1947-3
Western Pacific Airlines, Inc.
0000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxxx Xxxxxxx, XX 00000
Subject: Letter Agreement No. 1947-3 to
Purchase Agreement No. 1947 -
Seller Purchased Equipment
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).
For purposes of this Letter Agreement the following definitions apply:
Seller Purchased Equipment (SPE) is Buyer Furnished Equipment (BFE) that Boeing
purchases for Buyer.
Developmental Buyer Furnished Equipment (DBFE) is all BFE not previously
certified for installation on the same model aircraft.
Developmental Seller Purchased Equipment (DSPE) is DBFE which is converted to
SPE. This Letter Agreement does not include developmental avionics.
Developmental avionics are avionics that have not been previously certified for
installation on the same model aircraft.
All other terms used herein and in the Agreement, and not defined above, will
have the same meaning as in the Agreement.
Buyer has requested that Boeing purchase as SPE the BFE which has been changed
to SPE by Change Request. Accordingly, Boeing and Buyer agree as follows:
1. Price.
Advance Payments. An estimated SPE price will be included in the
Aircraft Advance Payment Base Price for the purpose of establishing the advance
payments for each Aircraft. The estimated price of this SPE is [XXXXXXXX] for
each Aircraft, expressed in 1995 dollars.
P.A. No. 1947
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Western Pacific Airlines, Inc.
1947-3 Page 2
Aircraft Price. The Aircraft Price will be adjusted to reflect (i) the
actual costs charged Boeing by the SPE suppliers, (ii) a handling fee of 10% of
such costs and (iii) transportation charges, if any. If all DBFE, except for
developmental avionics, is converted to SPE, Boeing will waive the handling fee
for all SPE.
2. Responsibilities.
2.1 Buyer is responsible for:
(i) selecting the supplier on or before:
Complete for galleys
Complete for seats
(ii) selecting a FAA certifiable part; and
(iii) providing to Boeing the SPE part
specification/Buyer requirements.
2.2. Boeing is responsible for:
(i) placing and managing the purchase order with the
supplier, such purchase order to include all terms and conditions agreed between
Buyer and supplier and provided to Boeing in a timely manner;
(ii) coordinating with the suppliers on technical
issues;
(iii) ensuring that the delivered SPE complies with
the part specification;
(iv) obtaining certification of the Aircraft with the
SPE installed; and
(v) obtaining for Buyer the supplier's standard or
Buyer negotiated warranty for the SPE. SPE is deemed to be BFE for purposes of
Exhibit B, the Product Assurance Document, of the Agreement.
3. Supplier Selection For SPE Galleys and Seats.
The supplier selection for the SPE galleys and seats is complete.
P.A. No. 1947
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Western Pacific Airlines, Inc.
1947-3 Page 3
4. Changes.
After this Letter Agreement is signed, changes to SPE may only be made
by and between Boeing and the suppliers. Buyer's contacts with SPE suppliers
relating to design (including selection of materials and colors), weights,
prices or schedules are for informational purposes only. If Buyer wants changes
made to any of the above, requests must be made directly to Boeing for
negotiating with the supplier.
5. Proprietary Rights.
Boeing's obligation to purchase SPE will not impose upon Boeing any
obligation to compensate Buyer or any supplier for any proprietary rights Buyer
may have in the design of the SPE.
6. Remedies.
If Buyer does not comply with the obligations above, Boeing may:
(i) delay delivery of the Aircraft;
(ii) deliver the Aircraft without installing the SPE;
(iii) substitute a comparable part and invoice Buyer
for the cost;
(iv) increase the Aircraft Price by the amount of
Boeing's additional costs attributable to such noncompliance.
Boeing agrees to consult with Buyer as to which of the identified remedies
Boeing will invoke. Boeing agrees to work with Buyer to mitigate the damages if
Buyer does not comply with Buyer's obligations.
7. Buyer's Indemnification of Boeing.
Buyer will indemnify and hold harmless Boeing from and against all
claims and liabilities, including costs and expenses (including attorneys' fees)
incident thereto or incident to successfully establishing the right to
indemnification, for injury to or death of any person or persons, including
employees of Buyer but not employees of Boeing, or for loss of or damage to any
property, including Aircraft, arising out of or in any way connected with any
nonconformance or defect in any SPE and whether or not arising in tort or
occasioned in whole or in part by the negligence of Boeing, whether active,
passive or imputed.
P.A. No. 1947
K/WPA
Western Pacific Airlines, Inc.
1947-3 Page 4
This indemnity will not apply with respect to any nonconformance or defect
caused solely by Boeing's installation of the SPE.
Very truly yours,
THE BOEING COMPANY
By
----------------------
Its Attorney-In-Fact
ACCEPTED AND AGREED TO this
Date: , 1996
WESTERN PACIFIC AIRLINES, INC.
By
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Its
P.A. No. 1947
K/WPA
