Frontier Airlines 2010 Annual Report Download - page 155

Agreement (the “Maintenance Cost Savings”). Such Maintenance Cost Savings shall be calculated by the Operator and agreed to by Delta. If
a Maintenance Sourcing Proposal with a third party that is acceptable to Operator, such acceptance not to be unreasonably withheld or
delayed, is available that would have the effect of lowering Operator's costs, but Operator does not consummate a transaction with respect to
such Maintenance Sourcing Proposal, the Base Rate Costs with respect to Airframe Maintenance, Depreciation and/or Engine Consumables,
as applicable based on the scope of the applicable Maintenance Sourcing Proposal not consummated by Operator shall be reduced by the
amount of the cost savings that Operator would have realized had Operator consummated such Maintenance Sourcing Proposal. If there is
disagreement on the amount by which the applicable Base Rates Costs shall be reduced, the parties shall engage, at equal cost to Delta and
Operator, a mutually agreed independent consultant to determine such amount, provided that with respect to each unresolved issue in
connection therewith such independent consultant shall be required to adopt the position of either Delta or Operator.
C.
N
ortheast Operations. Commencing with calendar year 2011, in addition to the Direct Costs, Delta shall
p
ay Operator the amounts set forth on Exhibit B attached to this Amendment and incorporated herein in
accordance with the terms and conditions set forth on such Exhibit B. The parties acknowledge and agree that
the amounts set forth on Exhibit B shall be considered Base Rate Costs under the Agreement and subject to
adjustment in accordance with Sections 2.A.(ii), (iii) and (iv) of this Amendment.
D.
Potential Adjustments to Performance Thresholds. Each party hereby covenants and agrees to negotiate in
good faith with the other party a potential amendment and/or modification to the Agreement with respect to
the completion rate and on-time arrival rate thresholds currently required to be met by Operator in order for
Operator to be entitled to the Mark-Up, Monthly Incentive Compensation and Semi-Annual Incentive
Compensation, taking into account the increase of “Northeast Shuttle Flights” and “NYC Spoke Flights” (as
such terms are defined in Exhibit B attached hereto) and the historic level of overall cancellations and delays
affecting those operations. If the parties have not agreed to any such amendment or modification April 30,
2011, thereafter either party shall have the option to engage, at equal cost to Delta and Operator, a mutually
agreed independent consultant, to determine such Performance Thresholds, [*]. The consultant's resolution
will be retroactively applied to all flights operated by Operator pursuant to the Agreement as of January 1,
2011. The parties agree that until the earlier of (i) the execution and delivery by the parties of an amendment
to the Agreement with respect to the completion rate and on-time arrival rate thresholds as contemplated by
this Section 2.D. or (ii) September 30, 2011, for the sole purpose of calculating Operator's completion rate for
Section 11.E.(iv) of the Agreement, such calculation shall exclude cancellations of any Northeast Shuttle
Flights or NYC Spoke Fights that are properly coded as weather, field conditions or Delta OCC coordinated
cancellations.
3.
Addition of Eight (8) ERJ-170 Aircraft.
A.
Pursuant to Article 1(A) of the Agreement, effective as of the Amendment Number Three Effective Date, the
eight (8) Embraer ERJ 170 aircraft set forth on Exhibit C attached hereto and incorporated herein (the
“ERJ-170 Additional Aircraft”) shall be included as Aircraft under, except as otherwise set forth in this
Amendment, the terms of the Agreement. The Base Rate Costs with respect to the ERJ-170 Additional
Aircraft shall be as set forth in Article 2 of this Amendment.