Document:

a50562467ex10-16.htm

Exhibit 10.16

EXECUTION COPY

AMENDED AND RESTATED

DEATH BENEFIT AGREEMENT

This Amended and Restated Death Benefit Agreement (the “Agreement”) is entered into this 30th day of November, 2012, by and between B/E AEROSPACE, INC., a Delaware corporation, hereinafter called the “Corporation,” and THOMAS P. McCAFFREY, hereinafter called the “Executive.”

WHEREAS, the Executive has been employed by the Corporation for many years and has rendered valuable services which have contributed to the growth and prosperity of the Corporation;

WHEREAS, the Executive is party to a death benefit agreement (the “Original Agreement”) dated on or about March, 2006 pursuant to which the Corporation shall provide The Thomas P. McCaffrey Irrevocable Trust dated March 15, 1997, the Executive’s beneficiary (the “Beneficiary”), with the payment of a death benefit;

WHEREAS, the Original Agreement was amended pursuant to the employment agreement dated December 31, 2008 between the Corporation and the Executive;

WHEREAS, the Corporation and the Executive wish to amend and restate the Original Agreement to increase the death benefit payable to the Beneficiary to $4,000,000 (four million dollars).

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and other good and valuable consideration, the parties agree as follows:

	
1.

	
DEATH BENEFIT.

	  	  	  
	  	
A.

	
Upon the Executive’s death at any time, whether during his employment with the Corporation or following the termination of his employment for any reason, the Corporation shall pay to the Beneficiary a payment of $4,000,000 (four million dollars) (the “Death Benefit”).  The Death Benefit shall be paid in a cash lump sum within thirty (30) days following the Executive’s death.

	  	  	  
	  	
B.

	
The Death Benefit shall not be payable if the Executive’s death results from suicide, whether sane or insane, within two (2) years after the execution of this Agreement.

	  	  	  
	
2.

	
CONDITIONS.  In order to fund its cash payment obligation under this Agreement, the Corporation may elect, in its absolute discretion, to purchase a life insurance policy.  The Executive agrees that in the event the Corporation elects to do so, then the Corporation may insure the life of the Executive and the Executive agrees to cooperate with the Corporation and insurance carrier in order to facilitate the purchase of such insurance.  The Executive further agrees that if the Corporation elects to purchase such a life insurance policy, then the Corporation or a Trust (as described in Section 3 of this Agreement) shall be the owner and the beneficiary of that policy.

 

  

  

  

 

	
3.

	
ESTABLISHMENT OF TRUST.  The Corporation may establish a Death Benefit Only Trust (the “Trust”).  If established, all benefits payable under this Agreement to the Beneficiary shall be paid directly by the Corporation from the Trust.  To the extent that such benefits are not paid from the Trust, the benefits shall be paid from the general assets of the Corporation.  The Trust, if established, shall be an irrevocable grantor trust which conforms to the terms of the model trust as described in IRS revenue procedure 92-64, I.R.B. 1992-33 except an independent individual third party may be designated as trustee.  The assets of the Trust are subject to the claims of the Corporation’s creditors in the event of the Corporation’s insolvency, as defined therein.  Except as provided under the Trust, the Corporation shall not be obligated to set aside, earmark or escrow any funds or other assets to satisfy its obligations under this Agreement, and neither the Executive nor the Beneficiary shall have any property interest in any specific assets of the Corporation other than the unsecured right to receive payments from the Corporation, as provided in this Agreement.

	  	  	  
	
4.

	
EMPLOYMENT RIGHTS.  This Agreement shall not be deemed to create a contract of employment between the Corporation and the Executive and shall create no right in the Executive to continue in the Corporation’s employ for any specific period of time, or to create any other rights in the Executive or obligations on the part of the Corporation, except as are set forth in this Agreement.

	  	  	  
	
5.

	
EXECUTIVE RIGHT TO ASSETS.

	  	  	  
	  	
A.

	
The rights of the Executive, the Beneficiary, or any other person claiming through the Executive under this Agreement, shall be solely those of an unsecured general creditor of the Corporation.  The Executive, the Beneficiary, or any other person claiming through the Executive, shall have the right to receive those payments specified under this Agreement only from the Corporation, and has no right to look to any specific or special property separate from the Corporation for payments.

	  	  	  
	  	
B.

	
The Executive agrees that he, the Beneficiary, or any other person claiming through the Executive shall have no right or beneficial ownership interest whatsoever in any general asset used or acquired by the Corporation in connection with the liabilities it has assumed under this Agreement. Such assets shall not be deemed to be held under any trust for the benefit of the Executive or the Beneficiary, nor shall any such general assets be considered security for the performance of the obligations of the Corporation.  Any such assets shall remain general, unpledged, and unrestricted assets of the Corporation.

	  	  	  
	  	
C.

	
The Executive also understands and agrees that his participation in the acquisition of any such general asset for the Corporation shall not constitute a representation to the Executive, the Beneficiary, or any person claiming through the Executive that any of them has a special or beneficial interest in such general asset.

 

  

2

  

 

	
6.

	
INDEPENDENCE OF BENEFITS.

	  	  	  
	  	
The benefits payable under this Agreement shall be independent of, and in addition to, any other benefits or compensation, whether by salary, or bonus or otherwise, payable under any other employment agreements that now exist or may hereafter exist from time to time between the Corporation and the Executive.  This Agreement between the Corporation and the Executive does not involve a reduction in salary or foregoing of an increase in future salary by the Executive.  Nor does the Agreement in any way affect or reduce the existing and future compensation and other benefits of the Executive.

	  	  	  
	
7.

	
ASSIGNABILITY.

	  	  	  
	  	
Except in so far as this provision may be contrary to applicable law, no sale, transfer, alienation, assignment, pledge, collateralization, or attachment of any benefits under this Agreement shall be valid or recognized by the Corporation.

	  	  	  
	
8.

	
AMENDMENT.

	  	  	  
	  	
This Agreement may be amended at any time by mutual written agreement of the Corporation and the Executive.  The Corporation shall have no right to change the benefits under this Agreement without the prior written consent of the Executive. The Executive may change the Beneficiary under this Agreement upon prior written notice to the Corporation, Attn. General Counsel, 1400 Corporate Center Way, Wellington, Florida 33414.  If any provision of this Agreement contravenes any regulations or guidance promulgated under Section 409A of the U.S. Internal Revenue Code of 1986 (collectively, “Section 409A”), the Corporation shall amend this Agreement or any provision hereof to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Section 409A.

	  	  	  
	
9.

	
LAW GOVERNING.

	  	  	  
	  	
This Agreement shall be governed by the laws of the State of Florida.  This Agreement is solely between the Corporation and the Executive.  Further, the Executive, the Beneficiary or other persons claiming through the Executive shall only have recourse against the Corporation for enforcement of the Agreement.  However, it shall be binding upon the Beneficiary and the beneficiaries, heirs, executors and administrators of the Executive and upon the successors and assigns of the Corporation.

[THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]

 

  

3

  

 

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

 

	
CORPORATION:

	
B/E AEROSPACE, INC.,

	  	  	
a Delaware corporation

	
ATTEST:

	  	  
	  	  	  	  
	
By:

	
/s/ Ryan M. Patch

	
By:

	
/s/ Eric J. Wesch

	
Name:

	
Ryan M. Patch

	
Name:

	
Eric J. Wesch

	
Title:

	
Secretary

	
Title:

	
Vice President & Treasurer

	  	  	  	  
	  	  	  	  
	  	  	  	  
	
EXECUTIVE:

	
/s/ Thomas P. McCaffrey

	  	  	

 
THOMAS P. McCAFFREY

 

 

4Exhibit_10_3ab

Exhibit 10.3(ab)
IAE PROPRIETARY INFORMATION

628 Hebron Avenue, Suite 400
Glastonbury, CT 06033 USA

November 9, 2012

Mr. Mark Powers
Chief Financial Officer
JetBlue Airways Corporation
27-01 Queens Plaza North
Long Island City, NY 11101

		
	Subject:
	Side Letter No. 37 to the V2500 General Terms of Sale Agreement between JetBlue Airways Corporation and IAE International Aero Engines AG dated May 4, 1999.

Ladies and Gentlemen:

We refer to the General Terms of Sale Agreement dated May 4, 1999 between IAE International Aero Engines AG (“IAE”) and JetBlue Airways Corporation (“JetBlue”), as amended from time to time, such contract being hereinafter referred to as the "Agreement".  

Unless expressly stated to the contrary, and to the extent possible, capitalized terms used in this Side Letter Agreement No. 37 (“Side Letter No. 37”) shall have the same meaning given to them in the Agreement. In the event of a conflict between the terms and provisions of this Side Letter No. 37 and those of the Agreement, this Side Letter No. 37 shall govern.

WHEREAS:
		
	A.
	The Parties wish to [***];

		
	B.
	JetBlue has agreed with the Aircraft Manufacturer to convert the aircraft model of thirty (30) Firm Aircraft from A320 to A321 and now wishes to reflect such changes in the Agreement;

		
	C.
	JetBlue has agreed with the Aircraft Manufacturer to certain Firm Aircraft scheduling changes and now wishes to reflect such changes in the Agreement;

		
	D.
	JetBlue has agreed with the Aircraft Manufacturer to cancel certain Option Aircraft and now wishes to reflect such changes in the Agreement; 

		
	E.
	The Parties wish to amend certain terms and conditions with respect to the calculations of [***] for future Firm Aircraft deliveries under the Agreement; 

		
	F.
	The Parties wish to amend the terms and conditions under which JetBlue procures the SelectOneTM Production Standard from IAE under the Agreement; and

		
	G.
	The Parties wish to [***] contained in the Agreement.

                                             
[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

IAE PROPRIETARY INFORMATION

NOW, THEREFORE, the Parties hereby agree as follows:
		
	1.
	Revision to Exhibit B-1 to the Agreement

		
	1.1
	The Parties hereby agree that Exhibit B-1 to the Agreement, Aircraft Delivery Schedule, is hereby deleted in its entirety and replaced by the revised delivery schedule attached as Appendix 1 hereto which captures the amendments as set forth in Sections 2, 3, 4 and 5 below.

		
	1.2
	The Parties hereby agree that Exhibit B-2 to the Agreement, Purchased Items, Price, Escalation Formula and Delivery, is hereby deleted in its entirety and replaced by Appendix 2 attached hereto.

		
	2.
	Aircraft [***]

		
	2.1.
	The Parties agree that of the forty-eight (48) Firm Aircraft still left to be delivered as of the date of this Side Letter No. 37 (the “Firm Backlog Aircraft”), the twenty-one (21) Incremental Firm Aircraft still left to be delivered shall hereafter [***].  This Side Letter No. 37 along with Side Letter No. 32, Side Letter No. 34 and Side Letter No. 36 together: (i) increase the total quantity of [***] from thirty (30) to fifty-five (55) and (ii) decrease the total quantity of [***] from sixty-five (65) to forty (40).

		
	2.2.
	[***].

		
	2.3.
	The Parties agree to [***] for Firm Aircraft No. 126, Firm Aircraft No. 127 and Firm Aircraft No. 128 which were delivered as [***] subject to Sections 6 and 7 below.  The Parties agree to [***].

		
	3.
	Aircraft Conversion

		
	3.1.
	The Parties agree that Thirty (30) Firm Backlog Aircraft, Firm Aircraft No. 133 through Firm Aircraft No. 162 inclusive as set forth in Exhibit B-1 to the Agreement attached as Appendix 1 hereto, shall be converted from A320 Firm Aircraft powered by V2527-A5 Engines to A321 Firm Aircraft powered by V2533-A5 Engines.

		
	4.
	Aircraft Rescheduling

		
	4.1.
	The delivery schedule for Firm Backlog Aircraft shall be deferred as set forth in Exhibit B-1 to the Agreement attached as Appendix 1 hereto.  

		
	4.2.
	The Parties agree that [***].  

		
	5.
	Option Aircraft Cancellation

		
	5.1.
	The twenty-two (22) remaining 2004 Option Aircraft are hereby cancelled and deleted from the Agreement.

		
	6.
	Escalation for Firm Backlog Aircraft Deliveries

		
	6.1.
	The [***] for Firm Backlog Aircraft shall be calculated from a base month of [***] in accordance with the applicable formula in Exhibit B-2 as follows: 

                                             
[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

Page 2 of 15

IAE PROPRIETARY INFORMATION

		
	6.1.1.
	escalation shall be calculated to [***] of the Firm Backlog Aircraft, except to the extent that [***], in which case escalation shall be calculated to [***] as set forth in Appendix 1 hereto; or

		
	6.1.2.
	in the event that JetBlue is the sole cause of a delay in delivery of any Firm Backlog Aircraft beyond its scheduled delivery date, escalation shall be calculated to [***]; or

		
	6.1.3.
	in the event that IAE is the sole cause of a delay in delivery of any Firm Backlog Aircraft beyond its scheduled delivery date, escalation shall be calculated to [***]; or 

		
	6.1.4.
	in the event that the Aircraft Manufacturer is the cause of a delay in the delivery of any Firm Backlog Aircraft beyond its scheduled delivery date (and such delay is not due to the acts, omissions or request of JetBlue, escalation shall be calculated to [***].

Notwithstanding the foregoing, in no event shall [***] of all pricing and credits for any Firm Backlog Aircraft [***] as set forth in Appendix1 hereto.
		
	6.2.
	Notwithstanding Clause 6.1 above, for the period beginning January 1, 2003 and ending December 31, 20[***], escalation for all pricing and credits for Firm Backlog Aircraft as calculated by the applicable escalation formula in Exhibit B-2 shall be [***], provided that for any year in which escalation calculated by the formula in Exhibit B [***].

		
	6.3.
	Notwithstanding anything to the contrary in the Agreement, upon delivery of each Firm Backlog Aircraft, IAE will, as of the respective dates of delivery of each of the Firm Backlog Aircraft delivered to and accepted by JetBlue, calculate [***]:

		
	6.4.1.
	The Deemed Shipset Price (as defined below) escalated in accordance with Clause 6.1 above; [***] 

		
	6.4.2.
	The Deemed Shipset Price escalated in accordance with Clause 6.1 above [***].  

IAE will [***].  For the purposes of administering this provision, the “Deemed Shipset Price” is as follows:
	
		
	Aircraft (Engine) Type
	Deemed Shipset Price ([***])

	A319-100 (V2524-A5)
	US$[***]

	A320-200 (V2527-A5)
	US$[***]

	A321-100 (V2533-A5)
	US$$[***]

		
	6.4.
	Clause d of Side Letter No. 25, Credits and Late Delivery Period, is hereby deleted in its entirety from Side Letter No. 25.

		
	6.5.
	Clause e of Side Letter No. 25, Limitation to Late Delivery Period, is hereby deleted in its entirety from Side Letter No. 25.

		
	7.
	Amendments to SelectOneTM Terms and Conditions

		
	7.1.
	Clause 1.2 of Section 1 of Side Letter No. 21, Definitions, is hereby deleted in its entirety from Side Letter No. 21 and replaced with the following:

                                                        
[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

Page 3 of 15

IAE PROPRIETARY INFORMATION

		
	“1.2
	“SelectOneTM Engines” shall mean each V2500-A5 Engines in which the SelectOneTM Production Standard has been incorporated at production.”

		
	7.2.
	Section 2 of Side Letter No. 21, Purchase of SelectOneTM Engines, is hereby deleted in its entirety from Side Letter No. 21 and replaced with the following:

“2.    Purchase of SelectOneTM Engines
		
	2.1
	JetBlue shall pay IAE for each SelectOneTM Engine as follows:

		
	2.1.1
	For each SelectOneTM Engine originally installed from new on SelectOneTM Eligible Aircraft delivered to JetBlue on or after the SelectOneTM Production Date (“SelectOneTM Installed Engine”), [***] (US$[***]) [***] US$ per SelectOneTM Installed Engine (the “SelectOneTM Purchase Price”);

		
	2.1.2
	For each SelectOneTM Production Standard Spare Engine (“SelectOneTM Spare Engine”), the SelectOneTM Purchase Price.

		
	2.2
	In addition to the SelectOneTM Purchase Price, JetBlue will also pay for each SelectOneTM Eligible Aircraft the following amounts, as applicable (the “[***]”):

		
	2.2.1
	[***] (US$[***]) in [***] US$ per SelectOneTM Eligible Aircraft delivered with V2527-A5 rated SelectOneTM; or

		
	2.2.2
	[***] (US$[***]) in [***] US$ per SelectOneTM Eligible Aircraft delivered with V2533-A5 rated SelectOneTM Engines.

		
	2.3
	The Parties agree that for each SelectOneTM Eligible Aircraft delivered to JetBlue, the [***] provided to JetBlue for such aircraft shall be [***], escalated in accordance in Section 2.4 below.

		
	2.4
	The escalation of each SelectOneTM Purchase Price and [***] shall be calculated in accordance with Section 6 of Side Letter No. 37.”

		
	7.3.
	Section 3 of Side Letter No. 21, [***], is hereby deleted in its entirety from Side Letter No. 21 and replaced with the following:

“3.    [Reserved]”
		
	7.4.
	Section 4 of Side Letter No. 21, [***], is hereby deleted in its entirety from Side Letter No. 21 and replaced with the following:

“4.    [Reserved]”
		
	7.5.
	Section 3 of Exhibit A to Side Letter No.21, [***], is hereby deleted in its entirety and replaced with the following:

 “3.    SelectOneTM Purchase Price

		
	3.1
	JetBlue shall pay IAE for each SelectOneTM Engine as follows:

                                                        
[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

Page 4 of 15

IAE PROPRIETARY INFORMATION

		
	3.1.1
	For each SelectOneTM Engine originally installed from new on SelectOneTM Eligible Aircraft delivered to JetBlue on or after the SelectOneTM Production Date (“SelectOneTM Installed Engine”), [***] Dollars (US$[***]) in [***]US$ per SelectOneTM Installed Engine (the “SelectOneTM Purchase Price”);

		
	3.1.2
	For each SelectOneTM Production Standard Spare Engine (“SelectOneTM Spare Engine”), the SelectOneTM Purchase Price.

		
	3.2
	The SelectOneTM Purchase Price shall be escalated from a base month of [***] in accordance with the formula in Exhibit A-1 hereto to [***]. To the extent that JetBlue [***]. 

		
	3.3
	Notwithstanding Clause 3.2 above, for the period beginning January 1, 2005 and ending December 31, 20[***], escalation for the SelectOneTM Purchase Price as calculated in accordance with the formula in Exhibit A-1 hereto shall be [***], provided that for any year in which escalation calculated by the formula in Exhibit A-1 [***].

		
	3.4
	For the avoidance of doubt, the pricing information provided in this Section 3 has been reproduced in its entirety from the pricing information contained in Section 2.1 to Side Letter No. 21, as amended from time to time.”

		
	7.6.
	The Parties agree that as of the date of this Side Letter No. 37, [***] as set forth in Sections 3 and 4 of Side Letter No. 21 is null and void and JetBlue hereby [***]. 

		
	8.
	Removal of [***]

		
	8.1.
	[***], is hereby deleted in its entirety from [***]

		
	8.2.
	The Parties agree that as of the date of this Side Letter No. 37, [***] as set forth in [***] is [***] for Engines delivered to JetBlue at any time under the Agreement. 

		
	9.
	Miscellaneous

		
	9.1.
	This Side Letter No. 37 is not, and shall not be construed as, a waiver of either Party’s rights or remedies.

		
	9.2.
	This Side Letter No. 37 contains matters of a confidential and proprietary nature and is delivered on the express condition that its terms shall not be disclosed to any third party or reproduced in whole or in part for anyone other than the parties hereto without the other party's prior written consent, unless otherwise stated herein.

		
	9.3.
	This Side Letter No. 37 constitutes a valid, legal, binding obligation.  This Side Letter No. 37 shall be construed and interpreted in accordance with the laws of the State of Connecticut, United States of America with the exception of its conflict of law provisions.  

		
	9.4.
	This Side Letter No. 37 may be executed in one or more counterparts, each of which when so executed and delivered shall be an original but shall constitute one and the same instrument.

                                                       
[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

Page 5 of 15

IAE PROPRIETARY INFORMATION

Except as expressly amended by this Side Letter No. 37, all provisions of the Agreement (as amended from time to time by various side letters and amendments) remain in full force and effect.

	
		
	Very truly yours,
	Agreed to and accepted on behalf of

	IAE International Aero Engines AG
	JetBlue Airways Corporation

	/s/ Debarshi Mandal______________ _ 
By  
	/s/ Mark D. Powers__________________ 
By  

	Debarshi Mandal__________________ 
Name
	Mark D. Powers_____________________ 
Name  

	Commercial Manager_____________ _
Title
	Chief Financial Officer________________
Title

Page 6 of 15

IAE PROPRIETARY INFORMATION

APPENDIX 1

Exhibit B-1

Aircraft Delivery Schedule

As of November 2012
____________________________________________________________________________________
Glossary Notes:
		
	•
	R denotes the Incremental Firm Aircraft that will be treated as [***] in accordance with Section 2 of Side Letter No. 37.

		
	•
	* denotes Firm Aircraft that have received or will receive the $[***] ([***])$) spare parts credit as set forth in Section 7 of Side Letter No. 13 or Section 7 of Side Letter No. 17, as applicable, and as amended by Side Letter No. 25.

		
	•
	** denotes Firm Aircraft that have received or will receive the $[***] ([***]$) spare parts credit as set forth in Section 7 of Side Letter No. 13 or Section 7 of Side Letter No. 17, as applicable, and as amended by Side Letter No. 25.

		
	•
	† denotes Firm Aircraft that have received or will receive the both the $[***] ([***]$) and $[***] ([***]$) the spare parts credits and as set forth in Section 7 of Side Letter No. 13 or Section 7 of Side Letter No. 17, as applicable, and as amended by Side Letter No. 25.

		
	•
	Delivered Aircraft are indicated by italics typeface.

		
	•
	Applicable escalation formulae, indicated for the calculation of Fleet Introductory Assistance credits, are in accordance with Side Letter No. 13 and Side Letter No. 17 to the Agreement, as amended by Side Letter No. 25 to the Agreement.

____________________________________________________________________________________

	
							
	Rank No.
	Firm Aircraft Category
	Aircraft
Type
	Contracted
Month
	Contracted
Year
	Applicable
Escalation
	 

	No. 1
	Existing Firm Aircraft
	A320
	[***]
	2,000
	Formula I
	 

	No. 2
	Existing Firm Aircraft
	A320
	[***]
	2,000
	Formula I
	 

	No. 3
	Existing Firm Aircraft
	A320
	[***]
	2,000
	Formula I
	 

	No. 4
	Existing Firm Aircraft
	A320
	[***]
	2,000
	Formula I
	 

	No. 5
	Existing Firm Aircraft
	A320
	[***]
	2,000
	Formula I
	 

	No. 6
	Existing Firm Aircraft
	A320
	[***]
	2,000
	Formula I
	 

	No. 7
	Existing Firm Aircraft
	A320
	[***]
	2,001
	Formula I
	 

	No. 8
	Existing Firm Aircraft
	A320
	[***]
	2,001
	Formula I
	 

	No. 9
	Existing Firm Aircraft
	A320
	[***]
	2,001
	Formula I
	 

	No. 10
	Existing Firm Aircraft
	A320
	[***]
	2,001
	Formula I
	 

	No. 11
	Existing Firm Aircraft
	A320
	[***]
	2,001
	Formula I
	 

	No. 12
	Existing Firm Aircraft
	A320
	[***]
	2,001
	Formula I
	 

	No. 13
	Existing Firm Aircraft
	A320
	[***]
	2,001
	Formula I
	 

	No. 14
	Existing Firm Aircraft
	A320
	[***]
	2,002
	Formula I
	 

	No. 15
	Existing Firm Aircraft
	A320
	[***]
	2,002
	Formula I
	 

	No. 16
	Existing Firm Aircraft
	A320
	[***]
	2,002
	Formula I
	 

	No. 17
	Existing Firm Aircraft
	A320
	[***]
	2,002
	Formula I
	 

	No. 18
	Existing Firm Aircraft
	A320
	[***]
	2,002
	Formula I
	 

	No. 19
	Existing Firm Aircraft
	A320
	[***]
	2,002
	Formula I
	 

                                               
[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

Page 7 of 15

IAE PROPRIETARY INFORMATION

	
							
	Rank No.
	Firm Aircraft Category
	Aircraft
Type
	Contracted
Month
	Contracted
Year
	Applicable
Escalation
	 

	No. 20
	Existing Firm Aircraft
	A320
	[***]
	2002
	Formula I
	 

	No. 21
	Existing Firm Aircraft
	A320
	[***]
	2002
	Formula I
	 

	No. 22
	Existing Firm Aircraft
	A320
	[***]
	2002
	Formula I
	 

	No. 23
	Existing Firm Aircraft
	A320
	[***]
	2002
	Formula I
	 

	No. 24
	Existing Firm Aircraft
	A320
	[***]
	2002
	Formula I
	 

	No. 25
	Existing Firm Aircraft
	A320
	[***]
	2002
	Formula I
	 

	No. 26
	Existing Firm Aircraft
	A320
	[***]
	2002
	Formula I
	 

	No. 27
	Existing Firm Aircraft
	A320
	[***]
	2002
	Formula I
	 

	No. 28
	Existing Firm Aircraft
	A320
	[***]
	2002
	Formula I
	 

	No. 29
	Existing Firm Aircraft
	A320
	[***]
	2002
	Formula I
	 

	No. 30
	Existing Firm Aircraft
	A320
	[***]
	2003
	Formula I
	 

	No. 31
	Existing Firm Aircraft
	A320
	[***]
	2003
	Formula I
	 

	No. 32
	Existing Firm Aircraft
	A320
	[***]
	2003
	Formula I
	 

	No. 33
	Existing Firm Aircraft
	A320
	[***]
	2003
	Formula I
	 

	No. 34
	Existing Firm Aircraft
	A320
	[***]
	2003
	Formula I
	 

	No. 35
	Existing Firm Aircraft
	A320
	[***]
	2003
	Formula I
	 

	No. 36
	Existing Firm Aircraft
	A320
	[***]
	2003
	Formula I
	 

	No. 37
	Existing Firm Aircraft
	A320
	[***]
	2003
	Formula I
	 

	No. 38
	Existing Firm Aircraft
	A320
	[***]
	2003
	Formula I
	*

	No. 39
	Existing Firm Aircraft
	A320
	[***]
	2003
	Formula I
	 

	No. 40
	Existing Firm Aircraft
	A320
	[***]
	2003
	Formula I
	 

	No. 41
	Existing Firm Aircraft
	A320
	[***]
	2003
	Formula I
	 

	No. 42
	Existing Firm Aircraft
	A320
	[***]
	2003
	Formula I
	 

	No. 43
	Existing Firm Aircraft
	A320
	[***]
	2003
	Formula I
	*

	No. 44
	Existing Firm Aircraft
	A320
	[***]
	2003
	Formula I
	 

	No. 45
	Existing Firm Aircraft
	A320
	[***]
	2004
	Formula I
	 

	No. 46
	Existing Firm Aircraft
	A320
	[***]
	2004
	Formula I
	 

	No. 47
	Existing Firm Aircraft
	A320
	[***]
	2004
	Formula I
	 

	No. 48
	Existing Firm Aircraft
	A320
	[***]
	2004
	Formula I
	*

	No. 49
	Existing Firm Aircraft
	A320
	[***]
	2004
	Formula I
	 

	No. 50
	Existing Firm Aircraft
	A320
	[***]
	2004
	Formula I
	 

	No. 51
	Existing Firm Aircraft
	A320
	[***]
	2004
	Formula I
	 

	No. 52
	Existing Firm Aircraft
	A320
	[***]
	2004
	Formula I
	 

	No. 53
	Existing Firm Aircraft
	A320
	[***]
	2004
	Formula I
	*

	No. 54
	Existing Firm Aircraft
	A320
	[***]
	2004
	Formula I
	 

	No. 55
	Incremental Firm Aircraft
	A320
	[***]
	2004
	Formula I
	 

	No. 56
	Existing Firm Aircraft
	A320
	[***]
	2004
	Formula I
	 

	No. 57
	Existing Firm Aircraft
	A320
	[***]
	2004
	Formula I
	 

	No. 58
	Existing Firm Aircraft
	A320
	[***]
	2004
	Formula I
	*

	No. 59
	Incremental Firm Aircraft
	A320
	[***]
	2004
	Formula I
	 

                                               
[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

Page 8 of 15

IAE PROPRIETARY INFORMATION

	
							
	Rank No.
	Firm Aircraft Category
	Aircraft
Type
	Contracted
Month
	Contracted
Year
	Applicable
Escalation
	 

	No. 60
	Existing Firm Aircraft
	A320
	[***]
	2005
	Formula I
	 

	No. 61
	Existing Firm Aircraft
	A320
	[***]
	2005
	Formula I
	 

	No. 62
	Incremental Firm Aircraft
	A320
	[***]
	2005
	Formula I
	 

	No. 63
	Existing Firm Aircraft
	A320
	[***]
	2005
	Formula I
	*

	No. 64
	Existing Firm Aircraft
	A320
	[***]
	2005
	Formula I
	 

	No. 65
	Existing Firm Aircraft
	A320
	[***]
	2005
	Formula I
	 

	No. 66
	Existing Firm Aircraft
	A320
	[***]
	2005
	Formula I
	 

	No. 67
	Incremental Firm Aircraft
	A320
	[***]
	2005
	Formula I
	 

	No. 68
	Existing Firm Aircraft
	A320
	[***]
	2005
	Formula I
	*

	No. 69
	Existing Firm Aircraft
	A320
	[***]
	2005
	Formula I
	 

	No. 70
	Existing Firm Aircraft
	A320
	[***]
	2005
	Formula I
	 

	No. 71
	Incremental Firm Aircraft
	A320
	[***]
	2005
	Formula I
	**

	No. 72
	Existing Firm Aircraft
	A320
	[***]
	2005
	Formula I
	 

	No. 73
	Existing Firm Aircraft
	A320
	[***]
	2005
	Formula I
	*

	No. 74
	Incremental Firm Aircraft
	A320
	[***]
	2005
	Formula I
	 

	No. 75
	Incremental Firm Aircraft
	A320
	[***]
	2005
	Formula I
	 

	No. 76
	2004 Incremental Aircraft
	A320
	[***]
	2006
	Formula II
	 

	No. 77
	Existing Firm Aircraft
	A320
	[***]
	2006
	Formula I
	 

	No. 78
	Incremental Firm Aircraft
	A320
	[***]
	2006
	Formula I
	*

	No. 79
	Incremental Firm Aircraft
	A320
	[***]
	2006
	Formula I
	 

	No. 80
	Existing Firm Aircraft
	A320
	[***]
	2006
	Formula I
	 

	No. 81
	Incremental Firm Aircraft
	A320
	[***]
	2006
	Formula I
	**

	No. 82
	Existing Firm Aircraft
	A320
	[***]
	2006
	Formula I
	 

	No. 83
	Incremental Firm Aircraft
	A320
	[***]
	2006
	Formula I
	*

	No. 84
	Incremental Firm Aircraft
	A320
	[***]
	2006
	Formula I
	 

	No. 85
	Existing Firm Aircraft
	A320
	[***]
	2006
	Formula I
	 

	No. 86
	Incremental Firm Aircraft
	A320
	[***]
	2006
	Formula I
	 

	No. 87
	Incremental Firm Aircraft
	A320
	[***]
	2006
	Formula I
	 

	No. 88
	Existing Firm Aircraft
	A320
	[***]
	2006
	Formula I
	*

	No. 89
	Incremental Firm Aircraft
	A320
	[***]
	2006
	Formula I
	**

	No. 90
	Incremental Firm Aircraft
	A320
	[***]
	2006
	Formula I
	 

	No. 91
	2004 Incremental Aircraft
	A320
	[***]
	2006
	Formula II
	 

	No. 92
	Existing Firm Aircraft
	A320
	[***]
	2007
	Formula I
	 

	No. 93
	Existing Firm Aircraft
	A320
	[***]
	2007
	Formula I
	*

	No. 94
	2004 Incremental Aircraft
	A320
	[***]
	2007
	Formula II
	 

	No. 95
	Existing Firm Aircraft
	A320
	[***]
	2007
	Formula I
	 

	No. 96
	Existing Firm Aircraft
	A320
	[***]
	2007
	Formula I
	 

	No. 97
	Existing Firm Aircraft
	A320
	[***]
	2007
	Formula I
	 

	No. 98
	Incremental Firm Aircraft
	A320
	[***]
	2007
	Formula I
	*

	No. 99
	Incremental Firm Aircraft
	A320
	[***]
	2007
	Formula I
	 

                                            
[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

Page 9 of 15

IAE PROPRIETARY INFORMATION

	
							
	Rank No.
	Firm Aircraft Category
	Aircraft
Type
	Contracted
Month
	Contracted
Year
	Applicable
Escalation
	 

	No. 100
	Incremental Firm Aircraft
	A320
	[***]
	2007
	Formula I
	 

	No. 101
	Incremental Firm Aircraft
	A320
	[***]
	2007
	Formula I
	**

	No. 102
	Incremental Firm Aircraft
	A320
	[***]
	2007
	Formula I
	 

	No. 103
	Incremental Firm Aircraft
	A320
	[***]
	2007
	Formula I
	*

	No. 104
	Incremental Firm Aircraft
	A320
	[***]
	2008
	Formula I
	 

	No. 105
	Incremental Firm Aircraft
	A320
	[***]
	2008
	Formula I
	 

	No. 106
	Incremental Firm Aircraft
	A320
	[***]
	2008
	Formula I
	**

	No. 107
	Incremental Firm Aircraft
	A320
	[***]
	2008
	Formula I
	 

	No. 108
	Incremental Firm Aircraft
	A320
	[***]
	2008
	Formula I
	*

	No. 109
	Incremental Firm Aircraft
	A320
	[***]
	2008
	Formula I
	 

	No. 110
	Incremental Firm Aircraft
	A320
	[***]
	2008
	Formula I
	 

	No. 111
	Incremental Firm Aircraft
	A320
	[***]
	2008
	Formula I
	**

	No. 112
	Incremental Firm Aircraft
	A320
	[***]
	2008
	Formula I
	 

	No. 113
	Incremental Firm Aircraft
	A320
	[***]
	2008
	Formula I
	*

	No. 114
	Incremental Firm Aircraft
	A320
	[***]
	2008
	Formula I
	 

	No. 115
	Incremental Firm Aircraft
	A320
	[***]
	2008
	Formula I
	 

	No. 116
	Incremental Firm Aircraft
	A320
	[***]
	2009
	Formula I
	**

	No. 117
	Incremental Firm Aircraft
	A320
	[***]
	2009
	Formula I
	 

	No. 118
	Incremental Firm Aircraft
	A320
	[***]
	2009
	Formula I
	*

	No. 119
	Incremental Firm Aircraft
	A320
	[***]
	2010
	Formula I
	 

	No. 120
	Incremental Firm Aircraft
	A320
	[***]
	2010
	Formula I
	 

	No. 121
	Incremental Firm Aircraft
	A320
	[***]
	2010
	Formula I
	**

	No. 122
	2004 Incremental Aircraft
	A320
	[***]
	2011
	Formula II
	 

	No. 123
	2004 Incremental Aircraft
	A320
	[***]
	2011
	Formula II
	†

	No. 124
	2004 Incremental Aircraft
	A320
	[***]
	2011
	Formula II
	 

	No. 125
	2004 Incremental Aircraft
	A320
	[***]
	2011
	Formula II
	 

	No. 126
	2004 Incremental Aircraft
	A320
	[***]
	2012
	Formula II
	R

	No. 127
	2004 Incremental Aircraft
	A320
	[***]
	2012
	Formula II
	R

	No. 128
	2004 Incremental Aircraft
	A320
	[***]
	2012
	Formula II
	R† 

	No. 129
	2004 Incremental Aircraft
	A320
	[***]
	2012
	Formula II
	R

	No. 130
	2004 Incremental Aircraft
	A320
	[***]
	2013
	Formula II
	R

	No. 131
	2004 Incremental Aircraft
	A320
	[***]
	2013
	Formula II
	R

	No. 132
	2004 Incremental Aircraft
	A320
	[***]
	2013
	Formula II
	R

	No. 133
	2004 Incremental Aircraft
	A321
	[***]
	2013
	Formula II
	†

	No. 134
	2004 Incremental Aircraft
	A321
	[***]
	2013
	Formula II
	 

	No. 135
	2004 Incremental Aircraft
	A321
	[***]
	2013
	Formula II
	 

	No. 136
	2004 Incremental Aircraft
	A321
	[***]
	2013
	Formula II
	 

	No. 137
	2004 Incremental Aircraft
	A321
	Year
	2014
	Formula II
	R

	No. 138
	2004 Incremental Aircraft
	A321
	Year
	2014
	Formula II
	R† 

                                            
[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

Page 10 of 15

IAE PROPRIETARY INFORMATION

	
							
	Rank No.
	Firm Aircraft Category
	Aircraft
Type
	Contracted
Month
	Contracted
Year
	Applicable
Escalation
	 

	No. 139
	2004 Incremental Aircraft
	A321
	Year
	2014
	Formula II
	R

	No. 140
	2004 Incremental Aircraft
	A321
	Year
	2014
	Formula II
	R

	No. 141
	2004 Incremental Aircraft
	A321
	Year
	2014
	Formula II
	R

	No. 142
	2004 Incremental Aircraft
	A321
	Year
	2014
	Formula II
	R

	No. 143
	2004 Incremental Aircraft
	A321
	Year
	2014
	Formula II
	†

	No. 144
	2004 Incremental Aircraft
	A321
	Year
	2014
	Formula II
	 

	No. 145
	2004 Incremental Aircraft
	A321
	Year
	2014
	Formula II
	R

	No. 146
	2004 Incremental Aircraft
	A321
	Year
	2015
	Formula II
	 

	No. 147
	2004 Incremental Aircraft
	A321
	Year
	2015
	Formula II
	 

	No. 148
	2004 Incremental Aircraft
	A321
	Year
	2015
	Formula II
	†

	No. 149
	2004 Incremental Aircraft
	A321
	Year
	2015
	Formula II
	 

	No. 150
	2004 Incremental Aircraft
	A321
	Year
	2015
	Formula II
	 

	No. 151
	2004 Incremental Aircraft
	A321
	Year
	2015
	Formula II
	 

	No. 152
	2004 Incremental Aircraft
	A321
	Year
	2015
	Formula II
	 

	No. 153
	2004 Incremental Aircraft
	A321
	Year
	2015
	Formula II
	R† 

	No. 154
	2004 Incremental Aircraft
	A321
	Year
	2015
	Formula II
	 

	No. 155
	2004 Incremental Aircraft
	A321
	Year
	2015
	Formula II
	 

	No. 156
	2004 Incremental Aircraft
	A321
	Year
	2016
	Formula II
	 

	No. 157
	2004 Incremental Aircraft
	A321
	Year
	2016
	Formula II
	 

	No. 158
	2004 Incremental Aircraft
	A321
	Year
	2016
	Formula II
	 

	No. 159
	2004 Incremental Aircraft
	A321
	Year
	2016
	Formula II
	 

	No. 160
	2004 Incremental Aircraft
	A321
	Year
	2016
	Formula II
	 

	No. 161
	2004 Incremental Aircraft
	A321
	Year
	2016
	Formula II
	 

	No. 162
	2004 Incremental Aircraft
	A321
	Year
	2016
	Formula II
	R

	No. 163
	2004 Incremental Aircraft
	A320
	Year
	2016
	Formula II
	 

	No. 164
	2004 Incremental Aircraft
	A320
	Year
	2016
	Formula II
	 

	No. 165
	2004 Incremental Aircraft
	A320
	Year
	2016
	Formula II
	 

	No. 166
	2004 Incremental Aircraft
	A320
	Year
	2017
	Formula II
	 

	No. 167
	2004 Incremental Aircraft
	A320
	Year
	2017
	Formula II
	 

	No. 168
	2004 Incremental Aircraft
	A320
	Year
	2017
	Formula II
	 

	No. 169
	2004 Incremental Aircraft
	A320
	Year
	2017
	Formula II
	R

	No. 170
	2004 Incremental Aircraft
	A320
	Year
	2017
	Formula II
	R

	No. 171
	2004 Incremental Aircraft
	A320
	Year
	2017
	Formula II
	R

	No. 172
	2004 Incremental Aircraft
	A320
	Year
	2017
	Formula II
	R

	No. 173
	2004 Incremental Aircraft
	A320
	Year
	2017
	Formula II
	R

                                            
[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

Page 11 of 15

IAE PROPRIETARY INFORMATION

APPENDIX 2 

Exhibit B-2
 
Purchased Items, Price, Escalation Formula and Delivery

As of November 2012
____________________________________________________________________________________
Glossary Notes:
		
	•
	Delivered Firm Spare Engines are indicated by italics typeface

		
	•
	Applicable escalation formulae, indicated for the calculation of Spare Engine pricing and credits, are in accordance with Side Letter No. 13 and Side Letter No. 17 to the Agreement, as amended by Side Letter No. 25 to the Agreement.

____________________________________________________________________________________

	
								
	 	Rank No.
	Engine Model
	Basic Contract Price (US$)
	Base Month
	Qty
	Applicable  
Escalation
	Contracted
Delivery Date

	 
	 	No. 1
	V2527-A5
	[***]
	[***]
	1
	Formula I
	[***]-99

	 	No. 2
	V2527-A5
	[***]
	[***]
	1
	Formula I
	[***]-00

	 	No. 3
	V2527-A5
	[***]
	[***]
	1
	Formula I
	[***]-01

	 	No. 4
	V2527-A5
	[***]
	[***]
	1
	Formula I
	[***]-02

	 	No. 5
	V2527-A5
	[***]
	[***]
	1
	Formula I
	[***]-02

	 	No. 6
	V2527-A5
	[***]
	[***]
	1
	Formula I
	[***]-03

	 	No. 7
	V2527-A5
	[***]
	[***]
	1
	Formula I
	[***]-04

	 	No. 8
	V2527-A5
	[***]
	[***]
	1
	Formula I
	[***]-05

	 	No. 9
	V2527-A5
	[***]
	[***]
	1
	Formula I
	[***]-05

	 	No. 10
	V2527-A5
	[***]
	[***]
	1
	Formula II
	[***]-06

	 	No. 11
	V2527-A5
	[***]
	[***]
	1
	Formula I
	[***]-06

	 	No. 12
	V2527-A5
	[***]
	[***]
	1
	Formula II
	[***]-07

	 	No. 13
	V2527-A5
	[***]
	[***]
	1
	Formula I
	[***]-07

	 	No. 14
	V2527-A5
	[***]
	[***]
	1
	Formula I
	[***]-07

	 	No. 15
	V2527-A5
	[***]
	[***]
	1
	Formula II
	[***]-07

	 	No. 16
	V2527-A5
	[***]
	[***]
	1
	Formula I
	[***]-07

	 	No. 17
	V2527-A5
	[***]
	[***]
	1
	Formula I
	[***]-08

	 	No. 18
	V2527-A5
	[***]
	[***]
	1
	Formula I
	[***]-08

	 	No. 19
	V2527-A5
	[***]
	[***]
	1
	Formula I
	[***]-09

	 	No. 20
	V2527-A5
	[***]
	[***]
	1
	Formula I
	[***]-10

	 	No. 21
	V2527-A5
	[***]
	[***]
	1
	Formula II
	[***]-10

	 	No. 22
	V2527-A5
	[***]
	[***]
	1
	Formula I
	[***]-10

	 	No. 23
	V2527-A5
	[***]
	[***]
	1
	Formula I
	[***]-11

	 	No. 24
	V2533-A5
	[***]
	[***]
	1
	Formula II
	[***]-11

	 	No. 25
	V2533-A5
	[***]
	[***]
	1
	Formula II
	[***]-11

	 	No. 26
	V2533-A5
	[***]
	[***]
	1
	Formula II
	[***]-11

	 	No. 27
	V2533-A5
	[***]
	[***]
	1
	Formula II
	[***]-12

	 	No. 28
	V2533-A5
	[***]
	[***]
	1
	Formula II
	[***]-12

                                                        
[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

Page 12 of 15

IAE PROPRIETARY INFORMATION

 ESCALATION FORMULA I

		
	1.
	Any unit base price or other sum expressed to be subject to escalation from a base month to a month of delivery or other date of determination in accordance with the IAE Escalation Formula will be subject to escalation in accordance with the following formula:

P = Pb ( [***]  L + [***]  M + [***] E )
 Lo      Mo        Eo

Where:

P = the invoiced purchase price or escalated sum rounded to the nearest U.S. Dollar

Pb = unit base price or other sum.

Lo = the “North American Industry Classification System (NAICS) Wages and Salaries for Aircraft Manufacturing (NAICS Code 336411), CIU2023211000000I” as published quarterly by the Bureau of Labor Statistics, U.S. Department of Labor for the Labor for the month preceding the base month by four months.

L = the “North American Industry Classification System (NAICS) Wages and Salaries for Aircraft Manufacturing (NAICS Code 336411), CIU2023211000000I” as published quarterly by the Bureau of Labor Statistics, U.S. Department of Labor for the month preceding the month of delivery or other date of determination by four months.

Mo = the “Producer Price Index, Code 10, for Metals and Metal Products” published by the Bureau of Labor Statistics in the U.S. Department of Labor for the month preceding the base month by four months.

M = the “Producer Price Index, Code 10, for Metals and Metal Products” for the month preceding the base month by four months.

Eo = the “Producer Price Index, Code 5, for Fuel and Related Products and Power” published by the Bureau of Labor Statistics in the U.S. Department of Labor for the month preceding the base month by four months.

E = the “Producer Price Index, Code 5, for Fuel and Related Products and Power” for the month preceding the base month by four months.

The values of the factors   [***]  L + [***]  M + [***]  E
 Lo      Mo       Eo

Respectively, shall be determined to the nearest fourth decimal place.  If the fifth decimal is five or more, the fourth decimal place shall be raised to the next higher number.

If the U.S. Department of Labor ceases to publish the above statistics or modifies the basis of their calculation, then IAE may substitute any officially recognized and substantially equivalent statistics.

The Basic Contract Prices contained in this Exhibit B are subject to escalation from a Base Month of [***] to the month of delivery using using Lo, Mo and Eo values for September 2002.

                                                        
[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

Page 13 of 15

IAE PROPRIETARY INFORMATION

If the application of the formula contained in this Exhibit B results in a Purchase Price which is lower than the Basic Contract Price, the Basic Contract Price will be deemed to be the Purchase Price for such Supplies.

ESCALATION FORMULA II
		
	1.
	Any unit base price or other sum expressed to be subject to escalation from a base month to a month of delivery or other date of determination in accordance with the IAE Escalation Formula will be subject to escalation in accordance with the following formula:

		
	Pi
	=    (Pb+F) x CPI where:

		
	Pi
	=    the invoiced purchase price or escalated sum rounded to the nearest U.S. Dollar.

Pb    =    unit base price or other sum.

F    =    [***] (N)(Pb)

N    =    the calendar year of scheduled delivery or other date of determination minus 2003

CPI    =    [***] (L) + [***] (M)

L    =    Labor Ratio defined below

M    =    Material Ratio defined below

IAE’s Composite Price Index (“CPI”) is the sum of [***] percent of the Labor ratio and [***] percent of the Material Ratio, with the sum rounded to the nearest ten thousandth.
The quarterly value published for the Employment Cost Index will be deemed to apply to each month of the quarter.
The Labor Ratio is the “North American Industry Classification System (NAICS) Wages and Salaries for Aircraft Manufacturing (NAICS Code 336411), CIU2023211000000I” as published quarterly by the Bureau of Labor Statistics, U.S. Department of Labor for the arithmetic average of the fifth, sixth and seventh months (rounded to the nearest tenth) preceding the month of scheduled delivery for each engine/equipment; divided by the value of “North American Industry Classification System (NAICS) Wages and Salaries for Aircraft Manufacturing (NAICS Code 336411), CIU2023211000000I” for the arithmetic average of the fifth, sixth and seventh months (rounded to the nearest tenth) preceding the Base Month. To be clear the quarterly value of CIU2023211000000I will apply to each month of a given quarter.

The Material Ratio is the “Producer Price Index, Industrial Commodities, WPU03thru15”, as published monthly by the Bureau of Labor Statistics, U.S. Department of Labor, for the arithmetic average of the fifth, sixth and seventh months (rounded to the nearest tenth) preceding the month of scheduled delivery for each engine/equipment; divided by the value for Industrial Commodities for the arithmetic average of the fifth, sixth and seventh months (rounded to the nearest tenth) preceding the Base Month.

For a given month, the escalation shall be computed by using the applicable Index value, which the Bureau has published as the time of delivery or other date of determination.

                                                        
[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

Page 14 of 15

IAE PROPRIETARY INFORMATION

		
	2.
	If the U.S. Department of Labor changes the base year for determination of the Index values as defined above, such re-based values will be incorporated in the escalation calculation.

		
	3.
	If the U.S. Department of Labor revises the methodology used for the determination of the values to be used to determine the CPI or, for any reason, has not released values needed to determine the CPI, IAE, in its sole discretion, shall select a substitute for such values from data published by the Bureau of Labor Statistics or otherwise make revisions to the escalation formula such that the escalation will as closely as possible approximate the result that would have been attained by continuing the use of the original escalation formula and values as they may have fluctuated during the applicable time period.

		
	4.
	The invoiced purchase price, which in no event shall be less than the unit base price, shall be the final price.  If the calculated sum of L + M is less than 1.0000, then the value of the sum is adjusted to 1.0000.

Page 15 of 15

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