S-1/A

As filed with the Securities and Exchange Commission on May 26, 2017

Registration No. 333-217078

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

AMENDMENT NO. 3

TO

FORM S-1

REGISTRATION STATEMENT

Under

The Securities Act of 1933

 

 

Frontier Group Holdings, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   4512   46-3681866

(State or other jurisdiction of

incorporation or organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification Number)

Frontier Center One

7001 Tower Road

Denver, CO 80249

(720) 374-4200

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

 

Barry L. Biffle

President and Chief Executive Officer

Frontier Group Holdings, Inc.

Frontier Center One

7001 Tower Road

Denver, CO 80249

(720) 374-4200

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

Anthony J. Richmond, Esq.

Brian D. Paulson, Esq.

Latham & Watkins LLP

140 Scott Drive

Menlo Park, CA 94025

Telephone: (650) 328-4600

Facsimile: (650) 463-2600

 

Howard M. Diamond

General Counsel & Secretary

Frontier Group Holdings, Inc.

Frontier Center One

7001 Tower Road

Denver, CO 80249

Telephone: (720) 374-4200

 

Alan F. Denenberg

Davis Polk & Wardwell LLP

1600 El Camino Real

Menlo Park, CA 94025

Telephone: (650) 752-2000

Facsimile: (650) 752-2115

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended, check the following box.  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer      Accelerated filer  
Non-accelerated filer   ☒  (do not check if a smaller reporting company)    Smaller reporting company  

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

 


EXPLANATORY NOTE

This Amendment No. 3 to Form S-1 Registration Statement (Registration No. 333-217078) of Frontier Group Holdings, Inc. is being filed solely to include updated exhibits to the Registration Statement. Accordingly, Part I, the form of prospectus, has been omitted from this filing.


PART II

 

Item 13. Other Expenses of Issuance and Distribution

The following table sets forth the costs and expenses, other than underwriting discounts, payable in connection with the sale and distribution of the securities being registered. All amounts are estimated except the SEC registration fee and the FINRA filing fee. All the expenses below will be paid by Frontier Group Holdings, Inc.

 

Item

   Amount  

SEC Registration fee

   $     11,590  

FINRA filing fee

     15,500  

Initial                 listing fee

     *  

Legal fees and expenses

     *  

Accounting fees and expenses

     *  

Printing and engraving expenses

     *  

Transfer Agent and Registrar fees

     *  

Blue Sky fees and expenses

     *  

Miscellaneous fees and expenses

     *  
  

 

 

 

Total

   $ *  
  

 

 

 

 

* To be completed by amendment.

 

Item 14. Indemnification of Directors and Officers

Frontier Group Holdings, Inc., Inc. is a Delaware corporation. Section 145 of the Delaware General Corporation Law authorizes a court to award, or a corporation’s board of directors to grant, indemnity to directors and officers in terms sufficiently broad to permit such indemnification under certain circumstances for liabilities, including reimbursement for expenses incurred, arising under the Securities Act of 1933, as amended. Our amended and restated certificate of incorporation to be in effect immediately prior to the consummation of this offering compels indemnification of our directors and officers and permits indemnification of our employees and other agents, in each case to the maximum extent permitted by the Delaware General Corporation Law, and our amended and restated bylaws to be in effect immediately prior to the consummation of this offering provide for indemnification of our directors, officers, employees and other agents to the maximum extent permitted by the Delaware General Corporation Law. In addition, we have entered into indemnification agreements with our directors, officers and some employees containing provisions which are in some respects broader than the specific indemnification provisions contained in the Delaware General Corporation Law. The indemnification agreements may require us, among other things, to indemnify our directors against certain liabilities that may arise by reason of their status or service as directors and to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified. Reference is also made to Section 8 of the underwriting agreement to be filed as Exhibit 1.1 hereto, which provides for indemnification by the underwriter of our officers and directors against certain liabilities.

 

Item 15. Recent Sales of Unregistered Securities

During the last three years, we granted equity awards for an aggregate of 402,621 shares of our common stock to employees and directors under our 2014 Equity Incentive Plan, which includes 123,249 shares that were subsequently forfeited and 16,516 shares that were subsequently repurchased.

The sales of the above securities were deemed to be exempt from registration under the Securities Act in reliance upon Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer not involving any public offering or pursuant to benefit plans and contracts relating to compensation as provided

 

II-1


under Rule 701. The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the stock certificates issued in these transactions. All recipients had adequate access, through their relationships with us, to information about us.

There were no underwriters employed in connection with any of the transactions set forth in Item 15.

 

Item 16. Exhibits and Financial Statements

See the Exhibit Index beginning on page II-5, which follows the signature pages hereof and is incorporated herein by reference.

 

Item 17. Undertakings

The undersigned registrant hereby undertakes that:

(1) for purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective;

(2) for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and

(3) the undersigned will provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 14, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

II-2


SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, we have duly caused this Amendment No. 3 to the Registration Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on the 26th day of May, 2017.

 

FRONTIER GROUP HOLDINGS, INC.
By:  

/s/ Barry L. Biffle

 

Barry L. Biffle

President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment No. 3 to the Registration Statement has been signed by the following persons in the capacities indicated below on the dates indicated.

 

Signature

  

Title

 

Date

/s/ Barry L. Biffle

Barry L. Biffle

  

President and Chief Executive Officer (principal executive officer)

  May 26, 2017

/s/ James G. Dempsey

James G. Dempsey

  

Chief Financial Officer (principal financial officer)

  May 26, 2017

*

Mark C. Mitchell

  

Chief Accounting Officer (principal accounting officer)

  May 26, 2017

*

William A. Franke

  

Director (Chairman of the Board)

  May 26, 2017

*

Josh T. Connor

  

Director

  May 26, 2017

*

Brian H. Franke

  

Director

  May 26, 2017

*

Robert J. Genise

  

Director

  May 26, 2017

*

Bernard L. Han

  

Director

  May 26, 2017

 

C.A. Howlett

  

Director

 

*

Michael R. MacDonald

  

Director

  May 26, 2017

 

II-3


Signature

  

Title

 

Date

*

Patricia Salas Pineda

  

Director

  May 26, 2017

*

John R. Wilson

  

Director

  May 26, 2017

 

*By:  

/s/ Barry L. Biffle

  Barry L. Biffle
  Attorney-in-Fact

 

II-4


EXHIBIT INDEX

 

 

      

Incorporated by Reference

 

Exhibit

Number

 

Exhibit Description

  

Form

    

Date

    

Number

   

Filed

Herewith

 
  1.1*   Form of Underwriting Agreement.           
  3.1(a)   Amended and Restated Certificate of Incorporation, currently in effect.      S-1        3/31/2017        3.1(a)    
  3.1(b)   Certificate of Amendment of the Amended and Restated Certificate of Incorporation.      S-1        3/31/2017        3.1(b)    
  3.2*   Form of Amended and Restated Certificate of Incorporation, to be in effect immediately prior to the consummation of this offering.           
  3.3   Amended and Restated Bylaws, currently in effect.      S-1        3/31/2017        3.3    
  3.4*   Form of Amended and Restated Bylaws, to be in effect immediately prior to the consummation of this offering.           
  4.1   Reference is made to exhibits 3.1 through 3.4.           
  4.2*   Form of Common Stock Certificate.           
  4.3*   Registration Rights Agreement, to be in effect immediately prior to the consummation of this offering, by and among Frontier Group Holdings, Inc. and Indigo Frontier Holdings Company, LLC.           
  5.1*   Opinion of Latham & Watkins LLP.           
10.1(a)   Airport Use and Lease Agreement, dated as of January 1, 2012, by and between Frontier Airlines, Inc. and the City and County of Denver.      S-1/A        5/9/2017        10.1(a)    
10.1(b)   First Amendment to the Airport Use and Lease Agreement, dated as of July 1, 2015, by and between Frontier Airlines, Inc. and the City and County of Denver.      S-1/A        5/9/2017        10.1(b)    
10.1(c)   Second Amendment to the Airport Use and Lease Agreement, dated as of December 22, 2016, by and between Frontier Airlines, Inc. and the City and County of Denver.      S-1/A        5/9/2017        10.1(c)    
10.1(d)   Letter of Agreement, dated as of May 5, 2015, by and between Frontier Airlines, Inc. and the City and County of Denver.      S-1/A        5/9/2017        10.1(d)    
10.2(a)#   2014 Equity Incentive Plan.      S-1        3/31/2017        10.2(a)    
10.2(b)#   Form of Stock Option Grant Notice and Stock Option Agreement under the 2014 Equity Incentive Annual Plan.      S-1        3/31/2017        10.2(b)    
10.2(c)#   Form of Stock Purchase Right Grant Notice and Restricted Stock Purchase Agreement for Non-Employee Directors.      S-1        3/31/2017        10.2(c)    
10.3(a)#   2017 Equity Incentive Award Plan.      S-1/A        5/9/2017        10.3(a)    
10.3(b)*#   Form of Stock Option Grant Notice and Stock Option Agreement under the 2017 Equity Incentive Annual Plan.           

 

II-5


 

      

Incorporated by Reference

Exhibit

Number

 

Exhibit Description

  

Form

  

Date

  

Number

 

Filed

Herewith

10.3(c)*#   Form of Restricted Stock Award Agreement and Restricted Stock Unit Award Grant Notice under the 2017 Equity Incentive Annual Plan.           
10.4#   Form of Indemnification Agreement for directors and officers.    S-1    3/31/2017    10.4  
10.5#   Employment Agreement, dated as of March 15, 2016, by and between Frontier Airlines, Inc. and Barry L. Biffle.    S-1    3/31/2017    10.5  
10.6#   Amended and Restated Employment Agreement, dated as of April 13, 2017, by and between Frontier Airlines, Inc. and James G. Dempsey.    S-1/A    5/9/2017    10.6  
10.7#   Employment Letter, dated as of February 23, 2015, by and between Frontier Airlines, Inc. and James E. Nides.    S-1    3/31/2017    10.7  
10.8#   Employment Letter, dated as of June 30, 2014, by and between Frontier Airlines, Inc. and Howard M. Diamond.    S-1    3/31/2017    10.8  
10.9#   Employment Letter, dated as of September 2, 2015, by and between Frontier Airlines, Inc. and Mark C. Mitchell.    S-1    3/31/2017    10.9  
10.10(a)#   Employment Agreement, dated as of June 25, 2012, by and between Frontier Airlines, Inc. and Daniel M. Shurz.    S-1    3/31/2017    10.10(a)  
10.10(b)#   Amendment to Employment Agreement, dated as of September 13, 2013, by and between Frontier Airlines, Inc. and Daniel M. Shurz.    S-1    3/31/2017    10.10(b)  
10.11*#   Non-Employee Director Compensation Program.           
10.12#   Amended and Restated Phantom Equity Investment Agreement, dated as of December 3, 2013, by and among, Frontier Airlines, Inc., Falcon Acquisition Group, Inc. and FAPAInvest, LLC.    S-1    3/31/2017    10.12  
10.13#   Professional Services Agreement, dated December 3, 2013, by and among Indigo Partners LLC, Frontier Airlines Holdings, Inc. and Frontier Airlines, Inc.    S-1    3/31/2017    10.13  
10.14#   Subscription Agreement, dated as of December 3, 2013, by and between, Falcon Acquisition Group, Inc. and Indigo Frontier Holdings Company, LLC.    S-1    3/31/2017    10.14  
10.15(a)   Airbus A320 Family Aircraft Purchase Agreement, dated as of September 30, 2011, by and between Airbus S.A.S. and Republic Airways Holdings Inc.    S-1/A    5/23/2017    10.15(a)  
10.15(b)   Letter Agreement No. 1, dated as of September 30, 2011, by and between Airbus S.A.S. and Republic Airways Holdings Inc.    S-1/A    5/23/2017    10.15(b)  
10.15(c)   Letter Agreement No. 2, dated as of September 30, 2011, by and between Airbus S.A.S. and Republic Airways Holdings Inc.    S-1/A    5/23/2017    10.15(c)  

 

II-6


 

      

Incorporated by Reference

Exhibit

Number

 

Exhibit Description

  

Form

  

Date

  

Number

 

Filed

Herewith

10.15(d)   Letter Agreement No. 3, dated as of September 30, 2011, by and between Airbus S.A.S. and Republic Airways Holdings Inc.    S-1/A    5/23/2017    10.15(d)  
10.15(e)   Letter Agreement No. 4, dated as of September 30, 2011, by and between Airbus S.A.S. and Republic Airways Holdings Inc.    S-1/A    5/23/2017    10.15(e)  
10.15(f)   Letter Agreement No. 5, dated as of September 30, 2011, by and between Airbus S.A.S. and Republic Airways Holdings Inc.    S-1/A    5/23/2017    10.15(f)  
10.15(g)   Letter Agreement No. 6A, dated as of September 30, 2011, by and between Airbus S.A.S. and Republic Airways Holdings Inc.    S-1/A    5/23/2017    10.15(g)  
10.15(h)   Letter Agreement No. 6B, dated as of September 30, 2011, by and between Airbus S.A.S. and Republic Airways Holdings Inc.    S-1/A    5/23/2017    10.15(h)  
10.15(i)   Letter Agreement No. 7, dated as of September 30, 2011, by and between Airbus S.A.S. and Republic Airways Holdings Inc.    S-1/A    5/23/2017    10.15(i)  
10.15(j)   Letter Agreement No. 8, dated as of September 30, 2011, by and between Airbus S.A.S. and Republic Airways Holdings Inc.    S-1/A    5/23/2017    10.15(j)  
10.15(k)   Letter Agreement No. 9, dated as of September 30, 2011, by and between Airbus S.A.S. and Republic Airways Holdings Inc.    S-1/A    5/23/2017    10.15(k)  
10.15(l)   Amendment No. 1 to Airbus A320 Family Aircraft Purchase Agreement, dated as of January 10, 2013, by and between Airbus S.A.S. and Republic Airways Holdings Inc.    S-1/A    5/23/2017    10.15(l)  
10.15(m)   Amendment No. 2 to Airbus A320 Family Aircraft Purchase Agreement, dated as of December 3, 2013, by and between Airbus S.A.S. and Frontier Airlines, Inc.    S-1/A    5/23/2017    10.15(m)  
10.15(n)   Amendment No. 3 to Airbus A320 Family Aircraft Purchase Agreement, dated as of September 30, 2011, by and between Airbus S.A.S. and Frontier Airlines, Inc.    S-1/A    5/23/2017    10.15(n)  
10.16(a)   Airbus A321 Aircraft Purchase Agreement, dated as of October 31, 2014, by and between Airbus S.A.S. and Frontier Airlines, Inc.    S-1/A    5/23/2017    10.16(a)  
10.16(b)   Letter Agreement No. 1, dated as of October 31, 2014, by and between Airbus S.A.S. and Frontier Airlines, Inc.    S-1/A    5/23/2017    10.16(b)  
10.16(c)   Letter Agreement No. 2, dated as of October 31, 2014, by and between Airbus S.A.S. and Frontier Airlines, Inc.    S-1/A    5/23/2017    10.16(c)  

 

II-7


 

      

Incorporated by Reference

Exhibit

Number

 

Exhibit Description

  

Form

  

Date

  

Number

 

Filed

Herewith

10.16(d)   Letter Agreement No. 3, dated as of October 31, 2014, by and between Airbus S.A.S. and Frontier Airlines, Inc.    S-1/A    5/23/2017    10.16(d)  
10.16(e)   Letter Agreement No. 4, dated as of October 31, 2014, by and between Airbus S.A.S. and Frontier Airlines, Inc.    S-1/A    5/23/2017    10.16(e)  
10.16(f)   Letter Agreement No. 5, dated as of October 31, 2014, by and between Airbus S.A.S. and Frontier Airlines, Inc.    S-1/A    5/23/2017    10.16(f)  
10.16(g)   Letter Agreement No. 6A, dated as of October 31, 2014, by and between Airbus S.A.S. and Frontier Airlines, Inc.    S-1/A    5/23/2017    10.16(g)  
10.16(h)   Letter Agreement No. 6B, dated as of October 31, 2014, by and between Airbus S.A.S. and Frontier Airlines, Inc.    S-1/A    5/23/2017    10.16(h)  
10.16(i)   Letter Agreement No. 7, dated as of October 31, 2014, by and between Airbus S.A.S. and Frontier Airlines, Inc.    S-1/A    5/23/2017    10.16(i)  
10.16(j)   Letter Agreement No. 8, dated as of October 31, 2014, by and between Airbus S.A.S. and Frontier Airlines, Inc.    S-1/A    5/23/2017    10.16(j)  
10.16(k)   Letter Agreement No. 9, dated as of October 31, 2014, by and between Airbus S.A.S. and Frontier Airlines, Inc.    S-1/A    5/23/2017    10.16(k)  
10.16(l)   Amendment No. 1 to Airbus A321 Aircraft Purchase Agreement, dated as of May 18, 2015, by and between Airbus S.A.S. and Frontier Airlines, Inc.    S-1/A    5/23/2017    10.16(l)  
10.16(m)   Amended and Restated Letter Agreement No. 2, dated as of May 18, 2015, by and between Airbus S.A.S. and Frontier Airlines, Inc.    S-1/A    5/23/2017    10.16(m)  
10.17(a)   Frontier Airlines, Inc. Credit Card Affinity Agreement, dated as of March 12, 2003, by and between Frontier Airlines, Inc. and Barclays Bank Delaware, formerly known as Juniper Bank.            X
10.17(b)   First Amendment to the Frontier Airlines, Inc. Credit Card Affinity Agreement, dated as of March 12, 2003, by and between Frontier Airlines, Inc. and Barclays Bank Delaware, formerly known as Juniper Bank.            X
10.17(c)   Second Amendment to the Frontier Airlines, Inc. Credit Card Affinity Agreement, dated as of April 1, 2005, by and between Frontier Airlines, Inc. and Barclays Bank Delaware, formerly known as Juniper Bank.    S-1/A    5/9/2017    10.17(c)  
10.17(d)   Third Amendment to the Frontier Airlines, Inc. Credit Card Affinity Agreement, dated as of March 27, 2006, by and between Frontier Airlines, Inc. and Barclays Bank Delaware, formerly known as Juniper Bank.    S-1/A    5/9/2017    10.17(d)  

 

II-8


 

      

Incorporated by Reference

Exhibit

Number

 

Exhibit Description

  

Form

  

Date

  

Number

 

Filed

Herewith

10.17(e)   Fourth Amendment to the Frontier Airlines, Inc. Credit Card Affinity Agreement, dated as of May 8, 2007, by and between Frontier Airlines, Inc. and Barclays Bank Delaware, formerly known as Juniper Bank.            X
10.17(f)   Fifth Amendment to the Frontier Airlines, Inc. Credit Card Affinity Agreement, dated as of May 25, 2007, by and between Frontier Airlines, Inc. and Barclays Bank Delaware, formerly known as Juniper Bank.    S-1/A    5/9/2017    10.17(f)  
10.17(g)   Sixth Amendment to the Frontier Airlines, Inc. Credit Card Affinity Agreement, dated as of September 9, 2009, by and between Frontier Airlines, Inc. and Barclays Bank Delaware, formerly known as Juniper Bank.            X
10.17(h)   Seventh Amendment to the Frontier Airlines, Inc. Credit Card Affinity Agreement, dated as of July 23, 2010, by and between Frontier Airlines, Inc. and Barclays Bank Delaware, formerly known as Juniper Bank.    S-1/A    5/9/2017    10.17(h)  
10.17(i)   Eighth Amendment to the Frontier Airlines, Inc. Credit Card Affinity Agreement, dated as of October 29, 2010, by and between Frontier Airlines, Inc. and Barclays Bank Delaware, formerly known as Juniper Bank.    S-1/A    5/9/2017    10.17(i)  
10.17(j)   Ninth Amendment to the Frontier Airlines, Inc. Credit Card Affinity Agreement, dated as of November 5, 2013, by and between Frontier Airlines, Inc. and Barclays Bank Delaware, formerly known as Juniper Bank.            X
10.17(k)   Tenth Amendment to the Frontier Airlines, Inc. Credit Card Agreement, dated as of June 18, 2015, by and between Frontier Airlines, Inc. and Barclays Bank, formerly known as Jupiter Bank.    S-1/A    5/9/2017    10.17(k)  
10.18(a)   General Terms Agreement No. 6-13616, dated as of June 30, 2000, by and between Frontier Airlines, Inc., CFM International, Inc. and Societe Nationale D’Etude et de Construction de Monteurs d’Aviation.    S-1/A    5/9/2017    10.18(a)  
10.18(b)   Letter Agreement No. 1, dated as of June 30, 2000, by and between Frontier Airlines, Inc. and CFM International, Inc.            X
10.18(c)   Letter Agreement No. 2, dated as of November 20, 2002, by and between Frontier Airlines, Inc. and CFM International, Inc.    S-1/A    5/9/2017    10.18(c)  
10.18(d)   Letter Agreement No. 3, dated as of August 1, 2003, by and between Frontier Airlines, Inc. and CFM International, Inc.    S-1/A    5/9/2017    10.18(d)  
10.18(e)   Letter Agreement No. 4, dated as of March 26, 2004, by and between Frontier Airlines, Inc. and CFM International, Inc.    S-1/A    5/9/2017    10.18(e)  

 

II-9


 

      

Incorporated by Reference

Exhibit

Number

 

Exhibit Description

  

Form

  

Date

  

Number

 

Filed

Herewith

10.18(f)   Letter Agreement No. 5, dated as of April 11, 2006, by and between Frontier Airlines, Inc. and CFM International, Inc.    S-1/A    5/9/2017    10.18(f)  
10.18(g)   Amendment No. 1 to GTA 6-13616, dated as of June 6, 2009, by and between Frontier Airlines, Inc. and CFM International, Inc.    S-1/A    5/9/2017    10.18(g)  
10.18(h)   Letter Agreement No. 7, dated as of October 25, 2011, by and between Frontier Airlines, Inc. and CFM International, Inc.    S-1/A    5/9/2017    10.18(h)  
10.18(i)   Letter Agreement No. 8, dated as of December 23, 2014, by and between Frontier Airlines, Inc. and CFM International, Inc.    S-1/A    5/9/2017    10.18(i)  
10.19(a)   General Terms Agreement No. CFM-1 1-2576101711, dated as of October 17, 2011, by and between Frontier Airlines, Inc. and CFM International, Inc.    S-1/A    5/9/2017    10.19(a)  
10.19(b)   Letter Agreement No. 1 to General Terms Agreement No. CFM-1 1-2576101711, dated as of October 26, 2011, by and between Frontier Airlines, Inc. and CFM International, Inc.    S-1/A    5/9/2017    10.19(b)  
10.19(c)   Amendment No. 1 to Letter Agreement No. 1, dated as of December 23, 2014, by and between Frontier Airlines, Inc. and CFM International, Inc.    S-1/A    5/9/2017    10.19(c)  
10.20(a)   Agreement on Technical Services for A320 Family Aircraft, dated as of November 5, 2014, by and between Frontier Airlines, Inc. and Lufthansa Technik AG.            X
10.20(b)   Total Component Support Attachment, dated as of November 5, 2014, by and between Frontier Airlines, Inc. and Lufthansa Technik AG.    S-1/A    5/9/2017    10.20(b)  
10.20(c)   Attachment on Aircraft Production Inspection, dated as of April 30, 2015, by and between Frontier Airlines, Inc. and Lufthansa Technik AG.            X
10.21   Purchase Terms Agreement (Material-Single Event), dated as of November 5, 2014, by and between Frontier Airlines, Inc. and Lufthansa Technik AG.    S-1/A    5/9/2017    10.21  
10.22(a)   Navitaire Hosted Services Agreement, dated as of June 20, 2014, by and between Frontier Airlines, Inc. and Navitaire LLC.            X
10.22(b)   Amendment No. 1 to Navitaire Hosted Services Agreement, dated as of March 1, 2015, by and between Frontier Airlines, Inc. and Navitaire LLC.    S-1/A    5/9/2017    10.22(b)  
10.22(c)   Amendment No. 2 to Navitaire Hosted Services Agreement, dated as of April 10, 2015, by and between Frontier Airlines, Inc. and Navitaire LLC.    S-1/A    5/9/2017    10.22(c)  

 

II-10


 

      

Incorporated by Reference

Exhibit

Number

 

Exhibit Description

  

Form

  

Date

  

Number

 

Filed

Herewith

10.22(d)   Amendment No. 3 to Navitaire Hosted Services Agreement, dated as of January 1, 2016, by and between Frontier Airlines, Inc. and Navitaire LLC.    S-1/A    5/9/2017    10.22(d)  
10.23   Second Amended and Restated Credit Agreement, dated as of December 16, 2016, by and among Vertical Horizons, Ltd., Citibank, N.A., Citigroup Global Markets, Inc., Bank of Utah and each lender identified on Schedule I thereto.    S-1/A    5/23/2017    10.23  
10.24   Second Amended and Restated Mortgage and Security Agreement, dated as of December 16, 2016, by and among Vertical Horizons, Ltd., Citibank, N.A. and Bank of Utah.    S-1/A    5/23/2017    10.24  
10.25   Second Amended and Restated Guarantee, dated as of December 16, 2016, by Frontier Airlines, Inc. in favor of Bank of Utah.    S-1/A    5/23/2017    10.25  
10.26   Second Amended and Restated Guarantee, dated as of December 16, 2016, by Frontier Airlines Holdings, Inc. in favor of Bank of Utah.    S-1/A    5/23/2017    10.26  
10.27(a)   Step-In Agreement, dated as of December 23, 2014, by and among Vertical Horizons, Ltd., Bank of Utah and Airbus S.A.S.    S-1/A    5/23/2017    10.27(a)  
10.27(b)   Letter Agreement to the Step-In Agreement and the Assigned A321 Purchase Agreement, dated as of May 18, 2015, by and among Vertical Horizons, Ltd., Frontier Airlines, Inc., Bank of Utah and Airbus S.A.S.    S-1/A    5/23/2017    10.27(b)  
10.27(c)   Amendment Agreement to Step-In Agreement and the Assigned Purchase Agreements, dated as of August 11, 2015, by and among Vertical Horizons, Ltd., Bank of Utah and Airbus S.A.S.    S-1/A    5/23/2017    10.27(c)  
10.27(d)   Amendment Agreement No. 3 to Step-In Agreement and the Assigned Purchase Agreements, dated as of December 16, 2016, by and among Vertical Horizons, Ltd., Bank of Utah and Airbus S.A.S.    S-1/A    5/23/2017    10.27(d)  
10.28(a)   Purchase Agreements Assignment and Assumption Agreement, dated as of December 23, 2014, by and among Vertical Horizons, Ltd., Frontier Airlines, Inc. and Airbus S.A.S.    S-1/A    5/23/2017    10.28(a)  
10.28(b)   Amendment Agreement to Assignment and Assumption Agreement, dated as of August 11, 2015, by and among Vertical Horizons, Ltd., Frontier Airlines, Inc. and Airbus S.A.S.    S-1/A    5/23/2017    10.28(b)  

 

II-11


 

      

Incorporated by Reference

Exhibit

Number

 

Exhibit Description

  

Form

  

Date

  

Number

 

Filed

Herewith

10.28(c)   Amendment Agreement No. 3 to Assignment and Assumption Agreement, dated as of December 16, 2016, by and among Vertical Horizons, Ltd., Frontier Airlines, Inc. and Airbus S.A.S.    S-1/A    5/23/2017    10.28(c)  
10.29   Second Amended and Restated CFMI Engine Benefits Agreement, dated as of December 16, 2016, by and among Vertical Horizons, Ltd., CFM International, Inc., Bank of Utah and Frontier Airlines, Inc.    S-1/A    5/23/2017    10.29  
10.30(a)   Amended and Restated Signatory Agreement (U.S. Visa and MasterCard Transactions), dated as of November 5, 2013, by and among Frontier Airlines Holdings Inc., Frontier Airlines, Inc. and U.S. Bank National Association.    S-1/A    5/23/2017    10.30(a)  
10.30(b)   First Omnibus Amendment to Signatory Agreements, dated as of March 1, 2016, by and among Frontier Airlines Holdings, Inc., Frontier Airlines, Inc. and U.S. Bank National Association.    S-1/A    5/23/2017    10.30(b)  
14.1*   Code of Ethics           
21.1   List of subsidiaries    S-1    3/31/2017    21.1  
23.1   Consent of independent registered public accounting firm.    S-1/A    5/9/2017    23.1  
23.2*   Consent of Latham & Watkins LLP (included in Exhibit 5.1).           
24.1   Power of Attorney. Reference is made to the signature page to the Registration Statement.    S-1    3/31/2017    24.1  

 

* To be filed by amendment.
# Indicates management contract or compensatory plan.
Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment and this exhibit has been filed separately with the SEC.

 

II-12

EX-10.17(A)

Exhibit 10.17(a)

FRONTIER AIRLINES, INC. CREDIT CARD AFFINITY AGREEMENT

THIS AGREEMENT is made on the 12th day of March, 2003, by and between Frontier Airlines, Inc., a Colorado corporation, having its principal office at 7001 Tower Road, Denver, CO 80249 (“FRONTIER”) and JUNIPER BANK, a Delaware Corporation, having its principal offices at 100 South West St., Wilmington, Delaware 19801 (“JUNIPER”).

RECITALS:

WHEREAS, JUNIPER Bank offers VISA and MASTERCARD consumer credit cards and related products to the public;

WHEREAS, FRONTIER has developed the EarlyReturns frequent flyer program, under which (a) FRONTIER Members are awarded mileage credit, including, but not limited to, credit for travel on airline flights operated under the airline code of FRONTIER, and credit for purchase transactions, including the purchases of goods and services from EarlyReturns “partners” in association with the EarlyReturns Program, as such Program is modified by FRONTIER from time to time; and (b) FRONTIER Members can obtain travel and other benefits by redeeming such mileage credit;

WHEREAS, EarlyReturns has at least ***** members;

WHEREAS, FRONTIER’S goals and objectives are to continue to add value to its EarlyReturns Program by offering a credit card associated with the FRONTIER Marks, which will (i) be competitive with comparable frequent flyer cards; and (ii) entitle FRONTIER Members to receive “mileage credit” for Net Purchases charged to the cardholder’s account;

WHEREAS, JUNIPER’S goals and objectives are to develop, promote and market the Affinity Program to the public consistent with FRONTIER’S stated goals, for the mutual benefit of JUNIPER and FRONTIER; and

WHEREAS, FRONTIER and JUNIPER wish to enter into the Affinity Program on the terms and conditions set forth below.

NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

 

  1. Definitions.

(a) “Account” means a JUNIPER Card account opened pursuant to an application under this Agreement, which is or may be eligible from time to time to make a purchase, to receive a cash advance, or to transfer a balance.

(b) “Acquisition Budget” means the aggregate Account acquisition budget of US ***** for the Initial Term of the Agreement to be allocated in a Marketing Plan.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

1


(c) “Added Earnings Program” means the direct and indirect solicitation by FRONTIER of applications for JUNIPER Cards from FRONTIER Members and other FRONTIER customers without the direct marketing participation of JUNIPER as more fully described in Section 3(e).

(d) “Affinity Program” means the co-branded credit card program between JUNIPER and FRONTIER, the terms of which are set forth in this Agreement.

(e) “Bonus Miles” means miles awarded to JUNIPER Cardholders to incent behavior, rather than as result of Net Purchases (other than Net Purchases of FRONTIER tickets, where applicable).

(f) “Customer Agreements” means the Account agreements.

(g) “Designated Issuer” shall have the meaning ascribed in Section 4(a) hereof.

(h) “Earnings Guarantee” means the funds to be paid by JUNIPER to FRONTIER during the Initial Term as a guarantee of net earnings in the amount of *****.

(i) “Effective Date” means the date on which FRONTIER and JUNIPER begin marketing JUNIPER Cards as more fully described in Section (3) hereof.

(j) “Fees” means, collectively, New Account Premiums, Renewal Premiums, Marketing Premiums, Purchase Mile Fees and Bonus Mile Fees as those terms are defined in Section 5.

(k) “Force Majeure Event” means any act of god; embargo or other governmental act, regulation, or request; fire; accident; strike; slowdown; war; riot; act of terrorism; or any other act or cause beyond the reasonable control of the affected party.

(l) “FRONTIER Intellectual Property” means the FRONTIER Marks (as defined below), together with the other property described in the License Agreement.

(m) “FRONTIER Marks” means the name, trademarks, service marks, photographs, graphics, copyrights and logo of FRONTIER that are set forth in Exhibit B attached hereto.

(n) “FRONTIER Members” means existing or potential members of the FRONTIER EarlyReturns frequent flyer program.

(o) “Initial Guarantee Payment” means the payment of ***** of the Earnings Guarantee in advance as set forth herein.

(p) “Initial Term” means the period that begins on the Effective Date and ends on the fifth anniversary of the date on which the parties begin marketing JUNIPER Cards under section 3(c) hereof.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

2


(q) “JUNIPER Cards” means the Affinity Program credit cards issued by JUNIPER.

(r) “JUNIPER Cardholders” means the holders of JUNIPER Cards.

(s) “JUNIPER Marks” means the name, trademarks, service marks, copyrights and logo of JUNIPER that are set forth in Exhibit A attached hereto.

(t) “JUNIPER Products” means those financial products described on Exhibit C attached hereto, as such exhibit may be amended by JUNIPER and FRONTIER from time to time in writing.

(u) “Lists” means lists of the FRONTIER Members, including names and residential addresses and, where available, residential telephone numbers.

(v) “Marketing Plans” means the plans developed from time to time during the Term in accordance with Paragraph 7 of this Agreement.

(w) “Marketing Premium” means the amount payable by JUNIPER to FRONTIER for each Account generated as a result of an Added Earnings Program, as described more particularly in Paragraph 5 of this Agreement.

(x) “Net Purchases” *****. In no event shall Net Purchases include (i) purchases or balance transfers that are posted to an Account that has been reported lost or stolen (unless such purchases or balance transfers represent bona fide purchases or a Qualifying Balance Transfers posted to a lost or stolen Account, on which Fees have not yet been paid by JUNIPER); (ii) balance transfers other than a Qualifying Balance Transfer, cash advance transactions and/or cash advance transaction fees; and (iii) annual fees, finance charges, and any other bank fee or charge posted to the Account (such fees include, but are not limited to, late fees, return check fees, overlimit fees, credit insurance premiums, collection costs and administrative fees).

(y) “Purchase Miles” means miles awarded to JUNIPER Cardholders as a result of Net Purchases.

(z) “Qualifying Balance Transfer” means a single balance transfer of up to ***** or such other amount as the parties may agree in writing, for which Purchase Miles are awarded.

(aa) “Quarterly Installment Payment” means the portion of the balance of the Earnings Guarantee to be paid each quarter in the amount of ***** as set forth herein.

(bb) “Renewal Premium” means the amount payable for each renewal of a JUNIPER Product, to be paid by JUNIPER to FRONTIER as described more particularly in paragraph 5 of this Agreement.

(cc) “Suspension Event” shall have the meaning ascribed in Section 6 hereof.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

3


(dd) “Term” means the Initial Term plus and extension or renewal term of this Agreement.

(ee) “Triggering Event” shall have the meaning ascribed in Section 7 hereof.

(ff) “Volume Incentive” shall have the meaning ascribed in Section 4(a) hereof.

 

  2. License to Use Marks.

(a) During the Term of this Agreement, JUNIPER shall have the right and license to the FRONTIER Marks as they now exist or as they may be modified during the Term hereof solely in connection with JUNIPER’S marketing of credit card products to FRONTIER Members under this Agreement. Such right and license is restricted to the products and services described herein and shall not apply or extend to any other product or service offered by JUNIPER. FRONTIER hereby agrees that the Marks may be used on either Visa or MasterCard Credit Cards as well as merchandise that has been approved by FRONTIER and is used to encourage individuals to apply for or use Credit Card Products (“Premiums”). FRONTIER and JUNIPER agree that JUNIPER will only issue Credit Cards and approved Premiums bearing the Marks pursuant to this Agreement, unless otherwise mutually agreed in writing by JUNIPER and FRONTIER. Except for amounts paid to FRONTIER pursuant to Paragraph 5 hereof, JUNIPER shall not be required to pay any additional amounts to FRONTIER, or on account of FRONTIER, in connection with the use of the Marks in conjunction with this Affinity Program. Following termination of this Agreement Credit Card Products issued during the Term hereof may continue to bear the Marks until the normal expiration date thereof (not to exceed twenty-four (24) months from the issuance thereof). Subject to and consistent with the applicable rules and regulations of Visa or MasterCard, JUNIPER shall comply with the standards established by FRONTIER with respect to the form of the Marks and their usage.

(b) FRONTIER is granted permission to use during the Term of this Agreement the JUNIPER Marks. Such permission is expressly limited to uses by FRONTIER necessary to perform its obligations under this Agreement, including without limitation its execution of any of its obligations under any Marketing Plan. FRONTIER agrees and recognizes JUNIPER’S exclusive ownership of such marks and names. FRONTIER agrees that it will not use the names, service marks and/or trademarks of the other party or any of its affiliated companies without the express prior written consent of that owning party.

(c) Each party agrees not to take any action inconsistent with the other party’s ownership of its Marks and further agrees to take any action, including without limitation assistance in legal proceedings, which the owner deems necessary to establish and preserve exclusive rights in and to its Marks. It is expressly understood that each party is not purchasing or acquiring any right, title or interest in the other party’s Marks.

(d) Subject to the foregoing, each of the parties hereto is and shall remain the owner of all rights in and to its name and logo, as the same now exist or as they may hereafter be modified, including all rights in and to any copyright, trademark, service-mark and/or like rights pertaining thereto. Any and all rights to the Marks not herein specifically granted and licensed to

 

 

4


JUNIPER are reserved to FRONTIER. Except as otherwise specifically provided, upon the termination of this Agreement, all rights conveyed by FRONTIER to JUNIPER with respect to the use of the Marks shall cease, and all such rights shall revert to FRONTIER. Upon termination of this Agreement, JUNIPER shall have no further right to market its credit card products using the FRONTIER Marks or to further utilize any promotional materials or Premiums containing the Marks. However, nothing contained herein shall require JUNIPER to cancel any Account or to terminate any card issued in connection with this Agreement.

 

  3. Marketing of the Affinity Program; Member Lists.

(a) Commencing on the Effective Date and continuing through the Term of this Agreement, JUNIPER, at its own expense, shall design and develop marketing, promotion and solicitation materials to promote the Affinity Program and JUNIPER Products. JUNIPER shall submit to FRONTIER, for its prior approval, samples of all marketing, promotional or solicitation materials, printed or otherwise, including, but not limited to telephone scripts, which JUNIPER intends to utilize to market or service the Affinity Program and JUNIPER Products. FRONTIER shall review such materials and respond to JUNIPER’S requests for approval within five business days. JUNIPER may communicate to the JUNIPER Cardholders information that does not bear FRONTIER Marks, provided, however, that JUNIPER must notify FRONTIER in advance of any communication to JUNIPER Cardholders which pertains to frequent flyer or other travel-related products and services.

(b) From time to time through the Term of this Agreement, JUNIPER shall market, promote and advertise the Affinity Program and Juniper Products to FRONTIER Members and such other target markets as FRONTIER and JUNIPER may from time to time agree upon. The JUNIPER Products shall initially consist of the credit card products listed in Exhibit C. JUNIPER shall make available to FRONTIER competitive and compelling products, as such products become available, for possible designation as JUNIPER Products to be added to Exhibit C.

(c) FRONTIER may supply inserts to JUNIPER to be included in reasonable monthly mailings of billing statements to JUNIPER Cardholders subject to JUNIPER’s reasonable determination of available space, size and weight limitations. JUNIPER will pay for the normal cost of mailing statement insertions as described, excluding the cost of preparing and producing the actual insert which shall be the sole responsibility of FRONTIER. In addition, if the inserts added by FRONTIER increase the postal expense incurred by JUNIPER to mail statements with such inserts, then JUNIPER shall inform FRONTIER in advance and, provided FRONTIER agrees to reimburse JUNIPER for such incremental postage expense, JUNIPER will use reasonable efforts to include such insertion.

(d) From time to time during the Term of this Agreement, FRONTIER, at its expense, shall provide JUNIPER with the Lists, via magnetic tape, electronic file, CD ROM, or any other media that is mutually agreed upon. Each List shall be as complete as possible, but shall not include those FRONTIER Members who have notified FRONTIER that they do not wish to receive solicitations regarding the EarlyReturns Program. Subject to applicable regulatory record retention requirements and except as may be necessary to complete a marketing campaign, JUNIPER shall promptly destroy each outdated List upon receipt of an

 

5


updated List from FRONTIER. JUNIPER shall use the Lists for the sole purpose of marketing and servicing the JUNIPER Cards (or such other Affinity Program products as FRONTIER may approve in writing from time to time), and JUNIPER shall not rent, use or permit any third party handling such Lists to use them for any other purpose. JUNIPER shall not rent or otherwise make available such Lists to any third party except for the purposes of fulfilling obligations under this Agreement, subject to the execution of an appropriate confidentiality agreement by such third party. The Lists provided by FRONTIER are and shall remain the sole property of FRONTIER.

(e) Upon request by FRONTIER and with prior written approval by JUNIPER, which approval shall not be unreasonably withheld or delayed, JUNIPER shall permit FRONTIER, subject to reasonable restrictions set forth by JUNIPER, to conduct Added Earnings Program from time to time during the Term of this Agreement, provided, JUNIPER’S approval and restrictions will not impair FRONTIER’S ability to reach the target levels of income anticipated by the parties in Section 5(a)(iii) of this Agreement. Any marketing materials developed by FRONTIER must be approved in writing by JUNIPER prior to distribution by FRONTIER (provided that such approval shall not be unreasonably withheld or delayed), however, the text of JUNIPER Products applications and disclosures used for the Added Earnings Program must be supplied to FRONTIER by JUNIPER. Unless otherwise agreed to by JUNIPER and FRONTIER, all expenses incurred by FRONTIER and JUNIPER with respect to Added Earnings Programs shall be borne solely by FRONTIER provided that JUNIPER expenses shall be limited to those out-of-pocket expenses that are pre-approved by FRONTIER in writing. For each Account opened by FRONTIER as a result of an Added Earnings Program, JUNIPER shall pay to FRONTIER the Marketing Premium described in Section 5 hereof, net of any JUNIPER out-of-pocket expenses related to the Added Earnings Program as pre-approved in accordance with the previous sentence, in lieu of the New Account Premium described in Section 5.

 

  4. Issuance and Servicing of JUNIPER Products.

(a) FRONTIER will designate either VISA or MasterCard International as the issuing association for JUNIPER Products. The definitive agreement between Designated Issuer and JUNIPER will materially conform to the proposal provided to FRONTIER by the selected association and will include the payment of a Affinity Program related volume incentive (the “Volume Incentive”) that will be passed along to FRONTIER for each purchase transaction dollar on credit cards which bear the FRONTIER Marks. JUNIPER shall offset the Volume Incentive received from the Designated Issuer in the quarter in which it is received against the then un-recouped Earnings Guaranty, if any, in accordance with paragraph 5(c) below.

(b) JUNIPER may solicit FRONTIER Members regarding the Affinity Program and issue JUNIPER Cards and other JUNIPER Products in accordance with JUNIPER’S standard consumer credit card product or other issuing policies and credit practices, subject to federal, state and local law. All decisions concerning the creditworthiness of any potential FRONTIER Member shall be made at the sole discretion of JUNIPER. JUNIPER at all times shall offer competitive and compelling terms and features in connection with JUNIPER Products, which are consistent with or better than the industry norm for co-branded frequent fryer cards.

 

6


(c) JUNIPER Cardholders shall be governed by the terms of the Customer Agreements. The Customer Agreements shall specify that the laws of the State of Delaware, and as applicable, federal law, shall govern the terms and conditions of the Account and the extension of credit by JUNIPER. JUNIPER shall have the right, subject to the limitations set forth in this paragraph to (i) amend the Customer Agreements in accordance with applicable law, and (ii) alter the pricing on Accounts, in accordance with JUNIPER’S standard credit policies and the applicable Customer Agreements in the event of late payments, non-payments, payment by checks returned for insufficient funds, bankruptcy or other failure of an Account holder to abide by the terms of his or her Customer Agreement. Notwithstanding the foregoing, at all times such Customer Agreements must contain terms and conditions that are consistent with or better than the industry norm for co-branded frequent flyer cards. JUNIPER shall process all applications and customer service requests in a timely and efficient manner. JUNIPER shall provide FRONTIER with written notice of all changes to the Customer Agreements, other than individual account pricing, at least thirty (30) days prior to their effective date.

(d) JUNIPER shall be the sole creditor under the law as to all debts incurred through the use of the JUNIPER Cards, shall be the sole owner of the Accounts and may securitize Account receivables from time to time. In addition, any and all outstanding balances with respect thereto (including, without limitation, all amounts owing for the payments of goods and services, periodic finance charges, late and other charges) and all records developed and retained by JUNIPER for the sole purpose of administering the Accounts shall be the sole property of JUNIPER or its assigns and FRONTIER shall have no rights or interests therein.

 

  5. Fees.

(a) During the Term of this Agreement, JUNIPER shall pay to FRONTIER Fees for the acquisition, retention and use of Accounts, as follows:

(i) New Account Premiums: For Accounts opened hereunder during the Term, other than Accounts for which the Marketing Premium is paid, a New Account Premium of ***** for each ***** Account and ***** for each Standard ***** Account opened hereunder.

(ii) Renewal Premiums: For Accounts renewed during the Term of this Agreement, a Renewal Account Premium in the amount equal ***** of the Annual fee for said Account. By way of example, based on the Annual Fee at launch the Renewal Premiums would be ***** for each ***** Account; ***** for each ***** Account.

(iii) Marketing Premiums: For each Account generated during the Term of this Agreement as a result of the Added Earnings Program, a Marketing Premium of *****, regardless of type of JUNIPER Product. FRONTIER has no obligation to maintain an Added Earnings Program hereunder and may do so in its sole discretion; however, the parties project that forty percent of the Accounts obtained hereunder shall be obtained pursuant to an Added Earnings Program.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

7


(iv) Notwithstanding the foregoing, JUNIPER shall not be obligated to pay to FRONTIER any (y) Marketing Premiums for a No Fee JUNIPER Card until such card is used for a purchase, balance transfer, or cash advance; or (z) New Account Premiums or Marketing Premiums in the event that the Accounts on which such Fees are calculated represent replacement Accounts for lost or stolen JUNIPER Cards.

(b) Bonus Mile Fees and Purchase Mile Fees: During the Initial Term of this Agreement, JUNIPER shall pay a Purchase Mile Fee to FRONTIER equal to ***** for each Purchase Mile and a Bonus Mile Fee of either (1) ***** for each Bonus Mile awarded to an Account for which the New Account Premium is paid, or (2) ***** for each Bonus Mile awarded to an Account for which the Marketing Premium is paid. Purchase Miles and Bonus Miles shall be awarded as follows:

(i) FRONTIER shall award one Purchase Mile on each Account for each dollar of Net Purchases posted to such Account.

(ii) FRONTIER will from time to time award Bonus Miles to Accounts. Bonus Miles will be awarded as agreed from time to time by the parties for, by way of example and not limitation, rewards to Members when they open Accounts, rewards to JUNIPER Cardholder for engaging in certain categories of transactions as the parties may agree, including, but not limited to, the use of an Account to purchase FRONTIER tickets. The Bonus Mile Fee shall be in addition to, and not in lieu of, the Purchase Mile Fee that is due for a transaction. For example:

For FRONTIER ticket purchases on the Platinum Card for which double miles are awarded for using the credit card, the first mile awarded by FRONTIER will be compensated by the Purchase Mile Fee, and the second (bonus) mile will be compensated by the Bonus Mile Fee.

(c) JUNIPER shall provide FRONTIER with a reconciliation report within ***** days following the end of the contract quarter, setting forth the amount of Fees earned by FRONTIER under this paragraph 5 during such quarter. JUNIPER shall pay all Fees net of expenses incurred by JUNIPER as a result of an Added Earnings Program under Section 3(e) to FRONTIER within ***** days following the transmittal of the reconciliation report; provided, however, that JUNIPER shall offset Fees and Volume Incentive payments due against the cumulative amount of the un-recouped Earnings Guaranty, and transmit to FRONTIER the net balance due, if any.

(d) The parties agree to create reasonable procedures to prevent JUNIPER Cardholders from circumventing limitations on mileage awards, including but not limited to, the Qualifying Balance Transfer limits.

(e) JUNIPER’S obligation to pay any of the aforementioned Fees to FRONTIER shall cease on the Termination Date or upon the expiration of the Wind-down Period, as applicable.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

8


  6. Earnings Guarantee.

(a) Subject to the conditions set forth in subparagraphs (b) and (c) and below, JUNIPER shall pay the Earnings Guarantee as follows:

(i) JUNIPER shall pay the Initial Guaranty Payment to FRONTIER within ***** business days of the date this Agreement is duly executed and delivered by the parties hereto. In the event that FRONTIER fails to reasonably cooperate in the launch of the Program causing the onset of marketing of the program to occur after June 30, 2003, FRONTIER shall immediately return the Initial Guaranty Payment to JUNIPER. The parties expressly agree that any joint decision to delay the launch of the Program beyond June 30, 2003 due to Force Majeure or other events will not result in a duty for FRONTIER to return the Initial Guaranty Payment.

(ii) The balance of the Earnings Guarantee shall be paid in Quarterly Installment Payments. The first Quarterly Installment Payment shall be due on the last day of the sixth contract quarter after the Effective Date, or, in the event the Initial Guaranty Payment is returned pursuant to Sub-section (i) above, the last day of the first quarter after the effective date, and the remainder shall be payable on the last day of every contract quarter thereafter.

(b) If one or more of the following (each a “Suspension Event”) occurs:

(i) The average Passenger Enplanements (“PE”) for the ***** most recent months for which FRONTIER has reported prior to the quarterly due date declines more than ***** from the average PE in the comparable ***** in *****;

(ii) The average number of Active Frequent Flyers for the ***** most recent months for which FRONTIER has reported prior to the quarterly due date declines more than ***** from the number of Active Frequent Flyers in the comparable ***** in *****.

(iii) FRONTIER fails to maintain a frequent flyer program that is as competitive in the marketplace as the EarlyReturns Program is as of Jan 1, 2003 based on domestic award levels and domestic mileage earning capability, provided that JUNIPER provides notice of the failure to maintain the frequent flyer program which will commence a ***** period during which FRONTIER may cure the deficiency;

(iv) FRONTIER becomes subject to voluntary or involuntary bankruptcy, insolvency, receivership, conservatorship or like proceedings, and for which JUNIPER does not terminate pursuant to Section 15(d) below;

then JUNIPER shall be relieved of the obligation to pay the Earnings Guarantee for the affected quarter, if any. If a Suspension Event under (i) or (ii) continues during the ensuing contract quarter(s), JUNIPER shall be relieved of its obligation to pay the Earnings Guarantee for such quarter(s) and the Earnings Guarantee shall be reduced by ***** for each affected quarter. Fees earned during such quarter shall be paid to FRONTIER to the extent not offset against the un-recouped Guarantee pursuant to Section 5 (c). For purposes of this Section 6(b), “PE” means the aggregate of ticketed passengers boarding a FRONTIER mainline flight as reported by

 

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

9


FRONTIER for each month on or before the ***** day of the following month (for avoidance of doubt, PE does not include passengers booked by or through FRONTIER’S codeshare partners) and “Active Frequent Flyer” means a FRONTIER Member who has taken at least one flight in a calendar year.

(c) At such time FRONTIER has earned and received a total of *****, (or a reduced amount pursuant to Section 6(b) above) hereunder, JUNIPER’S obligation to pay the Earnings Guaranty shall cease.

 

  7. Account Acquisition Budget; Marketing Plans.

(a) Unless decreased as set forth below, JUNIPER shall fund an aggregate Account acquisition budget of ***** for the Term of the Agreement (the “Acquisition Budget”) provided that FRONTIER: (i) fulfills all its obligations hereunder, including but not limited to review and approval in a timely manner of the marketing materials and programs proposed or submitted by JUNIPER; (ii) a Suspension Event does not occur and continue; or (iii) this Agreement is not terminated for any reason (each a “Triggering Event”).

(b) The Acquisition Budget includes the Marketing Premiums paid to FRONTIER as a result of an Added Earnings Program.

(c) Except as provided in Section (d) below, the occurrence of a Triggering Event terminates JUNIPER’S obligation to fund the Acquisition Budget.

(d) If FRONTIER (i) fails to fulfill all its obligations hereunder, including but not limited to review and approval in a timely manner of the marketing materials and programs proposed or submitted by JUNIPER; or (ii) a Suspension Event pursuant to Section 6.(b) (i), (ii) or (iii) occurs during any calendar quarter, JUNIPER shall have no obligation to fund the Acquisition Budget until such time that Suspension Event is cured. Acquisition Budget deferred as a result of this section may be removed from the Acquisition Budget if, at the time of establishing subsequent Marketing Plans, continuing to expend the Acquisition Budget on marketing efforts is not commercially reasonable.

(e) Beginning April l, 2003, and every ***** thereafter, FRONTIER and JUNIPER shall meet to develop a Marketing Plan for the ensuing ***** period. Both parties shall make themselves available for discussions and consultations regarding the Marketing Plans, and shall use all reasonable resources, including the assignment of adequate personnel, as may be necessary to develop each Marketing Plan. In addition, FRONTIER and JUNIPER, upon either party’s reasonable request, shall participate in additional meetings to revise the then-current Marketing Plan based on ongoing campaign results or changes to the marketing environment. Each Marketing Plan will establish the efforts to be completed by each party in order to promote the Affinity Program, the portion of the Acquisition Budget being allocated to the period covered by the Marketing Plan, and set forth whether new Accounts originated pursuant to the Marketing Plan will be considered a new Account resulting in the payment of the New Account Premium or the Marketing Premium, or allocated between the two according to some formula. The Marketing Plans shall be developed based upon the parties’ reasonable and objective evaluations

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

10


as to the most effective and efficient means to advertise and promote the Affinity Program, in light of the following parameters:

(i) The parties recognize that the Acquisition Budget is intended to acquire ***** new Accounts through all channels including but not limited to Added Earnings Programs during the Initial Term;

(ii) The anticipated average annual cost per Account is *****;

(iii) The occurrence of one or more Suspension Events will result in a reasonable adjustment to the Acquisition Budget;

(iv) The parties may reduce the Acquisition Budget to allow JUNIPER to receive the economic benefit of efficient Account acquisition; and

(v) The performance of earlier marketing efforts, the cost effectiveness of the particular marketing channels and other factors effecting response rates, including but not limited to general economic trends and trends regarding frequent flyer program participation.

(f) The parties recognize that the Acquisition Budget is intended to acquire ***** Accounts during the Initial Term of the Agreement at an average annual cost per Account (“CPA”) for JUNIPER of *****, including ***** Accounts obtained through Added Earnings Programs. During each period covered by a Marketing Plan, if JUNIPER wants to reallocate the Acquisition Budget from a particular marketing channel to other channels or suspend a channel in order to achieve the Account and CPA targets, or to reduce, the, Acquisition Budget during such period, JUNIPER will notify FRONTIER and an ad hoc meeting of the parties to revise the Marketing Plan. In the event that the parties do not agree on a Marketing Plan, including a revised Marketing Plan at the ad hoc meeting, JUNIPER may reduce the Acquisition Budget as a result of the reallocation or suspension of marketing if, in JUNIPER’S commercially reasonable judgment based on the prior performance of the marketing efforts, the Acquisition Budget for the particular year will not result in the cost effective acquisition of Accounts.

 

  8. Privacy.

A copy of JUNIPER’S Privacy Policy can be accessed at www.juniper.com/app/ccsite/legal/privacyDynamic.jsp. JUNIPER may modify the Privacy Policy from time to time. JUNIPER shall communicate all changes in the Privacy Policy to FRONTIER. FRONTIER acknowledges that to the extent that it receives from JUNIPER Account information about JUNIPER Cardholders, and does not receive that same information from any additional source, FRONTIER’S use and disclosure of such information to unaffiliated third parties is limited by JUNIPER’S Privacy Policy and by applicable law.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

11


  9. Relationship.

Nothing in this Agreement is intended to or shall be construed to constitute or establish an agency, joint venture, partnership or fiduciary relationship between the parties, and neither party shall have the right or authority to act for or on behalf of the other party.

 

  10. Confidentiality.

(a) The parties acknowledge and agree that all information provided to or in connection with either party’s performance under this Agreement shall be considered confidential and proprietary information (“Confidential Information”) and shall not be disclosed to any third party (including any affiliate) without the prior written consent of the party providing the Confidential Information (“Disclosing Party”). Confidential Information shall include, without limitation: (i) names, addresses, and demographic, behavioral, and credit information relating to JUNIPER Cardholders, FRONTIER Members, FRONTIER customers, subscribers or employees, (ii) marketing materials, proposed plans and targeting methods; (iii) business objectives, assets and properties; and (iv) programming techniques and technical, developmental, cost and account processing information.

(b) The party receiving such Confidential Information (“Receiving Party”) shall use Confidential Information only for the purpose of performing the terms of this Agreement and shall not accumulate in any way or make use of Confidential Information for any other purpose. The Receiving Party shall ensure that only its employees, authorized agents, or subcontractors who need to know Confidential Information to perform this Agreement will receive Confidential Information and that such persons agree to be bound by the provisions of this Paragraph 10 and maintain the existence of this Agreement and the nature of their obligations hereunder strictly confidential.

(c) The obligations with respect to Confidential Information shall not apply to Confidential Information that: (i) either party or its personnel already know at the time it is disclosed as shown by their written records; (ii) is publicly known without breach of this Agreement, provided that this exception does not apply to customer information as described in subparagraph (a)(i) above; (iii) either party receives from a third party, unless the receiving party knows that the third party is or will be in breach of a duty of confidentiality by supplying such information; (iv) either party, its agents or subcontractors, develop independently without use of Confidential Information; (v) either party is required by law, regulation or valid court or governmental agency order to disclose, in which case the party receiving such an order must give notice to the other party, allowing them to seek a protective order, unless the court or government agency prohibits the receiving party from so notifying the disclosing party at the time of its request.

(d) Each party agrees that any unauthorized use or disclosure of Confidential Information may cause immediate and irreparable harm to the Disclosing Party for which money damages may not constitute an adequate remedy. In that event, each party agrees that injunctive relief may be warranted in addition to any other remedies the Disclosing Party may have. In addition, the Receiving Party agrees promptly to advise the Disclosing Party in writing of any unauthorized misappropriation, disclosure or use by any person of the Confidential Information

 

 

12


which may come to its attention and to take all steps at its own expense reasonably requested by the Disclosing Party to limit, stop or otherwise remedy such misappropriation, disclosure or use. Notwithstanding the foregoing, neither JUNIPER nor FRONTIER shall have any liability for any disclosure of Confidential Information that occurs as a direct result of a Force Majeure Event.

(e) Upon either party’s demand, or upon the termination of this Agreement, the parties shall comply with each other’s reasonable instructions regarding the disposition of Confidential Information that may include the Receiving Party’s best efforts to return of any and all Confidential Information (including any copies or reproductions thereof). Such best efforts at compliance shall be certified in writing to the other party.

(f) Except as necessary for its performance under this Agreement, FRONTIER shall not use the name of JUNIPER, its affiliates or subsidiaries in connection with any representation, solicitation, promotion, sales or marketing publication or advertisement, or make any public statement relating to JUNIPER, its affiliates or subsidiaries, without the prior full disclosure of same to JUNIPER, and the prior written consent of JUNIPER which consent shall not be unreasonably withheld or delayed. Except as necessary for its performance under this Agreement, JUNIPER shall not use the name of FRONTIER, its affiliates or subsidiaries in connection with any representation, solicitation, promotion, sales or marketing publication or advertisement, or make any public statement relating to FRONTIER, its affiliates or subsidiaries, without the prior full disclosure of same to FRONTIER, and the prior written consent of FRONTIER, which consent shall not be unreasonably withheld or delayed.

(g) Except as may be required by law, regulation or any governmental authority (including the Securities Exchange Commission), neither FRONTIER nor JUNIPER, nor any of their affiliates, shall issue a press release or make a public announcement or any disclosure to any third party related to the transactions contemplated by this Agreement without the prior consent of the other party, which consent shall not be unreasonably withheld or delayed.

(h) The parties shall keep confidential and not disclose, and shall cause their officers, employees, and agents to keep confidential and not disclose, any of the terms and conditions of this Agreement to any third party without the prior written consent of the other party.

(i) The obligations of the parties hereunder shall survive and be enforceable by temporary and permanent injunctive relief against the breaching party and its employees, officers, directors, agents, representatives, and contractors following nonrenewal or termination of this Agreement.

 

  11. Representations and Warranties: Covenants.

(a) JUNIPER represents and warrants that it is (i) a Delaware corporation, validly existing and in good standing under the laws of the United States; (ii) the execution and delivery by JUNIPER of this Agreement, and the performance by JUNIPER of the transactions

 

13


contemplated hereby, are within JUNIPER’S corporate powers, have been duly authorized by all necessary corporate action, do not require any consent or other action by or in respect of, or filing with, any third party or governmental body or agency (other than informational filings required by Visa or MasterCard), and do not contravene, violate or conflict with, or constitute a default under, any provision of applicable law or regulation or of the charter or by-laws of JUNIPER or of any agreement, judgment, injunction, order, decree or other instrument binding upon JUNIPER; (iii) it is the owner of its Marks and has the right to and is authorized to grant FRONTIER the right and license to use the respective name, trademarks, service marks, copyrights and logos as set forth in Exhibit B and it is not currently aware of any claims, and is not currently involved in any litigation, challenging JUNIPER’S ownership of the Marks; and (iv) that it is, and will remain at all times during the Term of this Agreement, in material compliance with any applicable federal, state and local laws (including without limitation the Gramm-Leach-Bliley Act and, banking, usury, consumer credit and debt collection related laws) and any other rule, regulation and directive (including without limitation the MasterCard or Visa Rules and, any banking, debt collection and credit related rules, regulations and directives) applicable to the performance of its obligations under this Agreement.

(b) FRONTIER represents and warrants that it is validly existing and in good standing under the laws of the State of Colorado. FRONTIER further represents and warrants that (i) the execution and delivery by FRONTIER of this Agreement, and the performance by FRONTIER of the transactions contemplated hereby, are within FRONTIER’S powers, have been duly authorized by all necessary action, do not require any consent or other action by or in respect of, filing with, any third party or any governmental body or agency, and do not contravene, violate or conflict with, or constitute a default under, any provision of applicable law, regulation, or under any governing documents, charter or bylaw, or any agreement, judgment, injunction, order, decree or other instrument binding on FRONTIER and do not require the payment of any other fees or royalties, except as set forth herein, on the part of JUNIPER; (ii) the EarlyReturns frequent flyer program has at least ***** members as of the execution date of this Agreement; and (ii) it is the owner of its Marks and has the right to and is authorized to grant to JUNIPER the right and license to use the respective name, trademarks, service marks, copyrights and logos as set forth in Exhibit B and it is not currently aware of any claims, and is not currently involved in any litigation, challenging FRONTIER’S ownership of the Marks. FRONTIER represents and warrants that it has the right, power and authority to execute this Agreement and act in accordance herewith.

 

  12. Release and Indemnification.

(a) JUNIPER shall not be responsible in any way for any misrepresentation, negligent act or omission or willful misconduct of FRONTIER, its affiliates, officers, directors, agents, or employees in connection with the entry into or performance of any obligation of FRONTIER under this Agreement. Further, FRONTIER shall indemnify, defend and hold JUNIPER harmless from and against all claims, actions, suits or other proceedings, and any and all losses, judgments, damages, expenses or other costs (including reasonable counsel fees and disbursements), arising from or in any way relating to (i) any actual or alleged violation or inaccuracy of any representation, warranty or covenant of FRONTIER contained in Paragraph 11 above, and (ii) any negligent act or omission or willful misconduct of FRONTIER or its directors, officers, employees, agents or assigns in connection with the entry into or performance of this Agreement.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

14


(b) FRONTIER shall not be responsible in any way for any misrepresentation, negligent act or omission or willful misconduct of JUNIPER, its affiliates, officers, directors, agents, or employees in connection with the entry into or performance of any obligation of JUNIPER under this Agreement. Further, JUNIPER shall indemnify, defend and hold FRONTIER harmless from and against all claims, actions, suits or other proceedings, and any and all losses, judgments, damages, expenses or other costs (including reasonable counsel fees and disbursements), arising from or in any way relating to (i) any actual or alleged violation or inaccuracy of any representation, warranty or covenant of JUNIPER contained in Paragraph 11 above, any assertion that FRONTIER is a creditor in contravention of Section 4(d) above, and any negligent act or omission or willful misconduct of JUNIPER or its directors, officers, employees, agents or assigns in connection with the entry into or performance of this Agreement

 

  13. Reports and Records.

(a) During the Term of this Agreement, JUNIPER shall furnish to FRONTIER, via electronic transfer or such other method of delivery (e.g., electronic or paper) as agreed to by the parties, said agreement not to be unreasonably withheld or delayed:

(1) On the ***** of each week, JUNIPER shall report to FRONTIER all Accounts newly established, closed, or upgraded by JUNIPER during the prior week, and the EarlyReturns Program membership number associated with each such Account.

(2) Within ***** following the closing of each billing cycle of each month, JUNIPER shall provide to FRONTIER a transaction file showing the total Purchase Miles, Bonus Miles, and adjustments for each Account for that cycle for the purpose of posting miles to the Member’s EarlyReturns account. The parties shall mutually agree on the format, transmission process and reconciliation of the transaction file.

(3) Monthly on or about ***** of the month, JUNIPER shall issue to FRONTIER a report which shows, for each JUNIPER Product and source of Purchase Miles or Bonus Miles (i.e., purchases, Account activation, each type of Bonus Mile transaction, incentives, and adjustments): (i) the transaction or source code, (ii) the number of transactions in the previous month for that code, (iii) the Purchase Miles and Bonus Miles earned for that code, and (iv) the Purchase Mile Fees and Bonus Mile Fees earned for the transaction type during the preceding month, or a report of equivalent detail as may be agreed upon by the parties.

(4) At least monthly, JUNIPER shall also provide FRONTIER with a report showing for all Accounts in the aggregate, segregated by JUNIPER Product, the previous month’s total interest bearing principal balances outstanding, the number of statemented accounts, open accounts, average purchase amount, and month to date and year to date amounts for net sales, newly opened Accounts, closed Accounts and a summary of customer service performance including information regarding customer complaints.

(5) A monthly report showing all Fees earned, segregated by Fee type.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

15


(6) On the ***** following the completion of each calendar quarter, a report showing actual versus target data for the Service Levels set forth on Exhibit D for the previous calendar quarter.

(b) During the Term of this Agreement, FRONTIER shall furnish to JUNIPER, via electronic transfer, or such other method of delivery (e.g., electronic or paper) as agreed to by the parties, said agreement not to be unreasonably withheld or delayed, a report within ***** of the execution of this Agreement detailing the monthly FRONTIER mainline PE for calendar year ***** and thereafter as required under Paragraph 6(b)(iv) of this Agreement.

 

  14. Right to Audit.

(a) Upon FRONTIER’S request and upon reasonable prior notice, JUNIPER shall make pertinent records regarding the Affinity Program, including the source codes assigned by JUNIPER Accounts, which such records shall be retained throughout the Term of this Agreement, available to FRONTIER or its designated auditors, at the sole cost and expense of FRONTIER, at the business premises of JUNIPER during ordinary business hours, for the purpose of verifying JUNIPER’S compliance with the terms of this Agreement. Nothing herein shall be deemed to grant to FRONTIER the right to audit internal records of JUNIPER regarding the revenues, income, or profits to JUNIPER of the Affinity Program, or generally.

(b) Upon JUNIPER’S request and upon reasonable prior notice, FRONTIER shall make pertinent records regarding the Affinity Program available to JUNIPER or its auditors, at the sole cost and expense of JUNIPER, at the business premises of FRONTIER during ordinary business hours for the sole purpose of verifying FRONTIER’S compliance with the terms of this Agreement. Nothing herein shall be deemed to grant to JUNIPER the right to audit internal records of FRONTIER regarding the revenues, income, or profits of the Affinity Program to FRONTIER, or generally.

(c) Each party shall have the right, upon reasonable notice to the other, at its own expense, to audit and review the customer service instructions and materials of the other, and shall have the right, subject to privacy law concerns, to reasonably monitor the other’s telemarketing or customer service phone contacts regarding the Affinity Program,

(d) Notwithstanding anything in this paragraph to the contrary, if an audit conducted by a party under this paragraph 14 reveals a discrepancy of more than ***** between actual data and data supplied to the other party, or between actual performance and performance required under this agreement (if, in either such case, such discrepancy is numerically verifiable), then the party which is the subject of the audit shall pay all of the expenses incurred by the other party in connection with such audit.

 

  15. Term/Termination.

(a) This Agreement shall become effective on the date executed and delivered by the parties and shall continue for the Initial Term. Following the Initial Term, this Agreement will be automatically renewed for renewal terms of two (2) years each unless, at least ***** prior to the termination of the Initial Term or the then current renewal term, either party shall have notified the other in writing of its decision not to renew this Agreement.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

16


(b) If there is a material default by either party in the performance of the terms and conditions of this Agreement and such default shall continue for a period of ***** after receipt by the defaulting party of written notice thereof from the non-defaulting party (setting forth in detail the nature of such default), then this Agreement shall upon the written election of the non-defaulting terminate on the ***** following the delivery of the written notice. If, however, despite the ongoing commercially reasonable efforts by the defaulting party to cure the default set forth in the notice, the default cannot be remedied within such ***** such time period shall be extended for an additional period of not more than *****, so long as the defaulting party has notified the non-defaulting party in writing and in detail of its plans to initiate substantive steps to remedy the default and diligently thereafter pursues the same to completion within such additional ***** period. In the event that any material change in any federal, state or local law, statute, operating rule or regulation, or any material change in any operating rule or regulation of the Designated Issuer makes the continued performance of this Agreement under the then current terms and conditions unduly burdensome, then JUNIPER shall have the right to terminate this Agreement upon ***** advance written notice. Such written notice shall include a detailed explanation and evidence of the burden imposed as a result of such change.

(c) If either party becomes the subject of an event where (i) the party becomes insolvent, (ii) a party engages in willful and wanton conduct to the material detriment of the other party, (iii) voluntary or involuntary proceedings by or against such party are instituted in bankruptcy or under any insolvency law, or a receiver or custodian is appointed for such party, or proceedings are instituted by or against such party for the dissolution of such party (other than an administrative dissolution for which the party is taking corrective action), which proceedings, if involuntary, are not dismissed within ***** after the date of filing, or (iv) such party makes an assignment for the benefit of its creditors, or (v) substantially all of the assets of such party are seized or attached and not released within ***** thereafter, the other party may, by giving written notice to the affected party, terminate this Agreement.

(d) In the event this Agreement is terminated as a result of default by FRONTIER, including but not limited to a merging with another airline in which the Affinity Program does not continue with the merged entity, FRONTIER shall pay JUNIPER an amount equal to the paid but un-recouped guarantee as set forth in Section 6 in addition to all rights and remedies available to JUNIPER at law or in equity.

(e) In the event JUNIPER fails to meet the service levels described in Exhibit D for three (3) successive months, and JUNIPER is unable to cure such default within ***** of written notice from FRONTIER to JUNIPER setting forth the nature of such default, FRONTIER may terminate this Agreement for cause at the end of such ***** cure.

(f) In the event this Agreement is terminated as a result of default by JUNIPER, including but not limited to the terms of Paragraph 15(e), FRONTIER shall retain any paid but un-recouped guarantee as set forth in Section 6 in addition to all rights and remedies available to FRONTIER at law or in equity.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

17


  16. Exclusivity.

(a) FRONTIER. During the Term of this Agreement, JUNIPER shall have the exclusive right to perform the JUNIPER Product services contemplated by this Agreement, and FRONTIER agrees that during the Term hereof it shall not by itself or in conjunction with others, directly or indirectly, or through any parent, affiliate or subsidiary, offer or endorse, or enter into any agreement with others for the provision of credit card product or credit card product related products or services to FRONTIER Members. For the purposes of this Section 16, charge cards and related services shall be deemed to be a credit card product.

(b) JUNIPER. During the term of this Agreement JUNIPER agrees that it will not enter into a co-branded relationship with the airline that has the largest market share based on Revenue Passengers In and Out as reflected in the Total Operations and Traffic Report issued by Denver International Airport from time to time. The parties recognize that the airline with the largest market share may change, and agree that to the extent JUNIPER has an affinity relationship with an airline prior to that airline becoming airline with the largest market share at the Denver International Airport, this Paragraph will not be interpreted to require JUNIPER to terminate or otherwise discontinue that affinity relationship. In the event JUNIPER does have an affinity relationship with another airline providing service to or from Denver International Airport, JUNIPER hereby covenants that it will not discriminate in favor of such other airline in performing the marketing and support service required by the Affinity Program.

 

  17. Notices.

Any and all notices or other communications required or permitted under this Agreement shall be in writing and shall be delivered either by personal delivery; by telex, telegram, mailgram or telecopy; by nationally recognized overnight courier service; or by certified or registered mail, return receipt requested, addressed as follows:

If to JUNIPER, to:

JUNIPER BANK,

100 S. West St.

Wilmington, DE 19801

Fax No.: *****

Attention: *****

with a copy to:

General Counsel Fax No. *****

If to FRONTIER, to:

Frontier Airlines, Inc.

7001 Tower Road,

Denver, CO 80249

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

18


Fax No.: *****

Attention: *****

with a copy to: General Counsel

Fax No.: *****

or to such other person or address as either party shall have previously designated to the other by written notice given in the manner set forth above. Notices shall be deemed given one day after sent, if sent by telex, telegram, mailgram, telecopy or by overnight courier; when delivered and receipted for, if hand delivered; or when receipted for (or upon the date of attempted delivery where delivery is refused) if sent by certified or registered mail, return receipt requested. Where notice requires a response in ***** or fewer business days, the notice should be sent by hand delivery or telecopy.

 

  18. Assignment.

Any assignment by either party of that party’s rights and/or obligations pursuant to the Agreement shall be subject to the prior written consent of the other party to this Agreement, which consent shall not be unreasonably withheld, provided, the assigning party will be responsible for all legal costs and expenses of the non-assigning party relating to the completion of due diligence and documentation required, whether the assignment requires consent or is permitted pursuant to this Section 18 as set forth below. In addition, and notwithstanding the foregoing, JUNIPER may, with the prior written consent of FRONTIER (which may not be unreasonably withheld), (i) assign this Agreement and any of JUNIPER’S rights and obligations, to any federally regulated financial institution upon the condition that the assignee shall assume, either expressly or by operation of law, all of JUNIPER’S rights and obligations, to any federally regulated financial institution upon the condition that the assignee shall assume, either expressly or by operation of law, all of JUNIPER’S obligations hereunder, upon the delivery of prior written notice thereof to FRONTIER; or (ii) assign this Agreement to a corporate affiliate with the necessary resources to undertake JUNIPER’S obligations hereunder or to an entity that merges with JUNIPER or acquires all or substantially all the assets and obligations of JUNIPER, provided in each case that FRONTIER is reimbursed any expense associated with systems changes, if any, necessitated by said assignment. FRONTIER, without prior written notice or consent to JUNIPER, may assign its rights to receive Fees pursuant to this Agreement to a commercial lending institution which provides a credit facility to FRONTIER as collateral security for such credit facility, or to an entity that merges with FRONTIER or acquires all or substantially all of the assets of FRONTIER.

 

  19. Entire Agreement/Amendment.

This Agreement, including exhibits, constitutes the entire understanding between the parties with respect to the subject matter, and supersedes all prior written and oral proposals,

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

19


understandings, agreements and representations, all of which are merged herein. No amendment or modification of this agreement shall be effective unless it is in writing and executed by all of the parties hereto.

 

  20. Non-Waiver of Default.

The failure of either party to insist, in any one or more instances, on the performance of any terms or conditions of this Agreement shall not be construed as a waiver or relinquishment of any rights granted hereunder or of the future performance of any such term or condition, and the obligations of the non-performing party with respect thereto shall continue in full force and effect.

 

  21. Severability.

In the event that any provision of this Agreement shall, for any reason, be deemed to be invalid and unenforceable, the remaining provisions of this Agreement shall remain in full force and effect.

 

  22. Alternate Dispute Resolution.

FRONTIER and JUNIPER hereby waive their rights to resolve disputes through any court proceeding or litigation and acknowledge that all disputes shall be resolved pursuant to this Section, except that equitable relief may be sought pursuant to Section 10 from any court of competent jurisdiction. Both parties represent to the other that this waiver is made knowingly and voluntarily after consultation with and upon the advice of counsel and is a material part of this Agreement.

Any controversy or claim between the parties arising from or in connection with this Agreement or the relationship of the parties under this Agreement whether based on contract, tort, common law, equity, statute, regulation, order or otherwise (“Dispute”), except claims for equitable relief is sought pursuant Section 10, shall be resolved as follows:

 

  1. Informal Dispute Resolution

(a) Upon written request a duly appointed representative(s) of each party will meet for the purpose of attempting to resolve such Dispute. Should they be unable to resolve the Dispute, the President or a Vice President of FRONTIER will meet with JUNIPER’S Director of Partnership Marketing (the “Executives”) in an effort to resolve the Dispute. Said meeting shall be in person or by telephone.

(b) The Executives shall meet as often as the parties agree to discuss the problem in an effort to resolve the Dispute without the necessity of any formal proceeding.

 

20


(c) Formal proceedings for the resolution of a Dispute may not be commenced until the earlier of:

(i) the parties concluding in good faith that amicable resolution through the procedures set forth in subsections (a)-(b) hereof does not appear likely; or

(ii) the expiration of the ***** period immediately following the initial request to negotiate the Dispute;

provided, however, that this Section will not be construed to prevent a party from instituting formal proceedings earlier to avoid the expiration of any applicable limitations period, to preserve a superior position with respect to other creditors or to seek temporary or preliminary injunctive relief. The commencement of a proceeding pursuant to this provision does not relieve a party from the executive consultation requirement contained in this Section.

 

  2. Arbitration.

(a) If the parties are unable to resolve any Dispute as contemplated above, such Dispute shall be submitted to mandatory and binding arbitration at the election of either FRONTIER, on the one hand, and JUNIPER on the other hand (the “Disputing Party”). Except as otherwise provided in this Section, the arbitration shall be pursuant to the Code of Procedure of the National Arbitration Forum (“NAF”), P.O. Box 50191, Minneapolis, MN 55405, (800) 474-2371.

(b) To initiate arbitration, the Disputing Party shall notify the other party in writing (the “Arbitration Demand”) with a copy to the NAF, which shall (i) describe in reasonable detail the nature of the Dispute, (ii) state the amount of the claim, and, (iii) specify the requested relief. Within ***** after the other party’s receipt of the Arbitration Demand, such other party shall file, and serve on the Disputing Party, a written statement (i) answering the claims set forth in the Arbitration Demand and including any affirmative defenses of such party; (ii) asserting any counterclaim, which shall (A) describe in reasonable detail the nature of the Dispute relating to the counterclaim, (B) state the amount of the counterclaim, and (C) specify the requested relief.

(c) If the amount of the controversy set forth in either the claim or counterclaim is less than *****, then the matter shall be resolved by a single arbitrator selected pursuant to the rules of the NAF.

(d) If the amount of the controversy set forth in either the claim or counterclaim is equal to or exceeds *****, then the matter shall be resolved by a panel of three arbitrators (the “Arbitration Panel”) selected pursuant to the rules of the NAF. Decisions of a majority of the members of the Arbitration Panel shall be determinative.

(e) The arbitration hearing shall be held in Chicago, Illinois. The Arbitrator or Arbitration Panel is specifically authorized in proceeding pursuant to Section (d) to render partial or full summary judgment as provided for in the Federal Rules of Civil Procedure. Unless otherwise agreed by the parties, partial or full summary judgment shall not be available in proceedings pursuant to subsection (c) above. In the event summary judgment or partial summary judgment is granted, the non-prevailing party may not raise as a basis for a motion to vacate an award that the Arbitrator or Arbitration Panel failed or refused to consider evidence

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

21


bearing on the dismissed claim(s) or issue(s). The Federal Rules of Evidence shall apply to the arbitration hearing. The party bringing a particular claim or asserting an affirmative defense will have the burden of proof with respect thereto. The arbitration proceedings and all testimony, filings, documents and information relating to or presented during the arbitration proceedings shall be deemed to be information subject to the confidentiality provisions of this Agreement. The Arbitration Panel will have no power or authority, under the Code of Procedure of the NAF or otherwise, to relieve the parties from their agreement hereunder to arbitrate or otherwise to amend or disregard any provision of this Agreement, including, without limitation, the provisions of this Paragraph.

(f) Should an arbitrator refuse or be unable to proceed with arbitration proceedings as called for by this Section, the arbitrator shall be replaced pursuant to the rules of the NAF. If an arbitrator is replaced after the arbitration hearing has commenced, then a rehearing shall take place in accordance with this Section and the Code of Procedure of the NAF.

(g) At the time of granting or denying a motion of summary judgment as provided for in (e) and within ***** after the closing of the arbitration hearing, the arbitrator or Arbitration Panel will prepare and distribute to the parties a writing setting forth the arbitrator’s or Arbitration Panel’s finding of facts and conclusions of law relating to the Dispute, including the reasons for the giving or denial of any award. The findings and conclusions and the award, if any, shall be deemed to be information subject to the confidentiality provisions of this Agreement.

(h) The arbitrator or Arbitration Panel is instructed to schedule promptly all discovery and other procedural steps and otherwise to assume case management initiative and control to effect an efficient and expeditious resolution of the Dispute. The arbitrator or Arbitration Panel is authorized to issue monetary sanctions against either party if, upon a showing of good cause, such party is unreasonably delaying the proceeding.

(i) Any award rendered by the arbitrator or Arbitration Panel will be final, conclusive and binding upon the parties and any judgment hereon may be entered and enforced in any court of competent jurisdiction.

(j) Each party will bear a pro rata share of all fees, costs and expenses of the arbitrators, and notwithstanding any law to the contrary, each party will bear all the fees, costs and expenses of its own attorneys, experts and witnesses; provided, however, that in connection with any judicial proceeding to compel arbitration pursuant to this Agreement or to confirm, vacate or enforce any award rendered by the arbitrator or Arbitration Panel, the prevailing party in such a proceeding shall be entitled to recover reasonable attorney’s fees and expenses incurred in connection with such proceedings, in addition to any other relief to which it may be entitled.

 

  24. Governing Law.

This Agreement shall be governed by, and construed and enforced in accordance with the laws of the State of Delaware.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

22


IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first above written.

 

FRONTIER AIRLINES, INC.
By:  

/s/ David Siskowski

Name:   DAVID SISKOWSKI
Title:   Vice President
JUNIPER BANK
By:  

/s/ Kevin Kleinschmidt

Name:   Kevin Kleinschmidt,
Title:   Director of Partnership Marketing

 

23


EXHIBIT A

JUNIPER MARKS

 

  1) Privacy Champion

 

  2) Banking Without a Net

 

  3) Now You Have a Champion

 

  4) Tree Design – Black on White

 

  5) Tree Design – White on Black

 

  6) Juniper Financial

 

  7) Juniper Bank

 

  8) Juniper

 

24


EXHIBIT B

FRONTIER MARKS

 

 

25


EXHIBIT C

PRODUCTS

Frontier Product Description – Proposed

*****

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

26


SCHEDULE D

Juniper Service Levels

(Each measured over a calendar month)

 

MEASURE

  

TARGET

  

DESCRIPTION

*****

   *****    *****

*****

   *****    *****

*****

   *****    *****

*****

   *****    *****

*****

   *****    *****

*****

   *****    *****

*****

   *****    *****

*****

   *****    *****

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

27


Forecast

 

            *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****     *****     *****       *****       *****       *****       *****       *****  

*****

            *****       *****       *****       *****       *****       *****  

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

28


*****

       
*****     *****       *****       *****       *****       *****       *****       *****       *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  
*****     *****       *****       *****       *****       *****       *****         *****  

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

29


*****

    *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

*****

  *****   *****     *****   *****   *****   *****   *****   *****

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

30


*****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

*****

  *****   *****

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

31

EX-10.17(B)

Exhibit 10.17(b)

First Amendment to the Frontier Airlines, Inc Credit Card Affinity Agreement

This First Amendment to the Frontier Airlines Credit Card Affinity Agreement, made this 12th day of March 2003 by and between Juniper Bank (“Juniper”) and Frontier Airlines, Inc (“Frontier”), amends the Frontier Airlines Credit Card Agreement between the parties dated March 12, 2003 (the “Agreement”).

RECITALS:

The parties desire to clarify the manner in which the Credit Card Program is administered.

THEREFORE, the parties agree as follows:

 

  1. FRONTIER agrees to assign a full-time Marketing Coordinator to administer the Co-Branded Credit Card Program (job description attached hereto as Exhibit 1) hereinafter the “Program Administrator”).

 

  2. JUNIPER shall pay Frontier monthly as provided on Exhibit 2 hereto, to offset FRONTIER’s expense associated with the Program Administrator, provided that in any month that the Program Administrator position is unfilled for more than *****, JUNIPER shall have no obligation to pay FRONTIER for that month(s). FRONTIER will invoice JUNIPER on a *****.

 

  3. All other terms and conditions of the Agreement shall remain in effect except as expressly modified herein or in another writing signed by both parties. Capitalized terms shall have the same meaning as set forth in the Agreement.

 

  4. This Amendment shall be governed by and construed under the laws of the State of Delaware as applied to agreements among Delaware residents entered into and to be performed entirely within the State of Delaware.

 

  5. This Amendment 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.

Intending to be legally bound, the parties have executed this Amendment as of the date set forth above.

 

JUNIPER BANK      FRONTIER AIRLINES, INC.  

[Unsigned]

    

[Unsigned]

 
(Signature)      (Signature)  

[Unsigned]

    

[Unsigned]

 
(Title)      (Title)  

[Undated]

    

[Undated]

 
(Date)      (Date)  

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

1


EXHIBIT 1

Job Description

 

PAGE 2     
October 13, 2000      PROCESSING SERVICES AGREEMENT
  JUNIPER FINANCIAL CORP.   
This document is confidential and proprietary and may not be distributed outside of Juniper Financial Crop. Or e-PROFILE, Inc.


EXHIBIT 2

Payment Schedule

*****

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

3

EX-10.17(E)

Exhibit 10.17(e)

Fourth Amendment to the Frontier Airlines, Inc. Co-Branded Credit Card Agreement

This Fourth Amendment to the Frontier Airlines, Inc. Affinity Credit Card Agreement, made this 8th day of May 2007 by and between Barclays Bank Delaware, formerly known as Juniper Bank (“Barclays”) and Frontier Airlines, Inc. (Frontier) further amends the Frontier Airlines, Inc. Credit Card Agreement between the parties dated March 12, 2003. This agreement, as amended by the letter agreement and amendments described below in the Recitals, shall be referred to as the “Agreement”.

RECITALS:

WHEREAS, Juniper Bank changed its name to Barclays Bank Delaware on May 25, 2006;

WHEREAS, the parties entered into the Agreement (Exhibit 1 hereto) on March 12, 2003;

WHEREAS, the parties entered a letter agreement dated April 1, 2003 regarding the pass through of Volume Incentive of ***** of Net Purchases from ***** (Exhibit 2 hereto)

WHEREAS, the parties entered into a First Amendment to the Agreement in May 2003 (the “First Amendment”). Neither of the parties can locate an executed version of the First Amendment and hereby agree to and ratify the terms of the First Amendment attached as Exhibit 3 to this Fourth Amendment; and

WHEREAS, the parties entered into a Second Amendment to the Agreement in April 2005 (the “Second Amendment”), a copy of which is attached as Exhibit 4 to this Fourth Amendment; and

WHEREAS, the parties entered into a Third Amendment to the Agreement on March 27, 2006 (the “Third Amendment”), but inadvertently titled this Third Amendment as the Second Amendment to the Agreement. A copy of this Third Amendment is attached to this Agreement as Exhibit 5; and

WHEREAS, Frontier and Barclays desire to further amend the Agreement to extend the Term of the Agreement and revise the compensation paid thereunder.

THEREFORE, the parties agree to amend the Agreement as follows:

 

  1. The title of the Third Amendment is deleted and the following is inserted in its place:

Third Amendment to the Frontier Airlines, Inc. Co-Branded Credit Card Agreement

 

  2. The following is Agreement is inserted as Section l(g1) immediately following Section 1(g):

(g1) “Designated Association” and shall have the same meaning as Designated Issuer.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

1


  3. Section 1 (p) of the Agreement is deleted and the following is inserted in its place:

Initial Term” means the period that begins on the Effective Date and ends on December 31, 2014.

 

  4. The following is inserted at the conclusion of Section 3(e):

Effective May 1, 2007, Frontier may, upon ***** written notice, elect to conduct Added Earnings Programs through the event and airport channels provided that: (i) Frontier has demonstrated, to Barclays’s satisfaction, that Frontier is in compliance with Barclays’s reasonable restrictions and requirements for such event channels as required by applicable law and regulations and fraud control, as well as industry standards regarding the security of the applications and privacy of the applicants; (ii) such event channels continue to meet Barclays underwriting and profitability targets; and (iii) the event channels, as operated by Frontier meet volume forecasts established by the Joint Marketing Committee.

 

  5. The following is inserted at the conclusion of Section 4(a):

The Volume Incentive is funded as follows: ***** of Net Purchases by ***** (the “***** Volume Incentive”) and ***** of Net Purchases ***** (the “***** Volume Incentive Contribution”). Barclays shall pay Frontier the Barclays Volume Incentive Contribution so long as ***** is the Designated Association and without regard to spend thresholds that may be imposed by ***** with regard to the ***** Volume Incentive.

Effective May 1, 2007, Frontier may elect to change the Designated Association provided: (i) it provides Barclays with ***** notice of the election of a new Designated Association; (ii) the selection of a new Designated Association does not cause Barclays to be in breach of any agreements it has with prior Designated Association and (ii) Frontier bears Barclays third party expense related to the change of Designated Associations.

 

  6. Section 5(a) (ii) is deleted and the following is inserted in its place:

Renewal Premiums: For Accounts renewed prior to March 15, 2007, a Renewal Account Premium in the amount equal to ***** of the Annual fee for said Account. By way of example, based on the Annual Fee at launch the Renewal Premiums would be ***** for each Platinum, World Account; ***** for each Standard Account/with fee; and no fee for each Standard, no fee Account. For Accounts renewed on or after March 15, 2007, ***** for each ***** Account for which an annual fee is paid and

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

2


***** for each ***** Account. For the purposes of this Agreement an ***** Account means an Account without an annual fee and ***** and is not: (1) in default (2) ***** past due under the Cardmember Agreement or (3) flagged as lost, stolen, or fraudulent according to Barclays’ records.

 

  7. Section 5(a) (iii), as amended by the Second and Third Amendments to the Agreement is deleted and the following is inserted in its place:

Marketing Premiums: For each Account generated for a Prime Applicant prior to March 15, 2007 (as determined by the date the application is submitted to Barclays) as a result of the Added Earnings Program, a Marketing Premium of *****, and for each Near Prime Account generated as a result of an Added Earning Program, a Marketing Premium of *****. For each Account generated for a Prime Applicant on or after March 15, 2007 (as determined by the date the application is submitted to Barclays) as a result of the Added Earnings Program, a Marketing Premium of ***** and for each Near Prime Account generated as a result of an Added Earning Program, a Marketing Premium of *****. Frontier has no obligation to maintain an Added Earnings Program hereunder and may do so in its sole discretion. To the extent Frontier elects to create an Added Earnings Program, the failure to meet any Account goal established for such an Added Earnings Program shall not be deemed a breach of this Agreement.

 

  8. The introductory paragraph to Section 5(b) is deleted and the following is inserted in its place:

Bonus Mile Fees and Purchase Mile Fees: Prior to March 15, 2007, Barclays shall pay a Purchase Mile Fee to Frontier equal to ***** for each Purchase Mile and a Bonus Mile Fee of either ***** for each Bonus Mile awarded to an Account for which the New Account Premium is paid, or (2) ***** for each Bonus Mile awarded to an Account for which the Marketing Premium is paid. On or after March 15, 2007, Barclays shall pay a Purchase Mile Fee to Frontier equal to ***** for each Purchase Mile and a Bonus Mile Fee of ***** for each Bonus Mile. The Purchase Mile Fees and Bonus Miles Fees are inclusive of taxes, *****. Purchase Miles and Bonus Miles shall be awarded as follows:

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

3


  9. The following is added to the Agreement as new Section 7 (g):

Effective April 1, 2007, Frontier and Barclays shall establish a Joint Marketing Committee, to be comprised of an equal number of members from each party and to include, at a minimum, the Frontier program administrator and the Barclays Program manager. Each party may change its representatives to the Joint Marketing Committee by providing notice thereof to the other party. The committee shall meet quarterly, with at least two meetings per Contract Year being in person, to discuss Program results, marketing programs and other key matters. The Joint Marketing Committee shall each year agree on a Marketing Plan as set forth in sub-section (e) above.

 

  10. The following is added to the Agreement as new Section 7A, following Section 7:

7A. Cross Sell Opportunities. Barclays shall use commercially reasonable efforts to provide Frontier with opportunities to cross sell Frontier products and services, but not the Credit Card, to Barclays non-Program cardholders in the billing statements and, to the extent approved by another Barclays partner, customer statements of the Cardmembers in that partner’s program. Frontier acknowledges that inclusion of inserts in any mailing is subject to reasonable space, weight, size, content, and scheduling restrictions. In the event that Frontier inserts increase the postal expense incurred by Barclays to mail statements with such inserts, then Barclays shall inform Frontier in advance and, provided Frontier agrees to reimburse Barclays for such incremental postage expense, Barclays will use reasonable efforts to include such insertion in the statement mailing, or, if not approved or otherwise feasible, in the next available statement mailing. Frontier shall bear the cost of preparing and producing the actual insert. Barclays shall have the right to review and approve of all inserts, with such approval not to be unreasonably withheld, delayed or conditioned. Frontier acknowledges that with respect to any cross sell opportunities involving third parties (e.g. the Association or other Barclays partners) Barclays will use commercially reasonable efforts to obtain the cooperation or permission of such third party, but that the third party’s participation or approval remains in that third party’s sole discretion.

 

  11. Section 15. (a) is deleted and the following is inserted in its place:

This Agreement shall become effective on the date executed and delivered by the parties and shall continue for the Initial Term.

 

4


  12. The following is added to the Agreement as new Section 15 (c):

(c) (i) In the event of a Change of Control of Barclays, Frontier shall have the option to cause Barclays to sell its remaining interest in this Agreement together with the Portfolio pursuant to the process set forth in Section 15A(i). below.

 (ii) In the event that any material change in any applicable law, operating rule or regulation, or any material change in any operating rule, applicable interchange rate or regulation of MasterCard has a financial impact (by reducing income or increasing expenses) that renders the continued performance of this Agreement under the then current terms and conditions unduly burdensome, as determined in the sole discretion of Barclays, then Barclays shall have the right to terminate this Agreement ***** advance written notice, or such earlier date if required by applicable law, rule or regulation, provided that first Barclays and Frontier meet in good faith to renegotiate this Agreement to ameliorate the financial impact of said change. In the event the discussions fail to produce a revised agreement, such written notice shall include a detailed explanation and evidence of the burden imposed as a result of such change.

 

  13. The following is added to the Agreement as new Section 15A.

15A Portfolio Purchase Option

(i) If this Agreement is terminated other than by Barclays pursuant to Sections 15(b) or 15(e), or pursuant to Section 15(d) based on the status of Frontier, then Frontier shall have the option (the “Purchase Option”) to purchase or arrange for the purchase of all of the Accounts and the aggregate indebtedness under such Accounts, excluding any Accounts that have been previously written off by Barclays (for purposes of this Section 15A, the “Portfolio”) for a purchase price equal to the fair market value of the Portfolio, as determined below;

(ii) Exercise of Purchase Option. Frontier may exercise the Purchase Option by giving written notice (the “Exercise Notice”) to Barclays not later ***** prior to the date of termination if termination occurs pursuant to Section 15(a), or, not later than ***** after the date of termination for any termination event (other than natural expiration) that triggers the Purchase Option (the “Post Termination Option Period”). Within ***** prior to expiration of the Agreement or ***** after the date of termination for any termination event (other than natural expiration) that triggers the Purchase Option Barclays will provide portfolio data as requested by Frontier, necessary for Frontier to evaluate the exercise of the Purchase Option. If Frontier fails to timely deliver the Exercise Notice as provided herein, then the Purchase Option shall expire. Barclays shall continue to operate the Program (including servicing, managing and administering Accounts and Cardholders and paying all Sales Fees and other fees owed to Frontier, under the terms of this Agreement) through the Post

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

5


Termination Option Period and, if the Purchase Option is exercised, through the date the Portfolio is purchased, as if this Agreement had not been terminated. During the Post Termination Option Period, Barclays will maintain the Accounts at the pre-termination level and not remove Accounts from the portfolio except for cause.

(iii) Determination of Fair Market Value. For purposes of this Section 15, the fair market value (“FMV”) of the Portfolio shall be, as of the date of such determination. The appraisers shall be given the following instructions for preparing their valuations:

 

  1. The entire pre-charged off (amounts which are not yet deemed uncollectible under Barclays then standard operating procedure) amount of Credit Card Portfolio accounts must be purchases;

 

  2. Assume *****

 

  3. Assume *****;

 

  4. Assume *****

The process for determining the FMV shall be as follows:

(A) Negotiations. For a period of ***** (the “Mutual Agreement Period”) after receipt of the Exercise Notice, the parties shall meet in good faith to attempt to agree on the FMV. If the parties are able to agree upon the FMV, such agreed upon value shall constitute the Portfolio purchase price.

(B) Appraisal Process. In the event the parties are not able to agree on the FMV within the Mutual Agreement Period, Frontier and Barclays shall within ***** business days of the conclusion of the Mutual Agreement Period jointly and mutually agree upon the selection of an independent valuation or appraisal firm of national standing recognized as having the capability to appraise credit card portfolios within the credit card industry and must have had significant recent experience in performing such appraisals of the kind, size and nature of the Portfolio. If Frontier and Barclays are unable to jointly and mutually agree as to such firm, then each of Frontier and Barclays will select such a firm, and the two firms selected shall, within ***** business days, select a third such firm. Such firm(s) will determine the FMV, provided, however, that if three such firms are selected as described above, then the highest and lowest determinations of FMV made by two of the three firms will be discarded and the remaining determination will be the FMV. Within ***** of its or their

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

6


engagement, the appraisal firm (or firms) shall send to each of Frontier and Barclays the determination of the FMV, along with such documents and calculations (including the methodology used) that reasonably support the determination, and such determination shall constitute the Portfolio purchase price. Each firm utilized shall (1) execute a confidentiality and non-disclosure agreement in a form reasonably satisfactory to the parties, and (2) agree to complete the appraisal of the Portfolio in accordance with this Section and within the time frames set forth herein. Barclays agrees that within ***** of selection of the independent firms, it will provide all data to the independent firms necessary for these firms to determine the FMV.

(iv) In the event this Agreement is terminated pursuant to Section 15 (c) (1), the FMV, as determined above shall be increased by adding the percentage of credit card receivables (“Receivables”) as determined below:

 

Date of Termination

   Percent of
Receivables
added to
FMV

April 1, 2007-Dec. 31 2008

   *****

2009

   *****

2010

   *****

2011

   *****

2012

   *****

2013

   *****

2014

   *****

(v) Portfolio Conversion: If Frontier exercises the Purchase Option, the entire Portfolio of Accounts (including all Accounts all pre-charge-off and delinquent accounts) shall be purchased pursuant to a purchase and sale agreement, which terms: (1) shall establish a purchase price as determined in accordance with Section 15 (iii) or (iv), as applicable; and (2) shall establish a purchase date that allows Barclays, upon the exercise of commercially reasonable efforts in regard thereto, to remove the Accounts and associated indebtedness from any applicable loan or asset securitization arrangement. In addition to the amounts specified above, Frontier will pay interim processing fees to Barclays that are reasonable and customary in the industry based upon Barclays’ servicing expenses.

(vi) Continued Payment of Fees. Unless and until Frontier exercises its Purchase Option, Barclays shall pay Frontier in immediately available funds amounts due under the Agreement due Frontier through the expiration of the Purchase Option.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

7


  14. The following is added as new Section 25, to follow Section 24:

Frontier shall give Barclays the right of first offer to provide other banking products to Frontier Members, including without limitation, other Barclays products and services including other payment card products including private label cards, corporate cards, or debit cards regardless of whether such products include the Marks or participate in the Loyalty Program. Provided that Frontier may, to the extent Barclays does not or cannot offer a product that is economically competitive to Frontier or does not provide competitive functions, features, and support, pursue relationships with other financial institutions for the development and addition of such financial products. Regardless of the foregoing, Barclays agrees Frontier may provide gift and stored value cards to Frontier Members without using Barclays banking products or services.

 

  15. Barclays shall, within five business days of execution of this Fourth Amendment, pay Frontier, by wire transfer, a one time bonus of ***** as a signing bonus.

 

  16. All other terms and conditions of the Agreement shall remain in effect except as expressly modified herein or in another writing signed by both parties. Capitalized terms shall have the same meaning as set forth in the Agreement

 

  17. This Amendment shall be governed by and construed under the laws of the State of Delaware as applied to agreements among Delaware residents entered into and to be performed entirely within the State of Delaware.

 

  18. This Amendment 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.

Intending to be legally bound, the parties have executed this Amendment as of the date set forth above.

 

BARCLAYS BANK DELAWARE formerly known as JUNIPER BANK      FRONTIER AIRLINES, INC.   

/s/ [Authorized Signatory]

    

/s/ John Happ

  
(Signature)      (Signature)   

Senior Director, Segment Marketing

    

Senior V.P., Marketing & Planning

  
(Title)      (Title)   

May 10, 2007

    

May 9, 2007

  
(Date)      (Date)   

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

8

EX-10.17(G)

Exhibit 10.17(g)

 

EXECUTION COPY    September 9, 2009

Sixth Amendment to the Frontier Airlines, Inc. Co-Branded Credit Card Agreement

This Sixth Amendment to the Frontier Airlines, Inc. Affinity Credit Card Agreement, made this 9th day of September 2009 by and between Barclays Bank Delaware, formerly known as Juniper Bank (“Barclays”) and Frontier Airlines, Inc. (“Frontier”) further amends the Frontier Airlines, Inc. Credit Card Agreement between the parties dated March 12, 2003. This agreement, as amended by the letter agreement and amendments described below in the Recitals, shall be referred to as the “Agreement”.

RECITALS:

WHEREAS, the parties entered into the Agreement (Exhibit 1 hereto) on March 12, 2003;

WHEREAS, the parties entered a letter agreement dated April 1, 2003 regarding the pass through of Volume Incentive of ***** (Exhibit 2 hereto).

WHEREAS, the parties entered into a First Amendment to the Agreement in May 2003 (the “First Amendment”). Neither of the parties can locate an executed version of the First Amendment and hereby agree to and ratify the terms of the First Amendment attached as Exhibit 3 to this Agreement; and

WHEREAS, the parties entered into a Second Amendment to the Agreement in April 2005 (the “Second Amendment”) a copy of which is attached as Exhibit 4 to this Agreement; and

WHEREAS, the parties entered into a Third Amendment to the Agreement on March 27, 2006 (the “Third Amendment”) but inadvertently titled this Third Amendment as the Second Amendment to the Agreement. A copy of this Third Amendment is attached to this Agreement as Exhibit 5; and

WHEREAS, the parties entered into a Fourth Amendment to the Agreement in May 2007 (the “Fourth Amendment”), a copy of which is attached as Exhibit 6 to this Agreement; and

WHEREAS, the parties entered into a Fifth Amendment to the Agreement in May 2007 (the “Fifth Amendment”), a copy of which is attached as Exhibit 7 to this Agreement; and

WHEREAS, on April 10, 2008, Frontier and certain of its affiliated companies commenced Chapter 11 cases by filing voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court, Southern District of New York (the “Bankruptcy Court”), which cases are being jointly administered under Chapter 11 Case No. 08-11298 (RDD).

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

1


WHEREAS, Frontier and Barclays desire to further amend the Agreement to extend the Term of the Agreement and revise the compensation paid thereunder.

THEREFORE, the parties agree to amend the Agreement as follows:

 

  1. Section 1(p) of the Agreement is deleted and the following is inserted in its place:

Initial Term” means the period that begins on the Effective Date and ends on December 31. 2017, except as otherwise provided herein.

 

  2. The following shall be inserted as new Section 3(f):

“(f) Frontier shall, at a minimum, maintain the same level of marketing of the program as it did on July 1, 2009 and, in addition, shall ***** of the effective date of the Sixth Amendment commence marketing in its choice of the following marketing channels provided that the total Projected Channel Value *****:

 

Account Channel

   Projected
Channel Value*
*****    *****
*****    *****
*****    *****
*****    *****
*****    *****

 

* Projected Channel Value is an assigned value and not a representation of performance of the particular channel.

 

  3. The following is added to the end of Section 4(a):

“Upon Frontier entering into an agreement with ***** for the payment of all or part of the Volume Incentive, Barclays agrees it will continue to fund the Volume Incentive so that the combined Volume Incentive under this Agreement and the ***** is equal to *****, provided Barclays will not be required to fund ***** of the combined Volume Incentive.”

 

  4. The following is inserted as new Section 5A immediately following Section 5:

5A. PRE-PURCHASE OF MILES

5A.1 Pre-Purchase of Miles. Barclays will pre-purchase Miles in an amount totaling ***** (together with pre-purchased miles otherwise acquired hereunder, the “Pre-Purchased Miles”) and wire such funds to Frontier upon the satisfaction of the following conditions (“Closing Conditions”): (i) Unrestricted Cash shall be equal to or greater than *****; (ii) assumption of this Agreement, as amended, in the Frontier Bankruptcy by final non-appealable order; and (iii) the effective

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

2


date of Frontier’s Plan of Reorganization after confirmation of the Plan by non-appealable order. The price for each Pre-Purchased Mile shall be *****.

5A.2 Use of Pre-Purchased Miles. Barclays shall use the Pre-Purchased Miles to ***** in the manner and in accordance with the following terms and conditions. In addition, Frontier shall pay interest on ***** as set forth below.

5A.2.1 Payment with Pre-Purchased Miles. Commencing in October, 2009 and in each month thereafter that Barclays holds Pre-Purchased Miles, it shall compensate Frontier for fees earned hereunder with Pre-Purchased Miles pursuant to the following process: *****. For avoidance of doubt, the reporting and use of Pre-Purchased Miles as payment in lieu of cash shall occur within the time frames established in Section 5.

5A.2.2 Interest Payments. Commencing on the ***** of the calendar month following the Pre-Purchase Date, and continuing on the ***** of each calendar month, except for the month of February where the interest payment shall be due *****, so long as any Pre-Purchased Miles remain outstanding, Frontier will pay Barclays interest accruing *****. Unless otherwise agreed, Barclays *****

5A.3 Subsequent Monthly Purchase. Commencing in November, 2009, or the first day of the month following the pre-purchase of miles set forth in Section 5A.1 ***** (each a “Subsequent Purchase”). ***** shall mean the outstanding dollar amount of ***** held by Barclays on any given measurement date. Each Subsequent Purchase shall occur no later than the ***** following the month in which ***** are measured (the “Subsequent Purchase Date”). Prior to ***** (the “Repurchase Commencement Date”), in each month in which the ***** are not met, the Cap shall be reduced by *****. Commencing on the Repurchase Commencement Date, the Cap shall be reduced by ***** each month until such time no Pre-Purchased Miles remain outstanding. In the event that the average monthly fees earned during a calendar quarter hereunder are less than ***** (the “Shortfall Payment”) on or before the ***** following the end of the particular quarter. For purposes of this Agreement, the “Initial Cap” shall be ***** and the Cap will reduce accordingly as set forth above. Subsequent Purchases that occur in February shall occur on the later of ***** pursuant to Section 13(b). In the event that the monthly fees due to Frontier materially increase, Barclays agrees to in good faith, consider an increase in the Cap.

5A.3.1 ***** Barclays’s obligations to make a Subsequent Purchase each month pursuant to Section 5A.3 will only arise upon and are subject to the satisfaction or waiver of *****.

 

  (i) Frontier’s Unrestricted Cash shall be equal to or greater than *****.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

3


  (ii) No ***** has occurred in and is continuing as of the last day of the month being measured, as determined following expiration of applicable cure, grace, or dispute periods.

 

  (iii) No ***** occurred in and is continuing as of the last day of the month being measured, as determined following expiration of applicable cure, grace, or dispute periods.

 

  (iv) No merger of Frontier has occurred provided that merger as used in this sub-section does not include a merger with Republic Airways Holdings, Inc., or its subsidiaries (collectively “Republic”) or a merger that is the result of an internal restructuring of Republic.

 

  (v) Frontier shall have complied with the reporting requirements set forth in Section 13(b) for the month being measured.”

5A.4 Prepayment. Frontier may repurchase all or any of the Pre-Purchased Miles at any time, or from time to time, without penalty or premium. Any prepayment shall include accrued interest, if any, in accordance with Section 5A.2.2

5A.5 Acceptance of Payment with Pre-Purchased Miles. Frontier agrees to *****.

5A.6 Other Uses of Pre-Purchased Miles. Barclays may use Pre-Purchased Miles for purposes other than as set forth in Sections 5A.2 through 5A.6, subject to Frontier’s approval of these other uses, which approval shall not be unreasonably withheld. If Frontier has not met ***** under 5A.3.1 above, Frontier’s approval of other uses is not required. Frontier shall provide commercially reasonable methods to redeem these Pre-Purchased Miles (e.g., mileage certificates or assignment to FF Accounts) to facilitate the use of the Pre-Purchased Miles by Barclays and/or the recipient of said Pre-Purchased Miles. This obligation shall survive termination of this Agreement. If Barclays uses Pre-Purchased Miles pursuant to the Section 5A.6, Barclays shall provide monthly reports detailing the use of such Pre-Purchased Miles. The Pre-Purchased miles Barclays uses under this Section 5.A.6 during any month will be deducted from the Cap and included in calculating Unused Pre-Purchased Miles under Section 5.A.3 above.

5A.7 Transportation Tax. *****, as set forth in Section 5(b), shall *****.”

 

  5. The definition of Suspension Event set forth in Section 6(b)(i) through (iv) is deleted and the following inserted in its place:

 

  (i) The average Passenger Enplanements (“PE”) for the *****, for which Frontier has reported data declines ***** from the average PE *****. Passenger Enplanements will include passengers flown

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

4


  on Frontier flights operated by Lynx Aviation, Inc., Republic Airways Holdings, Inc. or its subsidiaries; or other carriers operating flights for Frontier under a codeshare; capacity purchase agreement, or similar type agreements;

 

  (ii) The average number of Active Frequent Flyers for the ***** for which Frontier has reported data declines ***** from the number of Active Frequent Flyers *****. Active Frequent Flyers shall mean a Frontier Member that has flown on a Frontier flight or used their Account *****.

 

  (iii) Frontier fails to maintain a frequent flyer program that is as competitive on a relative basis in the then current marketplace as the EarlyReturns Program is as of July 1, 2009 based on domestic award levels and domestic mileage earning capability, provided that Barclays provides notice of the failure to maintain the frequent flyer program which will commence a ***** period during which Frontier may cure the deficiency, including notice in reasonable detail and with backup information for why and how Barclay’s believes the frequent flyer program is not adequately competitive;

 

  (iv) Frontier becomes subject to voluntary or involuntary bankruptcy, insolvency, receivership, conservatorship or like proceedings, and for which Barclays does not terminate pursuant to Section 15(d) below;”

 

  6. Section 13(b) of the Agreement is deleted and the following inserted in its place:

“(b) Frontier shall make available to Barclays the following reports: (i) annual audited financials statements ***** after the end of each fiscal year and unaudited quarterly financial statements ***** after the end of each fiscal quarter; provided that the filing of such reports on a segment reporting basis in a format consistent with Securities Exchange Commission (“SEC”) standards as part of the Republic Airways Holdings filings on EDGAR shall satisfy the delivery obligations hereunder; (ii) annual financial plans and monthly projections for the following year as soon as practicable after preparation thereof in the ordinary course of business but in no event later than ***** of each year; (iii) monthly income statements and balance sheet results ***** following the close of each month; (iv) ***** after the end of each month, a monthly attestation from Frontier that ***** were met as of the end of the then ended month and to include a statement of the month end ***** and rolling ***** EBITDA for the then ended month: and (v) Monthly certificate of compliance with Section 6(b) including reporting of Active Frequent Flyers and Passenger Enplanements as well as the baseline Active Frequent Flyers and baseline Passenger Enplanements ***** following the end of each month. In addition, Frontier agrees to make available an appropriate person for monthly or quarterly calls, as determined by Barclays, with Barclays Chief Financial Officer and/or Chief Risk Officer; provided that each month or quarter Barclays desires to have such a call, it will provide Frontier with prior notice.”

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

5


  7. The following is added to the Agreement as new Section 25.

“25. Merchant Acquirer,

 

  (a) Barclays shall ***** of the effective date of the Sixth Amendment provide Frontier with a commercially reasonable merchant acquiring proposal (the “MA Proposal”) along with a plan to implement such program ***** of the effective date of the Sixth Amendment. Barclays shall ***** of the effective date of this Agreement, implement for Frontier a commercially reasonable merchant acquiring solution (the “MA Solution”). The MA Solution shall be selected so long as it is Competitive in the marketplace. “Competitive” as used herein is based on a combination of pricing and offers received from other providers in a commercially reasonable RFP process. Barclays *****. Moreover, to the extent that the MA Solution is not equal to or better than the Competitive Proposal, Frontier shall communicate to Barclays as much information as it can under the restrictions in any confidentiality agreements with other providers. Based on such communication, Barclays shall be afforded the opportunity to re-propose in an attempt to improve its offer. If the Barclays MA Solution on a Combined or standalone basis, as appropriate, is still not Competitive, Frontier shall have the right to terminate this Agreement without Penalty, provided: (i) Frontier presents ***** of its intent to terminate, said notice to be provided *****; and (ii) the date of the notice in sub-section (i) shall be deemed the Repurchase Commencement Date for the purposes of Section 5A.3. If Barclays falls to provide a good faith MA Solution, the initial Term of this. Agreement will revert back to the original date of *****, provided the Repurchase Commencement Date shall become *****. If Barclays provides a good faith MA Solution and Frontier selects a standalone acquiring solution instead of the MA Solution, the terms of this Agreement as amended by the Sixth Amendment will remain in effect.

 

  (b) The parties acknowledge that the intent of the Pre-Purchase of Miles is to provide liquidity to Frontier while the Parties develop the MA Solution. In the event the Parties enter into an agreement for the MA Solution, unless otherwise agreed, Frontier shall repurchase the Pre-Purchased Miles ***** of the effective date of the MA Solution Agreement provided the MA Solution releases funds from Frontier’s then existing holdback by

 

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

6


  an amount equal to or greater than the then current Cap amount under this Agreement. The Parties further acknowledge that if the impact of hold back is ameliorated by Frontier electing to participate in an industry wide initiative or other mechanism, Frontier’s right to terminate pursuant to this Section 25 shall be deemed waived.”

 

  8. All other terms and conditions of the Agreement shall remain in effect except as expressly modified herein or in another writing signed by both parties. Capitalized terms shall have the same meaning as set forth in the Agreement.

 

  9. This Amendment shall be governed by and construed under the laws of the State of Delaware as applied to agreements among Delaware residents entered into and to be performed entirely within the State of Delaware.

 

  10. This Amendment 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.

Intending to be legally bound, the parties have executed this Amendment as of the date set forth above.

 

BARCLAYS BANK DELAWARE

 

/s/ [Authorized Signatory]

  

FRONTIER AIRLINES, INC.

 

/s/ [Authorized Signatory]

(Signature)

 

Managing Director

  

(Signature)

 

SVP & CFO

(Title)

 

September 9, 2009

  

(Title)

 

September 9, 2009

(Date)    (Date)

 

7

EX-10.17(J)

Exhibit 10.17(j)

EXECUTION COPY

NINTH AMENDMENT TO THE FRONTIER AIRLINES, INC

CREDIT CARD AGREEMENT

THIS NINTH AMENDMENT (this “Amendment”) to the Frontier Airlines, Inc. Credit Card Agreement is made and entered into as of November 5, 2013 by and among Barclays Bank Delaware, formerly known as Juniper Bank (“Barclays”), and Frontier Airlines, Inc. (“Frontier”).

WHEREAS, Barclays and Frontier entered into the Frontier Airlines. Inc., Credit Card Affinity Agreement on March 12, 2003, which agreement has been supplemented by a letter agreement dated April 1, 2003 and amended by eight amendments (as so supplemented and amended, the “Agreements”);

WHEREAS, Falcon Acquisition Group, Inc., a Delaware corporation (the “Buyer”), has entered into an agreement to acquire all of the capital stock of Frontier Airlines Holdings, Inc., the parent corporation of Frontier, from Republic Airways Holdings Inc. (“Republic”), the closing of which acquisition (the “Transaction Closing”) is anticipated to occur in December 2013;

WHEREAS, upon the occurrence of the Transaction Closing, and pursuant to the terms of the Mutual Release and Removal of Parties from Frontier Airlines, Inc. Credit Card Affinity Agreement entered into as of November 5, 2013 among Barclays, Frontier, Republic, YX Properties, LLC (“YX”) and Midwest Airlines, Inc. (“Midwest”), YX, Midwest and Republic shall cease to be parties to the Agreement and Republic shall be released from its obligations under the Agreement;

WHEREAS, Barclays and Frontier desire to adopt further amendments to the Agreement, which amendments shall be effective on a prospective basis from and after the date on which the Transaction Closing occurs (the “Transaction Effective Date”), all in accordance with the further terms and conditions set forth below; and

WHEREAS, capitalized terms used herein and not otherwise herein defined are used as defined in the Agreement

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Initial Term. Effective as of the Transaction Effective Date, the text of Section l(p) of the Agreement is deleted and the following is inserted in its place:

Initial Term” means the period that begins on the Effective Date and ends on December 31, 2020.”

 

 

- 1 -


2. Pre-Purchased Mileage Facility. Effective as of the Transaction Effective Date, Section 5A of the Agreement is deleted and the following new Section 5A is inserted in its place:

“5A Pre-Purchased Mileage Facility.

5A.1 Pre-Purchased Miles Facility. On the Transaction Effective Date, Barclays will establish and implement a Pre-Purchased Miles facility (the “Facility”) pursuant to which Barclays will pre-purchase Purchase Miles (“Pre-Purchased Miles”). Subject to, and adjusted as contemplated by, the further terms of this Section 5A, the target size of the Facility (the “Target Size”) will be *****. The initial amount of the Facility will be *****. The amount of the Facility will be reset for the then current calendar year on ***** and on each ***** thereafter during the Initial Term through and including ***** (each, an “Annual Reset Date”). The Facility will initially be funded by the purchase by Barclays on the Transaction Effective Date of the number of Pre-Purchased Miles equal to the difference between ***** and the value (valued at ***** per Pre-Purchased Mile) of the number of Pre-Purchased Miles previously purchased by Barclays pursuant to the terms of this Agreement which are unused and outstanding on the Transaction Effective Date. The price for each Pre-Purchased Mile purchased by Barclays pursuant to any provision of this Section 5A shall be *****. Barclays obligation to purchase additional Pre-Purchased Miles on the Transaction Effective Date or in respect of any Annual Reset Date or Semi-Annual Reset Date (as defined below) pursuant to this Section 5A shall be conditioned upon the Conditions Precedent (as defined below) being satisfied on such dale. If the Conditions Precedent are not satisfied on any such date then, notwithstanding any other provision of this Section 5A, the Target Size of the Facility will not be subject to increase but may be reduced as provided in Section 5A.1.1, 5A.1.2 or 5A.1.3.

5A.1.1 A forecast of Revenue Share for each calendar year during the Initial Term *****, for purposes of determining the Target Size for such year, will be developed jointly by Barclays and Frontier on or before ***** and each ***** thereafter through *****. In the event Barclays and Frontier do not agree on any such forecast (such agreement not to be unreasonably withheld or delayed by either party), an annualized amount based upon the actual Revenue Share for the months of July through December of the immediately preceding calendar year will be used for calculating the Target Size for the new calendar year. If the Target Size is larger than (a) ***** on ***** or (b) the Target Size for the prior year on ***** or on any ***** thereafter through *****, Barclays will increase the Target Size of the Facility to the amount of the forecasted Revenue Share for such year by ***** of such year by means of the purchase of additional Pre-Purchased Miles. If the Target Size is less than (i) ***** on ***** or (ii) the Target Size for the prior calendar year on ***** or on any ***** thereafter through *****, the Facility will be reduced to the new Target Size following the annual review process by amortizing the amount of the reduction equally over the ***** of such year by deducting such reduction amounts from monthly Revenue Share amounts otherwise due to Frontier under this Agreement.

5A.1.2 If on ***** the annualized Revenue Share for the year, calculated based upon the actual Revenue Share for the ***** of the year (the “Annualized Run Rate”), is projected to be ***** or more below the Target Size set for such year, Barclays shall recover the amount in excess of the ***** deficiency, and the Target Size will be reduced, ***** of Revenue Share amounts

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

- 2 -


otherwise due to Frontier under this Agreement. If on ***** the Annualized Run Rate for the year is projected to be ***** or more above the Target Size for such year, Barclays shall increase the Target Size by the amount of the Revenue Share in, excess of the ***** overage. The increase in the amount of the Facility will be accomplished by means of the purchase of additional Pre-Purchased Miles by Barclays on or before *****.

5A.1.3 If on ***** or on each ***** thereafter through *****, the Annualized Run Rate for the year is projected to be ***** or more below the Target Size set for such year, Barclays shall recover the amount in excess of the ***** deficiency, and the Target Size will be reduced, in ***** of Revenue Share amounts otherwise due to Frontier under this Agreement. If on ***** or on any ***** thereafter through *****, the Annualized Run Rate is projected to be ***** or more above the Target Size for such year, Barclays shall increase the Target Size by the amount of the Revenue Share in excess of the ***** overage. The increase in the amount of the Facility will be accomplished by means of the purchase of additional Pre-Purchased Miles by Barclays on or before ***** of the applicable year.

5A.1.4 Notwithstanding the foregoing provisions of this Section 5A, the maximum Target Size of the Facility will be *****. If actual Revenue Share payable to Frontier pursuant to this Agreement has exceeded ***** on any rolling consecutive ***** during the Initial Term and the Conditions Precedent shall have been continually satisfied during such period, Barclays will employ commercially reasonable efforts to resize the Facility based on the overall attributes of the Frontier business at the time.

5A.2 Use of Pre-Purchased Miles. Barclays shall use the Pre-Purchased Miles to compensate Frontier for fees otherwise earned hereunder in the manner and in accordance with the following terms and conditions. In addition, Frontier shall pay interest on the value of the outstanding Pre-Purchased Miles as set forth below.

5A.2.1 In each mouth that Barclays holds Pre-Purchased Miles, it shall compensate Frontier for fees earned hereunder with Pre-Purchased Miles pursuant to the following process: *****. For the avoidance of doubt, the reporting and use of Pre-Purchased Miles as payment in lieu of cash shall occur within the time frames established in Section 5.

5A.2.2 On the ***** calendar day of each calendar month, except for the month of ***** where the interest payment shall be due *****, so long as any Pre-Purchased Miles remain outstanding, *****. Unless otherwise agreed, *****. For purposes of this Agreement, “Adjustable Rate” for Miles purchased up to ***** shall mean the *****. For purposes of this Agreement, “Adjustable Rate” for miles purchased above ***** shall mean the *****. “Interest Period” shall mean for any calendar month during the Initial Term, *****. The monthly calculation will be as follows: *****.

 

5A.3 Subsequent Monthly Purchases.

5A.3.1 Commencing in the first full calendar month following the month in which the Transaction Effective Date occurs and thereafter for each calendar month through *****, provided that in each such month the Conditions Precedent are satisfied, Barclays shall purchase

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

- 3 -


additional Pre-Purchased Miles in an amount *****. Each Subsequent Purchase shall occur no later than the ***** of the month following the month in which the Conditions Precedent are measured or ***** after the receipt of the Officer Certificates due pursuant to Section 13(b) (each a “Subsequent Purchase Date”); provided that Subsequent Purchases that occur in ***** shall occur on the later of ***** or ***** after receipt of the Officer Certificates due pursuant to Section 13(b).

5A.3.2 No Subsequent Purchase shall be made pursuant to Section 5A.3.1 with respect to any month in which the Facility is increased pursuant to Section 5A.1.1, 5A.1.2 or 5A.1.3.

5A.3.3 Prior to ***** (the “Repurchase Commencement Date”), in each month in which the Conditions Precedent are not satisfied, the Facility will be reduced by ***** of the Facility as measured in the ***** in which the Conditions Precedent were not satisfied (the “Reduction”). For avoidance of doubt, it is the intent that the size of the Reduction shall be fixed on the first measuring date and shall not be recalculated monthly.

5A.3.4 In the event the Facility is reduced pursuant to Section 5A.3.3 because of a failure of any Condition Precedent to be satisfied, and all Conditions Precedent are subsequently satisfied for three (3) consecutive months and it is prior to the Repurchase Commencement Date, then, subject to Section 5A.3.7, the Facility shall be *****.1,1, 5A.1.2 or 5A.1.3. Until and unless the Facility is returned to the level prescribed in this Section 5A.3.4, no increases will be made to the Target Size of the Facility under Section 5A.1.1, 5A.1.2 or 5A.1.3.

5A.3.5 Commencing on the Repurchase Commencement Date, the Facility will be reduced by ***** of the Facility as measured on the Repurchase Commencement Date each month until such time as no Pre-Purchased Miles remain outstanding (the “Buy Down Reduction”). Any reduction in the Facility will be offset against Revenue Share otherwise payable to Frontier, at the value of ***** per reduced Pre-Purchased Mile. However, in the event that the Revenue Share earned during a calendar month hereunder is less than the Reduction or Buy Down Reduction, as applicable, then Frontier shall for each such month pay Barclays the *****.

5A.3.6 As used herein, “Unused Pre-Purchased Miles” shall mean the outstanding dollar amount of the Pre-Purchased Miles held by Barclays on any given measurement date.

5A3.7 The parties acknowledge and agree that in the event the Facility is in the process of being reduced to its currently effective Target Size pursuant to Sections 5A.1.1, 5A.1.2 or 5A.1.3, the Reduction contemplated by this Section 5A.3 shall control and take precedence over the reductions contemplated by any of Sections 5A.1.1, 5A.1.2 or 5A.1.3, and the Facility shall be reduced monthly solely by the Reduction; provided, that, in the event that in any month a Reduction payment is no longer required under this Section 5A.3 because the Conditions Precedent have been met for the period of time required hereunder and the Facility has not yet been reduced to the currently effective Target Size, then the reduction payments contemplated by Sections 5A.1.1, 5A.1.2 or 5A.1.3 shall be made until the currently effective Target Size is reached, such reduction payments to be amortized over the remaining months prior to the next Annual Reset Date or Semi-Annual Reset Date, as applicable.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

- 4 -


5A.4 Conditions Precedent. Barclays’ obligation to make any purchase of Pre-Purchased Miles pursuant to this Section 5A will only arise upon and is subject to the satisfaction or waiver of the following conditions (the “Conditions Precedent”) each month prior to the month in which any such purchase of additional Pre-Purchased Miles is to be made:

(i) Frontier shall maintain Unrestricted Cash at the levels described in the matrix set forth below (measured at the end of each month), provided that if Frontier fails to meet the Unrestricted Cash level in any applicable month, Frontier must then also meet the EBITDAR coverage ratio level set forth below. Failure to meet both tests shall be deemed a failure to meet the Conditions Precedent. Further provided that if Frontier fails to maintain the applicable Unrestricted Cash threshold in successive months, the EBITDAR test shall not apply in the second month and the failure to maintain the Unrestricted Cash shall be deemed a failure of the Conditions Precedent regardless of the level of EBITDAR:

 

*****

  *****   *****   *****   *****   *****   *****   *****

*****

  *****   *****   *****   *****   *****   *****   *****

*****

  *****   *****   *****   *****   *****   *****   *****

*****

  *****   *****   *****   *****   *****   *****   *****

*****

  *****   *****   *****   *****   *****   *****   *****

If Unrestricted Cash falls below the agreed upon level set forth in the foregoing matrix, then the EBITDAR, defined as earnings before interest, taxes, depreciation, amortization and rent (excluding any non-cash, non-operating expense) measured on *****. An example of the EBITDAR coverage ratio calculation, is set forth on Schedule 3.

As used herein, the term “Unrestricted Cash” means the sum of cash, cash equivalents, short-term investments and available for sale securities (in each case unrestricted) maintained by Frontier as depicted on its balance sheet; the term “Principal Interest & Rent” means amounts due in respect of borrowed money or leases of assets; and all other terms are defined as they are under generally accepted accounting principles (“GAAP”).

(ii) No Suspension Event has occurred in and is continuing as of the last day of the month being measured, as determined following expiration of applicable cure, grace or dispute periods.

(iii) Frontier shall not be in default of any indebtedness for borrowed money in excess of ***** (in the aggregate), which default is continuing as of the last day of the month being measured, as determined following expiration of applicable cure, grace or dispute periods.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

- 5 -


(iv) No Business Combination (as defined in Section 26) to which Frontier is a party, or to which it is subject as a direct or indirect subsidiary, or any other merger to which Frontier is a party, has been approved by the board of directors and/or shareholders of Frontier, Frontier’s ultimate parent or any of their respective subsidiaries; provided that this Section 5A.4(iv) shall not constitute a Condition Precedent if (x) the Business Combination does not result in the failure of a Condition Precedent per Section 5A.4(i), (ii), (iii) or (v), (y) this Agreement remains in full force and effect and binding on Frontier or an applicable surviving entity following the closing of the Business Combination and (z) Frontier or an applicable surviving entity is in compliance in all material respects with all of the terms and conditions of this Agreement upon the closing of the Business Combination (including, without limitation, having caused the subordination of all unsecured loan facilities or equity investments pursuant to Section 30 of this Agreement).

(v) Frontier shall have complied with the reporting requirements set forth in Section 13(b) for the month being measured.

5A.5 Prepayment. Frontier may repurchase all or any portion of the Pre-Purchased Miles at any time, or from time to time, without penalty or premium, for a purchase price of ***** per Pre- Purchased Mile. Frontier shall repurchase all Unused Pre-Purchased Miles, if any, that are outstanding on the date of termination of this Agreement, whether termination is at the end of the Initial Term or upon an event causing an earlier termination, for a Purchase Price of ***** per Pre-Purchased Mile, which Purchase Price shall be payable on the date of termination. Any prepayment shall include accrued interest, if any, in accordance with Section 5A.2.2.

5A.6 Acceptance of Payment with Pre-Purchase Miles. Frontier agrees to accept payment in Pre-Purchased Miles as provided in this Section 5A in lieu of cash and irrevocably waives any rights to receive Cash or other consideration for such payments regardless of the then value of a Pre-Purchased Mile.

5A.7 Other Uses of Pre-Purchased Miles. Barclays may use Pre-Purchased Miles for purposes other than as set forth in this Section 5A subject to Frontier’s approval of such other uses, which approval shall not be unreasonably withheld or delayed. If Frontier has not satisfied the Conditions Precedent under Section 5A.4 above, Frontier’s approval of other uses is not required. Frontier shall provide commercially reasonable methods to redeem these Pre- Purchased Miles (e.g., mileage certificates or assignment to frequent flyer accounts) to facilitate the use of the Pre-Purchased Miles by Barclays and/or the recipient of such Pre-Purchased Miles. This obligation shall survive termination of this Agreement. If Barclays uses Pre-Purchased Miles pursuant to this Section 5A.7 Barclays shall provide monthly reports detailing the use of such Pre-Purchased Miles. The Pre-Purchased Miles Barclays uses under this Section 5A.7 during any month will be deducted from the Facility and included in calculating Unused Pre- Purchased Miles.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

- 6 -


5A.8 Transportation Tax. Frontier’s obligation to fund the Transportation Tax, as set forth in Section 5(b) of this Agreement, shall not occur with respect to Pre-Purchased Miles unless and until Barclays awards such Pre-Purchased Miles to cardholders and/or others such that the recipient may use such Pre-Purchased Miles for redemption for air travel.”

3. Effective as of the Transaction Effective Date, the definition of “Suspension Event” set forth in Sections 6(b)(i) through (vi) is deleted and the following inserted in its place:

“(i) Frontier fails to maintain a frequent flyer program that is as competitive on a relative basis in the Benchmark Market as the EarlyReturns Program is as of ***** based on domestic award levels and domestic mileage earning capability, provided that Barclays provides notice of the failure to maintain the frequent flyer program, including notice in reasonable detail and with backup information for why and how Barclays believes the frequent flyer program is not adequately competitive. Such notice will commence a ***** period during which Frontier may cure the deficiency, during which period no Redaction in the size of the Facility shall occur under Section 5A.3 as a result of the occurrence of this Suspension Event;

(ii) Frontier becomes subject to voluntary or involuntary bankruptcy, insolvency, receivership, conservatorship or like proceedings, and for which Barclays does not terminate pursuant to Section 15(d);

(iii) Frontier fails to maintain the marketing channels set forth in Exhibit F;

(iv) The average Passenger Enplanements (“PE”) for the ***** for which Frontier has reported data declines more than ***** from (i) the average PE in the comparable three months set forth on the attached Schedule 2 for the period through ***** or (ii) the forecasted PE in ***** as shown on Schedule 2 for the calendar years *****. Passenger Enplanements will include passengers flown on Frontier flights operated by carriers operating flights for Frontier under a codeshare, capacity purchase agreement, or similar type agreements;

(v) The average number of Active Frequent Flyers for the ***** for which Frontier has reported data declines more than ***** from (i) the number of Active Frequent Flyers set forth on the attached Schedule 2 for the period through ***** or (ii) the forecasted Active Frequent Flyers in ***** as shown on Schedule 2 for the calendar years *****. Active Frequent Flyers shall mean a Frontier Member that has flown on a Frontier flight or has opened a new frequent flyer account or earned miles in their frequent flyer account within the *****.

For purposes of this Agreement, “Benchmark Market” shall mean the then current market place for airlines, excluding United, Delta, American and US Airways.”

4. Reports. Effective as of the Transaction Effective Date, Section 13(b) of the Agreement is deleted and the following new Section 13(b) is inserted in its place:

“(b) Frontier shall make available to Barclays the following reports: (i) annual audited financial statements within ***** after the end of each fiscal year and unaudited

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

- 7 -


quarterly financial statements within ***** after the end of each fiscal quarter, (ii) annual financial plans and monthly projections for the following year as soon as practicable after preparation thereof in the ordinary course of business but in no event later than ***** of each year; (iii) monthly income statements and balance sheet results within ***** following the close of each month; (iv) within ***** after the end of each month, a monthly certification from Frontier that the Conditions Precedent were met as of the end of the then ended month and to include a statement of the month end Unrestricted Cash position and rolling ***** for the then ended month; and (v) monthly certification of compliance with Section 6(b) including reporting of Active Frequent Flyers and Passenger Enplanements as well as the baseline Active Frequent Flyers and baseline Passenger Enplanements within ***** following the end of each month. In addition, Frontier agrees to make available an appropriate person for monthly or quarterly calls, as determined by Barclays, with Barclays Chief Financial Officer and/or Chief Risk Officer; provided that each month or quarter Barclays desires to have such a call, it will provide Frontier with prior notice.”

5. Post-Termination Solicitation of Frontier Members. Effective as of the Transaction Effective Date, the following is added to the Agreement as new Section 15A(vii):

“(vii) Post-Termination Solicitation of Frontier Members. Notwithstanding anything contained in Sections 4, 15, 15A, and 16, and for the avoidance of doubt, upon termination of this Agreement, and in the event that Frontier was eligible to exercise its Purchase Option pursuant to Section 15A(ii) but declines to do so, nothing contained in this Agreement shall prevent Frontier from soliciting Frontier Members through the use of Frontier Member Data to enroll in a subsequently created co-branded credit card program between Frontier and other parties, including but not limited to competitors of Barclays. Notwithstanding the foregoing, neither Frontier nor any entity which Frontier controls shall by itself or in conjunction with others, directly or indirectly, use the fact that a person is a Barclays Cardholder to specifically target any offer of a credit card or credit card related product to any Barclays Cardholder, provided that nothing herein shall be construed to prevent Frontier from offering a credit card or credit card related product if the offer did not include Barclays Cardholder membership as a criteria in selecting the recipients of the offer.”

6. Business Combination. Effective as of the Transaction Effective Date, the following is added to the Agreement as new Section 26, to follow Section 25:

“26. Business Combination. In the event Frontier engages in, or is subject to, a Business Combination (as defined below) with an Other Carrier (as defined below), the following provisions shall apply:

(a) If Frontier is the surviving airline and the Other Carrier does not have a contractual relationship with a co-brand credit card issuer, Barclays shall remain the sole issuer of the co-branded credit card for the Affinity Program for the combined airlines through the Initial Term.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

- 8 -


(b) If Frontier is the surviving airline and the Other Carrier is a party to an agreement with any Person other than Barclays pursuant to which such Other Carrier endorses, sponsors, promotes or otherwise offers a credit card product associated with its frequent flyer program (a “Competing Agreement”), Frontier will use its commercially reasonable efforts to make Barclays the exclusive issuer of the co-branded credit card associated with the combined frequent flyer program of Frontier and the Other Carrier and to provide Barclays the right to purchase the credit card portfolio of the issuer (the “Other Issuer”) of the co-branded credit card associated with the Other Carrier’s frequent flyer program. If Barclays becomes the exclusive issuer, Barclays agrees that it will provide the combined airline with a co-branded credit card product of equal or greater value to Frontier and the Frontier Members than the Other Issuer’s affinity card based on an overall assessment of the two programs, including, without limitation, the assessment of all compensation, cost of customization and the value proposition. In the event the Other Issuer’s credit card portfolio cannot be purchased by Barclays, Barclays agrees that it will waive its exclusivity to Frontier Marks and miles currency under the EarlyReturns Program to enable the Other Issuer to service its credit card portfolio existing on the date of the Business Combination through the existing term of the Other Issuer’s co-brand agreement (subject to an agreement not to disparage or tarnish Barclays and/or the Affinity Program, appropriate provisions to avoid customer confusion and/or any such terms and conditions that may be required by law or for regulatory purposes),

(c) If Frontier is not the surviving airline and the Other Carrier does not have a Competing Agreement or there is a Competing Agreement but it does not survive the Business Combination, then Frontier will assign its rights and obligations under this Agreement to the Other Carrier, subject to appropriate adjustments to this Agreement as referenced in Section 26(e) (such adjustments to be agreed upon by the parties, such agreement not to be unreasonably withheld or delayed).

(d) If Frontier is not the surviving airline and the Other Carrier has a Competing Agreement, then Frontier will use commercially reasonable efforts to make Barclays the exclusive issuer of the co-branded credit card associated with the combined frequent flyer program of Frontier and the Other Carrier. If Barclays does not become the exclusive issuer, Barclays shall be permitted to continue servicing the Frontier portfolio under this Agreement through the Initial Term. In such circumstance, Barclays will *****.

(e) If a Business Combination to which this Section 26 applies will result in a significantly larger combined airline with Barclays as the exclusive credit card issuer, Barclays agrees that it will evaluate in good faith appropriate adjustments to increase the Target size of the Facility and the Acquisition Budget

(f) If, in connection with a Business Combination to which this Section 26 applies. Barclays becomes a co-issuer of a co-branded card for the combined airlines with an Other Issuer, and if the Barclays co-branded credit card program becomes uncompetitive with that of the Other Issuer in terms of the consumer value proposition, Frontier shall give written notice to Barclays setting forth in reasonable detail its views as to why the Barclays program is uncompetitive in the Benchmark Market. Barclays shall thereafter have a period of ***** to cure the uncompetitive aspect of its program. If the uncompetitive feature of Barclays program

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

- 9 -


is not so cured within such cure period, Frontier will have the right to cease marketing the Barclays program and to market the Other Issuer’s program to the Frontier membership; provided that information about whether the Frontier Member is a Barclays cardholder under the EarlyReturns Program is not used for targeting the Barclays’ cardholder base.

(g) This Section 26 shall only apply to a Business Combination involving Frontier and an Other Carrier that contemplates (i) ultimately merging Frontier and the Other Carrier onto a single operating certificate for regulatory purposes and (ii) the merging of the combined airlines into a single brand. Section 26 shall not apply to a change in control, initial public offering or other business combination, even with another airline, that contemplates the continued operation of Frontier as a separate carrier. For the avoidance of doubt, if the brands of the separate carriers are not merged, Barclays will remain the exclusive issuer for the Frontier co-branded credit card program.

(h) As used in this Section 26:

Business Combination” means any business combination transaction between Frontier, Frontier’s ultimate parent or any of their respective subsidiaries and an Other Carrier, whether by merger or consolidation, by acquisition of a majority of equity securities pursuant to a tender offer, exchange offer or purchase, or by acquisition of a majority of assets pursuant to a sale, conveyance or other transfer of assets,

Other Carrier” means any air carrier (other than a subsidiary of Frontier), its parent, or any of their respective subsidiaries.”

7. The parties acknowledge and agree that Frontier Airlines Holdings, Inc., Frontier and Barclays shall enter into a subordination agreement in the form attached hereto as Exhibit A to this Amendment on the Transaction Effective Date.

8. Additional Marketing Efforts. Effective as of the Transaction Effective Date, the following language is added to Exhibit F to the Agreement:

“On or before *****, Frontier, at its cost, shall undertake the following marketing efforts:

*****

On or before *****, Frontier, at its cost, will implement the below cardholder exclusives. The new benefits will remain relative in value to competitive benefits in the ultra-low cost carrier market:

 

    One annual Companion Certificate redeemable for ***** (plus taxes and fees) for use on any flight purchase of ***** or greater. Certificate to be delivered by Barclays via email to all new and current annual fee paying customers.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

- 10 -


    Reduced Award Redemption Fees for all cardholders based on days until redemption flight date.

*****

9. Anti-Bribery and Corruption. Effective as of the Transaction Effective Date, the following is added to the Agreement as new Section 27, to follow new Section 26:

 

“27. Anti-Bribery and Corruption.

 

  (a) Definitions:

Applicable Anti-Bribery Law” means any bribery, fraud, kickback, or other similar anti- corruption law or regulation to which Frontier or its Associated Person, as applicable, is subject in performing its responsibilities hereunder. Where relevant this may include the UK Bribery Act 2010 (“Bribery Act”) and the US Foreign Corrupt Practices Act 1977 (“FCPA”).

Associated Person” means in relation to any entity, a person who performs any services for or on behalf of that entity in any capacity and including, without limitation, employees, agents, subsidiaries, representatives and subcontractors.

Public Official” means;

(i) any officer, employee or representative of a government, whether national, federal or local;

(ii) any individual exercising a legislative, administrative or judicial function, whether appointed or elected;

(iii) any officer, employee or representative of any Government Entity, including but not limited to central banks, sovereign wealth funds, state-run hospitals and any business venture that is owned or controlled by a Government Entity;

(iv) any candidate for or holder of public office;

(v) any political party or official of a political party;

(vi) any officer, employee or representative of a public international organization; and

(vii) any member of a royal family.

Government Entity” means;

(i) Any national, federal, state, province, local and / or municipal government department, agency, office and / or instrumentality;

(ii) Any company or organization where a government has 50 percent or more ownership interest;

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

- 11 -


(iii) Any company or organization where a government controls a majority of votes attaching to the shares;

(iv) Companies and organizations that are controlled by a government. For example, the term “Government Entity” will generally include companies and organizations that:

 

    have constituting statutes that establish that they are instrumentalities, agents or mandataries of a government; perform functions or services that are public-in-nature (i.e., for the benefit of the general public or a large sector of the population);

 

    are financially dependent on the government (i.e., the government is responsible for losses or funding of operations);

 

    do not operate on a normal commercial basis (e.g., because they are given special powers by legislation);

 

    have boards of directors or management committees where the government nominates a majority of directors or officers.

 

  (b) Anti-Bribery - Undertakings, Representations and Warranties

(i) Frontier understands that Barclays is committed to complying with all anti-bribery laws and regulations to which Barclays is subject, including the Bribery Act and the FCPA. Frontier represents and warrants that neither it nor any of its Associated Persons have taken or will take any action that might cause Barclays to violate either the Bribery Act or the FCPA, namely: that neither it nor any of its Associated Persons will, in violation of Any Applicable Anti-Bribery Law, authorize, offer, give or agree to offer or give, directly or indirectly, any payment, gift or other advantage with respect to any activities undertaken relating to this Agreement which;

 

    is intended to, or does, influence any person to act or reward any person for acting in breach of an expectation of good faith, impartiality or trust, or which it would otherwise be improper for the recipient to accept; or

 

    is made to or for the benefit of a Public Official, or to any person while knowing or being aware of a high probability that all or a portion of the payment, gift or other advantage will be offered or given to a Public Official, with the intention of influencing any act or decision of the Public Official in his/its official capacity, inducing such Public Official to use his/its influence to affect any act or decision of a government entity, or securing an improper advantage; or

 

    would otherwise violate Applicable Anti-Bribery Law.

(ii) Frontier has implemented and must at all times maintain adequate procedures designed to comply with its obligations under Section 27 (b) (i) above.

(iii) Breach of any of the provisions in Section 27(b)(i) in a material breach of this Agreement pursuant to Section 15(b) of this Agreement. Notwithstanding anything contained in Section 15(b), and without remedy to any other right, relief or remedy, Barclays may terminate this Agreement immediately upon such a breach.”

 

- 12 -


10. Competitive Programs. Effective as of the Transaction Effective Date, the following is added to the Agreement as new Section 28, to follow new Section 27:

 

“28. Competitive Programs.

(a) At least once per calendar year, Barclays and Frontier shall consider (to the extent such terms and conditions are publicly known or otherwise known and not subject to any confidentiality obligations on the part of either Party) features, terms, conditions and other aspects of other co-branded credit card programs in the Benchmark Market in order to identify marketplace developments for possible inclusion in the Affinity Program to ensure that the Affinity Program remains competitive. If Barclays or Frontier determines that a change to the Affinity Program may be required, either Barclays or Frontier, depending upon which party shall provide the benefit, shall develop a plan with respect to implementation of such change, including the impact the proposed change would have, if any, on the Affinity Program economics, shall present such plan to the other party for its review, and, if both Barclays and Frontier agree that the proposed change should be implemented, the party that developed the plan shall employ commercially reasonable efforts to implement the proposed change.”

11. Ownership of Credit Card Accounts and Cardholder Data. Effective as of the Transaction Effective Date, the following is added to the Agreement as new Section 29, to follow new Section 28:

 

“29. Ownership of Credit Card Accounts and Cardholder Data.

(a) Ownership and all sharing, use and disclosure of Cardholder Data and Frontier Member Data under this Agreement shall, to the extent permitted under applicable law, be subject to the provisions of this Section 29. The Parties acknowledge that the same or similar information may be contained in the Cardholder Data, the Frontier Member Data, and other data and that each pool of data shall therefore be considered separate information, subject to the specific provisions applicable to that data hereunder.

(b) Barclays shall be the owner of all Cardholder Data and the Accounts related thereto and Frontier shall not be considered a creditor on any of such accounts for any purpose whatsoever.

(c) Barclays acknowledges that Frontier is the exclusive owner of all Frontier Member Data and that subject to the other terms in this Agreement, Frontier and its affiliates have lights to use and disclose such information independent of whether such information also constitutes Cardholder Data.

(d) For the avoidance of doubt, the Parties agree that Barclays’ ownership interests described in Sections 29(a) through (c) above shall apply during and after the Term unless the Cardholder Data is transferred to Frontier or its designee pursuant to this Agreement

 

- 13 -


(e) As used in this Section 29 and this Amendment;

Cardholder Data” means all personally identifiable information about a cardholder (a) received by or on behalf of Barclays in connection with the cardholder’s application for use of a credit card Account in connection with the Affinity Program; (b) otherwise obtained by or on behalf of Barclays for inclusion in its database of cardholder information, including all transaction and experience information collected by or on behalf of Barclays with regard to each purchase charged by a cardholder using a credit card issued pursuant to the Affinity Program.

Frontier Member Data” means all personally identifiable information regarding Frontier Members that is obtained by or on behalf of Frontier or any of its Affiliates at any time (including prior to the Transaction Effective Date.”

12. Subordination. Effective as of the Transaction Effective Date, the following is added to the Agreement as new Section 30, to follow new Section 29:

“30. Subordination. Frontier hereby acknowledges and agrees that any unsecured loan facility or equity investment obtained by Frontier shall be subordinated to repayment to Barclays of the Facility. Prior to Frontier entering into any such financing or equity investment, Barclays, Frontier and such lender or investor shall enter into a subordination agreement on terms agreed to by Barclays, such agreement not to be unreasonably withheld or delayed. This Section 30 and any such subordination agreement shall terminate upon (a) the payment in full of all obligations of Frontier under this Agreement to make payments to Barclays from time to time with respect to the principal, interest or other payment obligations under the Facility, including, without limitation, obligations to reduce the Facility in accordance with this Agreement, and (b) the expiration or termination of all commitments and all other obligations of Barclays to fund the Facility, with neither Frontier nor any other Person having the right to cause the purchase of Pre-Purchased Miles under this Agreement.”

13. Effective as of the Transaction Effective Date, a Schedule 3 is added to the Agreement in the form set forth in Exhibit B to this Ninth Amendment.

14. Effective as of the Transaction Effective Date, Schedule 2 to the Agreement (added by the Eighth Amendment to this Agreement) is deleted and replaced by the Schedule 2 set forth in Exhibit C to this Ninth Amendment.

15. Effective as of the Transaction Effective Date, Exhibit F to the Agreement (added by the Eighth Amendment to this Agreement) is deleted and replaced by the Exhibit F set forth in Exhibit D to this Ninth Amendment.

 

- 14 -


16. The closing for this Amendment (the “Amendment Closing”) shall take place no later than two Business Days after the satisfaction or waiver of the conditions precedent to the Amendment Closing set forth below in clauses (a) and (b):

(a) Barclays’ obligation to close the Amendment transaction shall be subject to the satisfaction or waiver of the following:

(i) Receipt of evidence of the Transaction Closing;

(ii) Receipt of each of the following agreements duly executed by the other parties thereto: (1) this Amendment, (2) the Mutual Release and Removal of Parties from Frontier Airlines Inc. Credit Card Affinity Agreement (the “Release”) among Barclays, Frontier, YX Properties, LLC, Midwest Airlines, Inc. and Republic, and (3) the Subordination Agreement; and

(iii) A certification from Frontier that as of the Amendment closing, all of the Conditions Precedent set forth in Section 5A.4 have been met.

(b) Frontier’s obligation to close the Amendment transaction shall be subject to the satisfaction or waiver of the following:

(i) Receipt of each of the following agreements duly executed by each of the parties thereto: (1) this Amendment and (2) the Release.

(c) Upon the Amendment Closing, after the satisfaction or waiver of the conditions precedent described above, Barclays shall deliver to Frontier by wire transfer to an account designated by Frontier, an amount equal to the difference between ***** and the value (valued at ***** per Pre-Purchased Mile) of the number of Pre- Purchased Miles previously purchased by Barclays pursuant to the Agreement which are unused and outstanding on the Transaction Effective Date. Frontier shall provide Barclays with its wiring instructions not less than ***** prior to the Amendment Closing.

17. Survival. Except as expressly modified by the terms of this Amendment, all of the terms and conditions of the Agreement remain in full force and effect and are hereby ratified and confirmed by the parties,

18. Governing Law. This Amendment shall be governed by, and construed and enforced in accordance with the domestic laws of the State of Delaware without giving effect to any choice of law or conflict of law, provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware,

19. Amendment Termination Event. If the Transaction Closing shall not have occurred on or before the Termination Date, this Amendment shall be of no further force and effect and shall be null and void ab initio. As used herein, “Termination Date” means January 31, 2014 or such later date as may be agreed upon in writing by each of the parties to this Amendment.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

- 15 -


20. Counterparts; Electronic Execution. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the same instrument, This instrument may be executed and delivered by electronic transmission, including by facsimile or pdf.

[Signature pages follow]

 

- 16 -


IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the day and year first above written,

 

BARCLAYS BANK DELAWARE
By:  

/s/ [Authorized Signatory]

  Name: [Authorized Signatory]
  Title: [Authorized Signatory]
FRONTIER AIRLINES, INC.
By:  

/s/ David N. Siegel

  Name: David N. Siegel
  Title: President & CEO


Exhibit A to Ninth Amendment

Form of Subordination Agreement


SUBORDINATION AGREEMENT

THIS SUBORDINATION AGREEMENT (this “Agreement”) is entered into as of this [ 🌑 ], 2013, by and among Barclays Bank Delaware (“Barclays”), Frontier Airlines, Inc. (the “Company”), and Frontier Airlines Holdings, Inc. (the “Subordinated Investor”).

R E C I T A L S

A. Barclays and the Company have entered into a Credit Card Affinity Agreement dated March 12, 2003, which Agreement has been supplemented by a letter agreement dated April 1, 2003 and amended by eight amendments thereto, and as further amended by the Ninth Amendment thereto (the “Ninth Amendment”) dated as of November         , 2013, and effective as of the date hereof (as so supplemented and amended, the “Affinity Agreement”) pursuant to which, among other things, Barclays has agreed, subject to the terms and conditions set forth in the Affinity Agreement, to make certain financial accommodations to the Company pursuant to the Facility (as defined in the Affinity Agreement).

B. The Subordinated Investor intends to make an Investment in the Company in connection with the Transaction Closing (as defined in the Affinity Agreement), and may agree to make further Investments in the Company in the future during the term of the Facility.

C. As an inducement to and as one of the conditions precedent to the agreement of Barclays to consummate the transactions contemplated by the Ninth Amendment, Barclays has required the execution and delivery of this Agreement by the Subordinated Investor, the Company and Barclays in order to set forth the relative rights and priorities of Barclays and the Subordinated Investor under the Senior Obligation Documents and the Subordinated Obligation Documents (as hereinafter defined).

NOW, THEREFORE, in order to induce Barclays to consummate the transactions contemplated by the Ninth Amendment, and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties hereto hereby agree as follows:

1. Definitions. Capitalized terms used herein and not otherwise herein defined are used as defined in the Affinity Agreement. The following terms shall have the following meanings in this Agreement:

Bankruptcy Code” means Chapter 11 of Title 11 of the United States Code, as amended from time to time and any successor statute and all rules and regulations promulgated thereunder,

Default” means either (i) the Company has failed to satisfy one or more of the Conditions Precedent in the Affinity Agreement or (ii) a Suspension Event has occurred.

Distribution” means, with respect to any Investment or other obligations under the Subordinated Obligation Documents (if any), (a) any payment or distribution by the Company of cash, securities or other property, by set-off or otherwise, on account of such Investment or obligation or (b) any redemption, purchase or other acquisition of such Investment or obligation by the Company.


Enforcement Action” means (a) to take from or for the account of the Company, by set-off or in any other manner, the whole or any part of any moneys which may now or hereafter be owing by the Company with respect to the Subordinated Obligations, (b) to sue for payment of, or to initiate or participate with others in any suit, action or proceeding against the Company to (i) enforce payment of or to collect the whole or any part of the Subordinated Obligations or (ii) commence judicial enforcement of any of the rights and remedies under the Subordinated Obligation Documents or applicable law with respect to the Subordinated Obligations, or (c) to accelerate the Subordinated Obligations.

Initial Investment” means any investment in the Company held by the Subordinated Investor at the time of the Transaction Closing, whether in the form of equity, or securities of any nature or loans or otherwise.

Investment” means the Initial Investment and the Subsequent Investments.

Paid in Full” and “Payment in Full” means, with respect to the Senior Obligations, that: (a) all of the Senior Obligations have been paid in full as provided under the Affinity Agreement and (b) all commitments and all other obligations of Barclays to fund the Facility under any Senior Obligations Document have expired or been terminated, and neither the Company nor any other Person shall have any right to cause the purchase of Pre-Purchased Miles under any Senior Obligations Document.

Person” means any natural person, corporation, general or limited partnership, limited liability company, firm, trust, association, government, governmental agency or other entity, whether acting in an individual, fiduciary or other capacity.

Proceeding” means any voluntary or involuntary insolvency, bankruptcy, receivership, custodianship, liquidation, dissolution, reorganization, assignment for the benefit of creditors, appointment of a custodian, receiver, trustee or other officer with similar powers or any other proceeding for the liquidation, dissolution or other winding up of a Person.

Senior Obligations” means all obligations of the Company to make payments to Barclays from time to time with respect to the principal, interest or other payment obligations under the Facility under the Senior Obligation Documents, including, without limitation, obligations to reduce the Facility in accordance with the Affinity Agreement, whether before or after the filing of a Proceeding under the Bankruptcy Code together with any amendments, modifications, renewals or extensions thereof to the extent not prohibited by the terms of this Agreement. Senior Obligations shall be considered to be outstanding whenever Barclays has any commitment under the Affinity Agreement to fund the Facility.

Senior Obligation Documents” means the Affinity Agreement and all other agreements, documents and instruments executed from time to time in connection therewith, as the same may be amended, supplemented or otherwise modified from time to time.

 

2


Subordinated Obligations” means all Investments and other obligations, liabilities and indebtedness of every nature of the Company from time to time owed to the Subordinated Investor or any of its Affiliates in respect of any Investment

Subordinated Obligation Documents” means any and all documents, agreements and instruments now existing or hereinafter entered into evidencing or pertaining to all or any portion of any the Subordinated Obligations.

Subsequent Investment” means any additional investment, other than the Initial Investment, in the Company made following the Transaction Closing by the Subordinated Investor or any Affiliate thereof, whether in the form of capital contributions, purchases of additional securities of any nature, loans or otherwise.

 

  2. Subordination.

2.1 Subordination of the Subordinated Obligations to Senior Obligations. The Company covenants and agrees, and the Subordinated Investor likewise covenants and agrees, notwithstanding anything to the contrary contained in any of the Subordinated Obligation Documents, that the payment of any and all of the Subordinated Obligations shall be subordinate and subject in right and time of payment, to the extent and in the manner hereinafter set forth, to the prior Payment in Full of all Senior Obligations.

2.2 Liquidation, Dissolution, Bankruptcy.

In the event of any Proceeding involving the Company, unless and until such Proceeding is dismissed or otherwise terminated:

(a) All Senior Obligations shall first be indefeasibly Paid in Full in accordance with the terms of the Affinity Agreement and all commitments to fund the Facility under the Senior Obligation Documents shall be terminated before any Distribution, whether in cash, securities or other property, and shall be made to the Subordinated Investor on account of any Subordinated Obligations.

(b) Any Distribution, whether in cash, securities or other property which would otherwise, but for the terms hereof, be payable or deliverable in respect of the Subordinated Obligations shall be paid or delivered directly to Barclays (to be held and/or applied by Barclays in accordance with the terms of the Senior Obligation Documents) until all Senior Obligations are Paid in Full in accordance with the terms of the Affinity Agreement and all commitments to fund the Facility under the Senior Obligation Documents shall have been terminated. The Subordinated Investor irrevocably authorizes, empowers and directs any debtor, debtor in possession, receiver, trustee, liquidator, custodian, conservator or other Person having authority, to pay or otherwise deliver all such Distributions to Barclays. The Subordinated Investor also irrevocably authorizes and empowers Barclays, in the name of the Subordinated Investor, to demand, sue for, collect and receive any and all such Distributions.

 

3


(c) The Subordinated Investor agrees not to initiate, prosecute or participate in any claim, action or other proceeding challenging the enforceability, validity, perfection or priority of the Senior Obligations.

(d) Solely with respect to that portion of an Investment structured as a debt investment (a “Debt Investment”), the Subordinated Investor hereby authorizes, empowers and appoints Barclays its agent and attorney-in-fact to (i) execute, verify, deliver and file such proofs of claim with respect to such Debt Investment and (ii) vote such Debt investment claim in any such Proceeding so long as such Debt Investment remains a debt investment; provided Barclays shall have no obligation to execute, verify, deliver and/or file any such proof of claim or to vote any such claim. In the event that Barclays votes any debt investment claim in accordance with the authority granted hereby, the Subordinated Investor shall not be entitled to change or withdraw such vote. Notwithstanding the foregoing, in the event that Barclays has not filed a proof of claim with respect to a Debt Investment prior to the date that is ***** prior to the bar date, Subordinated Investor may file such proof of claim; provided, that the foregoing shall not affect Barclays’ right to vote such Debt Investment claim as provided in clause (ii) of this subsection.

(e) The Senior Obligations shall continue to be treated as Senior Obligations and the provisions of this Agreement shall continue to govern the relative rights and priorities of Barclays and the Subordinated Investor even if all or part of the Senior Obligations are subordinated, set aside, avoided, invalidated or disallowed in connection with any such Proceeding, and this Agreement shall be reinstated if at any time any payment of any of the Senior Obligations is rescinded or must otherwise be returned by any holder of Senior Obligations or any representative of such holder.

2.3 Subordinated Obligations Payment Restrictions.

(a) Notwithstanding the terms of the Subordinated Obligation Documents, the Company hereby agrees that it may not make, and the Subordinated Investor hereby agrees that it will not accept, any Distribution with respect to the Subordinated Obligations until the Senior Obligations are Paid in Full, except as set forth in Section 2.3(b) below.

(b) Notwithstanding anything in this Agreement to the contrary, the Company shall be permitted to make, and the Subordinated Investor shall be permitted to accept, Distributions; provided, that (i) no Default has occurred and is continuing and (ii) no Default would occur upon such Distribution.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

4


2.4 Subordinated Obligations Standstill Provisions. Until the Senior Obligations are indefeasibly Paid in Full in accordance with the terms of the Affinity Agreement and all commitments to fund the Facility under the Senior Obligation Documents shall be terminated, the Subordinated Investor shall not, without the prior written consent of Barclays, take any Enforcement Action with respect to the Subordinated Obligations. Any Distributions or other proceeds of any Enforcement Action obtained by the Subordinated Investor in violation of the foregoing shall in any event be held in trust by it for the benefit of Barclays and promptly paid or delivered to Barclays in the form received until all Senior Obligations are Paid in Full in accordance with the terms of the Affinity Agreement and all commitments to fund the Facility under the Senior Obligation Documents shall have been terminated.

2.5 Incorrect Payments. If any Distribution on account of the Subordinated Obligations not permitted to be made by the Company or accepted by the Subordinated Investor under this Agreement is made and received by the Subordinated Investor, such Distribution shall not be commingled with any of the assets of the Subordinated Investor, shall be held in trust by the Subordinated Investor for Barclays and shall be promptly paid over to Barclays for application (in accordance with the Senior Obligation Documents) to the payment of the Senior Obligations then remaining unpaid, until all of the Senior Obligations are Paid in Full.

2.6 Sale, Transfer or other Disposition of the Subordinated Obligations The Subordinated Investor shall not sell, assign, pledge, dispose of or otherwise transfer all or any portion of the Subordinated Obligations or any Subordinated Obligation Document unless, prior to the consummation of any such action, the transferee thereof shall execute and deliver to Barclays a joinder to this Agreement. Notwithstanding the failure of any such transferee to execute or deliver a joinder to this Agreement or to execute or deliver an agreement substantially identical to this Agreement, the subordination effected hereby shall survive any sale, assignment, pledge, disposition or other transfer of all or any portion of the Subordinated Obligations, and the terms of this Agreement shall be automatically binding upon the successors and assigns of the Subordinated Investor.

2.7 Legends. Until the termination of this Agreement in accordance with Section 14 hereof, the Subordinated Investor will cause to be clearly, conspicuously and prominently inserted on the face of the Subordinated Obligation Documents a legend that refers to this Agreement.

2.8 Obligations Hereunder Not Affected. All rights and interest of Barclays hereunder, and all agreements and obligations of the Subordinated Investor and the Company hereunder, shall remain in full force and effect, irrespective of:

(a) any lack of validity or enforceability of any document evidencing Senior Obligations;

(b) any change in the time, manner or place of payment of, the amount of, or any other term of, all or any of the Senior Obligations, or any other amendment or waiver of or any release or consent to departure from any of the Senior Obligation Documents;

 

5


(c) any failure of Barclays to assert any claim or to enforce any right or remedy against any other party hereto under the provisions of this Agreement or any other Senior Obligation Document other than this Agreement;

(d) any reduction, limitation, impairment or termination of the Senior Obligations for any reason (other than the defense of payment in full of the Senior Obligations), including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to (and the Company and the Subordinated Investor hereby waive any right to or claim of) any defense (other than the defense of payment in full of the Senior Obligations) or setoff, counterclaim, recoupment or termination whatsoever by reason of invalidity, illegality, nongenuineness, irregularity, compromise, unenforceability of, or any other event or occurrence affecting, any Senior Obligations; and

(e) any other circumstance which might otherwise constitute a defense (other than the defense of payment in full of the Senior Obligations) available to, or a discharge of, the Company in respect of the Senior Obligations or the Subordinated Investor in respect of this Agreement.

The Subordinated Investor acknowledges and agrees that Barclays may, solely to the extent permitted by the terms of the Affinity Agreement, without notice or demand to the Subordinated Investor and without affecting or impairing the Subordinated Investor’s obligations hereunder from time to time (i) renew, compromise, extend, increase, accelerate or otherwise change the time for payment of or otherwise change the terms of the Senior Obligations or any part thereof; including, without limitation, to increase or decrease the rate of interest thereon or the amount of Pre-Purchased Miles constituting the Facility thereof; (ii) take or hold security for the payment of the Senior Obligations and exchange, enforce, foreclose upon, waive and release any such security; (iii) apply such security and direct the order or manner of sale thereof as Barclays in its sole discretion, may determine; and (iv) exercise or refrain from exercising any rights against the Company or any other Person.

3. Modifications to the Senior Obligation Documents; Intent. Barclays may at any time and from time to time without the consent of or notice to the Subordinated Investor, without incurring liability to the Subordinated Investor and without impairing or releasing the obligations of the Subordinated Investor under this Agreement, change the manner or place of payment or extend the time of payment of or renew or alter any of the terms of the Senior Obligations, or amend in any manner any agreement, note, guaranty or other instrument evidencing or securing or otherwise relating to the Senior Obligations. It is the intent of the parties that the terms of this Agreement shall apply to any Investment made by the Subordinated Investor or any of its subsidiaries or Affiliates, and in the event an Investment is made by any subsidiary or Affiliate that is not a party hereto, the Subordinated Investor covenants and agrees to cause such Person to execute a joinder to this Agreement or to execute or deliver an agreement substantially identical to this Agreement prior to the consummation of such Investment; and, provided further, the Company covenants and agrees that it shall not accept such Investment unless such Person has executed a joinder to this Agreement or executed and delivered an agreement substantially identical to this Agreement.

 

6


4. Subrogation. Subject to the Payment in Full of all Senior Obligations in accordance with the terms of the Affinity Agreement, to the extent that Barclays has received any Distribution on Senior Obligations which, but for this Agreement would have been applied to Subordinated Obligations, the Subordinated Investor shall be subrogated to the rights of Barclays to receive Distributions with respect to the Senior Obligations until the Subordinated Obligations are paid in full (as if the Senior Obligations had not been Paid in Full in accordance with for terms of the Affinity Agreement). The Subordinated Investor agrees that in the event that all or any part of a payment made with respect to the Senior Obligations is recovered from the holders of for Senior Obligations in a Proceeding or otherwise, any Distribution received by the Subordinated Investor with respect to the Subordinated Obligations at any time after the date of the payment that is so recovered, whether pursuant to the right of subrogation provided for in this Agreement or otherwise, shall be deemed to have been received by the Subordinated Investor in trust as property of the holders of the Senior Obligations and the Subordinated Investor shall forthwith deliver the same to Barclays for application to for Senior Obligations until the Senior Obligations are paid in full. A Distribution made pursuant to this Agreement to Barclays which otherwise would have been made to the Subordinated Investor is not, as between, the Company and the Subordinated Investor, a payment by the Company to or on account of the Senior Obligations.

5. Modification. Any modification or waiver of any provision of this Agreement, or any consent to any departure by any party from the terms hereof shall not be effective in any event unless the same is in writing and signed by Barclays, the Company and the Subordinated Investor, and then such modification, waiver or consent shall be effective only in the specific instance and for the specific purpose given. Any notice to or demand on any party hereto in any event not specifically required hereunder shall not entitle the party receiving such notice or demand to any other or further notice or demand in the same, similar or other circumstances unless specifically required hereunder.

6. Further Assurances. Each party to this Agreement promptly will execute and deliver such further instruments and agreements and do such further acts and things as may be reasonably requested in writing by any other party hereto that may be reasonably necessary or desirable in order to effect fully the purposes of this Agreement.

7. Notices. Unless otherwise specifically provided herein, any notice delivered under this Agreement shall be in writing addressed to the respective party as set forth below and may be personally served, telecopied or sent by overnight courier service or certified or registered United States mail and shall be deemed to have been given (a) if delivered in person, when delivered; (b) if delivered by telecopy, on the date of transmission if transmitted on a business day before 4:00 p.m. (New York time) or, if not, on the next succeeding business day; (c) if delivered by overnight courier, one business day after delivery to such courier properly addressed; or (d) if by United States mail, four business days after deposit in the United States mail, postage prepaid and properly addressed.

 

7


Notices shall be addressed as follows;

If to the Subordinated Investor.

Frontier Airlines Holdings, Inc.

[                    ]

Tel: (        )        

Fax: (        )        

If to the Company:

Frontier Airlines, Inc,

7001 Tower Road

Denver, CO 80249

Tel: (        )        

Fax: *****

Attn: *****

with a copy to:

General Counsel

Fax: *****

If to Barclays:

Barclays Bank Delaware

125 South West Street

Wilmington, Delaware 19801

Attn: Dennis Nealon

Fax: *****

With copies to:

Barclays Bank Delaware

125 South West Street

Wilmington, Delaware 19801

Attn: General Counsel

Fax: *****

or in any case, to such other address as the party addressed shall have previously designated by written notice to the serving party, given in accordance with this Section 7.

8. Successors and Assigns. This Agreement shall inure to the benefit of, and shall be binding upon, the respective successors and assigns of Barclays, the Subordinated Investor and the Company.

9. Relative Rights. This Agreement shall define the relative rights of Barclays and the Subordinated Investor. Nothing in this Agreement shall (a) impair, as between the Company and Barclays and as between the Company and the Subordinated Investor, the obligation of the Company with respect to the payment of the Senior Obligations and the Subordinated Obligations in accordance with their respective terms or (b) affect the relative rights of Barclays or the Subordinated Investor with respect to any other creditors of the Company.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

8


10. Conflict. In the event of any conflict between any term, covenant or condition of this Agreement and any term, covenant or condition of any of the Subordinated Obligation Documents, the provisions of this Agreement shall control and govern and nothing herein shall constitute or otherwise be deemed to represent an amendment, waiver or other modification to the Affinity Agreement

11. Headings; Terms. The paragraph headings used in this Agreement are for convenience only and shall not affect the interpretation of any of the provisions hereof.

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

13. Severability. In the event that any provision of this Agreement is deemed to be invalid, illegal or unenforceable by reason of file operation of any law or by reason of the interpretation placed thereon by any court or governmental authority, the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby, and the affected provision shall be modified to the minimum extent permitted by law so as most fully to achieve the intention of this Agreement

14. Continuation of Subordination; Termination of Agreement. This Agreement shall remain in full force and effect until the Payment in Full of the Senior Obligations, after which this Agreement shall terminate without further action on the part of the parties hereto.

15. Applicable Law. This Agreement shall be governed by and shall be construed and enforced in accordance with the internal laws of the State of Delaware, without regard to conflicts of law principles.

16. CONSENT TO JURISDICTION. EACH OF THE PARTIES HERETO HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE COURT LOCATED IN THE STATE OF DELAWARE AND ANY FEDERAL COURT SITTING IN DELAWARE AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. EACH OF THE PARTIES HERETO EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID. EACH OF THE PARTIES HERETO HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO THE PARTIES HERETO AT THEIR RESPECTIVE ADDRESSES SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE ***** AFTER THE SAME HAS BEEN POSTED.

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

9


17. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE SUBORDINATED DEBT DOCUMENTS OR ANY OF THE SENIOR DEBT DOCUMENTS. EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THE SENIOR DEBT DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH OF THE PARTIES HERETO WARRANTS AND REPRESENTS THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

 

- 10 -


IN WITNESS WHEREOF, the Subordinated Investor, the Company, and Barclays have caused this Agreement to be executed as of the date first above written,

 

SUBORDINATED INVESTOR:
FRONTIER AIRLINES HOLDINGS, INC.
By:  

 

Title:  

 

COMPANY
FRONTIER AIRLINES, INC.
By:  

 

Title:  

 

BARCLAYS:
BARCLAYS BANK DELAWARE
By:  

 

Title:  

 


Exhibit B to Ninth Amendment

See Attached Schedule 3 to the Frontier Agreement

*****

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.


Exhibit C to Ninth Amendment

Schedule 2 to the Frontier Agreement.

Frontier – Enplanements Forecast

*****

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 


Frontier – Early Returns Membership Forecast

*****

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 


Exhibit D to Ninth Amendment

See Attached Exhibit F


Exhibit F

Frontier shall, absent the agreement of the Parties to the contrary, undertake throughout the term of the Agreement the following marketing efforts:

 

1. *****

 

2. *****

 

3. *****

 

4. *****

 

5. *****

 

6. *****

 

7. *****

On or before April 30, 2011, Frontier shall undertake the following marketing efforts:

 

1. *****

 

2. *****

 

3. *****

 

4. *****

 

5. *****

On or before *****, Frontier, at its cost, shall undertake the following marketing efforts:

 

    *****

 

    *****

 

    *****

 

    *****

 

    *****

 

    *****

 

    *****

On or before *****, Frontier, at its cost, will implement the below cardholder exclusives. The new benefits will remain relative in value to competitive benefits in the ultra- low cost carrier market:

 

    *****

 

    *****

 

    ***** = ***** Redemption Fee

 

    ***** = An at least ***** discount to the standard ***** fee

 

    ***** = An at least ***** discount to the standard ***** fee

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

 

EX-10.18(B)

Exhibit 10.18(b)

GE Aircraft Engines

One Neumann Way

Cincinnati, OH 45215-1988

USA

LETTER AGREEMENT NO. 1

Frontier Airlines, Inc.

12015 East 46th Avenue

Suite 200

Denver, CO 80239-3116

Gentlemen:

CFM International, Inc. (“CFMI”) and Frontier Airlines, Inc. (“Airline”) have entered into General Terms Agreement No. 6-13616 dated June 30, 2000 (the “Agreement”). The Agreement contains applicable terms and conditions governing the sale by CFMI and the purchase by Airline from CFMI of CFM56 series Engines, Modules and Optional Equipment in support of Airline’s acquisition of new aircraft.

In consideration of Airline’s agreement to purchase and take delivery of ***** new firm and up to, ***** option CFM56-5B5/P powered A319 aircraft (“Aircraft”) directly from Airbus Industrie (“AI”) in accordance with the Airbus A3 18/A319 Purchase Agreement dated as of March 10, 2000 between Airline and AVSA, S.A.R.L. (the “Airbus Purchase Agreement”), as memorialized in Attachment A hereto, the parties agree as follows:

 

I. Prices

Base prices for new CFM56-5B5/P spare Engines, Modules and Optional Equipment delivered through *****, are set forth in Attachment B hereto. The escalation formula set forth in Exhibit C of the Agreement remains in effect through *****.

 

II. Special Allowances

CFMI agrees to provide to Airline the following special allowances. These allowances are contingent upon Airline selecting CFM56-5B5/P Engines to power all of its purchased A319 Aircraft, it being understood that Airline has the right not to exercise its options for the option A319 Aircraft, and up to ***** leased A319 aircraft, regardless of the lessors and are subject to the conditions set forth in Attachment C hereto.

 

  A. Per Aircraft Allowance

***** per each of the first ***** CFM56-5B5/P] powered purchased A319 Aircraft purchased by and delivered to Airline *****, and for each additional CFM56-5B5/P powered purchased Aircraft purchased by and delivered to Airline by *****, payable in each case by wire transfer within ***** following receipt of written notice from Airline that it has taken delivery of an A319 Aircraft in accordance with the Airbus Purchase Agreement.

 

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

1


* Subject to adjustment for escalation to the date of delivery of the shipset of Engines to AI pursuant to the escalation provisions applicable to base prices, as set forth in Exhibit C of the Agreement.

 

B. ***** Spare Engine Allowance

In consideration of Airline’s agreement to purchase and take delivery of a minimum of ***** CFM56 powered A319 Aircraft during the Delivery Period (as defined in Attachment A hereto), CFMI agrees to provide ***** to Airline a new CFM56-5B5/P or CFM56-3C-1 spare engine at Airline’s option (*****). CFMI shall deliver ***** to Airline, together with a full warranty bill of sale with respect thereto, upon delivery of Airline’s first leased or purchased A319 Aircraft; provided that Airline shall first enter into a security agreement with CFMI or CFMI’s designee in the form attached hereto as Attachment D.

Upon the delivery of the ***** CFM56 powered purchased A319 Aircraft during the Delivery Period, CFMI’s security interest in ***** shall be released and the security agreement referred to in the preceding paragraph shall terminate.

In the event Airline fails to take delivery of a minimum of ***** purchased A319 Aircraft during the Delivery Period, Airline shall immediately pay to CFMI the base price of ***** in effect at the time of delivery thereof to Airline. However, in the event Airline shall have purchased and taken delivery of at least ***** A319 Aircraft during the Delivery Period, CFMI will credit Airline an amount equal to ***** of such base price for each Aircraft so purchased and delivered.

For the avoidance of doubt, ***** for all purposes of the Agreement, including, without limitation, Exhibit B thereof.

 

C. Second Spare Engine Credit

Airline has the option to purchase a second new CFM56-5B5/P spare Engine (“2nd Spare Engine”) directly from CFMI at the Base Price specified in Attachment B hereto, plus escalation to the date the 2nd Spare Engine is purchased by and delivered to Airline. Airline shall earn a cash credit from CFMI equivalent to ***** of the price paid by Airline for the 2nd Spare Engine (“2nd Spare Engine Credit”) for each of the ***** purchased A319 Aircraft delivered (the “Credit Aircraft”). If Airline has purchased and taken delivery of the 2nd Spare Engine prior to delivery of the first Credit Aircraft, the 2nd Spare Engine Credit shall be paid to Airline upon delivery of each Credit Aircraft. If the 2nd Spare Engine is purchased and delivered subsequent to delivery of the first Credit Aircraft, the 2nd Spare Engine Credit for such Aircraft and any other Credit Aircraft which have been so delivered shall be credited against the purchase price of the 2nd Spare Engine; thereafter the 2nd Spare Engine Credit shall be paid upon delivery of each of the remaining Credit Aircraft.

 

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

2


The obligations set forth in this Letter Agreement No. 1 are in addition to the obligations set forth in the Agreement.

The provisions of paragraphs A, B, C, D and E of Article XVIII of the Agreement are incorporated herein by reference.

Please indicate your agreement with the forgoing by signing the original and one (1) copy of this Letter Agreement No. 1 in the space provided below.

 

    Very truly yours,
FRONTIER AIRLINES, INC.     CFM INTERNATIONAL, INC.
By:   /s/ Lars-Erik Arnell     By:   /s/ John C. Mericle
Printed Name:   Lars-Erik Arnell     Printed Name:   John C. Mericle
Title:   Senior Vice President     Title:   Chief Financial Officer
Date:   [undated]     Date:   October 26, 2011

 

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

3


ATTACHMENT A

 

AIRCRAFT DELIVERY SCHEDULE

Aircraft

   Engine Model    Year    Quantity of
Aircraft

*****

   *****    *****    *****

*****

   *****    *****    *****

*****

   *****    *****    *****

*****

   *****    *****    *****

*****

   *****    *****    *****

Airline’s failure to purchase and take delivery of any one or more A319 Aircraft in strict accordance with the foregoing schedule will not affect the rights and obligations of the parties hereunder, so long as such Aircraft are purchased and accepted by Airline within ***** after the last day of the scheduled year of delivery, as such scheduled year may be postponed in accordance with the Airbus Purchase Agreement for any reason other than a request by Airline or a default thereunder by Airline (the “Delivery Period”).

 

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

4


ATTACHMENT B

BASE PRICES FOR SPARE ENGINES

OPTIONAL EQUIPMENT AND MODUf.ES

 

Item

   Base Price
*****
 

1.*****

     *****  

2.*****

  
     *****  
     *****  
     *****  
     *****  

3.*****

  
     *****  

4.*****

  
     *****  
     *****  

 

A. Base prices are effective for firm orders received by CFMI within quoted lead time for basic spare Engines (including associated equipment and maximum climb thrust increase), Optional Equipment and Modules for delivery to Airline by CFMI on or before *****. The base prices are ex works, Evendale, Ohio, or point of manufacture, subject to adjustment for escalation and Airline shall be responsible, upon delivery, for the payment of all taxes, duties, fees or other similar charges.

 

B. The selling price of CFM56-5B basic spare Engines, Optional Equipment and Modules ordered for delivery after the period set forth in Paragraph A above shall be the base price then in effect and as set forth in each purchase order as accepted by CFMI, which base price shall be subject to adjustment for escalation in accordance with CFMI’s then-current escalation provisions.

 

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

5


ATTACHMENT C

 

1. Allowance for Initial Aircraft Sale Only

Any allowance described in this Letter Agreement No. 1 applies only to new A319 aircraft (together or individually the “Aircraft”) equipped with new CFM56-5B5/P engines (together or individually the “Engines”) purchased by Airline directly from the aircraft manufacturer.

 

2. Allowance Not Paid

Allowances described in this Letter Agreement No. 1 will not be earned or paid with respect to Engines which have been delivered to the aircraft manufacturer for installation in Airline’s Aircraft if, thereafter, for any reason, Airline’s purchase order with the aircraft manufacturer is terminated, canceled or revoked, or if delivery of the Aircraft will be prevented or delayed beyond the expiration of the Delivery Period.

 

3. Adjustment of Allowances

The special allowance described in paragraph II.A of this Letter Agreement No. 1 is contingent upon Airline purchasing and accepting delivery of a minimum of ***** CFM56-5B5/P powered A319 aircraft (“Minimum Number of Aircraft”) for delivery during the Delivery Period. If Airline has canceled or otherwise failed to accept delivery of one or more of the required Minimum Number of Aircraft within the Delivery Period, the allowances will be adjusted as follows:

 

Number of Aircraft delivered to Airline

  

Percentage of specified allowances on Aircraft
actually delivered to Airline

*****

   *****

*****

   *****

*****

   *****

*****

   *****

Adjustment of allowances in accordance with the above formula may be made by CFMI prospectively to take into account Aircraft delays and/or cancellations. In any case, Airline agrees to promptly reimburse CFMI for any allowance overpayments determined to have been made at the application of the adjustment formula set forth above *****. Unless otherwise agreed by CFMI, no allowance shall be paid on Aircraft not accepted within the Delivery Period and such Aircraft shall not be counted for purposes of the adjustment formula set forth above.

 

4. Assignability of Allowance

Any allowance described herein is exclusively for the benefit of Airline and is not assignable without CFMI’s written consent; provided that Airline may assign such allowance, together with its other rights under this Letter Agreement No. 1 on the terms described in clause (i) of paragraph A of Article XVIII of the Agreement.

 

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

6


5. Set Off for Outstanding Balance

CFMI shall be entitled, at all times, to set off any outstanding obligation and amounts that are due and owing from Airline to CFMI for CFMI Aircraft Engines goods or services (whether or not in connection with this Letter Agreement No. 1 or the Agreement), against any amount payable by CFMI to Airline in connection with this Letter Agreement No. 1 or the Agreement.

 

6. Cancellation of Spare Engines

Airline recognizes that harm or damage will be sustained by CFMI if Airline places a purchase order for spare Engine(s) or for Aircraft (the ***** firm Aircraft) equipped with installed Engines and subsequently cancels such purchase order and such cancellation is not caused by acts (or failure to act) of Airbus or CFMI or otherwise fails to accept delivery of the Engines or Aircraft when duly tendered. Within ***** of any such cancellation or failure to accept delivery occurs, Airline shall remit to CFMI, as liquidated damages, a cancellation charge equal to ***** of the Engine price, determined as of the date of scheduled Engine delivery to Airline or to the aircraft manufacturer, whichever is applicable.

The parties acknowledge such cancellation charge to be a reasonable estimate of the harm or damage to CFMI in such circumstances.

CFMI shall apply any progress payments or other deposits made to CFMI for any such Engine first to the cancellation charge for such Engine and thereafter to any other amounts owed to CFMI hereunder. Progress payments held by CFMI in respect of any such Engine which are in excess of such amounts will be refunded to Airline.

If CFMI fails to deliver a spare Engine in accordance with the terms of the Agreement or this Letter Agreement No. 1 within ***** after the date upon which such spare Engine was scheduled to be delivered for any reason other than an Excusable Delay or a default or breach by Airline, Airline may terminate this Letter Agreement No. 1 with respect to such spare Engine and CFMI shall promptly return any progress payments or other deposits made with respect to such Engine, together with interest thereon from the date such deposits were made at six month Libor. In addition, Airline will retain all remedies available to it at law or in equity.

 

7. Delay of Spare Engines

In the event the Airline delays the scheduled delivery date of a spare Engine, or causes the delay of the scheduled delivery date of an installed Engine, for which CFMI has received a purchase order from the aircraft manufacturer or Airline, as appropriate, through no fault of CFMI or the aircraft manufacturer, for a period, or cumulative period, of more than *****, such delay shall be considered a cancellation and the applicable provisions hereof regarding the effect of cancellation shall apply.

 

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

7


8. Option Aircraft Substitution Rights

CFMI acknowledges that Airline has the right, pursuant to the Airbus Purchase Agreement, to convert A319 option Aircraft into firm A318 aircraft which are not powered by CFM56 engines, and to convert option A318 aircraft into firm CFM56 powered A319 aircraft (the “Conversion Right”). Such right is exercisable upon notice by Airline to the airframe manufacturer not later than ***** before the start of the calendar quarter in which the aircraft to be converted is scheduled to be delivered. In the event that Airline elects to exercise its Conversion Right with respect to any A319 Aircraft or any A318 Aircraft, it will deliver a copy of the foregoing notice to CFMI, and CFMI agrees that, promptly following its receipt thereof, it will provide its written consent to such exercise to the airframe manufacturer. CFMI will use its best reasonable efforts, consistent with its other obligations and its production capabilities, to ensure that the delivery date for the engines for any new firm CFM56 powered A319 aircraft resulting from the exercise of the Conversion Right will be the same as the scheduled delivery date for the engines for the A318 aircraft from which it was converted, and further agrees that any such new A319 aircraft will be an “Aircraft” for all purposes of this Letter Agreement No. 1.

 

9. Aircraft Not Operated for Minimum Period

If, within the first ***** following delivery of each Aircraft for which a special allowance, of any nature, was provided by CFMI under this Letter Agreement No. 1 (the “Minimum Period”), such aircraft is no longer owned by (i) Airline or a wholly owned subsidiary of Airline, (ii) a trust or other special purpose entity established in connection with the financing of such Aircraft for Airline, or (iii) an entity to which Airline is permitted to assign its rights pursuant to clause (i)(b) of Paragraph A of Article XVIII of the Agreement, the special allowances earned and/or paid on such Aircraft will be proportionately reduced. Airline will reimburse CFMI an amount equal to the proportionate share of the special allowances earned and/or paid with respect to such Aircraft (based on the percentage of the Minimum Period the Aircraft was actually owned by Airline), with interest on such amount. The allowance reimbursement is due no later than ***** from the time Airline ceases to own and operate such Aircraft. *****.

 

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

8

EX-10.20(A)

Exhibit 10.20(a)

[LOGO] Lufthansa Technik

 

  

Frontier

 

 

Agreement

on

Technical Services for A320 Family Aircraft

 

between   

Frontier Airlines, Inc.

 

7001 Tower Road

Denver, CO 80249

USA

 

(hereinafter referred to as “Frontier”)

and    LUFTHANSA TECHNIK AG
  

Weg beim Jäger 193

22335 Hamburg

Germany

(hereinafter referred to as “LHT” or “Lufthansa Technik”)

 

- 1 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

Contents

BASIC AGREEMENT

Preamble

 

1.    SCOPE OF AGREEMENT      5  
2.    DEFINITIONS AND ABBREVIATIONS      6  
3.    COOPERATION BETWEEN THE PARTIES AND RESPONSIBILITIES TOWARDS THE AIRWORTHINESS AUTHORITIES/ THIRD PARTIES / MANAGE/ M™      11  
4.    SUBCONTRACTING      13  
5.    TURNAROUND TIME, PERFORMANCE DATE      14  
6.    PRICES AND PRICE ADJUSTMENT      15  
7.    PAYMENT TERMS      17  
8.    SECURITY FOR PAYMENT      20  
9.    QUALITY AND WARRANTY      21  
10.    DELIVERY AND REDELIVERY      23  
11.    LIABILITY AND INDEMNIFICATION—INSURANCE      24  
12.    TERM AND TERMINATION      26  
13.    CONFIDENTIALITY, NO TRANSFER OF INTELLECTUAL PROPERTY RIGHTS      27  
14.    NOTICES AND COMMUNICATION      29  
15.    LAW AND JURISDICTION      30  
16.    MISCELLANEOUS      32  

 

- 2 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

BASIC AGREEMENT

 

- 3 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

This Agreement is made and entered into as of this 5 Day of November 2014, between Frontier Airlines, Inc. a company incorporated under the laws of Colorado having its principal offices at 7001 Tower Road, Denver, Colorado, USA (hereinafter referred to as “Frontier” and Lufthansa Technik AG, a company incorporated under the Laws of the Federal Republic of Germany, having its registered offices at Weg beim Jäger 193, 22335 Hamburg, Germany (hereinafter referred to as “LHT” or “Lufthansa Technik”)

Preamble

WHEREAS LHT is a corporation in the business of providing all aircraft-related technical services, such as, but not limited to, the Maintenance of aircraft, Engines and Components, and is duly authorized and certified in accordance with the EASA Part-145, FAA Part-145 and EASA Part-21 requirements and/or aviation requirements of certain other authorities; and

WHEREAS Frontier wishes to have certain aircraft-related Services performed by LHT in accordance with such standards and experience; and

WHEREAS LHT wishes to perform such Services for Frontier in accordance with LHT’s quality standards and experience.

NOW THEREFORE for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged and in connection with mutual promises and covenants set forth hereunder, Frontier and LHT agree upon the following:

 

- 4 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

1. SCOPE OF AGREEMENT

The Basic Agreement sets forth the general terms of the contractual relationship between LHT and Frontier and the provisions contained herein shall apply to any Attachments, Annexes or any other documents referencing or amending this Agreement.

The Services to be provided by LHT are defined and specified in the respective Attachments. They shall be performed under applicable aviation Authority approvals or the applicable aviation Authority approvals of LHT’s Subcontractors and in accordance with the respective Maintenance Data.

Capitalized terms used in this Basic Agreement shall have the meaning ascribed to them in Article 2 and – to the extent used in one of the Attachments – shall have an identical meaning throughout the entire Agreement, unless otherwise defined with reference to the deviation in the respective Attachment.

 

- 5 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

2. DEFINITIONS AND ABBREVIATIONS

The following terms, expressions and abbreviations shall have the following meanings:

 

Agreement    Basic Agreement, Attachments and General Annexes.
Airworthiness    An aircraft or Component is airworthy if it conforms to the applicable approved type, i.e. if it complies with the valid type certificate data sheet and if the Maintenance was carried out in accordance with the applicable Maintenance requirements and if the aircraft or Component was released to service.
AAR    Any mandatory aviation authority requirement, including, but not limited to FAA Airworthiness Directives, EASA Airworthiness Directives, LBA “Lufttuechtigkeitsanweisungen” and DGAC “Consignes de Navigabilités”.
AOG    Aircraft on Ground.
APU    Auxiliary Power Unit.
APU Operating Hour    Each full or partial hour that the APU is in operation.
ATA 300    Air Transport Association specification 300.
Attachments    All specific attachments with corresponding annexes, side letters and any other mutually agreed documents referencing this Agreement and that are a part of this Agreement.
Attachment Assumptions    Has the meaning set forth in Article 6.3.1.
Authority    Either the approving authority of the aircraft operator or the approving authority of the Maintenance organization, production organization, design organization and/or the continuing airworthiness management organization.
Base Maintenance    All scheduled Maintenance activities in accordance with the operator’s approved Maintenance Program. For non-routine Maintenance activities, criteria according to AMC 145.A-10 shall apply.
Basic Agreement    This document has the meaning set forth in Article 1.
Beneficiary    Has the meaning set forth in Article 13.3.
BER    Beyond Economic Repair
Business Day    Any Day on which banks are open in Hamburg, Germany and Denver, Colorado USA.
CLP    Officially Published Catalog List Price.
Components    Devices, modules or individual parts of an aircraft, including Engine or flight equipment or emergency equipment. They are always identified by a part number in the Maintenance or operational documents issued by the respective aircraft or Component design organization.

 

- 6 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

Confidential Information    Has the meaning set forth in Article 13.1.
Consumables    Semi-finished products such as metal or plastic sheets or profiles, etc., fluids such as cleaning agents, pickling agents, primers, paints, etc. for surface treatment, adhesives, additional material for welding or plasma jet welding or other material or additives such as lubricants or fuels that are used for Maintenance or operation of aircraft or Components. They are distinguished from Components or Standard Parts in that they can never be used without processing. They are identified by a standard or other specification (or by a part number in exceptional cases) in the Maintenance and operational documents issued for the respective aircraft by the aircraft design organization.
CRS    Certificate of release to service.
CSN    Cycles Since New; means the aggregate number of Flight Cycles of an aircraft or an Engine, as applicable, since its manufacturing date.
Day    Calendar day.
Delivery    The act of Frontier giving LHT possession of an aircraft, Engine or a Component to be serviced.
DGAC    The French Direction Générale de l’Aviation Civile.
DOD    Domestic Object Damage; damage of Material caused by objects which are part of the damaged aircraft or Engine.
EASA    European Aviation Safety Agency also being the approving authority of the LHT design organisation and for each European STC (if applicable and/or required).
Engine    A basic engine assembly and its accessories.
Engine Flight Hour    Each full or partial hour that the Engine is in operation.
Excluded Taxes    (a) Taxes based on income, capital gains, net worth or property payable by LHT to any tax authority in Germany; or
   (b) Taxes for which LHT becomes liable by reason of its willful misconduct or gross negligence.
Expendable    An item for which no authorized repair procedure exists and for which standard cost of repair exceeds cost of replacement, including Standard Parts. Expendable inventory is controlled by quantity and is scrapped after removal.
Fixed Price (F/P)    A predetermined price for a single service or event according to Article 7.2.
Flat Rate (F/R)    A continuous lump sum payment for certain Services usually stated in currency per time measurement, e.g. ‘USD per Flight Hour’ according to Article 7.1.
Flight Cycle    One take-off and landing event.

 

- 7 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

Flight Hour    Each hour that the aircraft is airborne.
FOD    Foreign Object Damage, any damage to an aircraft, Engine or other aircraft part that is caused by any external impact, including, but not limited to, objects which are not part of such aircraft, Engine or other aircraft part, and/or lightning.
General Annex    Those documents named General Annexes and attached to this Agreement.
Interchangeability    Means that design, function and characteristics of a certain Component or part are sufficiently alike to be replaceable with each other under applicable Airworthiness laws and regulations.
JPM    Joint Procedures Manual.
Layover Period    Any downtime of an aircraft during which Maintenance of aircraft, aircraft Parts, Engine or Components is performed.
LBA    The German Luftfahrtbundesamt.
Line Maintenance    All routine Maintenance activities in accordance with the operator’s approved Maintenance Program. For non-routine Maintenance activities, criteria according to AMC 145.A-10 shall apply.
LLP    Life Limited Parts
LRU    A Component which can be readily changed on an aircraft during Line Maintenance operations.
Maintenance    One or a combination of the following actions: Overhaul, repair, inspection, testing, replacement, modification or rectification of discrepancies on an aircraft, an Engine or a Component.
Maintenance Data    Approved data for an aircraft or Component which has been issued by the design organization which has developed the aircraft or Component or another approved design organization, such as, but not limited to, LHT as EASA Part 21/J approved design organisation, to define the extent of Maintenance to be performed on an aircraft or a Component.
Maintenance Program    A Maintenance program that has been approved by the authority of the country of aircraft registration.
manage/m™    Has the meaning set forth in Article 3.6.
Material    Components, Consumables, Expendables and Raw Material.
Minimum Flight Hours    A certain number of Flight Hours during a certain period, agreed between the Parties for the purposes of calculating the minimum Flat Rate payment by Frontier.
Modification    The alteration of the aircraft, any Material or other aircraft-related part in conformity with an approved standard.

 

- 8 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

MRO Airbus World   
Data Release Agreement    An agreement in the form as attached to this Agreement signed by Frontier and by which Frontier authorizes Airbus to give LHT access to customized data included in the Airbus On-Line Services.
NAA    The approving Authority of the aircraft operator, including, if applicable, the Federal Aviation Administration (FAA).
OEM    Original equipment manufacturer.
Officially Published   
Catalog List Price    The most current OEM Officially Published Catalog List Price, without any discount or reductions, made public and available to any customer.
Party/Parties    LHT or Frontier / LHT and Frontier collectively.
Planned Flight Hours    The estimated number of Flight Hours during a certain period
Raw Material    Semi-finished products such as metal or plastic sheets or profiles, etc. Raw Materials are distinguished from Components in that they can never be used without processing and are identified by a standard or other specification (or by a part number in exceptional cases) in the Maintenance and operational documents issued for the respective aircraft by the aircraft design organization.
Redelivery    The act of LHT giving Frontier possession of an aircraft, Engine or a Component.
Release to Service    The issuance of a CRS by the Maintenance organization approved by the applicable Authority confirming, unless otherwise specified, that the Maintenance Services listed therein have been carried out in conformity with the applicable requirements (e.g. EASA Part-145 requirements) by appropriate authorized personnel of the Maintenance organization and in accordance with the applicable Maintenance organization exposition, and that the aircraft or Component has been released to service.
SB    Service Bulletin.
Serviceable Condition    The status required for the issuance of a CRS.
Services    The work to be performed by LHT as agreed in the Attachments.
Standard Parts    Individual parts that are identified by a standard rather than by a part number in the Maintenance or operational documents issued by the respective aircraft or aircraft Component design organization or any other approved design organisation, such as but not limited to, LHT as an EASA Part 21/J approved design organisation.

 

- 9 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

Standard OEM Warranty    The warranty that is given by the OEM of the Material concerned to any customer according to its published warranty terms.
STC    Supplemental type certificate.
Subcontractor    Any person, legal or natural (other than employees of LHT and Suppliers) engaged by LHT to support LHT in the performance of its obligations under this Agreement.
Supplier    Any person, legal or natural, supplying Material to a Party, the manufacturing of which is not such Party’s own contractual obligation vis-à-vis the other Party under this Agreement, e.g. off-the-shelf-parts or OEM parts and documentation.
Taxes    Any and all present and future taxes, duties, withholdings, levies, assessments, imposts, fees and other governmental charges of all kinds (including without limitation, any value added or similar tax and any stamp, documentary, registration or similar tax) and any amount treated as such whenever created or imposed and whether of the government of Germany or elsewhere and whether imposed by a local, municipal, governmental, state, federal or other body and, will include, without limitation, all fines, penalties, costs, charges and expenses payable in connection with any failure to pay or delay in paying the same (except and to the extent that any such fines, penalties, costs, charges and expenses arise as a result of acts or omissions or delay of LHT) but not “Excluded Taxes” and references to “Taxes” will be construed accordingly.
TC    Type certificate.
Time and Material    Basis for a pricing of certain Services in accordance with Article 7.3.
TSN    Time Since New; means the aggregate number of Flight Hours of an aircraft or an Engine or APU Operating Hour, as applicable, since its manufacturing date.
Turnaround Time / TAT    The period of time between scheduled Delivery and Redelivery, unless expressly otherwise stated in an Attachment.
Value Added Tax    Sales tax or value added tax on any goods and services, sales or turnover tax, customs duties, imposition or levy of a like nature including, without limitation, value added tax payable under the German VAT Act 1993 as amended or supplemented from time to time.

 

- 10 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

 

3. COOPERATION BETWEEN THE PARTIES AND RESPONSIBILITIES TOWARDS THE AIRWORTHINESS AUTHORITIES/ THIRD PARTIES / MANAGE/ M™

 

3.1 Communication

The Parties agree to establish a communication system and to define meetings and points of contact in order to enable Frontier and LHT to comply with their mutual obligations under the applicable Airworthiness regulations.

 

3.2 Liaison Person

Each Party shall nominate at least one person to secure the necessary liaison between Frontier and LHT.

 

3.3 Responsibility towards the Authorities/ Third Parties

Notwithstanding LHT’s obligations under this Agreement, Frontier shall be solely responsible for Frontier’s compliance with all applicable requirements imposed by any Authority or government agency or instrumentality. LHT shall grant Frontier access to any and all necessary information concerning LHT’s compliance with EASA-requirements or NAA-requirements, as applicable, in order for Frontier to exercise its Airworthiness responsibility.

For the avoidance of doubt this Agreement does not affect the contractual relationship between Frontier and third parties. Frontier shall remain the prime contractor in relation to the aircraft and Components manufacturers or to the lessor, if applicable, of the aircraft and Components.

In particular, LHT shall not have the responsibility towards the Authority or the manufacturer or other Supplier to follow-up manufacturer’s and other Supplier’s SBs or AARs issued by the respective Authority unless otherwise stipulated herein.

 

3.4 JPM

LHT shall issue a JPM containing procedures for the performance of the Services (process description) which are necessary to describe the relationship, responsibilities and points of contact between Frontier and LHT. Samples of forms to be used to inform the other Party shall be issued in the JPM.

 

3.5 Maintenance Data

 

3.5.1 Responsibility of Frontier for supply of Maintenance Data

Frontier shall provide to LHT the required Maintenance Data no later than on the date specified in the Attachments and ensure that the Maintenance Data reflect the current status of the respective aircraft, Engine or Component. Maintenance Data issued by LHT as EASA Part 21/J-approved design organization shall be provided by LHT.

If Frontier does not provide Maintenance Data on time or if such Maintenance Data does not reflect the current status of the respective aircraft, Engine or Component, LHT may, but is not obliged to, take appropriate actions to collect Maintenance Data to be able to start or continue performing the agreed Services.

 

3.5.2 Right to access and use Maintenance Data

Frontier hereby (i) grants to LHT a non-exclusive, royalty-free license (including the right to grant sublicenses to LHT’s Subcontractors) to use all trade secrets and copyrights related to the Maintenance Data for the purposes of performing the Services under this Agreement and (ii) to the extent that Frontier is not entitled to grant such license, guarantees to LHT that LHT and LHT’s Subcontractors are entitled to use all trade secrets and copyrights related to such Maintenance Data for the purposes of performing the Services under this Agreement.

 

- 11 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

Frontier shall ensure that LHT can access Maintenance Data electronically. To the extent LHT and the respective OEM have an agreement regarding LHT’s access and use of such data, Frontier shall comply with any reasonable requirements of LHT and the OEM to secure access to such data. Frontier shall in particular execute upon LHT’s request all necessary agreements (e.g. the MRO Airbus World Data Release Agreement, if applicable).

This Article 3.5.2 shall not apply to Maintenance Data issued by LHT as EASA Part 21/J-approved design organization.

 

3.5.3 Cost for provisioning and access to Maintenance Data

Any cost, expenses, royalties or other charges, incurred by LHT or LHT’s Subcontractors in connection with the provisioning, access and use of any Maintenance Data shall be borne by Frontier.

 

3.6 manage/m™

To the extent stated in the Attachments, LHT provides a web-based Technical Operation Websuite (“manage/m™”) for certain Services. manage/m™ enables Frontier to establish and manage its core operation functions relating to those Services on a web-based system and supports Frontier in the fulfilment of its obligations towards the Authorities as an aircraft operator. *****.

 

3.7 Reporting of failures, malfunctions or defects attributable to LHT originated design

If in the course of operation a failure, malfunction or defect or other occurrence which causes or might cause adverse effects on the continuing airworthiness of the product, part or appliance and if such are attributable to the LHT originated design change arises, Frontier shall notify the LHT Office of Airworthiness HAM TT/L without delay under Fax-No. + 49 40 5070 4855 or E-mail: hamtolmus@lht.dlh.de or mobile no. + 49 172 4044 238.

Such notification shall include all relevant details, e.g. operating conditions, flight hour and cycle information of the affected product and other data allowing LHT to investigate such failure, malfunction or defect to the LHT attributable design change and establish corrective action, if necessary.

LHT shall inform Frontier and all involved authorities on any known unsafe condition resulting from a LHT design, as required in EASA Part 21A.3 and FAA Part 121.

 

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

- 12 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

4. SUBCONTRACTING

 

4.1 LHT may subcontract Services to any other EASA/NAA-approved Maintenance facility, provided that facility meets the requirements of LHT’s CAMP (Continued Airworthiness Maintenance Program) (or equivalent) and is on LHT’s approved provider list (or equivalent). LHT will provide an updated provider list as required.

 

4.2 With the exception of a Base Maintenance check of an aircraft or a complete workshop Maintenance check or overhaul of an Engine or an Engine module, the Services may also be subcontracted to any other Maintenance facility to which LHT’s Authority approved management system has been extended. LHT may provide a Subcontractor with any information about Frontier that is required to perform the subcontracted Services.

 

4.3 LHT shall inform Frontier about any engagement of a Subcontractor and shall supply Frontier with appropriate information about the Subcontractor. Subcontracting of a Base Maintenance check of an aircraft or a complete workshop Maintenance check or overhaul of an Engine shall be subject to Frontier’s prior approval.

 

4.4 The engagement of a Subcontractor with respect to certain Services shall not affect LHT’s obligations vis-à-vis Frontier under this Agreement.

 

- 13 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

5. TURNAROUND TIME, PERFORMANCE DATE

 

5.1 The Parties may agree on Turnaround Times or other performance dates and time limits in the Attachments to this Agreement.

 

5.2 Further to Article 11.1, the Parties agree that it shall be deemed not to be LHT’s fault and LHT shall not be held liable if such ***** including:

 

5.2.1 *****, including, but not limited to, *****, general hindrance in transportation;

 

5.2.2 ***** which were unforeseen and which could not have been expected and which have an impact on the Services to be performed;

 

5.2.3 *****;

 

5.2.4 *****

 

5.2.5 *****

 

5.2.6 Additional tasks which were not part of the initially contracted work scope being carried out by LHT upon Frontier’s request, unless expressly agreed otherwise.

 

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

- 14 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

6. PRICES AND PRICE ADJUSTMENT

 

6.1 Prices

The applicable prices for the Services and Material are specified in the Attachments (and corresponding annexes) to this Basic Agreement.

 

6.2 Cost Increase/ Decrease

Unless expressly otherwise stated in the relevant Attachments all prices shall be revised and automatically adjusted annually at the beginning of each calendar year and with effect for that calendar year as follows:

The prices have been calculated assuming that the Services involve a certain Material and labor element. The ratio of that labor and Material element is set forth in the Attachments.

 

6.2.1 The portion of the prices corresponding to the labor portion of the Services shall be adjusted in accordance with *****.

 

     The price adjustment shall equal *****.

 

     The following formula shall apply:

*****

 

6.2.2 The portion of the prices corresponding to the Material portion of the Services shall be adjusted in accordance *****.

 

6.2.3 Frontier hereby accepts any adjustments made in accordance with this Article 6.2.

 

6.3 Changes of Assumptions

 

6.3.1 In the event that ***** the Parties shall, upon such Party’s request, negotiate in good faith an adjustment of the relevant prices.

 

6.3.2 In the event that the Parties cannot reach agreement on an adjustment ***** such Party shall be entitled to *****.

 

6.4 Taxes

 

6.4.1 All prices under this Agreement are exclusive of any Value Added Tax or similar tax on value or turnover payable in respect thereof, which tax, if any, will be payable by Frontier in addition thereto and at the same time. Subject to this Article 6.4.1, all payments made by Frontier under this Agreement shall be made gross without any tax deductions or withholdings of a similar nature.

 

6.4.2 If Frontier is required by law to make any deduction or withholding from any payment hereunder, it shall do so and the sum due from Frontier in respect of such payment will be increased to the extent necessary to ensure that, after the making of such deduction or withholding, LHT receives and retains (free of any liability in respect of any such deduction or withholding) a net sum equal to the sum it would have received and retained had no deduction or withholding been required to be made.

 

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

- 15 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

6.4.3 Either party will deliver to the other party or, in certain cases to such government or taxing authority as the other party reasonably directs upon reasonable demand by such other party, any form or document that may be required or reasonably requested in writing in order to allow such other party to make a payment under this Agreement without any deduction or withholding for or on account of any Tax or with such deduction or withholding at a reduced rate (so long as the completion, execution or submission of such form or document would not materially prejudice the legal or commercial position of the party in receipt of such demand), with any such form or document to be accurate and completed in a manner reasonably satisfactory to such other party and to be executed and to be delivered with any reasonably required certification as soon as reasonably practicable.

 

6.4.4 LHT shall be responsible for Excluded Taxes. Frontier shall assume full responsibility for and indemnify and hold harmless LHT on LHT’s demand from and against any and all Taxes and customs duties of any nature whatsoever which may arise from this Agreement and the transaction, acts events and circumstances envisaged thereby and in respect to the receipts of LHT hereunder. In the event any such Taxes or customs duties are recoverable, LHT shall use reasonable efforts to recover such Taxes or customs duties paid.

 

- 16 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

7. PAYMENT TERMS

As consideration for LHT’s Services under this Agreement, the Parties may agree on Flat Rate payments, Fixed Price payments or prices calculated on a Time and Material basis.

 

7.1 Flat Rates

To the extent that the Parties agree upon “Flat Rate” payments for certain Services in the Attachments, the following shall apply:

 

7.1.1 Frontier shall pay to LHT the Flat Rate payment ***** or, if such Day is not a Business Day, on the last Business Day preceding such Day.

 

7.1.2 Frontier shall report to LHT by the ***** the respective purchase order based on the Aircraft Flight Hours and Flight Cycles of the preceding month for each aircraft Serial Number, including TSN and CSN for each Aircraft, and place the purchase for the respective month in accordance with Article 7.1

 

7.1.3 In the event that during any given month the actual Flight Hours are lower than the Minimum Flight Hours in accordance with Article 11.2.1 of the TCS Attachment *****.

 

7.1.4 In the event that Frontier fails to supply LHT with the actual Flight Hours by ***** following the month of services LHT shall be entitled to charge Frontier based upon the actual Flight Hours of the previous month, and LHT will make a reconciliation adjustment at the next invoicing date.

 

7.1.5 This Article 7.1 shall apply respectively in the event that the Flat Rate is not based on Flight Hours but on Engine Flight Hours or APU Operating Hours or any other recurring reference.

 

7.2 Fixed Prices

To the extent that the Parties agree upon “Fixed Prices” for certain Services in the Attachments, the following shall apply:

 

7.2.1 Subject to Article 7.2.2, Frontier shall pay the Fixed Price *****.

 

7.2.2 *****

 

7.3 Pricing on the basis of Time and Material

To the extent that the Parties agree upon pricing on the basis of “Time and Material” for certain Services in the Attachments, the following shall apply:

 

7.3.1 *****

Subject to Article 7.3.3, LHT shall issue an invoice after Redelivery and Frontier shall pay within ***** from receipt of LHT’s invoice.

 

7.3.2 In the event that the proposed Price exceeds an amount of ***** or the equivalent thereof, both Parties will negotiate adequate payment terms in advance

 

7.3.3

LHT shall be entitled to dispatch all invoices electronically (e-billing) by e-mail or via upload to Frontier’s server. This will not yet apply for settlement via IATA Clearing House. Special requirements concerning e-billing in Frontier’s country (e.g. verification, archiving) have to

 

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

- 17 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

  be fulfilled by Frontier. In case LHT dispatches the invoices by e-mail the e-mail shall contain the invoice as well as related documentation, if any, and shall fully substitute a hard copy invoice. All such electronic invoices shall be dispatched to the below e-mail address of Frontier. Frontier’s mailbox shall have a capacity to receive e-mails up to 5 MB in size and be permanently accessible. To the extent that Frontier provides LHT with the required digital key, LHT will send electronic invoices by encrypted e-mail. Frontier names the following contact person in the event of any transmission problems: XXX.

 

7.4 LHT Bank Accounts and Address for Payments by Check

 

7.4.1 Payments by bank transfer to LHT in United States dollars shall be made to:

Lufthansa Technik AG

Account No. *****

*****

ABA/Bank-Code *****

SWIFT-Address *****

 

7.4.2 In case of payments to LHT, Frontier may pay through the Airline Clearing House (ACH).

 

7.4.3 Any fees charged in connection with the transfer of funds from Frontier to LHT shall be borne by *****.

 

7.4.4 Frontier shall make payment in USD.

 

7.5 Invoice discrepancy

 

7.6 Any invoice discrepancy between the Parties with regard to a payment obligation shall not affect Frontier’s obligation to make payment of the undisputed part of such payment obligation. Such invoice discrepancy must be made in writing, stating the date and number of the concerned invoice, the reason for Frontier’s objection and the disputed amount.

 

7.6.1 In case of an invoice discrepancy LHT and Frontier shall negotiate in good faith to resolve such invoice discrepancy within *****.

 

7.6.2 If such invoice discrepancy is resolved in favour of LHT, Frontier shall pay to LHT the amount determined by such negotiations within ***** after the end of negotiations. Such invoice discrepancy shall have no impact on the initial due date. If such invoice discrepancy is solved in favour of Frontier, Frontier shall not be obliged to pay the disputed amount or will be reimbursed the disputed amount, in case Frontier had already paid such amount to LHT.

 

7.6.3 Frontier agrees that any invoice discrepancy with regard to a payment obligation and any claim for reimbursement shall be made within ***** after the respective Services have been performed. Frontier shall be precluded from raising any such invoice discrepancy or claim if not made within this period.

 

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

- 18 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

 

7.7 Allocation and balancing

 

7.7.1 In case any payment cannot be allocated to a specific Service, LHT shall be entitled to apply the relevant amount to any outstanding amount owed by Frontier to LHT.

 

7.8 Late Payment Charge

Frontier shall pay to LHT a daily late payment charge of ***** on all late payments.

In the event that Frontier is a member of the IATA, Frontier hereby irrevocably authorizes LHT to take all steps necessary for the collection of late payments via IATA Clearing House. LHT is entitled to such collection for all late payments plus late payment charges.

 

7.9 Payment in advance

If Frontier fails to make payment in accordance with this Agreement, LHT may claim prepayment for any future Services to be performed under this Agreement by notifying Frontier in writing.

 

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

- 19 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

8. SECURITY FOR PAYMENT

 

8.1 Transfer of title

Title to Material supplied by LHT under this Agreement shall remain with LHT until complete payment of all amounts due under this Agreement, unless otherwise stated in any of the Attachments to this Agreement

 

8.2 Frontier security

Frontier shall deliver to LHT, and shall maintain in effect a Payment Bond issued by an A rated or higher insurance company in the amount of ***** securing all terms and provisions of this Agreement, and as said Agreement may be amended, supplemented or extended. Any cost and fees associated with such surety bond shall be borne by Frontier. The surety bond shall remain effective until 3 years after the start of services under this Agreement. Should Frontier fail to provide a surety bond, Frontier will source an alternative product or collateral in the requested amount. After that introductory period the parties may negotiate in good faith based on payment behavior and the financial standing of Frontier a new form and/or amount of security coverage for LHT. However the minimum shall be *****.

 

8.3 Failure to Pay

If Frontier fails to pay any undisputed sum on the due date, LHT may provide written notice of such failure to Frontier. If, after ***** of such written notice such sum remains unpaid, LHT may, without breach of this Agreement, discontinue performing under this Agreement with ***** prior notice until all due but unpaid payments are received

 

8.4 Retention right / lien

In the event that Frontier fails to comply with its payment obligations under this Agreement, LHT has by virtue of its Services performed a contractual right of retention and a contractual lien with respect to the serviced item of Frontier in its custody as well as with respect to other items of Frontier in LHT’s custody to secure any claims of LHT against Frontier out of or in connection with this Agreement as well as to secure any claims of affiliates of LHT against Frontier. These rights as well as a set-off right may also be claimed for Services performed or Material supplied previously. The right of retention and the lien as well as a right to set off any due claims of LHT against Frontier with claims of Frontier against LHT may *****.

 

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

- 20 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

9. QUALITY AND WARRANTY

 

9.1 Quality

 

9.1.1 LHT shall perform all Services under this Agreement in accordance with LHT’s Authority approved management system.

 

9.1.2 Upon prior written and reasonable request, Frontier shall have the right to perform quality audits of LHT’s organization. In the event that such audit leads to any objections, the Parties shall meet and discuss appropriate remedies to restate compliance with LHT’s Authority approved management system.

 

9.2 Warranty

 

9.2.1 Subject to the limitations of Article 9.2.2, LHT warrants that all Services and all Material manufactured by LHT or its Subcontractors shall be free from defects in workmanship and shall in all material aspects comply with the quality system described in Article 9.1.

 

9.2.2 The warranty is limited as follows, unless expressly agreed otherwise in the Attachments:

 

9.2.2.1 A defect shall only be subject to warranty if it arises within ***** or within ***** whichever may occur first.

 

9.2.2.2 A warranty claim must be raised by Frontier within ***** after the defect has or could have become reasonably apparent and LHT must be provided with the defective part for inspection and repair within an additional ***** after the warranty claim has been raised. If a defect arises on a non-removable part of an aircraft the Parties shall in good faith agree how to remedy such defect in a way convenient for Frontier and reasonably acceptable for LHT.

 

9.2.2.3 LHT does not warrant any defect in Material not manufactured by LHT or a Subcontractor or services not provided by LHT or a Subcontractor.

For such Material or services not covered by this warranty any assignable rights to warranty granted to LHT by its Suppliers shall be assigned to Frontier. LHT shall support Frontier in pursuing such warranty claim.

 

9.2.2.4 The defective part must not have been serviced, repaired, overhauled, maintained or modified by anyone other than LHT or its Subcontractors.

 

9.2.2.5 If upon Frontier’s special request LHT or its Subcontractors perform a provisional repair the Material installed and the Services performed during such repair are not subject to warranty.

 

9.2.2.6 Material must at all times have been stored, handled and operated in accordance with manufacturer’s recommendations.

 

9.2.3 LHT shall correct any defect covered by this warranty at its own cost and expense at one of its technical facilities or at any other place Frontier and LHT may agree upon from time to time. In such case Frontier shall arrange at its own risk and expense for the removal and the transport of the defective parts to and from the location where the repair shall be made and for the reinstallation of the respective parts.

 

9.2.4 The warranty set forth in this Article 9.2 shall be ***** in case of any *****. Article 11 shall remain unaffected.

 

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

- 21 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

9.3 Flat Rate Agreement

 

9.3.1 Defective Services or Material covered by a Flat Rate agreement shall be corrected without reference to Articles 9.2.1 to 9.2.3, unless otherwise agreed in the Attachments.

Upon termination of such Flat Rate agreement the remedy contained in Article 9.2.3 shall be fully available to Frontier under the terms and conditions stated in Article 9.2. In such case the time periods stated therein shall begin at the date an aircraft, Engine or Component was last redelivered to Frontier.

 

9.3.2 The Parties agree that any warranty claim of Frontier against its Suppliers as well as any other comparable credits or benefits relating to Services and an aircraft, Engine or Material covered by a Flat Rate shall be to the benefit of LHT.

Frontier hereby assigns its claims relating to such warranties, credits or benefits to LHT and undertakes to transfer any proceeds, credits or benefits obtained directly from its Supplier to LHT. Frontier shall make any further declarations eventually necessary to effect such assignment and/or transfer; Article 9.4 shall apply respectively. In the event that LHT is legally or otherwise prevented from pursuing any assigned claims directly, Frontier shall pursue such claims in close cooperation with LHT and any corresponding proceeds shall be passed on to LHT.

 

9.3.3 Frontier further guarantees to LHT that any aircraft or Material serviced by LHT under a Flat Rate agreement is at least covered by a Standard OEM Warranty and that LHT will be able to obtain the benefit of such Standard OEM Warranty.

In the event that LHT should for whatever reason beyond LHT’s reasonable control not be able to collect the benefit of a Standard OEM Warranty Frontier shall—notwithstanding other rights LHT may have under Article 9.3.2 pay to LHT at least the difference to the amount corresponding to the benefit that would have been attainable under an enforceable Standard OEM Warranty.

 

9.4 Warranty Handling

In the event that Frontier either assigns warranty claims to LHT for enforcement in LHT’s name or appoints LHT as an agent for the administration of warranty claims for enforcement on Frontier’s behalf, the Parties shall confirm such assignment or appointment by completing and signing General Annex Warranty Handling or any other appropriate documentation provided by LHT. Frontier shall make available to LHT any documents and information required to administer and enforce the respective claims.

 

- 22 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

10. DELIVERY AND REDELIVERY

 

10.1 Terms of Delivery and Redelivery

Unless otherwise agreed herein, the Delivery and Redelivery terms shall be set forth in the Attachments.

 

10.2 Shipping arrangements

Frontier may request that LHT supports Frontier in arranging for shipment of the Material or aircraft concerned. Any shipment arrangements made by LHT shall be in the name and on behalf of Frontier and LHT will not act as forwarding agent to Frontier.

 

10.3 CRS / Acceptance Certificate

Upon completion of the Services and at the latest upon Redelivery, LHT and/or its authority approved Subcontractor, as the case may be, shall issue and provide to Frontier a CRS, unless Frontier issues the CRS through its own approved organization.

Upon Redelivery, Frontier shall sign and provide to LHT a document of acceptance to confirm that the agreed Services have been completed in accordance with this Agreement or stating any objections. In the event that the aforementioned signed document is not provided to LHT prior to or upon Redelivery, the Services shall be deemed to have been completed as agreed.

 

10.4 Packaging

Any Material shall be packed for shipment using appropriate shipping containers that are in compliance with ATA 300 specification. To the extent that shipping containers are provided by LHT Frontier shall return such reusable shipping containers to LHT after Redelivery within ten (10) Business Days unless otherwise agreed in writing.

 

- 23 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

11. LIABILITY AND INDEMNIFICATION—INSURANCE

 

11.1 Liability and Indemnification

 

11.1.1 Each Party will be liable towards the other Party for damage to or loss of property and for the injury to or death of any person caused by ***** the wilful misconduct of its directors, officers, employees, agents or Subcontractors in connection with or as a result of the Services rendered under this Agreement.

 

11.1.2 LHT will indemnify and hold harmless Frontier, its directors, officers, employees, agents and Subcontractors from and against all claims of third parties related to damage, loss, injury or death caused by ***** the wilful misconduct of LHT, its directors, officers, employees, agents or Subcontractors.

 

11.1.3 Frontier will indemnify and hold harmless LHT, its directors, officers, employees, agents and Subcontractors from and against all claims of third parties related to damages, loss, injury or death unless such damage, loss, injury or death is caused ***** or the wilful misconduct of LHT, its directors, officers, employees, agents or Subcontractors.

 

11.1.4 The liability and indemnification include *****. However, under no circumstances will the liability in Article 11.1 include *****, provided, however, that this Article 11.1.4 *****.

 

11.2 Insurance

 

11.2.1 During the term and for a minimum period of ***** after the termination or expiration of this Agreement Frontier will effect and maintain and will provide LHT with a certificate of insurance evidencing the following coverages:

 

11.2.1.1 *****

 

11.2.1.2 *****

 

11.2.1.3 *****

In case items are leased or loaned to Frontier by LHT as per Art. 3.2 and Art. 13 of the TCS Attachment, *****.

 

11.2.2 ***** will be named as additional insureds with regard to *****.

 

11.2.3 All of the insurances will provide in favour of *****.

 

11.2.4 During the term and in respect of Products and Completed Operations Liability and for a minimum period of ***** after the termination or expiration of this Agreement LHT will effect and maintain and will provide Frontier with a certificate of insurance evidencing the following insurances:

*****

 

11.2.5 Frontier, its directors, officers, employees, agents and Subcontractors will be named as additional Insureds with regard to the insurance named in Article 11.2.4 above in case LHT is liable according to this agreement and such insurance will be primary and non-contributory to any insurances carried by Frontier and will contain a severability of interest clause.

 

11.2.6 All of the insurances will provide in favour of *****.

 

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

- 24 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

 

11.3 Termination of Insurance

If Frontier is no longer insured as per Article 11.2.1 Frontier will inform LHT of this situation in writing and LHT may discontinue providing support. However, if Frontier still maintains insurances as per Article 11.2.1 but LHT does not have valid certificate, Frontier has ***** to provide proof of insurance. LHT then is also entitled to terminate the contract with immediate effect.

If LHT is no longer insured as per Article 11.2.4 LHT will inform Frontier of this situation in writing. Frontier then is also entitled to terminate the contract with immediate effect. However, if LHT still maintains insurance as per Article 11.2.4 but Frontier does not have valid certificate, LHT has ***** to provide proof of insurance.

 

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

- 25 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

12. TERM AND TERMINATION

 

12.1 The Basic Agreement shall remain in force and be effective at least as long as one Attachment is still effective.

 

12.2 Subject to Article 12.1, the Basic Agreement shall survive for a minimum term of 10 years until 11/04/2024. Frontier and LHT have the right to extend this agreement for another five year term upon providing written notice to LHT ***** in advance of expiration.

In the event of a material breach of this Agreement by a Party, the other Party may terminate this Agreement as a whole or—if the material breach relates only to a particular Attachment—the Attachment concerned by prior written notice, unless the breaching Party cures the breach within ***** after having been notified by the non-breaching Party of the respective breach.

 

12.3 Either Party may terminate this Agreement as a whole or any of the Attachments **** if *****.

 

12.4 Unless otherwise agreed in the Attachments, in the event that prior to the expiration of this Agreement or any of its Attachments Frontier no longer operates an aircraft, an Engine or a Component which is subject to the Services under this Agreement, *****.

 

12.5 The premature termination of this Agreement as a whole or any Attachment by act of the Parties or otherwise shall not relieve the Parties of any liabilities, obligations, expenses or charges accrued up to the date when such termination takes effect and shall be without prejudice to any rights accruing to either Party up to said date of termination.

 

12.6 *****

 

12.7 *****

 

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

- 26 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

13. CONFIDENTIALITY, NO TRANSFER OF INTELLECTUAL PROPERTY RIGHTS

 

13.1 The Parties shall treat as strictly confidential any information pertaining to this Agreement, including the document itself as well as individual provisions contained therein (“Confidential Information”). Confidential Information shall include, but not be limited to, the contents of the negotiations leading up to this Agreement, any business, technical and strategic data disclosed by the other Party or its Subcontractors at any time for any reason—comprising any and all such information in oral or visual form—including but not limited to prices for Materials and Services, the scope of Services offered, legal provisions, Turnaround Times and man-hours needed.

 

13.2 Neither Party shall disclose any Confidential Information to any employee, except where such disclosure is necessary in order to fulfill the obligations under this Agreement and the employee commits to comply with the respective Party’s confidentiality obligations. Either Party may disclose Confidential Information to its certified accountants and attorneys, such persons to be instructed to adhere to the terms of this Article and as required by applicable law. In case Frontier is not the owner of the aircraft, Engine, Material or Component serviced subject to this Agreement, LHT may upon request by the owner and/or lessor of such aircraft, Engine, Material or Component disclose to the owner and/or lessor Confidential Information regarding such aircraft, Engine, Material or Component LHT’s right to disclose certain Frontier information including Confidential Information to its affiliates, subsidiaries and/or Subcontractors remains unaffected.

 

13.3 Any Party receiving Confidential Information from the other Party in connection with this Agreement (“Beneficiary”) shall not be bound by the confidentiality obligations under this Article 13 if the Beneficiary can prove that the Confidential Information:

 

    was already known to the public prior to the date the Beneficiary received said information;

 

    has become known to the public after the date the Beneficiary received said information, except if the Beneficiary is the originator of the publication of said information;

 

    has been communicated to the Beneficiary at any date by a third party with the right to communicate it,

 

    must be disclosed by binding and final order of a competent court or authority, in which case the Beneficiary will immediately inform the other Party about such mandatory disclosure and limit the disclosure to the extent legally permissible.

The aforementioned exceptions to the confidentiality obligations under this Article 13 shall apply to a combination of single pieces of Confidential Information only if such combination is subject to one of the aforementioned exceptions but not if only each individual piece of Confidential Information is subject of said exceptions.

 

13.4 All obligations of confidentiality imposed under this Article 13 shall survive the term of this Agreement for a period of *****.

 

13.5 LHT shall at all times retain all rights, title and interest in and to the intellectual property contained in the Services, products and processes, including but not limited to all rights under applicable patents, copyrights, trademarks and trade secrets and all

 

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

- 27 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

  renewals and extensions thereto. The disclosure of any documents, data and other information in connection with this Agreement, including without limitation when such disclosure is made in fulfillment of a contractual obligation hereunder, shall not be construed as a grant or transfer of such rights.

 

- 28 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

14. NOTICES AND COMMUNICATION

 

14.1 Except as otherwise stated in Article 7.3.4, for messages and correspondence exchanged in connection with this Agreement in day-to-day business, each Party may notify the other Party in writing at suitable postal, telefax, e-mail or other addresses and telephone numbers. The addresses given in Article 14.4 below may also be used.

 

14.2 No Party may claim that the other Party has received such messages or correspondence if other addresses than those exchanged or given below were used.

 

14.3 Messages sent by e-mail or other electronic means shall be deemed received only when the message has been opened by the recipient. The burden of proof for the receipt and time of receipt of such messages shall lie with the Party sending the message.

 

14.4 Whenever written notification or notice is required under this Agreement such notification or notice shall be given by telefax, mail or internationally recognized courier service to the following postal address:

 

Postal Address:    Lufthansa Technik AG
   Dept.: Marketing and Sales, HAM TS
   Weg beim Jäger 193 (P.O. Box 63 03 00)
   22335 Hamburg
   GermanyTelefax:            *****
Postal Address:                    Frontier Airlines, Inc.
   General Counsel
   7001 Tower Road
   Denver, CO 80249
   USA
Email: *****   
Telefax: *****   

 

14.5 Frontier shall report Flight Hours and Flight Cycles, if required, by using the Lufthansa Technik Customer Lounge web application “Airborne” accessible at www.lufthansa-technik.com.

Contact addresses for individual communication are: e- mail address: *****

Phone: *****

Fax: *****

Telex: *****

 

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

- 29 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

15. LAW AND JURISDICTION

 

15.1 Governing Law

This Agreement and any dispute shall be governed by and construed in accordance with the laws of the State of New York, U.S.A. without regard to its conflicts of laws principles.

 

15.2 Dispute Resolution / Arbitration

 

15.2.1 Any dispute between the Parties with respect to the interpretation of any provision of this Agreement or with respect to the performance of either Party shall be resolved as specified in this Section 15.2

 

15.2.2 Prior to commencing arbitration, the Parties may, if they so agree, seek the opinion of the relevant manufacturer in relation to the Services under dispute with a view to settling the dispute in good faith. In addition, each Party shall appoint a designated representative whose task it will be to meet for the purpose of endeavouring to resolve such dispute. The designated representatives shall discuss the problem and negotiate in good faith in an effort to resolve the dispute without the necessity of any formal proceeding. These procedures shall not prejudice either Party’s right to commence arbitration at any time as per Article 15.2.3.

 

15.2.3 If the dispute is not resolved by the Parties under Section 15.2.2, it shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by three (3) arbitrators appointed in accordance with the Rules. The place of arbitration shall be New York, New York. The language of the arbitration shall be English. All proceedings in the arbitration shall be scheduled and conducted so that the arbitral tribunal may render the award as expeditiously as possible.

 

15.2.4 The award shall be final and binding. No Party shall seek recourse to a court of law or other authorities to appeal or otherwise set aside the award. The award shall be in writing and in English, and shall specify the factual and legal basis for the award. The award may be enforced in any court having jurisdiction. The arbitrator shall award to the prevailing Party its costs, including reasonable attorneys’ fees and costs, to the degree of such prevailing Party’s success.

 

15.2.5 The award of the arbitration may be enforced in any court having jurisdiction over the person or property of the Parties. Nothing in this Agreement shall prevent any Party, before an arbitration has commenced pursuant to this Article 15.2, from seeking interim or injunctive relief, which will then have to be approved by the arbitral tribunal as per Article 15.2.3. For the sole and exclusive purpose of seeking pre-arbitral interim or injunctive relief, both Parties hereby consent and submit to the sole and exclusive jurisdiction of the federal courts of the Southern District of New York, and agree that such court is the most appropriate and convenient court to settle any pre-arbitral dispute, and accordingly waive the right to argue the contrary.

 

15.2.6 The Parties agree to keep any arbitration confidential, and shall not disclose to any person the existence of the arbitration, any document submitted or exchanged in connection with it, any oral submissions or testimony, any transcripts, or any award, unless such disclosure is required by law.

 

15.2.7 The Parties agree that this Agreement and the resulting obligations and relationships are commercial and that the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the Inter-American Convention on International Commercial Arbitration of 1975 apply to this Agreement and to any order or arbitral award resulting from any arbitration conducted in accordance with this Agreement.

 

- 30 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

15.2.8 Frontier hereby appoints Corporation Services Company: 80 State Street, Albany, NY 12207 (Phone 1-866-403-5272)

as its agent for service of process in New York in any dispute; provided, however, that the agent may be replaced by another agent in New York upon thirty (30) Days’ written notice. Service of process on the designated agent at the designated address shall be deemed, for all purposes, to be due and effective service and service shall be deemed completed whether or not forwarded to or received by the respective Party. Any correspondence sent to a Party’s agent for service of process shall also be copied to the Party directly pursuant to Article 14.4; provided, however, that the failure to copy any Party directly shall not affect the effectiveness of any service of process.

 

15.2.9 LHT hereby appoints Lufthansa Technik Component Services: 3102 Commerce Parkway, Miramar, FL 33025 as its agent for service of process in any dispute; provided, however, that the agent may be replaced by another agent upon thirty (30) Days’ written notice. Service of process on the designated agent at the designated address shall be deemed, for all purposes, to be due and effective service, and service shall be deemed completed whether or not forwarded to or received by the respective Party. Any correspondence sent to a Party’s agent for service of process shall also be copied to the Party directly pursuant to Article 14.4; provided, however, that the failure to copy any Party directly shall not affect the effectiveness of any service of process.

 

15.2.10 NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT, EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT TO TRIAL BY JURY IN ANY DISPUTE.

 

- 31 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

16. MISCELLANEOUS

 

16.1 Change of Law / Compliance with foreign export and import regulations

 

16.1.1 The Parties have agreed that certain laws and regulations regarding certification and regulatory requirements are to be observed in the performance of Services under this Agreement. Neither Party can foresee to what extent those laws and regulations will change after the execution of this Agreement. While LHT will use its best efforts to mitigate any impact on the performance and the agreed terms of the Services because of a change of laws (including export laws), regulations or their interpretation by the relevant Authority, any such impact and any resulting additional cost incurred by LHT shall be the responsibility of and be borne by Frontier.

 

16.2 Assignment

Any assignment of rights or obligations arising from this Agreement shall require the prior written consent of the other Party which shall not be unreasonably withheld.

 

16.3 Form of Agreement

 

16.3.1 Two counterpart originals of this Agreement shall be signed and executed by the Parties. One original shall remain with each Party. Each page of each original of the Agreement shall be initialled by each Party.

 

16.3.2 This Agreement shall not be varied in terms or amended except by an instrument in writing explicitly named an amendment to this Agreement and signed by duly authorized representatives of the Parties.

 

16.3.3 This Agreement is the entire understanding between the Parties subject matter herein. There are no oral, written or implied agreements with regard to the subject matter herein. In no event shall any general terms and conditions for purchase and/or sale of either Party apply.

 

16.3.4 All communication between the Parties shall be in English and all documentation shall be made available to the other Party In English. In case any other language is used or any document including this Agreement is translated into any other language it shall be for convenience only. The version in English shall be binding.

 

16.4 Incoterms

Any reference to any Incoterm shall be a reference to Incoterms 2000.

 

16.5 Order of Precedence

In the event that a provision in an Attachment, General Annex or contractual document referencing the Basic Agreement deviates from or conflicts with a provision in the Basic Agreement, the provision in such Attachment, General Annex or contractual document referencing the Basic Agreement shall prevail, but only if explicit reference is made to the conflicting or deviating provision in the Basic Agreement which it shall supersede. Article 12.1 shall remain unaffected.

 

16.6 Waiver and Severability

 

16.6.1 The failure by either Party to enforce any of the provisions of this Agreement shall not be construed as a waiver of its rights.

 

- 32 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

 

16.6.2 Nothing contained in this Agreement shall require either Party to take any action contrary to the law or to any order or regulation of any government or contrary to any permit or authorization granted to either Party by any governmental authority. If any of the provisions of this Agreement are held unlawful or otherwise ineffective by any court of competent Jurisdiction, the remainder of this Agreement shall remain in full force and the unlawful or otherwise ineffective provision shall be substituted by a new provision reflecting the intent of the provision substituted.

 

16.7 Export Clause

Both Parties shall comply with all applicable domestic and foreign export compliance requirements, including applicable US export laws and regulations (e.g. ITAR, EAR and OFAC sanctions regulations) and those of other relevant foreign jurisdictions. Upon either Party’s request, the other Party shall promptly provide the requesting Party with appropriate certifications as required by such applicable export laws and regulations, or as necessary to ensure continuing compliance with such applicable export laws and regulations.

 

- 33 -


[LOGO] Lufthansa Technik

 

  

Frontier

 

 

IN WITNESS WHEREOF Frontier and LHT have caused this Agreement to be executed as of the Day and year written below.

 

Hamburg, Germany     For and on behalf of
Date: November 11, 2014     Lufthansa Technik AG:
Name:   /s/ Wolfgang Weynell     /s/ Harald Gloy
Title:   Vice President, Sales, EUMEU & AMERICAS     Senior Vice President, Aircraft Component Services

 

Denver, CO USA     For and on behalf of
Date: [Undated]     Frontier Airlines, Inc.:
Name:   James G. Dempsey     /s/ James G. Dempsey
Title:   Chief Financial Officer    
       

 

- 34 -

EX-10.20(C)

Exhibit 10.20(c)

[LOGO] Lufthansa Technik

 

 

Attachment on Aircraft Production Inspection

(“APIP Attachment”)

 

between   

Frontier Airlines

7001 Tower Road

Denver, CO 80249

USA

hereinafter referred to as “Frontier”

and    LUFTHANSA TECHNIK AG
  

Weg beim Jäger 193

22335 Hamburg

Germany

hereinafter referred to as “LHT”

   each of them hereinafter referred to individually as a “Party” and collectively as the “Parties”.

 

APIP ATTACHMENT Frontier Airlines

April 30th, 2015

   1


[LOGO] Lufthansa Technik

 

 

1. SCOPE OF THE APIP ATTACHMENT

Frontier hereby engages LHT and LHT agrees to provide to Frontier its professional support services that shall consist of supporting the inspections held by Airbus in accordance with the Airbus Customer Inspection Program FM1302305, in order to give continuity to the Aircraft delivery process (hereinafter the “Aircraft Production Inspection Program or APIP”).

The terms and conditions of the said services are outlined in this APIP Attachment and set out in detail in Article 3 SCOPE OF SERVICES of this APIP Attachment.

The General Terms of the “Agreement on Technical Services for A320 Family Aircraft” dated 5.11.2014 between the Parties (hereinafter referred to as the “General Terms”) shall apply wherever applicable, unless stated otherwise in this APIP Attachment. For the purposes of this APIP Attachment, such General Terms will remain in effect during the Term. This APIP Attachment shall prevail in the case of a conflict between this APIP Attachment and the General Terms.

 

2. DEFINITIONS AND ABBREVIATIONS

The following capitalized terms, expressions and abbreviations shall have the following meanings for the Services provided subject to this APIP Attachment:

 

Aircraft

   an aircraft being manufactured by Airbus to be delivered to Frontier a detailed listing of the Aircraft to be covered under this APIP Attachment is set forth in Article 1 of Annex No.1 to the APIP Attachment stating the respective manufacturer serial number (MSN).

Airbus

   Airbus S.A.S.

BFE

   Buyer furnished equipment

BFG

   Goodrich Cooperation

Buy Backs

   LHT acceptance of any rectifications made by Airbus

eQLB

   shall mean the Airbus electronic quality log book

FAL

   shall mean the final assembly line as used in Airbus Customer Inspection Program FM1302305 in order to give continuity to the Aircraft delivery process

FAL Customer Manager

   is the responsible contact person at Airbus for all quality issues with respect to the Aircraft

 

APIP ATTACHMENT Frontier Airlines

April 30th, 2015

   2


[LOGO] Lufthansa Technik

 

 

Fixed Price

   a predetermined price for the Service or Services according to Article 3

Services

   The scope of work as described in Article 3 of this APIP Agreement

Term

   a reference to the term during which this APIP Attachment is effective (as set out in Article 8).

Other capitalized terms used herein but not defined shall have the meanings given in the General Terms.

 

3. SCOPE OF SERVICES

 

3.1 Subject to the terms and conditions set forth in this APIP Attachment, LHT shall perform the Services as stipulated under this Article and according to the presentations made by Airbus in accordance with Airbus Customer Inspection Program FM1302305.

 

3.1.1 Assembly Inspection

With regard to the final assembly Inspection the support Services performed by LHT include the following:

 

    *****

 

    *****

 

    *****

 

    *****

 

    *****

 

    *****

 

    *****

 

    *****

 

    *****

 

    *****

 

    *****

 

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

APIP ATTACHMENT Frontier Airlines

April 30th, 2015

3


[LOGO] Lufthansa Technik

 

 

3.1.2 Section Inspection

With regard to the section inspection the Services performed by LHT include the following:

*****

 

    *****

*****

 

    *****

 

    *****

 

    *****

 

    *****

 

    *****

 

    *****

 

    *****

 

    *****

 

    *****

*****

 

3.1.3 Final Acceptance Assistance

LHT assists the final acceptance inspectors assigned by Frontier during the final acceptance inspection by participation of one appropriate assembly line inspector of LHT. Such assistance is limited to the available know-how and expertise of the assigned LHT inspector.

This service includes:

*****

 

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

APIP ATTACHMENT Frontier Airlines

April 30th, 2015

4


[LOGO] Lufthansa Technik

 

 

3.2 LHT shall provide written reports to Frontier. The contents and format of such reports shall be mutually agreed between the Parties.

The Report shall include following information:

 

    *****

 

    *****

 

    *****

 

    *****

 

3.3 If in the course of the provision of Services and at its discretion, LHT becomes aware of the fact that it is necessary or advisable to modify the contractual performances, LHT will submit to Frontier a written proposal concerning the suggested alterations. The Parties hereto will use all reasonable efforts to come to a written agreement regarding such modifications, to be recorded as an amendment to this APIP Attachment For the avoidance of doubt, any such modifications or alterations are subject to a written agreement in the form of an amendment to this APIP-Agreement.

 

3.4 With regard to APIP, all information, data, documents made available to LHT by Frontier or Airbus, LHT assumes and shall have the right to assume that such information, data and/or documents made available to LHT are correct. LHT shall have no obligation to verify such information, data and /or documents. Consequently LHT shall not be responsible for any incorrect results of their consulting performance as far as such results are due to incorrect information, data and/or documents material furnished by Frontier.

 

4. OBLIGATIONS OF FRONTIER

Frontier shall provide the following documentation required for the provision of the Services no later than ***** before begin of the Services for each Aircraft and in addition any other information or data or documentation (“Additional Information”) LHT may require for the provision of the Services.

 

    Participation Agreement to guarantee LHT’s access to the aircraft

 

    Detailed Frontier aircraft specification

*****

 

5. PRICES AND INVOICING

For this APIP Attachment, LHT will perform the Services described in this APIP Attachment ***** for ***** Aircraft of which the first ***** are referenced in ANNEX 1, Article 1 Aircraft.

Subsequently LHT shall not send any invoices for the services as described in this Attachment under Article 3 Scope of Service.

 

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

APIP ATTACHMENT Frontier Airlines

April 30th, 2015

5


[LOGO] Lufthansa Technik

 

 

6. QUALITY AND WARRANTY

 

6.1 Quality

LHT shall perform all Services under this APIP Attachment in accordance with LHT’s Authority approved management system.

Upon prior written and reasonable request, Frontier shall have the right to perform quality audits of LHT’s organization. In the event that such audit leads to any objections, the Parties shall meet and discuss appropriate remedies to restate compliance with LHT’s Authority approved management system.

 

6.2 Sole and exclusive Warranty

LHT warrants that the Services provided comply with the LHT Authority approved management system. The warranty shall be limited to ***** after delivery of the Aircraft by Airbus to Frontier.

***** For the avoidance of doubt: LHT assumes no responsibility and gives no warranty for any defects originated by Airbus.

 

7. ADDITIONAL LIABILITY AND INDEMNIFICATION

*****

All other Liability and Indemnification clauses from the General Terms shall remain valid.

 

8. TERM AND TERMINATION

This APIP Attachment is valid from the date of signature until LHT has fully supported aircraft production inspections on thirty (30) Frontier aircraft deliveries

 

 

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

APIP ATTACHMENT Frontier Airlines

April 30th, 2015

6


[LOGO] Lufthansa Technik

 

 

The following ANNEX is an Integral part of this APIP Attachment:

ANNEX NO. 1 – AIRCRAFT AND PRICES FOR THE SERVICES

IN WITNESS WHEREOF Frontier and LHT have each caused this APIP Attachment to be executed by their duly authorised representatives as of the day and year written below.

 

Hamburg, Germany     For and on behalf of
Date: April 30, 2015     LHT:
Name:  

Daniel Schiffer

   

/s/ Daniel Schiffer

     
Title:  

Head of APIP

   

 

    For and on behalf of
Date: April 30, 2015    

Frontier Airlines, Inc.:

Name:  

Holly L. Nelson

   

/s/ Holly L. Nelson

     
Title:  

Chief Accounting Officer

   

 

APIP ATTACHMENT Frontier Airlines

April 30th, 2015

   7


[LOGO] Lufthansa Technik

 

 

ANNEX NO. 1

 

1. AIRCRAFT

Frontier Airbus A321 Aircraft to be delivered by Airbus:

*****

Schedule for additional Frontier Airbus Aircraft to be added at a later date.

 

 

***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

APIP ATTACHMENT Frontier Airlines

April 30th, 2015

 

   8
EX-10.22(A)

Exhibit 10.22(a)

 

Hosted Services Agreement      FINAL  

CONFIDENTIAL

FRONTIER AIRLINES — JUNE 2014

NAVITAIRE HOSTED SERVICES AGREEMENT

Table of Contents

 

1.

  Definitions      2  

2.

  Scope of Services      9  

3.

  NAVITAIRE Obligations      10  

4.

  Customer Obligations      10  

5.

  Term and Termination      18  

6.

  Price and Payment      20  

7.

  License, Title, Modifications, and Covenants      23  

8.

  Indemnification      29  

9.

  Confidential Information      31  

10.

  Disclaimers and Limitations      33  

11.

  Publicity      35  

12.

  Relationship of the Parties      36  

13.

  No Assignment      36  

14.

  Force Majeure      36  

15.

  Notices      37  

16.

  Waiver      38  

17.

  General      38  

 

1


Hosted Services Agreement      FINAL  

 

NAVITAIRE HOSTED SERVICES AGREEMENT

This Hosted Services Agreement (the “Agreement”) is made between Navitaire LLC, a Delaware limited liability company (“NAVITAIRE”) and Frontier Airlines, Inc., a Colorado corporation, (“Customer”), and shall be effective as of June 20, 2014 (“Effective Date”).

Recitals

 

A. Accenture LLP is a global management consulting, technology services and outsourcing company.

 

B. NAVITAIRE, wholly owned by Accenture LLP, is an airline technology services company, which provides various services such as hosted reservation and revenue management services to airline companies worldwide.

 

C. The parties desire that NAVITAIRE provide to Customer Hosted Services (as defined in Section 1), and Customer desires to purchase such Hosted Services on the terms contained in this Agreement.

 

NOW, THEREFORE, the parties agree as follows:

 

1. Definitions

As used herein, the following terms shall have the meanings accorded them in this Section 1. In the event of any conflict between a definition set forth in this Section 1 and in any one contained in an Exhibit to this Agreement, the definition contained within such Exhibit shall control.

 

  1.1 Affiliate of a party means any entity, whether incorporated or not, that is controlled by, controls, or is under common control with such party. “Control” means the ability, whether directly or indirectly, to direct the affairs of another by means of ownership, contract or otherwise.

 

  1.2 API(s) means Application Program Interface(s) contained within the Hosted Services System and used to facilitate communications between external systems of Customer or Customer API Agents and the Hosted Services System.

 

  1.3 Business Critical Services means the services required to be restored first in the event of a Disaster and comprise the components listed in the Disaster Recovery Services descriptions in Section 5 of Exhibits A and F, as applicable.

 

  1.4 Confidential Information has the meaning set forth in Section 9.1 hereof.