SupplementalAgreement No.61 to PurchaseAgreement No.1810 between THEBOEING COMPANY and SOUTHWESTAIRLINES CO. Relatingto Boeing Model 737-7H4 Aircraft (the Aircraft)

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Exhibit 10.1

CONFIDENTIAL TREATMENT

Supplemental Agreement No. 61

to

Purchase Agreement No. 1810

between

THE BOEING COMPANY

and

SOUTHWEST AIRLINES CO.

Relating to Boeing Model 737-7H4 Aircraft (the Aircraft)

THIS SUPPLEMENTAL AGREEMENT, entered into as of September 30, 2008, by and between THE BOEING COMPANY, a Delaware corporation with principal offices in Seattle, Washington, (Boeing) and SOUTHWEST AIRLINES CO., a Texas corporation with principal offices in Dallas, Texas (Buyer);

WHEREAS, the parties hereto entered into Purchase Agreement No. 1810 dated January 19, 1994, relating to Boeing Model 737-7H4 aircraft (the Agreement) and;

 

                WHEREAS, Buyer has requested and Boeing has agreed to slide the Contract Delivery Month of certain four (4) Firm Aircraft as follows (2016 Firm Aircraft):

                                                                                  and;

WHEREAS, Notwithstanding the Letter agreement No. 6-1162-NIW-1947 which was fully executed on May 2, 2008, Boeing and Buyer have agreed to revise the incorporation point of Record Option Number 2525C882G60 entitled “Replacement of BFE B/E Aerospace Passenger

 

 

Seats” to the Aircraft delivering in January 2010 from August 2009 due to slide of the Contract Delivery Month relating to the 2016 Firm Aircraft and;

 

              WHEREAS, Boeing and Buyer have agreed to use the latest escalation forecast (4th Quarter 2007 Forecast) to calculate the Advance Payment Base Price for the *** Firm Aircraft in Table 1; and

 

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

1.           The Table of Contents of the Agreement is deleted in its entirety and a new Table of Contents is attached hereto and incorporated into the Agreement by this reference.

2.           Table 1 is deleted in its entirety and replaced by a new Table 1 which is attached hereto to reflect the revision to the Contract Delivery Month of four (4) Firm Aircraft from year 2009 to year 2016.

3.           Exhibit A-3 is added as part of Exhibit A suite to reflect incorporation of Record Option Number 2525C882G60 entitled “Replacement of BFE B/E Aerospace passenger Seats” (Record Option) into the configuration of the second Aircraft delivering in January 2010 and thereafter.  The incorporation of such Record Option on the first Aircraft delivering in January 2010 will be done using a Boeing internal process and a one time charge associated with the Record Option in the amount of *** (in 1999$ Subject to Escalation) will be invoiced to Buyer as part of the Aircraft Delivery Invoice of the first Aircraft delivering in January 2010.

4.           All references in the Letter Agreements associated with Purchase Agreement No. 1810 shall be deemed to refer to the purchase by Buyer of four hundred nineteen (419) Model 737-7H4 Aircraft, sixty-seven (67) Model 737-7H4 Option Aircraft and fifty-four (54) Model 737-7H4 Purchase Right Aircraft, to the extent such reference is not specifically addressed herein.

5.           Boeing and Buyer have agreed that Boeing will ***:

***

 

6.           Boeing’s labor contract renewal date with its principal employee union (the IAM) expired at midnight on September 3, 2008. After a 48 hour mediation effort, the IAM initiated a strike on September 6, 2008. (IAM Action).  The Customer acknowledges that (i) the obligations of Boeing described in this Supplemental Agreement are premised upon Boeing’s manufacturing capability prior to the IAM Action; and (ii) delay in the performance of any obligation of Boeing under this Purchase Agreement resulting from the IAM Action is an excusable delay under the provisions of Article 6 of the Agreement.

 

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

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

THE BOEING COMPANY	SOUTHWEST AIRLINES CO.
By: /s/ Nobuko Wiles	By:/s/ Scott Toppping
Its:    Attorney-In-Fact	Its:Vice President Treasurer

 

 

TABLE OF CONTENTS

TABLE OF CONTENTS CON'T

TABLE OF CONTENTS CON'T

TABLE OF CONTENTS CON'T

 

		Base Aircraft Price	Special Features		Aircraft Basic Price	Base Year Dollars
Block A, B, C, D & E Aircraft		***	***		***	July 1992
Block F & G Aircraft		***	***		***	July 1992
Block H Aircraft		***	***		***	July 1992
Block I Aircraft		***	***		***	July 1992
Block J Aircraft		***	***		***	July 1992
Block K Aircraft		***	***		***	July 1992
Block K-W Aircraft		***	***		***	July 1992
Block L Aircraft		***	***		***	July 1992
Block T Aircraft		***	***		***	July 1999
Block T-W Aircraft		***	***		***	July 1999
Block T-W-1 / T-W-1a Aircraft		***	***		***	July 1999
Block T-W-2 / T-W-2a Aircraft		***	***		***	July 1999
Block K-W Aircraft: Block K airplanes with production winglets installation
Block T-W Aircraft: Block T airplanes with production winglets installation
Block T-W-1 / T-W-1a  Aircraft: Firm Aircraft contracted to deliver from May 1, 2006 through June 2008 at the signing
of SA-47  -- (T-W-1a Aircraft -- Advance Payment Schedule per LA 6-1162-JGM-669)
Block T-W-2 / T-W-2a Aircraft: U-W-1 Option Aircraft which became Firm Aircraft after signing of SA-47 and
Firm Aircraft contracted to deliver in July 2008 forward at the signing of SA47 --
(T-W-2a Aircraft -- Advance Payment Schedule per LA 6-1162-JGM-669)
* Exhibit A-2 applies to Block T-W-2 / T-W-2a Aircraft delivering through Dec 2009 and the first Aircraft delivering in Jan 2010
* Exhibit A-3 applies to Block T-W-2 / T-W-2a Aircraft the second Aircraft delivering in Jan 2010 and on

 

 

 

 

 

 

AIRCRAFT CONFIGURATION

Dated __________________, 2008

relating to

BOEING MODEL 737-7H4 AIRCRAFT

The Detail Specification is Boeing Detail Specification D6-38808-1, Rev G dated as of July 26, 2005.  Such Detail Specification will be comprised of Boeing Configuration Specification D019A001, Rev H dated as of November 18, 2005 as amended to incorporate the Options listed below, including the effects on Manufacturer's Empty Weight (MEW) and Operating Empty Weight (OEW).  As soon as practicable, Boeing will furnish to Buyer copies of the Detail Specification, 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 or Seller Purchased Equipment.  The effects of all Options which are mutually agreed upon between Boeing and Buyer for incorporation into the Aircraft Configuration will be incorporated into an applicable suit of Exhibit A of the Purchase Agreement by written amendment.

                                         Exhibit A-3 – Applicable to the second Aircraft Delivering January 2010 and on

 

 

 

                                     Sub-Total Changes - Special Features -- the same as in Exhibit A-1-Winglet                                                                                   ***

                                     Total Additional Master Changes                                                                                                                                                               ***

                                     2525C882G60                                 REPLACEMENT OF BFE B/E AEROSPACE PASSENGER SEATS***

                                     Exhibit A-3 Total                                                                                                                                                                        
60;                    ***