Airline Services Agreement Between Republic Airline and Frontier Airlines


     

    Exhibit
      10.56

    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.

    


    


    AIRLINE
      SERVICES AGREEMENT

    


    Between

    


    Frontier
      Airlines, Inc.and

    


    Republic
      Airline, Inc.

    


    and,
      in a limited capacity,

    


    Frontier
      Airlines Holdings, Inc.

    


    and

    


    Republic
      Airways Holdings Inc. 

    


    Dated
      as of January 11, 2007

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    AIRLINE
      SERVICES AGREEMENT

     

    This
      Airline Services Agreement (this “Agreement”),
      dated
      as of January 11, 2007 (the “Effective
      Date”),
      is
      between Frontier Airlines, Inc., a Colorado corporation (“Frontier”),
      Republic Airlines, Inc., an Indiana corporation (“RAI”),
      Frontier Airlines Holdings, Inc., a Delaware corporation, solely with respect
      to
Section
      10.20
      herein,
      and, Republic Airways Holdings Inc., a Delaware corporation, solely with respect
      to Section
      10.19
      herein.

     

    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 

    AIRLINE
      SERVICES, SCHEDULES AND FARES

     

    Section
      2.01  Capacity
      Purchase.
      Frontier
      agrees to purchase the capacity of each Covered Aircraft for the period
      beginning on the date such aircraft is presented for service by RAI under this
      Agreement and ending on the last day of the Term, or as such date may be
      extended pursuant to Section
      10.17
      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, RAI shall provide all of the
      capacity of the Covered Aircraft solely to Frontier and use the Covered Aircraft
      solely to operate the Scheduled Flights. Except as provided in Section
      2.01(e),
      the
      Covered Aircraft may not be used by RAI for any other purpose without the
      express prior written consent of Frontier.

     

    (a)  Fares,
      Rules and Seat Inventory.
      Frontier shall establish and publish all fares and related tariff rules for
      all
      seats on the Covered Aircraft. RAI shall not publish any fares, tariffs, or
      related information for the Covered Aircraft. In addition, Frontier 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.
      Frontier 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
      or otherwise made at Frontier'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. Frontier
      shall also be entitled, in its sole discretion and at any time prior to takeoff,
      to direct RAI to delay or cancel a Scheduled Flight, including without
      limitation for delays and cancellations that are air traffic control or weather
      related, and RAI shall take all necessary action to give effect to any such
      direction, provided, however, that such delays or cancellations will not violate
      the minimum scheduling parameters of Exhibit
      G.
      Subject
      to the notice requirement set forth in Section 4.08 regarding international
      service, Frontier will provide RAI with a preliminary schedule in a Standard
      Schedule Input Message (“SSIM”)
      file
      format 45 days prior to the first day of the month to which the preliminary
      schedule relates. RAI will review the proposed schedule and provide feedback
      to
      Frontier no later than seven days following receipt of the preliminary schedule
      by RAI. Frontier will send RAI a Final Monthly Schedule, together with
      operational assumptions for the month (the “Operational
      Assumptions”),
      including without limitation the weighted average number of Covered Aircraft,
      estimated passengers, revenue passenger miles, departures, block hours, and
      flights hours, based on the Final Monthly Schedule, no later than two Business
      Days following receipt of RAI’s comments to the preliminary schedule. Following
      delivery of the Final Monthly Schedule, however, Frontier may make such
      adjustments to the proposed Final Monthly Schedule as it deems appropriate
      (subject to Reasonable Operating Constraints).

     

    (c)  Wet
      Leases.
      At
      Frontier's option, and provided that RAI is not adversely affected in any
      material respect, RAI shall “wet lease” one or more of the Covered Aircraft to
      Frontier, 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, RAI's compensation hereunder, including
      without limitation in this Article
      II,
      in
Article
      III
      and in
Exhibit
      D,
      shall
      be adjusted so that RAI'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 RAI'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
      Exhibit B.

     

    (e)  Spare
      Aircraft.
      The
      Spare Aircraft constituting a Covered Aircraft shall be used by RAI solely
      as an
      operational and maintenance spare to replace Covered Aircraft that are out
      of
      service due to scheduled maintenance or to cover for other irregular operations,
      provided, RAI may use the Spare Aircraft for flights operated for its own
      benefit or to cover flights for any other airline subject to the following
      conditions:

    


    (1) Frontier
      will have the right to designate which of the first twelve Covered Aircraft
      will
      be the Spare Aircraft no later than the inservice date of the twelfth Covered
      Aircraft, such designation to be provided to RAI in writing no fewer than 90
      days prior to the inservice date of the aircraft to be designated as the Spare
      Aircraft.

    


    (2) The
      Spare
      Aircraft will be in a neutral livery as set forth in Exhibit C to this Agreement
      and configured in accordance with the Frontier specifications set forth in
      Exhibit C and its principal base of operations will be Denver International
      Airport.

    


    (3) The
      Spare
      Aircraft will be pooled with other neutral spare aircraft operated by RAI for
      other air carriers (the “Pool
      Participants”)
      and
      will be available for use by RAI to cover flying for Pool Participants due
      to
      irregular operations, aircraft damage, or maintenance events incurred by Pool
      Participants. RAI shall give Frontier notice of its intent to use the Spare
      Aircraft as early as operationally possible. If necessary, Frontier will apprise
      RAI of its operational situation related to re-deployment of the Spare Aircraft.
      Nothwithstanding the above, Frontier acknowledges and agrees that RAI will
      at
      all times retain operational control of the Spare Aircraft.

    


    (4) Regardless
      of RAI’s use of the Spare Aircraft to cover flights of Pool Participants, the
      Spare Aircraft will be considered a Covered Aircraft for purposes of calculating
      Frontier’s Fixed Costs. Frontier will not be obligated to pay or reimburse RAI
      for any Variable Costs or Pass-Thru Costs relating to (i) the ferrying of the
      Spare Aircraft to and from locations necessary to cover flying for other Pool
      Participants, or (ii) the covered flying itself. Fixed Costs, Variable Costs
      and
      Pass-Thru Costs as used in this paragraph are as described on Exhibit
      D.

    


    (5) In
      consideration of Frontier making the Spare Aircraft available for flights
      operated by Pool Participants according to this Section, Frontier will be
      entitled to use the neutral spare aircraft contributed to the pool by other
      Pool
      Participants, provided,
      Frontier will be responsible for the payment of Variable Costs and Pass-Thru
      Costs relating to (i) the ferrying of the neutral spare aircraft to and from
      the
      location necessary to cover for Frontier Scheduled Flights, and (ii) the covered
      Scheduled Flights, provided further, Frontier will not be responsible under
      Section 2.01 (e)(5)(i) if the neutral aircraft is being ferried to cover for
      flights canceled or delayed due to aircraft damage caused by RAI, its agents,
      contractors or employees.

    


    (6) Frontier
      will have the right, in its sole discretion, to remove the Spare Aircraft from
      the neutral spare pool at any time during the period from the date the Spare
      Aircraft first entered the neutral aircraft pool until the first anniversary
      thereof by providing RAI with 30 days advance written notice. Should the Spare
      Aircraft be removed from the neutral aircraft pool, (i) RAI will incur all
      costs
      to convert the aircraft livery to the Frontier livery set forth in Exhibit
      C,
      and (ii) from and after the date of removal, the Spare Aircraft will be
      dedicated to supporting Frontier’s Scheduled Flights and will no longer be
      available for use by RAI to cover flights for itself or any other airline and
      Frontier shall no longer have the use of the neutral spare aircraft of any
      Pool
      Participant for Regional Airline Services. 

    (f)
      Fleet
      Expansion.
      During
      the term of this Agreement, RAI will advise Frontier of any regional jet
      aircraft that RAI believes will become available, whether due to RAI option
      positions, the return of aircraft previously in service for another airline,
      or
      the removal of the aircraft from RAI's own fleet, or otherwise, for potential
      inclusion in the Frontier fleet of Covered Aircraft. Notwithstanding
      the foregoing, such regional jet aircraft shall only be deemed a Covered
      Aircraft upon an amendment to this Agreement.

     

    Section
      2.02  Flight-Related
      Revenue.
      RAI
      acknowledges and agrees that 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 fees related to ticket changes,
      unaccompanied minors, excess baggage and nonrevenue pass travel, revenues
      relating to the transportation of cargo or mail, and revenues associated with
      food, beverage, passenger entertainment, 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 Frontier (or, if received by RAI, shall be promptly
      accounted for and remitted to Frontier).

     

    Section
      2.03  Pass
      Travel. RAI
      maintenance personnel traveling to provide critical repair services and dead
      heading RAI crews will be entitled to travel on flights operated by RAI or
      Frontier as must ride passengers. Commuting RAI crew members and all other
      RAI
      employees will be entitled to travel on Frontier and Frontier JetExpress flights
      at a priority category one level below the lowest category for Frontier
      employees and subject to the fare policies applicable to individuals traveling
      at that priority level. To the extent permitted by existing arrangements,
      Frontier employees will be entitled to (x) travel on Scheduled Flights operated
      by RAI under the category of travel and fare policies to which they are entitled
      to travel on Frontier flights, and (y) will be entitled to travel on all other
      RAI operated flights at a category one level below the lowest category for
      RAI
      employees.

     

    Section
      2.04  Conversion
      of Covered Aircraft.
      RAI will
      be responsible for all costs and expenses of preparing each Covered Aircraft
      prior to its being placed into service hereunder in accordance with the
      specifications, cabin configurations and livery as required by Exhibit
      C,
      provided, it is expressly understood that the first four aircraft scheduled
      to
      be placed in service under Exhibit
      C
      (the
      "Two-Class Aircraft") will be placed in service on the dates indicated in RAI’s
      two-class 70-seat configuration. RAI, at its sole cost and expense, will convert
      the Two-Class Aircraft to the specifications, cabin configurations and livery
      as
      described in Exhibit
      C
      and
      obtain all necessary approvals, documentation, and certifications required
      or
      prudent in connection with such configuration and conversion no later than
      June
      30, 2007. During the period between the initial inservice date and the inservice
      date following the reconfiguration of the Two-Class Aircraft, the monthly
      aircraft rent rate as set forth in Exhibit
      D
      will be
      reduced by [* ]
      per
      month per aircraft, with a pro rata rent reduction for any partial
      month.

    


    
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      *
        Confidential



    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    ARTICLE
      III  RAI COMPENSATION

     

    Section
      3.01  Base
      and Incentive Compensation.
      For and
      in consideration of the aircraft and services to be provided by RAI hereunder,
      Frontier shall pay RAI the base and incentive compensation as provided in
Exhibit
      D
      hereto,
      subject to the terms and conditions set forth in this
      Article III.

    Section
      3.02  Periodic
      Adjustment of Base Compensation.
      The
      rates under this Agreement set forth in Appendix
      1
      to
Exhibit
      D
      hereto
      shall remain in effect throughout the Term of this Agreement, provided,
      the
      rates on Appendix
      1
      to
Exhibit
      D
      hereto
      will be adjusted from time to time as described in Exhibit
      D,
      and,
provided
      further,
      that
      the rates on Appendix
      1
      to
Exhibit
      D
      designated as “Subject to Escalation” will 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 ([*] (Annual Change in PPI [*])), where PPI = the annual Producer
      Price Index, Commodities, Finished Goods (not seasonally adjusted), Series
      ID:
      WPUSOP3000 as published by the Bureau of Labor Statistics for January of the
      applicable year, provided
      further,
      annual
      adjustments will not decrease from the prior year and will not increase more
      than [*]over the prior year. Adjustments will be calculated as soon as the
      PPI
      for the prior year is published by the Bureau of Labor Statistics and the
      adjusted rates will be applied retroactively to the 1st
      day of
      the calendar year and paid as part of the next monthly payment.

     

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

     

    Section
      3.04  Frontier
      Expenses

     

    (a)  Certain
      Expenses.
      Frontier shall incur directly those expenses relating to the Regional Airlines
      Services that are described in Paragraph
      6
      of
      Exhibit D.

     

    (b)  Design
      Changes.
      Except
      as set forth in Section 2.04 with respect to RAI’s obligation to convert the
      Two-Class Aircraft, Frontier 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 Frontier,
      including facility-related design changes and the cost of changes in aircraft
      livery, in each case that occur outside of the Covered Aircraft specifications,
      livery and other requirements of Exhibit
      C
      to this
      Agreement or as otherwise specified in this Agreement.

     

    Section
      3.05  Audit
      Rights; Financial Information.
      RAI
      shall make available for inspection by Frontier and its outside auditors and
      advisors, within a reasonable period of time after Frontier makes a written
      request therefor, all of RAI's books and records (including all financial and
      accounting records and operations reports, and records of other subsidiaries
      or
      affiliates of RAI, if any) as necessary to audit any reimbursement of Pass-Thru
      Costs or other expenses set forth in Paragraph
      6
      of
Exhibit
      D
      hereto.
      In connection with such audit, Frontier 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 RAI's Chief Financial Officer or
      such
      other employees or agents of RAI knowledgeable about such records. Upon the
      reasonable written request of Frontier or its outside auditors or advisors,
      RAI
      will cooperate with Frontier and its outside auditors and advisors to permit
      Frontier and its outside auditors and advisors access to RAI Holding's outside
      auditors for purposes of reviewing such records. In addition, RAI shall deliver
      or cause to be delivered to Frontier (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 RAI Holdings, as at the end of such year, and the related
      consolidated statements of income and retained earnings and of cash flows of
      RAI
      Holdings 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 RAI Holdings, as at the end of such quarter, and the related unaudited
      consolidated statements of income and retained earnings and of cash flows of
      RAI
      Holdings 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 RAI Holdings, 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).

    


    Section
      3.06  Billing
      and Payment; Reconciliation.

     

    (a) Billing
      and Payment.
      No
      later than ten calendar days prior to the beginning of the month covered by
      a
      Final Monthly Schedule and the Operational Assumptions for a given month
      pursuant to Section 2.01(b),
      RAI
      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 and Operational Assumptions
      pertain, calculated in accordance with Paragraph
      2
      of
Exhibit
      D.
      Frontier shall pay RAI the amount due under such invoice (the “Invoiced
      Amount”),
      subject to Frontier'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 RAI to Frontier, as follows:

     

    (i)  Thirty-four
      percent (34%) of the Invoiced Amount on the later of the first Business Day
      of
      the covered month or the third Business Day following receipt by Frontier of
      the
      invoice, by electronic transfer of funds to a bank account designated by
      RAI;

     

    (ii)  Thirty-three
      (33%) of the Invoiced Amount on the 10th
      calendar
      day of the covered month, or the next Business Day thereafter, by electronic
      transfer of funds to a bank account designated by RAI; and

     

    (iii)  Thirty-three
      (33%) of the Invoiced Amount on the 20th
      calendar
      day of the covered month, or the next Business Day thereafter, by electronic
      transfer of funds to a bank account designated by RAI.

    
      _______________

      *
        Confidential

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    (b)  Reconciliation.
      Not
      later than 30 days following the end of each month, RAI and Frontier shall
      reconcile actual amounts due in respect of such month for the Fixed Cost and
      Variable Cost elements set forth in Appendix
      1
      to
      Exhibit D
      with the
      estimated amounts included in the Invoiced Amount for such elements for such
      month in accordance with the terms and conditions set forth in Exhibit
      D.
      On or
      before the 15th day following the end of such reconciliation period (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 Frontier to RAI,
      together with any payment to be made by Frontier pursuant to Section 3.06(a)(iii)
      above,
      or (ii) shall be paid by RAI to Frontier or set off by Frontier against any
      other amounts owing to RAI under this Agreement.

    


    (c)
      Reimbursed
      Costs.
      From
      time to time it is anticipated that RAI may incur certain costs and expenses
      in
      connection will the provision of Regional Airline Services under this Agreement
      for which RAI will be reimbursed by Frontier. These costs and expenses are
      indicated as “Pass-Thru Costs” on Appendix
      1
      to
Exhibit
      D.
      RAI
      will pay all Pass-Thru Costs in advance, and will submit to Frontier an invoice
      together with all supporting documentation for all Pass-Thru Costs incurred.
      Frontier will reimburse RAI for all uncontested Pass-Thru Costs within five
      Business Days following receipt of the invoice and supporting documentation
      by
      electronic transfer of funds to a bank account designated by RAI. RAI will
      provide any additional supporting information and documentation to Frontier
      for
      any Pass-Thru Costs contested by Frontier at RAI’s earliest convenience. Any
      disputed Pass-Thru Costs not resolved within 30 days of receipt of the invoice
      by Frontier will be resolved in accordance with the arbitration provisions
      of
      this Agreement.

     

    
    

    ARTICLE
      IV  RAI OPERATIONS AND AGREEMENTS WITH FRONTIER

     

    Section
      4.01  Crews,
      Etc.   RAI
      shall be responsible for providing all crews (flight and cabin) and maintenance
      personnel necessary to operate the Scheduled Flights and for all aspects
      (personnel and other) of dispatch control. Flight crews will be domiciled in
      Denver, Colorado and Indianapolis, Indiana and any other location deemed
      suitable for RAI’s staffing requirements. RAI will maintain pilot reserves
      sufficient to achieve performance objectives set forth in Section
      4.03,
      but no
      lower than [* ],
      throughout the Term. RAI pilots will wear neutral uniforms with RAI logo items.
      RAI flight attendants will wear neutral uniforms with accessories displaying
      approved Frontier Marks and designs. RAI flight attendants will obtain Frontier
      branded accessories through Frontier or its approved vendor (subject to the
      vendor’s approval), and will be responsible for all costs and expenses,
      including shipping, relating to their orders.

    


    Section
      4.02  Governmental
      Regulations.
      Except
      as noted in Section
      9.01(j),
      RAI 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 RAI
      to
      perform the services required by this Agreement. All flight operations, dispatch
      operations and all other operations and services undertaken by RAI pursuant
      to
      this Agreement shall be conducted, operated and provided by RAI 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 RAI
      in
      compliance with all laws, regulations and governmental requirements, RAI'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, RAI shall provide Regional Airline Services with appropriate standards
      of
      care, but in no event lower than such standards held by Frontier as of the
      date
      of this Agreement. Frontier 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 RAI.
      RAI shall achieve at least the comparable quality of airline service as provided
      by Frontier, subject to limitations imposed by the type of aircraft used by
      RAI
      and its route network. RAI shall comply with all airline customer service
      commitments and policies of Frontier as of the date hereof, including without
      limitation the 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, RAI shall maintain
      aircraft cleaning cycles and policies, and shall maintain adequate staffing
      levels, to achieve a level of operations that routinely meet or exceed the
      on-time performance Target Threshold and the completion factor Target Threshold
      as set forth in Appendix
      2
      to
Exhibit
      D.
      RAI
      shall provide Frontier with timely communication regarding the status of all
      Scheduled Flights. At either party's request, RAI and Frontier will meet to
      discuss and review RAI's customer service and handling procedures and policies
      and its employees' conduct, appearance and training standards and policies.
      Frontier shall give RAI 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.
      RAI
      shall promptly notify Frontier of all irregularities involving a Scheduled
      Flight or Covered Aircraft operated by RAI, 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. RAI shall furnish to
      Frontier as much detail as practicable concerning such irregularities and shall
      cooperate with Frontier at RAI's own expense in any appropriate
      investigation.

     

    Section
      4.05  Emergency
      Response.
      RAI
      shall adopt Frontier's Emergency Response Plan for aircraft accidents or
      incidents. In the event of an accident or incident involving a Covered Aircraft
      or Scheduled Flight, Frontier will have the right to manage the emergency
      response efforts on behalf of RAI with full cooperation from RAI and if such
      right is exercised, RAI acknowledges and agrees that Frontier representatives
      will conduct all public communications, and that RAI will make no public
      statements, regarding such accident or incident.

     

    Section
      4.06  Safety
      Matters. In
      the event of a reasonable safety concern, Frontier shall have the right, at
      its
      own cost, to inspect, review, and observe RAI's operations of Scheduled Flights.
      Notwithstanding the conduct or absence of any such review, RAI 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 Frontier responsible for such safety
      matters.

     

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

     

    Section
      4.08  
      Slots and Route Authorities.
      Should
      Frontier schedule Covered Aircraft on international routes, Frontier will
      provide RAI notice of such intent no fewer than 150 days in advance of the
      intended start date. To the extent permitted under applicable laws and
      regulations, Frontier will obtain the necessary slots, route authorities or
      other approval required for such service at its own cost and expense, provided
      such items may be held and controlled by Frontier. If it is required that RAI,
      as the operator of the Scheduled Flights, obtain the authorities and approvals,
      or if Frontier is prohibited from holding such authorities and approvals in
      its
      own name, RAI will use its commercially reasonable efforts to obtain all
      necessary licenses, permits, route authorities or slots and complete all
      necessary filings and registrations, all at RAI’s sole cost and expense, in
      order to initiate such service. During the Term, RAI will operate Scheduled
      Flights on these routes solely on behalf of Frontier. At the request of Frontier
      made during the Term or upon termination of this Agreement, so long as Frontier
      is not in breach of a material obligation under this Agreement, RAI shall use
      its commercially reasonable efforts to transfer to Frontier or its designee,
      to
      the extent permitted by law, any airport takeoff or landing slots, route
      authorities or other similar regulatory authorizations held by RAI in connection
      with Scheduled Flights, or held or acquired by RAI and used for Scheduled
      Flights, in consideration of the payment to RAI of the reasonable, documented
      out of pocket expenses incurred by RAI in order to obtain such transferred
      rights, authorities and slots. Frontier will be responsible for all costs and
      expenses relating to such assignment, including without limitation reasonable
      attorneys’ fees. RAI's obligations herein shall survive the termination of this
      Agreement for so long as any transfer requested pursuant to this Section
      4.08
      shall
      not have been completed. RAI hereby agrees that all of RAI'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 Frontier.
      If any airport takeoff or landing slot, route authority or other similar
      regulatory authorization transferred to RAI by Frontier for use in connection
      with Scheduled Flights, or held by RAI and used for Scheduled Flights, is
      withdrawn or otherwise forfeited as a result of circumstances or events within
      RAI's reasonable control, then RAI agrees (i) to purchase a reasonably
      acceptable replacement slot, route authority or other similar regulatory
      authorization, or (ii) to pay to Frontier promptly upon demand an amount equal
      to the greater of (y) [* ]of
      the
      revenue loss for [*] days after the date such slot, authority or authorization
      is withdrawn or forfeited, or (z) the interrupted trip expense and
      reaccommodation costs incurred by Frontier due to the withdrawal or forfeiture
      of the slot, authority or authorization.

    
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    Section
      4.09  Use
      of Frontier Marks.
      Frontier
      hereby grants to RAI the non-exclusive and non-transferable rights to use the
      Frontier Marks as provided in, and RAI shall use the Frontier Marks, in
      accordance with the terms and conditions of Exhibit
      C.

     

    Section
      4.10  Use
      of RAI Marks.
      RAI
      hereby grants to Frontier the non-exclusive and non-transferable rights to
      use
      the RAI Marks as provided in, and Frontier shall use the RAI Marks, in
      accordance with the terms and conditions of Exhibit
      F.

     

    Section
      4.11  Catering
      Standards.

    


    (a)
      Station
      Services.
      RAI and
      Frontier will negotiate separate handling or catering agreements at those
      airports where Frontier elects, in its sole discretion, to select RAI as its
      handling agent pursuant to separately negotiated agreements.

    


    (b)
      Onboard Services.
      Frontier
      will determine, in its sole discretion, meal/beverage service parameters and
      scheduling for Scheduled Flights. Frontier has right to conduct onboard service
      audits on Scheduled Flights to ensure service standards are being met. RAI
      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.
      RAI will provide sufficient galley service ship's equipment to operate onboard
      services, such as hot jugs, coffee makers and trash bins. Frontier will provide
      all liveried catering items, such as cups and napkins, and all food, liquor
      and
      other beverage items.

     

    Section
      4.12  
      RAI Charters or Other Operations.
      RAI will
      not be permitted to operate the Covered Aircraft to fly charters, other revenue
      service, or to cover flights for other carriers, without the express prior
      written consent of Frontier, except with respect to the Spare Aircraft as
      provided in Section
      2.01(e).

    


    Section
      4.13 Negative
      Operational Covenant.
      During
      the term of this Agreement, RAI will not enter into any contracts or agreements
      of any kind or type that would prohibit or restrict RAI’s ability to operate the
      Covered Aircraft on any city pair, segment or route requested by Frontier
      pursuant to the terms of this Agreement.

    


    


     

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    ARTICLE
      V  CERTAIN RIGHTS AND OBLIGATIONS OF FRONTIER

     

    Section
      5.01  Use
      of Covered Aircraft.
      RAI
      agrees that, except as otherwise directed or approved in writing by Frontier
      in
      Frontier's sole discretion and as provided in Section
      2.01(e)
      herein
      with respect to the Spare Aircraft, the Covered Aircraft may be used only to
      provide Regional Airline Services. Without the written consent of Frontier,
      the
      Covered Aircraft may not be used by RAI for any other purpose, including without
      limitation flying for any other airline or on RAI's own behalf except as
      provided in Section
      2.01(e)
      with
      respect to the Spare Aircraft.

    


    Section
      5.02 Frontier
      Obligations.
      Frontier shall provide to RAI, at no cost to RAI, the following support services
      (either directly or by contracting with third party vendors or by contracting
      with RAI pursuant to a separately negotiated handling agreement):

    


    (a) all
      airport passenger service and aircraft ground handling at all airports served,
      including without limitation:

    


    
      	 	
              (i)

            	
              all
                ticket counter and gate check-in
                services;

            


    

    
      	 	
              (ii)

            	
              all
                passenger enplaning and deplaning services, including sky cap and
                wheelchair services;

            


    

    
      	 	
              (iii)

            	
              aircraft
                loading and unloading services, including airside
                busing;

            


    

    
      	 	
              (iv)

            	
              passenger
                ticketing;

            


    

    
      	 	
              (v)

            	
              jet
                bridges and air stairs, including maintenance and
                cleaning;

            


    

    
      	 	
              (vi)

            	
              janitorial
                services;

            


    

    
      	 	
              (vii)

            	
              deicing
                services;

            


    

    
      	 	
              (viii)

            	
              aircraft
                towing and push back; and

            


    

    
      	 	
              (ix)

            	
              airport
                security services.

            


    

    


    (b) all
      Frontier logo items, such as drink cups, napkins, pillows, blankets and inflight
      magazines;

    


    (c) lavatory
      service and light aircraft cleaning at Denver International Airport, all
      aircraft overnight locations that are not RAI maintenance locations, and, upon
      the written request of RAI, at other cities served by the Covered
      Aircraft;

    


    (d) denied
      boarding amenities and travel voucher compensation certificates consistent
      with
      Frontier mainline customer service programs;

    


    (e) customer
      reaccommodations due to schedule disruption;

    


    (f) interface
      and all technological support necessary to ensure accurate and reliable dynamic
      transfer of operational data from Frontier to RAI’s system operational control
      center in Indianapolis, Indiana, a data interface of RAI’s ACARS to Frontier’s
      reservation systems, and of RAI’s system control with Frontier’s flight
      information data;

    


    (g) capital
      expenditures for aircraft ground handling;

    


    (h) advertising
      and sales programs;

    


    (i) operations
      space at Denver International Airport, including gates, holdrooms, and airport
      concourse space for offices, break rooms, parts storage, crew lounges, and
      flight operations (the “Denver Space Requirements”), all as agreed to by the
      parties no later than January 31, 2007; and

    


    (j) hangar
      space at Denver International Airport sufficient to accommodate the maintenance
      activities referred to in Section
      2(a) and 3
      of
Exhibit
      G.

     

    Section
      5.03  
      Change of Control.
      Upon the
      occurrence of a Change of Control of any party hereto (including RAI Holdings
      or
      Frontier Holdings) without the prior written consent of the other party, the
      non-consenting party shall have the right to terminate this Agreement on 90
      days
      prior written notice, such notice to be delivered not later than 90 days after
      the non-consenting party 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 the written notice
      of termination is delivered).

    


    Section
      5.04 Transfer of Assets.
      Neither
      Frontier nor RAI will enter into an agreement (or series of agreements) to
      sell,
      assign, transfer or convey all or substantially all of its assets to any Person
      unless, as part of such agreement, such Person agrees to assume any and all
      of
      the seller’s rights, duties and obligations arising under this Agreement and the
      non-selling party consents in writing in advance to such sale, assignment,
      transfer or conveyance. 

     

     

    
 

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

     ARTICLE
      VI

     INSURANCE

    


     Section
      6.01  Minimum
      Insurance Coverages.
      During
      the Term, in addition to any insurance required to be maintained by RAI pursuant
      to the terms of any aircraft lease, or by any applicable governmental or airport
      authority, RAI 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
      airline liability insurance, including bodily injury and personal injury, third
      party propery damage, passenger liability (including passengers' baggage and
      personal effects), cargo and mail legal liability, for a combined single limit
      of not less than [* ]
      per
      occurrence (or whatever higher amount RAI may carry from time to time), limited
      in the case of personal injury to [*] per occurrence and in the aggregate
      (except with respect to passengers to whom the full policy limit applies),
      and War Risk liability insurance as per London form AVN.52E or current
      equivalent, or as provided by the Federal Aviation Administration program,
      with
      a combined single limit no less than [*]
      per
      occurrence (or whatever higher amount RAI may carry from time to
      time);

    


    (b)
      All
      Risk Hull Insurance on aircraft performing services hereunder, insured on an
      agreed value basis with standard market deductibles, including hull war coverage
      as per London form LSW 555 or equivalent, or as provided by the Federal Aviation
      Administration program.

     

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

     

    (d)  Other
      property and liability insurance coverages of the types and in the amounts
      that
      would be considered reasonably prudent for a business organization of RAI'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 Frontier 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 RAI's operations. All coverages described in this Section
      6.01
      shall be
      placed with deductibles reasonably prudent for a business organization of RAI's
      size and nature, under the insurance market conditions in effect at the time
      of
      placement.

     

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

    


    (a)
      with
      respect to liability coverage to provide that Frontier, and its directors,
      officers, agents, employees and other authorized representatives shall be
      endorsed as additional insured parties;

     

    (b)  To
      provide that the underwriters shall waive subrogation rights against Frontier,
      its directors, officers, agents, employees and other authorized
      representatives;

     

    (c)  with
      respect to liability coverage, 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 RAI'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;

    


    (f)
      with
      respect to liability coverages to provide that the inclusion of more than one
      corporation, person, organization, firm or entity as Insured under the policies
      shall not in any way affect the rights of any such corporation, person,
      organization, firm or entity either as respects any claim, demand, suit, or
      judgment made, brought or recovered by or in favor of any other Insured, or
      by
      or in favor of any employee of such other Insured. The policy shall protect
      each
      corporation, person, organization, firm or entity in the same manner as though
      a
      separate policy had been issued to each. Nothing herein shall operate to
      increase the liability of the insurers as set forth in the policies beyond
      the
      amount for which the insurers would have been liable if only one person or
      interest had been included as an insured.

     

    (g)  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 Frontier.

     

    Section
      6.03  Evidence
      of Insurance Coverage.
      At the
      commencement of this Agreement, and thereafter at Frontier's request, RAI shall
      furnish to Frontier evidence reasonably satisfactory to Frontier 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 RAI fails to acquire or
      maintain insurance as herein, provided,
      Frontier may at its option secure such insurance on RAI's behalf at RAI's
      expense.

    


    


    
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    ARTICLE
      VII  INDEMNIFICATION

     

    Section
      7.01  RAI
      Indemnification of Frontier.
      RAI
      shall be liable for and hereby agrees to fully defend, release, discharge,
      indemnify and hold harmless Frontier, 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 Frontier 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 RAI's or Frontier'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 (x) any act or omission by RAI or any of its directors,
      officers, employees or agents relating to the provision of Regional Airline
      Services, (y) the performance, improper performance, or non-performance of
      any
      and all obligations to be undertaken by RAI or any of its directors, officers,
      employees or agents pursuant to this Agreement, or (z) the operation,
      non-operation, or improper operation of the Covered Aircraft or RAI'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 Frontier 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). RAI will use commercially
      reasonable efforts to cause and assure that RAI will at all times be and remain
      in custody and control of all aircraft, equipment, and facilities of, or
      operated by, RAI, and Frontier 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  Frontier
      Indemnification of RAI.
      Frontier
      shall be liable for and hereby agrees fully to defend, release, discharge,
      indemnify, and hold harmless RAI, 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 RAI, 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 RAI's or Frontier'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, (x) the performance,
      improper performance, or nonperformance of any and all obligations to be
      undertaken by Frontier or any of its directors, officers, employees or agents
      pursuant to this Agreement, (y) the operation, non-operation or improper
      operation of Frontier's aircraft, equipment or facilities (excluding, for the
      avoidance of doubt, Covered Aircraft and any equipment or facilities leased
      or
      subleased by Frontier to RAI) 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 RAI or its directors, officers, agents or
      employees.

     

    Section
      7.03  Indemnification
      Claims.
      A party
      entitled to indemnification (the “Indemnified
      Party”)
      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.

     

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

    
       

       

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

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

     

    (d)  RAI
      Flights.
      The
      fact that RAI's operations are conducted under Frontier's Marks and listed
      under
      the F9 designator code will not affect their status as flights operated by
      RAI
      for purposes of this Agreement or any other agreement between the parties,
      and
      RAI and Frontier 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.

    
      
      

    

    
    

    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 Effective
      Date and, unless earlier terminated for Cause or breach or extended as provided
      herein, shall continue until the eleventh (11th)
      anniversary of the date the last Covered Aircraft was placed into service,
      as
      such date may be extended pursuant to Section
      10.17
      hereof
      (the “Term”).

     

    Section
      8.02  Early
      Termination

     

    (a)  By
      Frontier for Cause.
      Frontier shall have the right to terminate this Agreement upon written 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) The notice of termination provided by Frontier pursuant to this
      Section
      8.02(a)
      shall
      designate a termination date (which may be any date between the date of the
      notice and a date no more than 120 days of the date of the notice) and will
      also
      indicate whether or not Frontier intends to submit a Wind-Down Schedule pursuant
      to Section
      8.03(a),
      and the
      termination date set forth in the notice provided by Frontier will 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 Frontier shall not have
      delivered written notice of termination pursuant to this Section
      8.02(a) within
      45
      days after Frontier receives written notice from RAI of the occurrence of any
      event that constitutes Cause by RAI, then Frontier 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
      Frontier for Breach.
      Frontier may terminate this Agreement, upon two Business Days’ prior written
      notice, upon the occurrence of (A) a material breach of this Agreement by RAI
      as
      described in clause
      (i)
      below,
      which breach shall not have been cured within such two Business Day period,
      or
      (B) a breach by RAI of its covenant contained in Section
      5.04.
      Frontier may also terminate this Agreement upon the occurrence of any other
      material breach of this Agreement by RAI, which breach shall not have been
      cured
      within 60 days after written notice of such breach is delivered by Frontier
      to
      RAI (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). Any termination notice provided by Frontier
      pursuant to this Section
      8.02(b)
      shall
      specify a Termination Date that will be no more than 90 days from the date
      of
      such notice. 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 RAI: (i) a reasonable and
      good
      faith determination by Frontier, using recognized standards of safety, that
      there is a material safety concern with the operation of any Scheduled Flights,
      or (ii) the grounding of the Covered Aircraft by regulatory or court order
      or
      other governmental action. In the event that Frontier shall not have delivered
      written notice of termination pursuant to this Section
      8.02(b)
      within
      45 days after Frontier receives written notice from RAI of any material breach
      of this Agreement by RAI, then Frontier 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
      RAI for Breach.
      RAI may
      terminate this Agreement upon (i) five Business Days prior written notice upon
      (A) any failure by Frontier 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 five Business Days after written notice of such failure is delivered
      by
      RAI to Frontier, or (B) a breach by Frontier of its covenant contained in
Section
      5.04,
      (ii)
      the occurrence of any other failure by Frontier 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 RAI to
      Frontier, or (iii) the occurrence of any other material breach of this Agreement
      by Frontier, 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 received by Frontier. In the event that RAI shall
      not
      have delivered written notice of termination pursuant to this Section
      8.02(c)
      within
      45 days after RAI receives written notice from Frontier of any material breach
      of this Agreement by Frontier, then RAI 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.
      Notwithstanding the Termination Date indicated in any notice of termination
      provided by either party pursuant to this Agreement, upon any termination
      hereunder where a party has elected to provide a Wind-Down Schedule, 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, if any,
      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 the final Covered Aircraft is withdrawn from this Agreement.

    


    Section
      8.03  Disposition
      of Aircraft during Wind-Down Period

    


    (a)  Termination
      by Frontier for Cause.
      If this
      Agreement is terminated pursuant to Section 8.02(a),
      the
      Covered Aircraft shall be completely 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, unless the notice of termination provided
      by
      Frontier under Section
      8.02(a)
      indicates that Frontier intends to submit a Wind-Down Schedule. In such event
      within 120 days of sending the notice of termination pursuant to Section
      8.02(a),
      Frontier will provide an irrevocable Wind-Down Schedule according to which
      the
      Covered Aircraft will be withdrawn from the capacity purchase provisions of
      this
      Agreement. The Wind-Down Schedule will provide for the withdrawal of the Covered
      Aircraft no sooner than the Termination Date and no later than 24 months from
      the Termination Date. The provisions of this Section 8.03(a)
      shall
      supersede any Wind-Down Schedule delivered pursuant to any other provision
      of
      this Agreement.

    
      _______________

      *
        Confidential

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    (b)  Termination
      by Frontier for Breach or Change of Control.
      If this
      Agreement is terminated by Frontier under Section
      8.02(b), Section 5.03,
      or
Section
      5.04,
      then
      the Covered Aircraft shall be withdrawn from the capacity purchase provisions
      of
      this Agreement in accordance with the following terms and
      conditions:

     

    (i)  Within
      180 days of delivery of any notice of termination, Frontier shall deliver to
      RAI
      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 to be withdrawn by month, which will
      not
      be more than [* ]
      Covered
      Aircraft per month.

     

    (ii)  The
      Wind-Down Schedule may not provide for the withdrawal of any Covered Aircraft
      beyond any date more than 24 months after the Termination Date.

     

    (c)  Termination
      by RAI for Breach.
      If this
      Agreement is terminated by RAI under Section
      8.02(c)
      or
Section
      5.03,
      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 RAI to Frontier pursuant to
      Section 8.02(c)(i)
      shall be
      irrevocable and shall contain a Termination Date that is no 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 Frontier 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 RAI to Frontier pursuant to
Section
      8.02(c)(ii)
      shall be
      irrevocable and shall contain a Termination Date that is at least 10 and not
      more than 360 days after the date of such notice. The notice of termination
      delivered by RAI to Frontier pursuant to Section
      8.02(c)(iii)
      or
Section
      5.03
      shall be
      irrevocable and shall contain a Termination Date that is no fewer than 180
      days
      after the date of such notice. Prior to the earlier of (i) two Business Days
      prior to the Termination Date, and (ii) the 90th day after receipt of such
      termination notice pursuant to Section
      8.02(c)(ii), 8.02(c)(iii),
      or
5.03,
      RAI
      shall deliver to Frontier 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
      Frontier 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 RAI. The Wind-Down Schedule may not provide for the withdrawal
      of
      any Covered Aircraft beyond any date more than 12 months after the Termination
      Date nor provide for the removal of more than [* ]
      Covered
      Aircraft per calendar month.

     

    (d)  Termination
      at End of Term.
      If the
      Agreement is terminated at the end of the Term or any extension thereof (other
      than pursuant to Section
      8.02),
      Frontier shall deliver to RAI a Wind-Down Schedule no fewer than 180 days prior
      to the end of the Term or any extension thereof. Such Wind-Down Schedule may
      not
      provide for the withdrawal of any Covered Aircraft beyond any date more than
      18
      months after the end of the Term or extension period nor provide for the removal
      of more than [*] Covered Aircraft per calendar month

     

    (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 the Covered
      Aircraft by the FAA, then for so long as such Labor Strike or grounding shall
      continue and thereafter until the Controllable Completion Factor Percentage
      of
      Scheduled Flights (calculated on a daily basis) on any day of the week equals
      or
      exceeds the Controllable Completion Factor Percentage Target Threshold of
      Scheduled Flights, Frontier shall not be required to pay any of the Fixed Cost
      elements set forth on Appendix
      1
      to
Exhibit
      D.
      The
      rights set forth in this Section
      8.03(e)
      are in
      addition to, and not in limitation of, any other right of Frontier 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

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    ARTICLE
      IX  REPRESENTATIONS, WARRANTIES AND COVENANTS

     

    Section
      9.01  Representations
      and Warranties of RAI.
      RAI
      represents and warrants to Frontier as of the date hereof as
      follows:

     

    (a)  Organization
      and Qualification.
      RAI is
      a duly organized and validly existing corporation under the laws of the State
      of
      Indiana. RAI has the corporate power and authority to own, operate and use
      its
      assets and to provide the Regional Airline Services. RAI is duly qualified
      to do
      business as a foreign corporation under the laws of each jurisdiction that
      requires such qualification, except where the failure to possess such
      qualification would not have a material adverse effect on RAI or its ability
      to
      conduct its business, to provide Regional Airline Services, and otherwise to
      perform its obligations hereunder.

     

    (b)  Authority
      Relative to this Agreement.
      RAI 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 RAI. This Agreement has been duly and validly
      executed and delivered by RAI and is, assuming due execution and delivery
      thereof by Frontier and that Frontier has legal power and right to enter into
      this Agreement, a valid and binding obligation of RAI, enforceable against
      RAI
      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 RAI of the
      transactions contemplated hereby will (i) violate, conflict with, or constitute
      a default under any of the terms of RAI'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 RAI
      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.
      RAI 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 RAI or on its ability to provide Regional Airlines Services and
      otherwise perform its obligations hereunder. To the knowledge of RAI, no third
      party to any indenture, mortgage, deed of trust, loan agreement, lease or other
      agreement or instrument that is material to RAI to which RAI 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.
      RAI 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
      RAI Holdings delivered (or, if filed with the Securities and Exchange
      Commission, made available) to Frontier immediately prior to the date hereof
      fairly present in all material respects the consolidated financial position
      of
      RAI Holdings 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 RAI Holdings. 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.
      RAI 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. RAI 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. RAI 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 RAI.

     

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

    


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

     

    (j)  Permits.
      Other
      than FAA certification for over-water operations, which certification RAI
      intends to obtain prior to the inservice date of the fifth Covered Aircraft,
      RAI
      possesses 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 RAI has
      not
      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 RAI or on its ability to conduct its
      businesses, to provide Regional Airlines Services and otherwise to perform
      its
      obligations hereunder.

    
       


    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

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

     

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

     

    (b)  Authority
      Relative to this Agreement.
      Frontier 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 Frontier. This Agreement has
      been duly and validly executed and delivered by Frontier and is, assuming due
      execution and delivery thereof by RAI and that RAI has legal power and right
      to
      enter into this Agreement, a valid and binding obligation of Frontier,
      enforceable against Frontier 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 Frontier
      of
      the transactions contemplated hereby will (i) violate, conflict with, or
      constitute a default under any of the terms of Frontier'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 Frontier 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.
      Frontier 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 Frontier has received notice, in each case to which Frontier is a party
      or
      of which any property or assets of Frontier is the subject which, if determined
      adversely to Frontier, would individually or in the aggregate have a material
      adverse effect on Frontier or on its ability to perform its obligations
      hereunder; and to the best knowledge of Frontier, no such proceedings are
      threatened or contemplated by governmental authorities or threatened by
      others.

    


    (f)  Financial
      Statements.
      The
      financial statements (including the related notes and supporting schedules)
      of
      Frontier Holdings delivered (or, if filed with the Securities and Exchange
      Commission, made available) to RAI immediately prior to the date hereof fairly
      present in all material respects the consolidated financial position of Frontier
      Holdings. 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 Frontier Holdings. 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.

     

     

    
       


    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    ARTICLE
      X  MISCELLANEOUS

     

    Section
      10.01  Transition
      Arrangements

     

    (a)  Scheduling.
      Subsequent to the execution of this Agreement, and prior to the inservice date
      of the first Covered Aircraft, RAI and Frontier 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 inservice date
      of the first Covered Aircraft, RAI and Frontier shall work together to
      facilitate all other relevant aspects of the commencement of RAI's provision
      of
      Regional Airlines Services, including without limitation the provision of
      passenger-related and technology-related services.

     

    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 Frontier:

    


    Frontier
      Airlines, Inc.7001 Tower Road

    Denver,
      Colorado 80249

    Attention:
      Senior Vice President - Marketing & PlanningTelecopy No.: (720)
      374-4375

    Email:
      jhapp@flyfrontier.com

    


    With
      copy
      to:

    


    Frontier
      Airlines, Inc.

    7001
      Tower Road

    Denver,
      Colorado 80249

    Attention:
      General Counsel

    Telecopy
      No.: 720-374-4579

    Email:
      dsislowski@flyfrontier.com

    


    if
      to
      RAI:

    


    Republic
      Airways Holdings Inc.8909 Purdue Road, Suite 300

    Indianapolis,
      IN 46268

    Attention:
      President and Chief Executive OfficerTelecopy No.: 317-484-4547

    Email:
      bbedford@rjet.com

    


    With
      copy
      to:

    


    Republic
      Airways Holdings, Inc.

    8909
      Purdue Road, Suite 300

    Indianapolis,
      Indiana 46268

    Attention:
      Mr. Timothy Dooley

    Telecopy:
      317-484-4580

    Email:
      tdooley@rjet.com

    


    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
      .

    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
      Frontier's and RAI’s respective 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 (x) the
      terms or conditions of this Agreement, or any exhibit, schedule or appendix
      hereto or thereto, or any information, data, schedules, route information,
      fare
      schedules and rules shared between the parties during the course of performance
      under this Agreement, without the prior written consent of the other parties
      thereto, or (y) any confidential information or data, both oral and written,
      received from the other, whether pursuant to or 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 (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 as otherwise expressly permitted or contemplated by this
      Agreement. 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, unless expressly requested not to do so by
      a
      government agency issuing the subpoena or other process, 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
      New
      York, New York 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 New York, New York, 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.

    


    (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 New York (excluding New York 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 New York, New York 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.
      RAI
      will update from time to time Exhibit
      B
      to
      reflect the exact in-service week and in-service day that each of the TBD
      aircraft appearing on Exhibit
      B
      is
      known, with notification to Frontier as to such week being no later than
      [* ]
      in
      advance of the in-service week and the notification as to such date being no
      later than [*] in advance of the in-service date. RAI will deliver such amended
      Exhibit
      B
      to
      Frontier as soon as possible. If RAI shall fail to provide a Covered Aircraft
      (such Covered Aircraft being referred to as a “Delayed Aircraft”) on the
      applicable in-service day reflected on the amended Exhibit
      B, or, if no inservice date has been specified, the last day of the applicable
      scheduled inservice week, or, if no inservice week has been designated, the
      last
      day of the inservice month (in each case, the “Anticipated Service
      Date”),
      RAI
      will pay to Frontier liquidated damages in an amount equal to [* ]
      per
      each day between the Anticipated Service Date and the actual in-service date
      of
      such aircraft (or, if applicable, the date of any election by Frontier to remove
      the aircraft, as provided below), provided
      that,
      in the
      event such inservice delay is due to circumstances beyond the control of RAI
      and
      RAI provides prior notice (the “Delay
      Notice”)
      of
      such delay, such liquidated damages shall not in any event exceed (x) [*] if
      the
      Delay Notice is provided to Frontier no fewer than [*] prior to the Anticipated
      Service Date for the Delayed Aircraft, or (y) if such notice is delivered fewer
      than [*] prior to the Anticipated Service Date for the Delayed Aircraft, (i)
      [*]
      plus (ii) [*] times the difference between [*] minus the number of days between
      the date of such notice and the Anticipated Service Date for the Delayed
      Aircraft, and provided
      further,
      if the
      revised delivery date for the Delayed Aircraft indicated in the Delay Notice
      (or
      in any subsequent notice as a result of subsequent delays), is more than [*]
      beyond the Anticipated Service Date, Frontier will have the right, to be
      exercised within five Business Days of receipt of such notice (or subsequent
      notice), to elect to remove the Delayed Aircraft from the terms of this
      Agreement. Should Frontier elect to remove the Delayed Aircraft from the terms
      of this Agreement pursuant to this Section
      10.11(b),
      (x) if
      such removal occurs prior to the Anticipated Service Date, no liquidated damages
      shall be payable by RAI, and (y) if such removal occurs after the Anticipated
      Service Date as a result of any such subsequent notice, the liquidated damages
      described herein will be calculated based on the number of days between the
      Anticipated Service Date and the date of Frontier’s election to remove such
      aircraft from this Agreement. 

    


    The
      parties agree that the damages to be suffered by Frontier in connection with
      RAI's failure to deliver an aircraft on an Anticipated Service Date 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 shall be Frontier's sole and exclusive remedies against
      RAI
      for any damages suffered solely as a result of RAI's failure to deliver an
      aircraft on an Anticipated Service Date as described above.

    (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 RAI, Frontier
      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
      (iv)
      of the
      definition thereof, (ii) a material breach of the type described in clause
      (ii)
      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) 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 New York (excluding New York 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 the City and County of New York, New York.

     

    Section
      10.15  
      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. 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
      10.16  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.

    


    Section
      10.17  Extension
      of Term. 
      Frontier may extend the Term of this Agreement for up to two extension periods
      by delivering to RAI written notice on such extension no less than 365 days
      prior to the end of the then existing Term. Any extension shall be for no less
      than three years.

    
      _______________

      *
        Confidential

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    Section
      10.18   
      Life Limited Parts.

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

    


    Section
      10.19 RAI Holdings Guarantee. 

    


    (a) RAI
      Holdings does hereby unconditionally and irrevocably guaranty to Frontier,
      as a
      primary obligor and not merely as surety, (i) the due, punctual, and full
      payment (when due, by acceleration or otherwise) of each amount which RAI is
      or
      may become obligated to pay under this Agreement, (ii) the full and punctual
      performance and observance by RAI of each term, provision, condition, agreement
      and covenant for which it is liable contained in this Agreement, and (iii)
      the
      accuracy of each of the representations and warranties of RAI set forth in
      this
      Agreement. RAI Holdings hereby expressly waives notice, promptness, presentment
      and diligence as to the obligations guaranteed hereby and acceptance of this
      guarantee or any requirement that Frontier proceed first against RAI or any
      security for or any other guarantor of any of the obligations guaranteed
      hereunder (and without having to join any other person in any such action).
      RAI
      Holdings agrees that it shall not be required to consent to, or receive any
      notice of, any amendment or modification of, or waiver, consent or extension
      with respect to, this Agreement or any payments or performance obligations
      required of RAI herein.

    


    (b) This
      guarantee by RAI Holdings is a guarantee of payment and performance and not
      merely a guaranty of collection, and RAI Holding’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 Section 10.19, 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 RAI Holdings
      hereunder.

    


    (c) The
      guarantee by RAI Holdings in this Section 10.19 shall continue to be effective,
      or be reinstated, as the case may be, if at any time payment by RAI or RAI
      Holdings of all or any part of any sum payable pursuant to this Agreement or
      this guarantee is rescinded or otherwise must be returned by Frontier upon
      RAI’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 and performed in full, RAI Holdings shall have no right of subrogation
      or
      any other right to enforce any remedy which Frontier now has or may hereafter
      have against RAI.

    


    (d) RAI
      Holdings hereby represents and warrants (i) that it has the necessary power
      and
      authority to execute and deliver this Agreement, (ii) all required consents,
      approvals and authorizations have been obtained with respect to the execution
      and delivery of this Agreement by RAI Holdings, and (iii) that this Agreement
      has been duly executed and delivered by RAI Holdings and is enforceable against
      RAI Holdings in accordance with its terms, and (iv) the execution and delivery
      of this Agreement by RAI Holdings does not violate its certificate of
      incorporation or bylaws or the terms of any material contract to which it is
      a
      party or by which it is bound, provided,
      the
      representations and warranties set forth in clauses (i) through (iv) above
      are
      solely as to the extent necessary to provide the guarantee set forth in this
      Section
      10.19,
      and,
provided
      further,
      that
      such representations and warranties as to enforceability are qualified to the
      extent enforceability may be effected by the laws of bankruptcy and
      equity.

    


    Section
      10.20 Frontier Holdings Guarantee. 

    


    (a) Frontier
      Holdings does hereby unconditionally and irrevocably guaranty to RAI, as a
      primary obligor and not merely as surety, (i) the due, punctual, and full
      payment (when due, by acceleration or otherwise) of each amount which Frontier
      is or may become obligated to pay under this Agreement, (ii) the full and
      punctual performance and observance by Frontier of each term, provision,
      condition, agreement and covenant for which it is liable contained in this
      Agreement, and (iii) the accuracy of each of the representations and warranties
      of Frontier set forth in this Agreement. Frontier Holdings hereby expressly
      waives notice, promptness, presentment and diligence as to the obligations
      guaranteed hereby and acceptance of this guarantee or any requirement that
      RAI
      proceed first against Frontier or any security for or any other guarantor of
      any
      of the obligations guaranteed hereunder (and without having to join any other
      person in any such action). Frontier Holdings agrees that it shall not be
      required to consent to, or receive any notice of, any amendment or modification
      of, or waiver, consent or extension with respect to, this Agreement or any
      payments or performance obligations required of Frontier herein.

    


    (b) This
      guarantee by Frontier Holdings is a guarantee of payment and performance and
      not
      merely a guaranty of collection, and Frontier Holding’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 Section 10.20, 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 Frontier Holdings
      hereunder.

    


    (c) The
      guarantee by Frontier Holdings in this Section 10.20 shall continue to be
      effective, or be reinstated, as the case may be, if at any time payment by
      Frontier or Frontier Holdings of all or any part of any sum payable pursuant
      to
      this Agreement or this guarantee is rescinded or otherwise must be returned
      by
      RAI upon Frontier’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 and performed in full, Frontier Holdings shall have no
      right of subrogation or any other right to enforce any remedy which RAI now
      has
      or may hereafter have against Frontier.

    


    (d) RAI
      Holdings hereby represents and warrants (i) that it has the necessary power
      and
      authority to execute and deliver this Agreement, (ii) all required consents,
      approvals and authorizations have been obtained with respect to the execution
      and delivery of this Agreement by RAI Holdings, and (iii) that this Agreement
      has been duly executed and delivered by RAI Holdings and is enforceable against
      RAI Holdings in accordance with its terms, and (iv) the execution and delivery
      of this Agreement by Frontier Holdings does not violate its certificate of
      incorporation or bylaws or the terms of any material contract to which it is
      a
      party or by which it is bound, provided,
      the
      representations and warranties set forth in clauses (i) through (iv) above
      are
      solely as to the extent necessary to provide the guarantee set forth in this
      Section
      10.19,
      and,
provided
      further,
      that
      such representations and warranties as to enforceability are qualified to the
      extent enforceability may be effected by the laws of bankruptcy and
      equity.

    
      
 

    

    
      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

    

    


    


    


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

    


    


    
      	
              FRONTIER
                AIRLINES, INC.

            	
              REPUBLIC
                AIRLINE INC.

            
	 	 
	 	 
	
              By
                /s/ Jeff S. Potter

            	
              By
                /s/ Bryan Bedford, President

            
	
              Jeff
                S. Potter, President

            	
              Bryan
                Bedford, President

            
	 	 
	 	 
	
              By
                /s/ Paul H. Tate

            	 
	
              Paul
                H. Tate, Senior Vice President

            	 


    

    


    The
      parties signing below do so solely with respect to their respective obligations
      under Section 10.19 and Section 10.20 of this Agreement.

     

    
      	
              FRONTIER
                AIRLINES HOLDINGS, INC.

            	
              REPUBLIC
                AIRWAYS HOLDINGS INC.

            
	 	 
	 	 
	
              By
                /s/
                Jeff S. Potter

            	
              By
                /s/
                Bryan Bedford

            
	
              Jeff
                S. Potter, President

            	
              Bryan
                Bedford, President

            
	 	 
	 	 
	
              By
                /s/
                Paul H. Tate

            	 
	
              Paul
                H. Tate, Senior Vice President

            	 


    

    


    


    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    


    


    


    Exhibits

    


    Exhibit
      A
      - Definitions

    Exhibit
      B
      - Covered
      Aircraft & Inservice Schedule

    Exhibit
      C
      - Aircraft
      Specification, Interior Configuration, Livery and Use of Frontier
      Marks

    Exhibit
      D
      - Compensation

    Exhibit
      E
      - Terms
      of Codeshare Arrangements

    Exhibit
      F
      - Use
      of RAI Marks

    Exhibit
      G
      - Reasonable
      Operating Constraints

    


    


    

      

      
         

      

    

    


    


    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    EXHIBIT
      A

    Definitions

    


     Agreement
      - means
      the Airline Services Agreement, dated as of January 11, 2007, among Frontier
      and
      RAI, as amended from time to time pursuant to Section
      10.04
      hereof. 

     

    Base
      Compensation
      - is
      defined in
      Paragraph A.1 of Exhibit D. 

     

    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 Denver, Colorado are
      authorized by law to close or the general offices of Frontier or RAI are closed
      due to weather or other natural forces. 

     

    Cause
      - means
      (i) the suspension for three consecutive days or longer or the revocation of
      RAI's authority to operate as a scheduled airline, (ii) the ceasing of RAI's
      operations as a scheduled airline, other than as a result of a Labor Strike
      or
      the mandatory grounding of the Covered Aircraft 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) beginning after the month in which the 12th
      aircraft
      is placed in service, RAI operating at or below the Default Threshold for
      Controllable arrivals within [* ]
      minutes
      or the Default Threshold for Controllable Completion Factor Percentage, each
      as
      described in Appendix
      2
      to
Exhibit
      D,
      for any
      two consecutive calendar months, or (v) a willful or intentional material breach
      of this Agreement by RAI that substantially deprives Frontier of the benefits
      of
      this Agreement, which breach shall have continued for 45 days after notice
      thereof is delivered by Frontier to RAI.

    


    Change
      of Control
      - means,
      with respect to any Person, the merger of such Person with, or the acquisition
      of direct or indirect control of such Person by, another air carrier, or a
      corporation directly or indirectly owning or controlling or directly or
      indirectly owned or controlled by another air carrier (a “Holding Company”), or
      a corporation directly or indirectly owned or controlled by such Holding
      Company, unless (1) such Person is the acquiring or surviving entity in such
      merger or acquisition, or (2) the ultimate beneficial ownership of the surviving
      entity immediately following such transaction is substantially similar (i.e.,
      at
      least 80% common ownership) to the ultimate beneficial ownership of such Person
      immediately prior to such transaction.

    


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

     

    Effective
      Date
      - is as
      set forth in the preamble to this Agreement. 

     

    Frontier
      - means
      Frontier Airlines, Inc., a Colorado corporation, and its successors and
      permitted assigns. Frontier
      

     

    Marks
      - is
      defined in Exhibit
      C.

    


    Frontier
      Holdings
      - means
      Frontier Airlines Holdings, Inc., a Delaware corporation.

    


    Covered
      Aircraft
      - means
      all of the aircraft listed on Exhibit
      B
      (as
      amended from time to time pursuant to the provisions of this Agreement) and
      presented for service by RAI, as adjusted from time to time for withdrawals
      pursuant to Article
      VIII
      and for
      extensions pursuant to Section
      10.17
      .

    


    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. 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 Frontier to RAI pursuant to Section 2.01(b).

     

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

     

    LLP
      - is
      defined in Section
      10.18.

     

    Denver
      Maintenance Base
      - is as
      described in paragraph 3 of Exhibit
      G

     

    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.

     

    RAI
      - means
      Republic Airlines, Inc., an Indiana corporation, and its successors and
      permitted assigns. 

     

    RAI
      Holdings -
      means
      Republic Airways Holdings Inc., a Delaware corporation.

     

    RAI
      Marks
      - is
      defined in
      Exhibit F.

     

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

     

    Reconciled
      Expenses
      - are
      those Variable Cost elements subject to reconciliation as described in
Exhibit
      D. 

     

    Regional
      Airline Services
      - means
      the provisioning by RAI to Frontier of Scheduled Flights and related ferrying
      using the Covered Aircraft or neutral spare aircraft in accordance with this
      Agreement. 

     

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

     

    Spare
      Aircraft
      - means
      any Aircraft designated as such by Frontier that will not be part of the
      Scheduled Flights and is intended to be used in place of Aircraft that are
      removed from Scheduled Flights due to mechanical issues or heavy check
      requirements, and may be used to cover flights for RAI or other carriers;
provided
      that,
      “Spare
      Aircraft”
shall
      also mean a neutral spare aircraft operated by RAI for another carrier which,
      as
      a result of operational needs, is required on a temporary basis to Scheduled
      Flights under the Agreement, all in accordance and subject to the limitations
      set forth in Section
      2.01(e)
      of this
      Agreement. 

     

    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.

    


    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. 

     

    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. 

     

    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

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    


    EXHIBIT
      B

    Covered
      Aircraft& In-Service Schedule

    


    


    
      	
              Number1

            	
              Aircraft
                Type

            	
              Scheduled
                In-Service Month

            	
              Scheduled
                In-Service Week

            	
              Scheduled
                In-Service Day

            
	
              1.  

            	
              EMB
                1702

            	
              [* ]

            	
              [*]

            	
              [*]

            
	
              2.  

            	
              EMB
                1702

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              3.  

            	
              EMB
                1702

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              4.  

            	
              EMB
                1702

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              5.  

            	
              EMB
                170

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              6.  

            	
              EMB
                170

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              7.  

            	
              EMB
                170

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              8.  

            	
              EMB
                170

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              9.  

            	
              EMB
                170

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              10.  

            	
              EMB
                170

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              11.  

            	
              EMB
                170

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              12.  

            	
              EMB
                170

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              13.  

            	
              EMB
                170

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              14.  

            	
              EMB
                170

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              15.  

            	
              EMB
                170

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              16.  

            	
              EMB
                170

            	
              [*]

            	
              [*]

            	
              [*]

            
	
              17.  

            	
              EMB
                170

            	
              [*]

            	
              [*]

            	
              [*]

            


    

     

    1 
      Frontier will designate which of the first twelve aircraft will be the spare
      aircraft no later than delivery of the 12th
      aircraft.

    


    2
      Aircraft initially delivered in two-class configuration and to be converted
      to
      single class Frontier specifications no later than June 30, 2007 in accordance
      with the terms of the Agreement.

    

      
         

      

    

    
      _______________

      *
        Confidential

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    EXHIBIT
      C

    


    Aircraft
      Specification, Interior Configuration, Livery and Use of Frontier
      Marks

    


    
      	
              1.

            	
              Aircraft
                Specification.
                The specifications of the Covered Aircraft will be as set forth in
                Schedule
                1
                of
                this Exhibit
                C.

            


    

    


    
      	
              2.

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

            


    

    


    
      	
              3.

            	
              Ownership
                of the Frontier Marks.

            


    

    


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

            


    

    


    
      	 	 	
              b.
                RAI acknowledges that Frontier is the owner of the Frontier Marks
                and
                hereby agrees to take no action that would be contrary to Frontier’s
                ownership of the Frontier Marks and agrees to cooperate with all
                of
                Frontier’s reasonable request to take any and all actions necessary to
                protect and preserve Frontier’s ownership of the Frontier
                Marks.

            


    

    


    
      	
              4.

            	
              Use
                of the Frontier Marks.

            


    

    


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

            


    

    


    
      	
               

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

            


    

    


    
      	
               

            	 	
              d.
                Frontier shall have exclusive control over the use and display of
                the
                Frontier Marks, and may change the Frontier Marks at any time and
                from
                time to time, in which case RAI shall as soon as practicable make
                such
                changes as are requested by Frontier to incorporate the new Frontier
                Marks;
                provided
                that Frontier shall either pay directly the reasonable costs of making
                such changes or shall promptly reimburse RAI for its reasonable expenses
                incurred in making such changes.

            


    

    


    
      	
               

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

            


    

    


    
      	
              5.

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

            


    

    


    
      	
              6.

            	
              Revocation
                of License.
                Frontier 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 Frontier Marks provided RAI herein shall
                revert to Frontier and the Frontier Marks shall not be used by RAI
                in
                connection with any operations of RAI. The following provisions shall
                apply to the termination of the license provided herein: in the case
                of a
                termination of the license to use the Frontier Marks, RAI shall cease
                all
                use of the Frontier Marks with respect to each Covered Aircraft within
                30
                days of such aircraft being withdrawn from the capacity purchase
                provisions of the Agreement, and shall cease all use of the Frontier
                Marks
                in all other respects within 30 days of last Covered Aircraft being
                withdrawn from this Agreement. Within such specified period, RAI
                shall
                cease all use of such other Frontier Marks, and shall change its
                facilities, equipment, uniforms and supplies to avoid any customer
                confusion or the appearance that RAI is continuing to have an operating
                relationship with Frontier, and RAI shall not thereafter make use
                of any
                word, words, term, design, name or mark confusingly similar to the
                Frontier Marks or take actions that otherwise may infringe the Frontier
                Marks.

            


    

    


    
      	
              7.

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

            


    

    


    
      	
              8.

            	
              Frontier
                Marks.
                The Frontier Marks are as set forth in Schedule
                2
                to
                this Exhibit
                C
                and also include the Aircraft Livery, including, without limitation,
                the
                use of an animal image on the tail of the aircraft, the Frontier
                flight
                code and other trade names, trademarks, service marks, graphics,
                logos,
                employee uniform designs, distinctive color schemes and other
                identification selected by Frontier in its sole discretion for the
                Regional Airline Services to be provided by RAI, whether or not such
                identification is copyrightable or otherwise protected or protectable
                under federal law.

            


    

    


    
      	
              9.

            	
              Aircraft
                Livery.
                With the exception of the Spare Aircraft (which may be in neutral
                livery),
                the Covered Aircraft will be painted in accordance with the designs
                shown
                on Schedule
                3
                to
                this Exhibit
                C
                at
                RAI’s sole cost and expense.

            


    

    


    
      	
              10.

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

            


    

    


    Attachments
      to Exhibit C

    


    Schedule
      1
      -
      Aircraft Specifications

    Schedule
      2
      -
      Frontier Marks

    Schedule
      3
      -
      Aircraft Livery


     

     

    SCHEDULE
      1 TO EXHIBIT C

    


    Aircraft
      Specifications

     

    1.  EMBRAER
      170 CONFIGURATION

     

    1.1.  EMBRAER
      170 Standard Aircraft

     

    The
      Aircraft EMBRAER 170 was manufactured in accordance with (i) the standard
      configuration specified in the Preliminary Technical Description PTD-170 Rev.
      4
      dated May 2003 and (ii) the characteristics described in the items
      below.

     

    1.2.  EMBRAER
      170 Optional Equipment

     

    The
      Aircraft will also be fitted with the following options selected by
      Buyer:

     

    1.2.1.
       Aircraft
      Model and Engines

              

                        a.
      EMBRAER 170
      LR

                        b.
      GE CF34-8E5
      Engine

     

    1.2.2.
       Options
      By Ata Chapter

    


    
      	
              ATA
                02

               

            	
              Ditching
                Certification (FAA and ANAC) (1)

               

            
	
              ATA
                21

               

            	
              Fwd
                Baggage Compartment Ventilation (live animals transportation)

               

            
	
              ATA
                23

               

            	
              3rd
                Digital VHF (data)

               

            
	
              ATA
                23

               

            	
              CMU
                (ACARS) (requires 3rd VHF digital)

               

            
	
              ATA
                25

               

            	
              Ultraleather
                cover for passenger seats

               

            
	
              ATA
                25

               

            	
              Elite
                Seats on Economy Class (38 double seats) (2)

               

            
	
              ATA
                25

               

            	
              Handicapped
                lavatory with soft partition

               

            
	
              ATA
                31

               

            	
              QAR
                (Quick Access Recorder) (Follow-on certification)

               

            
	
              ATA
                34

               

            	
              2nd
                Radio Altimeter

               

            
	
              ATA
                34

               

            	
              Turbulence
                Detection Mode on Weather Radar (model WU-880)

               

            
	
              ATA
                34

               

            	
              2nd
                FMS / GPS

               

            
	
              ATA
                35

               

            	
              77
                cubic feet Oxygen cylinder (std = 50 cubic feet) 

               

            
	
              ATA
                35

               

            	
              3rd
                oxygen masks for all RH seats

               

            
	
              ATA
                35

               

            	
              3rd
                oxygen masks for all LH seats

               

            
	
              ATA
                44

               

            	
              Audio
                Entertainment (CD Player)

               

            
	
              ATA
                45

               

            	
              Dataloader
                Management Unit (CD/Floppy drive) 

               

            
	
              ATA
                52

               

            	
              Door
                sill doublers (scuff plates at passenger, cargo and service doors)
                

               

            
	
              ATA
                52

               

            	
              FAA
                Cockpit Reinforced Door

               

            


    

    


     

    
      	
              (1) 

            	Ditching Certification does not include
              any
              operational equipment required for Extended Overwater Operations, such
              as
              ELT, life rafts etc. Such equipment shall be acquired by
              Republic.
	 	 
	
              (2)

            	Last row of seats do not
              recline.


    

     

     

     

    1.2.3.
       EMBRAER
      170 Interior Configuration (76 seats)

    


    
      	
               

              Class

               

            	
               

              #
                of Seats

               

            	
               

              Pitch

               

            
	
               

              Economy
                

               

            	
               

              4
                (1 row) 

               

            	
               

              30”

               

            
	
               

              Economy

               

            	
               

              72
                (18 rows) 

               

            	
               

              31”

               

            


    

    


    [Missing
      Graphic Reference]

    


    
      	
              Galley
                Inserts

            	
              G12HM*

            	
              G33FL*

            
	
              Half
                Size Trolley

            	
              2

            	
              6

            
	
              Standard
                Unit

            	
              1

            	
              4

            
	
              Mini
                Oven

            	
              ---

            	
              ---

            
	
              Coffee
                Maker

            	
              2

            	
              2

            




    *
      G12HM -
      Forward Galley Insert

    *
      G33FL -
      Rear Galley Insert

     

    Additional
      Comments: 

    
      	-  	
              Extended
                wardrobe (PN171-43850-801)
                to
                accommodate 3 life rafts (PN
                66536-103).

            


    

    -
      Embraer
      will implement the new weight increase modification with improved operational
      characteristics as described to Republic and Frontier.

    


     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    


    SCHEDULE
      2 TO EXHIBIT C

    


    Frontier
      Marks

    


    [Missing
      Graphic Reference]

    


    [MissingGraphic
      Reference]

     

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

     

    SCHEDULE
      3 TO EXHIBIT C

    


    Frontier
      E170 Livery

    


    [Missing
      Graphic Reference]

    


    [Missing
      Graphic Reference]


     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    EXHIBIT
      D

    Compensation

    Base
      and Incentive Compensation.

     

    
      	
              1.

            	
              Base
                Compensation.
                Frontier will pay to RAI, in respect of the Covered Aircraft, the
                rates
                set for on Appendix 1 to this Exhibit D for each calendar month,
                times,
                the applicable Unit of Measure, times, in each case where the rate
                category is indicated as being “Subject to Margin” on Appendix 1, a margin
                of [* ]
                (the “Margin”). Rates indicated as “Subject to Escalation on Appendix 1 to
                this Exhibit D will be adjusted in accordance with Section 3.02 of
                this
                Agreement.

            


    

    


    
      	
              2.

            	
              Pre-Bill
                Invoiced Amount.
                The Invoiced Amount calculated in accordance with Section 3.06 (a)
                of the
                Agreement will be calculated by using the data from the Final Monthly
                Schedule and the Operational Assumptions for any given month as
                follows:

            


    

    a.   the
      Invoiced Amount for each of the Fixed Cost cost elements will be calculated
      by
      multiplying (i) the Rate, times (ii) the Unit of Measure (as set forth in the
      Final Monthly Schedule and the Operational Assumptions for the month), times
      (iii) the Margin, where “W/A A/C” is the weighted average number of Covered
      Aircraft for the month and “Days” is the number of calendar days in the month.
      The Rate for each Fixed Cost element will not change during the Term except
      for
      the annual adjustment pursuant to Section 3.02 of the Agreement for those
      elements noted as “Subject to Escalation”; plus

    


    b. the
      Invoiced Amount for each of the Variable Cost elements will be calculated by
      multiplying (i) the Rate, times (ii) the Unit of Measure (as set forth in the
      Final Monthly Schedule and the Operational Assumptions for the month), times
      (iii) the Margin, times (iv) (other than those determined by using the “W/A A/C”
Unit of Measure) the Completion Factor Target Threshold percentage as in effect
      at the time of calculation, where “Blk Hrs” are the block hours estimated to be
      flown by the Covered Aircraft for the month, “W/A A/C” is the weighted average
      number of Covered Aircraft for the month, “Departures” is the number of
      departures estimated to be made by the Covered Aircraft during the month, “Flt
      Hrs” are the flight hours estimated to be flown by the Covered Aircraft for the
      month, “Pax” is the number of passengers estimated to be transported by the
      Covered Aircraft during the month, and “1000 RPMS” is the estimated revenue
      passenger miles flown by the Covered Aircraft during the month divided by 1,000.
      The Rate for each Variable Cost element will not change during the Term except
      for (i) the annual adjustment pursuant to Section 3.02 of the Agreement for
      those elements noted as “Subject to Escalation, and (ii) those elements noted as
      subject to “Periodic Adjustment” will be adjusted based on the actual costs of
the related insurance premiums paid by RAI, taking into account any increases
      or
      reductions in those premiums due to end of the coverage year calculations based
      on RAI’s operational statistics.

    


    
      	
              3.

            	
              Reconciled
                Costs.
                The Fixed Cost elements calculated by using the “W/A A/C” Unit of Measure,
                and the Variable Cost elements will be reconciled pursuant to Section
                3.06
                (b) of the Agreement by calculating the difference between the Invoiced
                Amount for such elements and the amount due for such elements based
                on the
                Rate for each Variable Cost element times the actual Unit of Measure
                for
                the month.

            


    

    


    
      	
              4.

            	
              Pass-Thru
                Costs.
                Frontier will reimburse RAI for each Pass-Thru Cost element in accordance
                with Section 3.06 (c) of the Agreement. Pass-Thru Costs are actual
                costs
                incurred and are not subject to Margin, Escalation or Periodic
                Adjustment.

            


    

    


    
      	
               5.

            	
              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 Frontier to RAI) or a rebate or
                offset
                (represented by a payment by RAI to Frontier), in each case in respect
                of
                on-time performance, as determined pursuant to
                Appendix 2
                to
                this Exhibit
                D
                .

            


    

    


     b. Completion
      Factor Bonus/Rebate.
      The
      reconciliation for any calendar month shall include, as applicable, a bonus
      (represented by a payment by Frontier to RAI) or a rebate or offset (represented
      by a payment by RAI to Frontier), in each case in respect of RAI’s completion
      factor for the month, as determined pursuant to
      Appendix 2
      to this
Exhibit
      D.

    


    
      	6.	Frontier Expenses.
              With respect to Scheduled Flights, in consideration of the provision
              by
              RAI of Regional Airline Services and its compliance with the other
              terms
              and conditions of this Agreement, the following expenses shall be incurred
              directly Frontier, provided
              that,
              should RAI incur any such expenses, RAI will be reimbursed for such
              expenses in accordance with Section 3.06 (c) of the
              Agreement:


    

     

    (a)   Covered
      Aircraft fuel, including into plane charges, taxes and administrative
      fees;

    (b)   Landing
      fees;


    (c)   Passenger
      catering;


    (d) Travel
      agency and OAL related CRS booking fees;


    (e)
       Revenue
      taxes and PFCs;  

    (f)   Credit
      card processing fees;

    (g)   Deicing
      services at all cities;

    (h)   All
      customer inconvenience charges;

    (i)   TSA
      fees
      or charges and any other passenger security fees;

    (j)   NAV
      Canada fees; and


    (k)   Any
      future ATC or enroute navigation fees charged in the United States of America;
      and


    (l) Station
      expenses;


    (m) Staged
      overnight hotel and per diem expense; and


    (n) Rates
      and
      charges relating to the Denver Space Requirements as defined in Section
      5.02(i) and
      the
      hangar space as described in
      Section 5.02(j).

     

    
      	
               

            	
              7.

            	
              No
                Reconciliation for Fines, Etc. Notwithstanding
                anything to the contrary contained in this
                Exhibit D
                or
                the Agreement, Frontier shall not be required to incur any cost or
                make
                any reconciliation payment to RAI 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 RAI as a result of
                any
                violation by RAI of any law, statute, judgment, decree, order, rule
                or
                regulation of any governmental or airport authority, provided
                that,
                Frontier 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 RAI as a result of any violation
                by
                Frontier or its agents of any law, statute, judgment, decree, order,
                rule
                or regulation of any governmental or airport
                authority.

            


    

    
      
        _______________

        *
          Confidential

        
        

      

      
        
        

        
        

      

      
        
        

      

    

     

     

     

    Exhibit
      D Appendices

     

    


    Appendix
      1     Base Compensation Rates 

    Appendix
      2     Incentive Bonuses/Rebates

    

      
        
           

        

      

    

     

    
       


    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

     

    APPENDIX
      1 TO EXHIBIT D

    
 

    
      	 	
              COST

            	 	
              SUBJECT

            	
              SUBJECT

            	
              UNIT
                OF

            	 	 	
              PERIODIC

            
	 	
              ELEMENT

            	 	
              TO
                MARGIN

            	
              TO
                ESCALATION

            	
              MEASURE

            	 	
              RATE

            	
              ADJUSTMENT

            
	
              FIXED
                COSTS:

            	 	 	 	 	 	 	 	 
	 	
              [* ]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            
	 	 	 	 	 	 	 	 	 
	
              VARIABLE
                COSTS:

            	 	 	 	 	 	 	 	 
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*] 

            
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*] 

            
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            
	 	 	 	 	 	 	 	 	 
	
              PASS-THRU
                COSTS:

            	 	 	 	 	 	 	 	 
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            
	 	
              [*]

            	 	
              [*]

            	
              [*]

            	
              [*]

            	 	
              [*]

            	
              [*]

            


    

    


    
      _______________

      *
        Confidential


    

    
      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

    

    
 

    Appendix
      2 to Exhibit D

     

    Incentive
      Bonuses/Rebates

     

    1. On
      Time Bonus/Rebate:
      The
      bonus or rebate/offset, as the case may be, for on-time performance shall be
      determined as follows:

     

    Beginning
      each month or partial month after the 12th
      Covered
      Aircraft is placed in service, the percentage of RAI’s Controllable arrivals
      within [* ]
      minutes
      will be measured using ACARS data for each completed Scheduled Flight as soon
      as
      practicable following the end of each calendar month of operation. A flight
      cancellation will not also be counted as a delayed flight. The Target Threshold
      is for [*]of all Scheduled Flights to arrive within [*] minutes of scheduled
      arrival. The Bonus Threshold is [*]. The Penalty Threshold is [*]and the Default
      Threshold is [*]. Should RAI fall below the Penalty Threshold for Controllable
      arrivals within [*] minutes, RAI shall pay Frontier a minimum penalty of [*]
      plus and an additional [*] per full percentage point below the Penalty
      Threshold. Should RAI’s Controllable arrivals within [*] minutes be between the
      Penalty Threshold and the Bonus Threshold, there shall be no payment due to
      or
      from either party. In the event that RAI meets or exceeds the Bonus Threshold
      for Controllable arrivals within [*] minutes, Frontier shall pay to RAI a
      minimum bonus payment of [*] plus an additional [*] per full percentage point
      above the Bonus Threshold.

    


    2. Completion
      Factor Bonus/Rebate:
      The
      bonus or rebate/offset, as the case may be, for completion factor shall be
      determined as follows:

    


    Beginning
      each month or partial month after the 12th
      Covered
      Aircraft is place in service, the percentage of RAI’s Controllable Completion
      Factor Percentage will be measured for each Scheduled Flight as soon as
      practicable following the end of each calendar month of operation. The Target
      Threshold is for [*] of all Scheduled Flights to be completed. The Bonus
      Threshold is [*]. The Penalty Threshold is [*]and the Default Threshold is
      [*].
      Should RAI fall below the Penalty Threshold for Controllable Completion Factor
      Percentage in any month, RAI shall pay Frontier, for each percentage point
      (rounded to the next highest full percentage in all cases) below the Penalty
      Threshold, a penalty of [*] for the first month, [*] for the second consecutive
      month, [*] for the third consecutive month, and [*] for the fourth consecutive
      month and each consecutive month thereafter that the Penalty Threshold is not
      met. Should RAI’s Controllable Completion Factor Percentage be between the
      Penalty Threshold and the Bonus Threshold in any month, there shall be no
      payments due to or from either party. In the event RAI meets or exceeds the
      Bonus Threshold for Controllable Completion Factor Percentage in any month,
      Frontier will pay RAI a bonus of [*].

    


    3.
      Bonus/Penalty
      Payment Terms and Definitions.

    


    a. “Controllable”
      means factors other than those that are beyond RAI’s direct control, including,
      without limitation, weather, natural disasters, air traffic control, ground
      stops, taxi and parking delays, lightening strikes or bird strikes, delays
      caused by or requested by Frontier personnel, including aircraft ground
      damage.

    


    b. Frontier
      will be responsible for coding all delays and cancellations. When aircraft
      are
      scheduled for heavy maintenance, Frontier will determine, in its sole
      discretion, whether to reduce the flight schedule or use the spare aircraft
      to
      maintain schedule integrity. Should Frontier decide to use the spare aircraft
      to
      replace aircraft in scheduled heavy maintenance, incentive bonuses and rebates
      will be suspended until such time that the spare is removed from scheduled
      service to act once again as a spare or the out of service aircraft is returned
      to service, either as a scheduled aircraft or a spare aircraft.

    


    c. Any
      final
      settlement for bonuses or penalties will occur within 30 days after the end
      of
      each performance period. If any matters relating to the measurement or
      calculation of any penalties remain in dispute at the end of the 30 day period,
      Frontier will be entitled to set off the penalty amount it believes due against
      the next monthly payment due RAI, and will refund any excess over the final
      determined penalty within 5 business days’ of the parties reaching agreement on
      the measurement and calculation. If any matters relating to the calculation
      of
      bonuses remain in dispute at the end of the initial 30 day period, at the time
      final agreement is reached between the parties regarding the amount of bonus
      due, Frontier will pay the bonus to RAI plus interest on the agreed amount
      at an
      annual rate of prime plus [* ]
      for
      each day from the initial date of calculation through the date of
      payment.

    

      
        
          _______________

          *
            Confidential

        

      

      
        
          
          



      

    

    
      
        
          
             

          

          
          

        

        
          
          

          
          

        

        
          
          

          
          

        

      

    

    



    EXHIBIT
      E

    Terms
      of Codeshare Arrangements

    


    


    1. RAI's
      use of F9 code.
      During
      the Term of the Agreement, Frontier shall place its designator code, “F9”, on
      all Scheduled Flights operated by RAI. Frontier may suspend the display of
      its
      code on flights operated by RAI if RAI 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 RAI operated flights
      that display the F9 code are referred to herein as “F9 Flights”.

    


    2. RAI's
      display of F9 code.
       

    


      (a) All
      F9
      Flights will be included in the schedule, availability and fare displays of
      all
      computerized reservations systems in which Frontier and RAI participate, the
      Official Airline Guide (to the extent agreed upon) and Frontier's and RAI's
      internal reservation systems, under the F9 code, to the extent possible.
      Frontier and RAI will take the appropriate measures necessary to ensure the
      display of the schedules of all F9 Flights in accordance with the preceding
      sentence.

    


      (b) Frontier
      and RAI will disclose and identify the F9 Flights to the public as actually
      being a flight of and operated by RAI, in at least the following
      ways:

    


      (i) a
      symbol
      or a flight number range will be used in timetables and computer reservation
      systems indicating that F9 Flights are actually operated by RAI;

    


      (ii) to
      the
      extent reasonable, messages on airport flight information displays will identify
      RAI as the operator of flights shown as F9 Flights;

    


      (iii) Frontier
      and RAI advertising concerning F9 Flights and Frontier and RAI reservationists
      will disclose RAI as the operator of each F9 Flight; and

    


    (iv) in
      any other manner prescribed by law or DOT regulation.

    


    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. Frontier and RAI 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 Irregular Operations.
      RAI
      shall promptly notify Frontier System Operations Control via both positive
      phone
      contact and email of all irregularities involving a F9 Flight which result
      in
      any material damage to persons or property as soon as such information is
      available and shall furnish to Frontier as much detail as practicable. For
      purposes of this section, notification shall be made as follows:

    


    Frontier
      Airlines System Operations Control (SOC)

    7001
      Tower Road

    Denver,
      Colorado 80249

    Attention:
      SOC Shift Manager

    Phone
      no.
      (720) 374-4251 or (720) 374-4599

    Email:
      SOC@flyfrontier.com

    


    5. Code
      Sharing License.

    


    (a)  Grant
      of License.
      Subject
      to the terms and conditions of the Agreement, Frontier hereby grants to RAI
      a
      nonexclusive, nontransferable, revocable license to use the F9 designator code
      on all of its flights operated as a F9 Flight.

    


    (b)  Control
      of F9 Flights.
      Subject
      to the terms and conditions of the Agreement, RAI shall have sole responsibility
      for and control over, and Frontier shall have no responsibility for, control
      over or obligations or duties with respect to, each and every aspect of RAI's
      operation of F9 Flights.

    


    6. Display
      of other Codes.
      During
      the Term of the Agreement, Frontier 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 RAI
      with
      Covered Aircraft and to enter into agreements with such Alliance Airlines with
      respect thereto.
      RAI will
      cooperate with Frontier and any Alliance Airlines in the formation of a code
      share relationship between RAI and the Alliance Airlines and enter into
      reasonably acceptable agreements and make the necessary governmental filings,
      as
      requested by Frontier, with respect thereto.

    


    
      
        
          
             

          

          
          

        

        
          
          

          
          

        

        
          
          

          
          

        

      

    

    



    EXHIBIT
      F

    Use
      of RAI Marks

     

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

    


    2. Ownership
      of the RAI Marks.

    


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

    


      b. Frontier
      acknowledges RAI's ownership of the RAI Marks and further acknowledges the
      validity of the RAI Marks. Frontier agrees that it will not do anything that
      in
      any way infringes or abridges RAI's rights in the RAI Marks or directly or
      indirectly challenges the validity of the RAI Marks.

    


    3. Use
      of
      the RAI Marks.

    


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

    


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

    


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

    


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

    


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

    


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

    


    5. Revocation
      of License.
      RAI
      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
      RAI Marks provided Frontier herein shall revert to RAI and the RAI Marks shall
      not be used by Frontier in connection with any operations of Frontier. Frontier
      shall cease all use of the RAI Marks in all respects upon the last Covered
      Aircraft being withdrawn from this Agreement. Frontier shall not thereafter
      make
      use of any word, words, term, design, name or mark confusingly similar to the
      RAI Marks or take actions that otherwise may infringe the RAI
      Marks.

    


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

    


    7. RAI
      Marks.
      The RAI
      Marks are as follows:

    


    [Need
      Graphic Reference or other description of RAI Marks]

    


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

    


    
      
        
          
             

          

          
          

        

        
          
          

          
          

        

        
          
          

          
          

        

      

    

    



    EXHIBIT
      G

    Reasonable
      Operating Constraints

    


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

    


    1.  Minimum
      & Maximum Scheduling Parameters:

    


    
      	
               

            	
              Minimum

            	
              Maximum

            
	
              Scheduled
                Block Hours per Aircraft per day  

            	
              [* ]

            	
              [*]

            
	
              Scheduled
                Cycles per Aircraft per day 

            	
              [*]

            	
              [*]

            


    

    


    


    


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

    


    2.  Aircraft
      Maintenance and Crew Requirements.

    


    Frontier
      agrees to take into consideration RAI’s operational requirements for overnight
      maintenance and crew productivity (including, where feasible, mid-day flights
      into RAI crew base cities for crew exchanges) and legality.

    


    (a)
      Frontier shall use its best efforts to produce a Final Monthly Schedule in
      cooperation with RAI that meets the following location and minimum (block to
      block) hour requirements for overnight aircraft:

    


    (i)
      one-quarter (but in no event fewer than one) of the scheduled Covered Aircraft
      will remain overnight at Denver International Airport for normal maintenance
      (the “Required Denver RON Aircraft”);

    


    (ii)
      one-half (but in no event fewer than one and otherwise rounded down to the
      nearest whole number) of the Required Denver RON Aircraft will be scheduled
      to
      provide 9 hours of available maintenance time;

    


    (iii)
      the
      remaining Required Denver RON Aircraft will in no event have fewer than 7 hours
      of available maintenance time;

    


    (iv)
      at
      least one day per week, one of the Required Denver RON Aircraft will be
      scheduled to provide at least 14 hours of available maintenance time (block
      to
      block)

    


    (b)
      On
      the first Business Day of each calendar quarter, RAI will provide Frontier
      a
      listing of all scheduled heavy maintenance for the next twelve month period
      for
      all Covered Aircraft, and will use commercially reasonable best efforts to
      complete all scheduled heavy maintenance on the Aircraft during the four
      shoulder months of April, May, September and October.

    


    3.  Maintenance
      Bases.

    


    RAI
      will
      establish a crew base and a maintenance base for line and overnight aircraft
      maintenance work at Denver International Airport. The Denver maintenance base
      will be sufficient to perform intermediate maintenance checks, clear minimum
      equipment list and configuration deviation list items, and perform general
      maintenance, trouble shooting, and component removals and repairs. RAI will
      also
      advise Frontier of all other cities where RAI maintains line maintenance bases
      upon execution of this Agreement and any overnight time requirements related
      to
      RAI’s line maintenance obligations.

    


    4.  Crew
      Overnights.

    


    The
      schedule may allow for single overnights, multiple overnights, staged, and
      continuous duty overnights of crews in outstations, provided, should Frontier
      schedule continuous duty overnights or staged crews, incremental hotel and
      per
      diem costs related to such continuous duty overnights or staged crews will
      be
      billed by RAI to Frontier in arrears as a Pass Thru costs not subject to margin.
      Frontier reserves the right to review RAI’s crew schedules to ensure efficient
      and economic crew scheduling and agrees to negotiate economic settlement with
      RAI for schedule changes that materially affect crew utilization or line
      maintenance requirements.

    


    5.
      Charter
      Flights.

    


    Frontier
      may schedule, price and sell Charter Flights using the Covered Aircraft,
      provided RAI receives 60 days’ advance notice of the tentative dates and times
      of such Charter Flights and the final dates are built into the Final Monthly
      Schedule. Frontier may also request RAI to consider ad hoc Charter Flights.
      Frontier agrees to compensate RAI for any additional operating costs of the
      Charter Flights, including but not limited to aircraft ferry costs and
      unproductive crew time, as such costs are provided to Frontier at the time
      Frontier provides notice to RAI of the Charter Flights, or sufficiently in
      advance of Frontier’s bid for the Charter Flight to allow such costs to be
      passed through to the charterer.

    

      
         

        
          _______________

          *
            Confidential