6-1162-JDR-396
(CONFIDENTIALITY REQUESTED)
CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO RULE 24B-21 AS
INDICATED BY "(XXX)"
Western Pacific Airlines, Inc.
0000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxxx Xxxxxxx, XX 00000
Subject: Letter Agreement No. 6-1162-JDR-396 to
Purchase Agreement No. 1947 -
Escalation 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. Commitment.
Boeing agrees to share [XXXXXXX] of the escalation up to a maximum of
[X] percent per year in each of the years [XX] and [XX], as more fully described
in paragraph 2 below, for any of Buyer's aircraft which are scheduled to deliver
after December 31, 1996. For the purpose of this Letter Agreement such aircraft
are referred to as "Eligible Aircraft."
All escalation calculations under this Letter Agreement will be made in
accordance with Exhibit D to the Agreement entitled "Price Adjustment Due to
Economic Fluctuations - Aircraft Price Adjustment" (hereinafter referred to as
"Exhibit D"), using actual escalation indices published for the applicable
period.
2. Escalation Credit Memo.
2.1 Calculation - Eligible Aircraft Delivering in 1997.
At the time of delivery of each Eligible Aircraft delivering
in 1997, Boeing will issue to Buyer a credit memorandum (the 1997 Credit
Memorandum) which shall be applied to the Purchase Price of such Aircraft. The
1997 Credit Memorandum shall be calculated as follows:
[XXXXXX] of the difference between the Aircraft escalation
calculated for a December [XX] aircraft delivery position, and
the escalation calculated for the month of delivery of the
[XX] Eligible Aircraft;
P.A. No. 1947
K/WPA
Western Pacific Airlines, Inc.
6-1162-JDR-396 Page 2
provided however,
The maximum amount of the [XX] Credit Memorandum shall not
exceed [X] percent pursuant to the following calculation:
At the time of the delivery of the 1997 Eligible
Aircraft, the Aircraft Basic Price will be escalated
to a December 1996 delivery month. The December 1996
escalated price will be referred to in the following
formula as the "December 1996 Index Amount." The [XX]
Credit Memorandum for the [XX] Eligible Aircraft will
not exceed an amount equal to:
the December 1996 Index Amount times [XX].
2.2 Calculation - Eligible Aircraft Delivering in 1998.
At the time of delivery of each Eligible Aircraft delivering
in [XX], Boeing will issue to Buyer a credit memorandum (the [XX] Credit
Memorandum) which shall be applied to the Purchase Price of such Aircraft. The
[XX] Credit Memorandum shall be calculated as follows:
(i) [XXXXXX] of the difference between the Aircraft escalation
calculated for a December [XX] aircraft delivery position, and
the escalation calculated for the month of delivery of the
[XX] Eligible Aircraft;
provided however,
The maximum amount of the [XX] Credit Memorandum shall not
exceed [X] percent pursuant to the following calculation:
At the time of the delivery of the 1998 Eligible
Aircraft, the Aircraft Basic Price will be escalated
to a December 1997 delivery month. The December 1997
escalated price will be referred to in the following
formula as the "December [XX] Index Amount." The [XX]
Credit Memorandum for the [XX] Eligible Aircraft will
not exceed an amount equal to:
the December 1997 Index Amount times [XX];
and,
P.A. No. 1947
K/WPA
Western Pacific Airlines, Inc.
6-1162-JDR-396 Page 3
(ii) The amount calculated above in paragraph 2.1 for the 1997
Credit Memorandum calculated through December, 1997.
2.3 Eligible Aircraft Delivering after 1998.
For Eligible Aircraft delivering after the calendar year 1998,
the amount of the Credit Memorandum will be the amount calculated pursuant to
paragraph 2.2 above through December 1998. This credit memorandum amount will be
escalated from December 1998 to the month of delivery.
3. Advance Payment Base Price.
It is agreed that the Advance Payment Base Prices for the Eligible
Aircraft set forth in Article 3.4 of the Agreement include an estimate for the
escalation sharing Credit Memorandum pursuant to this Letter Agreement.
4. Escalating Credits (STE).
It is agreed that the credit memoranda specified in Letter Agreement
No. 6-1162-JDR-394 which escalate in accordance with Exhibit D, will be
calculated using the same factors used to develop the adjusted aircraft
escalation pursuant to this Letter Agreement.
5. 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 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
P.A. No. 1947
K/WPA
Western Pacific Airlines, Inc.
6-1162-JDR-396 Page 4
ACCEPTED AND AGREED TO this
Date: , 1996
WESTERN PACIFIC AIRLINES, INC.
By
--------------------------------
Its
P.A. No. 1947
K/WPA
