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Aircraft General Terms Agreement (agta-dal)

This is an actual contract between Delta Air Lines and THE Boeing Company.

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Sectors: Transportation, Manufacturing
Governing Law: Washington, View Washington State Laws
Effective Date: October 21, 1997
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AIRCRAFT GENERAL TERMS AGREEMENT

AGTA-DAL

BETWEEN

THE BOEING COMPANY

AND

DELTA AIR LINES, INC.


2


TABLE OF CONTENTS


Page Number
ARTICLES
1. Definitions, Subject Matter of Sale and
Annual Fleet Plan Review 2
2. Price, Payment and Taxes 6
3. Option Aircraft 11
4. * 13
5. * 17
6. Regulatory Requirements and Certificates 19
7. Detail Specification; Changes 21
8. Representatives, Inspection, Demonstration Flights, Test
Data and Performance Guarantee Compliance 22
9. Delivery 23
10. Excusable Delay 24
11. Risk Allocation/Insurance 26
12. Assignment, Resale or Lease 27
13. Termination for Certain Events 29
14. Notices 31
15. Confidentiality 31
16. Miscellaneous 32


EXHIBITS


A Buyer Furnished Equipment Provisions Document
B Customer Support Document
C Product Assurance Document
D Escalation Adjustment
E Aircraft Delivery Requirements and Responsibilities Document
F *


APPENDICES


1 Sample Insurance Certificate
2 Sample Purchase Agreement Assignment
3 Post-Delivery Sale Notice
4 Post-Delivery Lease Notice
5 Purchaser's/Lessee's Agreement
6 Owner Appointment of Agent - Warranties
7 Contractor Confidentiality Agreement
8 Notice of Option Exercise
9 *


*This confidential information has been omitted and filed separately with the Commission.


AGTA-DAL


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AIRCRAFT GENERAL TERMS AGREEMENT NUMBER AGTA-DAL


BETWEEN


THE BOEING COMPANY


AND


DELTA AIR LINES, INC.


RELATING TO


BOEING AIRCRAFT


This Aircraft General Terms Agreement Number AGTA-DAL (AGTA) dated as of October 21, 1997, is entered into between The Boeing Company (Boeing) and Delta Air Lines, Inc. (Customer).


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Article 1. Definitions, Subject Matter of Sale and Annual Fleet Plan
Review.


1.1 Definitions. As used in this AGTA, the following terms have the following meanings:


Additional Aircraft means all aircraft other than Firm Aircraft, Option Aircraft and Rolling Option Aircraft that, pursuant to a written commitment entered into during the Term, Customer agrees to purchase, or is granted an option to purchase.


Advance Payment is defined as an advance payment against the Aircraft Price for an Aircraft.


Advance Payment Base Price is defined as the estimated price of an Aircraft, as of the Execution Date of a Purchase Agreement, for the Scheduled Delivery Month of such Aircraft using commercial forecasts of the Escalation Adjustment.


Advance Payment Schedule means, for any Aircraft, a Standard Advance Payment Schedule or Alternate Advance Payment Schedule.


Aircraft is defined as all aircraft manufactured by Boeing to be delivered to Customer under the applicable Purchase Agreement, including (i) Firm Aircraft, (ii) Option Aircraft that became Firm Aircraft, and (iii) Rolling Option Aircraft that became Firm Aircraft.


Aircraft Basic Price is defined as the sum of (i) the Airframe Price, (ii) the Optional Features Prices, and (iii) the Engine Price (except 737 model Aircraft for which the Engine Price is included in the Airframe Price).


Aircraft Price is defined as the sum of (i) the Aircraft Basic Price, (ii) the Escalation Adjustment and other price adjustments made pursuant to the applicable Purchase Agreement.


Airframe Price is defined as the price of the airframe for a model of Aircraft set forth in Table 1 to the applicable Purchase Agreement (for models 737-600, 737-700 and 737-800, the Airframe Price includes the Engine Price).


Alternate Advance Payment Schedule is defined as the Advance Payment schedule set forth in Table 3 to the applicable Purchase Agreement.


Boeing is defined as The Boeing Company, a Delaware corporation.


Boeing Excusable Delay is defined in Article 10.1.


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Boeing Non-Excusable Delay is defined in Article 10.2.


Business Day is defined as any day other than a Saturday, Sunday or other day on which banking institutions in New York, New York, Atlanta, Georgia or the State of Washington are authorized or required by law to close.


Buyer Furnished Equipment (BFE) is defined as equipment purchased and provided by Customer, which Boeing will receive, inspect, store and install in an Aircraft before Delivery in accordance with Supplemental Exhibit BFE/CDSPE/SPE/CSE to the applicable Purchase Agreement.


*This confidential information has been omitted and filed separately with the Commission.


Customer is defined as Delta Air Lines, Inc., a Delaware corporation.


Delivery is defined as the following events performed in accordance with the delivery procedure described in Article 9: (a) tender of an Aircraft that conforms to the applicable Detail Specification; (b) acceptance of the Aircraft by Customer; (c) payment by Customer of monies due upon sale of the Aircraft; (d) sale of such Aircraft by Boeing; and (e) Customer's receipt of the bill of sale as described in Article 9.3.


Delivery Date is defined as the actual date of delivery for an Aircraft.


Detail Specification is defined as the Boeing document that describes the configuration of each Aircraft purchased by Customer.


Engine Price is defined as the price set by the engine manufacturer for a specific engine model to be installed on the model of Aircraft set forth in the Tables to the applicable Purchase Agreement (not applicable to models 737-600, 737-700, and 737-800).


Escalation Adjustment is defined as the price adjustment to the Airframe and Optional Features Prices (and the Engine Price for models 737-600, 737-700 and 737-800) resulting from the calculation using the economic price formula contained in Exhibit D to this AGTA.


*This confidential information has been omitted and filed separately with the Commission.


Execution Date is defined as the date upon which this AGTA and the Purchase Agreements are executed.


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FAA means the United States Federal Aviation Administration or any successor agency of the United States.


Firm Aircraft is defined as those Aircraft listed in Table 1 to the applicable Purchase Agreement, and are initially: (a) 70 model 737-632/-732/-832 Aircraft; (b) 9 model 757-232 Aircraft; (c) 10 model 767-332/-332ER Aircraft; and (d) 21 model 767-432ER Aircraft.


Invoice Price is defined as the Aircraft Price, net of Credits, Advance Payments and other price adjustments made pursuant to the applicable Purchase Agreement.


Letter Agreement is defined as a letter agreement which, by its terms, relates to the subject matter of this AGTA and the Purchase Agreements.


Manufacturer Change is defined as any change to an Aircraft, data relating to an Aircraft, or testing of an Aircraft required by the FAA to obtain a Standard Airworthiness Certificate.


Notice of Option Exercise is defined as Customer's notification to Boeing of the exercise of an Option in the form presented in Appendix 8 to this AGTA.


Operator Change is defined as a change in equipment that is required by Federal Aviation Regulations (i) which is generally applicable to transport category aircraft to be used in United States certified air carriage and (ii) for which the required compliance date is on or before the Scheduled Delivery Month of the Aircraft.


Option is defined as a right granted to Customer to purchase an Aircraft of a designated model in a previously agreed-to delivery position, exercisable in accordance with the terms and conditions of Article 3 to this AGTA.


Option Aircraft is defined as those Option Aircraft listed in Table 2 to the applicable Purchase Agreement and are initially: (i) 60 model 737-632/-732/-832 Aircraft; (ii) 20 model 757-232 Aircraft; (iii) 10 model 767-332/-332ER Aircraft; (iv) 24 model 767-432ER Aircraft; and (v) 10 model 777-232IGW Aircraft.


Option Exercise Date is defined as that date on which Customer exercises an Option by providing Boeing with a Notice of Option Exercise.


Optional Feature is defined as an alternative addition or deletion to a basic feature.


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Optional Features Price is defined as the price for optional features selected by Customer for a specific model of Aircraft described in Exhibit A to the applicable Purchase Agreements.


Performance Guarantees are defined as the written guarantees in a Purchase Agreement or Letter Agreement regarding the operational performance of an Aircraft.


Purchase Agreement means a purchase agreement for each of the model (a) 737-632/-732/-832, (b) 757-232, (c) 767-332ER/-332, (d) 767-432ER, and (e) 777-2321GW Aircraft.


Rolling Option is defined as a right granted to Customer to purchase an Aircraft of a designated model with an estimated delivery position from a pool of such Aircraft, exercisable in accordance with the terms and conditions of Article 3 to this AGTA.


Rolling Option Aircraft is defined as those Aircraft listed in Table 2 to the applicable Purchase Agreement and are initially: (i) 280 model 737 Aircraft; (ii) 90 model 757 Aircraft; (iii) 19 model 767-300 Aircraft; and (iv) 25 model 767-400 Aircraft.


Scheduled Delivery Month is defined as the scheduled month of delivery for an Aircraft.


Standard Advance Payment Schedule is defined as the schedule of Advance Payments as set forth in Table 1 to the applicable Purchase Agreement.


Taxes are defined as all taxes, fees, charges, or duties and any interest thereon, including, but not limited to sales, use, customs, value added taxes, excise, transfer and similar taxes imposed by any domestic or foreign taxing authority, arising out of or in connection with the performance of the applicable Purchase Agreement or the sale, delivery, transfer or storage of any Aircraft, BFE, or other things furnished under the applicable Purchase Agreement.


Term is defined as the period from the Execution Date through December 31, 2017.


1.2 Aircraft. Boeing will manufacture and sell to Customer and Customer will purchase from Boeing Firm Aircraft under Purchase Agreements that incorporate the terms and conditions of this AGTA.


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1.3 Annual Fleet Plan Review. Customer and Boeing agree to meet annually (commencing on a date to be established by mutual agreement) to review Customer's projected fleet requirements and Boeing's projected production plans.


Article 2. Price, Payment and Taxes.


2.1. Price.


2.1.1 Price of Aircraft. At Delivery, Customer agrees to pay the Invoice Price for each Aircraft. The Invoice Price is determined as follows:


(i) Calculate the Aircraft Basic Price.


(ii) Calculate the Aircraft Price.
(iii) *This confidential information has been omitted and filed separately with the Commission.


2.1.2 Airframe Price. *This confidential information has been omitted and filed separately with the Commission.


2.2 Price for Additional Aircraft. *This confidential information has been omitted and filed separately with the Commission.


2.3 *This confidential information has been omitted and filed separately with the Commission.


2.4. Advance Payments.


2.4.1 Calculation of Advance Payments. *This confidential information has been omitted and filed separately with the Commission.


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*This confidential information has been omitted and filed separately with the Commission.


2.4.3 Standard Advance Payment Schedule.


2.4.3.1 All Aircraft except 777-232IGW:


At Execution Date 1%
24 months before delivery 4%
21 months before delivery 5%
18 months before delivery 5%
12 months before delivery 5%
9 months before delivery 5%
6 months before delivery 5%
Total 30%


2.4.3.2 777-232IGW:


At Execution Date 1%
24 months before delivery 4%
21 months before delivery 5%
18 months before delivery 5%
15 months before delivery 5%
12 months before delivery 5%
9 months before delivery 5%
6 months before delivery 5%
Total 35%


2.4.4 *This confidential information has been omitted
and filed separately with the Commission.


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*This confidential information has been omitted and filed separately with the Commission.


2.4.5 *This confidential information has been omitted and filed separately with the Commission.


2.4.6 *This confidential information has been omitted and filed separately with the Commission.


2.4.7 *This confidential information has been omitted and filed separately with the Commission.


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2.4.8 *This confidential information has been omitted and filed separately with the Commission.


2.4.9 *This confidential information has been omitted and filed separately with the Commission.


2.5 *This confidential information has been omitted and filed separately with the Commission.


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*This confidential information has been omitted and filed separately with the Commission.


2.6 Payment at Delivery. *This confidential information has been omitted and filed separately with the Commission.


2.7 Form of Payment. Customer will make all payments to Boeing by deposit of United States Dollars in immediately available funds in a bank account in the United States designated by Boeing.


2.8 Taxes.


2.8.1 Taxes. Customer agrees to pay, and to defend, indemnify and hold Boeing harmless from all Taxes imposed on Boeing or on Customer by any government except to the extent that any such Tax is measured by the net or gross income or excess profits, receipts, capital, franchise, net worth or business privilege Taxes of Boeing. If Boeing has reason to believe that any such tax is applicable, Boeing shall separately state the amount of such tax on its invoice. Such Taxes shall exclude any and all penalties, fines, similar fees or other assessments imposed by a country or governing body as a result of any violation of competition or antitrust law.


2.8.2 Contests. If a claim is made against any party for Taxes with respect to which the other party is liable for a payment or indemnity hereunder, the party making such claim will promptly give the other notice in writing within 15 days of receipt of such claim; provided however, that failure to give notice will not relieve any party of its obligations thereunder. Either party may, in good faith, with due diligence and at its expense, contest (or permit the other party to contest in the name of such party) the validity, applicability, or amount of such Taxes. If either party receives any refund on account of any suit or action for a Tax for which the other party has provided funds hereunder, such party shall promptly, but in any event within thirty (30) days of receipt of such refund, remit such refund to the other party, together with any interest refunded on such amount.


2.8.3 Reimbursement of Boeing. Customer will promptly reimburse Boeing on demand, net of additional Taxes thereon, for any Taxes that are imposed on and paid by Boeing or for which Boeing is responsible for collecting.


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Article 3. Option Aircraft.


3.1 Options.


3.1.1 Grant of Options. Boeing hereby grants to Customer Options for the Option Aircraft.


3.1.2 Exercise of Option. Customer may exercise an Option by providing Boeing with a Notice of Option Exercise no later than * prior to the first day of the Scheduled Delivery Month for the Aircraft. Each date on which Customer provides Boeing with a notice of option exercise is an Option Exercise Date, which is in the form of Appendix 8 of the AGTA. For the exercise of each 737-632/-732/-832 Option, the Notice of Option Exercise shall indicate Customer's selection of minor model.


3.1.3 Effect of Exercise. On each Option Exercise Date:


(i) the Option Aircraft is converted to a Firm Aircraft;


(ii) the Aircraft Basic Price for the Aircraft will be revised in accordance with Article 3.3 below and updated Tables 1, 2 and 3 to the applicable Purchase Agreement will be furnished to Customer;


(iii) the Aircraft is subject to all of the terms and conditions of this AGTA and the Purchase Agreements that apply to Firm Aircraft except for any Credits that are specifically set forth for Option Aircraft; and


*This confidential information has been omitted and filed separately with the Commission.


3.1.4 *This confidential information has been omitted and filed separately with the Commission.


3.1.5 Scheduled Delivery Month for Option Aircraft. As of the Execution Date, the Scheduled Delivery Months for Option Aircraft are set forth in Table 2 to the applicable Purchase Agreement. *


*This confidential information has been omitted and filed separately with the Commission.


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3.1.6 Tables. The Delivery Month, the Advance Payment Base Price and the Advance Payment Schedule for the Option Aircraft are listed in Table 2 to the applicable Purchase Agreement.


3.1.7 Differentiation of Option Aircraft from Firm Aircraft. When an Option is exercised and becomes a Firm Aircraft, such Aircraft will be denoted with an asterisk (*) in a column entitled "O/P" between the "Delivery Date Column" and the "Number of Aircraft Column" in Table 1 to the applicable Purchase Agreement.


3.1.8 *This confidential information has been omitted and filed separately with the Commission.


3.2. Rolling Options.


3.2.1 Grant of Options. Boeing hereby grants to Customer the right to convert Rolling Options to Options at the times and in the manner set forth in Articles 3.1.3 and 3.1.4.


3.2.2 Conversion of Rolling Options to Options. *This confidential information has been omitted and filed separately with the Commission.


3.2.3 Advance Payment Base Price. *This confidential information has been omitted and filed separately with the Commission.


3.3 Price.


3.3.1 Airframe Price. *This confidential information has been omitted and filed separately with the Commission.


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3.3.2 Optional Features. The Airframe Price for Option Aircraft will be adjusted to include the follow-on price for any applicable Optional Features previously selected by Customer that have been incorporated into the baseline Aircraft configuration. In addition, prices for newly selected Optional Features for Option Aircraft will be those in effect as of the Option Exercise Date.


3.3.3 Escalation Adjustments. The Airframe and Optional Features Prices for Option Aircraft are escalated on the same basis as the Firm Aircraft.


3.3.4 Engine Price Adjustments. Except for model 737 Aircraft, the Engine Price for the Option Aircraft will be adjusted to the engine manufacturer's then-current prices as of the Option Exercise Date. In addition, the engine escalation provisions listed in Exhibit EE1 to the applicable Purchase Agreement (except for model 737 Aircraft) will be revised if amended by the engine manufacturer prior to the Option Exercise Date.


3.4 Payment. *This confidential information has been omitted and filed separately with the Commission.


3.5 Amendments to Tables. From time to time Boeing and Customer agree to update affected tables and attachments to reflect, among other things, (i) delivery of Firm Aircraft, (ii) exercise and lapse of Options, (iii) conversion of Rolling Options, and (iv) re-assignment of Scheduled Delivery Months under Articles 4 and 5; provided, however that failure to enter into such amendments shall not affect any of Customer's and Boeing's rights and obligations under this Agreement or the Purchase Agreements.


3.6 Aircraft Configuration. The Option Aircraft will be configured to the latest Detail Specification in effect for the Firm Aircraft on the Option Exercise Date.


3.7 Performance Guarantees. Upon notification of Option Exercise, Boeing will, if necessary, update the Performance Guarantees to reflect changes in configuration in accordance with Articles 6 and 7 of the AGTA.


Article 4. *This confidential information has been omitted and filed
separately with the Commission.


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*This confidential information
has been omitted and filed
separately with the Commission.


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*This confidential information
has been omitted and filed
separately with the Commission.


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*This confidential information
has been omitted and filed
separately with the Commission.


16


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*This confidential information
has been omitted and filed
separately with the Commission.


Article 5. *This confidential information has been omitted and filed separately with the Commission.


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*This c
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