Document:

Exhibit

	
	
	Supplemental Agreement No. 99

	 

	to

	 

	Purchase Agreement No. 1810

	 

	between

	 

	THE BOEING COMPANY

	 

	and

	 

	SOUTHWEST AIRLINES CO.

	 

	Relating to Boeing Model 737-7H4 and 737-8H4 Aircraft

THIS SUPPLEMENTAL AGREEMENT No. 99 (SA-99) is entered into as of December 15, 2016, by and between THE BOEING COMPANY, a Delaware corporation with principal offices in Seattle, Washington (Boeing) and SOUTHWEST AIRLINES CO., a Texas corporation with principal offices in Dallas, Texas (Buyer).

	
	
	RECITALS:

WHEREAS, Buyer and Boeing entered into Purchase Agreement No. 1810 dated January 19, 1994, as amended and supplemented (Purchase Agreement), relating to the purchase and sale of Boeing Model 737-7H4 aircraft (737-7H4 Aircraft) and 737-8H4 aircraft (737-8H4 Aircraft), collectively the “Aircraft”.  This SA-99 is an amendment to and is incorporated into the Purchase Agreement.  Capitalized terms used herein but not otherwise defined shall have the meaning set forth in the Purchase Agreement; and

WHEREAS, Buyer has elected to exercise Buyer’s right to purchase two (2) Option Aircraft within the same scheduled delivery month in 2018 (Exercised Option Aircraft) in accordance with the terms set forth in Letter Agreement SWA-PA-1810-LA-
1105884R2, Option Aircraft.

NOW THEREFORE, in consideration of the mutual covenants herein contained, the parties agree to amend the Purchase Agreement as follows:

		
	1.
	TABLE OF CONTENTS.

The Table of Contents is deleted in its entirety and replaced by a new Table of Contents (attached), which lists the Tables and Letter Agreements revised by this SA-99 and is identified by “SA-99”.  Such revised Table of Contents, by this reference, is incorporated in 
the Purchase Agreement.

***Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed with the Commission.

	
			
	P.A. No. 1810
	SA-99-1
	 

	 
	BOEING PROPRIETARY
	 

2.    TABLES.

Table 1d, Aircraft Information Table - Block 800LUV Aircraft (non-ETOPS Configuration), is deleted in its entirety and replaced by a new Table 1d (attached).  The new Table 1d reflects the additions of the Exercised Option Aircraft.

3.   LETTER AGREEMENTS.

Attachment B to Letter Agreement SWA-PA-1810-LA-1105884R2, Option Aircraft, is deleted in its entirety and replaced by a new Attachment B (attached).  The new Attachment B reflects deletion of the Exercised Option Aircraft.

4.   ***

 

	
	
	[Signature page follows]

	 

	[Remainder of page intentionally left blank]

	
			
	P.A. No. 1810
	SA-99-2
	 

	 
	BOEING PROPRIETARY
	 

The Purchase Agreement will be deemed to be supplemented to the extent herein provided 
and as so supplemented will continue in full force and effect.

EXECUTED IN DUPLICATE as of the day and year first above written.

	
		
	THE BOEING COMPANY
	SOUTHWEST AIRLINES CO.

	 
	 

	By: /s/ Kyle L. Kersavage
	By:  /s/ Chris Monroe

	 
	       Chris Monroe

	Its: Attorney‐In‐Fact
	Its: VP, Treasurer

	 
	 

	
			
	P.A. No. 1810
	SA-99-3
	 

	 
	BOEING PROPRIETARY
	 

	
	
	TABLE OF CONTENTS

	
				
	 
	 
	Page
Number
	SA
Number

	 
	 
	 
	 

	ARTICLES
	 
	 
	 

	 
	 
	 
	 

	1.
	Subject Matter of Sale
	1-1
	SA-92

	 

	2.
	Delivery, Title and Risk
	 
	 

	 
	of Loss 
	2-1
	SA-28

	 

	3.
	Price of Aircraft
	3-1
	SA-92

	 

	4. 
	Taxes
	4-1
	 

	 

	5. 
	Payment
	5-1
	 

	 

	6.
	Excusable Delay
	6-1
	 

	 

	7.
	Changes to the Detail
	 
	 

	 
	Specification
	7-1
	SA-73

	 

	8.
	Federal Aviation Requirements and
	 
	 

	 
	Certificates and Export License
	8-1
	 

	 

	9.
	Representatives, Inspection,
	 
	 

	 
	Flights and Test Data
	9-1
	 

	 

	10.
	Assignment, Resale or Lease
	10-1
	 

	 

	11.
	Termination for Certain Events
	11-1
	 

	 

	12.
	Product Assurance; Disclaimer and
	 
	 

	 
	Release; Exclusion of Liabilities;
	 
	 

	 
	Customer Support; Indemnification
	 
	 

	 
	and Insurance
	12-1
	 

	 

	13.
	Buyer Furnished Equipment and
	 
	 

	 
	Spare Parts
	13-1
	 

	 

	14.
	Contractual Notices and Requests
	14-1
	 

	 

	15.
	Miscellaneous
	15-1
	 

	 

	
			
	P.A. No. 1810
	i
	 

	K/SWA
	 
	SA-99

TABLE OF CONTENTS
    	
			
	 
	 
	  SA
Number

	 
	 
	 

	TABLE
	 
	 

	 
	 
	 

	1b
	Aircraft Information Table - Block 800LUV Aircraf
	SA-82

	 
	 
	 

	1c
	Aircraft Information Table - Block 800LUV Aircraft
(non-ETOPS Configuration)

	SA-98

	 
	 
	 

	1d
	Aircraft Information Table - Block 800LUV Aircraft
(non-ETOPS Configuration) 

	SA-99

	 
	 
	 

	EXHIBITS
	 
	 

	 
	 
	 

	A-6
	Aircraft Configuration - Block 800LUV Aircraft
	SA-75

	 
	 
	 

	A-7
	Aircraft Configuration - Block 800LUV Aircraft
                                        (non-ETOPS Configuration)

	SA-84

	 
	 
	 

	B
	***
	SA-75

	 
	 
	 

	C
	Customer Support Document
	SA-75

	 
	 
	 

	C-2
	737-800 Customer Support Document
	SA-75

	 
	 
	 

	D-2
	Economic Price Adjustment
ECI-MFG/CPI (July 2011 Base Price)

	SA-75

	 
	 
	 

	E
	Buyer Furnished Equipment
Provisions Document
Attachment A - 737-7H4 Aircraft (through 2012)
Attachment B - 737-8H4 Aircraft (2012-2018) 

	SA-75

	 
	 
	 

	F
	Defined Terms Document
	SA-92

	 
	 
	 

	LETTER AGREEMENTS
	 

	 
	 
	 

	1810-1R1
	Waiver of Aircraft Demonstration Flight
	SA-75

	
			
	P.A. No. 1810
	ii
	 

	K/SWA
	 
	SA-99

TABLE OF CONTENTS

	
				
	 
	 
	 
	  SA
Number

	 
	 
	 
	 

	RESTRICTED LETTER AGREEMENTS

	 

	 
	 
	 
	 

	6‐1162‐RLL‐932R3
	 
	***
	SA-75

	 
	 
	 
	 

	6‐1162‐RLL‐934R5
	 
	Disclosure of Confidential Information
	SA-75

	 
	 
	 
	 

	6‐1162‐RLL‐941R3
	 
	Other Matters
	SA-75

	 
	 
	 
	 

	6-1162-KJJ-055R1
	 
	Structural Matters
	SA-25

	 
	 
	 
	 

	6-1162-KJJ-056
	 
	Noise and Emission Matters
	SA-13

	 
	 
	 
	 

	6-1162-KJJ-057
	 
	Product Development Matters
	SA-13

	 
	 
	 
	 

	SWA-PA-1810-LA-1001315R4
	 
	***
	SA-92

	 
	 
	Attachment A
	SA-98

	 
	 
	 
	 

	SWA-PA-1810-LA-1003498R1
	 
	***
	SA-75

	 
	 
	 
	 

	SWA-PA-1810-LA-1003490R4
	 
	***
	SA-92

	 
	 
	 
	 

	SWA-PA-1810-LA-1003367R1
	 
	***
	SA-75

	 
	 
	 
	 

	SWA-PA-1810-LA-1105883
	 
	Aircraft Model Substitution
	SA-75

	 
	 
	 
	 

	SWA-PA-1810-LA-1105884R2
	 
	Option Aircraft
	SA-92

	 
	Attachment A - Model 737-8H4 Aircraft
	SA-92

	 
	Attachment B - Option Aircraft Information Table
	SA-99

	 
	 
	 
	 

	SWA-PA-1810-LA-1105885R3
	 
	***
	SA-90

	 
	 
	 
	 

	SWA-PA-1810-LA-1105886R2
	 
	***
	SA-92

	 
	 
	 
	 

	SWA-PA-1810-LA-1105887
	 
	***
	SA-75

	 
	 
	 
	 

	SWA-PA-1810-LA-1105888R5
	 
	***
	SA-92

	 
	 
	 
	 

	SWA-PA-1810-LA-1105889
	 
	***
	SA-75

	 
	 
	 
	 

	SWA-PA-1810-LA-1303010R1
	 
	***
	SA-92

	 
	 
	 
	 

	SWA-PA-1810-LA-1504814
	 
	***
	SA-92

	
			
	P.A. No. 1810
	iii
	 

	K/SWA
	 
	SA-99

TABLE OF CONTENTS
	
		
	ADDITIONAL LETTERS (FOR REFERENCE) - INACTIVE (as of SA-82)

	6-1162-MSA-288
	Business Offer - Enhanced Ground Proximity

	 
	Warning System (EGPWS) - Activation - Peaks

	 
	and Obstacles Feature

	 
	(Not applicable to Block 700LUV & Block 800LUV Aircraft)

	 

	6-1162-JMG-501R2
	Business Offer - ACARS package

	 
	(Not applicable to Block 700LUV & Block 800LUV Aircraft)

INACTIVE / DELETED TABLES, EXHIBITS, AND LETTER AGREEMENTS

TABLE

	
				
	Table
	Title
	Last Updated under SA
	Current Status

	1
	Aircraft Information Table
	SA-75
	Inactive

	2
	Option Aircraft Information Table
	SA-74
	Deleted under SA-75

	1a
	Aircraft Information Table - Block 700LUV Aircraft
	SA-91
	Deleted Under SA-92

EXHIBITS
	
				
	Exhibits
	Title
	Last Updated under SA
	Current Status

	A
	Aircraft Configuration - 737-700
	SA-36
	Inactive

	A-Winglet
	Aircraft Configuration
	SA-36
	Inactive

	A-1-Winglet
	Aircraft Configuration
	SA-36
	Inactive

	A-1A
	Aircraft Configuration - 737-700 Block T-W-2c
	SA-36
	Inactive

	A-2
	Aircraft Configuration - 737-700 Block T-W-2 / T-W-2a
	SA-47
	Inactive

	A-3
	Aircraft Configuration - 737-700 Block T-W-2 / T-W-2a
	SA-61
	Inactive

	A-4
	Aircraft Configuration - 737-700 Block T-W-2b Aircraft
	SA-66
	Inactive

	A-5
	Aircraft Configuration - Block 700LUV Aircraft
	SA-75
	Deleted under SA-92

	C.2
	737-800 Customer Support Variables
	SA-71
	Deleted under SA-75

	D
	Price Adjustment Due to
Economic Fluctuations - Aircraft Price Adjustment
(July 1992 Base Price)
	 
	Inactive

	D-1
	Price Adjustment Due to Economic Fluctuations - Aircraft Price Adjustment
(July 1999 Base Price)
	SA-13
	Inactive

	
			
	P.A. No. 1810
	iv
	 

	K/SWA
	 
	SA-99

TABLE OF CONTENTS

	
				
	Exhibits
	Title
	Last Updated under SA
	Current Status

	 
	Aircraft Price Adjustment
(July 1999 Base Price)
	 
	 

	E.2
	737-800 Buyer Furnished Equipment Provisions Document
	SA-73
	Deleted under SA-75

	 
	 
	 
	 

	RESTRICTED LETTER AGREEMENTS
	 
	 

	
				
	Letter Agreement
	Title
	Last Updated under SA
	Current Status

	6‐1162‐RLL‐933R21
	Option Aircraft
	SA-60
	Deleted under SA-75

	6‐1162‐RLL‐935R1  
	Performance Guarantees
	SA-1
	Inactive

	6‐1162‐RLL‐936R4
	Certain Contractual Matters
	SA-4
	Inactive

	6‐1162‐RLL‐937
	Alternate Advance Payment Schedule
	 
	Inactive

	6‐1162‐RLL‐938
	***
	 
	Inactive

	6‐1162‐RLL‐939R1
	Certification Flight Test 
Aircraft
	SA-1
	Inactive

	6‐1162‐RLL‐940R1
	Training Matters
	SA-1
	Inactive

	6‐1162‐RLL‐942
	Open Configuration Matters
	 
	Inactive

	6‐1162‐RLL‐943R1
	Substitution Rights
	SA-6
	Deleted under SA 75

	6‐1162‐RLL‐944
	***
	 
	Inactive

	6-1162-RLL-945
	Comparison of 737-7H4 and 737-3H4 Block Fuel Burn
	 
	Inactive

	6-1162-RLL-1855R3
	Additional Contractual 
Matters
	SA-4
	Inactive

	6-1162-RLL-1856
	***
	SA-1
	Inactive

	6-1162-RLL-1857
	Service Ready Validation Program Field Test
	SA-1
	Inactive

	6-1162-RLL-1858R1
	Escalation Matters
	SA-4
	Inactive

	6-1162-RLL-2036
	Amortization of Costs for Customer Unique Changes
	SA-1
	Inactive

	6-1162-RLL-2037
	Reconciliation of the Aircraft Basic Price
	SA-1
	Inactive

	6-1162-RLL-2073
	Maintenance Training Matters
	SA-1
	Inactive

	6-1162-KJJ-058R1
	Additional Substitution Rights
	SA-71
	Deleted under SA-75

	6-1162-KJJ-150
	Flight Control Computer & Mode Control Panel Spares Matter
	SA-14
	Inactive

	6-1162-MSA-185R3
	Delivery Change Contractual Matters
	SA-21
	Inactive

	
			
	P.A. No. 1810
	v
	 

	K/SWA
	 
	SA-99

	
				
	Letter Agreement
	Title
	Last Updated under SA
	Current Status

	6-1162-JMG-747R1
	***
	SA-36
	Inactive

	6-1162-CHL-217
	Rescheduled Flight Test 
Aircraft
	SA-32
	Inactive

	6-1162-NIW-606R1
	***
	SA-36
	Inactive

	6-1162-NIW-640
	Early Delivery of Two April 2004  Aircraft
	SA-35
	Inactive

	6-1162-NIW-889
	Warranty - Exterior Color Schemes and Markings for YA143 and on 
	SA-39
	Inactive

	6-1162-NIW-1142
	***
	SA-43
	Inactive

	6-1162-NIW-1369
	***
	SA-46
	Inactive

	6-1162-NIW-1983
	***
	SA-62
	Inactive

	SWA-PA-1810-LA-1000419
	***
	SA-64
	Inactive

	6-1162-NIW-890R1
	***
	SA-75

SA-39
	Inactive

	6-1162-KJJ-054R2
	Business Matters
	SA-75
	Inactive

	6-1162-JMG-669R9
	***
	SA-75

SA-75
SA-54
	Inactive

	SWA-PA-1810-LA-02710R1
	***
	SA-72
	Inactive

	SWA-PA-01810/03729-LA-1301169
	***
	SA-2 to PA 3729
	Inactive

	
			
	P.A. No. 1810
	vi
	 

	K/SWA
	 
	SA-99

	
	
	Table 1d to

	Purchase Agreement No. PA-01810

	Aircraft Delivery, Description, Price and Advance Payments

	Block 800LUV Aircraft (non-ETOPS Configuration)

	
																							
	Airframe Model/MTOW:
	737-800
	 
	174,200 pounds
	 
	 
	Detail Specification:
	D019A001SWA38 (1/9/2015)
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	Engine Model/Thrust:
	 
	CFM56-7B27
	 
	27,300 pounds
	 
	Airframe Price Base Year/Escalation Formula:
	Jul-11
	 
	ECI-MFG/CPI

	 
	 
	 
	 
	 
	 
	 

	Airframe Price:
	***
	 
	Engine Price Base Year/Escalation Formula:
	N/A
	 
	N/A

	 
	 
	 
	 
	 
	 
	 
	 
	 

	Optional Features:
	***
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	Sub-Total of Airframe and Features:
	 
	***
	 
	Airframe Escalation Data:
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	Engine Price (Per Aircraft):
	***
	 
	Base Year Index (ECI):
	 
	***
	 

	 
	 
	 
	 
	 
	 
	 
	 

	Aircraft Basic Price (Excluding BFE/SPE):
	 
	 
	 
	Base Year Index (CPI):
	 
	 
	***
	 

	 
	 
	 
	 
	 
	 
	 

	Buyer Furnished Equipment (BFE) Estimate:
	***
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	Seller Purchased Equipment (SPE) Estimate:
	***
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Deposit per Exercised Option Aircraft (OPEX):
	***
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	Escalation
	Aircraft
	 
	 
	Escalation Estimate
	Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):

	Delivery
	Number of
	Factor
	Serial
	Escalation
	 
	Adv Payment Base
	At Signing
	24 Mos.
	21/18/12/9/6 Mos.
	Total

	Date
	Aircraft
	(Airframe)
	Number
	Forecast
	 
	Price Per A/P
	***
	***
	***
	***

	Dec-2016
	2
	***
	63593, 63594
	***
	OPEX
	***
	***
	***
	***
	***

	May-2017
	1
	***
	63592
	***
	OPEX
	***
	***
	***
	***
	***

	May-2017
	1
	***
	63575
	***
	 
	***
	***
	***
	***
	***

	May-2017
	1
	***
	63576
	***
	 
	***
	***
	***
	***
	***

	Jun-2017
	2
	***
	63577, 63578
	***
	 
	***
	***
	***
	***
	***

	Jun-2017
	2
	***
	63596, 63595
	***
	OPEX
	***
	***
	***
	***
	***

	Jun-2017
	2
	***
	63571, 63586
	***
	 
	***
	***
	***
	***
	***

	Jul-2017
	1
	***
	63581
	***
	 
	***
	***
	***
	***
	***

	Jul-2017
	2
	***
	63598, 63599
	***
	OPEX
	***
	***
	***
	***
	***

	Aug-2017
	1
	***
	63587
	***
	 
	***
	***
	***
	***
	***

	Sep-2017
	3
	***
	63572, 63573, 63574
	***
	 
	***
	***
	***
	***
	***

	
			
	SWA-PA-01810  82233 / 88233 / 93899

	 
	SA-99

	 
	Boeing Proprietary
	Page 1

	
																							
	Table 1d to
	 

	Purchase Agreement No. PA-01810
	 

	Aircraft Delivery, Description, Price and Advance Payments
	 

	Block 800LUV Aircraft (non-ETOPS Configuration)
	 

	 
	 

	Delivery

Date
	

Number of

Aircraft

	Escalation

Factor

(Aircraft)
	

Aircraft

Serial

Number
	

Escalation

Forecast
	 
	

Escalation Estimate

Adv Payment Base

Price Per A/P
	Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):
	 

	

At Signing

***
	

24 Mos.

***
	

21/18/12/9/6 Mos.

***
	 

	Oct-2017
	1
	***
	63579
	***
	 
	***
	***
	***
	***
	 

	Oct-2017
	1
	***
	63597
	***
	OPEX
	***
	***
	***
	***
	 

	Nov-2017
	1
	***
	63580
	***
	 
	***
	***
	***
	***
	 

	Dec-2017
	2
	***
	63582, 63583
	***
	 
	***
	***
	***
	***
	 

	Dec-2017
	4
	***
	63600, 63601,
63602, 36993
	***
	OPEX
	***
	***
	***
	***
	 

	Jan-2018
	1
	***
	64115
	***
	OPEX
	***
	***
	***
	***
	 

	Jan-2018
	2
	***
	63584, 63585
	***
	 
	***
	***
	***
	***
	 

	Feb-2018
	2
	***
	64171, 64172
	***
	OPEX
	***
	***
	***
	***
	 

	Mar-2018
	1
	***
	64174
	***
	OPEX
	***
	***
	***
	***
	 

	Apr-2018
	1
	***
	64248
	***
	OPEX
	***
	***
	***
	***
	 

	May-2018
	2
	***
	63588, 63589
	***
	 
	***
	***
	***
	***
	 

	May-2018
	2
	***
	64251, 64250
	***
	OPEX
	***
	***
	***
	***
	 

	Jun-2018
	2
	***
	63590, 63591
	***
	 
	***
	***
	***
	***
	 

	Jun-2018
	2
	***
	64350, 64349
	***
	OPEX
	***
	***
	***
	***
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	Total:
	42
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Notes:
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	1) ***
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	
			
	SWA-PA-01810  82233 / 88233 / 93899

	 
	SA-99

	 
	Boeing Proprietary
	Page 2

	
	
	Attachment B To

	Letter Agreement SWA PA-1810-LA-1105884R2

	Option Aircraft Delivery, Description, Price and Advance Payments

	
														
	Airframe Model/MTOW:
	737-800
	 
	174,200 pounds
	 
	 
	Detail Specification:
	D019A001SWA38 (1/9/2015)
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	Engine Model/Thrust:
	CFM56-7B27
	 
	27,300 pounds
	 
	 
	Airframe Price Base Year/Escalation Formula:
	Jul-11
	ECI-MFG/CPI

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Airframe Price:
	 
	***
	 
	 
	Engine Price Base Year/Escalation Formula:
	N/A
	N/A

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Optional Features Estimate:
	 
	***
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	Sub-Total of Airframe and Features:
	***
	 
	 
	Airframe Escalation Data:
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Engine Price (Per Aircraft):
	 
	***
	 
	 
	Base Year Index (ECI):
	 
	 
	***
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	Aircraft Basic Price (Excluding BFE/SPE):
	***
	 
	 
	Base Year Index (CPI):
	 
	 
	***
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	Buyer Furnished Equipment (BFE) Estimate:
	***
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	Seller Purchased Equipment (SPE) Estimate:
	***
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Deposit per Aircraft:
	***
	 
	 
	 
	 
	 
	 
	 

	
										
	

Delivery

Date
	

Number of

Aircraft
	

Escalation

Factor

(Airframe)
	

Option

Exercise

Date
	 
	

Escalation Estimate

Adv Payment Base

Price Per A/P
	Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):

	

At Signing

***
	

24 Mos.

***
	

21/18/12/9/6 Mos.

***
	Total

***

	Jul-2018
	2
	***
	1/1/17
	 
	***
	***
	***
	***
	***

	Aug-2018
	3
	***
	2/1/17
	 
	***
	***
	***
	***
	***

	Sep-2018
	1
	***
	3/1/17
	 
	***
	***
	***
	***
	***

	Oct-2018
	1
	***
	4/1/17
	 
	***
	***
	***
	***
	***

	Nov-2018
	1
	***
	5/1/17
	 
	***
	***
	***
	***
	***

	Dec-2018
	1
	***
	6/1/17
	 
	***
	***
	***
	***
	***

	Total:
	9
	 
	 
	 
	 
	 
	 
	 
	 

	
			
	 
	 
	SA-99

	SWA-PA-01810  82233-1F.TXT

	BOEING PROPRIETARY
	Page 1EXHIBIT 10.21

 

 EXHIBIT 10.21
 

 SUBLICENSE AGREEMENT
 This Sublicense Agreement (this “Agreement”) is dated as of January 31, 2017 (“Effective Date”), by and among ACCUREXA INC., a company incorporated in the Republic of the Marshall Islands (“Accurexa”) and CNMRGS Inc., a private company incorporated in the British Virgin Islands (“CNM”).  Each of Accurexa and CNM is referred to herein as a “Party” and collectively, as the “Parties.”
 BACKGROUND
 

 A.
 Accurexa entered into an exclusive license agreement (“UCSF License”) with the Regents of the University of California acting through its Office of Innovation, Technology, and Alliances, University of California San Francisco (“UCSF”) in regards to the exclusive licensing of a medical stereotactic device for the delivery of therapeutics to the human brain, characterized as “Microinjection Brain Catheter”, a.k.a. BranchPoint device ("Invention") on September 16, 2014.  The invention was claimed in U.S. Patent Application No. PCT/US2013/052301, Microinjection Catheter; UC Case No. SF2012-063 (“Patent Rights”).
 B.
 Accurexa desires to sublicense to CNM and CNM desires to sublicense from Accurexa the UCSF License upon the terms, provisions, and conditions and for the consideration hereinafter set forth.
 
 C.
 The Board of Directors of each of Accurexa and CNM has determined that it is desirable to enter into this Agreement. 
 NOW, THEREFORE, for and in consideration of the premises and mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto do hereby represent, warrant, covenant, and agree as follows:
 

 ARTICLE 1.
DEFINITIONS
 1.1.
 Sublicense.  Based upon the representations, warranties, and covenants and subject to the terms, provisions, and conditions contained in this Agreement, at the Closing (as defined below), Accurexa hereby sublicenses the UCSF License to CNM subject to the conditions set forth herein, and CNM agrees to sublicense the UCSF License from Accurexa for the consideration hereinafter set forth.
 1.2.
 Consideration.  On the Effective Date, CNM shall assume as a sublicensee all rights and obligations of the UCSF License from Accurexa and will pay Accurexa an Earned Royalty of thirty five percent (35%) of the Net Sales of Sublicensed Product or Sublicensed Method, as described in the UCSF License.  Furthermore, CNM will assume all obligations that arise from the promissory note in the amount of $200,000 and at an interest rate of 5.00% per annum that was issued to the Lim Development Group by Accurexa on January 12, 2015.
 1.3.
 Closing Deliveries.  (a) Upon execution of this Agreement (the “Closing”), Accurexa shall deliver or cause to be delivered to CNM the following (the “Deliverables”): (i) all BranchPoint prototypes and device inventories, if any, and (ii) all device specifications, drawings and test data.
 

 

 
 

 ARTICLE 2.
REPRESENTATIONS AND WARRANTIES BY ACCUREXA
 Accurexa represents and warrants as follows to CNM . 
 2.1.
 Organization, Standing and Power.  Accurexa is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized and has the corporate power and authority and possesses all governmental franchises, licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets and to conduct its businesses as presently conducted, other than such franchises, licenses, permits, authorizations and approvals the lack of which, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect on Accurexa (as defined below).  Accurexa is duly qualified to do business in the jurisdiction where the nature of its business or its ownership or leasing of its properties make such qualification necessary except where the failure to so qualify would not reasonably be expected to have a Material Adverse Effect.  “Material Adverse Effect” means any of (i) a material and adverse effect on the legality, validity or enforceability of this Agreement, (ii) a material and adverse effect on the results of operations, assets, prospects, business or condition (financial or otherwise) of the Company, or (iii) an adverse impairment to the Company’s ability to perform on a timely basis its obligations under this Agreement.
 2.2.
 Authority; Execution and Delivery; Enforceability.  Accurexa has all requisite corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated by this Agreement (the “Transactions”).  The execution and delivery by Accurexa of this Agreement and the consummation of the Transactions have been duly authorized and approved by its Board of Directors and no other corporate proceedings on the part of any of them are necessary to authorize this Agreement and the Transactions.  When executed and delivered, this Agreement will be enforceable against Accurexa in accordance with its terms, except as such enforcement is limited by general equitable principles, or by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors’ rights generally.
 2.3.
 No Conflicts; Consents.  The execution and delivery by Accurexa of this Agreement does not, and the consummation of the Transactions and compliance with the terms hereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any lien or encumbrance upon any of the properties or assets of the Company under, any provision of (i) the Constituent Instruments of   Accurexa , (ii) any material Contract to which the Accurexa is a party or by which any of its respective properties or assets is bound or (iii) any material judgment, order or decree or material Law applicable to Accurexa and each of its respective properties or assets, other than, in the case of clauses (ii) and (iii) above, any such items that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect on any of them.  
 2.4.
 Compliance with Applicable Laws.  Accurexa has conducted its business and operations in compliance with all applicable Laws, except for instances of noncompliance that, individually and in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect on the Company . 
 

 

 

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 ARTICLE 3.
REPRESENTATIONS AND WARRANTIES BY CNM
 CNM represents and warrants as follows to Accurexa . 
 3.1.
 Organization; Authority.  CNM is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite corporate or partnership power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution, delivery and performance by CNM of the transactions contemplated by this Agreement has been duly authorized by all necessary corporate action, on the part of CNM.  This Agreement has been duly executed by CNM, and when delivered by CNM in accordance with the terms hereof, will constitute the valid and legally binding obligation of the CNM, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.
 3.2.
 Knowledge and Experience. CNM has such knowledge and experience in financial and business matters so as to be capable of evaluating and understanding, and has evaluated and understood, the merits and risks of sublicensing the UCSF License. CNM has reviewed copies of such documents and other information as CNM has deemed necessary in order to make an informed decision with respect to its sublicensing of the UCSF License.
 ARTICLE 4.
MISCELLANEOUS
 4.1.
 Fees and Expenses.  Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. 
 4.2.
 Entire Agreement. This Agreement contains the entire agreement of the parties relating to the subject matter hereof.  This Agreement and its terms may not be changed orally but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought.     
 4.3.
 Amendments; Waivers; No Additional Consideration.  No provision of this Agreement may be waived or amended except in a written instrument signed by Accurexa and CNM holding.  No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.
 4.4.
 Termination.  This Agreement may be terminated by both Accurexa or CNM upon thirty (30) days written notice to the other.  However, CNM’s assumption of all obligations that arise from the promissory note in the amount of $200,000 and at an interest rate of 5.00% per annum that was issued to the Lim Development Group by Accurexa on January 12, 2015, shall survive any termination.
 4.5.
 Construction.  The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.  The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.  This Agreement shall be construed as 
 

 3 
 
 if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.
 4.6.
 Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.  
 4.7.
 No Third-Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
 4.8.
 Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the Republic of the Marshall Islands, without regard to the principles of conflicts of law thereof.  
 4.9.
 Execution.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.
 4.10.
 Severability.  If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.
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SIGNATURE PAGES FOLLOW]
 

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 IN WITNESS WHEREOF, the parties hereto have caused this Sublicense Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
 

 ACCUREXA INC. 
 

 By:
 /s/ Bryan Lee
 Name: Bryan Lee 
 Title: President & CEO
 

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 CNM SIGNATURE PAGE FOLLOWS]
 

 
 
 
 
 

 -
 IN WITNESS WHEREOF, the parties hereto have caused this Sublicense Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
 

 CNMRGS INC.
  
 By:
 /s/ Steffen Werner
 Name: Steffen Werner
 Title: Director
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