Exhibit 10.14(d)
Supplemental Agreement No. 4
to
Purchase Agreement No. 1951
between
The Boeing Company
and
Continental Airlines, Inc.
Relating to Boeing Model 737 Aircraft
THIS SUPPLEMENTAL AGREEMENT, entered into as of October 10,
1997, by and between THE BOEING COMPANY, a Delaware corporation
with its principal office in Seattle, Washington, (Boeing) and
CONTINENTAL AIRLINES, INC., a Delaware corporation with its
principal office in Houston, Texas (Buyer);
WHEREAS, the parties hereto entered into Purchase Agreement
No. 1951 dated July 23, 1996, as amended and supplemented, relating
to Boeing Model 737-500, 737-600, 737-700 and 737-800 aircraft (the
Purchase Agreement); and
WHEREAS, Buyer has requested and Boeing has agreed to
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
WHEREAS, Boeing and Buyer have mutually agreed to amend the
Purchase Agreement to incorporate the effect of these and certain
other changes;
NOW THEREFORE, in consideration of the mutual covenants herein
contained, the parties agree to amend the Purchase Agreement as
follows:
1. Table of Contents:
Remove and replace, in its entirety, the "Table of Contents",
with the Table of Contents attached hereto, to reflect the changes
made by this Supplemental Agreement No. 4.
2. Table 1:
Remove and replace, in their entirety, pages T-2, T-3 and T-4
of "Table 1, Aircraft Deliveries and Descriptions" that relate to
Models 737-700, 737-800 and 737-600 aircraft, respectively, with
the revised pages T-2, T-3 and T-4 attached hereto, to reflect the
mutually agreed upon revised delivery schedules and aircraft model
types.
3. Letter Agreements:
3.1 Remove and replace, in its entirety, Letter Agreement
1951-8R1, "Escalation Sharing - New Generation Aircraft" with
Letter Agreement 1951-8R2, "Escalation Sharing - New Generation
Aircraft", to clarify the language describing escalation sharing
for 1998 New Generation Aircraft.
3.2 Remove and replace, in its entirety, Letter Agreement
1951-11, "Escalation Sharing - Current Generation Aircraft" with
Letter Agreement 1951-11R1, "Escalation Sharing - Current
Generation Aircraft", to clarify the language describing escalation
sharing for 1998 Current Generation Aircraft.
3.3 Remove and replace, in its entirety, Letter Agreement 6-
1162-MMF-308R1, "Disclosure of Confidential Information" with
Letter Agreement 6-1162-MMF-308R2, "Disclosure of Confidential
Information", to revise the schedule of confidential documents,
revise the conditions for disclosure of confidential documents, and
to incorporate language limiting the requirement to revise this
Letter Agreement in the future.
3.4 Remove and replace, in its entirety, Letter Agreement 6-
1162-MMF-310R1, "Certain Contractual Matters" with Letter Agreement
6-1162-GOC-131, "Special Matters", to incorporate the effect of a
revised business offer.
3.5 Remove and replace, in its entirety, Letter Agreement 6-
1162-MMF-311R1, [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT] with Letter Agreement 6-1162-MMF-311R2,
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] to incorporate a change to the method used
to calculate Buyer's lease payment.
The Purchase Agreement will be deemed to be supplemented to the
extent herein provided as of the date hereof and as so supplemented
will continue in full force and effect.
EXECUTED IN DUPLICATE as of the day and year first written above.
THE BOEING COMPANY CONTINENTAL AIRLINES, INC.
By: /s/ Gunar O. Clem By: /s/ Brian Davis
Its: Attorney-In-Fact Its: Vice President
TABLE OF CONTENTS
Page SA
Number Number
ARTICLES
1. Subject Matter of Sale . . . . . . . . . . 1-1 SA 1
2. Delivery, Title and Risk of Loss . . . . . 2-1
3. Price of Aircraft. . . . . . . . . . . . . 3-1 SA 3
4. Taxes. . . . . . . . . . . . . . . . . . . 4-1
5. Payment. . . . . . . . . . . . . . . . . . 5-1
6. Excusable Delay. . . . . . . . . . . . . . 6-1
7. Changes to the Detail Specification. . . . 7-1 SA 1
8. Federal Aviation Requirements and
Certificates and Export License. . . . . . 8-1 SA 1
9. Representatives, Inspection,
Flights and Test Data. . . . . . . . . . . 9-1
10. Assignment, Resale or Lease. . . . . . . . 10-1
11. Termination for Certain Events . . . . . . 11-1
12. Product Assurance; Disclaimer and
Release; Exclusion of Liabilities;
Customer Support; Indemnification
and Insurance. . . . . . . . . . . . . . . 12-1
13. Buyer Furnished Equipment and
Spare Parts. . . . . . . . . . . . . . . . 13-1
14. Contractual Notices and Requests . . . . . 14-1
15. Miscellaneous. . . . . . . . . . . . . . . 15-1
TABLE OF CONTENTS
Page SA
Number Number
TABLES
1. Aircraft Deliveries and
Descriptions - 737-500 . . . . . . . . . . T-1 SA 3
Aircraft Deliveries and
Descriptions - 737-700 . . . . . . . . . . T-2 SA 4
Aircraft Deliveries and
Descriptions - 737-800 . . . . . . . . . . T-3 SA 4
Aircraft Deliveries and
Descriptions - 737-600 . . . . . . . . . . T-4 SA 4
EXHIBITS
A-1 Aircraft Configuration - Model 737-724 . . SA 2
A-2 Aircraft Configuration - Model 737-824 . . SA 2
A-3 Aircraft Configuration - Model 737-624 . . SA 1
A-4 Aircraft Configuration - Model 737-524 . . SA 3
B Product Assurance Document . . . . . . . . SA 1
C Customer Support Document - Code Two -
Major Model Differences. . . . . . . . . . SA 1
C1 Customer Support Document - Code Three -
Minor Model Differences. . . . . . . . . . SA 1
D Aircraft Price Adjustments - New
Generation Aircraft . . . . . . . . . . . SA 1
D1 Airframe and Engine Price Adjustments -
Current Generation Aircraft. . . . . . . . SA 1
E Buyer Furnished Equipment Provisions
Document . . . . . . . . . . . . . . . . . SA 1
F Defined Terms Document . . . . . . . . . .
TABLE OF CONTENTS
SA
Number
LETTER AGREEMENTS
1951-1 Not Used . . . . . . . . . . . . . . . . . .
1951-2R2 Seller Purchased Equipment . . . . . . . . . SA 2
1951-3R1 Option Aircraft-Model 737-824 Aircraft . . . SA 1
1951-4R1 Waiver of Aircraft Demonstration . . . . . . SA 1
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
1951-6 Configuration Matters. . . . . . . . . . . .
1951-7R1 Spares Initial Provisioning. . . . . . . . . SA 1
1951-8R2 Escalation Sharing - New Generation
Aircraft . . . . . . . . . . . . . . . . . . SA 4
1951-9 Option Aircraft-Model 737-624 Aircraft . . . SA 1
1951-10 Configuration matters [CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] - Model 737-624 Aircraft. . . . . SA 1
1951-11R1 Escalation Sharing-Current Generation
Aircraft . . . . . . . . . . . . . . . . . . SA 4
TABLE OF CONTENTS
SA
Number
RESTRICTED LETTER AGREEMENTS
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
6-1162-MMF-308R2 Disclosure of Confidential . . . . SA 4
Information
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
6-1162-MMF-312R1 Special Purchase Agreement
Provisions . . . . . . . . . . . SA 1
6-1162-MMF-319 Special Provisions Relating to
the Rescheduled Aircraft . . . .
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
6-1162-GOC-131 Special Matters. . . . . . . . . . SA 4
TABLE OF CONTENTS
SUPPLEMENTAL AGREEMENTS DATED AS OF:
Supplemental Agreement No. 1 . . . . . . . . . . October 10,1996
Supplemental Agreement No. 2 . . . . . . . . . . March 5, 1997
Supplemental Agreement No. 3 . . . . . . . . . . July 17, 1997
Supplemental Agreement No. 4 . . . . . . . . . . October 1997
October 10, 1997
1951-8R2
Continental Airlines, Inc.
2929 Allen Parkway
Houston, TX 77019
Subject: Letter Agreement No. 1951-8R2 to
Purchase Agreement No. 1951 -
Escalation Sharing - New Generation Aircraft
Ladies and Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1951 dated July
23, 1996(the Agreement), between The Boeing Company (Boeing) and
Continental Airlines, Inc. (Buyer) relating to Model 737-624/-724/-
824 aircraft (the Aircraft). This Letter Agreement supersedes and
replaces in its entirety Letter Agreement 1951-8R1 dated October
10, 1996.
All terms used herein and in the Agreement, and not defined herein,
will have the same meaning as in the Agreement.
1. Commitment.
Boeing agrees to share one-half of the escalation up to a
maximum of 3 percent per year in each of the years 1997 and 1998,
as more fully described in paragraph 2 below, for any of Buyer's
Aircraft which are scheduled to deliver after December 31, 1996.
For the purpose of this Letter Agreement such aircraft are referred
to as "Eligible Aircraft."
All escalation calculations under this Letter Agreement will be
made in accordance with Exhibit D to the Agreement entitled "Price
Adjustment Due to Economic Fluctuations - Airframe Price
Adjustment" (hereinafter referred to as "Exhibit D"), using actual
escalation indices published for the applicable period.
2. Escalation Credit Memo.
2.1 Calculation - Eligible Aircraft Delivering in 1997.
At the time of delivery of each Eligible Aircraft
delivering in 1997, Boeing will issue to Buyer a credit memorandum
(the 1997 Credit Memorandum) which shall be applied to the Purchase
Price of such Aircraft. The 1997 Credit Memorandum shall be
calculated as follows:
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
2.2 Calculation - Eligible Aircraft Delivering in 1998.
At the time of delivery of each Eligible Aircraft
delivering in 1998, Boeing will issue to Buyer a credit memorandum
(the 1998 Credit Memorandum) which shall be applied to the Purchase
Price of such Aircraft. The 1998 Credit Memorandum shall be
calculated as follows:
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
2.3 Eligible Aircraft Delivering after 1998.
For Eligible Aircraft delivering after the calendar
year 1998, the amount of the credit memorandum will be the amount
calculated pursuant to paragraph 2.2 above through December 1998.
This credit memorandum amount will be escalated from December 1998
to the month of delivery pursuant to Exhibit D to the Agreement.
3. Advance Payment Base Price.
It is agreed that the Advance Payment Base Prices for the
Eligible Aircraft set forth in Article 3 of the Agreement includes
an estimate for the escalation sharing credit memorandum pursuant
to this Letter Agreement.
4. Escalating Credits (STE).
It is agreed that the credit memoranda specified in Letter
Agreement No. 6-1162-GOC-131, which escalate in accordance with
Exhibit D, will be calculated using the same factors used to
develop the adjusted airframe escalation pursuant to this Letter
Agreement.
5. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
If the foregoing accurately reflects your understanding of the
matters treated herein, please so indicate by signature below.
Very truly yours,
THE BOEING COMPANY
By /s/ Gunar O. Clem
Its Attorney-In-Fact
ACCEPTED AND AGREED TO this
Date: October 10, 1997
CONTINENTAL AIRLINES, INC.
By /s/ Brian Davis
Its Vice President
October 10, 1997
1951-11R1
Continental Airlines, Inc.
2929 Allen Parkway
Houston, TX 77019
Subject: Letter Agreement No. 1951-11R1 to
Purchase Agreement No. 1951 -
Escalation Sharing - Current Generation Aircraft
Ladies and Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1951 dated July
23, 1996(the Agreement), between The Boeing Company (Boeing) and
Continental Airlines, Inc. (Buyer) relating to Model 737-524
aircraft (the Aircraft). This Letter Agreement supersedes and
replaces in its entirety Letter Agreement 1951-11 dated October 10,
1996.
All terms used herein and in the Agreement, and not defined herein,
will have the same meaning as in the Agreement.
1. Commitment.
Boeing agrees to share one-half of the escalation up to a
maximum of 3 percent per year in each of the years 1997 and 1998,
as more fully described in paragraph 2 below, for any of Buyer's
aircraft which are scheduled to deliver after December 31, 1996.
For the purpose of this Letter Agreement such aircraft are referred
to as "Eligible Aircraft."
All escalation calculations under this Letter Agreement will be
made in accordance with Exhibit D1 to the Agreement entitled "Price
Adjustment Due to Economic Fluctuations - Airframe Price
Adjustment" (hereinafter referred to as "Exhibit D1"), using actual
escalation indices published for the applicable period.
2. Escalation Credit Memo.
2.1 Calculation - Eligible Aircraft Delivering in 1997.
At the time of delivery of each Eligible Aircraft
delivering in 1997, Boeing will issue to Buyer a credit memorandum
(the 1997 Credit Memorandum) which shall be applied to the Purchase
Price of such Aircraft. The 1997 Credit Memorandum shall be
calculated as follows:
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
2.2 Calculation - Eligible Aircraft Delivering in 1998.
At the time of delivery of each Eligible Aircraft
delivering in 1998, Boeing will issue to Buyer a credit memorandum
(the 1998 Credit Memorandum) which shall be applied to the Purchase
Price of such Aircraft. The 1998 Credit Memorandum shall be
calculated as follows:
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
2.3 Eligible Aircraft Delivering after 1998.
For Eligible Aircraft delivering after the calendar
year 1998, the amount of the credit memorandum will be the amount
calculated pursuant to paragraph 2.2 above through December 1998.
This credit memorandum amount will be escalated pursuant to Exhibit
D1 to the Agreement from December 1998 to the month of delivery.
3. Advance Payment Base Price.
It is agreed that the Advance Payment Base Prices for the
Eligible Aircraft set forth in Article 3.4 of the Agreement include
an estimate for the escalation sharing credit memorandum pursuant
to this Letter Agreement.
4. Escalating Credits (STE).
It is agreed that the credit memoranda specified in Letter
Agreement No.6-1162-GOC-131 which escalate in accordance with
Exhibit D1, will be calculated using the same factors used to
develop the adjusted airframe escalation pursuant to this Letter
Agreement.
5. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
If the foregoing accurately reflects your understanding of the
matters treated herein, please so indicate by signature below.
Very truly yours,
THE BOEING COMPANY
By /s/ Gunar O. Clem
Its Attorney-In-Fact
ACCEPTED AND AGREED TO this
Date: October 10, 1997
CONTINENTAL AIRLINES, INC.
By /s/ Brian Davis
Its Vice President
October 10, 1997
6-1162-MMF-308R2
CONTINENTAL AIRLINES, INC.
2929 Allen Parkway
Houston, Texas 77019
Subject: Letter Agreement No. 6-1162-MMF-308R2 to
Purchase Agreement No. 1951 -
Disclosure of Confidential Information
Ladies and Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1951 dated July
23, 1996(the Agreement) between The Boeing Company (Boeing) and
Continental Airlines, Inc. (Buyer) relating to Model 737 aircraft
(the Aircraft). This Letter Agreement supersedes and replaces in
its entirety Letter Agreement 6-1162-MMF-308R1 dated October 10,
1996.
All terms used herein and in the Agreement, and not defined herein,
will have the same meaning as in the Agreement.
1. Boeing and Buyer each understand that certain commercial and
financial information contained in the documents listed below and
any documents that amend, supplement or supersede such documents
(Confidential Documents) is considered by the other party to be
confidential.
2. Boeing and Buyer agree that each party will treat the
Confidential Documents and the information contained therein as
confidential and will not, without the other party's prior written
consent, disclose such Confidential Documents or any information
contained therein to any other person or entity except as may be
required by (i) applicable law or governmental regulations; or (ii)
for financing the Aircraft in accordance with the provisions of
Article 10 of the Agreement.
3. In connection with any such disclosure or filing of the
Confidential Documents, or the information contained therein
pursuant to any such applicable law or governmental regulation,
Buyer or Boeing, as applicable, will request and use its best
reasonable efforts to obtain confidential treatment of such
Confidential Documents and the information contained therein.
Boeing and Buyer agree to cooperate with each other in making and
supporting any such request for confidential treatment.
Schedule of Confidential Documents
1. Letter Agreement No. 6-1162-MMF-295.
2. Letter Agreement No. 6-1162-MMF-296.
3. Letter Agreement No. 6-1162-MMF-309R1.
4. Letter Agreement No. 6-1162-MMF-311R1.
5. Letter Agreement No. 6-1162-MMF-312R1.
6. Letter Agreement No. 6-1162-MMF-319.
7. Letter Agreement No. 6-1162-MMF-378R1
8. Letter Agreement No. 6-1162-MMF-379R1.
9. Letter Agreement No. 6-1162-GOC-015
If the foregoing accurately reflects your understanding of the
matters treated herein, please so indicate by signature below.
Very truly yours,
THE BOEING COMPANY
By /s/ Gunar O. Clem
Its Attorney-In-Fact
ACCEPTED AND AGREED TO this
Date: October 10, 1997
CONTINENTAL AIRLINES, INC.
By /s/ Brian Davus
Its Vice President
6-1162-MMF-311R2
October 10, 1997
Continental Airlines, Inc.
2929 Allen Parkway
Houston, TX 77019
Subject: Letter Agreement No. 6-1162-MMF-311R2 to
Purchase Agreement No. 1951 -
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT]
Ladies and Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1751 dated July
23, 1996(the Agreement) between The Boeing Company (Boeing) and
Continental Airlines, Inc. (Buyer) relating to Model 737 aircraft
(the Aircraft). This Letter Agreement supersedes and replaces in
its entirety Letter Agreement 6-1162-MMF-311R1 dated October 10,
1996.
All terms used herein and in the Agreement, and not defined herein,
will have the same meaning as in the Agreement.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
5. Confidential Treatment.
Boeing and Buyer agree that certain commercial and financial
information contained in this Letter Agreement is confidential and
subject to the confidentiality provisions of Letter Agreement 6-
1162-MMF-308R2, Disclosure of Confidential Information.
If this Letter Agreement correctly states your understanding of the
matters treated herein, please so indicate by signature below.
Very truly yours,
THE BOEING COMPANY
By /s/ Gunar O. Clem
Its Attorney-In-Fact
ACCEPTED AND AGREED TO this
Date: October 10, 1997
CONTINENTAL AIRLINES, INC.
By /s/ Brian Davis
Its Vice President
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
[CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT]
October 10, 1997
6-1162-GOC-131
Continental Airlines, Inc.
2929 Allen Parkway
Houston, Texas 77019
Subject: Letter Agreement No. 6-1162-GOC-131 to
Purchase Agreement No. 1951 - Special Matters
Ladies and Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1951 dated as
of July 23, 1996 (the Agreement) between The Boeing Company
(Boeing) and Continental Airlines, Inc. (Buyer) relating to Model
737 aircraft (the Aircraft). This Letter Agreement supersedes and
replaces in its entirely Letter Agreement 6-1162-MMF-310R1, dated
October 10, 1996.
All terms used herein and in the Agreement, and not defined herein,
will have the same meaning as in the 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] Advance Payment Schedule.
2.1 Firm Aircraft. Notwithstanding the Advance Payment
Schedule contained in Article 5 of the Agreement, Buyer may pay
advance payments, according to the following schedule, for Aircraft
on firm order as of the date of signing Supplemental Agreement No.
4 to the Agreement.
Due Date of Payment Amount Due per Aircraft
(Percentage times
Advance Payment Base Price)
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
2.2 Option Aircraft. Notwithstanding the Advance Payment
Schedule contained in Article 5 of the Agreement, Buyer may pay
advance payments according to the following schedule for all Option
Aircraft.
Due Date of Payment Amount Due per Aircraft
(Percentage times
Advance Payment Base Price)
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
3. Payment of Interest on Deferred Advance Payments.
3.1 Interest Rate for Firm Aircraft. Buyer agrees to pay
interest on all amounts which are deferred pursuant to Paragraph
2.1 of this Letter Agreement at a fluctuating rate per annum equal
to the three month London Interbank Offered Rate (LIBOR), as
published in The Wall Street Journal for the first business day of
each calendar quarter (usually published on the second business day
of such calendar quarter), plus 1.40%. Such interest shall accrue
from and including the date on which such payments would have been
due but for the execution of this Letter Agreement to but excluding
the date on which such amounts are paid in full. Interest shall be
due and payable on the first business day of each calendar quarter
and on the delivery date of any Aircraft that had a deferred
advance payment schedule. (Note: the interest rate as determined
above will be used for the entire calendar quarter; e.g., the
interest rate determined based on the LIBOR interest rate for July
1, 1991, will be used for all interest calculations in July, August
and September.)
3.2 Interest Rate for Option Aircraft. Buyer agrees to
pay interest on all amounts which are deferred pursuant to
Paragraph 2.2 of this Letter Agreement at [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].
3.3 Delivery Delay Impact on Interest Calculations. If
the delivery of any Aircraft is delayed due to either an excusable
or a non-excusable delay, then interest on the deferred advance
payments in respect of such Aircraft will not accrue during the
time period from the last working day of the scheduled delivery
month to the day of delivery of the Aircraft. Payment of any
interest that has accrued prior to the start of the delay but
remains unpaid will be paid on the normal quarterly interest
payment schedule set forth in Paragraph 3.1 of this Letter
Agreement or on the delivery date of the Aircraft, whichever comes
first.
3.4 Boeing Invoice. Boeing shall submit to Buyer, not
less than fifteen (15) days prior to the end of each quarter, an
invoice for interest accrued during each such quarter. Buyer's
payment is due and payable to Boeing on the first business day of
the following month. Boeing's invoice will show interest accrued
during the quarter for each Aircraft for which advance payments
have been deferred. The invoice will also include interest accrued
on deferred advance payments with respect to other aircraft in
other purchase agreements between Buyer and Boeing.
4. Option Aircraft.
4.1 Option Deposits. Notwithstanding the amount
specified in paragraph 3 of Letter Agreements 1951-3R1 and 1951-9,
Boeing and Buyer agree that the Option Deposit shall be
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] per aircraft for either a Model 737-624,
737-724, or 737-824 Option Aircraft.
4.2 Option Aircraft Base Price Adjustment.
Notwithstanding the provisions of Paragraph 2.1.1 of the Attachment
to Letter Agreements 1951-3R1 and 1951-9, Boeing agrees that the
Base Airplane Price contained in Article 3 of the Agreement shall
apply to the [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT] Aircraft incorporated by Supplemental
Agreement No. 1 dated October 10, 1996.
5. Model Substitution.
5.1 Model 737-724/-824 Aircraft. Buyer may elect to
substitute Model 737-824 for Model 737-724 or Model 737-724 for
Model 737-824 Aircraft for any Aircraft or Option Aircraft
delivering in 1999 or later. Buyer's model substitution notice to
Boeing must be in writing to Boeing no later than the first day of
the tenth month prior to delivery of each Aircraft.
5.2 Model 737-624 Aircraft. Buyer may elect to
substitute either Model 737-724 or 737-824 Aircraft for Model 737-
624 Option Aircraft delivering in 2000 or later. Buyer's written
model substitution notice must be received by Boeing no later than
the first day of the tenth month prior to delivery of each
Aircraft.
5.3 Model 737-524 Aircraft. Buyer may elect to
substitute Model 737-324 for Model 737-524 Aircraft. Buyer's
substitution notice must be in writing and received by Boeing no
later than the first day of the tenth month prior to delivery of
each Aircraft if Customer and Boeing have previously agreed on a
configuration for the Model 737-324. If configuration for the
Model 737-324 has not been established, than the notice period
shall be the time required to configure the Model 737-324 plus 10
months.
6. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
7. Confidential Treatment.
Boeing and Buyer understand that certain information
contained in this Letter Agreement, including any attachments
hereto, are considered by both parties to be confidential.
Notwithstanding the provisions of Letter Agreement 6-1162-MMF-
308R2, Boeing and Buyer agree that each party will treat this
Letter Agreement and the information contained herein as
confidential and will not, without the other party's prior written
consent, disclose this Letter Agreement or any information
contained herein to any other person or entity except as may be
required by applicable law or governmental regulations.
Very truly yours,
THE BOEING COMPANY
By /s/ Gunar O. Clem
Its Attorney-In-Fact
ACCEPTED AND AGREED TO this
Date: October 10, 1997
CONTINENTAL AIRLINES, INC.
By /s/ Brian Davis
Its Vice President