EXHIBIT 10.27(b)
Supplemental Agreement No. 2
to
Purchase Agreement No. 2061
between
The Boeing Company
and
Continental Airlines, Inc.
Relating to Boeing Model 777 Aircraft
THIS SUPPLEMENTAL AGREEMENT, entered into as of July 30, 1998,
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 (Customer);
WHEREAS, the parties hereto entered into Purchase Agreement
No. 2061 dated October 10, 1997, (the Purchase Agreement) relating
to Boeing Model 777-200IGW aircraft, (the Aircraft); and
WHEREAS, Boeing and Customer have mutually agreed to
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] and
WHEREAS, Customer has accepted a proposal for [CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] and
WHEREAS, Boeing and Customer 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. 2.
2. Table 1
Remove and replace, in its entirety, "Table 1", with the
"Table 1" attached hereto, to reflect the [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
3. Letter Agreements:
Remove and replace, in its entirety, Letter Agreement 2061-1,
"777-200IGW Option Aircraft" with Letter Agreement 2061-1R1, "777-
200IGW Option Aircraft" attached hereto, to reflect [CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT]
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 above written.
THE BOEING COMPANY CONTINENTAL AIRLINES, INC.
By: /s/ John A. McGarvey By: /s/ Brian Davis
Its: Attorney-In-Fact Its: Vice President
TABLE OF CONTENTS
ARTICLES Revised
By
1. Quantity, Model and Description
2. Delivery Schedule
3. Price
4. Payment
5. Miscellaneous
TABLE
1. Aircraft Information Table SA No. 2
EXHIBIT
A. Aircraft Configuration
B. Aircraft Delivery Requirements
and Responsibilities
SUPPLEMENTAL EXHIBITS
BFE1. BFE Variables
CS1. Customer Support Variables
EE1. Engine Escalation/Engine Warranty
and Patent Indemnity
SLP1. Service Life Policy Components
LETTER AGREEMENTS
2061-1 Option Aircraft SA No. 2
2061-2 Demonstration Flights
2061-3 Installation of Cabin Systems Equipment
2061-4 Spares Initial Provisioning
2061-5 Flight Crew Training Spares
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
TABLE OF CONTENTS
CONFIDENTIAL LETTER AGREEMENTS: Revised By:
6-1161-GOC-087 Aircraft Performance Guarantees
6-1162-GOC-088 Promotion Support
6-1162-GOC-089 Special Matters
6-1162-GOC-172 Additional Matters SA No. 1
SUPPLEMENTAL AGREEMENTS
Supplemental Agreement No. 1 December 18, 1997
Supplemental Agreement No. 2 July 30, 1998
Table 1
to Purchase Agreement 2061
Aircraft Delivery, Description, Price and Advance Payments
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
July , 1998
2061-1R1
Continental Airlines, Inc.
2929 Allen Parkway
Houston, Texas 77019
Subject: Option Aircraft
Reference: Purchase Agreement No. 2061 (the Purchase Agreement)
between The Boeing Company (Boeing) and Continental
Airlines, Inc. (Customer) relating to Model 777-200IGW
aircraft (the Aircraft)
Ladies and Gentlemen:
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. This Letter
Agreement supersedes and replaces in its entirety Letter Agreement
2061-1 dated October 10, 1997.
Boeing agrees to manufacture and sell to Customer additional Model
777-200IGW aircraft as Option Aircraft. The delivery months,
number of aircraft, Advance Payment Base Price per aircraft and
advance payment schedule are listed in the Attachment to this
Letter Agreement (the Attachment).
1. Aircraft Description and Changes
1.1 Aircraft Description: The Option Aircraft are
described by the Detail Specification listed in the Attachment.
1.2 Changes: The Detail Specification will be revised to
include:
(i) Changes applicable to the basic Model 777
aircraft which are developed by Boeing
between the date of the Detail Specification
and the signing of the definitive agreement
to purchase the Option Aircraft;
(ii) Changes required to obtain required
regulatory certificates; and
(iii) Changes mutually agreed upon.
2. Price
2.1 The pricing elements of the Option Aircraft are listed
in the Attachment.
2.2 Price Adjustments.
2.2.1 Optional Features. The Optional Feature Prices for
the Option Aircraft will be adjusted to Boeing's current prices as
of the date of execution of the definitive agreement for the Option
Aircraft.
2.2.2 Escalation Adjustments. The Airframe Price and the
Optional Features Prices for Option Aircraft delivering before
January 2003, will be escalated on the same basis as the Aircraft.
The engine manufacturer's current escalation provisions, listed in
Exhibit Supplement EE1 to the Purchase Agreement, have been
estimated to the months of scheduled delivery using commercial
forecasts to calculate the Advance Payment Base Price listed in the
Attachment to this Letter Agreement. The engine escalation
provisions will be revised if they are changed by the engine
manufacturer prior to the signing of a definitive agreement for the
Option Aircraft.
2.2.3 Base Price Adjustments. The Airframe Price and the
Engine Price of the Option Aircraft delivering before January,
2003, will be adjusted to Boeing's and the engine manufacturer's
then current prices as of the date of execution of the definitive
agreement for the Option Aircraft.
2.2.4 Prices for Long Lead Time Aircraft. Boeing and the
engine manufacturer have not established prices and escalation
provisions for Model 777-200IGW aircraft and engines for delivery
in the year 2003 and after. When prices and the pricing bases are
established for the Model 777-200IGW aircraft delivering in the
year 2003 and after, the information listed in the Attachment will
be appropriately amended.
3. Payment.
3.1 Customer will pay a deposit to Boeing in the amount
shown in the Attachment for each Option Aircraft (Deposit), on the
date of this Letter Agreement. If Customer exercises an option,
the Deposit will be credited against the first advance payment due.
If Customer does not exercise an option, Boeing will retain the
Deposit for that Option Aircraft.
3.2 Following option exercise, advance payments in the
amounts and at the times listed in the Attachment will be payable
for the Option Aircraft.
The remainder of the Aircraft Price for the Option Aircraft will be
paid at the time of delivery.
4. Option Exercise.
Customer may exercise an option by giving written notice to Boeing
on or before the date [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT] prior to the first business
day of the applicable delivery month listed in the Attachment
(Option Exercise Date).
5. Contract Terms.
Boeing and Customer will use their best efforts to reach a
definitive agreement for the purchase of an Option Aircraft,
including the terms and conditions contained in this Letter
Agreement, in the Purchase Agreement, and other terms and
conditions as may be agreed upon to add the Option Aircraft to the
Purchase Agreement as an Aircraft. In the event the parties have
not entered into a definitive agreement within 30 days following
option exercise, either party may terminate the purchase of such
Option Aircraft by giving written notice to the other within 5
days. If Customer and Boeing fail to enter into such definitive
agreement, Boeing will retain the Deposit for that Option Aircraft
unless failure is attributable to Boeing's fault, in which case the
Deposit shall be promptly returned to Customer without interest.
Very truly yours,
THE BOEING COMPANY
THE BOEING COMPANY
By /s/ D. M. Hurt
Its Attorney-in-Fact
ACCEPTED AND AGREED TO this
Date: July 30, 1998
CONTINENTAL AIRLINES, INC.,
By /s/ Brian Davis
Its Vice President
Attachment
Attachment to
Letter Agreement 2061-1R1
Option Aircraft Delivery, Description, Price and Advance Payments
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]