EXHIBIT 4.3
PURCHASE AGREEMENT NUMBER 2399
between
THE BOEING COMPANY
and
KLM Royal Dutch Airlines
Relating to Boeing Model 777-206ER Aircraft
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
EXHIBIT
-------
A. Aircraft Configuration
B. Aircraft Delivery Requirements and Responsibilities
SUPPLEMENTAL EXHIBITS
---------------------
AE1. Escalation Adjustment/Airframe and Optional Features
BFE1. BFE Variables
CS1. Customer Support Variables
EE1. Engine Escalation/Engine Warranty and Patent Indemnity
SLP1. Service Life Policy Components
LETTER AGREEMENTS
-----------------
2399-04 Aircraft Schedule Reliability
Held Open until Dec. 1, 2002
2399-06 Spares Flight Crew Training
Held Open until Dec. 1, 2002
2399-07 Spares Initial Provisioning
6-1163-KSW-5123 Performance Guarantees
6-1163-KSW-5125 Performance Retention Commitment
Held Open until Dec. 1, 2002
6-1163-KSW-5147R10 Special Matters
6-1163-KSW-5191 Customer Services Matters
6-1163-KSW-5192 Purchase Right Aircraft
6-1163-KSW-5194 Promotional Support
6-1163-KSW-5195 [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT]
6-1163-KSW-5202 [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT]
6-1163-KSW-5203 Configuration Matters
6-1163-KSW-5204 [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT]
6-1163-KSW-5207 Contract Matters
Purchase Agreement No. 2399
between
The Boeing Company
and
KLM Royal Dutch Airlines
This Purchase Agreement No. 2399 dated as of August 19, 2002
between The Boeing Company (BOEING) and KLM Royal Dutch Airlines (CUSTOMER)
relating to the purchase and sale of Model 777-206ER aircraft incorporates the
terms and conditions of the General Terms Agreement dated as of August 19, 2002
between the parties, identified as AGTA-KLM (AGTA or GTA).
Article 1. Quantity, Model and Description.
The aircraft to be delivered to Customer will be designated as
Model 777-206ER aircraft (the AIRCRAFT). Boeing will manufacture and sell to
Customer Aircraft conforming to the configuration described in Exhibit A, which
is part of this Purchase Agreement, in the quantities listed in Table 1 to the
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. Exhibit B, which
is part of this Purchase Agreement, describes certain responsibilities for both
Customer and Boeing in order to accomplish the delivery of the Aircraft.
Article 3. Price.
3.1 Aircraft Basic Price. The Aircraft Basic Price is listed
in Table 1 and is subject to escalation dollars.
3.2 Advance Payment Base Prices. The Advance Payment Base
Prices listed in Table 1 were calculated utilizing the escalation factors as
specified in Table 1 available to Boeing on the date of this Purchase Agreement
projected to the month of scheduled delivery. Table 1 includes the escalation
base and edition used eg. 4Q2001.
Article 4. Payment.
4.1 Boeing acknowledges receipt of a deposit in the amount
shown in Table 1 for each Aircraft (DEPOSIT).
4.2 The standard advance payment schedule for the Model
777-206ER aircraft requires Customer to make certain advance payments,
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT], on the
effective date of the Purchase Agreement for the Aircraft. Additional advance
payments for each Aircraft are due [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
4.3 For any Aircraft whose scheduled month of delivery is
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] from the
date of this Purchase Agreement, the total amount of advance payments due for
payment upon signing of this Purchase Agreement will include all advance
payments which are past due in accordance with the standard advance payment
schedule set forth in paragraph 4.2 above.
4.4 Customer will pay the balance of the Aircraft Price of
each Aircraft at delivery.
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, escalation base and edition eg 4Q2001 and (vi) Advance Payment Base
Prices and advance payments and their schedules.
5.2 Escalation Adjustment/Airframe and Optional Features.
Supplemental Exhibit AE1 contains the applicable airframe and optional features
escalation formula.
5.3 Buyer Furnished Equipment Variables. Supplemental Exhibit
BFE1 contains vendor selection dates, on dock dates and other variables
applicable to the Aircraft.
5.4 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.
5.5 Engine Escalation Variables. Supplemental Exhibit EE1
contains the applicable engine escalation formula, the engine warranty and the
engine patent indemnity for the Aircraft
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. For avoidance of doubt, load bearing
primary structure hardware is included in the Service Life Policy.
5.7 Public Announcement. Public announcements regarding
Customer's purchase of the Aircraft may only be made by mutual agreement of the
parties. Approval of Boeing's press release by
Customer's public relations department or other authorized representative is
consent by Customer authorizing the release by Boeing.
5.8 Open Letter Agreements. The following letter agreements
have been signed by Boeing and are left open until December 1, 2002 for
Customer's acceptance: 2399-04, Aircraft Schedule Reliability; 2399-06, Spares
Flight Crew Training and 6-1163-KSW-5125, Performance Retention Commitment. If
these letter agreements are not signed by December 1, 2002 they are null and
void.
5.9 Amount Due at Signing. Within three days of signing this
Purchase Agreement, Customer will pay Boeing [CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
6.0 Negotiated Agreement; Entire Agreement. This Purchase
Agreement, including the provisions of Article 8.2 of the GTA relating to
insurance, and Article 11 of Part 2 of Exhibit C of the GTA relating to
DISCLAIMER AND RELEASE, EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES, Letter
Agreement 6-1163-KSW-5123 relating to Performance Guarantees and Exhibit C of
the GTA relating to Warranties, 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 and the specified
Letter Agreements, including the GTA, contains the entire agreement between the
parties and supersedes all previous proposals, understandings, commitments or
representations whatsoever, oral or written with respect to the purchase and
sale of Model 777-206ER aircraft, and may be changed only in writing signed by
authorized representatives of the parties.
DATED AS OF _________________________
KLM Royal Dutch Airlines THE BOEING COMPANY
By __________________________________
Its _________________________________ By _______________________________
Its ______________________________
(REPLACE THIS SHEET WITH THE RELEVANT PAGE(s) FROM
THE PA-2399_DATA.XLS WORKBOOK.)
AIRFRAME MODEL/MTGW: 777-200ER DETAIL SPECIFICATION: D019-W005KLM72P-1
ENGINE MODEL: GE90-94B
AIRFRAME PRICE: [CONFIDENTIAL MATERIAL OMITTED AND FILED
OPTIONAL FEATURES: SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR
SUB-TOTAL OF AIRFRAME AND FEATURES: CONFIDENTIAL TREATMENT]
ENGINE PRICE (PER AIRCRAFT):
AIRCRAFT BASIC PRICE (EXCLUDING
BFE/SPE):
AIRCRAFT CONFIGURATION
between
THE BOEING COMPANY
and
KLM Royal Dutch Airlines
Exhibit A to Purchase Agreement Number 2399
AIRCRAFT CONFIGURATION
Dated July 24, 2002
relating to
BOEING MODEL 777-206ER AIRCRAFT
The Detail Specification is Boeing Detail Specification
D019-W005KLM72P-1 that will be provided to Customer on or before March 31, 2003
and checked and agreed upon by Customer within 30 days of receipt. Such Detail
Specification will be comprised of Boeing Configuration Specification D019-W005,
Rev. A, dated June 2, 2000 as amended to incorporate the Options listed below,
including the effects on Manufacturer's Empty Weight (MEW) and Operating Empty
Weight (OEW). Such Options are set forth in Boeing Document D019-WCR1KLM72P-1.
Boeing will furnish to Customer copies of the mutually agreed to Detail
Specification, in no event later then June 30, 2003, which copies will reflect
such Options. The Aircraft Basic Price reflects and includes all effects of such
Options, except such Aircraft Basic Price does not include the price effects of
any Buyer Furnished Equipment. Boeing will provide the recurring/non-recurring
cost split at the end of Exhibit A. The non-recurring will be spread
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] Customer
will reimburse Boeing the non-recurring for [CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]. The non-recurring will be escalated
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] The
reimbursement will be made by [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]. When [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] commits to Boeing to purchase [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] for lease to Customer, then
the previous two sentences become null and void. ILF has currently committed to
purchase [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
aircraft for lease to Customer. Because Customer has not completed its selection
of the Optional Features for Exhibit A an estimate of [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] was used for the Optional
Features price in Table 1.
AIRCRAFT DELIVERY REQUIREMENTS AND RESPONSIBILITIES
between
THE BOEING COMPANY
and
KLM Royal Dutch Airlines
Exhibit B to Purchase Agreement Number 2399
AIRCRAFT DELIVERY REQUIREMENTS AND RESPONSIBILITIES
relating to
BOEING MODEL 777-206ER AIRCRAFT
Both Boeing and Customer have certain documentation and approval
responsibilities at various times during the construction cycle of Customer's
Aircraft that are critical to making the delivery of each Aircraft a
positive experience for both parties. This Exhibit B documents those
responsibilities and indicates recommended completion deadlines for the actions
to be accomplished.
1. GOVERNMENT DOCUMENTATION REQUIREMENTS.
Certain actions are required to be taken by Customer in advance of the scheduled
delivery month of each Aircraft with respect to obtaining certain government
issued documentation.
1.1 Airworthiness and Registration Documents.
Not later than 6 MONTHS PRIOR TO DELIVERY of each
Aircraft, Customer will notify Boeing of the registration
number to be painted on the side of the Aircraft. In addition, and not later
than 3 MONTHS PRIOR TO DELIVERY of each Aircraft, Customer will, by letter to
the regulatory authority having jurisdiction, authorize the temporary use of
such registration numbers by Boeing during the pre-delivery testing of the
Aircraft.
Customer is responsible for furnishing any Temporary or Permanent Registration
Certificates required by any governmental authority having jurisdiction to be
displayed aboard the Aircraft after delivery.
1.2 Certificate of Sanitary Construction.
1.2.1 U.S. Registered Aircraft. Boeing will obtain
from the United States Public Health Service, a United States Certificate of
Sanitary Construction to be displayed aboard each Aircraft after delivery to
Customer.
1.2.2 Non-U.S. Registered Aircraft. If Customer
requires a United States Certificate of Sanitary Construction at the time of
delivery of the Aircraft, Customer will give written notice thereof to Boeing at
least 3 MONTHS PRIOR TO DELIVERY. Boeing will then use its reasonable best
efforts to obtain the Certificate from the United States Public Health Service
and present it to Customer at the time of Aircraft delivery.
1.3 Customs Documentation.
1.3.1 Import Documentation. If the Aircraft is
intended to be exported from the United States, Customer must notify Boeing not
later than 3 MONTHS PRIOR TO DELIVERY of each Aircraft of any documentation
required by the customs authorities or by any other agency of the country of
import.
1.3.2 General Declaration - U.S. If the Aircraft is
intended to be exported from the United States, Boeing will prepare Customs Form
7507, General Declaration, for execution by U.S. Customs immediately prior to
the ferry flight of the Aircraft. For this purpose, Customer will furnish to
Boeing not later than 20 DAYS PRIOR TO DELIVERY a complete crew and passenger
list and a complete ferry flight itinerary, including point of exit from the
United States for the Aircraft.
If Customer intends, during the ferry flight of an Aircraft, to land at a U.S.
airport after clearing Customs at delivery, Customer must notify Boeing not
later than 20 DAYS PRIOR TO DELIVERY of such intention. If Boeing receives such
notification, Boeing will provide to Customer the documents constituting a
Customs permit to proceed, allowing such Aircraft to depart after any such
landing. Sufficient copies of completed Form 7507, along with passenger
manifest, will be furnished to Customer to cover U.S. stops scheduled for the
ferry flight.
1.3.3 Export Declaration - U.S. If the Aircraft is
intended to be exported from the United States, Boeing will prepare Form 7525V
and, IMMEDIATELY PRIOR TO THE FERRY FLIGHT, will submit such Form to U.S.
Customs in Seattle in order to obtain clearance for the departure of the
Aircraft, including any cargo, from the United States. U.S. Customs will deliver
the Export Declaration to the U.S. Department of Commerce after export.
2. INSURANCE CERTIFICATES.
Unless provided earlier, Customer will provide to Boeing not
later than 30 DAYS PRIOR TO DELIVERY of the first Aircraft, a copy of the
requisite annual insurance certificate in accordance with the requirements of
Article 8 of the AGTA.
3. NOTICE OF FLYAWAY CONFIGURATION.
Not later than 20 DAYS PRIOR TO DELIVERY of the Aircraft,
Customer will provide to Boeing a configuration letter stating the requested
"flyaway configuration" of the Aircraft for its ferry flight. This configuration
letter should include:
(i) the name of the company which is to furnish fuel for the
ferry flight and any scheduled post-delivery flight training, the
method of payment for such fuel, and fuel load for the ferry
flight;
(ii) the cargo to be loaded and where it is to be stowed on
board the Aircraft, the address where cargo is to be shipped after
flyaway and notification of any hazardous materials requiring
special handling;
(iii) any BFE equipment to be removed prior to flyaway and
returned to Boeing BFE stores for installation on Customer's
subsequent Aircraft;
(iv) a complete list of names and citizenship of each crew
member and non-revenue passenger who will be aboard the ferry
flight; and
(v) a complete ferry flight itinerary.
4. DELIVERY ACTIONS BY BOEING.
4.1 Schedule of Inspections. All FAA, Boeing, Customer and, if
required, U.S. Customs Bureau inspections will be scheduled by Boeing for
completion prior to delivery or departure of the Aircraft. Customer will be
informed of such schedules.
4.2 Schedule of Demonstration Flights. All FAA and Customer
demonstration flights will be scheduled by Boeing for completion prior to
delivery of the Aircraft.
4.3 Schedule for Customer's Flight Crew. Boeing will inform
Customer of the date that a flight crew is required for acceptance routines
associated with delivery of the Aircraft.
4.4 Fuel and oil Provided by Boeing. Boeing will provide to
Customer, without charge, the amount of fuel shown in U.S. gallons in the table
below for the model of Aircraft being delivered and full capacity of engine oil
at the time of delivery or prior to the ferry flight of the Aircraft.
AIRCRAFT MODEL FUEL PROVIDED
-------------- -------------
777 3000
4.5 Flight Crew and Passenger Consumables. Boeing will provide
reasonable quantities of food, coat hangers, towels, toilet tissue, drinking
cups and soap for the first segment of the ferry flight for the Aircraft.
4.6 Delivery Papers, Documents and Data. Boeing will have
available at the time of delivery of the Aircraft certain delivery papers,
documents and data for execution and delivery. If title for the Aircraft will be
transferred to Customer through a Boeing sales subsidiary and if the Aircraft
will be registered with the FAA, Boeing will pre-position in Oklahoma City,
Oklahoma, for filing with the FAA at the time of delivery of the Aircraft an
executed original Form 8050-2, Aircraft ▇▇▇▇ of Sale, indicating transfer of
title to the Aircraft from Boeing's sales subsidiary to Customer.
4.7 Delegation of Authority. Customer requests that Boeing
present a certified copy of a Resolution of Boeing's Board of Directors,
designating and authorizing certain persons to act on its behalf in connection
with delivery of the Aircraft.
5. DELIVERY ACTIONS BY CUSTOMER.
5.1 Aircraft Radio Station License. At delivery Customer will
provide its Aircraft Radio Station License to be placed on board the Aircraft
following delivery.
5.2. Aircraft Flight Log. At delivery Customer will provide
the Aircraft Flight Log for the Aircraft.
5.3 Delegation of Authority. Customer will present to Boeing
at delivery of the Aircraft an original or certified copy of Customer's
Delegation of Authority designating and authorizing certain persons to act on
its behalf in connection with delivery of the specified Aircraft.
ESCALATION ADJUSTMENT
AIRFRAME AND OPTIONAL FEATURES
between
THE BOEING COMPANY
and
KLM Royal Dutch Airlines
Supplemental Exhibit AE1 to Purchase Agreement Number 2399
1. Formula.
Airframe and Optional Features price adjustments (Airframe Price
Adjustment) are used to allow prices to be stated in current year dollars at the
signing of this Purchase Agreement and to adjust the amount to be paid by
Customer at delivery for the effects of economic fluctuation. The Airframe Price
Adjustment will be determined at the time of Aircraft delivery in accordance
with the following formula:
P(a) = (P+B)(L + M) - P
Where:
P(a) = Airframe Price Adjustment.
L = .65 x ( ECI
-----
ECI(b)) where ECI(b) is the base year
index (as set forth in Table 1
of this Purchase Agreement)
M = .35 x ( ICI
-----
ICI(b)) where ICI(b) is the base year
index (as set forth in Table 1
of this Purchase Agreement)
P = Airframe Price plus Optional Features Price (as set
forth in Table 1 of this Purchase Agreement).
B = 0.005 x (N/12) x (P) where N is the number of
calendar months which have
elapsed from the Airframe
Price Base Year and Month up
to and including the month of
delivery, both as shown in
Table 1 of the Purchase
Agreement. The entire
calculation of 0.005 X (N/12)
will be rounded to 4 places,
and the final value of B will
be rounded to the nearest
dollar.
ECI is a value determined using the U.S. Department of
Labor, Bureau of Labor Statistics "Employment Cost Index
for workers in aircraft manufacturing - Wages and
Salaries" (ECI code 3721W), calculated by establishing a
three-month arithmetic average value (expressed as a
decimal and rounded to the nearest tenth) using the values
for the fifth, sixth and seventh months prior to the month
of scheduled delivery of the applicable Aircraft. As the
Employment Cost Index values are only released on a
quarterly basis, the value released for the month of March
will be used for the months of January and February; the
value for June used for April and May; the value for
September used for July and August; and the value for
December used for October and November.
ICI is a value determined using the U.S. Department of
Labor, Bureau of Labor Statistics "Producer Prices and
Price Index - Industrial Commodities Index ", calculated
as a 3-month arithmetic average of the released monthly
values (expressed as a decimal and rounded to the nearest
tenth) using the values for the 5th, 6th and 7th months
prior to the month of scheduled delivery of the applicable
Aircraft.
As an example, for an Aircraft scheduled to be delivered
in the month of January, the months June, July and August
of the preceding year will be utilized in determining the
value of ECI and ICI.
Note: i. In determining the values of L and M, all calculations and
resulting values will be expressed as a decimal rounded to the
nearest ten-thousandth.
ii. .65 is the numeric ratio attributed to labor in the Airframe
Price Adjustment formula.
iii. .35 is the numeric ratio attributed to materials in the
Airframe Price Adjustment formula.
iv. The denominators (base year indices) are the actual average
values reported by the U.S. Department of Labor, Bureau of Labor
Statistics (base year June 1989 = 100). The applicable base year
and corresponding denominator is provided by Boeing in Table 1 of
this Purchase Agreement.
v. The final value of P(a) will be rounded to the nearest dollar.
vi. The Airframe Price Adjustment will not be made if it will
result in a decrease in the Aircraft Basic Price.
2. Values to be Utilized in the Event of Unavailability.
2.1 If the Bureau of Labor Statistics substantially revises the
methodology used for the determination of the values to be used to determine the
ECI and ICI values (in contrast to benchmark adjustments or other corrections of
previously released values), or for any reason has not released values needed to
determine the applicable Airframe Price Adjustment, the parties will, prior to
the delivery of any such Aircraft, select a substitute from other Bureau of
Labor Statistics data or similar data reported by non-governmental
organizations. Such substitute will result in the same adjustment, insofar as
possible, as would have been calculated utilizing the original values adjusted
for fluctuation during the applicable time period. However, if within 24 months
after delivery of the Aircraft, the Bureau of Labor Statistics should resume
releasing values for the months needed to determine the Airframe Price
Adjustment, such values will be used to determine any increase or decrease in
the Airframe Price Adjustment for the Aircraft from that determined at the time
of delivery of the Aircraft.
2.2 Notwithstanding Article 2.1 above, if prior to the scheduled
delivery month of an Aircraft the Bureau of Labor Statistics changes the base
year for determination of the ECI and ICI values as defined above, such re-based
values will be incorporated in the Airframe Price Adjustment calculation.
2.3 In the event escalation provisions are made non-enforceable or
otherwise rendered void by any agency of the United States Government, the
parties agree, to the extent they may lawfully do so, to equitably adjust the
Aircraft Price of any affected Aircraft to reflect an allowance for increases or
decreases in labor compensation and material costs occurring since February of
the price base year shown in the Purchase Agreement which is consistent with the
applicable provisions of paragraph 1 of this Supplemental Exhibit AE1.
2.4 If within 12 months of Aircraft delivery, the published index
values are revised due to an acknowledged error by the Bureau of Labor
Statistics, the Airframe Price Adjustment will be re-calculated using the
revised index values (this does not include those values noted as preliminary by
the Bureau of Labor Statistics). A credit memorandum or supplemental invoice
will be issued for the Airframe Price Adjustment difference. Interest charges
will not apply for the period of original invoice to issuance of credit
memorandum or supplemental invoice.
Note: i. The values released by the Bureau of Labor Statistics and
available to Boeing 30 days prior to the first day of the scheduled
delivery month of an Aircraft will be used to determine the ECI and
ICI values for the applicable months (including those noted as
preliminary by the Bureau of Labor Statistics) to calculate the
Airframe Price Adjustment for the Aircraft invoice at the time of
delivery. The values will be considered final and no Airframe Price
Adjustments will
be made after Aircraft delivery for any subsequent changes in
published Index values, subject always to paragraph 2.4 above.
ii. The maximum number of digits to the right of the decimal after
rounding utilized in any part of the Airframe Price Adjustment
equation will be 4, where rounding of the fourth digit will be
increased to the next highest digit when the 5th digit is equal to
5 or greater.
BUYER FURNISHED EQUIPMENT VARIABLES
between
THE BOEING COMPANY
and
KLM Royal Dutch Airlines
July 05, 2002
Supplemental Exhibit BFE1 to Purchase Agreement Number 2399
BUYER FURNISHED EQUIPMENT VARIABLES
relating to
BOEING MODEL 777-200ER AIRCRAFT
This Supplemental Exhibit BFE1 contains vendor selection dates, on-dock dates
and other variables applicable to the Aircraft.
1. Supplier Selection.
Customer will:
1.1 Select and notify Boeing of the suppliers and part numbers of
the following BFE items by the following dates:
Galley System Complete
------------------
Galley Inserts Complete
------------------
Seats (passenger) Complete
------------------
In Seat Video System Complete
------------------
Overhead & Audio System Complete
------------------
Miscellaneous Emergency Equipment Complete
------------------
Textiles/Raw Materials Complete
------------------
2. On-dock Dates
On or before January 2003, 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
below:
Item Preliminary On-Dock Dates
Seats [CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE
Galleys/Furnishings SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A
Antennas and Mounting Equipment REQUEST FOR CONFIDENTIAL
TREATMENT]
Avionics Equipment
Cabin Systems Equipment
Miscellaneous/ Emergency Equipment
Textiles/Raw Material
IFE Trays
IFE Equipment
Item Preliminary On-Dock Dates
Seats [CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE
Galleys/Furnishings SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A
Antennas and Mounting Equipment REQUEST FOR CONFIDENTIAL
TREATMENT]
Avionics Equipment
Cabin Systems Equipment
Miscellaneous/ Emergency Equipment
Textiles/Raw Material
*For remaining Aircraft will be part of Cabin Systems Equipment.
CUSTOMER SUPPORT VARIABLES
between
THE BOEING COMPANY
And
KLM Royal Dutch Airlines
Supplemental Exhibit CS1 to Purchase Agreement Number 2399
CUSTOMER SUPPORT VARIABLES
relating to
BOEING MODEL 777-206ER 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.
The customized Customer Services Program will be based upon and equivalent to
the entitlements summarized below.
1. Maintenance Training.
1.1 Airplane General Familiarization Course; 2 classes of 24
students;
1.2 Mechanical/Electrical Systems Course (Instructor); 1 class of
15 students;
1.3 Avionics Systems Course (Instructor); 1 class of 15 students;
1.4 Mechanical/Electrical Systems Course (Line and Base); 2
classes of 15 students;
1.5 Avionics Systems Course (Line and Base); 1 class of 15
students;
1.6 Engine Run-Up Course; 2 classes of 3 students;
1.7 Corrosion Prevention & Control Course; 1 class of 10 students;
1.8 Aircraft Rigging Course; 1 class of 6 students;
1.9 Composite Repair for Technicians, 1 class of 8 students;
1.10 Digital Data Familiarization Course; 1 class of 15 students;
1.11 Cabin Management System (CMS) Configuration Database Generator
(CDG) Familiarization Course; 1 class of 6 students;
1.12 Training materials will be provided to each student. In
addition, one set of training materials as used in Boeing's
training program, including visual aids, Computer Based
Training Courseware, instrument panel wall charts,
text/graphics, video programs, etc. will be provided for use
in Customer's own training program.
2. Flight Training.
2.1 Transition training for 8 flight crews (16 pilots) in 2
classes; The training will consist of ground school (utilizing
computer based training), fixed base simulator, full flight
simulator and actual aircraft training on Customer's Aircraft.
2.2 Flight Dispatcher training; 2 classes of 6 students;
2.3 Flight Attendant training; 2 classes of 12 students;
2.4 Performance Engineer training in Boeing's regularly scheduled
courses; schedules are published twice yearly.
2.5 Training materials will be provided to each student. In
addition, one set of training materials as used in Boeing's
training program, including visual aids, Computer Based
Training Courseware, instrument panel wall charts,
text/graphics, video programs, Flight Attandant Manuals, etc.
will be provided for use in Customer's own training program.
2.6 Additional Flight Operations Services:
a. Boeing flight crew personnel to assist in ferrying
the first aircraft to Customer's main base;
b. Instructor pilots for 90 calendar days for revenue
service training assistance
c. An instructor pilot to visit Customer 6 months after
revenue service training to review Customer's flight
crew operations for a 2 week period.
3. Planning Assistance.
3.1 Maintenance and Ground Operations.
Upon request, Boeing will visit Customer's main base to
evaluate aircraft maintenance facilities, develop
recommendations and assist in maintenance planning.
3.2 Spares.
a) Recommended Spares Parts List (RSPL)
A customized RSPL, data and documents will be
provided to identify spare parts required for
Customer's support program.
b) Illustrated Parts Catalog (IPC)
A customized IPC in accordance with ATA 100 will be
provided.
c) Provisioning Training
Provisioning training will be provided for Customer's
personnel at Boeing's facilities, where documentation
and technical expertise are available. Training is
focused on the initial provisioning process and
calculations reflected in the Boeing RSPL.
d) Spares Provisioning Conference
A provisioning conference will be conducted, normally
at Boeing's facilities where technical data and
personnel are available.
4. Technical Data and Documents.
4.1 Flight Operations.
Airplane Flight Manual
Operations Manual and Checklist
Planning and Performance Manual
Weight and Balance Manual
Dispatch Deviation Procedures Guide
Flight Crew Training Manual
Flight Attendants Manual
Fault Reporting Manual
Performance Engineer's Manual
Jet Transport Performance Methods
FMC Supplemental Data Document
Operational Performance Software
Baggage/Cargo Loading Manual
ETOPS Guide Vol. III
Flight Planning and Performance Manual
4.2 Maintenance.
Maintenance Manual
Wiring Diagram Manual
Systems Schematics Manual
Structural Repair Manual
Component Maintenance Manual
Standard Overhaul Practices Manual
Standard Wiring Practices Manual
Non-Destructive Test Manual
Service Bulletins and Index
Corrosion Prevention Manual
Fault Isolation Manual
Interior Reconfiguration Document
Power Plant Buildup Manual (except Rolls Royce)
In Service Activity Report
Significant Service Item Summary
All Operators Letters
Service Letters
Structural Item Interim Advisory Combined Index
Maintenance Tips
Configuration Data Base Generator User Guide
Production Management Data Base
Baggage/Cargo Loading Manual
4.3 Maintenance Planning.
Maintenance Planning Data Document
Maintenance Task Cards and Index
Maintenance Inspection Intervals Report
ETOPS Guide Vol. II
Configuration Maintenance and Procedures for Extended Range
Operations
4.4 Spares.
Illustrated Parts Catalog
Standards Books
4.5 Facilities and Equipment Planning.
Facilities and Equipment Planning Document
Special Tool & Ground Handling Equipment Drawings & Index
Supplementary Tooling Documentation
Illustrated Tool and Equipment List/Manual
Aircraft Recovery Document
Airplane Characteristics for Airport Planning Document
Airplane Rescue and Fire Fighting Document
Engine Handling Document
ETOPS Guide Vol. I
4.6 Supplier Technical Data.
Service Bulletins
Component Maintenance Manuals and Index
Publications Index
4.7 Product Support Supplier Directory
Customer may request a reasonable quantity of data and
documents in the formats offered and within the format and
quantity guidelines Boeing has at the time the data is
ordered. Customer may request advance copies which will be
provided, if available. Customer understands that from time to
time, Boeing may replace a format or media type with a more
advanced offering and discontinue offering older formats or
media types. Boeing will notifiy Customer in a timely manner
of such replacement.
ENGINE ESCALATION,
ENGINE WARRANTY AND PATENT INDEMNITY
between
THE BOEING COMPANY
and
KLM ROYAL DUTCH AIRLINES
Supplemental Exhibit EE1 to Purchase Agreement Number 2399
ENGINE ESCALATION,
ENGINE WARRANTY AND PATENT INDEMNITY
relating to
BOEING MODEL 777-206ER 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 engines and all accessories,
equipment and parts provided by General Electric Aircraft Engines (GE). 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:
P(e) = [(P(b) + F) x ( CPI / CPI(b)_)] - P(b)
where CPI(b) is the Engine Escalation Base Year Index as set forth in Table 1 of
the Purchase Agreement.
(b) The following definitions will apply herein:
P(e) = Engine Price Adjustment
P(b) = Engine Price (per Aircraft), as set forth in Table 1 of the
Purchase Agreement.
F = 0.005 x (N/12) x P(b) where N is the number of calendar
months which have elapsed from the Engine Price Base Year
and Month up to and including the month of delivery, both
as shown in Table 1 of the Purchase Agreement.
CPI = L + ICI (rounded to the nearest hundredth)
L = A value determined using the U.S. Department of Labor,
Bureau of Labor Statistics "Employment Cost Index Wages and
Salaries for Aircraft Manufacturing (SIC 3721)", calculated
as a 3-month arithmetic average of the released values
(expressed as a decimal and rounded to the nearest tenth)
using the values for the 12th, 13th and 14th months prior to
the month of scheduled Aircraft delivery then multiplied by
65% and rounded to the nearest thousandth.
ICI = A value determined using the U.S. Department of Labor,
Bureau of Labor Statistics "Producer Prices and Price Index
- Industrial Commodities Index ", calculated as a 3-month
arithmetic average of the released monthly values (expressed
as a decimal and rounded to the nearest hundredth) using the
values for the 12th, 13th and 14th months prior to the month
of scheduled delivery of the Aircraft, then multiplied by
35% and rounded to the nearest thousandth.
The Engine Price Adjustment will not be made if it would result in a decrease in
the Engine Price.
(c) The values of the Employment Cost Index Wages & Salaries (SIC 3721) and
Producer Prices and Price Index - Industrial Commodities Index used will be
those published as of a date 30 days prior to the first day of the scheduled
Aircraft delivery month to Customer. As the Employment Cost Index Wages and
Salaries for Aircraft Manufacturing (SIC 3721) values are only released on a
quarterly basis, the value released for the month of March will be used for the
months of January and February; the value for June used for April and May; the
value for September used for July and August; and the value for December used
for October and November. 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. If no values have been released for an applicable
month, the provisions set forth in Paragraph e, below, will apply. If prior to
delivery of an Aircraft, the U.S. Department of Labor, Bureau of Labor
Statistics changes the base year for determination of the L or ICI values as
defined above, such rebase values will be incorporated in the Engine Price
Adjustment calculation.
(d) If at the time of delivery of an Aircraft, Boeing is unable to determine the
Engine Price Adjustment because the applicable values to be used to determine L
and ICI have not been released by the U.S. Department of Labor, Bureau of Labor
Statistics, then: 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, GE agrees to meet jointly with Boeing and Customer (to the
extent such parties may lawfully do so) to adjust equitably the Aircraft Basic
Price of any affected Aircraft to reflect an allowance for increase or decrease
in labor compensation and material costs occurring since February of the base
price year which is consistent with the application provisions of this
Supplemental Exhibit EE1.
(e) If prior to delivery of an Aircraft, the U.S. Department of Labor, Bureau of
Labor Statistics substantially revises the methodology used for the
determination of the values to be used to determine the L and ICI values (in
contrast to benchmark adjustments or other corrections of previously released
values), Customer, Boeing and GE will, prior to delivery of such Aircraft,
select a substitute for such values from data published by the U.S. Department
of Labor, Bureau of Labor Statistics or other similar data reported by
non-governmental United States organizations, such substitute to lead in
application to the same adjustment result insofar as possible, as would have
been achieved by continuing the use of the original values as they may have
fluctuated during the applicable time period. Appropriate revisions of the
formula will be made as required to reflect any substitute values. However, if
within 24 months from delivery of the Aircraft, the U.S. Department of Labor,
Bureau of Labor Statistics should resume releasing values for the months needed
to determine the Engine Price Adjustment, such values will be used to determine
the increase or decrease in the Engine Price Adjustment determined at the time
of delivery of such Aircraft.
NOTE: The factor (CPI divided by the base year index) by which the Engine
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 ▇▇▇▇▇▇▇ ▇▇▇ 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.
2. ENGINE WARRANTY AND PRODUCT SUPPORT PLAN.
Boeing has obtained from GE the right to extend to Customer the provisions of
GE's warranty and product support plan (Warranty and Product Support Plan);
subject, however, to Customer's acceptance of the
conditions set forth herein and in such Warranty and Product Support Plan.
Accordingly, Boeing hereby extends to Customer and Customer hereby accepts the
provisions of GE's Warranty and Product Support Plan, and such Warranty and
Product Support Plan shall apply to all CF6 turbofan engines including all
Modules and Parts thereof, as these terms are defined in the Warranty and
Product Support Plan, (Engines) installed in the Aircraft at the time of
delivery or purchased from Boeing by Customer for support of the Aircraft except
that, if Customer and GE have executed a general terms agreement (Engine GTA),
then the terms of the Engine GTA shall be substituted for and supersede the
below-stated provisions and such provisions shall be of no force or effect and
neither Boeing nor GE shall have any obligation arising therefrom. In
consideration for Boeing's extension of the GE Warranty and Product Support Plan
to Customer, Customer hereby releases and discharges Boeing from any and all
claims, obligations and liabilities whatsoever arising out of the purchase or
use of the Engines and Customer hereby waives, releases and renounces all its
rights in all such claims, obligations and liabilities. The Warranty and Product
Support Plan is set forth in Exhibit C to the applicable purchase contract
between GE and Boeing. Copies of the Warranty and Product Support Plan shall be
provided to Customer by Boeing upon request.
SERVICE LIFE POLICY COMPONENTS
between
THE BOEING COMPANY
and
KLM ROYAL DUTCH AIRLINES
Supplemental Exhibit SLP1 to Purchase Agreement Number 2399
COVERED SERVICE LIFE COMPONENTS
relating to
BOEING MODEL 777 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. 2399.
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) Upper wing fold hinge, end ribs and lower latch lugs.
(f) Main landing gear support structure.
(g) Wing center section lower beams, spanwise beams and
floor beams, but not the seat tracks attached to the
beams.
(h) Wing-to-body structural attachments.
(i) Engine strut support fittings attached directly to wing
primary structure.
(j) 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.
(k) Leading edge device and trailing edge flap support
system.
(l) 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 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. ▇▇▇▇▇ 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.
(b) Front and rear spars including stiffeners.
(c) Attachment fittings between vertical stabilizer and
body.
(d) Inspar ribs.
(e) Support structure in the vertical stabilizer for rudder
hinges, reaction links and actuators.
(f) Rudder internal, fixed attachment and actuator support
structure.
(g) Rudder hinges and supporting ribs, excluding bearings.
4. Horizontal Stabilizer.
(a) External skins between front and rear spars.
(b) Front and rear spars including splices and stiffeners.
(c) Inspar ribs.
(d) Stabilizer splice fittings and 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.
(g) Elevator hinges and supporting ribs, excluding
bearings.
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 ▇▇▇▇▇ &
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.
(e) Orifice support tube.
(f) Downlock links including spindles and universals.
(g) Torsion links.
(h) Bogie beam.
(i) Axles.
(j) Steering crank arm.
(k) Steering rod.
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.
2399-04
KLM Royal Dutch Airlines
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Subject: Aircraft Schedule Reliability Program
Reference: Purchase Agreement No. (the Purchase Agreement) between The Boeing
Company (Boeing) and KLM Royal Dutch Airlines (Customer) relating
to Model 777-206ER aircraft Serial Numbers [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] (the
Aircraft)
This letter agreement (Letter Agreement) amends and supplements the Purchase
Agreement. All terms used but not defined in this Letter Agreement have the same
meaning as in the Purchase Agreement. The price for this Program is
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] per
Aircraft and Leased Aircraft expressed in 2001 dollars. This Letter Agreement
will remain open for Customer Acceptance until December 1, 2002.
1.0 Definition of Terms:
1.1 "ACHIEVED MECHANICAL SCHEDULE RELIABILITY" shall mean a number calculated
pursuant to the following formula:
100 X (1 - INT/RevFlights)
where: INT equals the number of Chargeable Schedule Interruptions occurring
during an Analysis Period, and RevFlights equals the number of Scheduled Revenue
Departures occurring during the same Analysis Period.
1.2 "Aircraft" shall mean the direct buy 777-200ER aircraft with serial numbers,
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] "Leased
Aircraft" shall mean the six 777-200ER aircraft purchased from Boeing by
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] for lease
to Customer with serial numbers [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] and [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] to be determined at a later date.
1.3 "ANALYSIS PERIOD" shall mean any four consecutive calendar months of
Scheduled Revenue Departures.
1.4 "AVERAGE FLIGHT LENGTH" shall mean the flight hours during an Analysis
Period divided by the number of Scheduled Revenue Departures during the same
Analysis Period.
1.5 "CHARGEABLE SCHEDULE INTERRUPTION" or "INTERRUPTION" shall mean a
cancellation, turn-back, diverted landing or delayed departure of any scheduled
revenue flight of a Covered Aircraft which is [CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT], other than as provided in Section 4, below,
and results directly from a mechanical malfunction of such Covered Aircraft, or
any system, accessory, equipment or part (including engines) installed thereon.
1.6 "COVERED AIRCRAFT" shall mean those Aircraft and the Leased Aircraft
operated by Customer on Customer's routes during the Program Term and including
any Aircraft originally scheduled to be delivered during the Program Term but
not delivered within such period due to an Excusable or Non Excusable Delay.
1.7 "PROGRAM" shall mean the rights and obligations defined in this Letter
Agreement.
1.8 "PROGRAM TERM" shall mean the five consecutive years commencing on the
delivery date of the first Covered Aircraft.
1.9 "SCHEDULED REVENUE DEPARTURE" shall mean any departure of a Covered Aircraft
for a scheduled revenue flight segment; including, but not limited to, (i) any
departure of a Covered Aircraft for a charter flight or extra section flight; or
(ii) any canceled departure of a flight segment.
2. Program Description.
Mechanical schedule reliability targets for the Covered Aircraft
(Mechanical Schedule Reliability Target(s)) during the Program Term are as
follows:
Mechanical Schedule
Program Term Reliability Target
------------ ------------------
First year, [CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL
TREATMENT]
------------------------------------------------------------------------
Second year [CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL
TREATMENT]
------------------------------------------------------------------------
Third Thru Fifth Years [CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL
TREATMENT]
------------------------------------------------------------------------
These Mechanical Schedule Reliability Targets are based on an average flight
length of [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] per Scheduled Revenue Departure for Covered Aircraft in revenue
service operations. The Mechanical Schedule Reliability Targets are subject to
change based on changes in the Customer's actual Average Flight Length and other
factors under Customer's control.
3. Remedial Action.
3.1 Following the first four months of Scheduled Revenue Departures,
for any Analysis Period during which Customer has greater than six (6) Covered
Aircraft in revenue service, if Customer notifies Boeing that the Achieved
Mechanical Schedule Reliability for the Analysis Period is more than
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] below the
Mechanical Schedule Reliability Target (Agreed Threshold Value) for such
Analysis Period, Boeing will for the Aircraft:
3.1.1 Investigate the circumstances and possible causes for an
Achieved Mechanical Schedule Reliability lower than the Agreed Threshold Value;
3.1.2 Provide technical assistance to Customer in the form of
analysis and recommendations of a kind and nature which Boeing determines to be
best suited for improving the Achieved Mechanical Schedule Reliability;
3.1.3 Initiate a design review of the system, accessory,
equipment or part (other than engines and engine parts) which are determined by
Boeing to be the primary cause of an Achieved Mechanical Schedule Reliability
lower than the Agreed Threshold Value;
3.1.4 When in Boeing's judgment a redesign or modification is
indicated as a technically and economically practical means of improving the
Achieved Mechanical Schedule Reliability, redesign or cause the redesign of such
system, accessory, equipment or part; or offer such modification,
3.1.5 If such redesign or modification results in retrofit
kits being offered by Boeing or Boeing's suppliers, provide such kits or cause
such kits to be provided, at Customer's request, at no charge to Customer and
reimburse Customer's reasonable direct labor costs for incorporation of any such
kit manufactured to Boeing's detailed design. This offer will be valid for any
redesign or modification addressing improved reliability of the system,
accessory, equipment or part being identified as the main cause of Mechanical
Schedule Reliability below the Agreed Threshold Value that becomes available
within 5 years after Customer having made its notification in accordance with
above terms. The Covered Aircraft must still be experiencing Mechanical Schedule
Reliability below the Agreed Threshold Value at the time the retrofit kits
become available in order to qualify for the free retrofit kits.
Such reimbursement will be provided pursuant to Boeing Warranty (Article 11 of
Part 2 of Exhibit C, Product Assurance Document, of the AGTA); and
3.1.6 If Boeing determines that the design of engines or
engine parts is the primary cause of an Achieved Mechanical Schedule Reliability
lower than the Agreed Threshold Value, Boeing will, if requested by Customer,
take whatever reasonable action is permitted under Boeing's contracts with the
engine manufacturer in an effort to obtain correction of such design. This offer
will be valid for any redesign or modification addressing improved reliability
of the system, accessory, equipment or part being identified as the main cause
of the low Mechanical Schedule Reliability, and that comes available within five
years after Customer having made its notification in accordance with the above
terms.
4. Interruption Exclusions.
An Interruption does not include any cancellation, turn-back, diverted landing
or delayed departure of any scheduled revenue flight of any Covered Aircraft
which is caused by any of the following events:
(i) Late arrival of an inbound flight;
(ii) Late return from out-of-service status;
(iii) Operation, service, maintenance or overhaul of such Covered
Aircraft or any system, accessory, equipment or part (including engines)
installed thereon, in a manner other than in accordance with Customer's approved
instructions and requirements;
(iv) Logistics problems such as lack of spare parts at stations
where spares could reasonably be expected to be available, as determined in
accordance with industry standard provisioning practices, or inordinate delays
in the availability of spares, unless such delays are caused by Boeing or other
appropriately trained personnel at any location where any maintenance of the
Covered Aircraft is performed;
(v) A malfunction caused by any extrinsic force such as foreign
object damage;
(vi) Failure to utilize the FAA approved minimum equipment list
(▇▇▇) to defer corrective maintenance, or failure to correct any deferred item
within the time period specified in such ▇▇▇;
(vii) Buyer Furnished Equipment;
(viii) Tires;
(ix) Normal brake wear;
(x) Acts or omissions of Customer or any strikes or labor troubles
causing cessation, slowdown or interruption of work related to the operation or
maintenance of the Covered Aircraft; or
(xi) Any other cancellation, turn-back, diverted landing or delayed
departure which cannot fairly be attributed to mechanical malfunction of the
Covered Aircraft, or any system, accessory, equipment or part (including
engines) installed on the Covered Aircraft.
If a Covered Aircraft is used as a substitute for some other
aircraft or some other aircraft is used as a substitute for a Covered Aircraft
and the revenue flight affected by such substitution departs without a
cancellation, turn-back, diverted landing or delay greater than [CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT], then no Chargeable
Schedule Interruption will be deemed to have occurred. If an Interruption occurs
as a result of a malfunction of the substitute aircraft/Covered Aircraft, such
Interruption will be charged against the aircraft/Covered Aircraft initially
scheduled for the flight rather than its substitute. An Interruption, which
affects a subsequent segment or flight for a Covered Aircraft, will count as
only one Interruption unless such Interruption is separate from and unrelated to
the initial Interruption.
5. Administrative Requirements.
5.1 Customer will provide status reports every month (Reporting
Period).
5.2 The Customer's status reports shall include the data required to
calculate the Achieved Mechanical Schedule Reliability for each month of the
Reporting Period using the formulas described in Section 1.0, above, and a list
of the Chargeable Schedule Interruptions for the Reporting Period. Customer
shall submit such data to Boeing electronically in accordance with the
provisions of Boeing Document D6-81692.
All data submitted pursuant to Subsection 5.2 will be addressed to the
attention of:
MANAGER - IN-SERVICE DATA GROUP
Boeing Commercial Airplanes
P.0. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
5.3 Customer claim reports will include the data described in
Subsection 5.2 above and sufficient data to substantiate any claimed Chargeable
Schedule Interruption. Customer will submit to Boeing reasonable proof that any
claimed Chargeable Schedule Interruption does in fact constitute a Chargeable
Schedule Interruption. In addition, Customer will maintain and submit to Boeing
such data as may reasonably be required to:
(i) determine Achieved Mechanical Schedule Reliability,
(ii) analyze the problems causing any claimed Chargeable Schedule
Interruption, and
(iii) when required, develop appropriate remedial action.
5.4 Failure to file the status reports or provide the information as
specified in Subsections 5.1 through 5.3, above, will constitute an
acknowledgment by Customer that the Achieved Mechanical Schedule Reliability is
equal to or greater than the Agreed Threshold Value for such Analysis Period,
and Boeing will not be obligated to provide any of the remedies arising under
this Program for such Analysis Period.
5.5 All reports submitted to Boeing will be addressed to the attention
of:
Director - Warranty & Supplier Product Support
Boeing Commercial Airplanes
P.0. Box 3707
Seattle, Washington 98124-2207
6. Conditions and Limitations.
6.1 If, to improve schedule reliability, Boeing or any Boeing supplier
issues service bulletins, service letters or other written instructions
(Instructions) or offers no-charge retrofit kits, Customer will accomplish such
Instructions or install such kits within a period of [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] after availability of such
Instructions or kits at Customer's
facility or such longer period as may be established by mutual agreement of the
parties. If Customer does not accomplish the Instructions or install the kits
within such time period, Chargeable Schedule Interruptions relating to the
systems, accessories, equipment or parts affected by such Instructions or kits
will be excluded from this Program from the date the Instructions or kits were
available at Customer's facility until such time as Customer notifies Boeing
that Customer has incorporated such Instructions or kits on all affected Covered
Aircraft.
6.2 Boeing may inspect at all reasonable times Customer's maintenance
facilities and review its relevant maintenance programs and procedures. If
Boeing recommends in writing reasonable changes in Customer's maintenance
programs and procedures which would improve the Achieved Mechanical Schedule
Reliability and Customer does not effect such changes within [CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] after receiving
such written recommendations or such longer period as may be established by
mutual agreement of the parties, Boeing will have the right to redefine the
Chargeable Schedule Interruptions after the date Customer received such written
recommendations so as to eliminate interruptions which Boeing estimates result
from Customer's failure to effect the recommended changes within such time
period.
6.3 If, for any Analysis Period, the actual Average Flight Length or
other factors affecting schedule reliability of the Covered Aircraft change
significantly, the Mechanical Schedule Reliability Target for such Analysis
Period will be appropriately adjusted by the parties.
6.4 At Boeing's request, Customer will assign to Boeing any of
Customer's rights against any manufacturer of any system, equipment, accessory
or part installed in the Covered Aircraft as Boeing may reasonably require to
fulfill its obligations with respect to any remedy provided by Boeing hereunder.
6.5 THE DISCLAIMER AND RELEASE and EXCLUSION OF CONSEQUENTIAL AND OTHER
DAMAGES provisions stated in Article 11 of Exhibit C of the AGTA apply to this
Program.
7. Confidential Treatment.
Customer understands that certain commercial and financial information
contained in this Letter Agreement are considered by Boeing as confidential.
Customer agrees that it will treat this Letter Agreement and the information
contained herein as confidential and will not, without the prior written consent
of Boeing, disclose this Letter Agreement or any information contained herein to
any other person or entity.
If the foregoing correctly sets forth your understanding of our agreement with
respect to the matters treated above, please indicate your acceptance and
approval below.
Very truly yours,
THE BOEING COMPANY
By
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Its Attorney-In-Fact
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ACCEPTED AND AGREED TO this
Date: , 2002
--------------------------------
KLM ROYAL DUTCH AIRLINES
By
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Its
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2399-06
KLM ROYAL DUTCH AIRLINES
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Subject: Flight Crew Training Spare Parts Support
Reference: Purchase Agreement No. 2399 (the Agreement) between The
Boeing Company (Boeing) and KLM Royal Dutch Airlines
(Customer) relating to Model 777-206ER aircraft (the
Aircraft)
This Letter Agreement is entered into on the date below, and amends and
supplements the Agreement. All terms used but not defined in this Letter
Agreement have the same meaning as in the Agreement. THIS LETTER AGREEMENT WILL
REMAIN OPEN UNTIL DECEMBER 1, 2002 FOR CUSTOMER'S ACCEPTANCE.
Definition of Terms:
FLIGHT CREW TRAINING: Flight training conducted by Boeing and occurring
immediately following delivery of the Aircraft .
REMOVED PARTS: Parts removed from an Aircraft during Flight Crew Training.
REPLACEMENT PARTS: Parts taken from Boeing inventory and installed in an
Aircraft because no Standby Parts are available.
STANDBY PARTS: Parts which are owned by Customer and located at Customer's
designated storage area at Boeing to support Flight Crew Training.
TRAINING AIRCRAFT: The Aircraft delivered to Customer and used for Flight Crew
Training.
1. Provisioning of Spare Parts
To support Flight Crew Training, Boeing agrees to provide normal line
maintenance and expendable spare parts at no charge on the Training Aircraft;
and, Customer agrees to provide Standby Parts for the Training Aircraft. The
Standby Parts list, including part numbers, exact quantities and on-dock dates,
will be established during the provisioning meeting.
If parts other than those discussed above fail on the Training Aircraft
during Flight Crew Training, Boeing will attempt to provide Replacement Parts
for those failed parts. If Boeing is unable to provide Replacement Parts,
Customer will be responsible for providing those parts.
2. Disposition of Removed Parts
With respect to Removed Parts, Boeing may:
(i) repair such Removed Parts, at no charge to Customer, and either
retain such parts as Standby Spare Parts or return the Removed Parts to
Customer, at Customer expense;
(ii) return the Removed Parts to Customer at Customer's expense; or
(iii) return the Removed Parts to the manufacturer for repair or
replacement under such manufacturer's warranty. Upon Boeing's receipt of the
repaired Removed Parts or their replacements, Boeing may retain such Removed
Parts or their replacements as Standby Parts or return such Removed Parts or
their replacements to Customer, at Customer's expense.
Any Removed Parts returned to Customer, or replacements, will be
accomplished in accordance with any written instructions from Customer received
by Boeing prior to such return.
3. Redelivery of Standby Parts
Standby Parts not installed in the Training Aircraft will be
redelivered to Customer on board the last aircraft used for Flight Crew
Training.
4. Non-performance by Customer
If Customer's non-performance of obligations in this Letter Agreement
causes a delay in the Flight Crew Training, Customer will be deemed to have
agreed to any such delay in Flight Crew Training. In addition, Boeing will have
the right to:
(i) purchase Standby Spare Parts and invoice Customer for the price of
such Parts and for any necessary adjustment and calibration of such Parts;
(ii) cancel or reschedule the Flight Crew Training.
(iii) invoice Customer for any expenses, including but not limited to
ground handling expenses, maintenance costs and storage costs, that are directly
attributable to the delay in the Flight Crew Training.
5. Customer Warranty
Customer warrants that the Standby Parts will meet the requirements of
the Detail Specification and be in a condition to pass Boeing's receiving
inspection and functional test, and if not in a new condition, will have an
attached FAA Serviceable Parts Tag.
6. Title and Risk of Loss
Title to and risk of loss of any Standby Parts or Removed Parts will
remain with Customer. Boeing will have only such liability for Standby Parts and
Removed Parts as a bailee for mutual benefit would have, but will not be liable
for loss of use. For Replacement Parts, title will transfer to Customer at the
time such part is installed on the Training Aircraft.
Very truly yours,
THE BOEING COMPANY
By
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Its Attorney-In-Fact
------------------------------------------
ACCEPTED AND AGREED TO this
Date: , 2002
-------------------------------
KLM Royal Dutch Airlines
By
------------------------------------------
Its
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2399-07
KLM Royal Dutch Airlines
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Subject: Spares Initial Provisioning
Reference: Purchase Agreement No. 2399 (the Purchase Agreement) between
The Boeing Company (Boeing) and KLM Royal Dutch Airlines
(Customer) relating to Model 777-206ER aircraft (the Aircraft)
This Letter Agreement (Letter Agreement) amends and supplements the Purchase
Agreement. All terms used but not defined in this Letter Agreement have the same
meaning as in the Purchase Agreement.
1. Applicability.
This letter will apply to initial provisioning for the Model 777-206ER
Aircraft purchased by Customer under the Purchase Agreement.
2. Initial Provisioning Meeting.
Boeing will conduct an initial provisioning meeting (Initial
Provisioning Meeting) with Customer to establish mutually agreeable procedures
to accomplish Customer's initial provisioning of spare parts for the Aircraft.
The parties will agree, during the Initial Provisioning Meeting on the
operational data to be provided by Customer for Boeing's use in preparing its
quantity recommendations for initial provisioning of spare parts for the
Aircraft, exclusive of special tools, ground support equipment, engines and
engine parts (Provisioning Items). Such operational data to be provided by
Customer will be the data described in Chapter 6 of Boeing Manual D6-81834,
entitled "Spares Provisioning Products Guide" (Boeing Spares Provisioning
Products Guide) which will be furnished to Customer prior to the Initial
Provisioning Meeting. The parties will also agree on the provisioning
documentation to be provided by Boeing as described in Boeing Spares
Provisioning Products Guide (such data will be hereinafter referred to
collectively as the "Provisioning Data"). Boeing will provide instruction in the
use of the initial provisioning documentation. The date of the Initial
Provisioning Meeting will be agreed upon between the parties. However, Boeing
and Customer will use their best efforts to convene such meeting within 30 days
after execution of the Purchase Agreement.
3. Initial Provisioning Documentation.
3.1 Provisioning Data. Boeing will furnish Provisioning Data to
Customer on or about ninety (90) days after Aircraft implementation which is
approximately 12 months before delivery (Aircraft implementation is the date
engineering begins the detailed engineering designs and major suppliers start
locking in body requirements.) The Provisioning Data will be as complete as
possible and will cover Provisioning Items selected by Boeing for review by
Customer for initial provisioning for the Aircraft. The Provisioning Data will
set forth the prices for Provisioning Items which are Boeing Spare Parts and
such prices will be firm and remain in effect until the date or dates set forth
below in Paragraph 4.1, Boeing Spare Parts, by which orders must be placed with
Boeing. Boeing will, from time to time, until a date approximately 90 days
following delivery of the last Aircraft or until the delivery configuration of
each of the Aircraft is reflected in the Provisioning Data, whichever is later,
furnish to Customer revisions to the Provisioning Data.
3.2 Provisioning IPC. Boeing will, on or about ninety (90) days after
Aircraft implementation which is approximately 12 months before delivery,
furnish to Customer a Boeing Illustrated Parts Catalog (IPC), hereinafter
referred to as the "Provisioning IPC". The Provisioning IPC will be as complete
as possible and will cover Provisioning Items selected by Boeing for review by
Customer for initial provisioning for the Aircraft. Boeing will, from time to
time, until a date approximately 90 days following delivery of the last
Aircraft, or until the delivery configuration of each of the Aircraft is
reflected in the Provisioning IPC, whichever is later, furnish to Customer
revisions to the Provisioning IPC.
3.3 Buyer Furnished Equipment (BFE) Provisioning Data.
3.3.1 Boeing's Responsibility. Boeing will include BFE end
items in the Provisioning Data and Provisioning IPC for BFE installed on
Customer's Aircraft provided such equipment has been installed on other Aircraft
by Boeing and Boeing has data on the BFE.
3.3.2 Customer's Responsibility. Customer will be responsible
for ensuring BFE data is provided to Boeing by the BFE supplier in a format
acceptable to Boeing for BFE not covered by 3.3.1 above. If the data is not
provided to Boeing in a timely manner and in a format acceptable to Boeing, such
BFE equipment will not be included in Boeing's Provisioning Data or IPC.
3.4 Other Data. Boeing will submit to Customer listings of Raw
Materials, Standard Parts and Bulk Materials to be used by Customer in the
maintenance and repair of the Aircraft.
4. Purchase from Boeing of Spare Parts as Initial Provisioning for the
Aircraft.
4.1 Boeing Spare Parts. Customer will place orders for Provisioning
Items within sixty (60) days of receipt of the initial submittal of provisioning
data; provided, however, that in those instances where Boeing submits any
revision to the Provisioning Data, Customer will place orders for Boeing Spare
Parts covered by such revision within 60 days following the date of such
submittal. At Customer's request, Boeing will process "controlled shipments" by
shipping full or partial quantities of an order on a schedule specified by
Customer, provided the final shipment is made no later than 24 months after
receipt of the order.
4.2 Supplier Provisioning Items. Customer may place orders with Boeing
for Provisioning Items which are manufactured by suppliers or to their detailed
design and are covered by the Provisioning
Data as initial provisioning for the Aircraft. The price to Customer for any
such supplier Provisioning Item will [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] If Customer elects to purchase such supplier
Provisioning Items from Boeing, Customer will place its orders therefor in
accordance with the provisions of Paragraph 4.1, Boeing Spare Parts.
4.3 Ground Support Equipment and Special Tools. Customer may place
orders with Boeing for ground support equipment (GSE) and special tools
manufactured by suppliers which Customer determines it will initially require
for maintenance, overhaul and servicing of the Aircraft and/or engines. The
price to Customer for such GSE or special tools will be [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] If Customer elects to purchase
such GSE and special tools from Boeing, Customer will place its orders therefor
by the date set forth in Paragraph 4.1, Boeing Spare Parts or such later date as
the parties may mutually agree.
4.4 Spare Engines and Engine Spare Parts. Customer may place orders
with Boeing for spare engines and/or engine spare parts which Customer
determines it will initially require for support of the Aircraft or for
maintenance and overhaul of the engines. The price to Customer for such spare
engines or such engine spare parts, will be [CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]. If Customer elects to purchase such spare
engines or engine spare parts through Boeing, Customer will place its orders on
a date to be mutually agreed upon during the Initial Provisioning Meeting.
4.5 QEC Kits. Boeing will, on or about thirty (30) days after Aircraft
implementation, furnish to Customer a listing of all components which could be
included in the Quick Engine Change (QEC) kits which may be purchased by
Customer from Boeing. Customer agrees to review such listing and indicate by
marking on one copy of such listing those components that Customer desires
included in its QEC kits. Customer will return such marked copy to Boeing within
30 days after Customer's receipt of such listing. Within 30 days after Boeing's
receipt of such marked copy, Boeing will republish such listing to reflect only
those components selected by Customer and will provide copies of such
republished listing to Customer. Boeing will from time to time furnish revisions
to such republished listing until a date approximately 90 days after delivery of
the last QEC kit ordered by Customer for the Aircraft. Boeing will furnish to
Customer as soon as practicable a statement setting forth a firm price for the
QEC kit configuration selected by Customer. Customer agrees to place orders with
Boeing for the QEC kits for the Aircraft within (30) days after receipt of firm
price for the QEC kit configuration selected by the Customer.
4.6 Payment for Provisioning Items. The payment provisions of the
Customer Services General Terms Agreement (CSGTA) between Boeing and Customer
will be applicable to Provisioning Items ordered by Customer from Boeing for the
Aircraft.
5. Delivery.
Boeing will, insofar as reasonably possible, deliver to Customer the
Spare Parts ordered by Customer in accordance with the provisions of this Letter
Agreement on dates reasonably calculated to conform to Customer's anticipated
needs in view of the scheduled deliveries of the Aircraft. Customer and Boeing
will agree upon the date to begin delivery of the Provisioning Spare Parts
ordered in accordance with this Letter Agreement. Where appropriate, Boeing will
arrange for shipment of such Spare Parts, which are manufactured by suppliers,
directly to Customer from the applicable supplier's facility. The routing and
method of shipment for initial deliveries and all subsequent deliveries of such
Spare Parts will be as mutually agreed between Boeing and Customer.
6. Substitution for Obsolete Spare Parts.
6.1 Obligation to Substitute. In the event that, prior to delivery
of the first Aircraft pursuant to the Purchase Agreement, any Spare Part
purchased by Customer from Boeing in accordance with this Letter Agreement is
rendered obsolete or unusable due to the redesign of the Aircraft or of any
accessory, equipment or part therefor, Boeing will at Customer's request deliver
to Customer new and usable Spare Parts in substitution for such obsolete or
unusable Spare Parts and Customer will return the obsolete or unusable Spare
Parts to Boeing. Boeing will credit Customer's account with Boeing with the
price paid by Customer for any such obsolete or unusable Spare Part and will
invoice Customer for the purchase price of any such substitute Spare Part
delivered to Customer.
6.2 Delivery of Obsolete Spare Parts and Substitutes. Obsolete or
unusable Spare Parts returned by Customer pursuant to this Item will be
delivered to Boeing at its Seattle Distribution Center, or such other
destination as Boeing may reasonably designate. Spare Parts substituted for such
returned obsolete or unusable Spare Parts will be delivered to Customer at
Boeing's Seattle Distribution Center, or such other Boeing shipping point as
Boeing may reasonably designate. Boeing will pay the freight charges for the
shipment from Customer to Boeing of any such obsolete or unusable Spare Part and
for the shipment from Boeing to Customer of any such substitute Spare Part.
7. Repurchase of Provisioning Items.
7.1 Obligation to Repurchase. During a period commencing 1 year after
delivery of the first Aircraft under the Purchase Agreement, and ending 5 years
after such delivery, Boeing will, upon receipt of Customer's written request and
subject to the exceptions in Paragraph 7.2, Exceptions, repurchase unused and
undamaged Provisioning Items which (i) were recommended by Boeing in the
Provisioning Data as initial provisioning for the Aircraft, (ii) were purchased
by Customer from Boeing, and (iii) are surplus to Customer's needs. If Customer
follows a phased provisioning program as was done on Customer's 737NGs
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
7.2 Exceptions. Boeing will not be obligated under Paragraph 7.1,
Obligation to Repurchase, to repurchase any of the following: (i) quantities of
Provisioning Items in excess of those quantities recommended by Boeing in the
Provisioning Data for the Aircraft, (ii) QEC Kits, Bulk Material Kits, Raw
Material Kits, Service Bulletin Kits, Standards Kits and components thereof
(except those components listed separately in the Provisioning Data), (iii)
Provisioning Items for which an order was received by Boeing more than 5 months
after delivery of the last Aircraft, (iv) Provisioning Items which have become
obsolete or have been replaced by other Provisioning Items as a result of (a)
Customer's modification of the Aircraft or (b) design improvements by Boeing or
the supplier (other than Provisioning Items which have become obsolete because
of a defect in design if such defect has not been remedied by an offer by Boeing
or the supplier to provide no charge retrofit kits or replacement parts which
correct such defect), and (v) Provisioning Items which become excess as a result
of a change in Customer's operating parameters, provided to Boeing pursuant to
the Initial Provisioning meeting in Paragraph 2, which were the basis of
Boeing's initial provisioning recommendations for the Aircraft.
7.2.1 [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT]
7.3 Notification and Format. Customer will notify Boeing, in writing,
when Customer desires to return Provisioning Items which Customer's review
indicates are eligible for repurchase by Boeing under the provisions of this
Repurchase of Provisioning Items paragraph. Customer's notification will include
a detailed summary, in part number sequence, of the Provisioning Items Customer
desires to return. Such summary will be in the form of listings, tapes,
diskettes or other media as may be mutually agreed between Boeing and Customer,
and will include part number, nomenclature, purchase order number, purchase
order date and quantity to be returned. Within 5 business days after receipt of
Customer's notification, Boeing will advise Customer, in writing, when Boeing's
review of such summary will be completed.
7.4 Review and Acceptance by Boeing. Upon completion of Boeing's review
of any detailed summary submitted by Customer pursuant to Paragraph 7.3, Boeing
will issue to Customer a Material Return Authorization (MRA) for those
Provisioning Items Boeing agrees are eligible for repurchase in accordance with
this Repurchase of Provisioning Items paragraph. Boeing will advise Customer of
the reason that any spare part included in Customer's detailed summary is not
eligible for return. Boeing's MRA will state the date by which Provisioning
Items listed in the MRA must be redelivered to Boeing and Customer will arrange
for shipment of such Provisioning Items accordingly.
7.5 Price and Payment. [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
7.6 Delivery of Provisioning Items. Provisioning Items repurchased by
Boeing pursuant to this Repurchase of Provisioning Items paragraph will be
delivered to Boeing F.O.B. at its Seattle Distribution Center, or such other
destination as Boeing may reasonably designate. Customer will pay the freight
charges for the shipment from Customer to Boeing of any such Provisioning Items.
8. Obsolete Spare Parts and Surplus Provisioning Items - Title and Risk of
Loss.
Title to and risk of loss of any obsolete or unusable Spare Parts
returned to Boeing pursuant to Paragraph 6, Substitution for Obsolete Spare
Parts, will pass to Boeing upon delivery thereof to Boeing. Title to and risk of
loss of any Spare Part substituted for an obsolete or unusable Spare Part
pursuant to Paragraph 6, Substitution for Obsolete Spare Parts, will pass to
Customer upon delivery thereof to Customer. Title to and risk of loss of any
Provisioning Item repurchased by Boeing pursuant to ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇ of
Provisioning Items, will pass to Boeing upon delivery thereof to Boeing. With
respect to the obsolete or unusable Spare Parts which may be returned to Boeing
and the Spare Parts substituted therefor, pursuant to Paragraph 6, and the
Provisioning Items which may be repurchased by Boeing, pursuant to Paragraph 7,
the party which has risk of loss of any such Spare Part or Provisioning Item
will have the responsibility of providing any insurance coverage for it desired
by such party.
9. Supplier Support.
Boeing has entered, or anticipates entering, into product support
agreements with suppliers (Boeing Suppliers) of major system components
manufactured by such Suppliers to be installed on the Aircraft (Supplier
Components). Such product support agreements commit, or are expected to commit,
the Boeing Suppliers to provide to Boeing's customers and/or such customer's
designees support services with respect to the Supplier Components which can be
reasonably expected to be required during the course of normal operation. This
support includes but is not limited to shelf-stock of certain spare parts,
emergency spare parts, timely delivery of spare parts, and technical data
related to the Supplier Components. Copies of such product support agreements
will be provided to Customer on or about sixty (60) days after Aircraft
implementation which is approximately 12 months before delivery in Boeing
Document D6-56115, Volumes 1 and 2. In the event Customer has used due diligence
in attempting to resolve any difficulty arising in normal business transactions
between Customer and a Boeing Supplier with respect to product support for a
Supplier Component manufactured by such Supplier and if such difficulty remains
unresolved, Boeing will, if requested by Customer, assist Customer in resolving
such difficulty. Assistance will be provided by the Customer Supplier Services
organization.
10. Termination for Excusable Delay.
In the event of termination of the Purchase Agreement with respect to
any Aircraft pursuant to Article 7 of the AGTA, such termination will, if
Customer so requests by written notice received by Boeing within [CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] after such
termination, also discharge and terminate all obligations and liabilities of the
parties as to any Spare Parts which Customer had ordered pursuant to the
provisions of this Letter Agreement as initial provisioning for such Aircraft
and which are undelivered on the date Boeing receives such written notice.
11. Adjustment for SEP and Gain.
In the event Customer enters into a Spares Exchange Program (SEP) for
the 777 or the GAIN Program Boeing and Customer will by mutual agreement adjust
the spares provisioning purchase orders.
Very truly yours,
THE BOEING COMPANY
By
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Its Attorney-In-Fact
-----------------------------------------
ACCEPTED AND AGREED TO this
Date: , 2002
------------------------------
KLM Royal Dutch Airlines
By
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Its
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6-1163-KSW-5123 GE
KLM Royal Dutch Airlines
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Subject: Aircraft Performance Guarantees GE90-94B
Reference: Purchase Agreement No. 2399 (the Purchase Agreement) between
The Boeing Company (Boeing) and KLM Royal Dutch Airlines
(Customer) relating to Model 777-206ER aircraft (the Aircraft)
This letter agreement (Letter Agreement) amends and supplements the Purchase
Agreement. All terms used but not defined in this Letter Agreement have the same
meaning as in the Purchase Agreement.
Boeing agrees to provide Customer with the performance guarantees in the
Attachment. These guarantees are exclusive and expire upon delivery of the
Aircraft to Customer.
The performance guarantees included as an attachment are based on LOPA 777-206,
B775146. These guarantees will be revised to include the affect of changes
included in Exhibit A and incorporated into a mutually to be agreed to Customer
detail specification D019-W005KLM72P.
Customer agrees not to disclose this Letter Agreement, attachments, or any other
information related to this Letter Agreement without prior written consent by
Boeing.
Very truly yours,
THE BOEING COMPANY
By
--------------------------------------
Its Attorney-In-Fact
--------------------------------------
ACCEPTED AND AGREED TO this
Date: , 2002
-------------------------------
KLM ROYAL DUTCH AIRLINES
By
--------------------------------------
Its
--------------------------------------
6-1163-KSW-5125
KLM Royal Dutch Airlines
▇.▇. ▇▇▇ ▇▇▇▇
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Subject: Performance Retention Commitment
Reference: Purchase Agreement No. 2399 (the Purchase Agreement) between
The Boeing Company (Boeing) and KLM Royal Dutch Airlines
(Customer) relating to Model 777-206ER Aircraft (Aircraft).
This Letter Agreement (Letter Agreement) amends and supplements the
Purchase Agreement. All terms used but not defined in this Letter Agreement have
the same meaning as in the Purchase Agreement. THIS LETTER AGREEMENT WILL REMAIN
OPEN FOR CUSTOMER'S ACCEPTANCE UNTIL DECEMBER 1, 2002.
Boeing recognizes that performance retention within reasonable
limits is essential to maintain the economy of operation of the Aircraft.
Therefore the parties hereto agree as follows with respect to performance
retention.
1. Aircraft Commitment.
For the purposes of this Letter Agreement, the Performance
Retention Covered Aircraft shall be defined as a fleet not less than
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
Boeing commits to Customer that, for the Performance Retention Covered Aircraft,
the Fleet Average Fuel Mileage Deterioration, as defined in Attachment A, during
the Performance Retention Term (as defined in paragraph 2 below), will not
exceed [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] within
the Performance Retention Term (Aircraft Commitment).
If the Fleet Average Fuel Mileage Deterioration of the Performance Retention
Covered Aircraft is determined to have increased to an extent greater than the
Aircraft Commitment set forth above, Customer's remedies and Boeing's
obligations and liabilities shall be as set forth in this Letter Agreement.
2. Applicability and Performance Retention Term.
This Letter Agreement shall be applicable to the Performance
Retention Covered Aircraft, including the engines installed on the Performance
Retention Covered Aircraft, whether purchased from Boeing as installed engines
or purchased directly from the engine manufacturer (Engine Manufacturer) as new
spare engines for support of the Performance Retention Covered Aircraft during
the Performance Retention Term of this Letter Agreement.
Boeing shall deliver Performance Retention Covered Aircraft to Customer at the
rate of [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]. If
the actual rate of delivery is significantly different, the Aircraft Commitment
may be appropriately adjusted to reflect such changes.
The performance retention term of Boeing's and Customer's rights and obligations
pursuant to this Letter Agreement for the Performance Retention Covered Aircraft
shall commence on the date the first such Performance Retention Covered Aircraft
is delivered to Customer and shall expire forty eight (48) months later
(Performance Retention Term).
3. Conditions.
3.1 Operation and Maintenance.
Customer shall operate and maintain the Performance Retention
Covered Aircraft in accordance with Customer's JAA-approved operations and
maintenance programs. Customer shall operate and maintain the engines in
accordance with the Operation and Maintenance Manuals and Customer's Maintenance
Program as mutually agreed to by Boeing, Customer and Engine Manufacturer.
3.2 Powerback.
It is specifically agreed that reverse thrust will not be used for
normal ground maneuvering (Powerback) of the Performance Retention Covered
Aircraft, unless required for exceptional operational situations. Customer will
promptly notify Boeing of any use of Powerback under such situations. Boeing and
Customer mutually agree to determine, through good faith technical negotiation,
the impact of such uses of Powerback on a Performance Retention Covered
Aircraft's cruise fuel mileage and to apply the appropriate adjustments in the
calculations of performance levels and/or remedies under this Letter Agreement.
3.3 Flight Cycle Utilization and Derate.
The parties agree that the Aircraft Commitment, as set forth in
Paragraph 1 above, is predicated upon Customer's utilization of [CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] per Performance
Retention Covered Aircraft during the Performance Retention Term, and where the
engines are operated with an average minimum derate of [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]. In the event Customer employs
a Performance Retention Covered Aircraft during the Performance Retention Term
of this Letter Agreement within the Customer's system such that the utilization
is greater than [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT], and/or the average engine derate is less than [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT], the parties agree to make
adjustments to the Basic Data, defined in Paragraph 4 below, solely with respect
to such Performance Retention Covered Aircraft, as a consequence of such greater
utilization and/or reduced derate, if appropriate.
4. Determination of Fuel Mileage Deterioration.
For the purposes of this Letter Agreement, fuel mileage
deterioration shall be determined on the basis of the cruise fuel mileage
performance of each Performance Retention Covered Aircraft in accordance with
Attachment A.
Following the delivery of each Performance Retention Covered Aircraft to
Customer by Boeing, and continuing until expiration of the Performance Retention
Term, Customer shall record, analyze, and forward to Boeing cruise fuel mileage
data obtained on such Performance Retention Covered Aircraft as specified in
Attachment B (Basic Data).
5. Notice of Performance Deterioration.
Following evaluation of the Basic Data by Customer, if Customer
believes the Fleet Average Fuel Mileage Deterioration is [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] of the Aircraft Commitment,
Customer shall give Boeing prompt written notice thereof.
6. Election of Actions.
Upon Boeing's receipt of any notice that the Fleet Average Fuel
Mileage Deterioration is within [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] of the Aircraft Commitment and evaluation of the Basic
Data indicates that the Aircraft Commitment shall not be met, Boeing and
Customer, as appropriate, will take the following actions:
6.1 Data.
Boeing will evaluate the Basic Data. At its option, Boeing may
accomplish such evaluation by analysis of Customer's raw ACMS data or by
obtaining additional performance data on such Performance Retention Covered
Aircraft in accordance with Attachment B. Such additional data may include data
acquired during revenue service with Boeing personnel aboard as observers. The
Basic Data and any additional data obtained by Boeing in its evaluation shall be
appropriately adjusted to reflect any material changes elected by Customer to
the Performance Retention Covered Aircraft or engines which have occurred
subsequent to delivery of the Performance Retention Covered Aircraft.
Additionally, adjustments will be applied for any relevant factors as agreed by
Customer and Boeing (e.g., inaccuracies in flight deck instrumentation, a sudden
increase in deterioration that is attributed to a foreign object damage event
such as severe hail and the additional rate of deterioration for Aircraft used
for pilot training.) If Boeing and Customer are in disagreement as to such
evaluation of the Basic Data, such disagreement shall be resolved by good faith
technical negotiation between the parties.
6.2 Surveys.
If Customer's cruise fuel mileage data is confirmed as correctly
indicating the Fleet Average Fuel Mileage Deterioration is within [CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] of the Aircraft
Commitment, Boeing shall, at its option, perform or cause the Engine
Manufacturer to perform (1) a survey of Customer's operating procedures for such
Performance Retention Covered Aircraft and engines, and (2) a conformity survey
of the airframe and engines of such Performance Retention Covered Aircraft.
Boeing agrees that it will only perform such inspections at reasonable times and
upon reasonable notice and shall not interfere with Customer's normal day-to-day
operations.
6.3 Weight.
Boeing may request that Customer weigh such Performance Retention
Covered Aircraft, in which event Customer agrees to weigh such Performance
Retention Covered Aircraft in conjunction with its normally scheduled
maintenance and will report its findings to Boeing.
6.4 Corrective Actions.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
6.5 Improvement Parts and Engine Refurbishment.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
7. Assignment.
Neither party may assign this Letter Agreement without the express
written approval of the other party.
8. Exclusive Remedy.
Performance of the commitments made in this Letter Agreement by Boeing in
accordance with the terms and conditions of this Letter Agreement is in
substitution for all other damages and remedies recoverable by Customer from
Boeing and shall constitute complete, full and final settlement and satisfaction
of all Boeing's obligations and liabilities to Customer arising out of failure
of a Performance Retention Covered Aircraft to comply with the Performance
Retention Commitment. Customer hereby waives and releases all other rights,
remedies, claims and causes of action against Boeing relating to the failure of
any Performance Retention Covered Aircraft to comply with the Performance
Retention Commitment.
9. Confidential Treatment.
Boeing and Customer understand that certain commercial and financial information
contained in this Letter Agreement are considered by Boeing and Customer as
confidential. Customer and Boeing agree that they will treat this Letter
Agreement and the information contained herein as confidential and will not,
without the prior written consent of Boeing and Customer, disclose this Letter
Agreement or any information contained herein to any other person or entity.
Very truly yours,
THE BOEING COMPANY
By
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Its Attorney-In-Fact
------------------------------------------
ACCEPTED AND AGREED TO:
Date: , 2002
-------------------------------
KLM ROYAL DUTCH AIRLINES
By
------------------------------------------
Its
------------------------------------------
Attachment A
Determination of Fleet Average Fuel Mileage Deterioration
For purposes of this Letter Agreement, the "Fleet Average Fuel Mileage
Deterioration" is the average cruise fuel mileage deterioration of the
Performance Retention Covered Aircraft. The determination of the Fleet Average
Fuel Burn Deterioration will be based on fuel mileage deterioration of
individual Performance Retention Covered Aircraft relative to their Baseline
Performance Level cruise fuel mileage performance as defined below.
1. Boeing will provide Customer with the Boeing Airplane Performance Monitoring
Program (APM) for data analysis. For purposes of this Letter Agreement, the
Model Reference Level cruise fuel mileage performance for the Performance
Retention Covered Aircraft shall be as set forth in the APM.
2. During the first thirty (30) days after each Performance Retention Covered
Aircraft begins revenue service (Initial Monitoring Period), Customer shall
acquire cruise fuel mileage data using the methodology described in Attachment
B. Customer will establish the average cruise fuel mileage level relative to the
Model Reference Level (Baseline Performance Level) for each Performance
Retention Covered Aircraft. The data sample for the Initial Monitoring Period
shall be comprised of [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] to assure that a representative level of fuel mileage is established.
3. During each of the [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] following completion of the Initial Monitoring Period (Subsequent
Monitoring Periods), Customer will continue to monitor the cruise fuel mileage
of the Aircraft using the methodology described in Attachment B. During the
Subsequent Monitoring Periods, one (1) Data Event should be recorded on each
flight when it is practicable to do so. The monthly sample for each Performance
Retention Covered Aircraft must include valid data for at least [CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] For the purposes of
this Letter Agreement, the "Current Performance Level" is defined as the average
of the cruise fuel mileage data relative to the Model Reference Level acquired
during the Subsequent Monitoring Period for each Performance Retention Covered
Aircraft. In the event insufficient data is available for a given month, the
Current Performance Level for such month shall be assumed the same as the
previous month.
4. The "Current Deterioration" (expressed as a percentage) for each Performance
Retention Covered Aircraft is the difference between the Current Performance
Level and the Baseline Performance Level.
5. The "Fleet Average Fuel Mileage Deterioration" (expressed as a percentage)
will be determined for each Subsequent Monitoring Period by summing the Current
Deterioration values as determined in Paragraph 4 above for each Performance
Retention Covered Aircraft in that calendar month and dividing by the number of
Performance Retention Covered Aircraft that comprised the sample.
6. Customer will report the results of this analysis for the immediately
preceding calendar quarter to Boeing within 20 days of the end of each calendar
quarter following the date each Performance Retention Covered Aircraft is
delivered.
Cruise Fuel Mileage Performance Determination
Cruise performance data shall be obtained by using the Airplane Condition
Monitoring System (ACMS).
This data will be recorded during level flight cruise in
steady state conditions. The following data will be obtained
during each such data recording:
Initial C.G.
Initial Takeoff Gross Weight
Zero Fuel Weight
Initial Fuel Quantity for each tank
dVG/dt
Time
Ground Speed
SAT
TAT
Mach
CAS
Altitude
Gross Weight
Primary Power Setting Parameter for each engine
Fuel Flow for each engine
EGT for each engine
Latitude
True Track
Air-conditioning mass flow - left and right
Electrical load for each engine
Fuel used for each engine
Fuel Quantity for each tank
Fuel Density
Fuel Temperature
Fuel Totals; calculated and totalizer
Control Surface Positions
Customer shall reduce and analyze data obtained from the revenue
service recordings. Such analysis shall be in accordance with the
methods set forth in the then current revision of Boeing Document
D041A404, "The Determination of Cruise Fuel Mileage by Flight Testing
Boeing Commercial Production Airplanes". Customer's analysis shall
include the determination of the fuel mileage, thrust required, and
fuel flow required relative to the Model Reference Level.
In addition, Customer will maintain records of factors relating to fuel
mileage deterioration. These factors will include (a) engine history,
cockpit instrumentation history and airframe history and condition of
such Performance Retention Covered Aircraft, (b) pertinent Performance
Retention Covered Aircraft maintenance and operational procedures used
by Customer, (c) drag effects of any post delivery airframe and/or
engine changes incorporated in such Performance Retention Covered
Aircraft, (d) sudden shifts in engine EGT condition monitoring data,
and (e) any other relevant factors.
6-1163-KSW-5147R10
KLM Royal Dutch Airlines
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Subject: Special Matters.
Reference: Purchase Agreement No. 2399 (the Purchase Agreement) between
The Boeing Company (Boeing) and KLM Royal Dutch Airlines
(Customer) relating to Model 777-206ER aircraft (the Aircraft)
This letter agreement (Letter Agreement) amends and supplements the Purchase
Agreement. All terms used but not defined in this Letter Agreement have the same
meaning as in the Purchase Agreement.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
Credit Memoranda:
1. Special Credit Memorandum.
At the delivery of [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT], Boeing will issue to Customer a Special Credit Memorandum in the
amount of [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] expressed in 2000 dollars and subject to escalation in accordance
with the applicable airframe escalation provisions set forth in this Purchase
Agreement. For the 777-300ER aircraft the Special Credit Memorandum will be in
the amount of [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] expressed in 2000 dollars and subject to escalation in accordance
with the applicable airplane escalation provisions set forth in the purchase
agreement for such aircraft.
2. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
3. Overhead Space Utilization and Large Cargo Door Credit Memorandum.
At the delivery [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT], Boeing will issue to Customer an Overhead Space Utilization and
Large Cargo Door Credit Memorandum equivalent to [CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT] and subject to escalation in accordance with
the applicable airframe escalation provisions set forth in this Purchase
Agreement. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT]
4. Other Features Credit Memorandum
At the delivery [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT], Boeing will issue to Customer an Other Features Credit Memorandum in
the amount [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] expressed in 2000 dollars and subject to escalation in accordance
with the applicable airframe escalation provisions set forth in this Purchase
Agreement. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT]
5. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
6. Electronic Flight Bag (EFB) Side Displays Credit Memorandum.
To offset part of the features price of the Electronic Flight Bag option, at the
delivery of each Aircraft and Purchase Right Aircraft, Boeing will issue to
Customer an Electronic Flight Bag Side Displays Credit Memorandum in the amount
of [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] expressed
in 2000 dollars and subject to escalation in accordance with the applicable
airframe escalation provisions set forth in this Purchase
Agreement.[CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].
7. Use of Credit Memoranda.
The credit memoranda described in paragraphs one through five, thirteen and
fourteen and the Electronic Flight Bag Side Displays Credit Memorandum described
in paragraph six, may be used for the purchase of Boeing goods and services or
applied to the price of the Aircraft at the time of delivery but may not be used
for advance payments. If Customer selects the 777-300ER, the credit memoranda
described in paragraphs one through five and the Electronic Flight Bag Side
Displays Credit Memorandum described in paragraph six may also be used for the
purchase of General Electric goods and services. If Customer's account balances
with Boeing are current, then at the request of Customer, the cash amount of the
credit will be transferred directly to Customer's account in its designated
bank.
8. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
9. Deferral of Advance Payments.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT], Customer
may elect at the time the Purchase Agreement for the Aircraft and for each
Purchase Right Aircraft is signed to make advance payments for the Aircraft
against the [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT]:
Months Prior to Delivery Standard Schedule Deferred Schedule
------------------------ ----------------- -----------------
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
Customer has selected the standard advance payment schedule for this Purchase
Agreement.
10. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
11. Purchase Right Aircraft.
Customer has requested a [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]. To accommodate this request, Boeing will sell and
deliver to Customer [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT].
Delivery positions will be subject to available positions.
12. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
13. Taxi Weight -[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] Pounds Credit Memorandum.
At the delivery of each Aircraft, Boeing will issue to Customer a Maximum Taxi
Weight Credit Memorandum in the amount of [CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT] expressed in 2000 dollars and subject to
escalation in accordance with the applicable airframe escalation provisions set
forth in this Purchase Agreement.[CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
14. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
15. Use of 777 Door Trainer and Slide for Evacuation Training.
Boeing will make available to Customer for [CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT] a 777 door trainer and a slide for
evacuation training. These will be provided to Customer three months prior to
the first delivery.
16. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
17. PRRs Generating Retrofit.
Each PRR, which generates a retrofit action, by, for example a Service Letter or
Service Bulletin (certification documents, labor and material) and is also a
"Defect" as defined in Exhibit C, Product Assurance Document, of the AGTA is
covered under the warranty provisions of the Product Assurance Document.
Execution will be at Customer's discretion.
18. Overhead Flight Crew Rest (OFCR).
Boeing agrees to make option 2529B703A83 for the OFCR no charge to Customer for
the Aircraft.
19. Pricing of Unique Changes.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
Non-Monetary Concessions:
In addition to the monetary concessions described above, Boeing will provide the
following non-monetary concessions.
20. Flexibility.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
22. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
23. Assignment of Concessions.
The concessions described above are provided as a financial accommodation to
Customer in consideration of its becoming the operator of the Aircraft, and are
not assignable, in whole or in part, without the prior written consent of
Boeing.
24. Confidential Treatment. Customer and Boeing understand that certain
commercial and financial information contained in this Letter Agreement is
considered by Boeing and Customer as confidential. Customer and Boeing agree
that they will treat this Letter Agreement and the information contained herein
as confidential and will not, without the prior written consent of Boeing and
Customer, disclose this Letter Agreement or any information contained herein to
any other person or entity.
Very truly yours,
THE BOEING COMPANY
By
------------------------------------------
Its Attorney-In-Fact
------------------------------------------
ACCEPTED AND AGREED TO this
Date: , 2002
-------------------------------
KLM ROYAL DUTCH AIRLINES
By
------------------------------------------
Its
------------------------------------------
6-1163-KSW-5191
KLM Royal Dutch Airlines
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Subject: Customer Services Matters
Reference: Purchase Agreement No. 2399 (the Purchase Agreement) between
The Boeing Company (Boeing) and KLM Royal Dutch Airlines
(Customer) relating to Model 777-206ER aircraft (the Aircraft)
This letter agreement (Letter Agreement) amends and supplements the Purchase
Agreement. All terms used but not defined in this Letter Agreement have the same
meaning as in the Purchase Agreement.
1. Documentation and revision service and related pricing.
1.1 Maintenance documentation will be prepared in general accordance
with ATA 100 specification rev. 33 and ATA 2100 specification rev. 01, or later.
The Boeing digital data group intends to comply with the latest standards for
ATA specification 2200, however they depend on the data produced by METS
systems.
1.2 All documents listed in Exhibit CS1 paragraph 4 are provided at no
charge including revision service, as applicable, for as long as Customer
operates the Aircraft, with the following exceptions:
1.2.1 Illustrated Parts Catalog (IPC) - Revision service stops
ninety days after delivery of the last Aircraft. Revision service is available
for purchase and is currently priced at [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] (2001 STE) per revision. If Customer incorporates the
leased aircraft into its manuals the price of [CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT] will only be charged once per revision.
1.2.2 Wiring Diagram Manual (WDM) - The WDM is provided free
of charge under the Purchase Agreement until the last firm Aircraft delivers.
After the last firm Aircraft delivers Boeing will incorporate wiring changes
resulting from the incorporation of Boeing service bulletins at no charge to
Customer upon receipt of notice from Customer of the incorporation of the
service bulletin. Upon request, Boeing will incorporate wiring changes for other
Customer modifications for a mutually agreeable fee.
2. Training Support. Customer may, at its option, substitute a person from its
maintenance provider for one of Customer's student for the scheduled maintenance
training courses. Other substitutes will be permitted on a case by case basis.
3. Swapping of Unused Support . Customer may trade any unused introductory
support entitlements for up to twelve (12) months after delivery of the first
Aircraft for goods and services produced by Customer Services including but not
limited to:
o [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
4. Digital Access. Customer will have the option to select digital access to
all available 777 on-line data. If Customer chooses digital data, they will not
receive paper and microfilm media for the same 777 data.
5. Boeing Digital On-Line Access. Distribution of current formats will continue
for nine (9) months from the date that Boeing Digital On-Line Access is first
provided. To assist Customer's transition to on-line access, for documents
available in CD format Boeing will include up to five (5) Boeing Digital
Technical Document Compact Disk (CD) back up copies. The CD's will be delivered
at the next revision cycle. The policy for CD back up copies will be
re-evaluated on an annual basis to assess the continued business need.
6. Model 777-206ER Weights and Balance Manual. Boeing will provide a
preliminary copy of the Customer's Weights and Balance Manual approximately six
weeks prior to the first Aircraft delivery. A representative copy will be
provided six (6) months before the first Aircraft delivery to Customer and, if
possible, will include the overhead crew rest.
7. Schedule of Inspections. All FAA, Boeing, Customer and, if required, U.S.
Customs Bureau inspections will be scheduled by Boeing for completion prior to
delivery or departure of the Aircraft. Customer will be informed of such
schedules.
8. STAR Footprint Training. Boeing will train [CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT] Customer crews using the STAR footprint.
Boeing will be responsible for obtaining the JAA approval for the STAR Program.
Boeing and Customer will work together to get the STAR footprint approved by the
Dutch authorities and to incorporate any Customer unique requirements. For
avoidance of doubt this is above the pro forma [CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT] crews of flight crew training Customer
receives.
Scheduling will be by mutual agreement taking into consideration the first
delivery date.
9. Manuals for Leased Aircraft. With permission from [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT], Customer may have the manuals
for their leased aircraft incorporated into Customer's suite of manuals for the
Aircraft and then, at the conclusion of the lease, have them removed from
Customer's manuals and incorporated into the [CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT] manuals. Customer will be responsible for
any costs associated with this addition and removal. Customer must notify Boeing
of its intent to incorporate the [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] manuals into Customer's suite by [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].
10. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
11. Assignment. This Letter Agreement is provided as an accommodation to
Customer in consideration of Customer's becoming the operator of the Aircraft,
and cannot be assigned, in whole or in part, without the prior written consent
of Boeing.
12. Confidential Treatment. Customer and Boeing understand that certain
commercial and financial information contained in this Letter Agreement is
considered by Customer and Boeing as confidential. Customer and Boeing agree
that it will treat this Letter Agreement and the information contained herein as
confidential and will not, without the prior written consent of Boeing and
Customer, disclose this Letter Agreement or any information contained herein to
any other person or entity.
Very truly yours,
THE BOEING COMPANY
By
------------------------------------------
Its Attorney-In-Fact
------------------------------------------
ACCEPTED AND AGREED TO this
Date: , 2002
-------------------------------
KLM ROYAL DUTCH AIRLINES
By
------------------------------------------
Its
------------------------------------------
6-1163-KSW-5192
KLM Royal Dutch Airlines
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Subject: Purchase Rights
Reference: Purchase Agreement No. 2399 (the Purchase Agreement) between
The Boeing Company (Boeing) and KLM Royal Dutch Airlines
(Customer) relating to Model 777-206ER aircraft (the Aircraft)
This letter agreement (Letter Agreement) amends and supplements the Purchase
Agreement. All terms used but not defined in this Letter Agreement have the same
meaning as in the Purchase Agreement.
1. Purchase Right Aircraft.
Boeing will sell to Customer [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
2. Price.
2.1. 777-200ER Prices.
2.1.1. Airframe Base Price and Optional Features Prices. The
Airframe Base Price and Optional Features will [CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
2.1.1. Engine Price. The engine price for aircraft purchased
pursuant to purchase rights will be adjusted to the engine manufacturer's
then-current price as of the date of execution of the definitive purchase
agreement, unless General Electric agrees to base price protection for the
engines.
2.2. 777-300ER Prices. Airframe Base Price (including engine) and
Optional Features Prices. The established Aircraft Base Price (airframe and
engines) for the 777-300ER is [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] expressed in 2000
dollars. The Optional Features Prices will be established at the time Customer's
initial configuration becomes final.
Currently all options for all 777 minor models are contained in the same 777
Standard Selections Catalog. The Catalog identifies which options are available
for which minor model (777-200, 777-200ER, 777-300ER, etc.). The 777
Configuration Specification has all the 777 minor models included. Any
differences are noted by separate appendices for the various 777 minor models.
2.3. Other 777 Models Prices. For 777 models not discussed in paragraph
2.1 and 2.2, the Airframe Base Price and Optional Features Prices will be
established at the time of Customer's initial configuration. The engine price
purchased pursuant to purchase rights will be adjusted to the engine
manufacturer's then-current price as of the date of execution of the definitive
purchase agreement, unless the engine manufacturer agrees to base price
protection for the engines.
2.4 Development Changes and Regulatory Requirements. Customer will
remain responsible for the price of Development Changes and Regulatory
Requirements (Manufacturer Changes and Operator Changes) that occur up to the
time a Purchase Right Aircraft becomes firm.
2.5. Escalation Adjustments.
2.5.1 General. The Airframe Price and price of Optional Features
for the Purchase Right Aircraft will be the escalation provisions in
Supplemental Exhibit AE1. The Engine Price for Purchase Right Aircraft will be
adjusted to the engine manufacturer's then-current escalation provisions as of
the date of execution of the definitive agreement for the Purchase Right
Aircraft.
2.5.2. Purchase in Block of Four. Should Customer purchase a block
of four Purchase Rights Aircraft that deliver within a [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] period (the Block Aircraft),
the Block Aircraft will be covered by a [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT].
3. Concessions.
3.1. Credit Memoranda. All 777-200ER Purchase Right Aircraft will have the
following credit memoranda as more fully described in Letter Agreement
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
3.2. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]. The
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] as
provided in Letter Agreement 6-1163-KSW-5147R10 paragraph 16 will apply to
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].
3.3. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
4. Delivery Positions.
4.1. If Customer requests a specific delivery position (year/month)
(Requested Delivery Position) [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] or more months prior to that Requested Delivery
Position, Boeing will contract for delivery in the requested year/month.
4.2. If Customer requests a Requested Delivery Position
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] prior to
the Requested Delivery Position, Boeing will contract for delivery within the
same calendar quarter as the requested month.
4.3. Customer may request a Requested Delivery Position at
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]. In that
case Boeing will contract for delivery in the requested month subject to
availability of the requested position considering sales commitments and
production constraints at that time.
5. Exercise of Purchase Right. Customer will notify Boeing in writing of its
desire to exercise a purchase right and the preferred delivery position. Once
the delivery position is established the parties will enter into a purchase
agreement for the Purchase Right Aircraft within [CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT].
6. Option Aircraft. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] Option exercise will be with mutual agreement in writing twenty-four
months prior to the scheduled delivery month of the option aircraft. At the time
an option is exercised Customer may elect to replace the Option Aircraft by
converting a Purchase Right Aircraft to an Option Aircraft on the same terms and
conditions described above.
7. Assignment. The Credit Memoranda described in this Letter Agreement are
provided as a financial accommodation to Customer in consideration of Customer's
becoming the operator of the Aircraft, and cannot be assigned, in whole or in
part, without the prior written consent of Boeing.
8. Confidential Treatment. Customer and Boeing understand that certain
commercial and financial information contained in this Letter Agreement is
considered by Boeing and Customer as confidential. Customer and Boeing agree
that they will treat this Letter Agreement and the information contained herein
as confidential and will not, without the prior written consent of Boeing and
Customer, disclose this Letter Agreement or any information contained herein to
any other person or entity.
Very truly yours,
THE BOEING COMPANY
By
-------------------------------------------
Its Attorney-In-Fact
-------------------------------------------
ACCEPTED AND AGREED TO this
Date: , 2002
-------------------------------
KLM ROYAL DUTCH AIRLINES
By
-------------------------------------------
Its
-------------------------------------------
6-1163-KSW-5194
KLM Royal Dutch Airlines
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Subject: Promotional Support
Reference: Purchase Agreement No. 2399 (the Purchase Agreement) between
The Boeing Company (Boeing) and KLM Royal Dutch Airlines
(Customer) relating to Model 777-206ER aircraft (the
Aircraft)
This letter agreement (Letter Agreement) amends and supplements the Purchase
Agreement. All terms used but not defined in this Letter Agreement have the same
meaning as in the Purchase Agreement.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
Boeing's obligation to provide the support will commence at the time the
purchase of the Aircraft becomes firm (not subject to cancellation by either
party) and will terminate [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] from the date the first Aircraft is delivered to
Customer or as extended by mutual agreement. There will be no cash payments or
other support in lieu thereof. Following the execution of this Letter Agreement,
a Boeing Airline Promotion representative will meet with Customer's designated
representative to discuss the extent, selection, scheduling, and funds
disbursement process for the program.
Very truly yours,
THE BOEING COMPANY
By
------------------------------------------
Its Attorney-In-Fact
--------------------------------------
ACCEPTED AND AGREED TO this
Date: , 2002
-------------------------------
KLM ROYAL DUTCH AIRLINES
By
------------------------------------------
Its
------------------------------------------
6-1163-KSW-5195
KLM Royal Dutch Airlines
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Subject: [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
Reference: Purchase Agreement No. 2399 (the Purchase Agreement) between
The Boeing Company (Boeing) and KLM Royal Dutch Airlines
(Customer) relating to Model 777-206ER aircraft (the
Aircraft)
This Letter Agreement amends and supplements the Purchase Agreement. All terms
used but not defined in this Letter Agreement have the same meaning as in the
Purchase Agreement.
1. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
2. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
3. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
4. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
5. Assignment. This Letter Agreement is provided as an accommodation to
Customer in consideration of Customer's becoming the operator of the Aircraft,
and cannot be assigned, in whole or in part, without the prior written consent
of The Boeing Company.
6. Confidential Treatment. Customer understands that certain commercial and
financial information contained in this Letter Agreement are considered by
Boeing as confidential. Customer agrees that it will treat this Letter Agreement
and the information contained herein as confidential and will not, without the
prior written consent of Boeing, disclose this Letter Agreement or any
information contained herein to any other person or entity.
Very truly yours,
THE BOEING COMPANY
By
------------------------------------------
Its Attorney-In-Fact
------------------------------------------
ACCEPTED AND AGREED TO this
Date:___________________________
KLM ROYAL DUTCH AIRLINES
By
------------------------------------------
Its
------------------------------------------
ATTACHMENT 1
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
6-1163-KSW-5202
KLM Royal Dutch Airlines
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Subject: [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
Reference: Purchase Agreement No. 2399 (the Purchase Agreement) between
The Boeing Company (Boeing) and KLM Royal Dutch Airlines
(Customer) relating to Model 777-206ER aircraft (the
Aircraft)
This letter agreement (Letter Agreement) amends and supplements the Purchase
Agreement. All terms used but not defined in this Letter Agreement have the same
meaning as in the Purchase Agreement.
1. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
2. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
3. Assignment. This Letter Agreement is provided as a financial accommodation
to Customer in consideration of Customer's becoming the operator of the
Aircraft, and cannot be assigned.
4. Confidential Treatment. Customer and Boeing understands that certain
commercial and financial information contained in this Letter Agreement and
attachment(s) hereto are considered by Customer and Boeing as confidential.
Customer and Boeing agree that they will treat this Letter Agreement and the
information contained herein as confidential and will not, without the prior
written consent of Customer and Boeing, disclose this Letter Agreement or any
information contained herein to any other person or entity.
Very truly yours,
THE BOEING COMPANY
By
------------------------------------------
Its Attorney-In-Fact
------------------------------------------
ACCEPTED AND AGREED TO this
Date: , 2002
-------------------------------
KLM ROYAL DUTCH AIRLINES
By
------------------------------------------
Its
------------------------------------------
6-1163-KSW-5203
KLM Royal Dutch Airlines
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Subject: Configuration Matters
Reference: Purchase Agreement No. 2399 (the Purchase Agreement) between
The Boeing Company (Boeing) and KLM Royal Dutch Airlines
(Customer) relating to Model 777-206ER aircraft (the
Aircraft)
This letter agreement (Letter Agreement) amends and supplements the Purchase
Agreement. All terms used but not defined in this Letter Agreement have the same
meaning as in the Purchase Agreement.
1. Development Changes. Boeing recognizes Customer's wish to receive early
notification of Development Changes (PRRs) applicable to its Aircraft to
evaluate the effect on maintenance and operation in a timely manner. In addition
to the notices required by Sections 4.1 and 4.3 of the AGTA, Boeing will furnish
Customer written notice of PRRs within [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] after Boeing's commitment to incorporate them into
production. Notice will include: description of change, list of applicable
aircraft effectivities and, if appropriate, graphics. If Customer provides
Boeing written notification within [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] of receipt of a PRR notice that Customer does not want
the PRR, Boeing will investigate reversal of the PRR either by proposing a
priced master change for Customer's consideration or by deleting Customer's
Aircraft effectivity from the PRR at no charge. There can be no reversal for
PRRs that: (1) are reasonably required for Boeing to maintain efficient
production of all aircraft of that model type, (ii) would result in the loss of
any common type rating, (iii) are required to replace obsolete parts or (iv) are
imposed by either the Manufacturer's or Customer's respective regulatory agency
to be incorporated prior to delivery of the Aircraft.
2. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
3. 180 Minutes ETOPS. The 777 will be delivered with type design approval for
180 minute ETOPS.
4. JAA Changes.
4.1 JAA Type Certification. The Boeing model 777 has already
obtained its JAA Type Certification.
4.2 JAA Manufacturing Changes. A JAA Manufacturing Change is
defined as any change to an aircraft, data relating to an aircraft, or testing
of an aircraft required by the JAA to obtain an Export Certificate of
Airworthiness. Boeing agrees to incorporate into Customer's Aircraft all JAA
Manufacturer Changes required to be incorporated into the Aircraft by the JAA at
the time of Aircraft delivery. Customer will pay Boeing's charge for
incorporating all JAA Manufacturer Changes When a manufacturing change is both a
JAA Manufacturer Change and a FAA Manufacturer Change the provisions of Article
3.2.2 and 3.2.3 of the AGTA will take precedence. At the present time there are
no known JAA Manufacturer Changes that will impact the price of the Aircraft;
nor based, on our experience to date, does Boeing forsee any future divergency.
4.3 JAR OPS 1 (JAR OPS Operator Changes). Boeing will deliver each
Aircraft with JAR OPS Operator Changes incorporated or, at Boeing's option, with
suitable provisions for the incorporation of such JAR OPS Operator Changes, and
Customer will pay Boeing's applicable charges.
5. Assignment. The concessions described above are provided as a financial
accommodation to Customer in consideration of Customer's becoming the operator
of the Boeing aircraft, and cannot be assigned, in whole or in part, without the
prior written consent of The Boeing Company.
6. Confidential Treatment. Customer and Boeing understand that certain
commercial and financial information contained in this Letter Agreement is
considered by Boeing and Customer as confidential. Customer and Boeing agree
that they will treat this Letter Agreement and the information contained herein
as confidential and will not, without the prior written consent of Boeing and
Customer, disclose this Letter Agreement or any information contained herein to
any other person or entity.
Very truly yours,
THE BOEING COMPANY
By
------------------------------------------
Its Attorney-In-Fact
------------------------------------------
ACCEPTED AND AGREED TO this
Date: , 2002
-------------------------------
KLM ROYAL DUTCH AIRLINES
By
------------------------------------------
Its
------------------------------------------
6-1163-KSW-5204
KLM Royal Dutch Airlines
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Subject: [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
Reference: Purchase Agreement No. 2399 (the Purchase Agreement) between
The Boeing Company (Boeing) and KLM Royal Dutch Airlines
(Customer) relating to Model 777-206ER aircraft (the
Aircraft)
This letter agreement (Letter Agreement) amends and supplements the Purchase
Agreement. All terms used but not defined in this Letter Agreement have the same
meaning as in the Purchase Agreement.
1. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
2. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
3. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
4. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
5. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
6. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
7. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
8. Confidential Treatment.
Customer and Boeing understand that certain commercial and financial information
contained in this Letter Agreement is considered by Boeing and Customer as
confidential. Customer and Boeing agree that they will treat this Letter
Agreement and the information contained herein as confidential and will not,
without the prior written consent of Boeing and Customer, disclose this Letter
Agreement or any information contained herein to any other person or entity.
Very truly yours,
THE BOEING COMPANY
By
------------------------------------------
Its Attorney-In-Fact
------------------------------------------
ACCEPTED AND AGREED TO this
Date: , 2002
-------------------------------
KLM ROYAL DUTCH AIRLINES
By
------------------------------------------
Its
------------------------------------------
6-1163-KSW-5207
KLM Royal Dutch Airlines
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Subject: Contract Matters
Reference: Purchase Agreement No. 2399 (the Purchase Agreement) between
The Boeing Company (Boeing) and KLM Royal Dutch Airlines
(Customer) relating to Model 777-206ER aircraft (the
Aircraft)
This letter agreement (Letter Agreement) amends and supplements the Purchase
Agreement. All terms used but not defined in this Letter Agreement have the same
meaning as in the Purchase Agreement.
1. Information Sharing. Once a proprietary information agreement is signed by
all parties, Boeing agrees that Customer [CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT] Upon request, other sharing may be approved
on a case by case basis with written consent from Boeing.
2. Delivery Discussions. Delivery discussions will address conditions with the
delivering of the Aircraft including but not limited to the reduction in price
to address options not completed during production.
3. CAA-NL Validation. To export the Aircraft into The Netherlands Boeing must
satisfy CAA-NL Type Certificate Number T-085-95 dated 20 May 1998. This is the
only requirement to validate the Aircraft under JAA rules.
4. In addition to the the delivery notice provided under the AGTA , Boeing will
provide KLM with a preliminary delivery date [CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT] months prior to the contractual delivery
month. This notice is being provided for informational purposes only and does
not affect the contractual requirement that the Aircraft be delivered within the
delivery month.
5. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
6 New Aircraft Invoices. All invoices related to a new aircraft purchase will
be sent only to KLM Corporate Fleet Development.
7. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
8. Suppy chain solutions. Boeing will offer to Customer a proposal for a 777
Spares Exchange Program and will begin discussions with Customer on adding 777
consumables to the current GAIN Program
9. Special Aircraft Test Requirements. Notwithstanding the language in Article
5.5 of the AGTA, Boeing agrees to provide notice to Customer of any flight and
ground test on Customer's Aircraft required to obtain or maintain the Type
Certification or Certificate of Airworthiness for aircraft. In addition Boeing
will also obtain consent from Customer prior to such testing, if the testing is
not for a Customer's Aircraft.
10. Assignment. This Letter Agreement is provided as an accommodation to
Customer in consideration of Customer's becoming the operator of the Aircraft,
and cannot be assigned, in whole or in part, without the prior written consent
of The Boeing Company.
11. Confidential Treatment. Customer understands that certain commercial and
financial information contained in this Letter Agreement are considered by
Boeing as confidential. Customer agrees that it will treat this Letter Agreement
and the information contained herein as confidential and will not, without the
prior written consent of Boeing, disclose this Letter Agreement or any
information contained herein to any other person or entity.
Very truly yours,
THE BOEING COMPANY
By
------------------------------------------
Its Attorney-In-Fact
------------------------------------------
ACCEPTED AND AGREED TO this
Date: , 2002
-------------------------------
KLM ROYAL DUTCH AIRLINES
By
------------------------------------------
Its
------------------------------------------