Frontier Airlines 2006 Annual Report Download - page 196

under a United Express Agreement in excess of [*] aircraft. For purposes of calculating the Amended [*], the Amended [*] will be
prorated when an aircraft is introduced into service or removed from service after the start of the month. In addition, irrespective of the
ERJ170 spare count shown on Exhibit B, the actual number of aircraft operated in revenue service will be used to determine the basis
for the Amended [*].
c)Right to Finance. Before finalization of any and all aircraft purchase and financing agreements, Contractor will advise United of
expected, estimated ownership costs for aircraft covered under proposed aircraft purchase and financing agreements. Should United be
able to secure financing such that the ownership cost to United (excluding Markup) be less than the [*] of the estimated costs
(excluding markup) provided by Contractor, United reserves the right to finance those aircraft to be covered by the Contractor’s
proposed aircraft purchase and financing agreements. In the event United exercises such right, (i) it shall provide written notice to
Contractor within [*] after receipt of notice from Contractor of the proposed aircraft purchase and financing agreements, and (ii) for
each such aircraft it shall make a [*] monthly payment to Contractor in lieu of any Markup on the ownership cost of such aircraft.
B. MARKUP
1. Markup. Markup will remain fixed for the duration of this Agreement. Markup will be applied only to Carrier
Controlled Costs (excluding aircraft ownership).
a. Operating goals will be set consistent with the methodology outlined in Article VIII.C.
b. “A” level performance in all categories will result in a [*] markup
c. “B” level performance in all categories will result in a [*] markup
d. “C” level performance in all categories will result in a [*] markup
e. “D” level performance in all categories will result in a [*] markup
2. One-Time Markup on New Aircraft. With any new aircraft brought in the United system, United shall pay a
markup of [*] on only the one-time startup costs noted in Appendix E.
3. Markup on Aircraft Ownership Costs.
a. Markup on Aircraft. United agrees to pay actual aircraft ownership costs on Aircraft plus a markup of [*], not to
exceed [*] per aircraft per month.
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* Confidential
Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, March 15, 2007 Powered by Morningstar® Document Research℠