Frontier Airlines 2006 Annual Report Download - page 140

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ATTACHMENT “E” - DIRECT MAINTENANCE COST GUARANTEE
I. Embraer, subject to the terms, conditions and limitations contained in this Attachment, shall guarantee the incurred direct
maintenance cost (the “Maintenance Cost Guarantee”) for the fleet of Aircraft subject of the Purchase Agreement as follows:
a. The Maintenance Guarantee for the Aircraft shall be for the period that begins at ***.
b. For the first *** period commencing with the first Aircraft Actual Delivery Date, the Achieved cumulative Maintenance
Cost - AMC for replacement, repair, overhauls and inspections of Buyer's Aircraft, shall not exceed a Maintenance Cost
Guarantee (MCG1) rate of:
***
*** ***
*** *** ***
c. For the first *** period commencing with the first Aircraft Actual Delivery Date, the Achieved cumulative Maintenance
Cost - AMC for replacement, repair, overhauls and inspections of Buyer's Aircraft, shall not exceed a Maintenance Cost
Guarantee (MCG1)rate of:
*** *** ***
*** *** ***
d. The *** shall be ***.
e. Measurement will be computed annually on the anniversary date of ***. The results will be reconciled year by year until
***.
f. In the event at the end of each annual measurement period, the AMC is higher than the MCG, Embraer shall *** as
provided for below:
***
g. Buyer shall use *** efforts to calculate and submit to Embraer the AMC quarterly, in electronic format, *** after the end
of each quarter during the Guarantee Term. In the event that Buyer fails to submit such data to Embraer as described in the
preceding sentence, Embraer shall send a written notice to Buyer requesting such data, and the guarantee contained in this
Attachment shall terminate in the event Buyer fails to submit the AMC to Embraer within *** of such written notice.
The Parties shall use *** efforts to reach an agreement over the data annually within *** after the submission of AMC in
regard to any fourth quarter. In the event that the AMC contains *** that is out of the reasonable control of ***, the Parties
shall also discuss the reasons for such *** and whether it should be included in the calculation of the AMC. Any credit
amount will be credited to Buyer *** after the agreement regarding the annual period. Such credit may be used by Buyer
only toward ***.
h. This Maintenance Guarantee is based upon the following assumptions, and any change to the assumptions shall result in an
appropriate recalculation of the MCG rate specified in items “b” and “c” above, at Embraer criteria.
Fleet Size: A minimum fleet size of *** Aircraft (*** EMBRAER 170 and *** EMBRAER 175 delivered in accordance
with Article 5 of the Purchase Agreement ***).
Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, March 15, 2007 Powered by Morningstar® Document Research℠