1
EXHIBIT 10.4
PURCHASE AGREEMENT NUMBER 2025
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Relating to Boeing Model 767-432ER Aircraft
P.A. No. 2025
2
TABLE OF CONTENTS
SA
ARTICLES NUMBER
-------- ------
1. Quantity, Model and Description
2. Delivery Schedule
3. Price
4. Payment
5. Miscellaneous
TABLE
-----
1. Aircraft Information Table
2. Option Aircraft Information Table
3. *
EXHIBIT
-------
A. Aircraft Configuration
SUPPLEMENTAL EXHIBITS
---------------------
BFE/CDSPE/SPE/CSE. Buyer Furnished Equipment, Customer Directed Seller
Purchased Equipment, Seller Purchased Equipment and Cabin
Systems Equipment Variables
CS1. Customer Support Variables
EE1. Engine Escalation
*
SLP1. Service Life Policy Components
*This confidential information has been omitted and filed separately with the
Commission.
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P.A. No. 2025
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LETTER AGREEMENTS
6-1162-RLL-2198 Delivery Price Adjustment
6-1162-RLL-2234 Special Matters
6-1162-RLL-2241 Promotion Support
6-1162-RLL-2242 1997&1998 Escalation Sharing
6-1162-RLL-2243 *
6-1162-RLL-2244 Performance Retention Commitment
6-1162-RLL-2245 Certain Contractual Matters
6-1162-RLL-2247 *
6-1162-RLL-2251 Total Cost Team
6-1162-RLL-2275 Multiple Aircraft Operating Weights
6-1162-RLL-2281 Aircraft Performance Guarantees
6-1162-RLL-2284 Open Configuration Matters
6-1162-RLL-2287 Certification Flight Test Aircraft
6-1162-RLL-2289 *
6-1162-RLL-2290 *
6-1162-RLL-2292 *
6-1162-RLL-2420 767-400ER Pilot Type Rating
6-1162-RLL-2424R1 Engine Matters
*This confidential information has been omitted and filed separately with the
Commission.
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P.A. No. 2025
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Purchase Agreement No. 2025
between
The Boeing Company
and
DELTA AIR LINES, INC.
------------------------------
This Purchase Agreement No. 2025 dated as of October 21, 1997
between The Boeing Company (Boeing) and DELTA AIR LINES, INC. (Customer)
relating to the purchase and sale of Model 767-432ER aircraft incorporates the
terms and conditions of the Aircraft General Terms Agreement dated as of October
21, 1997 between the parties, identified as AGTA-DAL (AGTA).
Article 1. Quantity, Model and Description.
The aircraft to be delivered to Customer will be designated as
Model 767-432ER aircraft (the Aircraft). Boeing will manufacture and sell to
Customer Twenty-One (21) Aircraft to conform to the configuration described in
Exhibit A, which is part of this Purchase Agreement.
Article 2. Delivery Schedule.
The scheduled months of delivery of the Aircraft are listed in
the attached Table 1, which is part of this Purchase Agreement.
Article 3. Price.
3.1 Aircraft Basic Price. The Aircraft Basic Price for each
Aircraft is subject to escalation, as listed in Table 1.
3.2 Advance Payment Base Prices. The Advance Payment Base
Price and the Advance Payment Schedule for each Aircraft is listed in Table 1.
Article 4. Payment.
Advance Payments and payments at Delivery by Customer will be
in accordance with Article 2 of the AGTA.
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P.A. No. 2025
5
Article 5. Miscellaneous.
5.1 Aircraft Information Table. Table 1 consolidates
information contained in Articles 1, 2, 3 and 4 with respect to (i) quantity of
Aircraft, (ii) applicable Detail Specification, (iii) month and year of
scheduled deliveries, (iv) Aircraft Basic Price, (v) applicable escalation
factors and (vi) Advance Payment Base Prices and advance payments and their
schedules.
5.2 Buyer Furnished Equipment Variables. Supplemental Exhibit
BFE/CDSPE/SPE/CSE contains vendor selection dates, on dock dates and other
variables applicable to the Aircraft.
5.3 Customer Support Variables. Supplemental Exhibit CS1
contains the variable information applicable to information, training services
and other things furnished by Boeing in support of the Aircraft.
5.4 Engine Escalation Variables. Supplemental Exhibit EE1
contains the applicable engine escalation formula.
5.5 *This confidential information has been omitted and filed
separately with the Commission.
5.6 Service Life Policy Component Variables. Supplemental
Exhibit SLP1 lists the airframe and landing gear components covered by the
Service Life Policy for the Aircraft.
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P.A. No. 2025
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5.7 Negotiated Agreement; Entire Agreement. This Purchase
Agreement, including the provisions of Article 11.2 of the AGTA relating to
insurance, and Article 12 of Part 2 of Exhibit C of the AGTA relating to
DISCLAIMER AND RELEASE and EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES, has
been the subject of discussion and negotiation and is understood by the parties;
the Aircraft Price and other agreements of the parties stated in this Purchase
Agreement were arrived at in consideration of such provisions. This Purchase
Agreement, including the AGTA, contains the entire agreement between the parties
and supersedes all previous proposals, understandings, commitments or
representations whatsoever, oral or written, and may be changed only in writing
signed by authorized representatives of the parties.
* * * * * * * * * * * * * * * *
DATED AS OF October 21, 1997
DELTA AIR LINES, INC. THE BOEING COMPANY
By /s/ Xxx X. Xxxxxx By /s/ X.X. Xxxxxxx
------------------ ----------------
Its President and CEO Its President
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P.A. No. 2025
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TABLE 1 TO
PURCHASE AGREEMENT NO. 2025
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
AIRFRAME MODEL/MTGW: 767-432ER * DETAIL SPECIFICATION: D019T001-A(2/7/97)
ENGINE MODEL/THRUST LEVEL: CF6-80C2B7F * PRICE BASE YEAR: *
AIRFRAME BASE PRICE: *
OPTIONAL FEATURES: * AIRFRAME ESCALATION DATA:
-------------------------
SUB-TOTAL OF AIRFRAME AND FEATURES: * BASE YEAR INDEX (ECI): *
ENGINE PRICE (PER AIRCRAFT): * BASE YEAR INDEX (ICI): *
BUYER FURNISHED EQUIPMENT (BFE) ESTIMATE: *
SELLER PURCHASED EQUIPMENT (SPE) ESTIMATE: * ENGINE ESCALATION DATA:
-----------------------
AIRCRAFT BASIC PRICE (EXCLUDING BFE/SPE): * BASE YEAR INDEX (CPI): *
REFUNDABLE DEPOSIT PER AIRCRAFT AT PROPOSAL ACCEPTANCE: *
---------------------------------------------------------------------------------------------------------------------------------
* * * * *
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DELIVERY O NUMBER OF * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * * *
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2000
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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*
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2001
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* * * * * * * * * *
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* * * * * * * * * *
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*This confidential information has been omitted and filed separately with the
Commission.
Page 1
8
TABLE 1 TO
PURCHASE AGREEMENT NO. 2025
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
---------------------------------------------------------------------------------------------------------------------------------
* * * * *
---------------------------------------------------------------------------------------------------------------------------------
DELIVERY O NUMBER OF * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
ANNUAL
---------------------------------------------------------------------------------------------------------------------------------
2000 * * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
2001 * * * * * * * * *
---------------------------------------------------------------------------------------------------------------------------------
*This confidential information has been omitted and filed separately with the
Commission.
Page 2
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TABLE 2
TO
THE AGTA AND PURCHASE AGREEMENT NO. 2025
767-432ER OPTION AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
AIRFRAME MODEL/MTGW: 767-432ER * DETAIL SPECIFICATION: D019T001-A(2/7/97)
ENGINE MODEL/THRUST LEVEL: CF6-80C2B7F * PRICE BASE YEAR: *
AIRFRAME PRICE: *
OPTIONAL FEATURES: * AIRFRAME ESCALATION DATA:
-------------------------
SUB-TOTAL OF AIRFRAME AND FEATURES: * BASE YEAR INDEX (ECI): *
ENGINE PRICE (PER AIRCRAFT): * BASE YEAR INDEX (ICI): *
BUYER FURNISHED EQUIPMENT (BFE) ESTIMATE: *
SELLER PURCHASED EQUIPMENT (SPE) ESTIMATE: * ENGINE ESCALATION DATA:
-----------------------
AIRCRAFT BASIC PRICE (EXCLUDING BFE/SPE): * BASE YEAR INDEX (CPI): *
NON-REFUNDABLE DEPOSIT PER AIRCRAFT AT DEFINITIVE AGREEMENT: *
-------------------------------------------------------------------------------------------------------------------------------
* * * * *
-------------------------------------------------------------------------------------------------------------------------------
DELIVERY NUMBER OF * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
DATE AIRCRAFT * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
-------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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*This confidential information has been omitted and filed separately with the
Commission.
Page 1
P.A. No. 2025
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TABLE 2
TO
THE AGTA AND PURCHASE AGREEMENT NO. 2025
767-432ER OPTION AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
--------------------------------------------------------------------------------------------------------------------------------
* * * * *
--------------------------------------------------------------------------------------------------------------------------------
DELIVERY NUMBER OF * * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------
DATE AIRCRAFT * * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------
*This confidential information has been omitted and filed separately with the
Commission.
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P.A. No. 2025
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TABLE 2
TO
THE AGTA AND PURCHASE AGREEMENT NO. 2025
767-432ER ROLLING OPTION AIRCRAFT DELIVERY
------------------------- ------------------------ ------------------------ ------------------------- ------------------------
2005 2006 2007 2008 2009
------------------------- ------------------------ ------------------------ ------------------------- ------------------------
* * * * *
------------------------- ------------------------ ------------------------ ------------------------- ------------------------
* * * * *
------------------------- ------------------------ ------------------------ ------------------------- ------------------------
------------------------- ------------------------ ------------------------ ------------------------- ------------------------
2010 2011 2012 2013 2014
------------------------- ------------------------ ------------------------ ------------------------- ------------------------
* * * * *
------------------------- ------------------------ ------------------------ ------------------------- ------------------------
* * * * *
------------------------- ------------------------ ------------------------ ------------------------- ------------------------
------------------------- ------------------------ ------------------------ ------------------------- ------------------------
2015 2016 2017
------------------------- ------------------------ ------------------------
* * *
------------------------- ------------------------ ------------------------
* *
------------------------- ------------------------ ------------------------
------------------------- ------------------------ ------------------------
*This confidential
information has been omitted
and filed separately with
the Commission.
P.A. No. 2025
12
TABLE 3
TO THE AGTA PURCHASE AGREEMENT NO. 2025
*
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
AIRFRAME MODEL/MTGW: 767-432ER * DETAIL SPECIFICATION: D019T001-A(2/7/97)
ENGINE MODEL/THRUST LEVEL: CF6-80C2B7F * PRICE BASE YEAR: *
AIRFRAME PRICE: *
OPTIONAL FEATURES: * AIRFRAME ESCALATION DATA:
------------------------
SUB-TOTAL OF AIRFRAME AND FEATURES: * BASE YEAR INDEX (ECI): *
ENGINE PRICE (PER AIRCRAFT): * BASE YEAR INDEX (ICI): *
BUYER FURNISHED EQUIPMENT (BFE) ESTIMATE: *
SELLER PURCHASED EQUIPMENT (SPE) ESTIMATE: * ENGINE ESCALATION DATA:
----------------------
AIRCRAFT BASIC PRICE (EXCLUDING BFE/SPE): * BASE YEAR INDEX (CPI): *
REFUNDABLE DEPOSIT PER AIRCRAFT AT PROPOSAL ACCEPTANCE: *
-----------------------------------------------------------------------------------------------------------------------------------
* * * * *
-----------------------------------------------------------------------------------------------------------------------------------
DELIVERY O NUMBER OF * * * * * * * *
-----------------------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * * *
-----------------------------------------------------------------------------------------------------------------------------------
2000
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
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* * * * * * * * * *
-----------------------------------------------------------------------------------------------------------------------------------
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2001
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* * * * * * * * * *
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* * * * * * * * * *
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*This confidential information has been omitted and filed separately with the
Commission.
Page 1
13
TABLE 3
TO THE AGTA PURCHASE AGREEMENT NO. 2025
*
AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS
-----------------------------------------------------------------------------------------------------------------------------------
* * * * *
-----------------------------------------------------------------------------------------------------------------------------------
DELIVERY O NUMBER OF * * * * * * * *
-----------------------------------------------------------------------------------------------------------------------------------
DATE P AIRCRAFT * * * * * * * *
-----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
-----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
-----------------------------------------------------------------------------------------------------------------------------------
* * * * * * * * * *
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
ANNUAL
-----------------------------------------------------------------------------------------------------------------------------------
2000 * * * * * * * * *
-----------------------------------------------------------------------------------------------------------------------------------
2001 * * * * * * * * *
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
*This confidential information has been omitted and filed separately with the
Commission.
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AIRCRAFT CONFIGURATION
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Exhibit A to Purchase Agreement Number 2025
A
P.A. No. 2025
15
Exhibit A to
Purchase Agreement No. 2025
Page 1
AIRCRAFT CONFIGURATION
Dated October 21,1997
relating to
BOEING MODEL 767-432ER AIRCRAFT
The Detail Specification is Boeing Document D019T001DAL64P-1, dated
as of even date herewith. Such Detail Specification will be comprised of
Configuration Specification D019T001, dated February 7, 1997, revised to
Revision A, dated June 6, 1997, as amended to incorporate the Optional Features
selected in accordance with Letter Agreement No. 6-1162-RLL-2284, including the
effects on Manufacturer's Empty Weight (MEW) and Operating Empty Weight (OEW).
Such Optional Features are set forth in Boeing Document D019TCR1DAL64P-1.
Following completion of the configuration, Boeing will furnish to Customer
copies of the Detail Specification, which copies will reflect such Optional
Features. The Aircraft Basic Price reflects and includes an estimate of such
Optional Features, except such Aircraft Basic Price does not include the price
effects of any Buyer Furnished Equipment or Seller Purchased Equipment.
A-1
P.A. No. 2025
16
BUYER FURNISHED EQUIPMENT, CUSTOMER DIRECTED SELLER
PURCHASED EQUIPMENT, SELLER PURCHASED EQUIPMENT AND CABIN
SYSTEMS EQUIPMENT VARIABLES
relating to
BOEING MODEL 767-432ER AIRCRAFT
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Supplemental Exhibit BFE/CDSPE/SPE/CSE
to
Purchase Agreement Number 2025
P.A. No. 2025
17
This Supplemental Exhibit BFE/CDSPE/SPE/CSE contains supplier selection dates,
on-dock dates and terms and conditions for Buyer Furnished Equipment, Customer
Directed Seller Purchased Equipment, Seller Purchased Equipment and Cabin
Systems Equipment and other variables applicable to the Aircraft.
1. Definition of Terms:
Buyer Furnished Equipment (BFE) is defined as equipment purchased and provided
by Customer, which Boeing will receive, inspect, store and install in the
Aircraft before Delivery in accordance with this Supplemental Exhibit
BFE/CDSPE/SPE/CSE.
Seller Purchased Equipment (SPE) is Buyer Furnished Equipment (BFE) that Boeing
purchases for Customer.
Customer Directed Seller Purchased Equipment (CDSPE) is SPE for which Customer
is to solicit proposals from suppliers, select the supplier, and negotiate
commercial terms.
Developmental Buyer Furnished Equipment (DBFE) is BFE not previously certified
for installation on the same model aircraft.
References to SPE in this letter will be inclusive of CDSPE unless otherwise
specified.
This Exhibit does not include developmental avionics.
Inflight entertainment, cabin communications systems and cabin management
systems (IFE/CCS/CMS) are collectively referred to as Cabin Systems Equipment
(CSE).
2. BFE Variables:
2.1 Supplier Selection.
Customer will:
2.1.1 Select and notify Boeing of the suppliers of the following BFE
items by the following dates:
Galley System June 2, 1998
Seats (passenger) February 2, 1998
IFE/CMS February 2, 1998
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2.2 On-dock Dates.
On or before August 31, 1999, Boeing will provide to Customer a BFE
Requirements On-Dock/Inventory Document (BFE Document) or an electronically
transmitted BFE Report which may be periodically revised, setting forth the
items, quantities, on-dock dates and shipping instructions relating to the
in-sequence installation of BFE. For planning purposes, a preliminary BFE
on-dock schedule is set forth in Attachment A.
3.0 SPE Variables:
3.1 Customer has requested that Boeing purchase as SPE the BFE which has been
changed to SPE by Optional Feature Number TBD. Accordingly, Articles 3.2, 3.3,
3.4, 3.5, 3.6, 3.7, and 4.8 below are applicable to SPE. *This confidential
information has been omitted and filed separately with the Commission.
3.2 Price Effect of SPE on Aircraft Price and Advance Payments.
3.2.1 Advance Payments. Upon completion of the conversion from BFE to
SPE, the Advance Payment Base Prices in Tables 1 and 3 will be updated to
reflect the conversion from BFE to SPE. For Customer's planning purposes the
estimated price of this SPE for each of the Aircraft is *This confidential
information has been omitted and filed separately with the Commission.
3.2.2 Aircraft Price. The Aircraft Price will be adjusted to reflect
(i) the actual costs charged Boeing by the SPE suppliers, and (ii)
transportation charges.
3.3 Responsibilities for SPE.
3.3.1 Customer is responsible for:
(i) selecting the supplier on or before:
for galleys - June 2, 1998
(ii) selecting a FAA certifiable part; and
(iii) providing to Boeing the SPE part
specification/Customer requirements.
(iv) providing notice to CDSPE supplier that the
Boeing purchase order terms and conditions
will apply.
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P.A. No. 2025
19
(v) advising CDSPE suppliers to provide part
number pricing, as agreed to between
supplier and Customer to Boeing in a timely
manner to support lead times and purchase
order placement by Boeing.
(vi) obtaining the supplier's warranty and
agreement to provide customer support
commitments for the CDSPE in accordance with
paragraph 3.5 of Exhibit A of the AGTA.
CDSPE is deemed BFE for the purposes of
Exhibit B and C of the AGTA.
(vii) advising Boeing which commodities will be
SPE and which will be CDSPE on or before
TBD.
3.3.2 Boeing is responsible for:
(i) placing and managing the purchase order with
the supplier;
(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) for SPE other than CDSPE, obtaining for
Customer the supplier's standard warranty
for the SPE. SPE is deemed to be BFE for
purposes of Exhibit B and C of the AGTA.
3.4 Supplier/Equipment Selection for SPE.
3.4.1 In addition to those responsibilities described above, for
galleys the following provisions apply with respect to Customer's selection of
suppliers:
Galley Requirements. Customer will provide Boeing the definitive galley
configuration requirements not later than March 2, 1998.
Bidder's List. Suppliers for galleys are listed in Attachment B. Not
later than sixty (60) days prior to the selection date shown above, Boeing will
submit to Customer a list of offerable suppliers.
Selection. If Customer does not make supplier selections by the dates
specified in Article 3.3, paragraph 3.3.1 (i), or if Customer selects a galley
supplier that is not on the
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P.A. No. 2025
20
Boeing Bidder's list, such galley will become BFE and the provisions of Exhibit
A, Buyer Furnished Equipment Provisions Document, of the AGTA will apply.
3.4.2 Boeing shall retain the right to approve Customer's selected
supplier's and/or part numbers, for each item of SPE.
3.5 Changes to SPE.
After the Purchase Agreement is signed, changes to SPE may only be made
by and between Boeing and the suppliers. Customer's contacts with SPE suppliers
relating to design (including selection of materials and colors), weights,
prices or schedules are for informational purposes only. If Customer wants any
changes made, requests must be made directly to Boeing for coordination with the
supplier.
3.6 Proprietary Rights for SPE.
Boeing's obligation to purchase SPE will not impose upon Boeing any
obligation to compensate Customer or any supplier for any proprietary rights
Customer may have in the design of the SPE.
3.7 Remedies for SPE.
If Customer 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 Customer for the
cost;
(iv) increase the Aircraft Price by the amount of Boeing's
additional costs attributable to such noncompliance.
4.0 CSE Variables.
Customer has requested that Boeing install in the Aircraft the CSE
described in Attachment C to this Exhibit. Accordingly, Articles 4.0, 4.1, 4.2,
4.3, 4.4, 4.5, 4.6, 4.7 and 4.8 below are applicable to CSE.
Because of the complexity of the IFE/CCS, special attention and
additional resources will be required during the development, integration,
certification, and manufacture of the Aircraft to achieve proper operation of
the IFE/CCS at the time of delivery of the Aircraft. To assist Customer, Boeing
will perform the functions of project manager (the Project Manager) as set forth
in Attachment D and according to the requirements of Exhibit C to the AGTA.
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4.1 Responsibilities for CSE.
4.2.1 Customer will:
4.2.1.1 Provide Customer's CSE system requirements to Boeing;
4.2.1.2 Select the CSE suppliers (Suppliers) from among those
suppliers identified in the Change Requests listed in Attachment C to this
Exhibit, on or before February 2, 1998.
4.2.1.3 Promptly after selecting Suppliers, participate with
Boeing in meetings with Suppliers to ensure that Supplier's functional system
specifications meet Customer's and Boeing's respective requirements;
4.2.1.4 Select Supplier part numbers and provide to Boeing by
February 2, 1998.
4.2.1.5 Negotiate and obtain agreements on product assurance,
product support following Aircraft delivery (including spares support),
supplier's pricing and any other special business arrangements directly with
Suppliers;
4.2.1.6 Provide pricing information for part numbers selected
above to Boeing by March 13, 1998.
4.2.1.7 Negotiate and obtain agreements with any required service
providers.
4.2.1.8 Include in Customer's contract with any seat supplier a
condition obligating such seat supplier to enter into and comply with a Boeing
approved bonded stores agreement. This bonded stores agreement will set forth
the procedures concerning the use, handling and storage for the Boeing owned CSE
equipment during the time such equipment is under the seat supplier's control.
4.2.1.9 Authorize Boeing to obtain production CSE spares for test
and or rejection replacement as follows: 5% overage for in-seat LCD monitors,
in-seat cables, handsets, cord reels, and remote jacks; 15% overage for seat
boxes; and, one each of the head-end equipment. Unused parts will be returned to
the Customer with the aircraft delivery and any parts returned to the supplier
for repair will be returned to the Customer, at no further cost, after aircraft
delivery.
4.2.2 Boeing will:
4.2.2.1 Perform the Project Manager functions stated in Attachment
D;
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4.2.2.2 Provide Aircraft interface requirements to Suppliers as
specified in Boeing Document D6-36440, Standard Cabin Systems Requirements
Document (SCSRD) and as specified in Attachment B, paragraph 3 A Seat
integration.
4.2.2.3 Assist Suppliers in the development of their CSE system
specifications and approve such specifications;
4.2.2.4 Negotiate terms and conditions (except for price, product
assurance, product support following Aircraft delivery and any other special
business arrangements) and enter into contracts with Suppliers and manage such
contracts for the CSE;
4.2.2.5 Coordinate the resolution of technical issues with
Suppliers;
4.2.2.6 Ensure that at time of Aircraft delivery the CSE
configuration and functionality meets the requirements of the Change Requests
contained in Attachment C to this Exhibit as such Attachment C may be amended
from time to time; and
4.2.2.7 Obtain FAA certification of the Aircraft with the IFE/CCS
installed therein.
4.3 Software for CSE.
CSE systems may contain software of the following two types.
4.3.1 Systems Software. The software required to operate and certify the
CSE systems on the Aircraft is the Systems Software and is part of the CSE.
4.3.2 Customer's Software. The software accessible to the Aircraft
passengers which controls Customer's specified optional features is Customer's
Software and is not part of the CSE.
4.3.2.1 Customer is solely responsible for specifying Customer's
Software functional and performance requirements and ensuring that Customer's
Software meets such requirements. Customer and Customer's Software supplier will
have total responsibility for the writing, certification, modification,
revision, or correction of any of Customer's Software. Boeing will not perform
the functions and obligations described in paragraph 4.2.2 above, nor the
Project Manager's functions described in Attachment D, for Customer's Software.
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23
4.3.2.2 The omission of any Customer's Software or the lack of any
functionality of Customer's Software will not be a valid condition for
Customer's rejection of the Aircraft at the time of Aircraft delivery.
4.3.2.3 Boeing has no obligation to approve any documentation to
support Customer's Software certification. Boeing will only review and operate
Customer's Software if in Boeing's reasonable opinion such review and operation
is necessary to certify the CSE system on the Aircraft.
4.3.2.4 Boeing will not be responsible for obtaining FAA
certification for Customer's Software.
4.4 Changes to CSE.
4.4.1 After Boeing and Supplier have entered into a contract for the
purchase of the CSE, changes to such contract may only be made by Boeing. Any
Customer request for changes to the CSE specification after the Boeing/Supplier
contract has been signed must be made in writing directly to Boeing. Boeing
shall respond to such request by Customer in a timely manner. If such change is
technically feasible and Boeing has the resources and time to incorporate such
change, then Boeing shall negotiate with the Supplier to incorporate such change
into the contract for the CSE. Any Supplier price increase resulting from such a
change will be negotiated between Customer and Supplier.
4.4.2 Boeing and Customer recognize that the developmental nature of the
CSE may require changes to the CSE or the Aircraft in order to ensure (i)
compatibility of the CSE with the Aircraft and all other Aircraft systems, and
(ii) FAA certification of the Aircraft with the CSE installed therein. In such
event Boeing will notify Customer and recommend to Customer the most practical
means for incorporating any such change. If within 15 days after such
notification Customer and Boeing through negotiations cannot mutually agree on
the incorporation of any such change or alternate course of action, then the
remedies available to Boeing in Article 15 shall apply.
4.4.3 The incorporation into the Aircraft of any mutually agreed change
to the CSE may result in Boeing adjusting the price of the Change Request
contained in Attachment C to this Letter Agreement.
4.4.4 Boeing's obligation to obtain FAA certification of the Aircraft
with the CSE installed is limited to the CSE as described in Attachment C, as
Attachment C may be amended from time to time.
4.4.5 Boeing shall notify Customer in a timely manner in the event of a
default by a Supplier under the Supplier's contract with Boeing. Within 15 days
of Customer's receipt of such notification, Boeing and Customer shall agree
through negotiations on an alternative Supplier or other course of action. If
Boeing and Customer
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P.A. No. 2025
24
are unable to agree on an alternative Supplier or course of action within such
time, the remedies available to Boeing in Article 4.6 shall apply. In the event
of a BFE/SPE Seat Supplier default, Boeing and Customer mutually agree to the
contingency plan described in Exhibit C.
4.5 Exhibits B and C to the AGTA for CSE.
CSE is deemed to be BFE for the purposes of Exhibit B, Customer
Support Document, and Exhibit C, the Product Assurance Document, of the AGTA.
4.6 Boeing's Remedies for CSE.
If Customer does not comply with any of its obligations set forth
herein, Boeing may:
4.6.1 delay delivery of the Aircraft pursuant to the provisions of
Article 10, Excusable Delay, of the AGTA;
4.6.2 deliver the Aircraft without part or all of the CSE
installed, or with part or all of the CSE inoperative; or
4.6.3 increase the Aircraft Price by the amount of Boeing's
additional costs attributable to such noncompliance.
4.7 Price Effect of CSE on Aircraft Price and Advance Payments.
4.7.1 Advance Payments. An estimated CSE price will be included in
the Aircraft Advance Payment Base Price for the purpose of establishing the
advance payments for the Aircraft. The estimated price for the Boeing purchased
CSE installed on each Aircraft by Change Requests identified in Attachment C is
TBD Dollars expressed in 1995 dollars.
4.7.2 Aircraft Price. The Aircraft Price will include the actual
CSE prices and any associated transportation costs charged Boeing by Suppliers.
4.8 Customer's Indemnification of Boeing for SPE and CSE.
Customer 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 Customer 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, CSE, or in the installation thereof or
in the provision of services hereunder, and whether or not arising in tort or
occasioned in whole or in part by the negligence of Boeing, whether active,
passive or
Page 8
P.A. No. 2025
25
imputed. This indemnity will not apply with respect to any nonconformance or
defect caused solely by Boeing's installation of the CSE.
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P.A. No. 2025
26
ATTACHMENT A
PRELIMINARY ON-DOCK DATES
Items Preliminary On-Dock Dates
----- -------------------------
* *
* *
* *
Seats * *
Galleys * *
Electronics * *
Furnishings * *
Items *
-----
* *
* *
* *
Seats * *
Galleys * *
Electronics * *
Furnishings * *
* Early on dock dates are required to support instrumental flight test.
Developmental Avionics will be determined at ITCM (Initial Technical
Coordination Meeting).
** On dock date for those items required to support flight test.
*THIS CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
Page 1
P.A. No. 2025
27
ATTACHMENT A
PRELIMINARY ON-DOCK DATES
CONTINUED
Items Preliminary On-Dock Dates
----- -------------------------
*
Seats *
Galleys *
Electronics *
Furnishings *
*This confidential information has been omitted and filed separately with the
Commission.
Page 2
P.A. No. 2025
28
ATTACHMENT B
GALLEY BIDDERS LIST
TBD
Page 1
P.A. No. 2025
29
ATTACHMENT C
CABIN SYSTEMS EQUIPMENT
The following Change Requests describe the items of equipment that
under the terms and conditions of this Letter Agreement are considered to be
CSE. Each such Change Request is fully described in the Change Request Document.
Change Request Number and Title
TBD
Page 1
P.A. Xx. 0000
00
XXXXXXXXXX X
PROJECT MANAGER
This Attachment D describes the functions that Boeing will perform as Project
Manager to support (i) the development and integration of the CSE and (ii) the
FAA certification of the CSE when installed on the Aircraft.
1. Project Management
Boeing will perform the following functions for the CSE. Boeing will
have authority to make day-to-day management decisions, and decisions on
technical details which in Boeing's reasonable opinion do not significantly
affect form, fit, function, cost or aesthetics. Boeing will be responsible for:
A. Managing the development of all program schedules;
B. Evaluating and approving Supplier's program
management and developmental plans;
C. Defining program metrics and status requirements;
D. Scheduling and conducting program status reviews;
E. Scheduling and conducting design and schedule reviews
with Customer and Suppliers;
F. Monitoring compliance with schedules;
G. Evaluating and approving any recovery plans or plan
revisions which may be required of either Suppliers
or Customer;
H. Leading the development of a joint CSE project
management plan (the Program Plan) and;
I. Managing the joint development of the System
Specification
2. System Integration
Boeing's performance as Project Manager will include the functions of
systems integrator (Systems Integrator). As Systems Integrator Boeing will
perform the following functions:
Page 1
P.A. No. 2025
31
A. As required, assist Suppliers in defining their system
specifications for the CSE, approve such specifications and
develop an overall system functional specification;
B. Coordinate Boeing, Customer and Supplier teams to ensure
sufficient Supplier and Supplier sub system testing and an
overall cabin system acceptance test are included in the
Program Plan; and
C. Organize and conduct technical coordination meetings with
Customer and Suppliers to review responsibilities,
functionality, Aircraft installation requirements and overall
program schedule, direction and progress.
3. Seat Integration
A. Boeing will coordinate the interface requirements between seat
suppliers and Suppliers. Interface requirements are defined in
Boeing Document Nos. D6-36230, "Passenger Seat Design and
Installation"; D6-36238, "Passenger Seat Structural Design and
Interface Criteria"; D222W232, "Seat Wiring and Control
Requirements"; and D222W013-4, "Seat Assembly Functional Test
Plan".
B. The Suppliers will be required to coordinate integration
testing and provide seat assembly functional test procedures
for seat electronic parts to seat suppliers and Boeing, as
determined by Boeing.
C. The Suppliers will assist the seat suppliers in the
preparation of seat assembly functional test plans.
Page 2
P.A. No. 2025
32
ATTACHMENT E
767-432ER
CRITICAL PATH EVENTS
The contingency plan is the alternate course of action which will be implemented
if the critical decision date is not met or other course of action is not agreed
to by Boeing and Customer. The critical impact events listed below are
milestones which must be met by the BFE/SPE and CSE Suppliers to achieve the
in-sequence installation of the CSE. The Required Due Dates in such tables are
the dates on which Boeing begins to incur disruption costs. The Critical
Decision Dates are the dates after which the critical impact event cannot be
accomplished to maintain the delivery schedule and/or full system functionality.
A meeting to discuss a recovery plan cost impact and/or an alternate course of
action will be held within one week of knowledge of delinquency or impending
delinquency.
Critical
Required Decision Contingency
Event Due Date Date Plan
----- -------- ---- ----
Approvable Seat-Abuse XXX XXX CSE inoperative Load
Test Plan Submittal at Delivery
CSE Test Hardware On- XXX XXX CSE inoperative
Dock at Seat Supplier at Delivery
Seat-Abuse Load XXX XXX CSE inoperative
test conduct at Delivery
Seat-Abuse Load Test XXX XXX CSE inoperative Report
Submittal at Delivery
CSE Production XXX XXX Assess additional out-
Hardware On-Dock at of-sequence charges
Seat Supplier for the consequent late
seats
Seats-On-Dock XXX XXX Assess additional
(Complete and In-Seat out-of-sequence charges
CSE Hardware Functionality
Tested) at Boeing
Zone CSE Production XXX XXX CSE inoperative
Hardware On-Dock at Boeing at Delivery
Head End CSE Production XXX XXX CSE inoperative
Hardware On-Dock at at Delivery
Boeing
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P.A. No. 2025
33
Further Development of the contingency plan, including additional events, based
upon customer's final selected configuration is required. The TBD schedules in
this Exhibit will be added within two weeks of the Initial Technical
Coordination Meeting (ITCM).
Page 2
P.A. No. 2025
34
CUSTOMER SUPPORT VARIABLES
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Supplemental Exhibit CS1 to Purchase Agreement Number 2025
CS1
P.A. No. 2025
35
CUSTOMER SUPPORT VARIABLES
relating to
BOEING MODEL 767-432ER AIRCRAFT
Customer and Boeing will conduct planning conferences approximately 12 months
prior to delivery of the first Aircraft, or as mutually agreed, in order to
develop and schedule a customized Customer Support Program to be furnished by
Boeing in support of the Aircraft.
*This confidential information has been
omitted and filed separately with the
Commission.
CS1-1
P.A. No. 2025
36
*This confidential information has been
omitted and filed separately with the
Commission.
CS1-2
P.A. No. 2025
37
7. Technical Data, Documents and Manuals.
7.1 Revisions.
Boeing will revise, as applicable, technical data and
documents provided with previously delivered aircraft.
7.2 Manuals.
Boeing will provide to Customer manuals as identified below ,
ninety (90) days prior to delivery of first Aircraft, except
for the following manuals which will be provided at delivery
of each Aircraft.
Airplane Flight Manual
Weight and Balance Manual (chapters 1 and 2)
Operations Manual and Quick Reference Handbook
Fault Reporting Manual
Manuals are subject to revision based upon engineering and
manufacturing changes not available at the time of delivery of
Customer's first Aircraft.
Boeing will provide manuals to Customer electronically as
technology makes manuals accessible, and manuals are
incorporated into Boeing Online Data System (BOLD).
CS1-3
P.A. No. 2025
38
At Customer's request, the engine warranty portion of this Supplemental Exhibit
EE1 has been deleted because the Customer intends to enter into a warranty
agreement with GE.
ENGINE ESCALATION
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Supplemental Xxxxxxx XX0 to Purchase Agreement Number 2025
EE1
P.A. No. 2025
39
ENGINE ESCALATION
relating to
BOEING MODEL 767-432ER AIRCRAFT
1. ENGINE ESCALATION.
(a) The Aircraft Basic Price of each Aircraft set forth in Table 1 of the
Purchase Agreement includes an aggregate price for CF6-80C2 engines and all
accessories, equipment and parts provided by the engine manufacturer. The
adjustment in Engine price applicable to each Aircraft (Engine Price Adjustment)
will be determined at the time of Aircraft delivery in accordance with the
following formula:
Pe = (Pb x CPI ) - Pb
CPIb where CPIb is the Base Year Index
as set forth in Table 1 of the
Purchase Agreement
(b) The following definitions will apply herein:
Pe = Engine Price Adjustment
Pb = Engine Base Price (per Aircraft), as set forth in
Table 1 of the Purchase Agreement.
CPI is the Composite Price Index, a value determined using the
Bureau of Labor Statistics, U.S. Department of Labor actual data in
accordance with the formula below. The Index values utilized in the
formula will be the numbers shown in the actual data for the ninth
month prior to the month of scheduled Aircraft delivery or the
ninth month prior to the Base Year Dollars month set forth in Table
1.
CPI = L +C + M + E
L = The Labor Index will be equal to the
quotient of the value associated with the
Aircraft Delivery Month divided by the
value associated with the Base Year Dollar
month in "Hourly Earnings of Aircraft
Engines and Engine Parts Production
Workers" SIC 3724, multiplied by 100 and
then by 30%.
EE1-1
P.A. No. 2025
40
C = The Industrial Commodities Index will be
equal to 30% of the Producer Price Index
for "all commodities other than Farm and
Foods," Code 3-15 associated with the
scheduled Aircraft delivery month.
M = The Metals and Metal Products Index will
be equal to 30% of the Producer Price Index
for "Metals and Metal Products," Code 10
associated with the scheduled Aircraft
delivery month.
E = The Fuel Index will be equal to 10% of
the Producer Price Index for "Fuel and
Related Products and Power," Code 5
associated with the scheduled Aircraft
delivery month.
The Engine Price Adjustment will not be made if it would result in a decrease in
the Engine Base Price.
(c) The values of the Average Hourly Earnings and Producer Price
Indices used will be those published as of a date 30 days prior to the scheduled
Aircraft delivery to Customer. Such values will be considered final and no
Engine Price Adjustment will be made after Aircraft delivery for any subsequent
changes in published Index values.
(d) In the event the Engine price escalation provisions are made
non-enforceable or otherwise rendered null and void by any agency of the United
States Government, or if the U.S. Department of Labor, Bureau of Labor
Statistics (i) substantially revises the methodology (in contrast to benchmark
adjustments or other corrections of previously published data) or (ii)
discontinues publication of any of the data referred to above, General Electric
Company (GE) agrees to meet jointly with Boeing and Customer, (to the extent
such parties may lawfully do so,) to jointly select a substitute for the revised
or discontinued data; such substitute data to lead in application to the same
adjustment result, insofar as possible, as would have been achieved by
continuing the use of the original data as it may have fluctuated had it not
been revised or discontinued. If such Engine price escalation provisions,
methodology or data publication are subsequently reinstated, Boeing will make
adjustments consistent with the agreements defined in this Supplemental Exhibit
EE1.
NOTE: The factor (CPI divided by the base year index) by which the Engine
Base Price is to be multiplied will be expressed as a decimal and
rounded to the nearest thousandth. Any rounding of a number, as
required under this Supplemental Xxxxxxx XX0 with respect to
escalation of the Engine price, will be accomplished as follows: if
the first digit of the portion to be dropped from the number to be
rounded is five or greater, the preceding digit will be raised to
the next higher number.
EE1-2
P.A. No. 2025
41
*
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Supplemental Exhibit * to Purchase Agreement Number 2025
*This confidential information has been omitted and filed separately with the
Commission.
*
P.A. No. 2025
42
*
relating to
BOEING MODEL 767-432ER
*This confidential information has been
omitted and filed separately with the
Commission.
*
P.A. No. 2025
43
SERVICE LIFE POLICY COMPONENTS
between
THE BOEING COMPANY
and
DELTA AIR LINES, INC.
Supplemental Exhibit SLP1 to Purchase Agreement Number 2025
SLP1
P.A. No. 2025
44
COVERED SERVICE LIFE COMPONENTS
relating to
BOEING MODEL 767 AIRCRAFT
This is the listing of Covered Components for the Aircraft which relate to Part
3, Boeing Service Life Policy of Exhibit C, Product Assurance Document to the
AGTA and is a part of Purchase Agreement No. 2025.
1. Wing.
(a) Upper and lower wing skins and stiffeners between the
forward and rear wing spars.
(b) Wing spar webs, chords and stiffeners.
(c) Inspar wing ribs.
(d) Inspar splice plates and fittings.
(e) Main landing gear support structure.
(f) Wing center section lower beams, spanwise beams and
floor beams, but not the seat tracks attached to the
beams.
(g) Wing-to-body structural attachments.
(h) Engine strut support fittings attached directly to
wing primary structure.
(i) Support structure in the wing for spoilers and spoiler
actuators; for aileron hinges and reaction links; and
for leading edge devices and trailing edge flaps.
(j) Leading edge device and trailing edge flap support
system.
(k) Aileron, leading edge device and trailing edge flap
internal, fixed attachment and actuator support
structure.
2. Body.
(a) External surface skins and doublers, longitudinal
stiffeners, longerons and circumferential rings and
frames between the forward
SLP1-1
P.A. No. 2025
45
pressure bulkhead and the vertical stabilizer rear
spar bulkhead, and structural support and enclosure
for the APU but excluding all system components and
related installation and connecting devices,
insulation, lining, and decorative panels and related
installation and connecting devices.
(b) Window and windshield structure but excluding the
windows and windshields.
(c) Fixed attachment structure of the passenger doors,
cargo doors and emergency exits excluding door
mechanisms and movable hinge components. Xxxxx and
frames around the body openings for the passenger
doors, cargo doors and emergency exits, excluding
scuff plates and pressure seals.
(d) Nose wheel well structure, including the wheel well
walls, pressure deck, forward and aft bulkheads, and
the gear support structure.
(e) Main gear wheel well structure including pressure
deck, bulkheads and landing gear beam support
structure.
(f) Floor beams and support posts in the control cab and
passenger cabin area, but excluding seat tracks.
(g) Forward and aft pressure bulkheads.
(h) Keel structure between the wing front spar bulkhead
and the main gear wheel well aft bulkhead, including
splices.
(i) Wing front and rear spar support bulkheads, and
vertical and horizontal stabilizer front and rear spar
support bulkheads including terminal fittings but
excluding all system components and related
installation and connecting devices, insulation,
lining, and decorative panels and related installation
and connecting devices.
(j) Support structure in the body for the stabilizer pivot
and stabilizer screw.
3. Vertical Stabilizer.
(a) External skins between front and rear spars including
splices.
(b) Front, rear and auxiliary spar chords, webs and
stiffeners, and attachment fittings between vertical
stabilizer and body.
SLP1-2
P.A. No. 2025
46
(c) Inspar ribs.
(d) Support structure in the vertical stabilizer for
rudder hinges, reaction links and actuators.
(e) Rudder internal, fixed attachment and actuator support
structure.
(f) Rudder hinges and supporting ribs, excluding bearings.
4. Horizontal Stabilizer.
(a) External skins between front and rear spars.
(b) Front, rear and auxiliary spar chords, webs and
stiffeners.
(c) Inspar ribs.
(d) Stabilizer center section and fittings splicing to
outboard stabilizer including pivot and screw support
structure.
(e) Support structure in the horizontal stabilizer for the
elevator hinges, reaction links and actuators.
(f) Elevator internal, fixed attachment and actuator
support structure.
5. Engine Strut.
(a) Strut external surface skin and doublers and
stiffeners.
(b) Internal strut chords, frames and bulkheads.
(c) Strut to wing fittings and diagonal brace.
(d) Engine mount support fittings attached directly to
strut structure.
(e) For Aircraft equipped with General Electric or Xxxxx &
Whitney engines only, the engine mounted support
fittings.
6. Main Landing Gear.
(a) Outer cylinder.
(b) Inner cylinder.
(c) Upper and lower side strut, including spindles and
universals.
(d) Upper and lower drag strut, including spindles and
universals.
SLP1-3
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(e) Orifice support tube.
(f) Downlock links, including spindles and universals
(g) Torsion links.
(h) Bogie beam.
(i) Axles.
7. Nose Landing Gear.
(a) Outer cylinder.
(b) Inner cylinder, including axles.
(c) Orifice support tube.
(d) Upper and lower drag strut, including lock links.
(e) Steering plates and steering collar.
(f) Torsion links.
(g) Actuator support beam and hanger.
NOTE: The Service Life Policy does not cover any bearings, bolts,
bushings, clamps, brackets, actuating mechanisms or latching
mechanisms used in or on the Covered Components.
SLP1-4
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