V2500 General Terms of Sale Agreement [Side Letter No. 8] - IAE International Aero Engines AG and JetBlue Airways Corp.
[LETTERHEAD OF INTERNATIONAL AERO ENGINES]
31 October 2001
JetBlue Airways Corporation
19 Old Kings Highway South, Suite 23
Darien, Connecticut 06820
Attention: Vice President and Treasurer
Subject: Side letter No. 8 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 V2500 General Terms of Sale Agreement between JetBlue Airways
Corporation ("JetBlue") and IAE International Aero Engines AG ("IAE") dated May
4, 1999 (the "Agreement"). Capitalized terms used herein which are not otherwise
defined shall have the same meaning as those given to them in the Agreement.
This Side Letter No. 8 provides flexibility to JetBlue on the payment terms for
certain Purchased Item and sets forth terms and conditions for advancing certain
Fleet Introductory Credits to JetBlue.
1. PREDELIVERY PAYMENT DEFERRALS
IAE hereby agrees to allow JetBlue to defer two (2) pre-delivery deposit
payments due to be paid to IAE in [****] 2001 for Purchased Items numbers
5 and 6 scheduled for delivery in [****] 2002 and [****] 2003,
respectively, as follows:
(i) that certain deposit of [****] percent ([****]%) of the Estimated
Purchase Price, in the amount of U.S.$[****], which is to be paid
to IAE [****] months before the scheduled delivery of Purchased Item
No. 5 (the "[****] Month PDP Amount"), and
(ii) that certain deposit of [****] percent ([****]%) of the Estimated
Purchase Price, in the amount of U.S.$[****], which is to be
paid to IAE [****] months before the scheduled delivery of
Purchased Item No.
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[****] Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant to
Rule 406 under the Securities Act of 1933, as amended.
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6 (the "[****] Month PDP Amount," together with the [****] Month
PDP Amount, the "PDP Amounts"),
shall now in each case be due and payable to IAE in [****] 2002 at the
time of the scheduled delivery of Purchased Item No. 4, or should such
Purchased Item not be delivered in [****] as scheduled, no later than
the last business day of [****] 2002.
2. ADVANCED FLEET INTRODUCTORY CREDITS
IAE agrees to advance certain Fleet Introductory Credits to JetBlue as
follows:
(i) with respect to the Aircraft ranked Nos. 11, 12 and 13, which are
scheduled for delivery on [****] 2001, [****] 2001 and [****]
2001, respectively (the "Credit Advance Aircraft"), IAE will advance
to JetBlue, in addition to the credits already to be provided under
the Agreement, an additional credit amount with each one of these
three (3) aircraft only, which is equal (the "FIA Credits") to the
following: [****]
JetBlue agrees to that the total amount of such FIA Credits shall be
repaid to IAE as follows:
(ii) commencing with Aircraft No. 14 onwards, IAE shall automatically
reduce the credit to be provided by IAE on delivery of each aircraft
at a fixed rate of U.S.$[****] per Aircraft at the time of delivery
of the Aircraft to JetBlue until the total amount of the FIA Credits
advanced to JetBlue under this Side Letter No. 8 has been repaid in
full to IAE (the "Repayment Aircraft"); PROVIDED, HOWEVER, that with
respect to Aircraft No. 18 only, which is scheduled to be delivered
in [****] 2002, IAE shall automatically reduce the credit to be
provided by IAE on delivery of such aircraft by an amount equal to
the following: [****]
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[****] Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant to
Rule 406 under the Securities Act of 1933, as amended.
<Page>
[****]
JetBlue and IAE hereby agree that if JetBlue fails to take delivery of a
Credit Advance Aircraft or any Repayment Aircraft, or informs IAE or
Airbus, or IAE in its sole discretion determines, that it will not take
delivery, of any or all of such Aircraft and spare engines it has firmly
committed to IAE to purchase, then IAE will immediately cease advancing
any more FIA Credits to JetBlue and JetBlue will promptly pay to IAE the
PDP Amounts and any FIA Credits already advanced to JetBlue. In addition,
if:
(a) The present ownership of JetBlue, or a portion thereof which is
greater than 50 percent of the present ownership is transferred to a
third party, or there has been a change in the beneficial ownership
of the total voting power of all classes of stock then outstanding
which are normally entitled to vote in the election of JetBlue's
directors. If JetBlue can demonstrate to the satisfaction of IAE
that the surviving company resulting from the transfer is at least
as credit worthy as JetBlue prior to such transfer then IAE will
waive its rights under this Paragraph (a).
(b) JetBlue falls to make payment of any indebtedness for borrowed money
which, in the aggregate, is greater than U.S.$[****] (or its
equivalent in other currencies) when due (subject to any applicable
period of grace) or any default or event of default occurs which
causes such indebtedness to become, or to permit any person to
declare the same, due prior to its normal maturity and such person
has not waived its right to declare the same due.
(c) JetBlue commences any case, proceeding or other action with respect
to JetBlue or its property in any jurisdiction relating to
bankruptcy, insolvency, reorganization, dissolution, liquidation,
winding-up, or relief from, or with respect to, or readjustment of,
debts or obligations.
(d) JetBlue seeks the appointment of a receiver, trustee, custodian or
other similar official for JetBlue for all or substantially all of
its assets, or JetBlue makes a general assignment for the benefit of
its creditors.
(e) JetBlue otherwise becomes the object of any case, proceeding or
action of the type referred to in the preceding clauses (c) or (d)
which remains unstayed, undismissed or undischarged for a period of
sixty (60) days.
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[****] Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant to
Rule 406 under the Securities Act of 1933, as amended.
<Page>
(f) An action is commenced against JetBlue seeking issuance of a warrant
of attachment, execution, distraint or similar process against all
or any substantial part of its assets which remains unstayed,
undismissed or undischarged for a period of sixty (60) days; or
(g) In the opinion of IAE, a material adverse change has occurred with
respect to the financial condition or operations of JetBlue since
the date of this side letter.
then, in the event that any of the conditions listed in the above
paragraphs (a) through (g) occur, JetBlue will no longer receive any FIA
Credits. JetBlue will instead immediately pay IAE in immediately available
funds all PDP Amounts and FIA Credit Amounts already advanced together
with interest on the late payment of any such amounts at [****] ([****]%),
such rate to be determined as of the date that the original payments were
due. An interest penalty for late payment will be applied from the date
such PDP Amounts or FIA Credits were due to be paid to IAE until the date
that IAE receives payment therefor.
3. SETTLEMENT OF CLAIM
JetBlue hereby agrees that in consideration of the cost to IAE, including
the cost of money, in providing pre-delivery payment deferrals and FIA
Credits to JetBlue, that JetBlue agrees that the IAE commitments hereunder
are full and final settlement for any and all JetBlue claims arising from
the late delivery by IAE to JetBlue of that certain V2500-A5 spare engine
bearing serial number V11033.
Except as expressly amended by this Side Letter No. 8 all provisions of the
Agreement 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/ ILLEGIBLE /s/ T.E. Anderson
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Name Name
VP Finance & CFO VICE PRESIDENT
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Title Title
November 2, 2001 NOVEMBER 2, 2001
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Date Date
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[****] Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant to
Rule 406 under the Securities Act of 1933, as amended.