.

            "Continued  Errors" shall have the meaning  specified in Section 5.4
of the Indenture.

            "Co-op  Shares"  shall  mean  a  share  certificate  issued  by  the
timeshare cooperative  association of La Cabana Resort, which entitles the owner
thereof the right to use and occupy a fixed Unit at a fixed period of time at La
Cabana Resort.

            "Corporate  Trust  Office"  shall mean the  office of the  Indenture
Trustee  located in the State of  Minnesota,  which office is at the address set
forth in Section 13.3 of the Indenture.

            "Credit Card Account" shall mean the deposit account (account number
008981708368)  established  at the Lockbox Bank,  which shall be a  non-interest
bearing account.

            "Credit Card  Timeshare  Loan" shall mean a Timeshare Loan where the
Obligor makes its payments due on such  Timeshare  Loan with credit card payment
arrangements.

            "Credit Policy" shall mean the credit and  underwriting  policies of
the  Originators  in effect on the  Closing  Date  attached  as Exhibit C to the
Indenture.

            "Custodial  Agreement" shall mean the custodial agreement,  dated as
of September 15, 2006 by and among the Issuer, the Depositor,  the Servicer, the
Backup  Servicer,  and the Indenture  Trustee and Custodian,  as the same may be
amended,  supplemented or otherwise modified from time to time providing for the
custody  and  maintenance  of  the  Timeshare  Loan  Documents  relating  to the
Timeshare Loans.

            "Custodian"  shall mean U.S. Bank National  Association,  a national
banking association, or its permitted successors and assigns.

            "Custodian's  Certification"  shall have the  meaning  specified  in
Section 2.2(a) of the Custodial Agreement.

            "Custodian  Fees" shall mean for each Payment Date,  the fee payable
by the Issuer to the Custodian in accordance with the Custodial Agreement.

            "Cut-Off Date" shall mean, with respect to (i) the Initial Timeshare
Loans,  the Initial  Cut-Off Date, and (ii) any Qualified  Substitute  Timeshare
Loan or Subsequent Timeshare Loan, the related Subsequent Cut-Off Date.

            "Cut-Off  Date  Loan  Balance"  shall  mean  the Loan  Balance  of a
Timeshare Loan on its related Cut-Off Date.

                                     - 7 -
<PAGE>

            "Deeded  Club Loan" shall mean a Timeshare  Loan  originated  by the
Club Originator and evidenced by a Mortgage Note and secured by a first Mortgage
on a fractional fee simple timeshare interest in a Unit or an undivided interest
in a Resort associated with a Unit.

            "Default"  shall mean an event  which,  but for the passage of time,
would constitute an Event of Default under the Indenture.

            "Default  Level" shall mean for any Due Period,  the aggregate  Loan
Balance  (without regard to recoveries) of Timeshare Loans that became Defaulted
Timeshare Loans during such Due Period and not repurchased or substituted by the
last day of such Due Period (less the Loan Balances of Defaulted Timeshare Loans
that subsequently  became current during such Due Period which are still subject
to the Lien of the Indenture at such time) divided by the Aggregate Loan Balance
on the first day of such Due Period, expressed as a percentage.

            "Defaulted  Timeshare  Loan" is any Timeshare  Loan for which any of
the  following  events  may  have  occurred:  (i)  the  Servicer  has  commenced
cancellation  or termination or deletion  actions on the related  Timeshare Loan
after  collection  efforts  have  failed  in  accordance  with  its  credit  and
collection policies, (ii) as of the last day of any Due Period, all or part of a
scheduled payment under the Timeshare Loan is more than 120 days delinquent from
the due date,  or (iii) the related  Timeshare  Loan  otherwise  ceases to be an
Eligible Timeshare Loan.

            "Defective  Timeshare  Loan"  shall have the  meaning  specified  in
Section 4.6 of the Indenture.

            "Deferred  Interest  Amount" shall mean,  with respect to a Class of
Notes and a Payment  Date,  the sum of (i) interest  accrued at the related Note
Rate during the related Interest Accrual Period on such Note Balance  Write-Down
Amounts applied in respect of such Class and (ii) any unpaid  Deferred  Interest
Amounts from any prior  Payment  Date,  together  with  interest  thereon at the
applicable Note Rate from the date any such Note Balance  Write-Down  Amount was
applied in respect of such Class, to the extent permitted by law.

            "Definitive Note" shall have the meaning specified in Section 2.2 of
the Indenture.

            "Delinquency  Level"  shall mean for any Due Period,  the sum of the
Loan Balances of Timeshare Loans (other than Defaulted Timeshare Loans) that are
61 days or more  delinquent  on the last day of such Due  Period  divided by the
Aggregate  Loan  Balance  on the first day of such Due  Period  (expressed  as a
percentage).

            "Depositor"  shall mean Bluegreen  Receivables  Finance  Corporation
XII, a Delaware Corporation, and its permitted successors and assigns.

            "Depository"  shall mean an  organization  registered as a "clearing
agency"  pursuant  to Section 17A of the  Securities  Exchange  Act of 1934,  as
amended. The initial Depository shall be The Depository Trust Company.

                                     - 8 -
<PAGE>

            "Depository  Agreement"  shall  mean the  letter of  representations
dated as of September 21, 2006, by and among the Issuer,  the Indenture  Trustee
and the Depository.

            "Depository  Participant"  shall mean a securities broker or dealer,
bank, trust company, clearing corporation,  other financial institution or other
Person for whom from time to time a Depository  directly or  indirectly  effects
book-entry transfers and pledges securities deposited with the Depository.

            "Determination  Date" shall mean,  with respect to any Payment Date,
the day that is five Business Days prior to such Payment Date.

            "Developer"  shall  mean  Bluegreen  Vacations  Unlimited,  Inc.,  a
Florida corporation, and its permitted successors and assigns.

            "DTC" shall mean The  Depository  Trust  Company,  and its permitted
successors and assigns.

            "Due Period" shall mean with respect to any Payment Date, the period
from the 16th day of the second preceding  calendar month to the 15th day of the
preceding  calendar month.  The initial Due Period for the Initial Payment Date,
shall be the period from and including September 16, 2006 to October 15, 2006.

            "Early  Amortization  Event" shall occur on a Determination  Date if
the average of the Default  Levels for the last three Due Periods  exceeds 0.60%
and shall  continue  until the Default  Level is equal to or less than 0.60% for
three consecutive Due Periods.

            "Eligible Bank Account" shall mean a segregated  account,  which may
be an  account  maintained  by  the  Indenture  Trustee,  which  is  either  (a)
maintained  with a  depositary  institution  or trust  company  whose  long-term
unsecured debt  obligations  are rated at least "A" by Fitch and "A2" by Moody's
and whose short-term unsecured obligations are rated at least "A-1" by Fitch and
"P-1" by Moody's;  or (b) a trust account or similar  account  maintained at the
corporate trust department of the Indenture  Trustee held in the name of and for
the benefit of the Noteholders.

            "Eligible Investments" shall mean one or more of the following:

                  (a)  obligations  of, or  guaranteed  as to timely  payment of
            principal  and  interest  by,  the  United  States or any  agency or
            instrumentality thereof when such obligations are backed by the full
            faith and credit of the United States;

                  (b) federal funds,  certificates of deposit, time deposits and
            bankers'  acceptances,  each of which  shall  not  have an  original
            maturity  of more than 90 days,  of any  depository  institution  or
            trust  company  incorporated  under the laws of the United States or
            any state; provided that the long-term unsecured debt obligations of
            such  depository  institution  or  trust  company  at  the  date  of
            acquisition  thereof have been rated by each Rating Agency in one of
            the three highest rating categories  available from S&P and no lower
            than A2 by Moody's;

                                     - 9 -
<PAGE>

            and  provided,  further,  that the  short-term  obligations  of such
            depository  institution  or  trust  company  shall  be  rated in the
            highest rating category by such Rating Agency;

                  (c)  commercial   paper  or  commercial  paper  funds  (having
            original  maturities  of not more  than 90 days) of any  corporation
            incorporated  under  the  laws of the  United  States  or any  state
            thereof; provided that any such commercial paper or commercial paper
            funds shall be rated in the highest  short-term  rating  category by
            each Rating Agency;

                  (d) any  no-load  money  market  fund rated  (including  money
            market  funds  managed  or advised  by the  Indenture  Trustee or an
            Affiliate  thereof) in the  highest  short-term  rating  category or
            equivalent  highest long-term rating category by each Rating Agency;
            provided  that,  Eligible  Investments  purchased  from funds in the
            Eligible  Bank  Accounts  shall  include  only such  obligations  or
            securities that either may be redeemed daily or mature no later than
            the Business Day next preceding the next Payment Date; or

                  (e) demand and time deposits in,  certificates  of deposit of,
            bankers'  acceptances  issued  by,  or  federal  funds  sold  by any
            depository  institution  or trust company  (including  the Indenture
            Trustee or any  Affiliate of the  Indenture  Trustee,  acting in its
            commercial  capacity)  incorporated  under  the  laws of the  United
            States of America or any State  thereof and  subject to  supervision
            and examination by federal and/or state authorities,  so long as, at
            the  time  of  such  investment,   the  commercial  paper  or  other
            short-term deposits of such depository  institution or trust company
            are rated at least P-1 by Moody's and at least A-1 by S&P;

and provided, further, that (i) no instrument shall be an Eligible Investment if
such instrument evidences a right to receive only interest payments with respect
to the obligations  underlying such instrument,  and (ii) no Eligible Investment
may be purchased at a price in excess of par.  Eligible  Investments may include
those  Eligible  Investments  with respect to which the Indenture  Trustee or an
Affiliate thereof provides services.

            "Eligible Owner Trustee" shall have the meaning specified in Section
10.01 of the Trust Agreement.

            "Eligible  Timeshare  Loan" shall mean a Timeshare  Loan which meets
all of the criteria set forth in Schedule I of the Sale Agreement.

            "Equity" shall mean the "Total  Shareholder's  Equity"  specified in
Bluegreen's  Consolidated  Balance Sheet as reported in Bluegreen's  most recent
filing with the Securities and Exchange Commission.

            "ERISA" shall mean the Employee  Retirement  Income  Security Act of
1974, as amended.

                                     - 10 -
<PAGE>

            "Errors"  shall have the  meaning  specified  in Section  5.4 of the
Indenture.

            "Event of Default"  shall have the meaning  specified in Section 6.1
of the Indenture.

            "Finance  Agreement"  shall mean a purchase  and  finance  agreement
between an  Obligor  and the Aruba  Originator  pursuant  to which such  Obligor
finances the purchase of Co-op Shares.

            "Force Majeure  Delay" shall mean with respect to the Servicer,  any
cause or event which is beyond the control and not due to the  negligence of the
Servicer,  which delays,  prevents or prohibits  such  Person's  delivery of the
reports  required  to be  delivered  or the  performance  of any  other  duty or
obligation of the Servicer under the Indenture,  as the case may be,  including,
without limitation, computer, electrical and mechanical failures, acts of God or
the elements and fire; provided,  that no such cause or event shall be deemed to
be a Force  Majeure  Delay  unless the Servicer  shall have given the  Indenture
Trustee  written notice  thereof as soon as  practicable  after the beginning of
such delay.

            "Foreclosure Properties" shall have the meaning specified in Section
5.3(a)(xiii) of the Indenture.

            "GAAP" shall mean  generally  accepted  accounting  principles as in
effect from time to time in the United States of America.

            "General Reserve  Account" shall mean the account  maintained by the
Indenture Trustee pursuant to Section 3.2(b) of the Indenture.

            "General Reserve Account Initial Deposit" shall mean an amount equal
to 1.00% of the Aggregate Closing Date Collateral Balance.

            "General  Reserve Account  Required  Balance" shall equal,  for each
Payment Date, the greater of (i) 1.50% of the Aggregate  Closing Date Collateral
Balance and (ii) the Target Amount;  provided,  however,  that in no event shall
the General  Reserve Account  Required  Balance equal an amount greater than the
Aggregate  Outstanding  Note Balance as of such Payment Date  regardless of what
the  Target  Amount  or the  General  Reserve  Account  Required  Balance  would
otherwise be.

            "Global Note" shall have the meaning specified in Section 2.2 of the
Indenture.

            "Governmental  Authority"  shall mean any nation or government,  any
state  or  other  political   subdivision  thereof  and  any  entity  exercising
executive,  legislative,  judicial, regulatory or administrative functions of or
pertaining to government.

            "Grant"  shall mean to grant,  bargain,  convey,  assign,  transfer,
mortgage,  pledge,  create and grant a security interest in and right of set-off
against, deposit, set over and confirm.

                                     - 11 -
<PAGE>

            "Highest Lawful Rate" shall have the meaning  specified in Section 3
of the Sale Agreement.

            "II" shall mean Interval International, Inc.

            "Indenture"  shall mean the  indenture,  dated as of  September  15,
2006,  by and among the  Issuer,  the Club  Trustee,  the  Servicer,  the Backup
Servicer and the Indenture Trustee.

            "Indenture  Trustee"  shall mean U.S. Bank National  Association,  a
national  banking  association,  not in its  individual  capacity  but solely as
Indenture Trustee under the Indenture, and any successor as set forth in Section
7.9 of the Indenture.

            "Indenture Trustee Fee" shall mean for each Payment Date, the sum of
(A) $875.00  and (B) until the  Indenture  Trustee  shall  become the  successor
Servicer,  the  greater of (i) the  product of  one-twelfth  of 0.0175%  and the
Aggregate  Loan  Balance as of the first day of the  related Due Period and (ii)
$1,500.00.

            "Initial Cut-Off Date" shall mean the close of business on September
15, 2006.

            "Initial Note Balance" shall mean with respect to the Class A Notes,
the Class B Notes,  the Class C Notes,  the Class D Notes, the Class E Notes and
the  Class  F  Notes,  $51,561,000,   $21,879,000,   $22,338,000,   $24,480,000,
$11,475,000 and $7,497,000, respectively.

            "Initial  Payment  Date" shall mean the Payment  Date  occurring  in
November 2006.

            "Initial  Purchaser" shall mean BB&T Capital Markets,  a division of
Scott & Stringfellow, Inc.

            "Initial  Timeshare  Loans" shall mean the Timeshare Loans listed on
the  Schedule  of  Timeshare  Loans  purchased  by the Issuer and pledged to the
Indenture Trustee on the Closing Date.

            "Intended Tax Characterization"  shall have the meaning specified in
Section 4.2(b) of the Indenture.

            "Interest Accrual Period" shall mean with respect to (i) any Payment
Date other than the Initial  Payment  Date,  the period from the 16th day of the
second preceding  calendar month to the 15th day of the preceding calendar month
and (ii) the Initial  Payment  Date,  the period from and  including the Closing
Date through October 15, 2006.

            "Interest Distribution Amount" shall equal, for a Class of Notes and
on any Payment Date, the sum of (i) interest accrued during the related Interest
Accrual Period at the related Note Rate on the Outstanding  Note Balance of such
Class of Notes  immediately  prior to such Payment Date (or, if any Note Balance
Write-Down  Amounts have been applied to such Class of Notes,  the Adjusted Note
Balance of such Class of Notes) and (ii) the amount of unpaid

                                     - 12 -
<PAGE>

Interest  Distribution Amounts from prior Payment Dates for such Class of Notes,
plus, to the extent permitted by applicable law,  interest on such unpaid amount
at the related Note Rate. The Interest  Distribution  Amount shall be calculated
on the basis of a 360-day year consisting of twelve 30-day months.

            "Issuer" shall mean BXG Receivables  Note Trust 2006-B,  a statutory
trust  formed  under the laws of the  State of  Delaware  pursuant  to the Trust
Agreement.

            "Issuer  Order" shall mean a written  order or request  delivered to
the  Indenture  Trustee  and signed in the name of the  Issuer by an  Authorized
Officer of the Issuer or Administrator.

            "Knowledge"  shall  mean (a) as to any  natural  Person,  the actual
awareness of the fact, event or circumstance at issue or receipt of notification
by proper delivery of such fact,  event or circumstance and (b) as to any Person
that is not a  natural  Person,  the  actual  awareness  of the  fact,  event or
circumstance at issue by a Responsible  Officer of such Person or receipt,  by a
Responsible  Officer of such Person,  of notification by proper delivery of such
fact, event or circumstance.

            "La Cabana  Resort" shall mean the Resort  located in Aruba known as
the La Cabana Beach Resort and Racquet Club.

            "Lien" shall mean any mortgage,  pledge,  hypothecation,  assignment
for security, security interest, claim, participation,  encumbrance,  levy, lien
or charge.

            "Liquidation"  means with respect to any Timeshare Loan, the sale or
compulsory  disposition  of  a  Foreclosure  Property,   following  foreclosure,
termination  or other  enforcement  action or the  taking of a  deed-in-lieu  of
foreclosure, to a Person other than the Servicer or an Affiliate thereof.

            "Liquidation  Expenses"  shall mean, with respect to the Foreclosure
Property related to a Defaulted Timeshare Loan, as of any date of determination,
any reasonable  out-of-pocket expenses (exclusive of overhead expenses) incurred
by the Servicer or the  Remarketing  Agent in connection with the performance of
its obligations  under Section  5.3(a)(xiii) in the Indenture or the Remarketing
Agreement,  as applicable,  including,  but not limited to, (i) any foreclosure,
deed-in-lieu  of  foreclosure  or termination  and other  repossession  expenses
incurred  with  respect  to such  Foreclosure  Property,  (ii)  commissions  and
marketing and sales expenses  incurred by the Servicer or the Remarketing  Agent
with respect to the remarketing of the related  Foreclosure  Property (including
the Remarketing Fee), and (iii) any other fees and expenses  reasonably  applied
or allocated in the ordinary  course of business with respect to the Liquidation
of a Foreclosure  Property  (including any assessed and unpaid  Association fees
and real estate taxes).

            "Liquidation  Proceeds" means with respect to the Liquidation of any
Foreclosure Property related to a Defaulted Timeshare Loan, the amounts actually
received  by the  Servicer  or the  Remarketing  Agent in  connection  with such
Liquidation.

                                     - 13 -
<PAGE>

            "Loan  Balance"  shall  mean,  for any  date of  determination,  the
outstanding  principal  balance  due under or in  respect  of a  Timeshare  Loan
(including a Defaulted Timeshare Loan).

            "Lockbox  Account" shall mean the deposit account  maintained at the
Lockbox Bank pursuant to the Lockbox  Agreement,  which shall be a  non-interest
bearing account.

            "Lockbox   Agreement"   shall  mean  the  deposit   account  control
agreement,  dated as of  September  15,  2006,  by and  among  the  Issuer,  the
Indenture Trustee and the Lockbox Bank.

            "Lockbox Bank" shall mean Bank of America, N.A.

            "Lockbox  Fee" shall mean on each Payment  Date,  the fee payable by
the Issuer to the Lockbox Bank in accordance with the Lockbox Agreement.

            "Misdirected  Deposits"  shall  mean  such  payments  that have been
deposited to the Collection Account in error.

            "Monthly  Servicer  Report"  shall  have the  meaning  specified  in
Section 5.5 of the Indenture.

            "Moody's" shall mean Moody's Investors Service, Inc.

            "Mortgage"  shall  mean,  with  respect to a Deeded  Club Loan,  any
purchase money mortgage, deed of trust, purchase money deed of trust or mortgage
deed creating a first lien on a Timeshare Property to secure debt granted by the
Club Trustee on behalf of an Obligor to the Club  Originator with respect to the
purchase of such Timeshare  Property and/or the  contribution of the same to the
Club and otherwise encumbering the related Timeshare Property to secure payments
or other obligations under such Timeshare Loan.

            "Mortgage  Note" shall mean, with respect to a Deeded Club Loan, the
original,  executed  promissory note  evidencing the  indebtedness of an Obligor
under a Deeded  Club  Loan,  together  with any  rider,  addendum  or  amendment
thereto, or any renewal, substitution or replacement of such note.

            "Net Liquidation Proceeds" shall mean with respect to a Liquidation,
the positive difference between Liquidation Proceeds and Liquidation Expenses.

            "New  Servicing  Fee Proposal"  shall have the meaning  specified in
Section 5.4 of the Indenture.

            "Non-Bluegreen  Owned  Resort"  shall  mean a  Resort  that is not a
Bluegreen Owned Resort.

            "Note  Balance  Write-Down  Amount"  shall mean with  respect to any
Payment Date, an amount equal to the excess,  if any, of the aggregate  Adjusted
Note Balance of all Classes  (immediately  after the  distribution  of Available
Funds) over the sum of (i) the Aggregate

                                     - 14 -
<PAGE>

Loan  Balance as of the end of the Due Period  related to such  Payment Date and
(ii)  amounts on deposit  in the  General  Reserve  Account  and the  Prefunding
Account, if any.

            "Note Owner" shall mean,  with  respect to a  Book-Entry  Note,  the
Person who is the beneficial  owner of such Book-Entry Note, as reflected on the
books of the Depository or on the books of a Person  maintaining an account with
such Depository (directly or as an indirect participant,  in accordance with the
rules of such Depository).

            "Note  Purchase  Agreement"  shall mean that certain  note  purchase
agreement  dated  September  13,  2006,  between the Initial  Purchaser  and the
Issuer.

            "Note Rate" shall mean with respect to the Class A Notes,  the Class
B Notes, the Class C Notes, the Class D Notes, the Class E Notes and the Class F
Notes, 5.605%, 5.704%, 5.952%, 6.468%, 7.210% and 9.377%, respectively.

            "Note Register"  shall have the meaning  specified in Section 2.4(a)
of the Indenture.

            "Note Registrar" shall have the meaning  specified in Section 2.4(a)
of the Indenture.

            "Noteholder" shall mean any holder of a Note of any Class.

            "Notes"  shall  mean  collectively,  the Class A Notes,  the Class B
Notes,  the Class C Notes,  the Class D Notes, the Class E Notes and the Class F
Notes.

            "Obligor" shall mean the related obligor under a Timeshare Loan.

            "Offering  Circular" shall mean that certain  Confidential  Offering
Circular,  dated  September  13, 2006  related to the Notes and the  Transaction
Documents.

            "Officer's  Certificate"  shall  mean a  certificate  executed  by a
Responsible Officer of the applicable party.

            "Opinion of  Counsel"  shall mean a written  opinion of counsel,  in
each case acceptable to the addressees thereof.

            "Optional  Purchase  Limit" shall mean, on any date, an amount equal
to (x) 15% of the  Aggregate  Closing  Date  Collateral  Balance,  less  (y) the
aggregate Loan Balances (as of the related  purchase dates or release dates,  as
applicable) of all Defaulted  Timeshare  Loans (i)  previously  purchased by the
Club Originator  pursuant to the Sale Agreement,  the Transfer  Agreement or the
Bluegreen  Purchase  Agreement and (ii) previously  released pursuant to Section
4.7(c) of the Indenture.

            "Optional  Redemption  Date"  shall mean the first date in which the
Aggregate Outstanding Note Balance is less than or equal to 10% of the Aggregate
Initial Note Balance.

                                     - 15 -
<PAGE>

            "Optional  Substitution  Limit" shall mean,  on any date,  an amount
equal to (x) 20% of the Aggregate  Closing Date Collateral  Balance less (y) the
aggregate  Loan  Balances (as of the related  Transfer  Dates) of all  Defaulted
Timeshare Loans  previously  substituted by the Club Originator  pursuant to the
Sale Agreement, the Transfer Agreement or the Bluegreen Purchase Agreement.

            "Original  Club  Loan"  shall  mean a  Timeshare  Loan for which the
related  Obligor  has  elected to effect and the Club  Originator  has agreed to
effect an Upgrade.

            "Originator"  shall  mean  either the Club  Originator  or the Aruba
Originator.

            "Outstanding"  shall mean, with respect to the Notes, as of any date
of determination,  all Notes  theretofore  authenticated and delivered under the
Indenture except:

            (a) Notes theretofore canceled by the Indenture Trustee or delivered
to the Indenture Trustee for cancellation;

            (b)  Notes  or  portions  thereof  for  whose  payment  money in the
necessary amount has been theretofore  irrevocably  deposited with the Indenture
Trustee in trust for the holders of such Notes; and

            (c) Notes in exchange  for or in lieu of which other Notes have been
authenticated and delivered  pursuant to the Indenture unless proof satisfactory
to the Indenture  Trustee is presented  that any such Notes are held by a Person
in  whose  hands  the Note is a valid  obligation;  provided,  however,  that in
determining  whether the holders of the requisite  percentage of the Outstanding
Note  Balance  of the Notes  have  given  any  request,  demand,  authorization,
direction,  notice,  consent, or waiver hereunder,  Notes owned by the Issuer or
any  Affiliate  of  the  Issuer  shall  be  disregarded  and  deemed  not  to be
Outstanding,  except that, in determining whether the Indenture Trustee shall be
protected in relying upon any such request,  demand,  authorization,  direction,
notice,  consent,  or  waiver,  only  Notes  that a  Responsible  Officer of the
Indenture Trustee actually has notice are so owned shall be so disregarded.

            "Outstanding   Note   Balance"   shall   mean  as  of  any  date  of
determination  and Class of Notes,  the  Initial  Note  Balance of such Class of
Notes less the sum of Principal Distribution Amounts actually distributed to the
Noteholders of such Class of Notes as of such date;  provided,  however,  to the
extent that for purposes of consents,  approvals, voting or other similar act of
the  Noteholders  under  any of the  Transaction  Documents,  "Outstanding  Note
Balance"  shall  exclude  Notes  which are held by  Bluegreen  or any  Affiliate
thereof.

            "Owner  Beneficiary"  shall have the meaning  specified  in the Club
Trust Agreement.

            "Owner  Beneficiary  Agreement"  shall mean the  purchase  agreement
entered into by each obligor and the Developer with respect to the Club Loans.

            "Owner  Beneficiary  Rights" shall have the meaning specified in the
Club Trust Agreement.

                                     - 16 -
<PAGE>

            "Owner  Trustee" shall mean  Wilmington  Trust  Company,  a Delaware
banking  corporation,  or any successor  thereof,  acting not in its  individual
capacity but solely as owner trustee under the Trust Agreement.

            "Owner  Trustee  Corporate  Trust  Office"  shall mean Rodney Square
North, 1100 North Market Street, Wilmington, Delaware 19890-0001.

            "Owner  Trustee Fee" shall mean an annual fee equal (A) prior to the
Owner Trustee becoming successor Administrator, $6,000.00 and (B) upon the Owner
Trustee becoming successor Administrator,  $5,000.00, which fee shall be due and
payable on the first Payment Date of each year during the term hereof  occurring
after the Issuer's receipt of an invoice therefor.

            "Paying Agent" shall mean any Person  authorized under the Indenture
to make the  distributions  required under Sections 3.4 of the Indenture,  which
such Person initially shall be the Indenture Trustee.

            "Payment  Date"  shall mean the 2nd day of each  month,  or, if such
date is not a Business Day, then the next succeeding Business Day, commencing on
the Initial Payment Date.

            "Payment  Default  Event"  shall have  occurred if (i) each Class of
Notes shall become due and payable  pursuant to Section  6.2(a) of the Indenture
or (ii) each Class of Notes shall otherwise become due and payable  following an
Event of Default under the Indenture and the Indenture  Trustee has, in its good
faith  judgment,  determined  that the value of the assets  comprising the Trust
Estate is less than the Aggregate Outstanding Note Balance.

            "Percentage Interest" for a Class of Notes shall mean the following:

            (i)   initially, for the Class A Notes, the Class B Notes, the Class
                  C Notes,  the Class D Notes, the Class E Notes and the Class F
                  Notes,  33.70%,  14.30%,  14.60%,  16.00%,  7.50%  and  4.90%,
                  respectively;

            (ii)  if an Early Amortization Event has occurred and is continuing,
                  for each Class of Notes,  the then Outstanding Note Balance of
                  such Class  divided  by the then  Aggregate  Outstanding  Note
                  Balance,   expressed  as  a   percentage,   until  such  Early
                  Amortization  Event is  cured,  at which  time the  Percentage
                  Interest  for  each  Class  of  Notes  shall  equal  the  then
                  Outstanding Note Balance of such Class of Notes divided by the
                  then Aggregate Loan Balance, expressed as a percentage; and

            (iii) if a Trigger  Event has  occurred and is  continuing,  for the
                  most senior Class of Notes  outstanding at any time,  100% and
                  the remaining  Classes of Notes,  0%, until such Trigger Event
                  is cured,  at which time,  the  Percentage  Interest  for each
                  Class of Notes shall equal the then  Outstanding  Note Balance
                  of such  Class of Notes  divided  by the then  Aggregate  Loan
                  Balance, expressed as a percentage.

                                     - 17 -
<PAGE>

            "Permitted  Liens" shall mean (a) with respect to Timeshare Loans in
the Trust  Estate,  (i) Liens for state,  municipal or other local taxes if such
taxes  shall  not at the  time be due and  payable,  (ii)  Liens in favor of the
Depositor and the Issuer  created  pursuant to the  Transaction  Documents,  and
(iii) Liens in favor of the Trust and the Indenture  Trustee created pursuant to
the  Indenture;  (b)  with  respect  to  the  related  Timeshare  Property,  (i)
materialmen's,  warehousemen's,  mechanic's and other Liens arising by operation
of law in the  ordinary  course of  business  for sums not due,  (ii)  Liens for
state, municipal or other local taxes if such taxes shall not at the time be due
and payable,  and (iii) the Obligor's  interest in the Timeshare  Property under
the Timeshare  Loan whether  pursuant to the Club Trust  Agreement or otherwise;
and (c) with  respect  to  Timeshare  Loans and  Related  Security  in the Trust
Estate,  any and all rights of the  Beneficiaries  referred to in the Club Trust
Agreement under such Club Trust Agreement.

            "Person"  means  an   individual,   general   partnership,   limited
partnership, limited liability partnership,  corporation,  business trust, joint
stock company,  limited liability company,  trust,  unincorporated  association,
joint venture, Governmental Authority, or other entity of whatever nature.

            "Predecessor Servicer Work Product" shall have the meaning specified
in Section 5.4(b) of the Indenture.

            "Prefunding   Account"  shall  be  the  account  maintained  by  the
Indenture Trustee pursuant to Section 3.2(c) of the Indenture.

            "Prefunding Account Initial Deposit" shall equal $35,720,236.47.

            "Prefunding  Period" shall mean the period commencing on the Closing
Date and ending on the Prefunding Termination Date.

            "Prefunding  Termination  Date"  shall mean the  Determination  Date
immediately  following the earliest of (i) 90 days after the Closing Date,  (ii)
the date on which the amount on deposit in the  Prefunding  Account is less than
$10,000 and (iii) the date on which an Event of Default occurs.

            "Principal Distribution Amount" shall equal for any Payment Date and
Class of Notes, the sum of the following, without duplication:

            (i)   the product of (a) such Class' Percentage Interest and (b) the
                  amount of  principal  collected  in respect of each  Timeshare
                  Loan during the related Due Period (including, but not limited
                  to,  principal  in  respect  of  scheduled  payments,  partial
                  prepayments,  prepayments in full, liquidations,  Substitution
                  Shortfall Amounts and Repurchase Prices, if any, but excluding
                  principal  received in respect of Timeshare  Loans that became
                  Defaulted  Timeshare  Loans during prior Due Periods that have
                  not been released from the lien of the  Indenture)  or, if the
                  Cut-Off Date for a Qualified  Substitute  Timeshare Loan shall
                  have  occurred  during the related  Due Period,  the amount of
                  principal  collected in respect of such  Qualified  Substitute
                  Timeshare Loan after such Cut-Off Date;

                                     - 18 -
<PAGE>

            (ii)  the product of (a) such Class' Percentage Interest and (b) the
                  aggregate  Loan  Balance of all  Timeshare  Loans which became
                  Defaulted  Timeshare  Loans during the related Due Period less
                  the sum of (x) the  aggregate  Loan  Balance of all  Qualified
                  Substitute  Timeshare  Loans which were  conveyed to the Trust
                  Estate in  respect of  Defaulted  Timeshare  Loans  during the
                  related Due Period,  (y) the  principal  portion of Repurchase
                  Prices paid in respect of Defaulted Timeshare Loans during the
                  related  Due  Period,   and  (z)  the  principal   portion  of
                  Liquidation Proceeds received during the related Due Period;

            (iii) on the first  Payment  Date after the  Prefunding  Termination
                  Date,  the product of (a)(1) such Class'  Percentage  Interest
                  divided  by (2)  91% and (b) the  amount  deposited  into  the
                  Collection  Account from the  Prefunding  Account  pursuant to
                  Section 3.2(c) of the Indenture, if any; and

            (iv)  any unpaid Principal  Distribution Amounts for such Class from
                  prior Payment Dates.

            "Qualified  Substitute  Timeshare  Loan" shall mean a Timeshare Loan
(i) that, when aggregated with other Qualified  Substitute Timeshare Loans being
substituted on such Transfer Date, has a Loan Balance,  after application of all
payments  of  principal  due and  received  during  or  prior  to the  month  of
substitution,  not in excess of the Loan  Balance  of the  Timeshare  Loan being
substituted on the related Transfer Date, (ii) that complies,  as of the related
Transfer Date, with each of the representations and warranties  contained in the
Sale Agreement,  the Transfer  Agreement and the Bluegreen  Purchase  Agreement,
including that such Qualified Substitute Timeshare Loan is an Eligible Timeshare
Loan;  provided  that  there will be no  seasoning  requirement  if a  Qualified
Substitute  Timeshare  Loan is an Upgrade Club Loan  replacing an Original  Club
Loan with the same  Obligor,  (iii)  that shall not cause the  weighted  average
coupon  rate  of  the  Timeshare  Loans  to  be  less  than  14.75%  after  such
substitution,  (iv) that shall not cause the weighted  average  months of age on
the Timeshare Loans to be less than 3 months after such  substitution,  (v) that
shall not cause the weighted average remaining term to maturity of the Timeshare
Loans to be equal to or greater  than 117 months,  and (vi) that does not have a
stated maturity later than October 2019.

            "Rating Agency" shall mean Moody's and S&P.

            "RCI" shall mean Resort Condominiums  International,  LLC (or one of
its wholly owned subsidiaries).

            "Receivables"  means the payments  required to be made pursuant to a
Timeshare Loan.

            "Receivables Collateral" shall have the meaning specified in Section
3 of the Sale Agreement.

            "Record  Date" shall mean,  with  respect to any Payment  Date,  the
close of business on the last day of the related Interest Accrual Period.

                                     - 19 -
<PAGE>

            "Redemption  Date" shall mean with respect to the  redemption of the
Notes on or after the  Optional  Redemption  Date,  the date fixed  pursuant  to
Section 10.1 of the Indenture.

            "Redemption  Price" shall mean, with respect to each Class of Notes,
the sum of the  Outstanding  Note Balance of such Class of Notes,  together with
interest  accrued  and  unpaid  thereon  at the  applicable  Note Rate up to and
including the Redemption Date.

            "Related  Security"  shall mean with respect to any Timeshare  Loan,
(i) all of the Issuer's  interest in the Timeshare  Property arising under or in
connection with the related Mortgage,  Owner Beneficiary Rights, Vacation Points
and the related Timeshare Loan Files, (ii) all other security interests or liens
and property  subject  thereto from time to time purporting to secure payment of
such  Timeshare  Loan,  together with all mortgages,  assignments  and financing
statements  signed by the Club  Trustee on behalf of an Obligor  describing  any
collateral  securing such Timeshare Loan,  (iii) all  guarantees,  insurance and
other  agreements  or  arrangements  of  whatever  character  from  time to time
supporting  or  securing  payment  of such  Timeshare  Loan,  and (iv) all other
security and books, records and computer tapes relating to the foregoing.

            "Remarketing Agent" shall mean Bluegreen.

            "Remarketing   Agreement"   shall  mean  that  certain   remarketing
agreement,  dated as of September  15, 2006,  by and among,  the  Servicer,  the
Issuer,  the  Remarketing  Agent and the Indenture  Trustee,  as the same may be
amended,  modified,  or  supplemented  from time to time in accordance  with the
terms thereof.

            "Repurchase  Price" shall mean with respect to any Timeshare Loan to
be purchased by the Club  Originator  pursuant to the  Transfer  Agreement,  the
Bluegreen Purchase Agreement or the Sale Agreement,  an amount equal to the Loan
Balance of such  Timeshare  Loan as of the date of such purchase or  repurchase,
together  with all accrued and unpaid  interest  on such  Timeshare  Loan at the
related  Timeshare  Loan Rate to,  but not  including,  the due date in the then
current Due Period.

            "Request  for  Release"  shall be a request for release of Timeshare
Loan Documents in the form required by the Custodial Agreement.

            "Required  Payments"  shall mean each of the items  described in (i)
through (xxii) of Section 3.4 of the Indenture.

            "Reservation  System":  The reservation  system utilized by the Club
and owned by the Club  Managing  Entity or the services  contracted  by the Club
Managing Entity with a third party.

            "Residual  Interest  Certificate"  shall mean the certificate issued
under the Trust Agreement,  which represents the economic  residual  interest of
the Trust formed thereunder.

            "Residual  Interest  Owner"  shall  mean the  owner of the  Residual
Interest Certificate issued by the Issuer pursuant to the Trust Agreement, which
shall initially be the Depositor.

                                     - 20 -
<PAGE>

            "Resort"  shall mean,  as the context shall  require,  the resort at
which the Timeshare Property related to a Timeshare Loan is located.

            "Resort   Interests"  shall  mean  as  defined  in  the  Club  Trust
Agreement.

            "Responsible  Officer"  shall mean (a) when used with respect to the
Owner  Trustee or the  Indenture  Trustee,  any  officer  assigned  to the Owner
Trustee  Corporate  Trust Office or the Corporate  Trust  Office,  respectively,
including any Managing  Director,  Vice  President,  Assistant  Vice  President,
Secretary,  Assistant Secretary,  Assistant Treasurer,  any trust officer or any
other  officer such Person  customarily  performing  functions  similar to those
performed by any of the above designated  officers,  and also, with respect to a
particular  matter, any other officer to whom such matter is referred because of
such officer's  knowledge of and familiarity  with the particular  subject;  (b)
when used with respect to the  Servicer,  the Chief  Financial  Officer,  a Vice
President,  an Assistant Vice  President,  the Chief  Accounting  Officer or the
Secretary  of the  Servicer;  and (c) with  respect  to any  other  Person,  the
chairman of the board, chief financial officer, the president, a vice president,
the treasurer,  an assistant treasurer,  the secretary,  an assistant secretary,
the controller, general partner, trustee or the manager of such Person.

            "S&P" shall mean Standard & Poor's Ratings  Services,  a division of
The McGraw-Hill Companies, Inc.

            "Sale Agreement" shall mean that certain sale agreement, dated as of
September 15, 2006,  between the Depositor and the Issuer  pursuant to which the
Depositor sells Timeshare Loans, from time to time, to the Issuer.

            "Sampler Loan" shall mean a loan originated by Bluegreen pursuant to
the terms of a Sampler Program Agreement.

            "Sampler Converted Loan" shall mean a Timeshare Loan, the obligor of
which,  previously had a Sampler Loan and converted the same to a Timeshare Loan
pursuant to the terms of a Sampler Program Agreement.

            "Sampler  Program  Agreement"  shall mean an  agreement  pursuant to
which a purchaser  thereunder  obtains those certain  benefits set forth therein
which comprise the "Sampler Membership" and, subject to the terms and conditions
thereof,  has the  opportunity  to convert  such  Sampler  Membership  into full
ownership in the Bluegreen Vacation Club multi-site timeshare plan.

            "Schedule of Timeshare Loans" shall mean the list of Timeshare Loans
delivered  pursuant  to the Sale  Agreement,  as  amended  from  time to time to
reflect  repurchases,  substitutions,  Subsequent  Timeshare Loans and Qualified
Substitute  Timeshare  Loans  conveyed  pursuant to the terms of the  Indenture,
which  list  shall set forth the  following  information  with  respect  to each
Timeshare  Loan as of the  related  Cut-Off  Date,  as  applicable,  in numbered
columns:

                                     - 21 -
<PAGE>

            1     Name of Obligor

            2     Condo Ref/Loan Number

            3     Interest Rate Per Annum

            4     Date of Origin

            5     Maturity

            6     Monthly Payment

            7     Original Loan Balance

            8     Original Term

            9     Outstanding Loan Balance

            10    First payment date

            11    Loan Term

            12    Zip Code

            If the Schedule of Timeshare Loans is provided in electronic format,
it shall be  substantially  in the form of Exhibit E to the Custodial  Agreement
(which, in any event, shall contain all the information specified above).

            "Securities Act" shall mean the Securities Act of 1933, as amended.

            "Seller" shall mean with respect to (i) the Transfer Agreement,  BXG
Timeshare I, (ii) the Bluegreen Purchase Agreement, Bluegreen and (iii) the Sale
Agreement, the Depositor.

            "Sequential  Pay Event" shall mean either a Payment Default Event or
a Trust Estate Liquidation Event.

            "Servicer"  shall mean  Bluegreen in its capacity as servicer  under
the Indenture,  the Backup Servicing Agreement and the Custodial Agreement,  and
its permitted successors and assigns.

            "Servicer  Credit  Card  Processing  Cost"  shall  have the  meaning
specified in Section 5.3(b) of the Indenture.

            "Servicer  Event of  Default"  shall have the meaning  specified  in
Section 5.4 of the Indenture.

            "Servicing  Fee" shall mean for any  Payment  Date,  the  product of
(i)(A) if Bluegreen or an affiliate  thereof is Servicer,  one-twelfth  of 1.50%
and (B) if the  Indenture  Trustee is the  successor  Servicer,  one-twelfth  of
1.55%,  and (ii) the  aggregate  Loan Balance of all  Timeshare  Loans as of the
first day of the related Due Period;  provided that if the Indenture  Trustee is
the successor Servicer,  it shall, after payment of the Backup Servicing Fee, be
entitled to a minimum monthly payment of $5,500.00.

            "Servicing  Officer"  shall  mean  those  officers  of the  Servicer
involved  in, or  responsible  for,  the  administration  and  servicing  of the
Timeshare  Loans, as identified on the list of Servicing  Officers  furnished by
the Servicer to the Indenture Trustee and the Noteholders from time to time.

                                     - 22 -
<PAGE>

            "Servicing  Standard"  shall mean,  with respect to the Servicer and
the Backup Servicer a servicing standard which complies with applicable law, the
terms of the Transaction Documents,  the terms of the respective Timeshare Loans
and,  to the  extent  consistent  with the  foregoing,  in  accordance  with the
customary standard of prudent servicers of loans secured by timeshare  interests
similar to the  Timeshare  Properties,  but in no event lower than the standards
employed by it when servicing  loans for its own account or other third parties,
but, in any case,  without regard for (i) any relationship that it or any of its
Affiliates  may have with the  related  Obligor,  and (ii) its right to  receive
compensation  for its  services  under  the  Indenture  or with  respect  to any
particular transaction.

            "Servicer   Termination   Costs"   shall   mean  any   extraordinary
out-of-pocket  expenses  incurred by the Indenture  Trustee  associated with the
transfer of servicing.

            "Similar  Law" shall mean the  prohibited  transaction  rules  under
ERISA or section  4975 of the Code or any  substantially  similar  provision  of
federal, state or local law.

            "Stated  Maturity"  shall mean the Payment Date occurring in October
2021.

            "Statutory  Trust Statute" shall mean the Delaware  Statutory  Trust
Act,  Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. ss. 3801, et seq.,
as the same may be amended from time to time.

            "Subsequent  Cut-Off  Date" shall mean with  respect to any Transfer
Date,  (i) the close of business  on the last day of the Due Period  immediately
preceding such Transfer Date or (ii) such other date designated by the Servicer.

            "Subsequent  Timeshare Loans" shall mean the Timeshare Loans meeting
the criteria  specified in Section 4.3 of the Indenture,  sold by the Depositor,
purchased by the Issuer and pledged to the Indenture  Trustee on a Transfer Date
during the Prefunding Period.

            "Subsequent  Transfer  Notice"  shall have the meaning  specified in
Section 4.2(a) of the Indenture.

            "Substitution  Shortfall  Amount"  shall  mean with  respect  to any
Transfer  Date, an amount equal to the excess of the aggregate  Loan Balances of
the  substituted  Timeshare  Loans  over  the  aggregate  Loan  Balances  of the
Qualified Substitute Timeshare Loans.

            "Target Amount" shall mean, for any Payment Date, an amount equal to
the product of (i) the Target Amount  Percentage and (ii) the Aggregate  Closing
Date Collateral Balance.

            "Target  Amount  Percentage"  shall mean (i) for each  Payment  Date
until and  including  the Payment  Date in April  2008,  5.00% and (ii) for each
Payment Date thereafter,  5.00% less the product of (A) 0.75% and (B) the number
of Target Amount Reduction Dates after the Payment Date in April 2008;  provided
that in no circumstances will the Target Amount Percentage be less than 1.50%.

                                     - 23 -
<PAGE>

            "Target Amount Reduction Date" shall mean a Payment Date in which no
Early Amortization Event or Trigger Event exists and is continuing.

            "Timeshare Declaration" shall mean the declaration or other document
recorded in the real estate records of the applicable municipality or government
office where a Resort is located for the purpose of creating and  governing  the
rights of owners of Timeshare Properties related thereto, as it may be in effect
from time to time.

            "Timeshare  Loan"  shall  mean a Club  Loan,  Aruba  Non-Club  Loan,
Initial  Timeshare  Loan,  Subsequent  Timeshare Loan or a Qualified  Substitute
Timeshare Loan, subject to the lien of the Indenture. As used in the Transaction
Documents,  the term "Timeshare  Loan" shall include the related  Mortgage Note,
Mortgage,  the Finance  Agreement,  if any, the Owner Beneficiary  Agreement and
other Related Security contained in the related Timeshare Loan Documents.

            "Timeshare  Loan  Acquisition  Price" shall mean with respect to any
Timeshare  Loan, an amount equal to the Loan Balance of such Timeshare Loan plus
all interest received up to and including the related Cut-Off Date.

            "Timeshare Loan Documents" shall mean with respect to each Timeshare
Loan and each Obligor,  the related (i) Timeshare Loan Files, and (ii) Timeshare
Loan Servicing Files.

            "Timeshare Loan Files" shall mean, with respect to a Timeshare Loan,
all documents related to such Timeshare Loan, including:

            1.    with  respect to a Club Loan  (other than an Aruba Club Loan),
                  the original  Mortgage Note executed by the Obligor,  endorsed
                  either as (i) "Pay to the order of ________, without recourse,
                  representation  or warranty"  (either directly on the Mortgage
                  Note or on an allonge placed with such Mortgage  Note),  by an
                  Authorized  Officer of the  related  Seller  (such  Authorized
                  Officer's  signature  may be  computer  generated),  or (ii) a
                  chain  of  endorsement  as  follows:  "Pay  to  the  order  of
                  Bluegreen   Receivables   Finance   Corporation  XII,  without
                  recourse,  representation  or warranty",  "Pay to the order of
                  BXG   Receivables   Note  Trust  2006-B,   without   recourse,
                  representation or warranty" and "Pay to the order of U.S. Bank
                  National Association,  as Indenture Trustee, without recourse,
                  representation or warranty except as provided in the Indenture
                  dated  as of  September  15,  2006"  (either  directly  on the
                  Mortgage  Note or on an  allonge  placed  with  such  Mortgage
                  Note),  by an Authorized  Officer of the related  Seller,  the
                  Depositor and the Issuer (such Authorized  Officer's signature
                  may be computer generated),  respectively (in the case of both
                  clauses (i) and (ii) above,  together with a complete chain of
                  endorsements from the original payee to the related Seller, if
                  applicable);

            2.    with  respect to a Club Loan  (other than an Aruba Club Loan),
                  (i) an original  Mortgage with evidence that such Mortgage has
                  been recorded in the appropriate  recording  office or (ii) if
                  such Mortgage has not yet been

                                     - 24 -
<PAGE>

                  returned to the related  Seller by such  recording  office,  a
                  photocopy of the  unrecorded  Mortgage that has been delivered
                  to such recording office (with evidence that such Mortgage has
                  been  delivered  to  the  appropriate   recording  office  for
                  recording,);

            3.    with  respect to a Club Loan  (other than an Aruba Club Loan),
                  (i) original recorded  Assignments of Mortgage (which may be a
                  part of a  blanket  assignment  of more  than one Club Loan in
                  which  case,  a  copy  thereof,   with  the  original  blanket
                  Assignments  of Mortgage  held by the Custodian in the related
                  master pool header file),  showing the assignment of such Club
                  Loan from the record  mortgagee to the Indenture  Trustee,  or
                  (ii)  if such  Assignments  of  Mortgage  have  not  yet  been
                  returned by the related  recording  office, a photocopy of the
                  unrecorded Assignments of Mortgage that have been delivered to
                  such  recording  office  (which  may  be a part  of a  blanket
                  assignment of more than one Club Loan), showing the assignment
                  of such Club Loan from the record  mortgagee to the  Indenture
                  Trustee (with evidence (a copy of (A) the Federal  Express (or
                  similar service) receipt and (B) the check made payable to the
                  applicable  recording office,  being sufficient evidence) that
                  such  Assignments  of  Mortgage  have  been  delivered  to the
                  appropriate  recording office for recording),  or (iii) if the
                  related  Mortgage  has not yet  been  returned  such  that the
                  related  Assignments  of  Mortgage  can not yet be filed,  (A)
                  evidence  that that such  Mortgage  has been  delivered to the
                  appropriate  recording office for recordation (the evidence in
                  paragraph 2 above being  sufficient)  and (B)  Assignments  of
                  Mortgage in recordable form (other than the Mortgage recording
                  information)  duly  executed by the last record  holder of the
                  Mortgage  showing  the  assignment  of such Club Loan from the
                  record  mortgagee the Indenture  Trustee;  provided,  however,
                  that with respect to clauses (ii) and (iii) of this  paragraph
                  3,  photocopies  held by the Custodian in the related investor
                  file shall be sufficient.

            4.    with  respect to a Club Loan  (other than an Aruba Club Loan),
                  the UCC  financing  statement,  if any,  evidencing  that  the
                  security  interest  granted under such Timeshare Loan, if any,
                  has been perfected under applicable state law;

            5.    with  respect to a Club Loan  (other than an Aruba Club Loan),
                  (i) a copy of any recorded  warranty deed  transferring  legal
                  title to the related  Timeshare  Property to the Club Trustee,
                  or  (ii) if  such  recorded  warranty  deed  has not yet  been
                  returned to the related Seller, a copy of a warranty deed sent
                  for recording;

            6.    with  respect to a Club Loan  (other than an Aruba Club Loan),
                  either (i) a final original  lender's title  insurance  policy
                  showing  no   exceptions   to   coverage  or  (ii)  a  binding
                  unconditional  commitment  to issue a title  insurance  policy
                  showing no exceptions to coverage (which may be a

                                     - 25 -
<PAGE>

                  blanket commitment, the original blanket commitment to be held
                  by the Custodian in the related  master pool header file),  in
                  all  cases   referencing  such  Timeshare  Loan  and  insuring
                  Bluegreen Corporation and its successors and/or assigns;

            7.    the original of any related  assignment  or  guarantee  or, if
                  such original is unavailable,  a copy thereof  certified by an
                  Authorized  Officer  of the  related  Seller  to be a true and
                  correct copy, current and historical computerized data files;

            8.    the original of any  assumption  agreement or any  refinancing
                  agreement;

            9.    all related Owner Beneficiary Agreements, finance applications
                  (including related Finance  Agreements,  if applicable),  sale
                  and escrow  documents  executed  and  delivered by the related
                  Obligor with respect to the purchase of a Timeshare Property;

            10.   all other papers and records of whatever kind or  description,
                  whether  developed or  originated  by an Originator or another
                  Person,  required to document,  service or enforce a Timeshare
                  Loan; and

            11.   any   additional    amendments,    supplements,    extensions,
                  modifications or waiver agreements required to be added to the
                  Timeshare  Loan Files  pursuant to the  Indenture,  the Credit
                  Policy,   the  Collection  Policy  or  the  other  Transaction
                  Documents, if any.

            "Timeshare Loan Rate" shall mean with respect to any Timeshare Loan,
the specified coupon rate thereon.

            "Timeshare  Loan  Servicing  Files"  shall mean with respect to each
Timeshare  Loan and each  Obligor,  the  portion  of the  Timeshare  Loan  Files
necessary  for the Servicer to service such  Timeshare  Loan  including  but not
limited to (i) a copy of the  truth-in-lending  disclosure statement executed by
such Obligor, as applicable,  (ii) all writings pursuant to which such Timeshare
Loan arises or which  evidences  such  Timeshare  Loan and not  delivered to the
Custodian,  (iii) all papers and computerized records customarily  maintained by
the Servicer in servicing  timeshare loans  comparable to the Timeshare Loans in
accordance with the Servicing  Standard and (iv) each Timeshare Program Consumer
Document (not the original), if applicable,  related to the applicable Timeshare
Property.

            "Timeshare  Program"  shall  mean the  program  under  which  (1) an
Obligor  has  purchased a Timeshare  Property  and (2) an Obligor  shares in the
expenses associated with the operation and management of such program.

            "Timeshare  Program  Consumer  Documents" shall mean, as applicable,
the Owner Beneficiary  Agreement,  Finance Agreement,  Mortgage Note,  Mortgage,
rescission  right notices,  public  offering  statements and other documents and
disclosures  used or to be used by an Originator in connection  with the sale of
Timeshare Properties.

                                     - 26 -
<PAGE>

            "Timeshare  Program Governing  Documents" shall mean the articles of
organization or articles of  incorporation  of each  Association,  the rules and
regulations  of each  Association,  the Timeshare  Program  management  contract
between each Association and a management company,  and any subsidy agreement by
which an  Originator  is obligated to  subsidize  shortfalls  in the budget of a
Timeshare  Program  in lieu of paying  assessments,  as they may be from time to
time in effect and all amendments,  modifications and restatements of any of the
foregoing.

            "Timeshare Projects" shall mean the part of the Resorts described in
Exhibit C to the Sale Agreement related to any Timeshare Loan.

            "Timeshare  Property"  shall mean (i) with  respect to a Deeded Club
Loan, a  fractional  fee simple  timeshare  interest in a Unit in a Resort or an
undivided  interest in a Resort  associated  with a Unit (which  pursuant to the
Timeshare Program Consumer Documents entitles the related Obligor to the use and
occupancy  of a Unit at such Resort for a specified  period of time each year or
every other year in  perpetuity)  and (ii) with respect to an Aruba Loan,  Co-op
Shares in the related  Association at La Cabana Resort,  which entitle the owner
thereof the right to use and occupy a fixed Unit at La Cabana Resort for a fixed
period of time.

            "Transaction  Documents"  shall mean the  Indenture,  the  Bluegreen
Purchase  Agreement,  the Transfer  Agreement,  the Sale Agreement,  the Lockbox
Agreement,  the Backup Servicing Agreement,  the Administration  Agreement,  the
Remarketing Agreement,  the Custodial Agreement, the Note Purchase Agreement and
all other  agreements,  documents or instruments  (other than the Timeshare Loan
Documents) delivered in connection with the transactions contemplated thereby.

            "Transfer Agreement" shall mean the transfer agreement,  dated as of
September  15, 2006, by and among  Bluegreen,  the Depositor and BXG Timeshare I
pursuant to which certain Initial Timeshare Loans are sold to the Depositor.

            "Transfer  Date"  shall  mean  with  respect  to  (i)  a  Subsequent
Timeshare  Loan,  the date  during  the  Prefunding  Period on which the  Issuer
purchases  such  Subsequent  Timeshare  Loan  from a  Seller  and  pledges  such
Timeshare  Loan to the  Indenture  Trustee to be  included  as part of the Trust
Estate,  and (ii) a Qualified  Substitute  Timeshare Loan, the date on which the
Club  Originator  substitutes  one or more  Timeshare  Loan in  accordance  with
Section 4.6 of the Indenture.

            "Treasury Regulations" shall mean the regulations, included proposed
or  temporary  regulations,  promulgated  under the Code.  References  herein to
specific provisions of proposed or temporary regulations shall include analogous
provisions  of  final   Treasury   Regulations  or  other   successor   Treasury
Regulations.

            "Trigger  Event"  shall occur on any  Determination  Date if (a) the
average of the Delinquency  Levels for the last three Due Periods is equal to or
greater  than 6%, (b) the average of the  Default  Levels for the last three Due
Periods  exceeds 1.40% and shall continue until the Default Level is equal to or
less than  1.40% for three  consecutive  Due  Periods  or (c) the  Servicer  (if
Bluegreen) fails to have at least $75,000,000 in financing facilities in place.

                                     - 27 -
<PAGE>

            "Trust" shall mean the Issuer.

            "Trust Accounts" shall mean collectively,  the Lockbox Account,  the
Collection Account,  the General Reserve Account,  the Prefunding  Account,  the
Credit Card Account and the Capitalized Interest Account.

            "Trust Agreement" shall mean the trust agreement, dated September 8,
2006, by and among the Depositor, the Trust Owner and the Owner Trustee.

            "Trust  Certificate"  shall mean the  certificate  issued  under the
Trust Agreement, which represents the legal ownership of the Trust and shall not
represent any economic interest in the Trust formed thereunder.

            "Trust  Estate"  shall have the meaning  specified  in the  Granting
Clause of the Indenture.

            "Trust Estate Liquidation Event" shall have the meaning specified in
Section 6.6(b) of the Indenture.

            "Trust  Owner"  shall  mean  the  owner  of the  non-economic  Trust
Certificate issued by the Issuer pursuant to the Trust Agreement, which shall be
GSS Holdings, Inc.

            "Trust Owner Fee" shall mean an annual fee equal to $3,500.00, which
fee shall be due and payable on the first  Payment  Date of each year during the
term hereof occurring after the Issuer's receipt of an invoice therefor.

            "Trust  Paying  Agent"  shall have the meaning  specified in Section
3.13 of the Trust Agreement.

            "UCC" shall mean the Uniform Commercial Code as from time to time in
affect in the applicable jurisdiction or jurisdictions.

            "Unit(s)":  One individual air-space condominium unit, cabin, villa,
cottage, townhome or lot within a Resort, together with all furniture,  fixtures
and furnishings therein, if applicable,  and together with any and all interests
in common elements  appurtenant  thereto,  as provided in the related  Timeshare
Program Governing Documents.

            "Upgrade"  shall mean the process in which an Obligor of an Original
Club Loan elects to (a)(i)  reconvey the existing  Club  Property for a new Club
Property (such new Club Property having a greater dollar value than the existing
Club Property) and (ii) cancel the Original Club Loan in exchange for an Upgrade
Club Loan secured by such new Club Property or (b)(i)  acquires  additional Club
Property and (ii) cancels the Original Club Loan in exchange for an Upgrade Club
Loan from the Club  Originator  secured by the  existing  Club  Property and the
additional Club Property.

            "Upgrade Club Loan" shall mean the new timeshare loan  originated by
the Club Originator in connection with an Upgrade.

                                     - 28 -
<PAGE>

            "Vacation Points" shall have the meaning specified in the Club Trust
Agreement.

                                     - 29 -

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