Credit and Engine Pricing Escalation Clause Samples
The Credit and Engine Pricing Escalation clause establishes a mechanism for adjusting the prices of credits and engines over time, typically in response to changes in market conditions or cost indices. In practice, this clause may specify how and when price adjustments occur, such as annual increases based on inflation rates or specific cost benchmarks relevant to the industry. Its core function is to ensure that pricing remains fair and reflective of current economic realities, thereby protecting both parties from unexpected cost fluctuations and maintaining the contract's financial balance.
Credit and Engine Pricing Escalation. 4.1 The FIA Credits, Spare Engine Credits *****, referenced in Sections 2 and 3 above, are subject to escalation in accordance with the IAE Escalation Formula set forth in Exhibit B-3 to the New Fleet Contract, and shall be escalated from a base month of January 2012 (the “Base Month”) to the earlier of the applicable scheduled delivery date as set forth in Exhibit B-1 (and B-2 if applicable) of the New Fleet Contract or the actual delivery date of the applicable Aircraft or Spare Engine (the “Base Escalated Credit”). *****
4.5 Upon delivery of each Aircraft, IAE will, as of the respective dates of delivery of each of the Aircraft delivered to Spirit, calculate the difference (if any) between:
(a) The Deemed Shipset Price (as defined below) escalated in accordance with Section 4.1 above; minus
(b) The Deemed Shipset Price escalated in accordance with Section 4.1 above and capped in accordance with Section 5.2 above. IAE will adjust the amount of the FIA Credit due and payable to Spirit for each such Aircraft by such difference. For the purposes of administering this provision, the “Deemed Shipset Price” is as follows:
4.6 IAE agrees that the credits provided to herein Spirit shall not expire provided that: (i) the New Fleet Contract remains in full force and effect, (ii) the credits have not been applied to overdue amounts arising under the New Fleet Contract or the New Fleet FHA under rights of set off and (iii) Spirit continues to operate at least one (1) Aircraft. *****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
Credit and Engine Pricing Escalation. The Incremental Aircraft shall be purchased in accordance with, and the Parties shall be subject to, the same terms and conditions with respect to the Credit and Engine Pricing Escalation as the Original Aircraft, as outlined in Section 4 of Side Letter 1 to the New Fleet Contact, dated October 1, 2013.
Credit and Engine Pricing Escalation. 3.1 The FIA Credits and Spare Engine Credits, referenced in Sections 1and 2above, are subject to escalation in accordance with the IAE Escalation Formula set forth in Exhibit B-3 to the Contract, and shall be escalated from a base month of January 2006 (the “Base Month”) to the earlier of the scheduled delivery date as set forth in Exhibit B-1 (and B-2 if applicable) of the Contract or the actual delivery date of the applicable Aircraft or Spare Engine (the “Base Escalated Credit”).
3.5 Upon delivery of each Aircraft, IAE will, as of the respective dates of delivery of each of the Aircraft delivered to Spirit, calculate the difference (if any) between:
(a) The Deemed Shipset Price (as defined below) escalated in accordance with Section 3.1 above; minus
(b) The Deemed Shipset Price escalated in accordance with Section 3.1 above and capped in accordance with Section 3.2 above.
Credit and Engine Pricing Escalation. 3.1 The FIA Credits and Spare Engine Credits, referenced in Sections 1and 2above, are subject to escalation in accordance with the IAE Escalation Formula set forth in Exhibit B-3 to the Contract, and shall be escalated from a base month of January 2006 (the "Base Month") to the earlier of the scheduled delivery date as set forth in Exhibit B-1 (and B-2 if applicable) of the Contract or the actual delivery date of the applicable Aircraft or Spare Engine (the "Base Escalated Credit").
3.2 [***]
3.3 [***]
3.4 [***]
3.5 Upon delivery of each Aircraft, IAE will, as of the respective dates of delivery of each of the Aircraft delivered to Spirit, calculate the difference (if any) between: Page 50 of 50
(a) The Deemed Shipset Price (as defined below) escalated in accordance with Section 3.1 above; minus
(b) The Deemed Shipset Price escalated in accordance with Section 3.1 above and capped in accordance with Section 3.2 above. IAE will adjust the amount of the FIA Credits due and payable to Spirit for each such Aircraft by such difference. For the purposes of administering this provision, the "Deemed Shipset Price" is as follows: A319 (V2524-A5) [***] A320 (V2527-A5) [***] A321 (V2533-A5) [***]