Exhibit 10.15(a)
October 10, 1997
6-1162-GOC-136
Continental Airlines, Inc.
2929 Allen Parkway
Houston, TX 77019
Subject: Certain Long Term Contractual Matters
Reference: Aircraft General Terms Agreement (the AGTA) and all
Purchase Agreements in effect as of the date hereof
(the Purchase Agreements) between The Boeing Company
(Boeing) and Continental Airlines, Inc. (Customer)
Ladies and Gentlemen:
This Letter Agreement documents the agreement between Boeing and
Customer with respect to certain long term contractual matters.
All terms used but not defined in this Letter Agreement shall
have the same meaning as in the AGTA.
1. Requirement Aircraft.
In consideration of [CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT], and other
benefits received by Customer under this Letter Agreement, the
AGTA and Purchase Agreements in effect between Customer and
Boeing, and subject to the terms and conditions of this Letter
Agreement, Customer and Boeing agree that Customer shall purchase
all of Customer's requirements for new passenger aircraft with
seating capacities (in Customer's configuration) ranging between
100 and 400 seats and scheduled for delivery before January 1,
2018 from Boeing. Boeing agrees to sell to Customer all of
Customer's requirements for such aircraft. All such aircraft so
purchased from Boeing shall hereinafter be referred to as
Requirement Aircraft.
2. Availability of Aircraft.
If Boeing for any reason is unable to deliver a new
passenger aircraft that has a seating capacity between 100 and
400 seats in the time period required by Customer, Customer may
purchase or lease Boeing manufactured aircraft from another
source (e.g. leasing companies) to support that requirement. If,
after reasonable inquiry, no such Boeing aircraft are available
to Customer on terms and conditions deemed reasonable by Customer
for delivery in such time period, Customer may elect to purchase
or lease non-Boeing aircraft solely for delivery during that time
period, but this obligation to purchase and sell will otherwise
be unaffected.
3. Enforceability of Paragraphs 1 and 2.
Boeing has agreed with the European Commission (EC) as part
of their approval of Boeing's merger with McDonnell Douglas, that
Boeing will not enforce the provisions of this Letter Agreement
with Customer which require that all of Customer's requirements
for aircraft of designated sizes be purchased from Boeing.
Boeing will notify Customer promptly in the event of any change
in the agreement with the EC.
4. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
5. Addition of New Aircraft Models and Types.
In the event Customer elects to purchase aircraft models
and types that are not yet included in the Purchase Agreements,
Boeing agrees to negotiate with Customer in good faith to
establish the terms and conditions (to the extent not provided
herein) under which Boeing will sell and Customer will purchase
such additional aircraft models and types.
6. Corporate Ownership Change, Mergers and Acquisitions.
6.1 If Customer acquires a majority of the outstanding
capital stock of another air carrier, the terms of this Letter
Agreement shall apply to such entity, however, such air carrier
may honor its preexisting firm aircraft orders. If Customer
acquires less than a majority of the outstanding capital stock of
another air carrier, the terms of this Letter Agreement shall not
apply to the other air carrier.
6.2 If another air carrier acquires an interest in
Customer, the terms of this Letter Agreement shall not apply to
such other air carrier unless consented to in writing by such
other air carrier and Boeing.
6.3 In the event of a merger of Customer and another
air carrier, if Customer is the surviving entity, then the terms
of this Letter Agreement shall apply to such combined entity;
provided that such combined entity may honor the pre-existing
firm aircraft orders of the other air carrier.
6.4 In the event of a merger of Customer and another
air carrier, if Customer is not the surviving entity, then the
surviving entity shall be bound by the terms of this Letter
Agreement with respect to future aircraft purchases for the
combined fleet, but only on a proportional basis calculated by
dividing the number of seats in Customer's fleet on aircraft of
100 seats or more immediately prior to the effective date of the
merger by the number of seats in the combined fleet on aircraft
of 100 seats or more immediately after the effective date of the
merger (the Required Percentage). The surviving entity shall be
deemed to have met its obligations hereunder if, on the third
anniversary of the effective date of the merger, and on every
third anniversary thereafter until January 1, 2018, the sum of
the total number of seats on Requirement Aircraft purchased by
the surviving entity during the three year period immediately
preceding the applicable anniversary, divided by the sum of the
total number of seats on all new aircraft that have a seating
capacity between 100 and 400 seats purchased by the surviving
entity during such three year time period, is equal to or greater
than the Required Percentage. Excluded from this calculation
shall be all undelivered aircraft that were on firm order by both
entities prior to the effective date of the merger and aircraft
acquired pursuant to paragraphs 2 and 7 hereof.
This paragraph will not negate the obligation by the
surviving entity to honor contractual commitments made by
Customer or the other air carrier prior to the merger.
7. Used Aircraft.
Nothing under this Letter Agreement will prevent Customer
from (i) renewing existing leases for Boeing or non-Boeing
aircraft or (ii) acquiring or leasing used aircraft whether or
not manufactured by Boeing provided that such aircraft have been
in airline service at least one year.
8. Model Substitution.
Within a Model Type. [CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
Cross Model Substitution. [CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
9. Advance Payments.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
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10. Option Deposits.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
14. Pricing of Requirement Aircraft.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
15. Credit Memoranda for Requirement Aircraft.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
16. Aircraft Performance Guarantees.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
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17. Customer Support Provisions for Future Requirement
Aircraft.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
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18. Warranty Provisions for Requirement Aircraft.
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
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19. Assignment.
The commitments contained in this Letter Agreement may not
be assigned by either party without the prior written consent of
the other party, except either party may assign its interest to a
corporation that (i) results from any merger or reorganization of
such party or (ii) acquires substantially all the assets of such
party.
20. Confidential Treatment.
Boeing and Customer understand that certain information
contained in this Letter Agreement, including any attachments
hereto, are considered by both parties as confidential. Boeing
and Customer 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
21. Miscellaneous.
21.1 GOVERNING LAW. THIS LETTER AGREEMENT WILL BE
INTERPRETED UNDER AND GOVERNED BY THE LAW OF THE STATE OF
WASHINGTON, U.S.A., EXCEPT THAT WASHINGTON'S CHOICE OF LAW RULES
SHALL NOT BE INVOKED FOR THE PURPOSE OF APPLYING THE LAW OF
ANOTHER JURISDICTION.
21.2 Amendments. This Letter Agreement may not be
amended or modified except in writing signed by both parties.
21.2 Headings. Headings used in this Letter Agreement
are for convenient reference only and are not intended to affect
the interpretation of this Letter Agreement.
21.3 Waiver/Severability. Failure by either party to
enforce any provision of this Letter Agreement will not be
construed as a waiver. If any provision of this Letter Agreement
is held unlawful or otherwise ineffective by a court of
competent jurisdiction, the remainder of the Letter Agreement
will remain in effect.
21.4 Entire Agreement.
This Letter Agreement contains the entire agreement of the
parties and supersedes all previous proposals, understandings,
commitments or representations whatsoever, oral or written, with
respect to the subject matter hereof.
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
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SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]