<PAGE>
 
                                                                        EX 10.21
  CONFIDENTIAL TREATMENT HAS BEEN SOUGHT FOR PORTIONS OF THIS DOCUMENT MARKED
     WITH " * " AND SUCH PORTIONS HAVE BEEN FILED SEPARATELY WITH THE SEC

[LOGO OF GREENWICH AIR SERVICES, INC. APPEARS HERE]

_______________________________________________________________________________ 
                                                Miami, Florida
                                                Dallas, Texas
                                                East Granby, Connecticut
                                                Prestwick, Scotland
_______________________________________________________________________________


                               SERVICE AGREEMENT

                                    BETWEEN

                            FRONTIER AIRLINES, INC.

                                      AND

                          GREENWICH AIR SERVICES, INC.

                                      FOR

                            CFM 56 AND JT8D ENGINES



                                 MAY  19, 1997


_______________________________________________________________________________
                        CONFIDENTIAL INFORMATION NOTICE

THE INFORMATION CONTAINED IN THIS DOCUMENT IS THE PROPRIETARY PROPERTY OF
GREENWICH AIR SERVICES, INC. AND SHALL NOT BE USED, DISCLOSED TO OTHERS, OR
REPRODUCED WITHOUT THE PRIOR WRITTEN CONSENT OF GREENWICH AIR SERVICES, INC.
<PAGE>
 
                                 TABLE OF CONTENTS

<TABLE>
<CAPTION>
 
 
 ARTICLE  SUBJECT                                                  PAGE
 -------  -------                                                  ----
<C>       <S>                                                      <C>
    1     Definitions..........................................     1
    2     Term.................................................     3
    3     Procedures...........................................     3
    4     Delivery - Repair Time...............................     4
    5     Pricing/Payment......................................     5
    6     Exchange Parts.......................................     6
    7     Missing or Damaged Parts.............................     7
    8     Miscellaneous........................................     7
    9     Warranty.............................................     8
   10     Indemnity............................................     8
   11     Insurance............................................     9
   12     Limitation of Liability..............................     9
   13     Force Majeure........................................    10
   14     Notices..............................................    10
   15     Renegotiation and Escalation.........................    10
   16     Termination..........................................    11
   17     Taxes and Other Charges..............................    12
   18     Governing Law and Severability.......................    12
   19     Entire Agreement.....................................    12
          Signatures...........................................    13
 
EXHIBITS
--------
Exhibit A Schedule 1 - CFM56 & JT8D Time and Material Pricing..   A-1
          Schedule 2 - Field Service Pricing...................   A-4
          Schedule 3 - CFM56 & JT8D Accessory Pricing..........   A-5
Exhibit B Aircraft Engine Service Warranty.....................   B-1
Exhibit C Accessory Shops Standard Overhaul Warranty...........   C-1
</TABLE>

                                       i
<PAGE>
 
                               SERVICE AGREEMENT


THIS AGREEMENT, is made as of this 19th day of May, 1997, by and between
FRONTIER AIRLINES, INC., a Delaware corporation, of 12015 E. 46th Avenue,
Denver, Colorado 80239 ("Customer") and GREENWICH AIR SERVICES, INC., a Delaware
corporation, having its principal place of business at Miami, Florida 33122 and
a mailing address of P.O. Box 522187, Miami, Florida 33152, for itself and on
behalf of its affiliated companies ("Greenwich") .

WITNESSETH:

WHEREAS, Greenwich is a Federal Aviation Administration ("FAA") approved
overhaul, service, and repair facility and operates facilities for the servicing
of aircraft engines, components, Q.E.C. components, and parts thereof at Miami,
Florida; East Granby, Connecticut; Dallas, Texas; and Prestwick, Scotland;

WHEREAS, Customer requires overhaul, check, inspection, modification, repair,
and/or service on its CFM56 and JT8D Engines, assemblies, subassemblies,
components, Q.E.C. components, and parts thereof (collectively, the
"Equipment"); and

WHEREAS, Greenwich agrees to overhaul, check, inspect, modify, repair, and/or
service such CFM56 and JT8D series Engines, modules, related accessories, and
other Equipment as Customer shall furnish to Greenwich for such service during
the period of this agreement;

NOW THEREFORE, and in consideration of the mutual promises and covenants herein
contained, the parties agree as follows.

                                   ARTICLE 1
                                  DEFINITIONS

1.1  Definitions.  In addition to terms elsewhere defined in this Agreement, the
     terms used in this Agreement shall have the following meanings unless some
     other meaning is apparent from the context in which these terms are used.

     (A)  "Accessories" or "Components" shall mean those items (excluding
          Engines) which are renewable and inventory controlled on a unit basis,
          usually by serial number, with a potential for reuse through
          inspection, overhaul, repair or calibration, as judged by Greenwich
          and approved by Customer.

     (B)  "Basic Workscope" shall mean the document executed by Customer listing
          the Services (as hereinafter defined) to be performed by Greenwich
          hereunder, including a repair/purchase order covering the cost of
          repair.

     (C)  "Business Day" shall mean any day on which banks are open for business
          in Dallas, Texas, U.S.A.

                                       1
<PAGE>
 
     (D)  "CLP" shall mean the current manufacturer's list price.

     (E)  "Condemned", as applied to any part, shall mean a part that is beyond
          repair limits or that has repair costs in excess of economical limits
          as determined by Greenwich.  Greenwich shall take title to and dispose
          of all Condemned parts at its own expense, after obtaining Customer's
          concurrence on the Condemned classification.

     (F)  "Customer Engineering Order" or "Modification" shall mean an order,
          direction or request from Customer to use parts, procedures, or
          modifications not approved by the manufacturer or not contained in the
          manuals supplied by the manufacturer.

     (G)  "Engine" shall mean the CFM56 or JT8D Engine series assembly plus its
          essential accessories as described in the CFM56 and JT8D
          manufacturer's specification manuals.

     (H)  "Exchange Part(s)" shall mean those part(s) utilized from Greenwich's
          inventory to replace Customer's repairable parts.

     (I)  "Field Service Support" shall mean any Services provided by Greenwich
          at a site other than at the Service Center (as hereinafter defined).

     (J)  "Overhaul" shall mean to perform such work services as are required to
          return the Equipment to "as new" condition or limits as established by
          the manufacturer's specifications, or to the condition contemplated by
          the parties in any Customer engineering order.

     (K)  "Refurbish", "Repair" and "Restore" shall mean to perform such work
          services as required and authorized to the Equipment to permit the
          item to continue its service life.

     (L)  "Repairable" shall mean the condition of an item which is capable of
          being made "serviceable" by subjecting it to certain processes and
          procedures as indicated in the appropriate original manufacturer's
          overhaul or specification manuals, Customer's engineering order or
          Greenwich's engineering order approved by Customer.

     (M)  "Replacement" shall mean any part or unit which is physically replaced
          by a different part or unit from that installed on the Engine at the
          time of receipt by Greenwich (not necessarily a part number change).

     (N)  "Rework" or "Update" shall mean to perform such work services as are
          required by service bulletin, technical order, Customer engineering
          order, or other document that will alter or modify the item from its
          original condition or configuration.

     (O)  "Service" shall mean those services requested by Customer which
          Greenwich agrees

                                       2
<PAGE>
 
          to perform.

     (P)  "Serviceable Condition" shall mean the condition of a Repaired item
          which can be used for the same purpose as a newly manufactured item.

     (Q)  "Service Center" shall mean any one or all of Greenwich's FAA approved
          Repair Stations.

                                   ARTICLE 2
                                      TERM

2.1  Term.  This Agreement shall be exclusive for CFM56 Engines and non-
     exclusive for JT8D Engines, shall commence upon the date first written
     above and, unless sooner terminated pursuant to Section 16 herein, is to
     continue through April 30, 2002, and shall continue in effect from year to
     year thereafter as long as Customer continues to operate CFM56 or JT8D
     series Engines (the "Term") or, unless and until either party shall
     terminate the same, by sixty (60) days advance written notice.

                                   ARTICLE 3
                                   PROCEDURES

3.1  Engine Procedures.   Greenwich shall furnish all labor, facilities,
     equipment, parts, materials, supplies, painting and plating, and testing
     devices required to perform the Services required by Customer pursuant
     hereto and shall accomplish such Service in a good and workmanlike manner
     in accordance with the requirements of the Engine manufacturer, the Federal
     Aviation Administration (FAA), the Joint Airworthiness Authority of Europe
     (JAA), or Customer; as applicable.  The following procedures shall govern
     the processing of work by Greenwich on Engines, subject to the terms and
     conditions contained herein:

     (A)  Basic Workscope.  With respect to any Engine, Customer shall provide
          Greenwich with a Basic Workscope outlining the (a) removal cause; (b)
          life limited parts ("LLP") Replacement requirements; (c) extent of
          disassembly; and (d) Customer's work specifications, if applicable,
          together with a repair/purchase order for the cost of Repairs. The
          Basic Workscope may be amended by Customer as agreed with Greenwich.

     (B)  Receiving Inspection.   Upon delivery to Greenwich of any Engine to be
          Repaired, Greenwich shall accomplish a standard receiving inspection
          to include, as applicable: (a) borescope inspection; (b) Component
          inventory; (c) filter contamination check; and (d) external
          inspection.  Greenwich shall provide copies of the results of this
          inspection to Customer.

     (C)  Disassembly.   Greenwich shall disassemble each Engine as requested by
          Customer in Article 3.1(A) above.

     (D)  Inspection.   Greenwich shall clean and inspect the disassembled
          Engine and promptly thereafter provide Customer with a cost estimate
          for the Services required. 

                                       3
<PAGE>
 
          Greenwich, upon Customer's request, shall provide a list of known
          rotable parts to be scrapped or replaced.

     (E)  Cost Estimate. Any quotation related to the cost of Services ("Cost of
          Services") is provided to and accepted by the Customer only as an
          estimate ("Cost Estimate"), is given solely for the purpose of
          guidance and not for reliance, and is entirely without prejudice to
          the calculation of the Cost of Services in accordance with the
          provisions of this Agreement.  The Cost of Services performed shall be
          based on the actual condition of the Equipment and the actual cost of
          the Repair.  The Cost of Services shall be as stated in the invoice(s)
          and Customer shall be responsible for all invoiced amounts regardless
          of the Cost Estimate.  Any trailing invoice(s) shall reflect actual
          charges which were not available at the time of the earlier invoice(s)
          and which have been reconciled with any estimated amounts previously
          invoiced to Customer.  Upon receipt of Customer's approval of the Cost
          Estimate, Greenwich shall Repair the Engine in accordance with the
          manufacturer's or Customer's specifications.

     (F)  Test Procedures. Greenwich shall test the Engine in accordance with
          the manufacturer's or Customer's specifications, as designated by
          Customer.  Following this acceptance test, Greenwich shall preserve
          the Engine's fuel and oil systems.

     (G)  Post Test Procedures.   Greenwich shall accomplish a post test
          borescope inspection and prepare the Engine for shipment.

     (H)  Certification Procedures.  Greenwich shall accomplish an Engine
          records review.  If Serviceable, the Engine shall be tagged with an
          FAA Serviceable Tag.  Greenwich shall compile an Engine records
          package and forward such package to Customer.

     (I)  Redelivery.   The Engine shall be made available for redelivery to
          Customer as described in Article 4.

     (J)  Final Invoice.   Greenwich shall prepare a final invoice and present
          such invoice to Customer for payment as described in Article 5 herein.

3.2  Parts Procedure.   Parts not received as part of an Engine will be subject
     to a separate procedure as agreed by the parties.

                                   ARTICLE 4
                             DELIVERY - REPAIR TIME

4.1  Delivery.  Customer shall deliver all Engines to Greenwich's designated
     freight agent F.O.B. Customer's facility, as designated by Customer.
     Greenwich shall redeliver the same items to Customer F.O.B. Greenwich's
     designated freight agent at Customer's facility, as designated by Customer.
     Customer shall deliver all Parts, Accessories, Components, and other items
     shipped separate from an Engine to Greenwich, F.O.B. Greenwich's Texas
     facility.  Greenwich shall redeliver the same items to Customer or its
     designated agent, F.O.B. Greenwich's Texas facility.

                                       4
<PAGE>
 
4.2  Repair Time.

     (A)  Engine repairs shall be accomplished by Greenwich in sixty (60)
          calendar days (the "Turn Time") from approval of the Cost Estimate to
          the date of test acceptance.  Such time may be extended under the
          Force Majeure provisions of Article 13 herein and/or any delays caused
          by Customer in providing required documentation, approvals, or timely
          delivery of Customer Furnished Material.

     (B)  Greenwich shall provide Customer an estimate of the redelivery date
          following disassembly, cleaning, and inspection.

     (C)  If the Turn Time, for any engine, exceeds sixty (60) days, and the
          reason for such delay is not a cause set forth in either Section 4.2
          (A) or Section 13 herein, and for JT8D engines eighty percent (80%) of
          Customer's removals for the previous twelve (12) months have gone to
          Greenwich, and Customer is in an AOG condition, Greenwich shall, as
          liquidated damages and not as a penalty:

          (i)  Lease to Customer, under a separate engine lease agreement, a
               spare Engine, if available, for Customer's use until redelivery
               of the repaired engine.  Customer agrees to pay Greenwich hourly
               charges for the hours of operation of the Engine, which charges
               shall be determined at a rate which is standard in the industry
               at the time of such lease.  Customer shall make available the
               leased spare Engine for shipment to Greenwich within five (5)
               days of redelivery of its repaired Engine to Customer's facility,
               or the Customer shall pay, in addition to the hourly charges for
               Engine operation, the daily lease rate, which is standard in the
               industry at the time of lease, from such time until the leased
               spare Engine is made available for shipment to Greenwich.  Such
               spare engine will not be delivered to Customer until the Lease
               Agreement is fully executed; or

          (ii) in the event that Greenwich is unable to provide a lease Engine
               to Customer under this provision and Customer is in an AOG
               situation due to circumstances entirely outside Customers
               control, Greenwich shall reimburse Customer its daily charge
               only, up to a maximum daily charge of two thousand U S Dollars
               ($2000.00) per day for CFM56 Engine requirement and/or a maximum
               daily charge of three hundred twenty-five U S Dollars ($325.00)
               per day for JT8D Engine requirement, until redelivery of the
               repaired Engine, or upon delivery at Customer's facility of a
               lease Engine from Greenwich, or when Customer is no longer in an
               AOG situation, whichever occurs first.

                                   ARTICLE 5
                                PRICING/PAYMENT

5.1  Pricing.   Charges for labor, material, outside services, testing and Field
     Service Support shall be in accordance with the prices listed on Exhibit A.

                                       5
<PAGE>
 
5.2  Payment.   All payments under this Agreement shall be made via wire
     transfer by Customer to Greenwich in United States dollars, immediately
     available for use, without any right of set-off or deduction.  All sums
     past due shall bear interest at the rate of one and one-half percentage
     (1.5%) points per month, or at the highest legal interest rate permitted by
     law, whichever is lower.

5.3  Payment Terms.

     (A)  In accordance with Exhibit A hereof, Customer shall pay one hundred
          percent (100%) of the Cost Estimate after test acceptance and prior to
          redelivery of the Engine.

     (B)  As set forth in Section 3.1(E) above, Customer agrees that any Cost
          Estimate and Initial Invoice is preliminary and may include estimated
          charges for rework, subcontractor work, and other related services
          when the actual charges for those activities are not available, and is
          subject to revision based on the condition of the Equipment and the
          actual cost of the repair.  Subsequent "trailing" invoices reflecting
          the actual charges will be submitted to Customer as soon as
          practicable and will be reconciled with the estimated amounts
          previously invoiced to Customer.  Customer shall pay the "trailing"
          invoice within thirty (30) calendar days of receipt.

5.4  Mechanic's Lien/Security Interest.  Customer hereby grants to Greenwich a
     security interest in all property of Customer in the possession of
     Greenwich at any time to secure all amounts owed by Customer to Greenwich
     now or in the future, and Greenwich shall have all rights of a secured
     party under the Uniform Commercial Code with respect to such property.

                                   ARTICLE 6
                                 EXCHANGE PARTS

6.1  Procedure.  Greenwich shall determine which Exchange Parts are required to
     Repair the Equipment, and will issue these parts from rotable stock.
     Greenwich shall transfer ownership to Customer (without representation of
     warranty except as expressly provided herein) of these Exchange parts in
     exchange for ownership of the respective parts removed, and provided that
     such removed parts are Repairable.  During the production process, Customer
     may, with reasonable advance notification, review Greenwich's Exchange
     Parts documentation and actions. Repairable parts received by Greenwich in
     exchange for parts in Serviceable Condition will be Repaired by Greenwich
     or an outside source, at Greenwich's sole option.  Greenwich shall invoice
     Customer for such Repairs and exchange fees as per Exhibit A.

6.2  Condemned Parts.  If the part that is removed from Customer's Equipment in
     an Exchange Part transaction is subsequently Condemned, then such
     transaction shall be void, and the Exchange part provided by Greenwich will
     be deemed to have been purchased by Customer at the price provided in the
     Price List at Exhibit A, less any exchange fee.

                                       6
<PAGE>
 
6.3  Scrapped Parts.  All scrapped parts determined to be unserviceable and/or
     not economically repairable shall become Greenwich's vested property
     fifteen (15) days after completion of engine services.  During this fifteen
     (15) day period, Customer may take possession of such parts and immediately
     ship or dispose of said parts at its sole cost and expense.  Parts which
     become Greenwich's vested property hereunder shall be Greenwich's
     responsibility at its sole expense and without any further adjustment to
     Customer, to mutilate and dispose of such parts as to preclude any further
     use as an Engine part.

6.4  Customer parts provisioning.  Customer may, at its discretion, review
     Greenwich's list of rotable parts required to repair its Engine.  After
     this review, Customer may elect to provide certain rotable parts.  If
     Customer so elects to provide certain rotable parts, it must inform
     Greenwich of such election within five calendar days of receipt of the
     Greenwich provided rotable parts list as to which parts it intends to
     provide.  All parts provided by Customer must be serviceable, tagged in
     accordance with FAA requirements, and in a condition to be installed on the
     Engine. All such parts must be delivered to Greenwich in a timely manner
     which does not affect Greenwich's production schedule.  If any part is not
     received by Greenwich prior to the scheduled installation date of such
     part, in an immediately usable condition, Greenwich may, at its sole
     option, either delay the turn time day for day until such part is received
     and reinduction of the engine into the production schedule can be
     accomplished, or provide a Greenwich owned rotable part under the terms of
     this Agreement.  Charges for Customer supplied parts shall be in accordance
     with Exhibit I.

                                   ARTICLE 7
                            MISSING OR DAMAGED PARTS

7.1  Missing or Damaged Parts.  Greenwich shall advise Customer of (i) parts
     missing from any Equipment when received at Greenwich's facility; and (ii)
     parts found to have been damaged in transit.  Should (i) or (ii) occur,
     resulting in the excusable delay of redelivery, Greenwich shall provide
     notice to Customer.  Greenwich may replace such parts with the express
     consent of Customer.  If neither party can provide Replacements
     immediately, then the redelivery date shall be extended by the length of
     the delay in receiving the Replacement parts.

                                   ARTICLE 8
                                 MISCELLANEOUS

8.1  Subcontracted Work.  Greenwich shall have the right to subcontract any work
     it deems necessary to an authorized repair facility; provided, that
     Greenwich shall provide Customer with any warranties received from such
     subcontractors which are assignable.  Greenwich will make its best efforts
     to minimize work subcontracted to outside vendors.  Upon request, Greenwich
     shall provide Customer a list of its subcontractors.

8.2  Work in Process.  Upon the expiration or termination of this Agreement,
     Greenwich shall complete all work in process in a diligent manner;
     provided, that Customer has deposited sufficient monies with Greenwich to
     pay the estimated charges for all such work, in

                                       7
<PAGE>
 
     accordance with the price list at Exhibit A.

8.3  Field Service Support.   Greenwich shall provide Field Service Support at
     the daily rates provided in the price list at Exhibit A.

8.4  Service Center Representatives.  Customer may appoint an employee or
     representative as Service Center Representative to act as liaison with
     Greenwich.  The Service Center Representative is authorized to review work,
     request additional work, revise the original workscope, and approve (i) the
     labor performed, (ii) any parts, materials, or supplies furnished by
     Greenwich, and (iii) receive notices for Customer.  The Customer
     Representative has the authority to request a stoppage of the work being
     performed on Customer's Engines; however, any such stoppage and subsequent
     restart will result in an adjusted turn time and a minimum additional
     charge of twenty five (25) manhours per occurrence to Customer. Greenwich
     shall provide the Service Center Representative with a suitable work area
     at its Service Center while this Agreement is in force. Customer shall
     provide all workman's compensation and other insurance required for such
     representatives.  Customer agrees to defend, indemnify, save, and hold
     harmless Greenwich, its affiliates, directors, officers, agents, and
     employees, from and against any and all responsibilities, liabilities,
     claims, demands, suits, judgements, damages, losses, costs, and expenses of
     any nature or description whatsoever for any injury to or death of any
     person associated with or employed by Customer, at Greenwich's facility for
     the purposes stated herein.

8.5  Spare Component Support.  Greenwich will maintain one each of the following
     spare components, available for shipment within forty eight (48) hours to a
     location designated by Customer.  These components will be provided to
     Customer in accordance with the terms of the exchange parts program found
     in Article 6 of this Agreement

          A.  JT8D Gearbox

          B.  JT8D C1 Fan Assembly

          C.  JT8D C2 Fan Assembly

8.6  Spare Engine Support. At the end of each calendar year, for the term of
     this contract, Greenwich shall credit Customer * for each of the first two
     (2) "full restoration" CFM56-3 engines input during the preceding year.
     This * maximum credit is specifically for the purpose of offsetting a
     portion of the expense associated with Customer's guaranteed spare engine
     program.

                                   ARTICLE 9
                                    WARRANTY

9.1  Workmanship.  Greenwich warrants its work to be free from defects in
     workmanship in the Services it performs hereunder, as set forth in its
     Engine Service Warranty contained in Exhibit B and its Accessory Shops
     Standard Overhaul Warranty contained in Exhibit C hereto.

9.2  EGT Margin Guaranty.  Full performance restoration, including or excluding
     LPT repair, provides for EGT margin guaranty of 30 degrees C for B1 powered
     CFM56 Engines and 25

                                       8
<PAGE>
 
     degrees C for B2 powered CFM56 Engines.

                                   ARTICLE 10
                                   INDEMNITY

10.1 Indemnity.  From and after delivery hereunder, Customer agrees to defend,
     indemnify, save, and hold harmless Greenwich, its affiliates, directors,
     officers, agents and employees, from and against any and all
     responsibilities, liabilities, claims, demands, suits, judgments, damages,
     losses, costs, and expenses of any nature or description whatsoever
     (including, without limitation, investigation costs and expenses and
     attorneys' fees and expenses in connection therewith) for any loss of,
     damage to, or destruction of any property (including the Equipment ) or for
     any injury to or death of any person, arising from and after the delivery
     of the Equipment to Greenwich and arising out of or connected with (i) the
     maintenance, operation, Repair, or condition of the Equipment before
     delivery hereunder or (ii) the ownership, use, operation, Repair,
     maintenance, or disposition by Customer, its successors, assigns, or agents
     of the Equipment, regardless of the negligence of Greenwich, its directors,
     officers, employees, or agents; provided, however, that Customer shall

                                       9
<PAGE>
 
not be required to indemnify Greenwich for any claims or liabilities arising
directly from Greenwich's gross negligence or willful misconduct.

                                   ARTICLE 11
                                   INSURANCE

11.1 The following insurance shall be provided:

     A.   Hangar (or Shop) Keeper's Insurance.  Greenwich agrees to maintain
          Hangarkeeper's liability insurance protecting Customer from loss,
          damage, or destruction of Customer's property in the care, custody, or
          control of Greenwich, from which loss, damage, or destruction
          Greenwich, subject to Article 10.1, agrees to defend, indemnify, save,
          and hold harmless customer.

     B.   Products Liability Insurance.   Greenwich agrees to maintain products
          liability insurance in an amount not less than One Hundred Million
          U.S. Dollars ($100,000,000.00) for personal injury and property damage
          to third parties, from which personal injury or property damage
          Greenwich, subject to Article 10.1, agrees to defend, indemnify, save,
          and hold harmless customer.

     C.   Public Liability Insurance.  Customer agrees to maintain public
          liability insurance in an amount not less than Five Hundred Million
          U.S. Dollars ($500,000,000.00).  Customer shall cause its insurer to
          name Greenwich, its affiliates, directors, officers, employees,
          agents, and representatives as additional insureds, and to
          specifically state that the indemnification requirements in Article 7
          are insured as a contractual obligation.

11.2 Certificates of Insurance.  Each party hereto agrees to furnish the other
     party, appropriate Certificates of Insurance evidencing its maintenance of
     the above insurance, applicable to it, at the commencement of this
     Agreement and each renewal thereof.  Each party shall maintain the
     applicable insurance until two (2) years after the expiration of this
     Agreement.  In addition, each party hereto agrees to provide the other
     party written notice not less than thirty (30) calendar days prior to any
     cancellation or adverse material change in the maintenance of the above
     Insurance.

                                   ARTICLE 12
                            LIMITATION OF LIABILITY

12.1 TOTAL LIABILITY.  THE TOTAL LIABILITY OF GREENWICH, INCLUDING ITS
     SUBCONTRACTORS AND SUPPLIERS, FOR ANY AND ALL CLAIMS, WHETHER IN CONTRACT,
     WARRANTY, TORT (INCLUDING NEGLIGENCE OF ANY DEGREE), OR OTHERWISE, ARISING
     OUT OF, CONNECTED WITH, OR RESULTING FROM THE PERFORMANCE OR NON-
     PERFORMANCE OF THE ACCEPTED WORKSCOPE, SHALL NOT EXCEED GREENWICH'S INVOICE
     FOR THE REPAIRED OR OVERHAULED ITEM WHICH GIVES RISE TO THE CLAIM HEREIN,
     PROVIDED THAT GREENWICH'S  LIABILITY WILL BE LIMITED TO THE LESSER OF THE
     COST TO PERFORM SAID REPAIRS OR THE COST TO REPLACE THE ENGINE WITH A
     SUBSTITUTE ENGINE OF EQUAL VALUE AND UTILITY.

12.2 DAMAGES.  IN NO EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT, WARRANTY,
     TORT, (INCLUDING NEGLIGENCE OF ANY DEGREE), OR OTHERWISE, SHALL GREENWICH,
     ITS SUBCONTRACTORS, AND/OR SUPPLIERS, BE LIABLE FOR ANY SPECIAL,
     CONSEQUENTIAL, RESULTANT, INCIDENTAL, INDIRECT, OR

                                      10
<PAGE>
 
     EXEMPLARY DAMAGES.

                                   ARTICLE 13
                                 FORCE MAJEURE

13.1 Inability, Delays, and Force Majeure.  Greenwich shall not be liable for
     any failure to perform or any delays in performance due to acts of God; the
     public enemy, war; declared or undeclared, or warlike conditions; inability
     to secure parts or material (provided such inability stems from scarcity or
     difficulty and not from delays by Greenwich in placing orders);
     insurrection or riots; floods; explosions; fires; earthquakes; hurricanes;
     any governmental act; failure of  transportation; strikes or other labor
     disputes; or any other cause beyond its control.

13.2 Customer's Obligation to Pay.  Section 13.1 above shall not relieve
     Customer of its obligations to pay for Services actually performed.

                                   ARTICLE 14
                                    NOTICES

14.1 Acknowledgment.  All notices required or permitted under this Agreement
     shall be in writing and shall be delivered personally, facsimiled, sent by
     courier service, or express mail, addressed as follows:
 
     If  to Greenwich:                  If to Customer:
     ----------------------------       -----------------------
     Greenwich Air Services, Inc.       Frontier Airlines, Inc.
     4590 N.W. 36th Street              12015 E. 46th Avenue
     Bldg. 23 MIAD                      Suite 200
     Miami, Florida                     33122  Denver, CO 80239
     Attn:  Director of Contracts       Attn: Jon Bartram
     Phone:  305 526-7000               V.P. of Maintenance
     Fax:      305 526-7005             Phone: 303-371-7400
     Fax:     303-371-7007

     or such other address as either party may designate in writing to the other
     party from time to time.

14.2 Effect of Notices.  Notices shall be effective and shall be deemed to have
     been given when received.

                                   ARTICLE 15
                          RENEGOTIATION AND ESCALATION

15.1 Renegotiation and Escalation.  Pricing and rates shown herein shall be
     adjusted in accordance with the following:

     (A) Labor.    Labor rates, vendor pricing, and test cell fees shown herein
         are valid through December 31, 1997. At that time, and each January 1st
         thereafter, Greenwich

                                      11
<PAGE>
 
         reserves the right to increase the hourly labor charges and fixed labor
         charges by an amount which is proportionate to any increase in the
         National Labor Index of the "Hourly Earnings of Aircraft Engine and
         Engine Parts Production Workers" SIC 3724, as prepared by the U.S.
         Department of Labor, Bureau of Labor Statistics for the previous twelve
         (12) month period. Each such increase shall be effective as to units
         completed on or after the relevant change date.

     (B) Material. Charges for material caps shown herein are valid through
         December 31, 1997. At that time, and each January 1st thereafter,
         Greenwich reserves the right to increase the such charges by an amount
         which is proportionate to any increase to the manufacturer's parts
         price book increase. Such increase shall be effective as to units
         completed on or after the relevant change date.

15.2 At any time and from time to time after execution of this agreement,
     Greenwich may, with Customer=s concurrence, establish new fixed rates for
     labor to service Engines, modules, and accessories and new fixed job rates
     for special processes, plasmas, platings, coatings, standards, and
     exchanges.  The new rates shall be effective as to units completed on or
     after the date on which Customer is notified of the new rates.

15.3 If, at any time during the term of this Agreement, the Engine related
     Services required by Customer decline to a level not supportive of rates
     and fees herein offered, then Greenwich may, by written notice to Customer,
     request that this Agreement be opened for renegotiation of prices, term of
     agreement, and performance times.  Within thirty (30) days after receipt of
     said notice from Greenwich, the parties hereto will meet to discuss
     proposals and counter proposals.  Any revision agreed to by the parties
     shall be made retroactive to the date that the parties met to commence
     renegotiations.

                                   ARTICLE 16
                                  TERMINATION

16.1 Material Provisions.  This Agreement may be terminated by either party upon
     sixty (60) calendar days advance written notice to the other party for any
     failure to comply with any material provision, and shall expire without
     further act or deed on the date indicated in such written notice, unless
     the failure shall have been completely cured or the party in breach has
     substantially performed all acts required to cure the failure prior to the
     expiration date, except for reason of termination pursuant to Section 16.2
     below.

16.2 Required Payments/Insurance.  Greenwich or Customer may terminate this
     Agreement on ten (10) calendar days notice if either party fails to make
     any of the required payments or to provide the required insurance, unless
     such party cures such nonpayment or provides the required insurance within
     such time period.

16.3 Effect of Agreement.  In the event that either party terminates this
     Agreement, any liabilities, obligations, expenses, or charges having
     accrued to the parties under this Agreement shall remain in full force and
     effect.

16.4 Redelivery of Customer Furnished Material.  Upon termination of this
     Agreement, Customer furnished material in Greenwich's possession shall be
     redelivered to Customer at the Service Center on the date of termination or
     the date of completion of work performed, after the payment of all charges
     by Customer to Greenwich.

                                      12
<PAGE>
 
                                   ARTICLE 17
                            TAXES AND OTHER CHARGES

17.1 Taxes, Duties, or Charges.  Any and all taxes, custom duties, brokerage
     fees, or other charges, excluding any income taxes payable by Greenwich,
     resulting from performance under this Agreement, ("Charges") shall be borne
     by Customer.

17.2 Exemption.  If Customer is claiming exempt status from the State Sales Tax,
     Customer shall, prior to the effective date of this Agreement, provide
     Greenwich with a copy of its state sales tax exemption certificate or
     affidavit in the form required by the State Department of Revenue.

                                   ARTICLE 18
                         GOVERNING LAW AND SEVERABILITY

18.1 Governing Law.  This Agreement shall be deemed to have been made in Dallas,
     Dallas County, Texas, and shall be interpreted, and the rights and
     liabilities of the parties hereto determined in accordance with the law of
     the State of Texas, U.S.A. without regard to conflicts of law principles.
     The parties consent and hereby submit to the exclusive jurisdiction of the
     state and federal courts located in Dallas County, Texas, U.S.A. for the
     determination of any and all issues between the parties relating to this
     Agreement.  Nothing in this clause limits the right of Greenwich to bring
     proceedings in any other court of competent jurisdiction; nor shall the
     bringing or continuing of proceedings in one or more jurisdictions preclude
     the bringing or continuing of proceedings in any other jurisdiction,
     whether concurrently or otherwise.  Customer irrevocably waives any
     objection which it may have at any time to the laying of the venue of any
     proceedings in any court referred to in this section, to any claim that any
     such proceedings have been brought in any inconvenient forum, to any right
     to trial by jury in any proceedings, and to any objection to service of
     process if such service is by certified mail, return receipt requested, at
     the address provided, or updated as provided, herein.  Customer agrees to
     be subject to the Texas Long Arm Statute for service of process.

18.2 Severability.  If any portion of this Agreement shall be determined to be
     in violation of or contrary to any law, rule or regulation by a court of
     competent jurisdiction, then that portion shall be unenforceable and
     deleted from the Agreement.  However, the balance of this Agreement shall
     remain in full force and effect notwithstanding the unenforceability of
     said portion.

                                   ARTICLE 19
                                ENTIRE AGREEMENT

19.1 Contents.  This Agreement contains the entire agreement between the parties
     and supersedes all prior and contemporaneous understandings,
     representations, warranties, and agreements.

19.2 Non-Waiver of Rights and Remedies.  Any failure or delay in the exercise of
     any rights or remedies hereunder shall not operate to waive or impair such
     rights or remedies.  Any waiver

                                      13
<PAGE>
 
     given shall not be construed to require said party to make any future or
     further waivers.

19.3 Additional Documentation.   The parties agree to cooperate with each other
     and to execute any additional documentation as may reasonably be necessary
     to give effect to this Agreement.

19.4 Titles/Subtitles.  The titles and subtitles given to the sections of this
     Agreement are for convenience only and shall not in any manner be deemed to
     limit or restrict the context of the article or section to which they
     relate.  The words "hereof", "hereunder", "herein", "herewith", and similar
     terms are not to be deemed restrictive and refer to the entire Agreement
     including all Exhibits.

19.5 Modification.  This Agreement may only be modified, supplemented, or
     amended by a writing duly signed by authorized representatives of both
     parties hereto.

19.6 Counterparts.   This Agreement may be executed in one or more counterparts,
     each of which shall be deemed to be an original, but both of which together
     shall constitute one and the same instrument.

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

GREENWICH AIR SERVICES, INC.             FRONTIER AIRLINES, INC.

By:_______________________________       By:_____________________________

Name: ____________________________       Name: __________________________

Title: ___________________________       Title:__________________________

Date: _____________________________      Date: __________________________

                                      14
<PAGE>
 
                                                                      SCHEDULE 1
                                   EXHIBIT A
                    FRONTIER AIRLINES - CFM56 & JT8D PRICING

I.   JT8D T&M PRICING

     1.  Labor (Basic & Rework)          *

     2.  Special Processes               *

     3.  Material

          A.   New                       *
                                         
                                         

          B.   Serviceable               *

          C.   Serviceable LLP           *

          D.   Rotable Scrap             *

          E.   Customer Supplied Material
 
               (a) New Parts:            *
 

               (b) Serviceable Parts:    *
                                         *
 
               (c) LLP (used 
                   serviceable)          *
                                         

     4.   Subcontract Services           *

     5.   Rotable Fee                    *
                                         

     6.   Test Cell Fee                  *

     7.   Fuel & Oil                     *

     8.   Transportation                 *

     9.   Engine Condition Monitoring    *
                                         

                                      A-1
<PAGE>
 
                                         (Waive 12 months following shop visit)
                                                                      SCHEDULE 1
                                                                        (cont'd)


II.  CFM56 PRICING


     1.   Time & Material Pricing

          A.    Labor                *
 
          B.    Special Processes    *

          C.    Material

                a.  New              *
                                     

                b.  Serviceable      *
                                     

                c.  Serviceable LLP  *
 
          D.    Subcontract          *
 
          E.    Rotable Fee          *
                                     
 
          F.    Test Cell Fee        *
 
          G.    Fuel & Oil           *
 
          H.    Transportation       *
 
          I.    ECM                  *
                                     
                                     

                                      A-2
<PAGE>
 
                                                                      SCHEDULE 1
                                                                        (cont'd)


     2.    Engine Flat Rates (specific work scopes to be provided)

           A.   Full Performance Restoration including LPT Repair $ *
                through 12/31/97

           B.   Full Performance Restoration excluding LPT Repair $ *
                through 12/31/97

           The above flat rates include all basic and rework labor, subcontract
           charges, special processes, test cell fee, fuel & oil and rotable
           fees. The above flat rates exclude bench check, repair, or overhaul 
           of accessories, and all material.


     3.    Material issued Flat Rated engines

           A.  New                             Current Manufacturer's Catalog 
                                               Price

           B.  Serviceable                     Current Manufacturer's Catalog 
                                               Price

           C.  Serviceable LLP                 Fair Market Value


     4.    Accessories for Flat Rated engines  See Exhibit A-3.B.

           Work that is over and above the defined workscope for the Performance
           Restoration Flat Rate Repair (with or without penetration of the LLP)
           shall be invoiced at the T&M pricing below:
 
                                      A-3
<PAGE>
 
                                                                      EXHIBIT A
                                                                      SCHEDULE 2

                   FRONTIER AIRLINES - FIELD SERVICE PRICING

                                  CFM56 & JT8D

A.   For each Technical Service Representative charged with providing technical
     assistance or support to Operator.  Charges applicable from time of
     dispatch to return less periods of rest.

     1)   Monday through Friday Rates (minimum 8 hour daily charge):

               0800 to 1700 Hours             $ *
               1700 to 0800 Hours             $ *

     2)   Saturday Rates (minimum 8 hour daily charge):

               0001 to 2400 Hours             $ *

     3)   Sunday and Holiday Rates (minimum 8 hour daily charge):

               0001 to 2400 Hours             $ *

B.   For Contractor-supplied tooling (i.e., borescopes, etc.):

               Regular Borescope              $ *
               Video Borescope                $ *
               Vibration Survey Equipment     $ *
               Tooling                        $ *

C.   Operator to be invoiced all reasonable costs to Contractor associated with
     travel, baggage and tooling, freight, lodging, meals, rental cars, local
     taxes and licenses, etc.

                                      A-4
<PAGE>
 
                                                                      EXHIBIT A
                                                                      SCHEDULE 3

                     FRONTIER AIRLINES - ACCESSORY PRICING
                                        

A.   JT8D ACCESSORY PRICING

     Basic Labor only to service accessories as applicable to JT8D engines (all
     material and rework of parts is additional, if required):
<TABLE>
<CAPTION>
 
                                      Overhaul   Bench Check  Exchange
                                      ---------  -----------  ---------
<S>                                   <C>        <C>          <C>
     Cable Assy-Thermocouple........  $  *         $  *             *  
     Cable - Exciter (Bendix).......  $  *         $  *             *
                 (Simmonds).........  $  *         $  *             *
     Control Assy-PRBC..............  $  *         $  *       $     *
     Control-Fuel (JFC-1, -2).......  $  *         $  *       $     *
           (JFC-3)..................  $  *         $  *       $     *
        (JFC-6 w/o SB 73-24)........  $  *         $  *             *
        (JFC-6 w/SB 73-24)..........  $  *         $  *             *
     Cooler Assy - Oil, Fuel........  $  *         $  *             *
     Exciter (Bendix)...............  $  *         $  *       $     *
             (Simmonds).............  $  *         $  *       $     *
     Flyweight Set-Fuel Control                     
     (min. qty. of 10 set/input)                    
      (grind only)..................  $  *            *             *
     Heater - Fuel De-icing.........  $  *         $  *       $     *
     Lead Assy - Thermocouple.......  $  *         $  *             *
     Manifold Assy, Fuel (each).....  $  *            *             *
     Nozzle & Support Assy, Fuel                     
     (JT8D-small)...................  $  *            *             *
     (JT8D-200 w/o SB 6169).........  $  *            *             *
     (JT8D-200 w/SB 6169)...........  $  *            *             *
     Nozzle, Fuel (only)............  $  *            *       $     *
     Pump Assy, Oil, Main...........  $  *            *             *
     Pump, Fuel, Main...............  $  *         $  *       $     *
     (TRW, i.e., 243601, 358201                     
      371901 379201, 384301)                        
      (Convert to 378201)...........  $  *            *       $     *
     Switch, Differential Fluid                     
     Pressure  (Custom).............  $  *         $  *             *
       (P&W)........................  $  *         $  *       $     *
     Valve & Actuator-Air Shutoff...  $  *         $  *       $     *
     Valve Assy - Compressor Bleed..  $  *         $  *             *
     Valve Assy-                                    
     Fuel Pressurizing & Dump.......               $  *       $     *
     Valve - Oil Drain..............  $  *         $  *             *
     Valve - Start Bleed Control....  $  *         $  *             *
     
</TABLE>
     Other at Direct Hourly Rate  JT8D T&M pricing

                                      A-5
<PAGE>
 
                                                                      SCHEDULE 3
                                                                        (cont'd)
 
B.   CFM56 ACCESSORY PRICING

<TABLE>
<CAPTION>

                                                                   Overhaul   Bench Check  Exchange
                                                                  ---------   -----------  ---------
<S>                                                               <C>         <C>          <C>
     Main Engine Control........................................  $     *     $    *           *
     Fuel Pump..................................................  $     *     $    *           *
     Fuel Pump with SB 073-085..................................        *     $    *           *
     Sensor, CIT................................................        *     $    *           *
     Heater, Fuel Servo.........................................        *     $    *       $   *
     Valve, Turbine Clearance...................................  $     *     $    *           *
     Valve, Turbine Clearance                                                                  
      (9th Stage Hsg)...........................................        *     $    *           *
      Cable, VBV................................................        *     $    *           *
      Cable, VSV................................................        *     $    *           *
     Motor, Hydraulic Gear......................................        *     $    *           *
      VSV Actuator..............................................        *     $    *       $   *
      VSV Piston................................................  $     *          *           *
     Lube Unit (including service bulletins)....................        *     $    *       $   *
     Oil, Heater Exchanger (Secan or Serik).....................        *     $    *       $   *
     Oil Tank...................................................        *     $    *           *
      Sensor, Fan Inlet Temperature.............................        *     $    *           *
      Sensor, T12...............................................        *     $    *           *
       Valve, Start Bleed.......................................        *     $    *       $   *
     Ignitor Plug...............................................        *     $    *           *
     Exciter....................................................        *     $    *           *
     N1 Speed Sensor (with SB 77-022)...........................        *     $    *           *
     Oil Screen (lots of 5 minimum)(each).......................        *     $    *           *
     Oil Screen (less than 5)(each).............................        *          *           *
     Alternator Stator..........................................        *     $    *       $   *
</TABLE>

       (*price is to bench check and modify)

     Other at Direct Hourly Labor Rate..........................    CFM56 T&M 
                                                                    Pricing


The above flat rates for both CFM56 and JT8D accessories are for basic labor
only.  All material is invoiced separately, as is repair of individual parts or
components.

                                      A-6
<PAGE>
 
                                   EXHIBIT B
                        AIRCRAFT ENGINE SERVICE WARRANTY
                        --------------------------------


Greenwich warrants its serviced Engines against defective workmanship relating
to the work that Greenwich performs.  Greenwich will repair any such Engine that
has failed for this reason.  Greenwich's obligations are expressly limited to
correction of such defects by Greenwich at its expense and to specific periods
after redelivery of the Engine to Customer, as follows:

          If, within one (1) year after redelivery, or within the first one
          thousand (1,000) hours or cycles (whichever is greater) of operation,
          whichever occurs first, the Engine fails due to a defect warrantable
          hereunder, Greenwich shall correct such defect at no cost to Customer.

This warranty covers all defects which Customer can establish after Customer's
notice to Greenwich of the defect as having occurred, provided:

 (1) Customer submits written notice of the defect within thirty (30) calendar
     days of discovery; and

 (2) the Engine is returned to Greenwich's facility, freight prepaid, within
     sixty (60) calendar days after discovery, accompanied by a written
     description of the nature of the defect; and

 (3) after redelivery to Customer, the Engine has not been improperly installed
     by Customer or by a subcontractor utilized by Customer; and

 (4) subsequent to redelivery, the Engine was operated and maintained in
     accordance with FAA and other applicable standards; was used under normal
     operating conditions; was not subjected to misuse, abuse, neglect, accident
     or incident; was properly stored and was not repaired or altered by anyone
     other than Greenwich; and

 (5) the Engine is returned with all proper records and necessary documents, all
     of which shall be in English; and

 (6) the Engine has not been sold to another; and

 (7) Customer has met all of its financial obligations under the contract; and

 (8) the Engine has not incurred Foreign Object Damage or has not failed as a
     result of the failure of Customer supplied material.

Greenwich reserves the right to disclaim liability for costs which are incurred
in correcting any defect but which reasonably would not have occurred had the
workscope not excluded, at Customer's direction, work which otherwise would have
been performed, or which would have included inspection and repairs, that would
have revealed or anticipated the defect.  Further, Greenwich shall not warrant
work excluded from Customer's workscope, when such work had been recommended by
Greenwich in writing.

                                      B-1
<PAGE>
 
This warranty expressly excludes correction of any defect in the Engine if it
must, following redelivery, be removed from operation due to performance or
material defects attributable to inadequacies or deficiencies in design,
materials or tooling as identified in applicable manufacturers' reports and
documents or due to problems generally recognized to be industry-wide.

Greenwich's total liability in connection with the service of Engines is
expressly limited to workmanship and any warranty for material will be the
warranty of the manufacturer of the material and Greenwich shall use its best
efforts to assist in obtaining that warranty for its Customer.

Greenwich reserves the right to determine whether the failure of the Engine
falls under the terms of this warranty and will have the option of repairing,
reworking, restoring or replacing the Engine and returning it to service or
crediting Customer on a prorata basis.  If it is determined that the subsequent
repair is covered by this warranty, all freight charges will be reimbursed to
Customer.  After repair or rework, to correct any such defect, the Engine will
be returned to Customer at Greenwich's expense.

The warranties provided for herein shall be for the benefit of Customer, and no
other party.

THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, GUARANTEES, OR REPRESENTATIONS
OF ANY KIND, EITHER EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, INCLUDING,
WITHOUT LIMITATION, IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, AND ANY OTHER LIABILITY OF ANY NATURE WHATSOEVER WITH
RESPECT TO WORK DONE, SERVICES PERFORMED OR PARTS OR MATERIALS PROVIDED BY
GREENWICH.  WITHOUT LIMITATION OF THE FOREGOING, GREENWICH SHALL HAVE NO
LIABILITY FOR INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY KIND DUE TO ANY DEFECT IN
WORKMANSHIP, AND CUSTOMER HEREBY WAIVES ANY RIGHTS IT MAY HAVE TO SUCH DAMAGES.
THIS WARRANTY SHALL NOT BE ALTERED EXCEPT BY WRITTEN AMENDMENT TO THIS AGREEMENT
BY AN AUTHORIZED OFFICER OF GREENWICH.

                                      B-2
<PAGE>
 
                                   EXHIBIT C
                                ACCESSORY SHOPS
                           STANDARD OVERHAUL WARRANTY
                           --------------------------


Greenwich warrants its Accessory Shop's services to be free from defects in
workmanship at the time of delivery. Greenwich's liability is expressly limited
to replacing or repairing, at its option, any part which may be damaged as a
result of such defect, within one (1) year after redelivery of the part, subject
to the following conditions:

   (1) Greenwich is notified in writing of the defect within ten (10) calendar
       days of discovery.

   (2) The assembly is returned to Greenwich freight prepaid, within thirty (30)
       calendar days after discovery of the defect.

   (3) Customer shall be responsible for costs of removal, reinstallation or
       other associated expenditures.

   (4) The assembly or part has been operated and maintained in accordance with
       current manufacturer's manuals, operator handbooks, written
       recommendations, service bulletins and procedures.

   (5) Proper records have been kept on the part or assembly, especially
       installation dates, where time in service is the only criterion.

   (6) The assembly has not experienced any foreign object or external
       (casualty) damage.

   (7) If warranty request is approved by Greenwich, repairs shall be completed
       with continued time applicable to the original overhaul transaction

   (8) Warranty claims are subject to proration for time or use.

   (9) Upon completion of the warranty work, Customer shall sign a release
       indicating that all warranty work has been satisfactorily completed and
       that all potential or actual claims related to the warranty work have
       been satisfied.

Greenwich will, at its discretion, determine whether or not the failure or
defect is covered under the terms of the warranty.  If it is determined that the
subsequent repair is covered by this warranty, this freight charge will be
reimbursed to Customer.  The warranties provided for herein shall be for the
benefit of Customer, and no other party.

THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, GUARANTEES, OR REPRESENTATIONS
OF ANY KIND, EITHER EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, INCLUDING,
WITHOUT LIMITATION, IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, AND ANY OTHER LIABILITY OF ANY NATURE WHATSOEVER WITH
RESPECT TO WORK DONE, SERVICES PERFORMED OR PARTS OR MATERIALS PROVIDED BY
GREENWICH.  WITHOUT LIMITATION OF THE FOREGOING, GREENWICH SHALL HAVE NO
LIABILITY FOR INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY KIND DUE TO ANY DEFECT IN
WORKMANSHIP, AND CUSTOMER HEREBY WAIVES ANY RIGHTS IT MAY HAVE TO SUCH DAMAGES.
THIS WARRANTY SHALL NOT BE

                                      C-1
<PAGE>
 
ALTERED EXCEPT BY WRITTEN AMENDMENT TO THIS AGREEMENT BY AN AUTHORIZED OFFICER
OF GREENWICH.

                                      C-2