Western Pacific Airlines, Inc.
6-1162-JDR-400 Page 1
6-1162-JDR-400
Western Pacific Airlines, Inc.
0000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxxx Xxxxxxx, XX 00000
Subject: Letter Agreement No. 6-1162-JDR-400 to
Purchase Agreement No. 1947 --
Miscellaneous Matters
This Letter Agreement amends Purchase Agreement No. 1947 dated as of even date
herewith (the Agreement) between The Boeing Company (Boeing) and Western Pacific
Airlines, Inc. (Buyer) relating to Model 737-300
aircraft (the Aircraft).
All terms used herein and in the Agreement, and not defined herein, will have
the same meaning as in the Agreement.
1. Notice of Delivery Date.
Boeing and Buyer agree that Article 2.3 is hereby revised to read
as follows:
2.3 Notice of Delivery Date. Boeing will give Buyer at
least 15 days notice of the delivery date of the Aircraft. If an Aircraft
delivery is delayed beyond such delivery date due to the responsibility of
Buyer, Buyer will reimburse Boeing for all costs incurred by Boeing as a result
of such delay, including reasonable amounts for storage, insurance, Taxes,
preservation or protection of the Aircraft and interest on payments due.
2. Xxxx of Sale.
Boeing and Buyer agree that Article 2.6 is hereby revised to read
as follows:
2.6 Xxxx of Sale. Upon delivery of an Aircraft Boeing will
deliver to Buyer, or to such other entity as Buyer directs in accordance with
Article 10 hereof, a xxxx of sale conveying to Buyer or such other entity good
title to such Aircraft, free and clear of all liens, claims, charges and
encumbrances of every kind whatsoever, and such other appropriate document of
title that Buyer reasonably requests.
P.A. No. 1947
K/WPA
Western Pacific Airlines, Inc.
6-1162-JDR-400 Page 2
3. Taxes.
Boeing and Buyer agree that Article 4.1 is hereby revised to read
as follows:
4.1 Taxes. Buyer will pay all Taxes imposed by any
domestic or foreign taxing authority arising out of or in connection with this
Agreement or performance pursuant to it. In this Agreement, "Taxes" are defined
as all taxes, fees, charges or duties and any interest, penalties, fines, or
other additions to tax (other than any such penalties, fines, interest or other
additions arising from the failure of Boeing to pay any such taxes in a timely
manner, fees, charges or duties which it has reason to believe are applicable),
including, but not limited to, sales, use, value added, gross receipts, stamp,
excise, transfer and similar taxes, except U.S. federal income taxes and
Washington State business and occupation tax imposed on Boeing.
4. Claims Made Against Boeing.
Boeing and Buyer agree that Article 4.4 is hereby added to the
Agreement to read as follows:
4.4 Claims Made Against Boeing. If claim is made against
Boeing for any such Taxes, Boeing shall promptly notify Buyer. If requested by
Buyer in writing in a timely matter, Boeing shall, at Buyer's expense, take such
action as Buyer may reasonably direct with respect to such claim, and any
payment by Boeing of such Taxes shall be made under protest, if protest is
necessary and proper. If payment is made, Boeing shall, at Buyer's expense, take
such action as Buyer may reasonably direct to recover such payment and shall, if
requested, permit Buyer in Boeing's name to file a claim or prosecute an action
to recover such payment. If a refund is obtained by Boeing of all or any part of
such Taxes, Boeing shall pay Buyer the amount of any such refund.
5. Excusable Delay.
Boeing and Buyer agree that Article 6.1 is hereby revised to read
as follows:
6.1 General. Boeing will not be liable for or be deemed to
be in default under this Agreement on account of any delay in delivery of any
Aircraft or other performance hereunder arising out of causes such as: acts of
God; war, armed hostilities, riots, fires, floods, earthquakes or serious
accidents; governmental acts or failures to act affecting materials, facilities
or Aircraft; strikes or labor troubles causing cessation, slowdown or
interruption of work; damage to
P.A. No. 1947
K/WPA
Western Pacific Airlines, Inc.
6-1162-JDR-400 Page 3
an Aircraft; failure of or delay in transportation; or inability, after due and
timely diligence, to procure materials, systems, accessories, equipment or
parts; or arising out of any other cause to the extent it is beyond Boeing's
control or not occasioned by Boeing's fault or negligence. A delay resulting
from such causes is referred to as an "Excusable Delay".
In the event of any Excusable Delay, Boeing shall use its best reasonable
efforts to reduce the extent of such delay and to mitigate the results thereof.
Promptly upon the occurrence of any event hereunder which may result in a delay
in the delivery of an Aircraft, Boeing shall give notice thereof to Buyer, which
notice shall identify such occurrence and specify either the period of delay
which may reasonably be expected to result therefrom, or that such period of
probable delay is so uncertain as not to be susceptible of reasonable estimate.
Thereafter, Boeing shall keep Buyer advised of the status of such delays and
shall furnish Buyer with reasonable details regarding such occurrence. It is
understood that any such Excusable Delay shall not affect the Aircraft Basic
Price except that such price shall be adjusted for changes agreed upon
subsequent to those changes previously covered by Change Order. The adjustment
due to economic fluctuations set forth in Exhibit D to this Agreement shall be
determined as of the original month of scheduled aircraft delivery as defined in
Article 2.1 of the Agreement for Aircraft so delayed.
6. Anticipated Excusable Delay.
Notwithstanding the provisions of Article 6.2.1, in the event (i)
Boeing notifies Buyer that due to an Excusable Delay, delivery of an Aircraft
will be delayed more than 12 months beyond the month in which delivery is
scheduled, (ii) such notice does not identify the revised delivery month for
such Aircraft and (iii) neither party terminates the Agreement pursuant to
Article 6.2.1, then Boeing and Buyer agree that at such time as Boeing provides
written notification to Buyer of the revised delivery month for such Aircraft,
Buyer may terminate the Agreement with respect to such Aircraft by giving
written notice to Boeing within 15 days after receipt by Buyer of Boeing's
notification of the revised delivery month.
7. Future Changes to Article 6, Excusable Delay.
If, prior to delivery of Buyer's last Aircraft, Boeing
substantially changes the proforma language of Article 6, Excusable Delay, to
the benefit of its other customers with aircraft delivering in the same general
time period as Buyer's Aircraft, Boeing will offer
P.A. No. 1947
K/WPA
Western Pacific Airlines, Inc.
6-1162-JDR-400 Page 4
Buyer the same revised provisions for inclusion in the Agreement, which Buyer
may accept or reject within thirty (30) days. If Buyer accepts Boeing's offer to
incorporate revised provisions, then the Agreement will be amended, as
appropriate, to incorporate the revised provisions.
8. FAA Manufacturer Changes.
Notwithstanding the provisions of Article 8.2, Boeing agrees to
work with Buyer to attempt to lessen the impact of incorporation of FAA
Manufacturer Changes.
9. Aircraft Inspection and Flight.
Boeing agrees to provide Buyer timely standard notice of Aircraft
manufacture, Aircraft inspection and Aircraft production flight schedules.
10. Special Aircraft Test Requirements.
Notwithstanding the provisions of Article 9.5, in the event Boeing
deems that the tests contemplated by Article 9.5.2 are desired to be performed
using one of Buyer's Aircraft, Boeing will so advise Buyer in advance of such
tests, including all pertinent particulars thereof, and obtain Buyer's consent
to conduct such tests.
11. Predelivery Assignment.
Notwithstanding the provisions of Article 10, with respect to
predelivery assignment of Buyer's rights and obligations under the Agreement,
Boeing and Buyer agree that Buyer shall not assign any of its rights and
obligations under the Agreement relating to the purchase of any Aircraft to any
third party without Boeing's prior written consent. Boeing agrees to discuss in
good faith, on a case by case basis, the terms and conditions under which
predelivery assignment of Buyer's rights to a third party may be acceptable.
12. Assignment.
Boeing and Buyer agree that Article 10.1.1 and 10.1.3 are hereby
revised to read as follows:
10.1.1 Either party may assign its interest to a
corporation that (i) results from any merger or reorganization of such party or
(ii) acquires or succeeds to substantially all the assets of such party;
P.A. No. 1947
K/WPA
Western Pacific Airlines, Inc.
6-1162-JDR-400 Page 5
10.1.3 Boeing may assign all or any part of its
rights and obligations under this Agreement to any wholly owned subsidiary of
Boeing, provided that Boeing will remain fully and solely responsible to Buyer
for all obligations and liabilities as the seller of the Aircraft, Buyer will
continue to deal exclusively with Boeing and provided no action by Boeing shall
subject Buyer to any liability, increase in costs (e.g. Taxes) or diminish
rights Buyer would otherwise have absent such action.
13. Exculpatory or Indemnity Clause in Post-Delivery
Sale or Lease.
Boeing and Buyer agree that Article 10.6 is hereby revised to read
as follows:
10.6 Exculpatory or Indemnity Clause in Post-Delivery Sale
or Lease. If, following delivery of an Aircraft, Buyer sells or leases such
Aircraft and obtains from the transferee an exculpatory or indemnity clause
protecting Buyer, Buyer will use best reasonable efforts to include the same
protection for Boeing.
14. Termination.
Boeing and Buyer agree that Article 11.1.1 is hereby revised to
read as follows:
11.1.1 Ceases doing business as a going concern,
suspends all or substantially all its business operations, generally does not
pay its debts, or admits in writing its inability to pay its debts; or
15. Contributions Toward Third-Party Damage. Boeing and Buyer agree
that Article 12.6 is hereby added to the Agreement to read as follows:
12.6 Contributions Toward Third-Party Damage. Claims by
Buyer against Boeing for contribution toward third-party bodily injury or
property damage claims, to the extent of Boeing's relative percentage of the
total fault or other legal responsibility of all persons causing such bodily
injuries or property damage, are excepted from the terms of this Article 12.2.
16. Warranty Remedies.
Boeing and Buyer agree that Exhibit B, Part A, paragraphs 5.1 and
5.2 are hereby revised to read as follows:
5.1 As to a defect in conformance to the Detail
Specification, the correction at Boeing's expense of such defect; provided,
however, that Boeing
P.A. No. 1947
K/WPA
Western Pacific Airlines, Inc.
6-1162-JDR-400 Page 6
will not be obligated to correct any defect that Boeing and Buyer agree has no
material adverse effect on the maintenance, use or operation of the Aircraft.
The warranty period for the corrected item will be the unexpired warranty period
for the defective item.
5.2 As to a defect in material or workmanship, (i) the
repair at Boeing's expense of such defect or, (ii) with Buyer's concurrence, the
replacement of such item with a similar item free from defect or the issuance of
a credit memorandum to reimburse Buyer for a spare part previously purchased
from Boeing as the replacement for such defective item. The warranty period for
either correction will be the unexpired warranty period for the defective item.
17. Returned Warranty Items.
Boeing and Buyer agree that Exhibit B, Part A, paragraph 6.1.2 is
hereby revised to read as follows:
6.1.2 All warranty work will be performed at
Boeing's expense, with best reasonable efforts to minimize Aircraft
out-of-service time. In addition, Boeing will reimburse Buyer by issuing a
credit memorandum for the cost of fuel, oil and landing fees incurred in
ferrying the Aircraft to Boeing's facilities and in ferrying the Aircraft back
to Buyer's facilities. Buyer will minimize the length of both ferry flights.
18. Warranty Reimbursement.
Boeing and Buyer agree that Exhibit B, Part B, paragraph 5 is
hereby revised to read as follows:
Reimbursement.
Upon approval of Buyer's claim for reimbursement, Boeing will use
reasonable efforts to reimburse Buyer within thirty days of approval by issuing
a credit memorandum as follows:
19. Service Life Policy.
Boeing and Buyer agree that Exhibit B, Part C, paragraph 2 is
hereby revised to read as follows:
Service Life Policy.
If a Failure occurs in any Covered Component within the following
periods, Boeing will promptly, at a price calculated pursuant to this Policy,
either (i) design and furnish to Buyer materials required to correct the Failed
Component (including Boeing designed
P.A. No. 1947
K/WPA
Western Pacific Airlines, Inc.
6-1162-JDR-400 Page 7
standard parts but excluding other industry standard parts) or (ii) furnish to
Buyer a replacement Covered Component:
20. Boeing Indemnity Against Patent Infringement.
Boeing and Buyer agree that Exhibit B, Part D, paragraphs 1, 3.1,
3.3 and 3.4 are hereby revised to read as follows and paragraph 3.6 is hereby
added to Exhibit B, Part D of the Agreement to read as follows:
1. Indemnity.
Subject to the provisions of this Part D, Boeing will indemnify and
hold harmless Buyer from and against all claims, suits, actions, liabilities,
damages and costs (including reasonable attorney fees for efforts reasonably
required in defense of claims covered by this indemnity) arising out of actual
or alleged infringement, by any Aircraft or any system, accessory, equipment or
part (item) installed thereon at the time of Aircraft delivery, of any patent
issued under the laws of any country in which Buyer lawfully operates the
Aircraft (Country).
3.1 Buyer must give Boeing written notice within 10 days
after Buyer receives formal notice of a suit or action against Buyer alleging
infringement or within 30 days after Buyer receives a written claim of
infringement.
3.3 Buyer will (i) promptly furnish to Boeing all data,
records and assistance (other than non-use of the allegedly infringing Aircraft
or item) within Buyer's control which are material to any such claim, suit or
action and (ii) (except as to amounts mandated by a judgment) obtain Boeing's
prior approval to pay or assume any liabilities, damages, royalties or costs.
3.4 Boeing's obligations and Buyer's remedies herein
exclude Buyer's incidental or consequential damages and liabilities, costs, loss
of revenue or loss of profit resulting from loss of use, but include, as Boeing
and Buyer may mutually agree, replacing the infringing item or otherwise curing
any infringement on account of which use of the Aircraft by Buyer is prevented.
3.6 Except as required by a final judgement entered
against Buyer by a court of competent jurisdiction, Buyer will obtain Boeing's
written approval prior to paying, committing to pay, assuming any obligation, or
making any material concession relative to any infringement covered by this
indemnity.
P.A. No. 1947
K/WPA
Western Pacific Airlines, Inc.
6-1162-JDR-400 Page 8
21. Boeing Indemnity Against Copyright Infringement.
Boeing and Buyer agree that Exhibit B, Part D-1, paragraphs 1, 2.1,
2.4, 2.5, 2.7 and 2.8 are hereby revised to read as follows:
1. Indemnity.
Subject to the following, Boeing will indemnify Buyer with respect
to claims, suits, actions, liabilities, damages and costs (including reasonable
attorney fees for efforts reasonably required in defense of claims covered by
this indemnity) arising out of actual or alleged copyright infringement by any
computer software included with the Aircraft when the Aircraft is first
delivered by Boeing (Aircraft Software).
2.1 Boeing will have no obligation to indemnify Buyer
relative to software comprising, contained in or included with Buyer Furnished
Equipment, engines, software not manufactured to Boeing's detailed design, or
software manufactured to Boeing's detailed design without Boeing's written
authorization.
2.4 Boeing may, as Boeing and Buyer may mutually agree,
replace any infringing or allegedly infringing Aircraft Software (or item
containing Aircraft Software) with a noninfringing equivalent or otherwise cure
any infringement.
2.5 Buyer must inform Boeing in writing (a) within 10 days
after Buyer receives formal notice of a suit or other formal action against
Buyer alleging copyright infringement involving Aircraft Software and (b) within
30 days after Buyer receives any allegation or claim in the nature of copyright
infringement involving Aircraft Software.
2.7 Buyer will promptly furnish to Boeing all data,
records and assistance (other than non-use of the allegedly infringing Aircraft
or item) within Buyer's possession or control which may be material to any
copyright infringement claim, suit or action relating to Aircraft Software.
2.8 Except as required by a final judgement entered
against Buyer by a court of competent jurisdiction, Buyer will obtain Boeing's
written approval prior to paying, committing to pay, assuming any obligation, or
making any material concession relative to any infringement covered by this
indemnity.
P.A. No. 1947
K/WPA
Western Pacific Airlines, Inc.
6-1162-JDR-400 Page 9
22. Supplier Warranties and Patent Indemnities.
Boeing and Buyer agree that Exhibit B, Part E, paragraphs 1 and 3.2
are hereby revised to read as follows:
1. Supplier Warranties and Supplier Patent
and Copyright Indemnities.
Boeing will use diligent efforts to obtain adequate warranties and
indemnities against patent and copyright infringement enforceable by Buyer from
manufacturers (Suppliers) of systems, accessories, equipment or parts installed
on the Aircraft at the time of delivery that were purchased by Boeing, but not
manufactured to Boeing's detailed design. Boeing will furnish copies of such
warranties and patent and copyright indemnities to Buyer prior to delivery of
the first Aircraft.
3.2 At Boeing's request, Buyer will assign to Boeing, and
Boeing will be subrogated to, Buyer's rights against the manufacturer providing
such Supplier warranty but only to the extent required by Boeing to fulfill its
obligations hereunder.
23. Boeing Interface Commitment.
Boeing and Buyer agree that Exhibit B, Part G, paragraph 3 is
hereby revised to read as follows:
3. Manufacturer Responsibility.
If Boeing determines that the Interface Problem is primarily
attributable to the design of an item not manufactured to Boeing's detailed
design, Boeing will assist Buyer in processing a warranty claim against the
manufacturer of such item. Boeing will also take whatever reasonable action is
permitted by its contract with such manufacturer in an effort to obtain a
correction of such Interface Problem acceptable to Buyer.
24. Maintenance Training.
Boeing and Buyer agree that Exhibit C, Part A, paragraphs 1 and 5.3
are hereby revised to read as follows:
1. General.
This Part describes the maintenance training to be provided by
Boeing (Maintenance Training) at Boeing's training facility at or near Seattle.
The Maintenance Training will be provided at no additional
P.A. No. 1947
K/WPA
Western Pacific Airlines, Inc.
6-1162-JDR-400 Page 10
charge to Buyer, except as otherwise provided herein. If any part of the
Maintenance Training is not used by Buyer prior to delivery of the last
Aircraft, but in no event later than June 1, 1998, Boeing will not be obligated
to provide such Maintenance Training at a later date, unless the parties have
otherwise agreed in writing.
All instruction, examinations and materials shall be prepared and presented in
the English language and in the units of measure used by Boeing.
Buyer will be responsible for the living expenses of Buyer's personnel during
Maintenance Training. For Maintenance Training provided at or near Seattle,
Boeing will transport Buyer's personnel between their local lodging and the
training facility.
5.3 Buyer will provide or reimburse Boeing for round-trip
transportation for Boeing's instructors and training materials between Seattle
and such alternate training site.
25. Flight Training.
Boeing and Buyer agree that Exhibit C, Part C, paragraphs 1 and 4.3
are hereby revised to read as follows:
1. General.
This Part describes the flight training to be provided by Boeing
(Flight Training) at or near Seattle, or at some other location to be determined
pursuant to this Part. The Flight Training will be provided at no additional
charge to Buyer, unless otherwise specified herein. If any part of the Flight
Training is not used by Buyer prior to delivery of the last Aircraft, but in no
event later than June 1, 1998, Boeing will not be obligated to provide such
Flight Training at a later date unless the parties have otherwise agreed in
writing.
All instruction, examinations and materials will be prepared and presented in
the English language and in the units of measure used by Boeing.
Buyer will be responsible for living expenses of Buyer's personnel during the
Flight Training Program. For Flight Training provided at or near Seattle, Boeing
will transport Buyer's personnel between their local lodging and the training
facility.
P.A. No. 1947
K/WPA
Western Pacific Airlines, Inc.
6-1162-JDR-400 Page 11
4.3 Buyer will provide or reimburse Boeing for round-trip
transportation for Boeing's flight training instructors and materials between
Seattle and such alternate site.
26. Technical Data and Documents.
Boeing and Buyer agree that Exhibit C, Part D, paragraph 2.1 is
hereby revised to read as follows:
2.1 The data and documents provided by Boeing under Exhibit C, Part
D of the Agreement ("Documents") are licensed to Buyer. They contain
confidential, proprietary and/or trade secret information belonging to Boeing;
and Buyer will treat them in confidence and use and disclose them only for
Buyer's own internal purposes as specifically authorized herein. If Buyer makes
copies of any Documents, the copies will also belong to Boeing and be treated as
Documents under this Agreement. Buyer will preserve all restrictive legends and
proprietary notices on all Documents and copies.
27. Disclosure of Detail Specification.
Boeing and Buyer agree that Boeing Detail Specification D6-38604-28
will be treated as confidential and Buyer will not, without the prior written
consent of Boeing, disclose such Detail Specification or any information
contained therein to any other person or entity except as may be required by (i)
applicable law or governmental regulations, or (ii) for financing the Aircraft.
28. Payment of Advance Payments.
Notwithstanding the provisions of Article 5, as amended by Letter
Agreement 6-1162-JDR-395, Boeing and Buyer agree that payment of those Advance
Payments due upon signing of the Agreement will be made by Buyer no later than
September 6, 1996.
29. Confidentiality.
Buyer understands that certain commercial and financial information
contained in this Letter Agreement are considered by Boeing as confidential.
Buyer agrees that it will treat this Letter Agreement and the information
contained herein as confidential and will not, without the prior written consent
of
P.A. No. 1947
K/WPA
Western Pacific Airlines, Inc.
6-1162-JDR-400 Page 12
Boeing, disclose this Letter Agreement or any information contained herein to
any other person or entity, except as provided in Letter Agreement 1947-1.
Very truly yours,
THE BOEING COMPANY
By
--------------------------------
Its Attorney-In-Fact
ACCEPTED AND AGREED TO this
Date: , 1996
WESTERN PACIFIC AIRLINES, INC.
By
--------------------------------
Its
P.A. No. 1947
K/WPA
